<PAGE>
As filed with the Securities and Exchange Commission on October 22, 1996
Registration No. 333-08701
================================================================================
Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1
to
Form S-1
Registration Statement
Under
The Securities Act of 1933
___________________________
U.S. Trade Trust, Series 1996-A
(Issuer of the Certificates)
U.S. Trade Funding Corp.
(Depositor)
(Exact name of Registrant as specified in its governing instrument)
___________________________
<TABLE>
<S> <C> <C>
DELAWARE 6799 13-3778761
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
U.S. TRADE FUNDING CORP.
TWO WALL STREET
NEW YORK, NEW YORK 10005
212/346-9000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Andrew L. Stidd
President
U.S. TRADE FUNDING CORP.
TWO WALL STREET
NEW YORK, NEW YORK 10005
212/346-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
___________________________
copies to:
Steven L. Clark
Stathy Darcy
Chapman and Cutler
111 West Monroe
Chicago, Illinois 60603
312/845-3000
___________________________
Approximate date of commencement of proposed sale to the public: As soon
as practicable on or after the effective date of this Registration Statement.
___________________________
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
___________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(b) OF REGULATION S-K SHOWING LOCATION
IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF FORM S-1
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<CAPTION>
Form S-1 Location in Prospectus
----------------------
Item Number and Heading
--------------------------
<S> <C>
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus ............................. Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.................................................. Inside Front and Outside Back Cover Page;
Additional Information
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges................................... Prospectus Summary
4. Use of Proceeds............................................. Use of Proceeds
5. Determination of Offering Price............................. Outside Front Cover Page; Underwriting
6. Dilution.................................................... Not Applicable
7. Selling Security Holders.................................... Not Applicable
8. Plan of Distribution........................................ Underwriting
9. Description of Securities to be Registered.................. Outside Front Cover Page; Description of the
Certificates
10. Interests of Named Experts and Counsel...................... Legal Matters
11. Information With Respect to the Registrant:
(a) Description of Business................................ Prospectus Summary
(b) Description of Property................................ Not Applicable
(c) Legal Proceedings...................................... Not Applicable
(d) Market Price of and Dividends on the
Registrant's Common Equity and Related
Stockholder Matters.................................... Description of the Certificates
(e) Financial Statements................................... Not Applicable
(f) Selected Financial Data................................ Not Applicable
(g) Supplementary Financial Information.................... Not Applicable
(h) Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... Not Applicable
(i) Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure............................................. Not Applicable
(j) Directors and Executive Officers....................... Not Applicable
(k) Executive Compensation................................. Not Applicable
(l) Security Ownership of Certain Beneficial
Owners and Management.................................. Not Applicable
(m) Certain Relationships and Related Transactions......... Not Applicable
12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.............. Not Applicable
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities And Exchange Commission. These Securities may not be sold nor may
offers to buy be accepted Prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion October __, 1996
Preliminary
Prospectus
6.75% TRADE TRUST CERTIFICATES, SERIES 1996-A
EVIDENCING INTERESTS IN LOAN NOTES GUARANTEED BY THE
EXPORT-IMPORT BANK OF THE UNITED STATES
DUE AUGUST 15, 2008
Each of the Certificates offered hereby will evidence an undivided
fractional interest in U.S. Trade Trust Series 1996-A (the "Trust") to be formed
pursuant to a Supplemental Trust Agreement dated as of October 1, 1996,
incorporating therein the Standard Terms and Conditions of Trust Agreement dated
as of January 1, 1995 (together, as the same may be amended from time to time,
the "Trust Agreement") between U.S. Trade Funding Corp., a Delaware corporation
(the "Company"), LaSalle National Bank, as trustee (the "Trustee") and ABN AMRO
Bank N.V., as servicer (in such capacity, the "Servicer") pursuant to which the
Company is entitled to cause the issuance of certain securities. The assets of
the Trust will consist of two Loan Notes (the "Loan Notes"), payable in U.S.
Dollars, of the foreign borrower referred to herein (the "Borrower"), which will
be conveyed to the Trust by the Company. The Borrower was formed for the
purpose of leasing aircraft to China Yunnan Airlines (the "Lessee"). The
aggregate amount of Certificates sold pursuant to this offering, which will be
determined by the aggregate principal amount of the Loan Notes issued, is
expected to be $101,672,199.28. The Loan Notes were originated by ABN AMRO Bank
N.V. (in such capacity, the "Seller") who loaned amounts to the Borrower
pursuant to a Loan Agreement (defined herein). The Loan Notes will be sold by
the Seller to the Company on the date of issuance of the Certificates pursuant
to a Purchase Agreement dated as of January 1, 1995 by and between the Seller
and the Company (the "Purchase Agreement") and will be conveyed by, or at the
direction of, the Company to the Trust on the date the Certificates are issued.
The Servicer will service the Loans represented by the Loan Notes held by the
Trust pursuant to a Servicing Agreement among the Servicer, the Trustee and the
Company.
PAYMENT OF 100% OF ALL SCHEDULED AMOUNTS OF PRINCIPAL OF AND INTEREST ON
THE LOAN NOTES WILL BE GUARANTEED BY THE EXPORT-IMPORT BANK OF THE UNITED STATES
("EXIMBANK"), WHICH GUARANTEE IS BACKED BY THE FULL FAITH AND CREDIT OF THE
UNITED STATES OF AMERICA. THE ATTORNEY GENERAL OF THE UNITED STATES OF AMERICA
HAS STATED IN AN OPINION DATED SEPTEMBER 30, 1966 THAT EXIMBANK'S CONTRACTUAL
LIABILITIES CONSTITUTE GENERAL OBLIGATIONS OF THE UNITED STATES OF AMERICA
BACKED BY ITS FULL FAITH AND CREDIT AND THAT PERSONS IN WHOSE FAVOR EXIMBANK HAS
INCURRED CONTRACTUAL LIABILITIES IN ACCORDANCE WITH LAW "HAVE ACQUIRED VALID
GENERAL OBLIGATIONS OF THE UNITED STATES, AND ARE THEREFORE IN A POSITION TO
REACH BEYOND EXIMBANK AND ITS ASSETS TO THE UNITED STATES FOR A SOURCE OF
PAYMENT, IF NECESSARY." THE CERTIFICATES WILL NOT BE DIRECTLY GUARANTEED BY
EXIMBANK AND THERE WILL BE NO DIRECT CONTRACTUAL LIABILITY OF EXIMBANK TO ANY
HOLDER OF A CERTIFICATE.
Eximbank will not be required to make payment pursuant to the Eximbank
Guarantee with respect to a default in payment by the Borrower on a Loan Note
unless the Trustee makes written demand on Eximbank within 150 calendar days of
the date on which the payment in default was due and on such other parties at
such times described herein. If the Trustee fails to make demand for payment on
Eximbank within such 150-day period, the Trustee will be unconditionally
obligated to pay such amount in default to the Trust.
The Trust will benefit from an irrevocable revolving liquidity facility
(the "Liquidity Facility") arranged by the Company with ABN AMRO Bank N.V. in
order to provide for the timely payment of principal and interest on the
Certificates on any Payment Date on which the Borrower defaults in the payment
of amounts due under a Loan Note.
Interest on the Certificates will accrue from and including October 25,
1996 and will be payable semi-annually on each February 15 and August 15 (unless
such day is not a Business Day as defined herein), commencing on February 15,
1997 and ending on August 15, 2008. Principal will be payable in 24 semi-annual
installments on such payment dates. The Certificates will be represented by a
single global Certificate registered in the name of a nominee of The Depository
Trust Company ("DTC").
The Certificates will not be subject to prepayment or acceleration under
any circumstances.
The Underwriter intends but is not obligated to make a market in the
Certificates. There can be no assurance that a secondary market will develop
or, if a secondary market does develop, that it will continue.
_________________________________
THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST
ONLY. THE CERTIFICATES ARE NOT OBLIGATIONS OF OR GUARANTEED BY EXIMBANK, THE
UNITED STATES OF AMERICA OR ANY OTHER GOVERNMENTAL AGENCY NOR ARE THEY
OBLIGATIONS OF OR GUARANTEED BY THE BORROWER, THE LESSEE, THE SERVICER, THE
LIQUIDITY PROVIDER, THE COMPANY, THE TRUSTEE OR ANY AFFILIATE OF THE FOREGOING.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________________________
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<CAPTION>
=====================================================================================================================
<S> <C> <C> <C> <C>
Initial Public Underwriting Proceeds to the
Principal Amount Offering Price Commission Trust(1)
- ---------------------------------------------------------------------------------------------------------------------
6.75% Trade Trust Certificates, Series 1996-A... $101,672,199.28 100% 0.45% $101,672,199.28
=====================================================================================================================
</TABLE>
(1) The underwriting commissions and certain other expenses estimated to be
$457,500 have been or will be paid by or on behalf of the Borrower. The
proceeds from the sale of the Certificates will be used to purchase the Loan
Notes from the Seller.
___________________________________
The Certificates offered by this Prospectus are offered subject to receipt
and acceptance by the Underwriter, to prior sale and to the Underwriter's right
to reject any order in whole or in part and to withdraw, cancel or modify the
offer without notice. It is expected that delivery of the Certificates will be
made in book-entry form through the facilities of DTC on or about October 25,
1996.
_________________________________
October ___, 1996
ABN AMRO SECURITIES (USA) INC.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
_________________________________
REPORTS TO CERTIFICATEHOLDERS
On behalf of the Trust, the Trustee will prepare and send semi-annual
reports to all registered holders of Certificates (the "Certificateholders").
See "Description of the Certificates--Reports to Certificateholders". If the
Trust is required to file documents and reports with the Securities and Exchange
Commission (the "Commission") pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Trustee will deliver, without charge, to
any registered Certificateholder copies of all documents and reports furnished
to the Commission upon written request delivered to the Trustee at LaSalle
National Bank, 135 South LaSalle Street, Chicago, Illinois 60674, Attention:
Asset Backed Securities Trust Services. The Trustee's obligation to file
periodic reports on behalf of the Trust with the Commission will be suspended if
the Certificates issued by the Trust are held of record by fewer than 300
holders at the beginning of any fiscal year of the Trust other than the fiscal
year in which the registration statement becomes effective with respect to the
Trust. Accordingly, if there are fewer than 300 holders of the Certificates
issued by the Trust as of the beginning of any such fiscal year, the Trustee may
cease to file reports on behalf of the Trust with the Commission in respect of
such fiscal year. If the Trustee ceases to file periodic reports on behalf of
the Trust with the Commission, the Trustee will distribute to the holders of the
Certificates issued by the Trust, semiannual reports as noted above.
_________________________________
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-1 under the
Securities Act of 1933, as amended, with the Commission with respect to the
Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material may be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
_________________________________
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain capitalized
terms used in the summary are defined elsewhere in this Prospectus.
Title of Certificates............... 6.75% Trade Trust Certificates, Series
1996-A (the "Certificates").
The Trust........................... U.S. Trade Trust Series 1996-A (the
"Trust"). The Trust will be formed
pursuant to the Trust Agreement for the
purpose of acquiring and holding the
Loan Notes and issuing the Certificates.
The Company......................... U.S. Trade Funding Corp. (the
"Company").
The Trustee......................... LaSalle National Bank (the "Trustee").
The Seller and Servicer............. ABN AMRO Bank N.V.
The Certificates.................... The Certificates will be issued in an
aggregate amount of approximately
$101,672,199.28, will entitle the holder
to interest at a rate of 6.75% per
annum, and will have a final
distribution date of August 15, 2008.
-2-
<PAGE>
Principal on the Certificates will be
payable in 24 semi-annual installments,
on each February 15 and August 15 (or,
if not a Business Day (as defined below)
on the immediately succeeding Business
Day except with respect to the final
payment at maturity, in which case such
payment shall be made on the immediately
preceding Business Day) in each year,
commencing on February 15, 1997, in the
amounts set forth under "Description of
the Certificates--Payment on the
Certificates." The payment dates
specified in the preceding sentence are
referred to herein as "Payment Dates."
Interest on the Certificates will accrue
from and include the date set forth on
the cover of this Prospectus and will be
payable on each semi-annual Payment
Date. A schedule of distributions on the
Certificates is attached as Annex A.
Each Certificate will represent the
right to receive a pro rata portion of
each semi-annual payment on the Loan
Notes held by the Trust or, in the event
of a default in the payment thereon, the
right to receive a pro rata portion of
any payment received under the Liquidity
Facility and/or the Eximbank Guarantee,
which guarantee is backed by the full
faith and credit of the United States of
America. Following an initial payment by
Eximbank under the Eximbank Guarantee,
Eximbank will issue Eximbank Payment
Certificates (as defined below) to the
Trustee which will require Eximbank, on
each subsequent Due Date (as defined
below), to directly and timely pay to
the Trust an amount equal to the amounts
that were originally scheduled to be due
on such Due Date with respect to the
Loan Notes and the Trust shall
distribute such amounts pro rata among
the holders of the Certificates.
-3-
<PAGE>
The Certificates will be available for
purchase in minimum denominations of
$100,000. The Certificates will be
available only in book-entry form and
will be represented by a single global
Certificate registered in the name of
Cede & Co., the nominee of DTC.
Beneficial interests in the global
Certificate will be shown on, and
transfers thereof will be effected only
through, records maintained by DTC and
its participants.
The Certificates represent beneficial
interests in the Trust only and do not
represent interests in or obligations of
the Seller, the Borrower, the Lessee
(defined below), the Company or the
Trustee nor are they obligations of or
guaranteed by Eximbank, the United
States of America or any other
governmental agency.
No Prepayment or Acceleration....... The Certificates will not be subject to
prepayment or acceleration under any
circumstances.
Rating.............................. It is a condition to the issuance of the
Certificates that they receive a rating
of "AAA" by Standard & Poor's Ratings
Group, a division of the McGraw-Hill
Companies ("S&P" or the "Rating
Agency"). A security rating is not a
recommendation to buy, sell or hold
securities, and may be subject to
revision or withdrawal at any time.
Investor Eligibility................ There are no restrictions set forth in
the Eximbank Guarantee on the
eligibility of holders of the
Certificates, including any restrictions
based upon residency or citizenship.
However, certain pension, profit sharing
and other benefit plans and other
investors subject to ERISA may be
subject to certain restrictions. See
"ERISA Considerations."
-4-
<PAGE>
Underwriting........................ ABN AMRO Securities (USA) Inc. will
serve as Underwriter. The Underwriter
proposes initially to offer the
Certificates to the public at the
offering price set forth on the cover
page of this Prospectus. After the
initial public offering, such public
offering price may be changed. See
"Underwriting."
The Trust Assets.................... The property of the Trust will consist
of the Loan Notes and the rights under
the Eximbank Guarantee together with the
right to draw amounts under the
Liquidity Facility (as defined herein).
On and after an Eximbank Payment Event
(as defined below) and in certain other
circumstances described below, the
property of the Trust will consist of
Eximbank Payment Certificates (as
defined below).
The Loan Notes will evidence the
obligations of the Borrower to pay to
the Trust, in U.S. Dollars, semi-
annually on each February 15 and August
15 (or, if not a Business Day, on the
immediately succeeding Business Day
except that if the final maturity date
of August 15, 2008 is not a Business
Day, such payment shall be made on the
immediately preceding Business Day) in
each year, commencing on February 15,
1997, interest at a fixed rate and
principal in 24 semi-annual installments
as set forth under "The Loan Notes."
Such payment dates are referred to
herein as "Due Dates" and each Due Date
shall coincide with a "Payment Date" on
the Certificates (as such term is
defined below). All scheduled payments
of principal and interest on the Loan
Notes made by or on behalf of the
Borrower on a Due Date will be
distributed to the Certificateholders on
the related Payment Date.
-5-
<PAGE>
The scheduled principal and interest
payments due on the Loan Notes on each
Due Date will be sufficient to enable
the Trustee to distribute the scheduled
amounts to the Certificateholders on the
corresponding Payment Date. See "The
Loan Notes."
Upon the occurrence of a payment default
on a Loan Note held by the Trust (an
"Event of Default"), Eximbank may
accelerate the payment of principal of
and interest on all such Loan Notes.
Whether or not Eximbank accelerates the
Loan Notes, if a timely demand shall
have been made on Eximbank by the
Trustee or the Servicer on behalf and in
the name of the Trustee in compliance
with the Eximbank Guarantee, Eximbank
will issue Eximbank Payment Certificates
to the Trust in exchange for the
Trustee's assignment to Eximbank of the
Loan Notes in default. The Eximbank
Payment Certificates will provide that
Eximbank will make payments directly to
the Trust on each subsequent Due Date of
the amounts that were originally
scheduled to be due on such Due Date
with respect to such Loan Notes. Any
such acceleration of the Loan Notes will
not result in an acceleration of the
Certificates. See "The Eximbank
Guarantee--The Eximbank Guarantee."
The Loan Notes evidence loans made to
the Borrower by the Seller to enable the
Borrower to finance the acquisition of
two Boeing 767-300 Aircraft (the
"Aircraft") and certain fees and
expenses related thereto. The Borrower
has leased the Aircraft to the Lessee
and has granted a mortgage thereon. See
"The Loan Notes" and "The Borrower and
the Lessee."
-6-
<PAGE>
If a total loss occurs with respect to
any Aircraft and such Aircraft is not
replaced in accordance with the terms of
the respective Aircraft lease, insurance
proceeds and any other required amounts
with respect to such Aircraft will be
paid to Eximbank. The Loan Note with
respect to such Aircraft will then be
assigned to Eximbank and Eximbank will
then issue an Eximbank Payment
Certificate to the Trust requiring
Eximbank to thereafter make payments
directly to the Trust on each subsequent
Due Date of the amounts that were
originally scheduled to be due on such
Due Date with respect to such Loan Note.
Failure to maintain adequate insurance
will not, however, relieve Eximbank of
its obligation to make payment under the
Eximbank Guarantee with respect to
Borrower payment defaults, provided the
notices and demands described below are
timely made. Similarly, if the Lessee
exercises its right to terminate the
lease relating to an Aircraft following
a determination by the Lessee that such
Aircraft is surplus to its requirements
or economically obsolete, the Loan Note
relating to such Aircraft and affected
by such early lease termination shall be
assigned by the Trustee to Eximbank, and
Eximbank will then issue an Eximbank
Payment Certificate to the Trust
requiring Eximbank to thereafter make
payments directly to the Trust on each
subsequent Due Date of the amounts that
were originally scheduled to be due on
such Due Date with respect to such Loan
Note.
Trustee's Fees and Expenses of
the Trust........................ The Trustee's fees and expenses will be
prepaid by or on behalf of the Borrower
on the date of issuance of the
Certificates. Such fees and expenses
will not be payable from the scheduled
payments on the Loan Notes. See
"Description of the Certificates --
Duties and Immunities of the Trustee."
-7-
<PAGE>
The Eximbank Guarantee.............. Eximbank has endorsed each Loan Note
with its guarantee of the payment of
100% of all scheduled amounts of
principal of and interest on such Loan
Note (the "Eximbank Guarantee"). The
Eximbank Guarantee provides that if any
scheduled amount of principal or
interest due on a Loan Note on a Due
Date is not paid when due, such amount
will be payable by Eximbank, subject to
compliance with the applicable terms and
conditions set forth in the Eximbank
Guarantee.
According to an opinion of the Attorney
General of the United States of America
dated September 30, 1966, the Eximbank
Guarantee represents an obligation of
Eximbank backed by the full faith and
credit of the United States of America,
enforceable against Eximbank even if the
obligations of the Borrower under a Loan
Note are unenforceable.
Under the terms of the Eximbank
Guarantee, Eximbank will not be required
to make a payment under the Eximbank
Guarantee of amounts due but not paid on
a Due Date which were not paid by or on
behalf of the Borrower on such Due Date
if the Trustee or the Servicer, on
behalf and in the name of the Trustee,
fails to make a written demand for
payment upon Eximbank within 150
calendar days following such Due Date
(but at least 30 calendar days after
such Due Date) and upon the Borrower and
the Lessee with respect to such Loan
Note at least 15 calendar days prior to
such demand upon Eximbank. In addition,
it is a condition of the Eximbank
Guarantee that a demand for payment must
be made on the Industrial and Commercial
Bank of China, on behalf of Eximbank, at
least 15 calendar days prior to the date
demand is made on Eximbank for payment
under the Eximbank Guarantee.
Accordingly, the Servicing Agreement
requires the Servicer, on behalf of the
Trustee, to make such a timely demand
upon Eximbank, the Borrower, the Lessee
and the Industrial and Commercial Bank
of China.
-8-
<PAGE>
If the Servicer or Trustee fails to
timely make such demand, the Servicer
and Trustee forfeit the right to collect
amounts on the Eximbank Guarantee with
respect to such Due Date, but this
failure does not affect the right to
collect amounts on the Eximbank
Guarantee with respect to any future Due
Date.
The Trustee is obligated pursuant to the
Trust Agreement to make timely demands
on Eximbank, the Borrower, the Lessee
and the Industrial and Commercial Bank
of China in the event the Servicer fails
to make such demands.
Liquidity Facility.................. The Certificates will benefit from an
irrevocable liquidity facility arranged
by the Company with ABN AMRO Bank N.V.
in order to provide for the timely
payment of principal and interest on the
Certificates on any Payment Date on
which the Borrower defaults in the
payment of amounts due under a Loan
Note. See "The Liquidity Facility."
Initial Certificate Principal
Balance.......................... $101,672,199.28 representing the
aggregate principal balance on the Loan
Notes as of October 25, 1996 (the
"Cutoff Date").
Tax Status.......................... Chapman and Cutler, as special United
States tax counsel to the Trust, will
render an opinion to the effect that the
Trust will be classified as a grantor
trust for United States Federal income
tax purposes, and the Certificateholders
will be treated as beneficial owners of
undivided fractional interests in the
assets of the Trust. See "Certain
Federal Income Tax Consequences."
ERISA Considerations................ Certain prospective investors in the
Certificates will be subject to the
requirements of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA") or Section 4975(e)(1) of the
Internal Revenue Code of 1986, as
amended (the "Code") if they are
pension, profit
-9-
<PAGE>
sharing, or other employee benefit
plans, individual retirement accounts or
annuities or employee annuity plans (a
"Plan" or "Plans"). The purchase of
Certificates by Plans may cause the
assets of the Trust to be treated as
"plan assets," subjecting the Trustee to
the fiduciary responsibility rules of
ERISA, with which the Trustee may not be
in a position to comply. Regardless of
whether the Trust's assets are regarded
as "plan assets," if the Certificates
are purchased with assets of Plans and
the Underwriter, the Trustee, the Lessee
(as defined below), the Liquidity
Provider or the Borrower, or any of
their respective affiliates, is a party
in interest or disqualified person with
respect to any such Plan, possible
violations of the prohibited transaction
or fiduciary responsibility rules of
ERISA could occur, unless such purchase
is subject to a statutory or
administrative exemption. Any fiduciary
of a Plan considering the purchase of
Certificates should consult its legal
advisors regarding the consequences of
such purchase under ERISA. See "ERISA
Considerations."
-10-
<PAGE>
OVERVIEW OF THE TRANSACTION
On the date of issuance of the Certificates, the Seller will sell,
transfer, assign, set over and otherwise convey the Loan Notes to, or at the
direction of, the Company, and the Company will simultaneously establish the
Trust and sell, transfer, assign, set over and otherwise convey or cause the
conveyance to the Trust all right, title and interest in the Loan Notes. On
behalf of the Trust, as the issuer of the Certificates offered hereby, the
Trustee will, concurrently with such conveyance, execute and deliver the
Certificates to or upon the order of the Company. The Servicer will service the
Loan Notes pursuant to the Servicing Agreement, and will be compensated as
Servicer.
The Trust will be formed for the purpose of acquiring and holding the Loan
Notes and issuing the Certificates. Each Certificate offered hereby will
represent an undivided fractional interest in payments on each Loan Note held by
the Trust. Each Loan Note will have endorsed thereon an Eximbank Guarantee,
which, according to the opinion of the Attorney General of the United States of
America, dated September 30, 1966, is backed by the full faith and credit of the
United States of America, of the payment of 100% of all scheduled amounts of
principal of and interest on such Loan Note. The Certificates are not
obligations of or guaranteed by Eximbank, the United States of America or any
other governmental agency.
The Borrower will be required to make payments to the Trust in respect of
the Loan Notes held by the Trust on each Due Date, and the aggregate amount of
the scheduled payments of principal of and interest on the Loan Notes on each
Due Date will be sufficient to satisfy the scheduled payments of principal of
and interest on the Certificates on the corresponding Payment Date (which will
be the same day as the Due Date). The basic fees of the Trustee and the Servicer
will be prepaid by or on behalf of the Borrower at the time of issuance of the
Certificates and will not be payable from the scheduled payments on the Loan
Notes.
If the Borrower has failed to make the payment required under a Loan Note
within 30 calendar days after a Due Date, Eximbank will be obligated, upon its
receipt of a written demand for payment by the Trustee or the Servicer on behalf
and in the name of the Trustee on any Business Day subsequent to such 30-day
period (but only within 150 calendar days of such Due Date), and provided that
the other provisions of the Eximbank Guarantee have been satisfied (see "The
Eximbank Guarantee--Certain Restrictions Applicable to the Eximbank Guarantee"),
to pay to the Trust within five Business Days of such demand (unless Eximbank
determines that additional time is required due to the large number of claims
then pending at Eximbank, in which case fifteen (15) Business Days thereafter)
100% of all scheduled amounts of principal of and interest on such Loan Note due
and unpaid on such Due Date, together with interest payable on such overdue
amounts of principal and interest at the rate stated in the Eximbank Guarantee
from such Due Date to the actual date of payment by Eximbank. On each subsequent
Due Date, without a requirement of a demand on or notice by the Trustee or
Servicer upon the Borrower or Eximbank, Eximbank will directly and timely pay to
the Trust on such Due Date an amount equal to the amounts that were originally
scheduled to be due on such Due Date with respect to the Loan Notes held by the
Trust at the time of the initial demand for payment upon
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Eximbank. Additionally, if the Trustee or Servicer fails to timely make such
demand, there is forfeited the right to collect amounts on the Eximbank
Guarantee with respect to such Due Date, but such failure does not affect the
right to collect amounts on the Eximbank Guarantee with respect to any future
Due Date. Also, as a result of the delay imposed in eventually realizing the
initial amounts on the Eximbank Guarantee as described above, the Trust has
secured the benefit of the Liquidity Facility to provide an interim source of
funds for such initial payment default by the Borrower. See "The Liquidity
Facility" below. If amounts are drawn on the Liquidity Facility to satisfy the
initial payment default of the Borrower, then amounts subsequently realized in
respect of the initial demand on the Eximbank Guarantee will be used, first, to
reimburse the Liquidity Provider for its payment of such amounts. See
"Description of the Certificates--Distributions on the Certificates" and "--
Trust Accounts and Investment of Funds."
USE OF PROCEEDS
The proceeds from the sale by the Trust of the Certificates offered hereby
will be used by the Trustee to purchase the Loan Notes from the Company at a
purchase price equal to the principal amount thereof. The Company will use such
proceeds to pay the Seller the purchase price of the Loan Notes pursuant to a
Purchase Agreement between the Company and the Seller. See "The Loan Notes--The
Purchase Agreement". As described under "The Loan Notes," the Loan Notes
evidence loans made to the Borrower pursuant to the Guaranteed Loan Agreement
dated as of August 27, 1996 among the Borrower, ABN AMRO Bank N.V., as lender
(the "Lender") and Facility Agent, Wilmington Trust Company (as Security
Trustee) and Eximbank (the "Loan Agreement"). The amounts loaned to the Borrower
under the Loan Agreement were applied by the Borrower to finance the acquisition
of two Boeing 767-300 Aircraft and related engines (collectively, the
"Aircraft") and to pay the exposure fee to Eximbank for the Eximbank Guarantee
and to pay certain other fees related to the financing of the Aircraft.
THE EXIMBANK GUARANTEE
The Eximbank Guarantee
Eximbank, pursuant to the Eximbank Guarantee, will, with respect to each
Loan Note, guarantee payment of 100% of all scheduled amounts of principal of
and interest on each such Loan Note. The Eximbank Guarantee provides that after
Eximbank's endorsement of a guarantee legend on a Loan Note, the guarantee of
Eximbank will be a binding obligation of Eximbank, except as provided under
"Certain Restrictions Applicable to the Eximbank Guarantee" below, even if the
Borrower's obligations under a Loan Note are unenforceable. If any scheduled
amount of principal or interest due on a Loan Note on a Due Date is not paid
when due, subject to the terms of the Eximbank Guarantee, such amount will be
payable by Eximbank as provided below.
The Attorney General of the United States of America has stated in an
opinion dated September 30, 1966 that Eximbank's contractual liabilities
constitute general obligations of the United States of America backed by its
full faith and credit.
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Under the terms of the Eximbank Guarantee, if the Borrower fails to make a
scheduled payment of principal of or interest on a Loan Note within 30 calendar
days after a Due Date, Eximbank will be obligated, upon its receipt of a written
demand for payment by the Trustee (or the Servicer in its name and on its
behalf) on any Business Day subsequent to such 30-day period (but only within
150 calendar days of such Due Date), and provided that all other provisions of
the Eximbank Guarantee have been satisfied (see "Certain Restrictions Applicable
to the Eximbank Guarantee") (the satisfaction of such conditions, an "Eximbank
Payment Event"), to pay to the Trust within five Business Days of such demand
(unless Eximbank determines that additional time is required due to the large
number of claims then pending at Eximbank, in which case fifteen (15) Business
Days thereafter) 100% of all scheduled amounts of principal of and interest on
such Loan Note due and unpaid on such Due Date, together with interest payable
on such unpaid installment of principal and interest at the rate stated in the
Eximbank Guarantee from such Due Date to the actual date of payment by Eximbank.
On each subsequent Due Date following an Eximbank Payment Event, without a
requirement of a demand on or notice by the Trustee or the Servicer upon the
Borrower or Eximbank, Eximbank will directly and timely pay to the Trust on such
Due Date an amount equal to the amounts that were originally scheduled to be due
on such Due Date with respect to the Loan Notes held by the Trust at the time of
the initial demand for payment upon Eximbank. Any payments received under the
Eximbank Guarantee would include interest from and including the relevant Due
Date to but excluding the actual date of payment by Eximbank. For purposes of
the foregoing, "Business Day" means any day other than a Saturday or Sunday on
which banks are open for business in New York, New York and Chicago, Illinois.
If timely demands are not made upon Eximbank, the Borrower, the Lessee and the
Industrial and Commercial Bank of China by the Servicer on behalf and in the
name of the Trustee (or by the Trustee directly), with respect to any default in
payment of an amount of principal or interest due under a Loan Note, and such
failure renders the Eximbank Guarantee unenforceable with respect to such
payment, the Trust Agreement provides that the Trustee will be irrevocably
obligated to pay the amount of that defaulted payment to the Trust. The Servicer
has indemnified the Trustee for the consequences of its failure to perform under
the Servicing Agreement. Notwithstanding any such failure by the Trustee or
Servicer to make timely demand, such failure does not affect the right to make
demand for payment under the Eximbank Guarantee with respect to any future Due
Date.
Within five Business Days of an Eximbank Payment Event (unless Eximbank
determines that additional time is required due to the large number of claims
then pending at Eximbank, in which case fifteen (15) Business Days thereafter),
Eximbank will execute and deliver certificates to the Trust (the "Eximbank
Payment Certificates") corresponding to the then outstanding principal amount of
the Loan Notes held by the Trust at the time of the initial demand for payment
upon Eximbank (after giving effect to any initial Eximbank payments referred to
above), providing for the timely payment to the Trust by Eximbank on each
subsequent Due Date regardless of any acceleration of the Loan Notes, of an
amount equal to the amounts that were originally scheduled to be due on the Loan
Notes on such Due Date. On and after such date, the property of the Trust will
consist of the Eximbank Payment Certificates held by the Trust, which, according
to the opinion of the Attorney General of the United States of America, dated
September 30, 1966, will be direct obligations of Eximbank, backed by the full
faith and credit of the United States of America. If Eximbank accelerates the
Loan Notes pursuant to the Loan Agreement due to a non-
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payment default thereunder and the Borrower makes payment of the accelerated
amounts to Eximbank and any other amounts then due, the Loan Notes will be
assigned to Eximbank and Eximbank will deliver an Eximbank Payment Certificate
corresponding to the outstanding principal amount of the Loan Notes (after
giving effect to any principal payments made by the Borrower prior to the
issuance of such Eximbank Payment Certificate) to the Trust providing for the
timely payment to the Trust of the amounts that were originally scheduled to be
due on each Due Date. The occurrence of these events will not, however, result
in acceleration of the Certificates.
If a total loss occurs with respect to any Aircraft (an "Event of Loss")
and such Aircraft is not replaced, insurance and certain other moneys with
respect to such Aircraft will be paid to Eximbank in accordance with the terms
of the related Aircraft lease. The Loan Note with respect to such Aircraft will
then be assigned to Eximbank and Eximbank will deliver an Eximbank Payment
Certificate corresponding to the outstanding principal amount of such Loan Note
(after giving effect to any principal payments made by the Borrower prior to the
issuance of such Eximbank Payment Certificates) to the Trust, providing for the
timely payment to the Trust of the amounts that were originally scheduled to be
due on each Due Date. Similarly, if the Lessee properly exercises its right to
terminate the lease relating to an Aircraft following a determination by the
Lessee that such Aircraft is surplus to its requirements or economically
obsolete, the Loan Note relating to such Aircraft and affected by such early
lease termination shall be assigned by the Trustee to Eximbank, and Eximbank
will deliver to the Trust an Eximbank Payment Certificate in respect of such
Loan Note requiring Eximbank to thereafter make payments directly to the Trust
on each subsequent Due Date of the amounts that were originally scheduled to be
due on such Due Date with respect to such Loan Note.
Certain Restrictions Applicable to the Eximbank Guarantee
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make a payment of amounts due on a Due Date which were not paid by or on behalf
of the Borrower on such Due Date if the Trustee (or the Servicer in its name and
on its behalf) fails to make a written demand for payment upon Eximbank within
150 calendar days following such Due Date (but at least 30 calendar days after
such date) and a written demand for payment upon the Borrower and the Lessee
with respect to the applicable Loan Note at least 15 calendar days prior to such
demand upon Eximbank. In addition, it is a condition of the Eximbank Guarantee
that a demand for payment must be made on the Industrial and Commercial Bank of
China, on behalf of Eximbank, at least 15 calendar days prior to the date on
which demand is made on Eximbank for payment under the Eximbank Guarantee.
Eximbank requires this prior demand on the Industrial and Commercial Bank of
China because the Industrial and Commercial Bank of China has guaranteed certain
obligations of the Lessee to Eximbank. Accordingly, the Servicing Agreement
requires the Servicer, on behalf and in the name of the Trustee, in the case of
a failure by the Borrower to make payment when due of the full amount payable on
a Loan Note, to make a timely demand upon Eximbank, the Borrower, the Lessee and
the Industrial and Commercial Bank of China.
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The Trustee is obligated pursuant to the Trust Agreement to make timely
demands on Eximbank, the Borrower, the Lessee and the Industrial and Commercial
Bank of China in the event the Servicer fails to make such demands.
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make any payment with respect to a Loan Note held by the Trust unless and until
the Trustee has assigned to Eximbank all of the Trust's rights and interests in
and to the affected Loan Note held by the Trust and the Loan Agreement, and
delivered to Eximbank such Loan Note. Accordingly, both the Eximbank Guarantee
and the Trust Agreement provide that the Trustee is obligated to assign the
Trust's rights and interests in the affected Loan Note to Eximbank in the event
a payment under the Loan Note is not timely received. Simultaneously with the
fulfillment of these requirements by the Trust, Eximbank will, if all other
provisions of the Eximbank Guarantee have been met, issue to the Trustee the
corresponding Eximbank Payment Certificates whereupon the Certificates will
evidence fractional undivided interests in these Eximbank Payment Certificates
rather than the Loan Notes for which such Eximbank Payment Certificates were
exchanged.
In addition, the Eximbank Guarantee provides that it will cease to be
effective if the Trustee or any holder of an interest in the Loan Notes agrees
to any amendment of or any deviation from any Loan Note, any Lease Agreement
relating to the Aircraft or the Loan Agreement without Eximbank's prior written
consent. The Trust Agreement therefore prohibits the Trustee from agreeing to
any such amendment or deviation without Eximbank's prior written consent. See
"Description of the Certificates--Events of Default, Enforcement of Loan Notes
and Eximbank Guarantee" and "--Amendments".
Eximbank
Eximbank, an independent agency of the government of the United States of
America, corporate in form, all of the capital stock of which is held by the
Secretary of the Treasury, was founded in 1934 and operates under authority
contained in the Export-Import Bank Act of 1945, as amended (12 U.S.C. Section
635 et seq.) (the "EXIM Act"). Eximbank's purpose is to aid in financing exports
and imports of goods and services between the United States of America and
foreign countries and, in furtherance thereof, the EXIM Act vests broad banking
powers in Eximbank, including the power to borrow and lend, to guarantee and
insure loans, and to purchase or guarantee negotiable instruments, evidences of
indebtedness and other securities. Eximbank's authority to exercise its
functions has been limited to specified periods, which have been extended by
Congressional action from time to time. The EXIM Act presently provides that the
authority empowering Eximbank to continue to exercise its functions expires on
September 30, 1997. Although the current authority under the EXIM Act to provide
loans and guarantees in support of import and export activities expires on
September 30, 1997, Eximbank is permitted to incur prior thereto liability as a
guarantor of obligations maturing subsequent to that date without limitation as
to the length of maturity of such obligations or the amount guaranteed.
The Attorney General of the United States of America has stated in an opinion
dated September 30, 1966 that Eximbank's contractual liabilities constitute
general obligations of
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the United States of America has stated in an opinion dated September 30, 1966
that Eximbank's contractual liabilities constitute general obligations of the
United States of America backed by its full faith and credit and that persons in
whose favor Eximbank has incurred contractual liabilities in accordance with law
"have acquired valid general obligations of the United States, and are therefore
in a position to reach beyond Eximbank and its assets to the United States for a
source of payment, if necessary." The Eximbank Guarantee is a guarantee of
payment of amounts due on the Loan Notes, and is not in favor of the
Certificateholders nor a guarantee of payment of amounts due on the
Certificates.
THE LOAN NOTES
On the date of initial issuance of the Certificates, the Company will,
pursuant to a Purchase Agreement (the "Purchase Agreement"), acquire from the
Seller two Loan Notes in the aggregate principal amount of $101,672,199.28. Each
Loan Note is a direct obligation of the Borrower and such Loan Note evidences a
loan made to the Borrower by the Seller under the Loan Agreement to finance up
to 85% of the purchase by the Borrower of the respective Aircraft, to finance
the exposure fee payable to Eximbank and to finance certain other fees relating
to the financing of the Aircraft. The Loan Notes will be secured by a mortgage
on the Aircraft.
The Loan Notes held by the Trust will amortize in 24 installments of
principal, payable on each Due Date. The Loan Notes held by the Trust will bear
interest at a rate equal to the interest rate on the Certificates. The aggregate
scheduled amounts of principal and interest payable on the Loan Notes held by
the Trust on each Due Date will be sufficient to provide for the scheduled
payments on the Certificates on the corresponding Payment Date. Each Due Date is
the same day as the corresponding Payment Date.
Payments of principal of and interest on the Loan Notes held by the Trust
are due from the Borrower to the Trust semi-annually on each February 15 and
August 15, commencing February 15, 1997, and ending on August 15, 2008; provided
that if any such date is not a Business Day, payment will be made on the next
succeeding Business Day unless such non-Business Day is August 15, 2008
whereupon such payment will be made on the immediately preceding Business Day.
Under the Loan Agreement, a "Business Day" is any day other than a Saturday or
Sunday on which banks are open for business in New York, New York. Interest on
the Loan Notes is computed on the basis of actual days elapsed in a year of 360
days consisting of twelve 30-day months.
All scheduled payments of principal and interest with respect to each Loan
Note will be payable in lawful money of the United States of America without
deduction or withholding for or on account of any present or future taxes levied
or imposed on such payments, unless the Borrower is required to make such a
payment subject to the deduction or withholding of tax. If any taxes are so
required to be deducted or withheld, the amounts so payable by the Borrower to
the Trust will be increased in accordance with the Loan Agreement to the extent
necessary to yield to the Trust (after payment of all such taxes), amounts equal
to the full amounts that would have been received pursuant to the Loan Notes in
the absence of such taxes.
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PURCHASE AGREEMENT
Pursuant to the Purchase Agreement, the Seller will sell and assign the
Loan Notes (and the related rights under the Loan Agreement and Eximbank
Guarantee) to, or at the direction of, or upon the order of the Company, without
recourse, representation or warranty, except the representation that the
Purchase Agreement has been duly authorized, executed and delivered and
constitutes an enforceable obligation of the Seller and that the Seller owns the
Loan Notes free and clear of all liens.
THE LIQUIDITY FACILITY
The Trust will benefit from an Irrevocable Revolving Credit Agreement,
dated as of January 1, 1995 among ABN AMRO Bank N.V. (the "Liquidity Provider"),
the Company, the Trustee and the Servicer (the "Liquidity Facility"). The
Liquidity Facility will be in an amount not less than one payment of principal
and the maximum amount of interest due on the Loan Notes on any Due Date. The
Liquidity Facility may be drawn on by the Servicer in the event that the
Borrower defaults in its obligation to make any required payment of principal
and interest on any Due Date. Under the Servicing Agreement, the Servicer has
agreed to make such drawing on or before 2:00 p.m., New York City time on any
Due Date on which the payment due from the Borrower has not been received.
Pursuant to the Liquidity Facility, the Liquidity Provider is obligated to pay
to the Servicer the amount demanded at or prior to 3:00 p.m., New York City time
on the date the demand is made by the Servicer. The Liquidity Provider will be
entitled to receive reimbursement (with interest thereon) for any payment made
under the Liquidity Facility from the amount eventually paid by Eximbank under
the Eximbank Guarantee in respect of such Borrower default. The Liquidity
Provider will receive a facility fee, which shall be prepaid on the date of
issuance of the Certificates.
The Liquidity Facility expires on December 30, 1996 (the "Expiration
Date"). In the event that (i) on or prior to the fifth Business Day prior to the
Expiration Date or (ii) within 15 days of any downgrade or withdrawal of the
short-term unsecured debt rating of the Liquidity Provider, the Liquidity
Provider does not provide to the Trust a replacement irrevocable liquidity
facility (a "Replacement Liquidity Facility") substantially identical to the
Liquidity Facility (and consented to by Eximbank) and issued by an institution
with a short-term unsecured debt rating of A-1+ by Standard & Poor's, the
Servicer shall make a demand under the Liquidity Facility for the full amount
available thereunder. The proceeds of any such demand shall be held in a
separate trust account and shall be invested by the Trustee at the direction of
the Company only in certain highly-rated permitted investments. Such funds will
be available to be withdrawn from such account under the same circumstances as
the Servicer was permitted to make demands on the Liquidity Facility. In such a
case, the Liquidity Provider would be entitled to reimbursement in respect of
withdrawals made from such account in the same manner as with respect to amounts
paid under the Liquidity Facility (other than amounts paid thereunder in
connection with the expiration thereof as described above). In the event that
the Liquidity Provider subsequently delivers a Replacement Liquidity Facility,
the Trustee is to release any proceeds of the demand on the original Liquidity
Facility to the Liquidity Provider.
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The Liquidity Provider is an affiliate of the Underwriter and the Trustee.
THE TRUST
U.S. Trade Trust Series 1996-A (the "Trust") will be formed for the purpose
of acquiring and holding the Loan Notes and issuing the Certificates. The Trust
will be formed pursuant to a Supplemental Trust Agreement dated as of October 1,
1996 incorporating therein the Standard Terms and Conditions of Trust Agreement
dated as of January 1, 1995 (as the same may be amended from time to time, the
"Trust Agreement") pursuant to which the Company is entitled to cause the
issuance of the Certificates. LaSalle National Bank (the "Trustee"), serves as
Trustee under the Trust Agreement on behalf of the Certificateholders. The Trust
will have no material assets other than the Loan Notes, payments in respect
thereof pending distribution and the rights under the Eximbank Guarantee, the
rights under the Liquidity Facility and, if an Eximbank Payment Event occurs or
certain other specified events occur, the related Eximbank Payment Certificates.
THE TRUSTEE
LaSalle National Bank will serve as Trustee. Its corporate trust office is
located at 135 S. LaSalle Street, Chicago, Illinois 60603 and its telephone
number is 312/904-7326. The Trustee is an affiliate of the Underwriter, the
Seller, the Liquidity Provider and the Servicer.
THE BORROWER AND THE LESSEE
YA96A Limited (the "Borrower") is a company incorporated under the laws of
the Cayman Islands. The Borrower has leased the Aircraft to China Yunnan
Airlines (the "Lessee"), a state-owned legal entity organized and existing under
applicable laws and decrees of the People's Republic of China and engaged in the
commercial air transportation of passengers and cargo. The Loan Notes are not
direct obligations of, and are not guaranteed by, the Lessee. The Borrower does
not have any material assets other than the Aircraft, which will constitute
collateral for the Loan Notes, and its rights under its lease agreements with
the Lessee and related documentation. The Certificates represent undivided
fractional interests in the Loan Notes held by the Trust, but the Certificates
are not direct obligations of, and are not guaranteed by, the Borrower, the
Lessee, Eximbank, the United States of America, the Industrial and Commercial
Bank of China or the government of the People's Republic of China.
THE SELLER AND THE SERVICER
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, is
the originator and Seller of the Loan Notes. ABN AMRO Bank N.V. will also serve
as the Servicer of the Loan Notes held in the Trust. The Seller and the Servicer
are affiliates of the Underwriter and the Trustee.
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THE COMPANY
The Company, U.S. Trade Funding Corp., is a corporation organized under the
laws of the State of Delaware. The Company will convey or cause the conveyance
of the Loan Notes purchased from the Seller to the Trust. The Company is a
wholly-owned subsidiary of Securitization Holding Company, L.L.C., a limited
liability company organized under the laws of the State of Delaware. The
Certificateholders will have no recourse against the Company's directors,
officers, stockholders, affiliates or employees, provided that nothing shall
limit or otherwise affect a Certificateholder's rights, if any, against any of
the foregoing under federal securities laws. See "UNDERWRITING."
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued under the Trust Agreement pursuant To which
The Trust is entitled to issue or cause the issuance of the certificates. The
following summary of the Certificates does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all provisions of
the Loan Notes, the Purchase Agreement, the Eximbank Guarantee, the Servicing
Agreement and the Trust Agreement.
PAYMENT ON THE CERTIFICATES
Interest on the Certificates will accrue from and including the date set
forth on the cover page of this Prospectus and will be payable semi-annually on
each February 15 and August 15 (or the next succeeding Business Day if such date
is not a Business Day unless such non-Business Day is August 15, 2008 whereupon
such payment shall be made on the immediately preceding Business Day),
commencing on February 15, 1997 and ending on August 15, 2008, to the persons in
whose name the Certificates are registered on the fifteenth day preceding the
next Payment Date (each, a "Record Date"). Interest on the Certificates will be
computed on the basis of a year of 360 days consisting of twelve 30-day months.
Payments of principal on the Certificates will be made in 24 semi-annual
installments, on each Payment Date, commencing February 15, 1997 to the persons
in whose names the Certificates are registered on the preceding Record Date.
A schedule of distributions on the Certificates is attached as Annex A.
The Certificates will not be subject to prepayment or acceleration under
any circumstances.
DISTRIBUTIONS ON THE CERTIFICATES
On each Payment Date, the Trustee is obligated to apply all amounts in the
Distribution Account (as defined below), after making any required reimbursement
to the Liquidity Provider for prior drawings to pay Certificateholders, so as to
make the
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distribution of any amounts due to the Certificateholders on such date, with no
priority of payments due on any one Certificate over those due on any other
Certificate.
Such amounts in the Distribution Account on any Payment Date will be
distributed to the Certificateholders on a pro rata basis. If payments in
respect of any Certificates are not made when due for any reason,
Certificateholders are entitled to be paid interest on overdue amounts of
principal and interest at the rate set forth on the cover page of this
Prospectus.
"Distribution Account" means the special purpose non-interest bearing trust
account established by the Trustee for the benefit of the Certificateholders,
for receipt of amounts transferred from the Revenue Account to be distributed on
the current Payment Date. See "Trust Accounts and Investment of Funds."
BOOK-ENTRY REGISTRATION
The Certificates will be issued in the form of a single global Certificate
in the aggregate amount of this issue that will be deposited with The Depository
Trust Company ("DTC"), New York, New York, and registered in the name of a
nominee of DTC. The Certificates will be available only in book entry form.
Cede & Co., as nominee for DTC, will be the registered holder of the global
Certificate. Except under the limited circumstances described below, no
Certificateholder will be entitled to receive a physical certificate
representing such Certificateholder's interest in the Certificates, which may
impair the ability of Certificateholders to transfer beneficial interests in the
related global Certificate.
The global Certificate will be exchangeable for definitive Certificates
registered in the name of, and a transfer of the global Certificate may be
registered to, any person other than DTC or its nominee, only if:
(a) DTC notifies the Trustee that it is unwilling or unable to
continue as Depository for such global Certificate or if at any time DTC
ceases to be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and no successor securities depository is designated
as provided in the Trust Agreement; or
(b) the Trustee (with the concurrence of the Company (or its
designee) and Eximbank), and upon notice to DTC, remove DTC as securities
depository for the Certificate and no successor securities depository is
designated as provided in the Trust Agreement.
Owners of beneficial interests in the global Certificate will not be
considered to be the holders thereof for any purpose under the Trust Agreement.
All references herein to actions by Certificateholders refer to actions taken by
DTC upon instructions from its participants (the "DTC Participants"), and all
references herein to distributions, notices, reports and statements to
Certificateholders refer to distributions, notices, reports and statements to
Cede & Co., as the registered holder of the global Certificate for distribution
to Certificateholders in accordance with DTC procedures. Accordingly, each
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Certificateholder must rely on the procedures of DTC and, if such person is not
a DTC Participant, on the procedures of the DTC Participant through which such
person owns its interest, to exercise any rights of a holder under the Trust
Agreement. None of the Underwriter, the Seller, the Servicer, the Trust, the
Trustee, Eximbank, the Company, the Lessee, the Borrower, nor any agent of such
parties will have any responsibility or liability for any aspect of DTC's
records or any DTC Participant's records relating to or payments made on account
of beneficial interests in the global Certificate or for maintaining,
supervising or reviewing any of DTC's records or any DTC Participant's records
relating to such beneficial interests.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking corporation" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC was created to hold securities for DTC Participants
and to facilitate the clearance and settlement of securities transactions, such
as transfers and pledges, between DTC Participants through electronic
computerized book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of certificates. DTC Participants
include the Underwriter, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. Indirect access to the
DTC system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and DTC Participants are on file with the Commission.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal of and interest on
the Certificates. DTC Participants and Indirect Participants with which
Certificateholders have accounts with respect to the Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificateholders.
Purchases of Certificates under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Certificates on DTC's
records. The ownership interest of each actual purchaser of each Certificate
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Certificates are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in
Certificates, except in the event that use of the book-entry system for the
Certificates is discontinued.
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To facilitate subsequent transfers, all Certificates deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Certificates with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Certificates; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Certificates are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Principal and interest payments on the Certificates will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Company or the Trustee,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the responsibility of
the Trust, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
Because DTC can act only on behalf of DTC Participants, which in turn act
on behalf of Indirect Participants and certain banks, the ability of a
Certificateholder to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of physical certificates for such
Certificates.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Certificates. Under its usual procedures, DTC mails an Omnibus Proxy with
respect to a series of Certificates to the Trustee as soon as possible after a
record date for a consent or vote. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Certificates are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
None of the Underwriter, the Trust, the Trustee, Eximbank, the Company, the
Lessee, the Borrower, nor their respective affiliates, can give any assurances
that DTC will perform or continue to perform the procedures discussed above, and
such procedures may be discontinued at any time.
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The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Trustee believe to be
reliable, but neither the Company nor the Trustee takes responsibility for the
accuracy thereof.
EVENTS OF DEFAULT, ENFORCEMENT OF LOAN NOTES AND EXIMBANK GUARANTEE
If the Borrower fails to pay on a Due Date all amounts due from the
Borrower in respect of the Loan Notes on such Due Date, the Servicing Agreement
provides that the Servicer, on behalf and in the name of the Trustee (and in
addition to making required drawings on the Liquidity Facility), shall send a
payment demand to the Borrower, the Lessee and, on behalf of Eximbank, to the
Industrial and Commercial Bank of China (with copies thereof to Eximbank) on or
prior to the time specified in the Servicing Agreement, setting forth the
amounts due on the Loan Notes on such Due Date and the amounts then due and
unpaid by the Borrower. If any amounts due in respect of the Loan Notes remain
unpaid on the 30th calendar day after such Due Date, the Servicing Agreement
requires the Servicer, on behalf and in the name of the Trustee, to file with
and deliver to Eximbank on such 30th calendar day (or the first following
Business Day) a payment demand setting forth such amounts due and unpaid by the
Borrower and demanding payment from Eximbank under the Eximbank Guarantee. If
timely demands are not made upon Eximbank, the Borrower, the Lessee and the
Industrial and Commercial Bank of China by the Servicer on behalf and in the
name of the Trustee (or by the Trustee directly), with respect to any default in
payment of an amount of principal or interest due under a Loan Note, and such
failure renders the Eximbank Guarantee unenforceable with respect to such
payment, the Trust Agreement provides that the Trustee will be irrevocably
obligated to pay the amount of that defaulted payment to the Trust. The Servicer
has indemnified the Trustee for the consequences of its failure to perform under
the Servicing Agreement. Under the Eximbank Guarantee, Eximbank, upon receipt of
a written demand for payment and satisfaction of all other provisions of the
Eximbank Guarantee (see "THE EXIMBANK GUARANTEE--Certain Restrictions Applicable
to the Eximbank Guarantee"), will within five Business Days of such demand
(unless Eximbank determines that additional time is required due to the large
number of claims then pending at Eximbank, in which case fifteen (15) Business
Days thereafter) make payment of all scheduled amounts of principal of and
interest on the Loan Notes due and unpaid on the Due Date, together with
interest payable on such overdue amounts of principal and interest at the rate
stated in the Eximbank Guarantee from the Due Date to the actual date of payment
by Eximbank. In such event, the Trust Agreement provides that the Trustee is
obligated to assign all of the right, title and interest of the Trust in and to
the defaulted Loan Notes to Eximbank. See "THE EXIMBANK GUARANTEE" and "THE LOAN
NOTES."
Following an Eximbank Payment Event, the Eximbank Guarantee provides that
Eximbank on each subsequent Due Date will directly and timely pay to the Trust
on such Due Date an amount equal to the amounts that were originally scheduled
to be due on such Due Date with respect to the Loan Notes held by the Trust at
the time of the initial demand for payment upon Eximbank, without a requirement
of a demand on or notice to the Borrower, the Lessee or Eximbank for such
payment. Within five Business Days of an Eximbank Payment Event (unless Eximbank
determines that additional time is required due to the large number of claims
then pending at Eximbank, in which case fifteen (15) Business
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Days thereafter), Eximbank will execute and deliver Eximbank Payment
Certificates to the Trust corresponding to the then outstanding principal amount
of the Loan Notes held by the Trust at the time of the initial demand for
payment upon Eximbank providing for timely payment to the Trust by Eximbank on
each subsequent Due Date of an amount equal to the amounts that were originally
scheduled to be due on such Due Date with respect to the Loan Notes. Under the
terms of the Eximbank Guarantee, Eximbank will not be required to make any
payment with respect to a Loan Note held by the Trust unless and until the
Trustee has assigned to Eximbank all of such Trust's rights and interests in and
to the affected Loan Note held by the Trust and the Loan Agreement, and
delivered to Eximbank such Loan Note. Simultaneously with the fulfillment of
these requirements by the Trust, Eximbank will, if all other provisions of the
Eximbank Guarantee have been met, issue to the Trustee the corresponding
Eximbank Payment Certificates whereupon the Certificates will evidence
fractional undivided interests in the Eximbank Payment Certificates rather than
the Loan Notes for which such Eximbank Payment Certificates were exchanged. On
and after such date, the property of the Trust will consist of the Eximbank
Payment Certificates held by the Trustee for the Trust. The Eximbank Payment
Certificates will be direct obligations of Eximbank, backed by the full faith
and credit of the United States of America.
Upon the occurrence of a payment default prior to an Eximbank Payment
Event, the Trustee is not entitled to exercise any remedies against the
Borrower, the Aircraft, the Lessee or the Industrial and Commercial Bank of
China with respect to a defaulted Loan Note on behalf of the Trust and is not
authorized or entitled to accelerate the Loan Notes. Subsequent to the
occurrence of the Eximbank Payment Event, the Trustee will have the right,
subject to the terms of the Eximbank Guarantee, to proceed against Eximbank for
payments due under the related Eximbank Payment Certificates held by the Trust.
The Trustee is required to take all necessary action, as permitted or
required by the Trust Agreement, the Eximbank Guarantee and applicable law, or
to cause the Servicer to take such action, (i) to enforce payments due from
Eximbank under the Eximbank Guarantee, (ii) to enforce the Liquidity Facility
against the Liquidity Provider, and (iii) to apply amounts received in
accordance with the Trust Agreement for the benefit of the Certificateholders.
TRUST ACCOUNTS AND INVESTMENT OF FUNDS
Contemporaneously with the execution of the Trust Agreement, the Trustee
shall establish a special purpose demand deposit account at its corporate office
in the name of the Trustee for its sole and exclusive benefit (the "Revenue
Account"). Pursuant to the Servicing Agreement, the Servicer shall, on or before
the Servicer Remittance Date for each period between Payment Dates (each, a
"Collection Period"), remit to the Revenue Account all collections received by
the Servicer during such Collection Period with respect to the Loans and shall,
concurrently therewith, deliver to the Trustee the Servicer Remittance Report.
"Servicer Remittance Report" means the report prepared by the Servicer before
each Payment Date sent to the Trustee directing the Trustee to deposit funds
collected by the Servicer on the Loan Notes (or under the Liquidity Facility or
Eximbank Guarantee) into certain Trust Accounts, and specifying the amount of
such funds. "Servicer Remittance Date" means the date on which such Servicer
Remittance Report, and all corresponding
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funds collected during such Collection Period are required to be sent to the
Trustee. The Servicer shall also deposit to the Revenue Account the proceeds, if
any, received from a draw upon the Liquidity Facility under the Servicing
Agreement. The Company shall have no legal, equitable or beneficial interest in
the Revenue Account.
Contemporaneously with the execution of the Trust Agreement, the Trustee
shall establish a special purpose trust account at its corporate trust office in
the name of the Trustee for the benefit of the Certificateholders, for receipt
of amounts transferred from the Revenue Account (the "Distribution Account").
Funds in the Distribution Account shall not be commingled with any other monies.
All funds deposited from time to time in the Distribution Account pursuant to
the Trust Agreement shall be held by the Trustee as part of the Trust Estate.
After remitting required payments to the Revenue Account, the Trustee shall
then transfer to the Distribution Account amounts remaining in the Revenue
Account (other than amounts representing payments of Loans due after the Due
Date coinciding with such Payment Date).
The Trustee shall, concurrently with the establishment of the Distribution
Account establish, as subaccounts of the Distribution Account, the Payment
Accounts. The Trustee shall withdraw from time to time from the Distribution
Account funds equal to the amount required to be distributed to the Liquidity
Provider to reimburse the Liquidity Provider for any Advance. On each Payment
Date, the Trustee shall withdraw from the Distribution Account funds equal to
the Interest Amount as reflected on the Servicer Remittance Report and shall
deposit such funds into the identified Payment Accounts in accordance with the
instructions contained in the Servicer Remittance Report. In addition, on each
Payment Date, the Trustee shall withdraw from the Distribution Account funds
equal to the Principal Amount as reflected on the Servicer Remittance Report and
shall deposit such funds into the identified Payment Accounts in accordance with
the instructions contained in the Servicer Remittance Report.
REPORTS TO CERTIFICATEHOLDERS
At least two Business Days prior to each Payment Date, the Servicer shall
deliver to the Trustee, the Company and S&P, and on each Payment Date the
Trustee shall furnish to each Holder (provided that the Trustee has received
such reports from the Servicer), the Monthly Servicer Report in the form
provided in Exhibit A to the Servicing Agreement with respect to activity in the
completed Collection Period immediately preceding the date on which such report
is to be provided.
On or before 120 days after the end of each fiscal year of the Servicer,
the Servicer shall deliver to the Company, the Trustee, each Holder and S&P an
Officer's Certificate to the effect that such Servicer has examined certain
documents and records relating to the servicing of the Loans under the Trust
Agreement and the related Servicing Agreement and that, on the basis of such
examination, nothing came to its attention which caused it to believe that the
Servicer has accounted for matters regarding the Loans, otherwise than in
accordance with the Trust Agreement and the related Servicing Agreement, except
for such
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insignificant exceptions or errors on records that, in the opinion of such
Servicer, it is not required to report.
The Servicer shall cause to be maintained books and records showing, and
shall report to the Trustee at least two Business Days prior to each Payment
Date, the information needed for the following calculations: (1) the amount of
principal and interest required to be distributed to Certificateholders on each
Payment Date, (2) the aggregate amount of interest accrued on the Loan Notes for
the period from the preceding Payment Date until the day preceding the related
Payment Date, (3) the unpaid principal amount of the Loan Notes after giving
effect to the payments to be made on such Payment Date, and (4) such other
information which the Trustee or any Holder of the Certificates may reasonably
request. Such books and records will be available for inspection by the Trustee,
the Company and any Holder upon reasonable notice at any time during normal
business hours.
Copies of all statements and reports furnished by the Trustee may be
obtained by Certificateholders by delivering a written request to the Trustee at
LaSalle National Bank, 135 LaSalle Street, Chicago, Illinois 60603, Attention:
Asset Backed Securities Trust Services or by telephoning the Trustee at 312/904-
7326.
ADDITIONAL TRUSTS
It is anticipated that the Company will establish additional Trusts from
time to time by means of a Supplemental Trust Agreement incorporating the
Standard Terms and Conditions of Trust Agreement for each such additional Trust.
Any Trust created by means of a Supplemental Trust Agreement incorporating the
Standard Terms and Conditions of Trust Agreement would issue a separate series
of certificates, which would represent undivided beneficial interests only in
the separate Trust created by the Supplemental Trust Agreement. A Trust so
created would acquire from the Company notes issued by a borrower and guaranteed
by Eximbank; however, the assets of such Trust would be held separate from the
assets of each other Trust and under no circumstances would holders of
Certificates of a particular series be entitled to payments from or attributable
to the assets of a Trust other than the Trust which issued such series of
Certificates.
AMENDMENTS
The Trust Agreement may be amended from time to time by the Trustee and the
Company, without the consent of any of the Certificateholders; provided that
such action will not cause a downgrading of the rating on the Certificates: (1)
to correct or amplify the description of any property at any time subject to the
lien of the Trust Agreement, or better to assure, convey and confirm unto the
Trustee any property subject or required to be subjected to the lien of the
Trust Agreement, or to subject to the lien of the Trust Agreement additional
property; or (2) to evidence the succession of another Person to the Company,
and the assumption by such successor of the covenants of the Company in the
Trust Agreement and contained in the Certificates; or (3) to add to the
covenants of the Company, for the benefit of the Certificateholders, or to
surrender any right or power in the Trust Agreement conferred upon the Company;
or (4) to convey, transfer, assign, mortgage or pledge any property to or with
the Trustee; or (5) to cure any ambiguity, to correct or
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supplement any provision in the Trust Agreement which may be defective or
inconsistent with any other provisions with respect to matters or questions
arising under the Trust Agreement, provided that such action shall not adversely
affect the interests of the Certificateholders; or (6) to evidence the
succession of the Trustee; or (7) to add to any events of default or events of
termination (to the extent applicable).
The Trust Agreement may also be amended from time to time by the Trustee
and the Company, with the consent of the Certificateholders of not less than 66-
2/3% in principal amount of the outstanding Certificates for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Trust Agreement or of modifying in any manner the rights of
such Certificateholders, provided, however, that no such amendment shall,
without the consent of the holders of all outstanding Certificates:
(1) change the stated maturity of the Certificates or the due date of
any scheduled Distribution, any installment of principal of, or any
installment of interest on, any Certificates, or reduce the scheduled
amount of any Distribution, or the principal amount thereof or the interest
rate or change any place of payment where, or the coin or currency in
which, any Certificates or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment; or
(2) reduce the percentage interest or principal amount of the
outstanding Certificates, the consent of the Certificateholders of which is
required for any such supplemental trust agreement, or the consent of the
Certificateholders of which is required for any waiver of compliance with
certain provisions of the Trust Agreement or their consequences; or
(3) impair or adversely affect the Trust Estate except as otherwise
permitted by the Trust Agreement; or
(4) modify or alter certain definitions or liability provisions
related to the Trustee; or
(5) modify any of the provisions of the Trust Agreement Section
governing supplemental trust agreements, except to increase the percentage
of Certificateholders required for any modification or wavier or to provide
that certain other provisions of the Trust Agreement cannot be modified or
waived without the consent of the Holder of all outstanding Certificates
affected thereby; or
(6) permit the creation of any lien ranking prior to or on a parity
with the lien of the Trust Agreement with respect to any part of the Trust
Estate or terminate the lien of the Trust Agreement on any property at any
time subject hereto or deprive the Holder of any Certificates of the
security afforded by the lien of the Trust Agreement; or
(7) modify certain provisions relating to events of default or events
of termination and the sale of the Trust Estate.
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Promptly after the execution by the Company and the Trustee of any
supplemental trust agreement, the Company shall mail to the Certificateholders,
the Borrower, Eximbank and S&P a copy of such supplemental trust agreement.
No amendment, modification, supplement or rescission to or of, or waiver of
rights under, the Trust Agreement which materially adversely affects the
Borrower or Eximbank will be effective as against such person unless approved in
writing by such person.
THE TRUSTEE
LaSalle National Bank, the Trustee under the Trust Agreement, currently has
its Corporate Trust Office at 135 S. LaSalle Street, Chicago, Illinois 60603,
Attention: Asset Backed Securities Trust Services. The Trustee is obligated to
provide each Certificateholder with prompt written notice of any change in the
address of such office.
The Trustee may resign at any time by giving 30 days' written notice
thereof to the Company, the Borrower, Eximbank and to each Certificateholder.
The Trustee may be removed at any time by written action of Certificateholders
holding at least 66-2/3% in principal amount of the outstanding Certificates
upon 30 days' notice to the Trustee.
If at any time (i) the Trustee shall cease to be eligible to perform its
duties and shall fail to resign after written request therefor by any
Certificateholder, or (ii) the Trustee shall become incapable of acting 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, in any such case, any Certificateholder who
has been a registered Certificateholder for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause with
respect to the Certificates, the Company by a Board Resolution shall promptly
appoint a successor Trustee or a Trustee with respect to the Certificates. If no
successor Trustee shall have been so appointed by the Company within 30 days of
notice of removal or resignation and shall have accepted appointment in the
manner provided, the Company, Trustee or any Certificateholder who has been a
registered Certificateholder for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Certificates. The
Company shall give notice in the manner provided in the Trust Agreement of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee with respect to the Certificates. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office. Any
resignation or removal of a Trustee and appointment of a successor Trustee does
not become effective until acceptance of the appointment by the successor
Trustee and transfer of the property of the Trust to such successor Trustee. See
"DUTIES AND IMMUNITIES OF THE TRUSTEE."
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DUTIES AND IMMUNITIES OF THE TRUSTEE
The Trustee assumes no responsibility or liability for, and makes no
representations as to, the validity or sufficiency of, or as to the accuracy of
the recitals, if any, set forth in the Certificates (other than the
authentication thereof), the Loan Notes, the Eximbank Guarantee, the Purchase
Agreement, the Underwriting Agreement or the accuracy of the recitals in the
Trust Agreement.
The Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the Trust Agreement and no implied covenants or
obligations shall be read into the Trust Agreement against the Trustee; and in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the trust of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of the Trust Agreement; but in the case of any such
certificates or opinions which by any provision of the Trust Agreement are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same and to determine whether or not they conform to the
requirements of the Trust Agreement. Subject to the foregoing sentence, the
Trustee will be liable for its own gross negligent action, its own gross
negligent failure to act or its own willful misconduct except for (i) good faith
errors in judgment (provided the Trustee was not negligent in ascertaining the
pertinent facts), (ii) actions taken or omitted in good faith pursuant to the
direction of Certificateholders as described below and (iii) no provision of the
Trust Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. If timely demands are
not made upon Eximbank, the Borrower, the Lessee and the Industrial and
Commercial Bank of China by the Servicer on behalf and in the name of the
Trustee (or by the Trustee directly), with respect to any default in payment of
an amount of principal or interest due under a Loan Note, and such failure
renders the Eximbank Guarantee unenforceable with respect to such payment, the
Trust Agreement provides that the Trustee will be irrevocably obligated to pay
the amount of that defaulted payment to the Trust. The Servicer has indemnified
the Trustee for the consequences of its failure to perform under the Servicing
Agreement in this regard.
Subject to the foregoing paragraph and the next sentence below, if no
payment default has occurred, the Trustee will have no responsibility or
liability for or with respect to the enforcement of the Loan Notes, of the
Liquidity Facility or of the Eximbank Guarantee, and, if no default under an
Eximbank Payment Certificate has occurred, the Trustee will have no
responsibility or liability for or with respect to the enforcement of the
Eximbank Payment Certificates. Except as described in the preceding paragraph
and except for such liability as is finally determined to have resulted from the
Trustee's gross negligence, willful misconduct or bad faith, no recourse may be
had for any claim based on any provision of the Trust Agreement, the
Certificates, the Underwriting Agreement, the Loan Notes, the Liquidity
Facility, the Eximbank Guarantee or the Purchase Agreement against the Trustee
in its individual capacity, and any such claim may be asserted solely against
the Trust.
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Upon the occurrence of a payment default prior to an Eximbank Payment Event
with respect to the Loan Notes, the Trustee will not be authorized or entitled
to accelerate the Loan Notes or exercise remedies against the Aircraft. If any
payment default under the Loan Notes occurs and is continuing, the Trustee is
(in addition to taking other steps described herein relating to the Liquidity
Facility and the Eximbank Guarantee) required to promptly mail notice thereof to
the relevant Certificateholders and to Eximbank. Subsequent to the occurrence of
an Eximbank Payment Event with respect to the Trust, the Trustee's recourse with
respect to the amounts of principal of and interest on the related Loan Notes
will be against Eximbank for payments due under the Eximbank Guarantee and
related Eximbank Payment Certificates issued by Eximbank at the time of such
Eximbank Payment Event.
Under the terms of the Eximbank Guarantee, Eximbank will not be required to
make a payment under the Eximbank Guarantee of amounts due on a Due Date which
were not paid by or on behalf of the Borrower on such Due Date if the Trustee
fails to make a written demand for payment on Eximbank within 150 calendar days
following such Due Date (but at least 30 days after such Due Date) and upon the
Borrower and the Lessee with respect to such Loan Note at least 15 calendar days
prior to such demand upon Eximbank. In addition, it is a condition of the
Eximbank Guarantee that a demand for payment must be made on the Industrial and
Commercial Bank of China, on behalf of Eximbank, at least 15 calendar days prior
to the date demand is made on Eximbank for payment under the Eximbank Guarantee.
Accordingly, the Servicing Agreement requires the Servicer, on behalf and in the
name of the Trustee, to make such timely demands upon Eximbank, the Borrower,
the Lessee and the Industrial and Commercial Bank of China. The Trustee in any
event is required to make such demands should the Servicer fail to do so.
The Trustee's fees and certain expenses are to be prepaid by the Borrower
in respect of U.S. Trade Trust Series 1996-A and will cover (a) compensation for
all services to be rendered by the Trustee under or as contemplated by the Trust
Agreement; and (b) certain expenses, disbursements and advances to be incurred
or made by the Trustee in its capacity as Trustee under or as contemplated by
the Trust Agreement (including the fees and expenses of the Trustee's agents and
counsel and auditors). No expenses of the Trustee incurred after the initial
issuance of Certificates will be payable from the scheduled payments on the Loan
Notes. If the Trustee were to be replaced by a successor trustee, any unearned
portion of the Trustee's prepaid fees and expenses would be made available to
such successor trustee.
Potential investors should be aware that the Trustee and the Underwriter
are both affiliates of ABN AMRO Bank N.V., which is the Seller, Servicer and
Liquidity Provider. Although not anticipated by any of such parties, it is
theoretically possible that conflicts of interest may arise between the Trustee
and the Servicer. Any such conflict would not, however, relieve the Trustee or
the Servicer from their respective legal obligations owing to the
Certificateholders under the Trust Agreement and Servicing Agreement.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain anticipated Federal income
tax consequences of the purchase, ownership and disposition of the Certificates.
The summary is based upon laws, regulations, rulings and decisions now in effect
and regulations which have been proposed, all of which are subject to change,
and focuses primarily on investors who will hold the Certificates as "capital
assets" (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code"). This summary does not
address the tax consequences to all categories of investors, some of which (for
example, non-United States persons, insurance companies, and pension funds or
other tax-exempt organizations) may be subject to special rules. Investors
should consult their own tax advisers in determining the Federal, state, local
and any other tax consequences to them of the purchase, ownership and
disposition of the Certificates.
TAX STATUS OF THE TRUST
In the opinion of Chapman and Cutler (special United States tax counsel to
the Trust), under existing Federal income tax law the Trust will not be taxable
as an association or a corporation and should be taxed as a grantor trust; each
Certificateholder will be considered as owning a pro rata share of each asset of
the Trust in the proportion that the Principal Amount of the Certificates held
by it bears to the aggregate Imputed Principal Amount then outstanding; each
Certificateholder will recognize taxable income derived from the assets held by
the Trust as if such Certificateholder directly held its pro rata portion of the
assets of the Trust, as more fully described under "Income and Deductions--
Income of the Certificateholders" below; and each Certificateholder will have a
taxable event when an asset of the Trust (including any Loan Note) is disposed
of (whether by sale, taxable exchange, redemption, payment at maturity or
otherwise) or when the Certificateholder's Certificate is redeemed or sold. A
Certificateholder must allocate the cost of its Certificates among all of the
assets of the Trust, including the Loan Notes (in accordance with the proportion
of the relative fair market values of such assets as of the valuation date
nearest the date such Certificateholder acquired its Certificate) in order to
determine its initial tax basis for its pro rata portion in each asset held by
the Trust, including the Loan Notes. Such tax basis is adjusted upward by the
amount of original issue discount, if applicable, and market discount, if any,
which the Certificateholder elects to include in income as it accrues, and
downward by the amount of amortized acquisition premium, if any, which the
Certificateholder has properly elected to amortize under the Code, on the Loan
Notes held by the Trust.
INCOME AND DEDUCTIONS
Income of the Certificateholders. Each Certificateholder will generally be
required to include in taxable income, based upon such Certificateholder's
method of tax accounting, its pro rata share of the income of the Trust,
including interest earned on the Loan Notes, and any gain or loss upon
collection or disposition of the Loan Notes, increased by the amount of market
discount, if any, included in income as it accrues, if the Certificateholder so
elects and reduced by the amount of acquisition premium, if any, as it is
amortized, if the Certificateholder has elected to amortize acquisition premium
under Section 171 of the Code.
-31-
<PAGE>
Limitations on Deductibility of Trust Expenses by Certificateholders. Each
Certificateholder's pro rata share of each expense paid by the Trust is
deductible by the Certificateholder to the same extent as though the expense had
been paid directly by such Certificateholder. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized deductions,
such as investment expenses, tax return preparation fees and employee business
expenses will be deductible by an individual, estate or trust only to the extent
that they exceed 2% of such taxpayer's adjusted gross income.
Certificateholders may be required to treat certain expenses of the Trust as
miscellaneous itemized deductions subject to this limitation. To the extent
that a Certificateholder is not permitted to deduct certain expenses of the
Trust, the taxable income of the Certificateholder attributable to its
Certificates will exceed the net cash distributions related to such income.
DISCOUNT AND PREMIUM
The Loan Notes, when originally issued by the Borrower, are believed to
have had adequate stated interest and it is believed that the original issue
discount rules of the Code should not severally apply to the Loan Notes.
As a result of the changes in the terms of the obligations of the Borrower
on the date the Loan Notes are acquired by the Trust, special United States tax
counsel believes that, for U.S. Federal income tax purposes, the Trust should be
treated as holding debt obligations of the Borrower newly issued on such
acquisition date. The Trust will adopt such view for purposes of tax reporting,
and the following discussion assumes the correctness of such view. If a contrary
view proved to be correct, the timing of interest income may vary from that
described below although the amount of such variation should not in most cases
be material. Certificateholders should consult their tax advisors regarding the
possible applicability of any contrary view and the consequences of any such
view as to timing of income and possibly other matters.
Each Certificateholder's pro rata share of income with respect to the debt
obligations of the Borrower held by the Trust will be treated as income from
sources without the United States for U.S. Federal income tax purposes. Such
income will be taken into account in determining the maximum amount of foreign
tax credit that a Certificateholder entitled to claim foreign tax credits may
claim for federal tax purposes. If as a result of an Eximbank Payment Event
(which for this purpose includes any acceleration of the Loan Notes or an Event
of Loss), an Eximbank Payment Certificate is substituted for the Loan Notes,
however, it is possible that the Internal Revenue Service could contend that
such substitution should be treated as an exchange for Federal income tax
purposes, with the result that each Certificateholder could be required to
recognize gain or loss as if such Certificateholder had actually exchanged his
interest in the Loan Notes for an interest in the Eximbank Payment Certificate.
If such substitution were treated as an exchange, each Certificateholder's pro
rata share of income with respect to the Eximbank Payment Certificate would be
treated thereafter as income from sources within the United States for Federal
income tax purposes and would affect the calculation of the maximum amount of
foreign tax credit that a Certificateholder entitled to claim foreign tax
credits may claim.
-32-
<PAGE>
In general, the Borrower is required to pay additional amounts if necessary
so that each scheduled payment of principal or interest on its Loan Notes, after
any required deduction or withholding of taxes, will equal the amount then due
and payable. Any such additional amounts will generally be treated as additional
income to the Certificateholders. Subject to certain limitations and exceptions,
each Certificateholder will be entitled to credit against its U.S. Federal
income tax liability its pro rata share of tax deducted or withheld with respect
to interest paid by the Borrower on its Loan Notes held by the Trust.
Acquisition Premium. If, as of the date a Certificateholder acquires its
Certificate, the Certificateholder's tax basis of its pro rata portion in any
Loan Notes held by the Trust exceeds the then outstanding principal amount of
such Loan Notes, such excess would be considered "acquisition premium" which may
be amortized by the Certificateholder at the Certificateholder's election as
provided in Section 171 of the Code. Certificateholders should consult their
tax advisers regarding whether such election should be made and the manner of
amortizing acquisition premium.
Market Discount. If, as of the date a Certificateholder acquires its
Certificate, the Certificateholder's tax basis of its pro rata portion in any
Loan Notes held by the Trust is less than the then outstanding principal amount
of such Loan Notes, such difference would be considered "market discount" unless
it is less than a "de minimis" amount specified in the Code. Market discount
accrues daily computed on a straight line basis, unless the Certificateholder
elects to calculate accrued market discount under a constant yield method.
Certificateholders should consult their tax advisers as to the amount of market
discount which accrues and the manner in which market discount is recognized.
Accrued market discount is generally includible in taxable income to the
Certificateholders for Federal income tax purposes upon the receipt by the Trust
of principal payments on the Loan Notes, on the sale, maturity or disposition of
such Loan Notes by the Trust, and on the sale by a Certificateholder of all or a
portion of its Certificate, unless the Certificateholder elects to include the
accrued market discount in taxable income as such discount accrues. If a
Certificateholder does not elect to include market discount in taxable income
annually as it accrues, deductions for any interest expense incurred by the
Certificateholder which is incurred to purchase or carry its Certificates will
be reduced by such accrued market discount. In general, the portion of any
interest expense which is not currently deductible would ultimately be
deductible when the accrued market discount is included in income.
Certificateholders should consult their tax advisors as to the method in which
market discount is included in income, the advisability of entering any
elections relating thereto and the potential impact on interest expense
deductions.
Computation of the Certificateholder's Tax Basis. The tax basis of a
Certificateholder with respect to its interest in the Loan Notes is increased by
the amount of accrued market discount, if any, previously included in taxable
income by such Certificateholder and reduced by the amount of amortized
acquisition premium, if any, provided that the Certificateholder had properly
elected to amortize acquisition premium under Section 171 of the Code. A
Certificateholder's tax basis in its Certificate will equal its tax basis in its
pro rata portion of all of the assets of the Trust.
-33-
<PAGE>
Recognition of Taxable Gain or Loss upon Disposition of Assets by the Trust
or Disposition of Certificates. A Certificateholder will recognize taxable gain
(or loss) when all or part of its pro rata portion in an asset of the Trust is
disposed of in a taxable transaction for an amount greater (or less) than its
tax basis therefor. Any gain recognized on a sale or exchange not constituting a
realization of accrued market discount and any loss will, under current law,
generally be capital gain or loss. As previously discussed, gain realized on the
disposition of the interest of a Certificateholder in any Loan Note deemed to
have been acquired with market discount will be treated as ordinary income to
the extent the gain does not exceed the amount of accrued market discount not
previously taken into income. In general, any capital gain or loss arising from
the disposition of a Loan Note by the Trust or the disposition of Certificates
by a Certificateholder will be short-term capital gain or loss unless the
Certificateholder has held its Certificates for more than one year, in which
case such capital gain or loss will be long-term. For taxpayers other than
corporations, net capital gains are currently subject to a maximum stated
marginal tax rate of 28 percent. However, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and could
affect relative differences at which ordinary income and capital gains are
taxed. The Revenue Reconciliation Act of 1993 includes a provision that would
recharacterize capital gains as ordinary income in the case of certain financial
transactions that are "conversion transactions." Certificateholders should
consult their tax advisers regarding the potential effect of this provision on
any gain recognized in connection with their Certificates.
If a Certificateholder disposes of its Certificate (or a portion thereof),
the Certificateholder is deemed thereby to have disposed of its entire (or a
related portion) interest in all Trust assets including its pro rata portion (or
related portion) of all of the Loan Notes represented by the Certificate. This
may result in a portion of the gain, if any, on such sale being taxable as
ordinary income under the market discount rules (assuming no election was made
by the Certificateholder to include market discount in income as it accrues) as
previously discussed.
FOREIGN CERTIFICATEHOLDERS
A Certificateholder who is a foreign investor (i.e., an investor other than
a U.S. citizen or resident or a U.S. corporation, partnership, estate or trust)
will not be subject to United States Federal income taxes, including withholding
taxes, on interest income (including original issue discount, if any) on, or any
gain from the sale or other disposition of, his pro rata interest in the Loan
Notes held by the Trust or the sale of his Certificates provided that all of the
following conditions are met: (i) the interest income or gain is not effectively
connected with the conduct by the foreign investor of a trade or business within
the United States; (ii) the interest income is not from sources within the
United States (which is believed to be the case with respect to all of the Loan
Notes of the Borrower held by the Trust); (iii) with respect to any gain, the
foreign investor (if an individual) is not present in the United States for 183
days or more during his or her taxable year; and (iv) the foreign investor
provides all certification which may be required of his status (generally,
certification on an IRS Form W-8 which must be filed with the Trustee and
refiled every three calendar years thereafter). Foreign investors should consult
their tax advisers with respect to the United States tax consequences of
ownership of Certificates. On December 7,
-34-
<PAGE>
1995, the U.S. Treasury Department released proposed legislation that, if
adopted could affect the United States federal income taxation of non-United
States Certificateholders and the portion of the Trust's income allocable to
such non-United States Certificateholders. Similar language which would be
effective on the date of enactment was included in the Health Insurance Reform
Bill proposed by the U.S. Senate on April 23, 1996.
In the event that an Eximbank Payment Event results in the income received
by a Certificateholder being treated as income from sources within the United
States, a foreign investor should be exempt from U.S. withholding tax of 30%
under the portfolio interest rules. In order to claim the portfolio interest
exemption, an affected Certificateholder must certify (on an IRS Form W-8) that
it is not a United States person and that its income is not effectively
connected with a U.S. trade or business. For this purpose, a "United States
person" means a citizen or resident of the U.S., a corporation, partnership, (or
other entity created or organized under the laws of the U.S. or any political
subdivision thereof,) or an estate or trust the income of which is includible in
gross income for U.S. federal income tax purposes, regardless of its source.
BACKUP WITHHOLDING
Each Certificateholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Certificateholder's taxpayer identification number to the Trustee and to certify
that the Certificateholder has not been notified that payments to the
Certificateholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Trust to such Certificateholder will be subject
to back-up withholding.
STATE AND LOCAL TAX CONSIDERATIONS
Certificateholders should consult their own tax advisers regarding the
potential state, local and foreign tax consequences relating to the Trust and
the Certificates.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit certain pension, profit
sharing, and other employee benefit plans, individual retirement accounts and
annuities and employee annuity plans (a "Plan" or "Plans") from engaging in
certain transactions involving "plan assets" with persons who, with respect to
such Plan, are "parties in interest" under ERISA or "disqualified persons" under
the Code. A violation of these "prohibited transaction" rules may generate
excise taxes under the Code and other liabilities under ERISA for such persons.
In addition, fiduciaries of Plans subject to ERISA are subject to the fiduciary
responsibility rules of Part 4 of Title I of ERISA, including the requirements
of investment prudence and diversification and the requirement that a Plan's
investments be made in accordance with the documents governing the Plan.
-35-
<PAGE>
Under regulations issued by the Department of Labor, the underlying assets
of certain entities in which Plans make equity investments could be regarded as
"plan assets." Under certain circumstances, the purchase of Certificates by
Plans could be viewed as equity investments that cause the assets of the Trust
to be treated as "plan assets." If the Trust's assets are "plan assets," the
Trustee would be subject to the fiduciary responsibility rules of Part 4 of
Title I of ERISA, including the prohibited transaction rules discussed above.
However, in light of the limited discretionary investment authority of the
Trustee and the otherwise essentially passive nature of the assets of the Trust,
and the custodial and ministerial nature of the responsibilities and functions
to be performed by the Trustee (other than with respect to its limited
investment authority), a non-exempt prohibited transaction or other fiduciary
violation should generally not occur merely because the assets of the Trust are
regarded as "plan assets."
Regardless of whether the Trust is deemed to hold plan assets of Plans that
are Certificateholders, possible violations of the prohibited transaction rules
of the Code and the prohibited transaction and fiduciary responsibility rules of
ERISA could occur if Certificates are purchased with assets of any Plan if the
Underwriter, the Seller, the Servicer, the Trustee, the Lessee or the Borrower,
or any of their affiliates, is a party in interest or disqualified person with
respect to any such Plan, unless such acquisition is subject to a statutory or
administrative exemption, such as Prohibited Transaction Class Exemption ("PTE")
75-1, which exempts certain transactions involving employee benefit plans and
certain broker-dealers, reporting dealers and banks; PTE 91-38 (formerly PTE 80-
51) which exempts certain transactions between bank collective investment funds
and parties in interest; PTE 90-1 (formerly PTE 78-19), which exempts certain
transactions with insurance-company pooled separate accounts; PTE 84-14, which
exempts certain transactions effected on behalf of a plan by a "qualified
professional asset manager"; or pursuant to any other available exemption.
None of the Underwriter, the Seller, the Servicer, the Trust, the Trustee,
Eximbank, the Company, the Lessee nor the Borrower, nor any of their affiliates,
express any opinion or are giving any assurance regarding the applicability of
any of the foregoing Prohibited Transaction Exemptions (or any other exemption).
Each Certificateholder should determine for itself whether and to what extent
such exemption (as well as any other possibly applicable exemption) is
applicable to the acquisition, holding or disposition of Certificates in general
as well as to the acquisition, holding or disposition of Certificates by any
particular Plan.
The foregoing discussion is general in nature and is not intended to be all
inclusive. Any fiduciary of a Plan considering the purchase of Certificates
should consult its legal advisors regarding the appropriateness of such purchase
under ERISA (and, particularly in the case of non-ERISA plans, concerning any
state law or Code considerations).
UNDERWRITING
Subject to the terms and conditions of an Underwriting Agreement (the
"Underwriting Agreement") between the Company and the Underwriter, the
Underwriter has agreed to
-36-
<PAGE>
purchase from the Company, and the Company has agreed to sell to the
Underwriter, Certificates in an aggregate principal amount equal to
$101,672,199.28.
The Underwriting Agreement provides that the obligations of the Underwriter
thereunder are subject to certain conditions precedent. The Company has agreed
in the Underwriting Agreement to indemnify the Underwriter and its controlling
persons against certain liabilities, including liabilities under the Securities
Act, and to contribute to payments that the Underwriter may be required to make
in respect thereof. The nature of the Underwriter's obligations under the
Underwriting Agreement is such that they are obligated to purchase all of the
Certificates, if any are purchased.
The Underwriter proposes initially to offer the Certificates to the public
at the offering price set forth on the cover page of this Prospectus. After the
initial public offering, such public offering price may be changed.
The Underwriter is an affiliate of the Seller. The Seller is also the agent
of a lending group, which includes the Seller, in connection with a bank loan
incurred by the Borrower to finance the portion of the purchase price of the
Aircraft that is not eligible for a guarantee from Eximbank. The Underwriter is
also an affiliate of the Servicer, the Trustee and the Liquidity Provider.
The Certificates are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that the Underwriter
intends, but is not obligated, to make a market in the Certificates.
Accordingly, there can be no assurance that a secondary market will develop or,
if a secondary market does develop, that it will continue.
The provisions of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. apply to this offering.
LEGAL MATTERS
Certain legal matters will be passed upon (a) for the Trustee by Chapman
and Cutler, Chicago, Illinois, (b) for the Underwriter by Chapman and Cutler,
Chicago, Illinois, (c) for the Company by Chapman and Cutler, Chicago, Illinois
and (d) for the Company and the Trust by Chapman and Cutler, Chicago, Illinois.
Chapman and Cutler, as special United States tax counsel to the Trust, will
render an opinion regarding certain United States Federal tax consequences.
Chapman and Cutler will also render an opinion with respect to certain matters
for ABN AMRO Bank N.V. in its capacities as Seller, Servicer and Liquidity
Provider. Clifford Chance will also render an opinion with respect to certain
matters for ABN AMRO Bank N.V. in its capacity as Liquidity Provider.
-37-
<PAGE>
ANNEX A
-------
SCHEDULE OF DISTRIBUTIONS
ON THE
6.75% TRADE TRUST CERTIFICATES, SERIES 1996-A
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE AGGREGATE
PRINCIPAL INTEREST PRINCIPAL AND
PAYMENT DATE PAYMENT PAYMENT INTEREST PAYMENT
<S> <C> <C> <C>
2/15/97 2,817,141.60 2,096,989.11 4,914,130.71
8/15/97 2,912,220.13 3,336,358.20 6,248,578.33
2/15/98 3,010,507.55 3,238,070.77 6,248,578.32
8/15/98 3,112,112.19 3,136,466.13 6,248,578.32
2/15/99 3,217,145.97 3,031,432.35 6,248,578.32
8/15/99 3,325,724.65 2,922,853.67 6,248,578.32
2/15/00 3,437,967.85 2,810,610.47 6,248,578.32
8/15/00 3,553,999.27 2,694,579.06 6,248,578.33
2/15/01 3,673,946.75 2,574,631.58 6,248,578.33
8/15/01 3,797,942.45 2,450,635.87 6,248,578.32
2/15/02 3,926,123.00 2,322,455.32 6,248,578.32
8/15/02 4,058,629.66 2,189,948.66 6,248,578.32
2/15/03 4,195,608.41 2,052,969.91 6,248,578.32
8/15/03 4,337,210.19 1,911,368.13 6,248,578.32
2/15/04 4,483,591.04 1,764,987.29 6,248,578.33
8/15/04 4,634,912.23 1,613,666.09 6,248,578.32
2/15/05 4,791,340.53 1,457,237.80 6,248,578.33
8/15/05 4,953,048.26 1,295,530.06 6,248,578.32
2/15/06 5,120,213.64 1,128,364.68 6,248,578.32
8/15/06 5,293,020.86 955,557.47 6,248,578.33
2/15/07 5,471,660.31 776,918.01 6,248,578.32
8/15/07 5,656,328.84 592,249.48 6,248,578.32
2/15/08 5,847,229.94 401,348.38 6,248,578.32
8/15/08 6,044,573.96 204,004.37 6,248,578.33
</TABLE>
<PAGE>
ANNEX B
-------
INDEX OF DEFINED TERMS
Aircraft 7 and 12
Beneficial Owner 21
Borrower 1 and 18
Business Day 13 and 16
Certificateholders 1
Certificates 2
Code 10 and 31
Collection Period 24
Commission 1
Company 1 and 2
Cutoff Date 9
Distribution Account 20 and 25
DTC 1 and 20
DTC Participants 21
Due Dates 6
ERISA 10 and 35
Event of Default 6
Event of Loss 4
EXIM Act 15
Eximbank 1
Eximbank Guarantee 8
Eximbank Payment Certificates 13
Eximbank Payment Event 13
Expiration Date 17
Indirect Participants 21
Lender 12
Lessee 1 and 18
Liquidity Facility 1 and 17
Liquidity Provider 17
Loan Agreement 12
Loan Notes 1
Payment Dates 3
Plan 10 and 35
Plans 10 and 35
PTE 36
Purchase Agreement 1 and 16
Rating Agency 4
Record Date 19
Replacement Liquidity Facility 17
Revenue Account 24
S&P 4
Seller 1
Servicer 1
Servicer Remittance Date 25
<PAGE>
Servicer Remittance Report 24
Trust 1 and 2 and 18
Trust Agreement 1 and 18
Trustee 1 and 2 and 18
Underwriting Agreement 37
-B2-
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Seller, the Borrower, the Lessee, the Industrial and Commercial Bank of
China, the Company, the Trust, the Trustee, Eximbank, or the Underwriter.
Neither the delivery of this Prospectus nor any sale made hereunder shall under
any circumstances create an implication that there has been no change in the
affairs of the Seller, the Borrower, the Lessee, the Industrial and Commercial
Bank of China, the Company, the Trust, the Trustee, Eximbank or the Underwriter
since the date hereof. This Prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such State.
_____________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Reports to Certificateholders.............................................. 1
Available Information...................................................... 1
Prospectus Summary......................................................... 2
Overview of the Transaction................................................ 11
Use of Proceeds............................................................ 12
The Eximbank Guarantee..................................................... 12
The Loan Notes............................................................. 16
The Liquidity Facility..................................................... 17
The Trust.................................................................. 18
The Trustee................................................................ 18
The Borrower and the Lessee................................................ 18
The Seller and the Servicer................................................ 19
The Company................................................................ 19
Description of the Certificates............................................ 19
Certain Federal Income Tax Consequences.................................... 31
ERISA Considerations....................................................... 36
Underwriting............................................................... 37
Legal Matters.............................................................. 38
</TABLE>
_____________________________
Until January 23, 1997 (90 days after the date of this Prospectus), all
dealers effecting transactions in the Certificates, whether or not participating
in this distribution, may be required to deliver this Prospectus. This is in
addition to the obligations of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
$101,672,199.28
U.S. TRADE TRUST, SERIES 1996-A
6.75% TRADE TRUST CERTIFICATES
SERIES 1996-A
______________________
PROSPECTUS
OCTOBER ___, 1996
ABN AMRO SECURITIES (USA) INC.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Expenses in connection with the offering of the Certificates being
registered herein are estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee...................... $ 30,937.00
Legal Fees and Expenses................... 100,000.00
Blue Sky Fees and Expenses................ 20,000.00
Rating Agency Fees........................ 21,000.00
Trustee's Fees and Expenses............... 12,000.00
Printing.................................. 10,000.00
Miscellaneous............................. 9,000.00
-----------
Total..................................... $200,937.00
===========
</TABLE>
Item 14. Indemnification of Directors and Officers.
Article Sixth of the Certificate of Incorporation and Article VII of the
By-Laws of U.S. Trade Funding Corp. (the "Registrant") provide for
indemnification of the directors, officers and employees of the Registrant, or
persons serving at the request of the Registrant as a director, officer,
employee or agent of another corporation or other business entity, to the full
extent permitted by the General Corporation Law of Delaware, as such laws exist
or may hereafter be amended. Article Sixth of the Certificate of Incorporation
and Article VII of the By-Laws of the Registrant also provide for the Registrant
to advance expenses in connection with such indemnification.
Section 145 of the General Corporation Law of Delaware contains detailed
provisions on indemnification of directors and officers against expenses,
judgments, fines and amounts paid in settlement, actually and reasonably
incurred in connection with litigation.
Item 15. Recent Sales of Unregistered Securities.
Not applicable.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits:
1.1 --Form of Underwriting Agreement.
3.1 --Certificate of Incorporation of U.S. Trade Funding Corp.
<PAGE>
*3.2 --By-Laws of U.S. Trade Funding Corp.
4.1 --Form of Standard Terms and Conditions of Trust Agreement.
4.2 --Form of Supplemental Trust Agreement.
5.1 --Opinion of Chapman and Cutler with respect to legality.
8.1 --Opinion of Chapman and Cutler with respect to certain United
States Federal tax matters.
10.1 --Form of Eximbank Guarantee.
10.2 --Form of Guaranteed Loan Agreement, including form of Transfer
Agreement and form of Loan Notes.
10.3 --Form of Servicing Agreement.
10.4 --Form of Liquidity Facility.
10.5 --Form of Purchase Agreement.
23.1(a) --Consent of Chapman and Cutler (included as part of Exhibit
5.1).
23.1(b) --Consent of Chapman and Cutler (with respect to Exhibit 8.1).
*24.1 --Power of Attorney (included in signature pages forming a part
of this Registration Statement).
___________________
* Filed Previously
(b) Financial Statements:
Not applicable.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event that
a claim for indemnification against such liabilities (other than payment by the
Registrant of expenses incurred or paid by a director, officer or
II-2
<PAGE>
controlling person of such Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, such Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(b) To cause to be provided to the Underwriter at the closing specified in
the Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriter to permit prompt delivery to each
purchaser.
(c) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of the registration statement as of the
time it was declared effective.
(d) That, for the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Chicago, State of Illinois, on this 23rd day of October, 1996.
U.S. Trade Funding Corp.
By /s/ Andrew L. Stidd
--------------------------
Andrew L. Stidd
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Andrew L. Stidd Director, Principal Executive October 23, 1996
- ------------------------ Officer, Principal Financial
Andrew L. Stidd Officer and Principal
Accounting Officer
/s/ Kevin P. Burns Director October 23, 1996
- -------------------------
Kevin P. Burns
Director October 23, 1996
- -------------------------
Paul E. Gipson*
Director October 23, 1996
- -------------------------
Margaret A. Gipson*
/s/ Attorney-in-Fact
--------------------
* Attorney-in-Fact
The Attorney-in-Fact does hereby sign this Amendment No. 1 to Registration
Statement on the date indicated on behalf of the above-listed directors and
officers of the Registrant pursuant to the power of attorney signed by such
directors and officers, a copy of which has been filed previously.
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of U.S. Trade Funding Corp.
*3.2 By-Laws of U.S. Trade Funding Corp.
4.1 Form of Standard Terms and Conditions of Trust Agreement.
4.2 Form of Supplemental Trust Agreement.
5.1 Opinion of Chapman and Cutler with respect to legality.
8.1 Opinion of Chapman and Cutler with respect to certain
United States Federal tax matters.
10.1 Form of Eximbank Guarantee.
10.2 Form of Guaranteed Loan Agreement, including form of Transfer
Agreement and form of Loan Notes.
10.3 Form of Servicing Agreement.
10.4 Form of Liquidity Agreement.10.5Form of Purchase Agreement.
23.1(a) Consent of Chapman and Cutler (included as part of Exhibit 5.1).
23.1(b) Consent of Chapman and Cutler (with respect to Exhibit 8.1)
*24.1 Power of Attorney (included in signature page forming a part of
this Registration Statement).
_____________________
* Filed previously
II-5
<PAGE>
EXHIBIT 1.1
$101,672,199.28
6.75% TRADE TRUST CERTIFICATES, SERIES 1996-A
U.S. TRADE TRUST SERIES 1996-A
ISSUED BY
U.S. TRADE FUNDING CORP.
(THE COMPANY)
UNDERWRITING AGREEMENT
October 25, 1996
ABN AMRO Securities (USA) Inc.
181 West Madison
Chicago, Illinois 60602
Ladies/Gentlemen:
1. Introduction. At the request of YA96A Limited (the "Borrower") on behalf
of China Yunnan Airlines (the "Lessee"), U.S. Trade Funding Corp., a Delaware
corporation (the "Company"), proposes to sell to you, as the underwriter
referred to herein (the "Underwriter") certificates (the "6.75% Trade Trust
Certificates, Series 1996-A," also referred to herein as the "Certificates")
representing fractional undivided interests in U.S. Trade Trust Series 1996-A
(the "Trust"), a trust to be established pursuant to a Supplemental Trust
Agreement incorporating therein the Standard Terms and Conditions of Trust
Agreement, dated as of January 1, 1995 between LaSalle National Bank, as trustee
for the Trust (the "Trustee"), the Company, and ABN AMRO Bank N.V., as Servicer
(the "Servicer") (together, the "Trust Agreement"). The Certificates are more
fully described in the Registration Statement and the Prospectus hereinafter
mentioned.
The assets of the Trust will consist primarily of two promissory notes
(each, a "Loan Note," and collectively, the "Loan Notes"), in the aggregate
principal amount of $101,672,199.28 issued by the Borrower. The Loan Notes will
bear interest at 6.75% per annum and will mature on August 15, 2008. Each
Loan Note was issued under the Guaranteed Loan Agreement (the "Loan Agreement")
dated as of August 27, 1996 among the financial institutions named as lenders
therein, ABN AMRO Bank N.V., as facility agent, Wilmington Trust Company, as
Security Trustee and the Borrower, and will be sold and assigned by ABN AMRO
Bank N.V. ("ABN AMRO") to the Company who will further sell and assign each Loan
Note to the Trust on the Closing Date. The Loan Notes are guaranteed as to
payment of 100% of all scheduled amounts of principal and interest due thereon
(at the "Guaranteed Interest Rate" as defined in the Guarantee Agreement
hereinafter referred to)
<PAGE>
by a guarantee (the "Guarantee") of the Export-Import Bank of the United States
("Eximbank") pursuant to a Guarantee Agreement (the "Guarantee Agreement") dated
as of September 11, 1996, between ABN AMRO and Eximbank. The Guarantee will be
entitled to the full faith and credit of the United States. The Borrower and the
Lessee have entered into the Lease Agreements referred to in the Loan Agreement.
As used herein, the term "Operative Documents" shall have the meaning
assigned thereto in each of the Lease Agreements. Other capitalized terms used
herein which are not otherwise defined herein shall have the meanings set forth
in the Trust Agreement.
2. Representations and Warranties of the Company. The Company represents
and warrants to the Underwriter as follows:
(i) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 33-08701) on Form S-1
which complies as to form with the requirements of the Securities Act of
1933 (the "Securities Act") and the rules and regulations of the Commission
thereunder for the registration under the Securities Act of the
Certificates (including a preliminary prospectus relating thereto) and may
have filed one or more amendments thereto (including one or more amended
preliminary prospectuses). The Company proposes to file with the Commission
(A) an amendment to said registration statement including a final
prospectus or (B) a final prospectus in accordance with Rule 424(b) ("Rule
424(b)") of the Commission under the Securities Act, in either case in the
form heretofore or hereafter delivered to you and including all Rule 430A
Information (as defined below). The Company will not file, and the Company
will not otherwise cause to be filed, any other amendment of such
registration statement or prospectuses or any supplement to such
prospectuses on or after the date of this Agreement and prior to the date
and time of delivery of and payment for the Certificates referred to in
Section 3 hereof (the "Closing Date"), except with the Underwriter's
approval.
The terms that follow, when used in this Agreement, shall have the
indicated meanings. The registration statement referred to in the
preceding paragraph, including exhibits, as amended at the time when it
became or shall become effective and including any Rule 430A Information
deemed to be included therein at such time as provided in Rule 430A (as
defined below), is hereinafter called the "Registration Statement", and the
prospectus relating to the Certificates that is first filed pursuant to
Rule 424(b) and including all Rule 430A Information or, if no filing
pursuant to such Rule 424(b) is required or if earlier filed with the
Commission, the form or forms of final prospectus included in an amendment
to the Registration Statement that first includes all Rule 430A Information
is hereinafter called the "Prospectus". Any reference in this Agreement to
the Prospectus as amended or supplemented shall include the Prospectus as
amended or supplemented by any prospectus filed with the Commission after
the effectiveness of the Registration Statement pursuant to Rule 424(b).
Any preliminary prospectus referred to in the preceding paragraph and any
prospectus included in the Registration Statement, as amended, at the
effective date thereof that omits Rule 430A Information is hereinafter
called a "Preliminary
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<PAGE>
Prospectus". The date the Registration Statement and any post-effective
amendment thereto became or shall become effective is herein called the
"Effective Date". Rule 430A promulgated by the Commission under the
Securities Act is herein called "Rule 430A". Information permitted under
Rule 430A to be omitted from the Registration Statement when it became or
shall become effective is herein called "Rule 430A Information".
(ii) When the Registration Statement became or shall become
effective, and when any post-effective amendment thereof became or shall
become effective, the Registration Statement (and the Registration
Statement as amended if any post-effective amendment thereof has become or
shall become effective) did, if the Registration Statement has become
effective, and will, if the Registration Statement has not yet become
effective, comply in all material respects with the provisions of the
Securities Act and the rules and regulations of the Commission thereunder
and did not, if the Registration Statement has become effective, and will
not, if the Registration Statement has not yet become effective, contain an
untrue statement of a material fact and did not, if the Registration
Statement has become effective, and will not, if the Registration Statement
has not yet become effective, omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and, at the earlier of (A) the time the Prospectus is first filed with the
Commission pursuant to Rule 424(b), if required, and (B) the time the
Registration Statement or a post-effective amendment thereof including the
Prospectus is first declared effective, the Prospectus (and the Prospectus
as amended or supplemented, if the Company shall have filed with the
Commission any amendment or supplement thereto) will comply in all material
respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact and will not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that none of the representations and
warranties in this subparagraph (ii) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto made in reliance upon and in
conformity with Underwriter Information (as defined below).
(iii) All agreements, contracts or other documents which are
required to be filed as exhibits to the Registration Statement have been so
filed.
(iv) The Commission has not issued and, to the knowledge of the
Company, is not threatening to issue, any order preventing or suspending
the use of the Prospectus (as amended or supplemented, if any amendment or
supplement shall have been filed with the Commission).
(v) There are no filing fees, transfer taxes or other expenses
imposed on the Trustee or the Trust by any governmental authority in
connection with any of the transactions contemplated herein or by the Trust
Agreement which are required to be paid prior to the Closing.
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<PAGE>
(vi) The Certificates when issued and sold to the Underwriter as
provided herein, assuming due execution by the Trustee on behalf of the
Trust and due authentication and delivery by the Trustee, will have been
duly and validly authorized, executed, authenticated and delivered, will
conform to the description thereof contained in the Prospectus and will be
validly issued and outstanding and entitled to the benefits of the Trust
Agreement.
(vii) Upon delivery of the Certificates to the Underwriter in
accordance with this Agreement and payment therefor by the Underwriter, the
Trust will have no assets other than the Loan Notes and the Loan Agreement,
the right to receive payments thereon, the Guarantee and the Guarantee
Agreement and the right to receive payment thereon, the right to receive
payments under the Liquidity Facility secured by the Company with ABN AMRO,
as lender (the "Liquidity Facility"), and the rights under the Trust
Agreement.
(viii) The Trust Agreement is not required to be qualified under
the Trust Indenture Act of 1939, as amended, in connection with the
transactions contemplated hereby or thereby.
(ix) The Company has full power, authority and legal right to
transfer and assign the Loan Notes to the Trustee, on behalf of the Trust,
and, on the Closing Date, each Loan Note will be so transferred and
assigned free and clear of any liens or other encumbrances of any nature
whatsoever, except those in favor of Eximbank created with respect to the
Guarantee Agreement.
(x) The Company has full power, authority and legal right to
execute, deliver and perform this Agreement; this Agreement, when executed
and delivered by the Company and the other parties hereto, will have been
duly and validly authorized, executed and delivered.
(xi) Neither the execution, delivery or performance by the Company
of this Agreement, nor the fulfillment by the Company of the terms hereof,
violates any provision of the laws of the United States of America or
violates any order of any United States court, regulatory body or
administrative agency or governmental body binding on it, or requires any
publication, registration or approval to be made or obtained by it which
has not been so made or obtained, except for such as may be required under
Federal securities laws or regulations, or the state securities or Blue Sky
laws or regulations of any jurisdiction.
(xii) Neither the execution, delivery or performance by the Company
of this Agreement, nor the fulfillment by the Company of the terms hereof
or thereof, will conflict with or result in any breach of, or constitute a
default under, any indenture, mortgage, deed of trust or other instrument
or agreement to which the Company is a party or to which it may be bound or
to which any of its property or assets may be subject.
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<PAGE>
(xiii) There is no action, suit or proceeding pending, or, to the
knowledge of the Company, threatened against the Company, and no other
action, suit or proceeding known to the Company is pending, before any
court or administrative agency, challenging the validity or enforceability
of this Agreement, the Loan Agreement, the Guarantee, the Guarantee
Agreement or the transactions contemplated hereby or thereby, or which
could have an adverse effect on the Company's ability to perform, in any
material respect, its obligations hereunder or thereunder.
(xiv) The Company has not received any notice from Eximbank to the
effect that the Guarantee has been or will be revoked, rescinded, modified
or suspended.
3. Purchase, Sale, Payment and Delivery of Certificates. Subject to the
terms and conditions and based on the representations and warranties herein set
forth, and the payment by or for the account of the Borrower of $457,524.90 as
compensation to the Underwriter, for its services hereunder (the "Underwriter's
Fee"), the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, the Certificates. The purchase price of the
Certificates will in the aggregate equal $101,672,199.28, being 100% of the
principal amount thereof (the "Purchase Price").
The Company shall not be obligated to deliver any Certificates except upon
payment for all of the Certificates to be purchased hereunder as hereinafter
provided.
Delivery by the Company and payment for the Certificates by the Underwriter
to the Company and payment to the Underwriter of the Underwriter's Fee (the
"Closing") shall be made at the office of Chapman and Cutler, 111 West Monroe,
Chicago, Illinois 60603 at 10:00 a.m., Chicago time, on October 25, 1996, or
such later date as shall be determined by agreement between you and the Company
(the "Closing Date"). Payment for the Certificates shall be made to or upon the
order of the Company by wire transfer or by certified or official bank check
payable in immediately available funds and payment of the Underwriter's Fee
shall be made to or upon the order of the Underwriter by wire transfer in
immediately available funds. The Certificates to be so delivered to you shall
be represented by a global certificate registered in the name of Cede & Co., as
nominee for The Depository Trust Company or registered in such other name as you
may direct by written notice to the Trustee two Business Days or more prior to
the Closing Date. The Company agrees to direct the Trustee to make the
Certificates available to you for inspection in Chicago, Illinois on the
business day next preceding the Closing Date. Time shall be of the essence, and
delivery of the Certificates at the time and place specified pursuant to this
Agreement is a further condition of your obligations hereunder.
4. Offering by the Underwriter. It is understood that, after the
Registration Statement becomes effective, the Underwriter proposes to offer the
Certificates for sale to the public (which may include selected brokers and
dealers) as set forth in the Prospectus.
5. Certain Agreements of the Company. (a) The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act. The
Company agrees to deliver to
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<PAGE>
you, without charge, from time to time during such period, as many copies of the
Prospectus (and, in the event of any amendment of or supplement to the
Prospectus, of such amended or supplemented Prospectus) as you may reasonably
request. If, at any time during the period in which the Company is required to
deliver copies of the Prospectus, as provided in this Section 5, an event shall
occur which makes it necessary to amend or supplement the Prospectus to comply
with law or with the rules and regulations of the Commission, the Company will
forthwith notify you of the proposed amendment or supplement and prepare and
furnish to you for distribution to the dealers a sufficient number of copies of
an amendment or amendments of or a supplement or supplements to the Prospectus
which will so amend or supplement the Prospectus such that, as amended or
supplemented, it will comply with law and with such rules and regulations. The
Company authorizes the Underwriter and all dealers effecting sales of the
Certificates to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of Certificates in accordance with
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder.
(b) If the Registration Statement has become effective pursuant to Rule
430A prior to the execution and delivery of this Agreement, the Company agrees
promptly to provide you notice, and confirm such notice in writing, of any
filing of the Prospectus pursuant to Rule 424(b). If the Registration Statement
is not yet effective, the Company agrees to advise you promptly, and to confirm
such advice in writing, when the Registration Statement shall have become
effective. The Company further agrees to so advise you (and to confirm such
advice) (i) when any post-effective amendment of the Registration Statement
shall have become effective after the date hereof and when any further amendment
of or supplement to the Prospectus shall be filed with the Commission, (ii) of
any request made by the Commission for any amendment of the Registration
Statement or the Prospectus or for additional information and (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the initiation of any proceedings for such purpose.
The Company will use every reasonable effect to prevent the issuance of such a
stop order and, if any such order shall at any time be issued, to obtain the
withdrawal thereof at the earliest possible moment.
(c) The Company agrees that (i) so long as any Certificates are
outstanding, it will direct the Trustee (or the Servicer on behalf of the
Trustee), on behalf of the Trust, to provide to you all reports and notices that
are provided to the holders of the related Certificates (the
"Certificateholder") pursuant to the Trust Agreement or that are furnished to
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any rule or regulation of the Commission thereunder, and
(ii) as soon as practicable after the effective date of the Registration
Statement, it will direct the Trustee (or the Servicer on behalf of the
Trustee), on behalf of the Trust, to make generally available to the related
Certificateholders and to deliver to you an earnings statement, conforming to
the requirements of Section 11(a) of the Securities Act, covering a period of at
least twelve months beginning after the effective date of the Registration
Statement.
6. Payment of Expenses. The Company agrees (regardless of whether this
Agreement is terminated prior to the delivery of the Certificates and payment
therefor by
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<PAGE>
the Underwriter) to pay, arrange for the payment of or reimburse all documented
fees and expenses ("Fees and Expenses") in connection with (i) the preparation,
printing and filing of the Registration Statement (including all exhibits to the
Registration Statement and payment of, or reimbursement of any party who has
advanced, the full amount of all filing fees), any Preliminary Prospectus and
the Prospectus and any amendments thereof and supplements thereto, and the
furnishing of copies of each thereof to the Underwriter in such quantities as it
may reasonably request (including costs of mailing and shipment), (ii) the
issuance of the Certificates, (iii) the preparation of this Agreement, (iv) the
rating of the Certificates by rating agencies, (v) the delivery of the
Certificates to you in Chicago, Illinois, (vi) fees and expenses of counsel to
the Company and (vii) other reasonable and documented out-of-pocket expenses
incurred by the Company, and its counsel in connection with the transactions
contemplated by this Agreement. The Underwriter agrees to pay for the fees and
expenses of its counsel and to pay all legal fees, expenses and filing fees in
connection with the qualification of the Certificates under the various state
"Blue Sky" laws.
7. Use of Proceeds. The parties agree that the proceeds from the
offering will be used to purchase and acquire the Loan Notes from ABN AMRO.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Underwriter, the directors, officers, employees
and agents of the Underwriter and each person who controls the Underwriter
within the meaning of Section 15 of the Securities Act against (i) any and all
losses, claims, damages or liabilities, joint or several, and any action in
respect thereof, to which it or any of them may become subject under the
Securities Act, the Exchange Act or any other United States Federal or state
statute or common law, and to reimburse such entities or persons for any
reasonable legal or other documented expenses as they are incurred by it or any
of them in connection with investigating any claims and defending any actions
insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon (A) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any post-effective
amendment thereof, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (B) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or contained in the
Prospectus (as amended or supplemented) or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (ii) against any and all losses, claims,
damages, liabilities and expenses whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever, in any such case, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided, however,
that the indemnity agreement contained in this Section 8(a) shall not apply to
any such losses, claims, damages, liabilities or actions arising out of, or
based upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement, or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Underwriter expressly for use in the preparation
of the Registration Statement or any
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<PAGE>
Preliminary Prospectus or the Prospectus or any such amendment thereof or
supplement thereto (it being agreed that the information so furnished by the
Underwriter, hereinafter "Underwriter Information", exclusively consists of the
material which appears in the Prospectus under the heading "Underwriting," in
the paragraph on the inside front cover on market-stabilizing transactions by
the Underwriter, and in the paragraph on the outside front cover regarding the
Underwriter's intention to make a market in the Certificates); and provided,
further that, with respect to any untrue statement, or alleged untrue statement
made in, or omission or alleged omission from, any Preliminary Prospectus, the
indemnity agreement contained in this Section 8(a) with respect to such
Preliminary Prospectus shall not inure to your benefit, if the Prospectus (or
the Prospectus as amended or supplemented if there have been any amendments
thereof or supplements thereto which shall have been furnished to you prior to
the time of the below-written confirmation) does not contain such statement,
alleged statement, omission or alleged omission, and a copy of such Prospectus
shall not have been sent or given to the person asserting any such losses,
claims, damages or liabilities at or prior to the written confirmation of the
sale of such Certificates to such person. The foregoing indemnity agreement is
in addition to any liability which the Company may otherwise have to the
Underwriter or any person who controls the Underwriter.
(b) The Underwriter agrees, to the same extent as set forth in Section
8(a) hereof, to indemnify and hold harmless the Company, the directors,
officers, employees and agents of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act with
respect to any statement or alleged statement in or omission or alleged omission
from the Registration Statement or any post-effective amendment thereof or any
Preliminary Prospectus or the Prospectus as amended or supplemented, if so
amended or supplemented, if such statement or omission was made in reliance upon
and in conformity with the Underwriter Information. The foregoing indemnity
agreement is in addition to any liability which the Underwriter may otherwise
have to the Company or any person who controls the Company.
(c) Promptly after receipt by an indemnified party under this Section 8
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 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
identifying party from any liability which it may have to any indemnified party
otherwise than under this Section 8, except up to the extent such indemnifying
party was unaware of the commencement of such action and was prejudiced by the
omission to be so notified by the indemnified party. 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 to represent the indemnified party in
such action; provided that, if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded upon the advice of counsel that there
may be legal defenses
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<PAGE>
available to it or them and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel in the defense
of such action on behalf of such identified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
the selected counsel, the indemnifying party will not be liable to such
indemnified party for expenses subsequently incurred by the indemnified party in
connection with the defense thereof (other than reasonable costs of
investigation) unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, representing the indemnified parties under Section 8 who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party (it being
understood that if clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause (i) or (iii)).
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to any indemnified party or be insufficient to hold
harmless any indemnified party under Sections 8(a) or 8(b) hereof, in respect of
any loss, claim, damage or liability or any action in respect thereof, referred
to above (except if such unavailability or insufficiency is as a result of
application of any of the exceptions to indemnification, if any, contained
therein) then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
benefit received by the Company on the one hand and the Underwriter on the other
from the offering of the Certificates. If however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), was well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand the Underwriter on the
other with respect to such offering shall be deemed to be in the same proportion
as the dollar amount of the total proceeds from the offering of the Certificates
received by the Company bears to the dollar amount of the total underwriting
commissions received by the Underwriter with respect to such offering, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 Underwriter Information,
and the parties, relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Underwriter
and the Company agree that it would not be just and equitable if contributions
pursuant to this
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<PAGE>
Section 8(d) were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of any loss, claim, damage or liability, or action in respect thereof
referred to above in this Section 8(d) shall be deemed to include, for purposes
of this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. 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.
(e) The Underwriter hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all Certificates, it
will not institute against or join with any other person in instituting against
the Company any involuntary insolvency proceeding. The obligations of the
Company hereunder are solely its corporate obligations and no recourse shall be
had against any director, officer, employee, shareholder or affiliate of the
Company for any claim against, or liability or obligation of, the Company
hereunder.
(f) The respective indemnity and contribution agreements contained in
this Section 8, and the representations and warranties of the Company set forth
in Section 2 hereof, shall remain operative and in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any entity or person indemnified or
entitled to contribution hereunder, and shall survive the delivery of the
Certificates.
9. Conditions to the Obligations of the Underwriter. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 2 hereof, as of the date hereof
and as of the Closing Date, the performance by the Company of its obligations
hereunder and to each of the following further conditions:
(a) In the event that this Agreement shall have been executed and
delivered prior to the effectiveness of the Registration Statement, the
Registration Statement shall have become effective not later than 9:00
a.m., New York City time, on the business day following the date of this
Agreement, or at such later time as you may approve; if the Registration
Statement shall have become effective prior to the execution and delivery
of this Agreement, either a post-effective amendment to the Registration
Statement containing the Prospectus shall have so become effective or the
Prospectus shall have been timely filed or transmitted by a means
reasonably calculated to result in filing with the Commission in accordance
with Rule 424(b); and in either case no stop order suspending the
effectiveness of the Registration Statement, as amended, if applicable,
shall be in effect on the Closing Date, and no proceedings for the issuance
of such an order shall be pending or threatened by the Commission on the
Closing Date.
(b) Your counsel shall have furnished to you such opinion or
opinions, dated the Closing Date, with respect to the validity of the
Registration Statement and
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<PAGE>
Prospectus, and such other matters as you may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to opine upon such matters.
(c) You shall have received on the Closing Date, the opinion,
addressed to you and dated the Closing Date, of Chapman and Cutler, counsel
for the Company, which opinion shall be reasonably satisfactory in form and
scope to your counsel to the following effect:
(i) the Company has been duly incorporated and is validly
existing under the laws of the State of Delaware with power and
authority to consummate the transactions contemplated hereby and by
the Trust Agreement, the Servicing Agreement, the Liquidity Agreement
and the Purchase Agreement (collectively, the "Documents");
(ii) each of the Documents has been duly authorized, executed
and delivered by the Company and constitutes the legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity (regardless of whether
considered in a proceeding in equity or at law);
(iii) neither the execution nor the delivery by the Company
of any Document nor the consummation by the Company of any other of
the transactions contemplated herein or therein, nor the fulfillment
of the terms of any Document will conflict with or violate, result in
a breach of or constitute a default under any statute governing the
Company or any regulation or any order of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Company;
(iv) there is no action, suit or proceeding pending or, to the
best of such counsel's knowledge, threatened against the Company, and
no other action, suit or proceeding known to such counsel is pending,
before any court or administrative agency, challenging the validity or
enforceability of the Documents or the transactions contemplated
hereby or thereby; and
(v) no approval, authorization, consent, order, registration,
filing, qualification, license or permit of or with any United States
state or Federal court or governmental agency or body having
jurisdiction over the Company is required for the consummation by the
Company of the transactions contemplated herein, except such as may be
required under United States Federal securities laws, and the Blue Sky
laws of any United States jurisdiction as to which such counsel
expresses no opinion;
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<PAGE>
(d) You shall have received on the Closing Date, the opinion,
addressed to you and dated the Closing Date, of Chapman and Cutler, special
counsel for the Company and Trust, which shall be reasonably satisfactory
in form and scope to your counsel to the following effect:
(i) the Certificates are validly issued and outstanding, and
represent fractional undivided beneficial interests in the Trust
assets entitled to the benefits of the Trust Agreement;
(ii) the delivery to the Underwriter of the Certificates
against payment therefor as provided herein will pass to the
Underwriter all right, title and interest in the Certificates;
(iii) none of the Documents is required to be qualified under
the Trust Indenture Act of 1939, as amended, in connection with the
transactions contemplated hereby or thereby;
(iv) the Company has full power, authority and legal right to
transfer and assign the Loan Notes to the Trust pursuant to the Trust
Agreement;
(v) the Certificates have been registered under the
Securities Act; any required filing (or transmission by a means
reasonably calculated to result in filing) of the Prospectus or any
supplement thereto pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened; and the Registration
Statement, the Prospectus and each amendment thereof or supplement
thereto comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of
the Commission thereunder;
(vi) the Certificates, the Loan Notes, the Guarantee Agreement
and the Trust Agreement, conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(vii) the Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended; and
(viii) upon delivery to the Trust of the Loan Notes against
payment therefor as provided in the Trust Agreement, the Trust, to
such counsel's knowledge, will hold title to the Loan Notes free and
clear of all liens except those in favor of Eximbank created by the
Guarantee Agreement.
In addition, such counsel shall state that nothing has come to their
attention causing them to believe that at the Effective Date the Registration
Statement, as amended, contained any untrue statement of a material fact or
omitted to state any material fact required to be
-12-
<PAGE>
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein nor necessary to make the
statement therein, in light of the circumstances under which they were made, not
misleading.
(e) You shall have received on the Closing Date the opinion dated the
Closing Date and addressed to you of Chapman and Cutler, special United States
Federal tax counsel to the Trust, reasonably satisfactory in form and scope to
your counsel, to the effect that the statements in the Prospectus under the
heading "Certain Federal Income Tax Consequences" address all Federal tax
matters material to investors.
(f) You shall have received, on the Closing Date, a certificate of the
Company, dated the Closing Date, signed on its behalf by an authorized officer
of the Company to the effect that the signer of such certificate has examined
the Registration Statement and any post-effective amendment thereof, and the
Prospectus and any supplement thereto and that (i) the representations and
warranties made by the Company in this Agreement are true and correct as of the
Closing Date, (ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, if applicable, is in effect on the Closing
Date and no proceedings for the issuance of such an order have been taken or to
the knowledge of the Company are contemplated by the Commission on or prior to
the Closing Date and (iii) all of the closing conditions contained in Part III
page A2-4 of the Loan Agreement have been satisfied.
(g) You shall have received, on the Closing Date, a certificate of
LaSalle National Bank (in its individual capacity, the "Bank"), dated the
Closing Date, signed by an authorized officer of the Bank to the effect that (i)
the Bank is a national bank duly organized and validly existing in good standing
under the laws of the United States and has the corporate power and authority to
execute, and carry out the transactions contemplated by, the Documents to which
it is a party (the "Trust Documents") and (ii) the execution, delivery and
performance by the Bank of the Trust Documents do not contravene the provisions
of the articles of association or by-laws of the Bank, or any rule or regulation
under the laws of the United States of America governing the banking or
fiduciary powers of the Bank, presently binding the Bank, or, to the best of the
signer's knowledge, violate any judgment, order or decree applicable to the
Bank, or result in any violation of, or conflict with or constitute a default
under, any indenture, contract, agreement or other instrument applicable to the
Bank.
(h) You shall have received, on the Closing Date, a certificate of ABN
AMRO dated the Closing Date, signed on its behalf by an authorized officer of
ABN AMRO to the effect that (i) ABN AMRO is a bank duly organized and validly
existing in good standing under the laws of The Netherlands and has the
corporate power and authority to execute, and carry out the transactions
contemplated by the Documents to which it is a party (the "Servicer Documents")
and (ii) the execution, delivery and performance by ABN AMRO of the Servicer
Documents do not contravene the provisions of the Articles of Association of ABN
AMRO, or any rule or regulation under the laws of The Netherlands governing ABN
AMRO's powers, presently binding ABN AMRO, or, to the best of the signer's
knowledge,
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<PAGE>
violate any judgment, order or decree applicable to ABN AMRO, or result in any
violation of, or conflict with or constitute a default under, any indenture,
contract, agreement or other instrument applicable to ABN AMRO.
(i) There shall not exist, in your judgment, on or prior to the Closing
Date, in the Registration Statement or the Prospectus or any amendment or
supplement thereto, an untrue statement of a fact which is material or omits to
state a fact which is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(j) The Certificates shall have been rated "AAA" by Standard & Poor's
Ratings Group, a division of the McGraw-Hill Companies.
(k) The Company shall have taken, on or prior to the Closing Date, all
other action, if any, which it is stated in the Registration Statement (or any
post-effective amendment thereof) or the Prospectus (as amended or supplemented,
if so amended or supplemented) that the Company will take prior to or
concurrently with the sale and delivery of the Certificates as contemplated
herein, and all agreements herein contained to be performed on the part of the
Company on or prior to the Closing Date shall have been so performed.
(l) You shall have received, on the Closing Date, the opinion, addressed
to you, and dated the Closing Date, of counsel of Eximbank, which opinion shall
be reasonably satisfactory in form and scope to your counsel, that the Guarantee
will be an obligation of Eximbank backed by the full faith and credit of the
United States of America.
(m) The Rating Agencies shall have received on the Closing Date a reliance
letter, dated the Closing Date and addressed to the Rating Agencies, from
counsel of Eximbank, permitting each of the Rating Agencies to rely upon the
opinion described in paragraph (k) above.
(n) The Company, the Trustee and the Servicer shall have furnished to you
and to your counsel such further certificates and documents as you or they may
have reasonably requested prior to the Closing Date.
(o) You shall have received your fee as Underwriter by wire transfer from
the Company.
If any of the conditions specified in this Section 9 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
and all obligations of the Underwriter hereunder may be cancelled on, or at any
time prior to, the Closing Date by you. Notice of such cancellation shall be
given to the Company in writing, or by telegraph, telephone or telex confirmed
in writing.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are reasonably satisfactory to counsel for the
Underwriter.
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<PAGE>
10. Effectiveness. This Agreement shall become effective when executed
and delivered by the parties hereto; provided, however, that in the event that
this Agreement shall have been executed and delivered prior to the effectiveness
of the Registration Statement, this Agreement shall become effective upon the
effectiveness of the Registration Statement. Until this Agreement shall have
become effective, it may be terminated (a) by you by giving notice to the
Company or (b) by the Company giving notice to you. Any such notice shall be in
writing, or by telegraph, telephone or telex confirmed in writing.
11. Termination. This Agreement shall be subject to termination by the
Underwriter, in your absolute discretion, by notice given to the Company prior
to delivery of and payment for the Certificates, if prior to such time (i) any
rating of the Certificates shall have been withdrawn or downgraded, or made
subject to a credit watch with adverse implications, by a national rating
service, (ii) a banking moratorium shall have been declared by United States
Federal or State authorities, (iii) trading in securities generally on the New
York Stock Exchange shall have been suspended or minimum prices shall have been
established on that Exchange, (iv) there shall have occurred any outbreak or
material escalation of hostilities involving the United States or other calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable to market the Certificates,
or (v) there shall have been such a material adverse change in general economic,
political or financial conditions in the United States of America so as, in your
judgment, to make it impracticable to market the Certificates.
12. Notices. Except as otherwise expressly provided in this Agreement,
(i) whenever notice is required by the provisions of this Agreement to be given
to the Underwriter, such notice shall be in writing addressed to ABN AMRO
Securities (USA) Inc., 181 West Madison, Suite 3201, Chicago, Illinois 60602,
Attention: Mr. James Arvia, and (ii) whenever notice is required to be given to
the Company, such notice shall be in writing addressed to U.S. Trade Funding
Corp., Two Wall Street, New York, New York 10005, Attention: Andrew L. Stidd,
President.
13. Registration Statement. The Company agrees to furnish to you, without
charge, a signed copy of the Registration Statement and each amendment thereof,
including all exhibits hereto.
14. Successors. This Agreement shall be binding upon the Underwriter and
the Company and their respective successors and permitted assigns. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, and of the controlling persons, directors and officers referred
to in Section 8 hereof and their respective successors, permitted assigns and
personal representatives. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
14, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
15. Business Day. The term "Business Day" as used in this Agreement shall
mean any day on which the New York Stock Exchange is open for trading and on
which
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<PAGE>
commercial banks are not authorized or required to close in New York, New York
or Chicago, Illinois.
16. Prior Agreements. This Agreement supersedes any prior agreements,
contracts, or understanding of the parties hereto with respect to the matters
described or contemplated herein.
17. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
18. Jurisdiction. Each of the parties hereto hereby irrevocably
and unconditionally submits to the non-exclusive jurisdiction of the Courts of
the State of Illinois or the Federal Courts sitting in the City of Chicago,
State of Illinois and hereby irrevocably and unconditionally agrees that any
legal suit, action or proceeding arising out of or relating to this Agreement,
the other documents or instruments executed in connection herewith or any of the
transactions contemplated hereby, may be instituted by any party hereto in such
Courts of the State of Illinois or Federal Court sitting in the City of Chicago,
State of Illinois. Each of the parties hereby irrevocably and unconditionally
waives, to the fullest extent permitted by law, any objection which it may have
now or hereafter to the laying of the venue or any objection base on forum non
conveniens, or based on the grounds of jurisdiction with respect to any such
legal suit, action or proceeding and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding.
19. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
U.S. Trade Funding Corp., the Company
By___________________________________________
Name:
Title:
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<PAGE>
We hereby confirm as of the date hereof
that this letter correctly sets forth the
agreement between the Company and ABN
AMRO Securities (USA) Inc.
ABN AMRO Securities (USA) Inc.
By_______________________________________
Name:
Title:
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<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
U.S. TRADE FUNDING CORP.
FIRST: The name of the corporation (the "Corporation") shall be U.S. Trade
Funding Corp.
SECOND: The registered office of the Corporation is to be located at 15
East North Street, in the City of Dover, Kent County in the State of Delaware
19901. The name of its registered agent at that address is United Corporate
Services, Inc.
THIRD: The purpose for which the Corporation is formed is to engage in the
following activities:
(a) to authorize, issue, sell and deliver debt obligations, interests
in trusts and other forms of securities, the issuance and sale of which may
or may not be exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Securities") secured by, or representing an
interest in, loans ("Loans") to manufacturers, wholesalers or retailers or
prospective purchasers of, specified merchandise, insurance and services or
to lending institutions that originate loans to such persons for such
purposes, or other financial assets ("Financial Assets"), which Loans or
other Financial Assets are secured or supported by guarantees by the
Export-Import Bank of the United States or other agencies or
instrumentalities of the federal government of the United States and which
may be secured by insurance policies, surety bonds, cash collateral,
letters of credit, lines of credit or other credit enhancements
(collectively, "Credit and Liquidity Support");
(b) to acquire, own, hold, assign, service, sell, pledge and
otherwise deal with Loans and Financial Assets and related Credit and
Liquidity Support supporting payment of the Loans and Financial Assets;
(c) to invest cash collateral, reserves and proceeds from Securities,
Loans and Financial Assets and Credit and Liquidity Support;
(d) to authorize, issue, sell, deliver and incur indebtedness or
obligations which are completely subordinated to any Securities; and
(e) to engage in any lawful act or activity and to exercise any
powers permitted to corporations organized under the General Corporation
Law of Delaware (as the same exists now or may hereafter be amended "GCL")
that are incidental to and necessary or convenient for the accomplishment
of the above mentioned purposes including, without limitation, the entering
into of interest rate or basis swap, cap,
<PAGE>
floor or collar agreements, currency exchange agreements or similar hedging
transactions and referral, management, servicing and administration
agreements.
FOURTH: The aggregate number of shares which the Corporation shall have
the authority to issue is three thousand (3,000) shares, all of which are to be
Common Stock of the par value of one United States cent ($.01) each.
FIFTH: The Board of Directors from time to time may make, alter or repeal
the By-laws of the Corporation, except any particular By-law which is specified
as not subject to alteration or repeal by the Board of Directors.
SIXTH: The Corporation shall indemnify and advance expenses to its
directors, officers, employees and agents and any person who is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise and
their respective heirs, executors, administrators, successors and assigns to the
fullest extent permitted by the GCL.
SEVENTH: No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty of a
director, provided, however, that the foregoing shall not eliminate or limit
liability of a director (i) for any breach of such director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the GCL or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment to or repeal of
this Article Seventh shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment.
EIGHTH: Notwithstanding any other provision of this Certificate of
Incorporation and any provision of law that otherwise so empowers the
Corporation, the Corporation shall not, without the affirmative vote of (1) in
the case of matters described in clauses (b) or (d) below, a simple majority of
the members of the whole Board of Directors of the Corporation (which simple
majority must include all members of the Board of Directors required by Article
NINTH then in office and acting) to do those things indicated in such clauses
and (2) in the case of matters described in clauses (a), (c) or (e) below, one
hundred percent (100%) of the members of the whole Board of Directors of the
Corporation to do those things indicated in such clauses:
(a) engage in any business or activity other than in connection with
or relating to the purposes set forth in Article Third hereof; or
(b) dissolve or liquidate, in whole or in part; or
(c) consolidate or merge with or into any other entity, or convey,
transfer or lease its properties and assets substantially as an entirety to
any entity, or permit any
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<PAGE>
entity to consolidate or merge into the Corporation or convey, transfer or
lease its properties and assets substantially as an entirety to the
Corporation, unless:
(1) the corporation formed by such consolidation or into which
the Corporation is merged or the entity which acquires by conveyance
or transfer, or which leases, the properties and assets of the
Corporation substantially as an entirety (i) shall be a corporation
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia, (ii) shall have a
certificate of incorporation containing provisions identical to the
provisions of Articles Third, Ninth, Tenth, Eleventh and Twelfth
hereof and this Article Eighth, and (iii) shall expressly assume the
due and punctual payment and performance of all indebtedness,
liabilities and obligations of the Corporation; and
(2) immediately after giving effect to such transaction, no
default or event of default shall have occurred and be continuing as a
result of such transaction under any agreement relating to any Credit
and Liquidity Support or the security or repayment of any provider of
such Credit and Liquidity Support; or
(d) institute proceedings to be adjudicated bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against
it, or file a petition seeking or consenting to reorganization or relief
under any applicable Federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Corporation or a
substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as
they become due, or take any corporate action in furtherance of any such
action; or
(e) amend, alter, change or repeal Articles THIRD, EIGHTH, NINTH,
TENTH, ELEVENTH or TWELFTH hereof; provided, however, that, subject to the
foregoing, the Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation;
provided, however, that if there shall not be at least one director required by
Article Ninth hereof then in office and acting, a vote upon any matter set forth
in this Article Eighth shall not be taken unless and until at least one director
meeting the requirements of Article NINTH hereof shall have been elected, then
in office and acting.
NINTH: At all times from and after the establishment of the Corporation,
at least two (2) directors of the Corporation and two (2) executive officers of
the Corporation (which may be two (2) individuals each serving as both a
director and an executive officer) will not be a director, officer or employee
of any person owning beneficially, directly or indirectly, more than ten percent
(10%) of the outstanding common stock of the Corporation, any
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<PAGE>
person from whom the Corporation acquires assets (or the originator of such
assets), any creditor of the Corporation, any provider of Credit and Liquidity
Support, the management company, the administrator, any referral agent, or any
person acting as, or providing the services of, a trustee, servicer, collateral
agent, collection agent, issuing and paying agent or depositary for or at the
request of the Corporation, or a director, officer or employee of any such
person's parent, subsidiaries or affiliates other than the Corporation, unless
acting as the independent director of any such subsidiary or affiliate (other
than such person's parent) or of any person from whom the Corporation acquires
assets (or the originator of such assets) pursuant to a provision substantially
similar to this Article Ninth contained in such person's certificate of
incorporation. No director required by this Article Ninth shall be a trustee in
bankruptcy for the Corporation or any affiliate thereof. In addition, no
director serving in the capacity set forth in this Article Ninth may be removed
unless his successor has been elected. For purposes of this Certificate of
Incorporation, the term "person" means a natural person, corporation or other
entity, government, or political subdivision, agency, or instrumentality of a
government; and an "affiliate" of a person is a person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the person specified. In no event shall all of the
members of the Board of Directors serve together as directors of any other
corporation, 10% or more of the outstanding common stock of which is owned by
any person owning 10% or more of the outstanding common stock of the
Corporation.
TENTH: The Corporation shall not commingle its assets with those of any
other entity or person and its funds and other assets shall be separately
identified and segregated. The Corporation shall maintain its own separate bank
accounts, and shall maintain its corporate, financial and accounting books and
records separate from those of any other entity or person. The Corporation
shall indicate in such statements and records the separateness of such
corporation's assets and liabilities from those of any other entity or person.
The Corporation shall pay from its assets all liabilities, obligations and
indebtedness of any kind incurred by the Corporation and shall not pay from its
assets any liabilities, obligations or indebtedness of any other entity or
person. The Corporation shall, at all times, hold itself out to the public
(including, without limitation, any creditors of any of its affiliates) under
the Corporation's own name and as a separate and distinct corporate entity.
ELEVENTH: The Corporation shall not institute proceedings to be
adjudicated bankrupt or insolvent; or consent to the institution of bankruptcy
or insolvency proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy; or consent to the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the Corporation or a
substantial part of its property; or make any assignment for the benefit of
creditors; or admit in writing its inability to pay its debts generally as they
become due; or take any corporate action in furtherance of any such action at
any time when the Corporation is able to pay its debts generally as they become
due.
TWELFTH: The Corporation shall not dissolve at any time at which any
Securities issued by the Corporation are outstanding.
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<PAGE>
THIRTEENTH: The name and address of the incorporator is as follows:
Christopher K. Aidun, c/o Loeb & Loeb, 345 Park Avenue, New York, New York
10154-0037.
IN WITNESS WHEREOF, I have signed my name to this Certificate of
Incorporation this 22nd day of July, 1994.
__________________________________________
Christopher Aidun, Sole Incorporator
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<PAGE>
================================================================================
U.S. TRADE FUNDING CORP.
Standard Terms and Conditions of Trust Agreement
Dated as of January 1, 1995
_______________________
Loan-Backed Securities
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C> <C>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................... 1
Section 1.01. Definitions............................................................... 1
Section 1.02. Acts of Holders........................................................... 11
Section 1.03. Notices, etc., to Trustee, Company and Servicer........................... 11
Section 1.04. Notices to Holders; Waiver................................................ 12
Section 1.05. Effect of Headings and Table of Contents.................................. 12
Section 1.06. Successors and Assigns.................................................... 12
Section 1.07. Separability.............................................................. 13
Section 1.08. Benefits of Trust Agreement............................................... 13
Section 1.09. Legal Holidays............................................................ 13
Section 1.10. Governing Law............................................................. 13
Section 1.11. Corporate Obligation...................................................... 13
Section 1.12. Compliance Certificates and Opinions...................................... 13
Section 1.13. Rights and Remedies Cumulative............................................ 14
Section 1.14. Undertaking for Costs..................................................... 14
ARTICLE TWO FORM OF SECURITIES........................................................ 15
Section 2.01. Form Generally............................................................ 15
ARTICLE THREE THE SECURITIES............................................................ 15
Section 3.01. Denominations............................................................. 15
Section 3.02. Issues of Securities...................................................... 15
Section 3.03. Execution, Authentication, Delivery and Dating............................ 15
Section 3.04. Temporary Securities...................................................... 16
Section 3.05. Registration, Registration of Transfer and Exchange....................... 17
Section 3.06. Reserved.................................................................. 18
Section 3.07. Mutilated, Destroyed, Lost or Stolen Securities........................... 18
Section 3.08. Payment of Principal and Interest; Principal and Interest
Rights Preserved.......................................................... 19
Section 3.09. Persons Deemed Owners..................................................... 20
Section 3.10. Cancellation.............................................................. 20
ARTICLE FOUR ORIGINAL AUTHENTICATION AND DELIVERY OF SECURITIES........................ 21
Section 4.01. General Provisions........................................................ 21
Section 4.02. Collateral................................................................ 23
ARTICLE FIVE SATISFACTION AND DISCHARGE................................................ 23
Section 5.01. Satisfaction and Discharge of Trust Agreement............................. 23
</TABLE>
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<TABLE>
<S> <C> <C>
Section 5.02. Application of Trust Money................................................ 24
ARTICLE SIX DEFAULTS AND REMEDIES..................................................... 25
Section 6.01. Events of Default......................................................... 25
Section 6.02. Acceleration of Maturity.................................................. 25
Section 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee........... 26
Section 6.04. Remedies.................................................................. 27
Section 6.05. Optional Preservation of Trust Estate..................................... 27
Section 6.06. Trustee May File Proofs of Claim.......................................... 29
Section 6.07. Trustee May Enforce Claims Without Possession of Securities............... 30
Section 6.08. Application of Money Collected............................................ 30
Section 6.09. Limitation on Suits....................................................... 30
Section 6.10. Right of Holders to Receive Principal and Interest........................ 31
Section 6.11. Restoration of Rights and Remedies........................................ 31
Section 6.12. [Reserved]................................................................ 31
Section 6.13. Delay or Omission; Not Waiver............................................. 31
Section 6.14. Control by Holders........................................................ 32
Section 6.15. Waiver of Past Defaults................................................... 32
Section 6.16. [Reserved]................................................................ 33
Section 6.17. Waiver of Stay or Extension Laws.......................................... 33
Section 6.18. Sale of Trust Estate...................................................... 33
Section 6.19. Actions on Debt Securities................................................ 34
ARTICLE SEVEN EVENTS OF TERMINATION; REMEDIES........................................... 34
Section 7.01. Events of Termination..................................................... 34
Section 7.02. Enforcement Actions; Rescission and Annulment............................. 35
Section 7.03. Suits for Enforcement by Trustee.......................................... 36
Section 7.04. Optional Preservation of Trust Estate..................................... 36
Section 7.05. Trustee May File Proofs of Claim.......................................... 38
Section 7.06. Trustee May Enforce Claims Without Possession of Securities............... 39
Section 7.07. Application of Money Collected............................................ 39
Section 7.08. Limitation on Suits....................................................... 39
Section 7.09. Delay or Omission; Not Waiver............................................. 40
Section 7.10. Control by Holders........................................................ 40
Section 7.11. Waiver of Past Defaults................................................... 40
Section 7.12. Sale of Trust Estate...................................................... 41
Section 7.13. Restoration of Rights and Remedies........................................ 42
ARTICLE EIGHT THE TRUSTEE............................................................... 42
Section 8.01. Certain Duties and Responsibilities....................................... 42
Section 8.02. Notice of Default......................................................... 44
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Section 8.03. Certain Rights of Trustee................................................. 44
Section 8.04. Not Responsible for Recitals or Issuance of Securities.................... 45
Section 8.05. May Hold Securities....................................................... 46
Section 8.06. Money Held in Trust....................................................... 46
Section 8.07. Compensation and Reimbursement............................................ 47
Section 8.08. Corporate Trustee Required; Eligibility................................... 47
Section 8.09. Resignation and Removal; Appointment of Successor......................... 47
Section 8.10. Acceptance of Appointment by Successor.................................... 49
Section 8.11. Merger, Conversion, Consolidation or Succession to Business of Trustee.... 49
Section 8.12. Co-trustees and Separate Trustees......................................... 49
Section 8.13. Rights with Respect to the Servicer....................................... 51
Section 8.14. Appointment of Authenticating Agent....................................... 51
Section 8.15. Trustee to Hold Loan Documents............................................ 53
Article Nine Reports by Trustee........................................................ 53
Section 9.01. Annual Servicer Report.................................................... 53
Section 9.02. Servicer's Books and Records.............................................. 53
ARTICLE TEN SUPPLEMENTAL TRUST AGREEMENTS............................................. 54
Section 10.01. Supplemental Trust Agreements without Consent of Holders.................. 54
Section 10.02. Supplemental Trust Agreements with Consent of Holders..................... 55
Section 10.03. Execution of Supplemental Trust Agreements................................ 56
Section 10.04. Effect of Supplemental Trust Agreements................................... 56
Section 10.05. Reference in Securities to Amendments..................................... 56
ARTICLE ELEVEN SPECIAL REDEMPTION OF SECURITIES.......................................... 57
Section 11.01. Special Redemption at the Option of the Company; Election to Redeem....... 57
Section 11.02. Notice to Trustee......................................................... 57
Section 11.03. Notice of Special Redemption by the Company............................... 57
Section 11.04. Deposit of the Special Redemption Price................................... 58
Section 11.05. Securities Payable on Special Redemption Date............................. 58
ARTICLE TWELVE COVENANTS................................................................. 58
Section 12.01. Payment of Principal and Interest......................................... 58
Section 12.02. Maintenance of Office or Agency........................................... 58
Section 12.03. Money for Payments on Securities to Be Held in Trust...................... 59
Section 12.04 Corporate Existence....................................................... 60
Section 12.05. Protection of Trust Estate; Protective Filing............................. 60
Section 12.06. Negative Covenants........................................................ 61
Section 12.07. Information as to Company................................................. 62
Section 12.08. Investment Company Act.................................................... 63
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Section 12.09. Enforcement of Servicing Agreement........................................ 63
Section 12.10. Company May Consolidate, etc., Only on Certain Terms...................... 63
Section 12.11. Taxes..................................................................... 64
Section 12.12. Successor Substituted..................................................... 64
Section 12.13. Opinions as to Trust Estate............................................... 64
Section 12.14. Performance of Obligations................................................ 65
ARTICLE THIRTEEN ACCOUNTS, ACCOUNTINGS AND DISTRIBUTIONS................................... 65
Section 13.01. Accounts.................................................................. 65
Section 13.02. Distribution Account...................................................... 66
Section 13.03. Liquidity Account......................................................... 67
Section 13.04. Credit Enhancement........................................................ 68
Section 13.05. Reports by Trustee to Holders............................................. 68
Section 13.06. Trust Estate.............................................................. 68
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These STANDARD TERMS AND CONDITIONS OF TRUST AGREEMENT dated as of January 1,
1995 (herein called these "Standard Terms of Trust Agreement") are incorporated
by reference in, and are intended to form a part of, each Supplemental Trust
Agreement to which these Standard Trust Agreement Terms are appended (each, a
"Supplement," and each such Supplement together with the Standard Terms of Trust
Agreement incorporated by reference therein, a "Trust Agreement").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions. The following terms as used in these Standard
Terms of Trust Agreement shall have the following meanings:
" Act": With respect to any Holder, the meaning specified in Section 1.02."
"Additional Servicing Fee": With respect to an Issue of Securities the
fee, if any, payable to the Servicer under the Servicing Agreement and
designated as an "Additional Servicing Fee."
"Administrator": ABN AMRO Bank N.V. in its capacity as agent to the
Company pursuant to that certain Administration Agreement dated as of July 22,
1994 between ABN AMRO Bank N.V. and Lord Securities Corporation."
"Affiliate": With respect to any specified Person, any other Person,
directly or indirectly through one or more intermediaries controlling or
controlled by or under 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 "affiliated," "controlling" and
"controlled" have meanings correlative to the foregoing."
"Authenticating Agent": Any entity appointed by the Trustee pursuant to
Section 8.14."
"Board of Directors": The board of directors of the Company or any duly
authorized committee of such Board."
"Board Resolution": A copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification
and delivered to the Trustee."
"Borrower" or "Borrowers": With respect to an Issue of Securities, the
obligor or obligors on the Loan Note, Loan Notes or other instruments or assets
securing such
<PAGE>
Securities or in which such Securities represent fractional undivided ownership
interests, as identified in the Supplement for such Issue."
"Business Day": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in New York, New York and Chicago,
Illinois are authorized or obligated by law or executive order to be closed."
"Collection Period": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Company": U.S. Trade Funding Corp., a Delaware corporation, until a
successor Person shall have become the Company pursuant to the applicable
provisions of the Trust Agreement, and thereafter Company shall mean such
successor Person."
"Company Order" and "Company Request": A written order or request signed
in the name of the Company by its Chairman of the Board, President, or a Vice
President, or signed on behalf of the Company by the Administrator and delivered
to the Trustee."
"Corporate Trust Office": The principal corporate trust office of the
Trustee specified in the Supplement, or at such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee."
"Credit Enhancement": With respect to any Issue of Securities, the meaning
specified in the Supplement for such Issue."
Cut-Off Date": With respect to any Issue of Securities, the meaning specified
in the Supplement for such Issue."
"Debt Securities": Notes, bonds, debentures or other form of securities
that may be issued by, or at the direction of, the Company from time to time
under Supplements incorporating by reference these Standard Terms of Trust
Agreement, in each case evidencing an obligation of the Company to pay."
"Debt Securities Register": The meaning set forth in Section 3.05."
"Debt Securities Registrar": The meaning set forth in Section 3.05."
"Default": Any occurrence or circumstance which, with notice or the lapse
of time or both, would become an Event of Default."
"Defaulted Loan": Any Loan which as of the applicable date is in Default
under the related Loan Note, Loan Documents or equivalent instrument."
"Delivery Date": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
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"Determination Date": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Determining Party": The party that for purposes of this Trust Agreement
shall have the right from time to time to direct the Trustee or otherwise direct
certain proceedings and remedies as described herein. Generally, the Determining
Party shall be the Holders of Outstanding Securities in priorities by Level as
specified in the Supplement. Where the Supplement does not establish a priority,
the Determining Party shall be the Holders of all Outstanding Securities without
regard to Level. Where provisions of this Trust Agreement specify a voting
percentage, then the applicable percentage in outstanding principal amount of
the specified Outstanding Securities must approve the action at issue. For
example, if for purposes of a certain action the Level 1-A Holders are the
Determining Party and the applicable provision recites "by written notice to the
Trustee from the Determining Party (66-2/3%)" then such action requires written
notice from the Holders of at least 66-2/3% of the outstanding principal amount
of Level 1-A securities."
"Distribution": The amounts payable from time to time on Pass-through
Securities, all as more fully described in a Supplement relating to an Issue of
Pass-through Securities."
"Distribution Account": The trust account specifically identified with
respect to an Issue of Securities in the Supplement for such Issue, established
by the Trustee pursuant to Section 13.02 hereof."
"Eligible Assets": Shall have the meaning ascribed to such term from time
to time pursuant to Rule 3a-7 under the Investment Company Act of 1940."
"Eligible Investments": Any and all of the following instruments (provided
that the same in all events shall mature prior to the related Payment Date on
which proceeds thereof are required to make payments hereunder, and shall not be
callable as to principal and interest):
(i) obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof whose
obligations are backed by the full faith and credit of the United States;
(ii) certificates of deposit and time and demand deposits and bankers'
acceptances having original maturities of no more than 365 days of any bank
or trust company incorporated or licensed under the laws of the United
States or any state, provided that the long-term obligations of such bank
or trust company, at the date of acquisition thereof have received a credit
rating of at least AAA (or its equivalent) from the Rating Agency or the
short term debt obligations of such bank or trust company at the date of
acquisition thereof have received a credit rating of at least AAA (or its
equivalent) from the Rating Agency;
(iii) money market funds rated AAAm or AAAm-g by the Rating Agency; any
such money market funds which provide for demand withdrawals being
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conclusively deemed to satisfy any maturity requirements for Eligible
Investments set forth in the Trust Agreement;
(iv) investment agreements or contracts which have a long-term rating
of AAA or higher by the Rating Agency or a short-term rating of A-1+ by the
Rating Agency;
(v) certificates of deposit and time and demand deposits and
bankers' acceptances having original maturities of no more than 365 days of
the Trustee, provided the Trustee maintains a short-term rating of A-1+ by
the Rating Agency;
(vi) commercial paper (including both non-interest bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
having a rating of A-1+ by the Rating Agency at the time of such
investment; and
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to the Rating Agency that was
requested to rate the Securities as collateral for securities having
ratings equivalent to their respective ratings of the Securities that were
in effect at the time of such investment.
Any such Eligible Investments may be purchased by or through the Trustee or
any of its Affiliates."
"Event of Default": The meaning specified in Section 6.01."
"Event of Termination": The meaning specified in Section 7.01."
"Eximbank": Export-Import Bank of the United States."
"Final Payment Date": With respect to each Issue of Securities, the date
on which the final principal payment on such Securities becomes due and payable
as therein or herein provided, whether at the Stated Maturity, by acceleration
or redemption."
"Grant": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of Loan
Notes, Loans or of any other instrument shall include all rights, powers and
options (but none of the obligations) of the Granting party thereunder,
including without limitation the immediate and continuing right to claim,
collect, receive and receipt for payments in respect of such Loan Notes and
Loans, or any other payment due thereunder, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything which the Granting party is
or may be entitled to do or receive thereunder or with respect thereto."
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"Holder": The person in whose name any Securities are registered in the
Register."
"Imputed Interest Amount": With respect to any Issue of Pass-through
Securities, the meaning specified in the Supplement related to such Issue of
Pass-through Securities."
"Imputed Principal Amount": With respect to any Issue of Pass-through
Securities, for purposes of any particular certificate representing an ownership
interest in Pass-through Securities, an amount equal to the Percentage Interest
of such certificate multiplied by the aggregate principal amount of the Loans
(or as the context may require, an installment of principal due in respect of
the Loans) and, for purposes of determining the aggregate Imputed Principal
Amount, an amount equal to the aggregate principal amount of the Loans."
"Independent": When used with respect to any specified Person means such a
Person, who (1) is in fact independent of the Company, (2) does not have any
direct financial interest or any material indirect financial interest in the
Company or in any Affiliate of the Company and (3) is not connected with the
Company as an officer, employee, promoter, underwriter, trustee, partner,
director, or person performing similar functions. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to the Trustee, such Person shall be appointed by a Company Order and such
opinion or certificate shall state that the signer has read this definition and
that the signer is Independent within the meaning hereof."
"Interest Amount": With respect to each Collection Period, the amount of
collections received by the Servicer or the Trustee, as applicable, from the
Borrower or Borrowers during such Collection Period or from any guarantor or
other credit enhancer of the Loans, or from any other payor in respect of Other
Collateral, in each case attributable to interest on the respective Loans, and
identified as such on the Servicer Remittance Report for such Collection
Period."
"Interest Rate": With respect to any Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Issue" or "Issue of Securities": For purposes of these Standard Terms of
Trust Agreement, the Securities issued by or at the direction of the Company
pursuant to each Supplement, including these Standard Terms of Trust Agreement
incorporated therein, which Securities may be issuable in any number of Classes
or Series with such titles and relative rights and benefits as shall be
specified in the Supplement for such Securities."
"Level [X-Z] Interest Accounts"; and "Level [X-Z] Principal Accounts":
Each of the several Payment Accounts identified as such and established for the
benefit of the Level [X-Z] Parties."
"Level [X-Z] Interest Amount" and "Level [X-Z] Principal Amount": With
respect to any Collection Period, the respective amounts reflected as such on
the Servicer Remittance Report for such Collection Period."
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"Level [X-Z] Parties": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue.
For purposes of each of the defined terms commencing with the word "Level",
the bracketed symbol [X-Z] shall be constituted by an integer in the case of the
character "X" and may be constituted by a letter designation in case of the
character "Z". Unless otherwise provided in the Supplement, the integers and
letters shall designate a hierarchy of priority such that "1" shall be higher
priority than "2", etc. and "A" shall be in higher priority than "B", etc."
"Liquidity Account". means the account, if any, established by the Trustee
pursuant to Section 13.03 below relating to a particular Issue of Securities."
Liquidity Facility": With respect to any Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Loan": Any one of the one or more loans, receivables or other evidences
of indebtedness or other form of Eligible Assets, including any amendments,
riders and annexes thereto, securing an Issue of Securities, or in which an
Issue of Securities represents fractional undivided ownership interests, in
either case, as more specifically identified and described in the Supplement for
such Issue."
"Loan Collateral": With respect to a Loan, the collateral, if any,
securing such Loan as described in the Supplement for the Issue of Securities
secured by such Loan, or in which such Securities represent fractional undivided
ownership interests."
"Loan Documents": With respect to any Loan, the documents and instruments
evidencing such Loan including, without limitation, any loan agreement, note,
security agreement, insurance policy or guarantee. "
"Loan Note": With respect to any Loan, the related promissory note
evidencing such Loan."
"Minimum Denomination": With respect to any Issue of Securities, the
meaning specified in the Supplement for such Issue."
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, or the Secretary of the
company on whose behalf the certificate is delivered, and delivered to the
Trustee and which certificate shall comply with the applicable requirements of
Section 1.12 hereof. Unless otherwise specified, any reference in the Trust
Agreement to an Officer's Certificate shall be to an Officer's Certificate of
the Company."
"Opinion of Counsel": A written opinion of counsel who may, except as
otherwise expressly provided in the Trust Agreement, be counsel for the Company
and who shall be
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reasonably satisfactory to the Trustee and which opinion shall comply with the
applicable requirements of Section 1.12 hereof."
"Other Collateral": Such Eligible Assets and other property as may from
time to time be a part of the Trust Estate."
"Outstanding": As of any date of determination, all Securities of such
Issue theretofore authenticated and delivered under the Trust Agreement except:
(i) Securities theretofore canceled by the Registrar or delivered to
the Registrar for cancellation;
(ii) Securities for whose payment money in the necessary amount has
been theretofore irrevocably deposited with the Trustee or any Paying Agent
(other than the Company) in trust for the Holders of such Securities
(provided, however, that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to the Trust Agreement or
provision therefor, satisfactory to the Trustee, has been made); and
(iii) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to the Trust Agreement
unless proof satisfactory to the Trustee is presented that any such
Securities are held by a bona fide purchaser;
provided, however, that for purposes of determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Securities that the Trustee knows to be so
owned shall be so disregarded."
"Pass-through Securities": Certificates of beneficial interest or other
securities evidencing an undivided fractional ownership interest in a Trust
Estate that may be issued at the direction of the Company from time to time
under Supplements incorporating by reference these Standard Terms of Trust
Agreement."
"Pass-through Securities Register": The meaning set forth in Section
3.05."
"Pass-through Securities Registrar": The meaning set forth in Section
3.05."
"Paying Agent": The Trustee or any other Person that meets the eligibility
standards for the Trustee specified in Section 8.08 and is authorized by the
Company pursuant to Section 12.03 to pay the principal of, or interest on, any
Securities on behalf of the Company."
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"Payment Accounts": The sub-accounts of the Distribution Account
established by the Trustee in accordance with Section 13.02 hereof. The Payment
Accounts with respect to an Issue of Securities shall be specifically identified
in the Supplement for such Issue and shall, in addition, be separately
identified as Level 1 Interest Accounts or Level 1 Principal Accounts, and, to
the extent necessary, Level 2 Interest Accounts or Level 2 Principal Accounts,
and Level 3 Interest Accounts or Level 3 Principal Accounts, etc."
"Payment Date": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Percentage Interest": The undivided fractional ownership interest of any
Holder of Pass-through Securities, expressed as a percentage of all such
ownership interests."
"Person": Any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof."
"Principal Amount": With respect to each Collection Period, the amount of
collections received by the Servicer or the Trustee, as applicable, from the
Borrower or Borrowers during such Collection Period or from any guarantor or
other credit enhancer of the Loans or from any payor in respect of any Other
Collateral, in each case attributable to principal on the respective Loans, and
identified as such on the Servicer Remittance Report for such Collection
Period."
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding."
"Rating Agency": With respect to an Issue of Securities, the statistical
rating organization or organizations specified in the Supplement for such Issue,
or any successor thereto."
"Record Date": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Register": With respect to an Issue of Debt Securities, the Debt
Securities Register and, with respect to an Issue of Pass-through Securities,
the Pass-through Securities Register."
"Registered Holder": The Person whose name appears on the Register on the
applicable Record Date or Redemption Record Date or Special Redemption Record
Date, as applicable."
"Registrar": With respect to an Issue of Debt Securities, the Debt
Securities Registrar and, with respect to an Issue of Pass-through Securities,
the Pass-through Securities Registrar."
"Reinvestment Income": Any interest or other earnings earned on all or
part of the Trust Estate."
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"Required Rating": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Responsible Officer": With respect to the Trustee, any Executive Vice
President and Trust Officer, any Senior Vice President and Trust Officer, any
Vice President and Trust Officer, any Assistant Vice President and Trust
Officer, or any Corporate Trust Officer assigned by the Trustee and working in
the corporate trust department of the Trustee at the location of the Corporate
Trust Office to administer its corporate trust matters."
"Revenue Account": The deposit account specifically identified, with
respect to an Issue of Securities in the Supplement for such Issue, established
by the Trustee pursuant to Section 13.01 hereof."
"Sale": The meaning specified in Section 6.18 or Section 7.12 hereof, as
the case may be."
"Scheduled Expenses": As of any particular date, any Servicing Fee and any
Trustee's Fee and any other fees that may be specified as such in the Supplement
for a particular Issue to be due on the next Payment Date."
"Securities": For purposes of these Standard Terms of Trust Agreement,
Debt Securities, Pass-through Securities or other securities that may be issued
by, or at the direction of, the Company from time to time under Supplements
incorporating by reference these Standard Terms of Trust Agreement and for
purposes of an Trust Agreement, the Issue of Securities issued pursuant to such
Trust Agreement."
"Security": The note, certificate, receipt or other evidence of ownership
of one or more Securities."
"Servicer": With respect to any Issue of Securities, the Person specified
as such in the Supplement for such Issue until a successor Person shall have
become the Servicer pursuant to the applicable provisions of the Servicing
Agreement, and thereafter, the "Servicer" shall mean such successor Person."
"Servicer Remittance Date": With respect to an Issue of Securities, the
meaning specified in the Supplement for such Issue."
"Servicer Remittance Report": The report of the Servicer substantially in
the form of Exhibit B to the Supplement, required to be delivered by the
Servicer to the Trustee on or before each Servicer Remittance Date."
"Servicing Agreement": The Servicing Agreement by and among the Company,
the Servicer, and the Trustee dated the date specified in the Supplement for a
particular Issue of Securities."
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"Servicing Fee": The fee paid to the Servicer as the servicing fee
pursuant to the Servicing Agreement."
"Special Payment Date": With respect to an Issue of Securities, the
meaning (if any) specified in the Supplement for such Issue."
"Special Redemption Date": A date fixed pursuant to Section 11.01."
"Special Redemption Price": With respect to any Securities, and as of any
Special Redemption Date, the outstanding principal amount of such Securities,
together with interest accrued thereon to the Special Redemption Date at the
Interest Rate applicable to such Securities (exclusive of installments of
interest and principal maturing on or prior to such date, payment of which shall
have been made or duly provided for to the Holder of such Securities on the
applicable Record Date or as otherwise provided in the Trust Agreement)."
"Special Redemption Record Date": With respect to any redemption of
Securities pursuant to Article Eleven, a date fixed pursuant to Section 11.01."
"Stated Maturity": With respect to an Issue of Securities, the meaning
specified in the Supplement for such Issue."
"Trust Agreement": Any one Supplemental Trust Agreement incorporating by
reference these Standard Trust Agreement Terms, in the form when originally
executed and, if from time to time supplemented or amended by one or more
supplemental trust agreements entered into pursuant to the applicable provisions
hereof. All references in these Standard Trust Agreement Terms designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of these
Standard Trust Agreement Terms as originally executed, or if amended or
supplemented, as so amended and supplemented, and all references in each
Supplement to the designated "Articles," "Sections," "Subsections" and other
subdivisions, unless explicitly provided otherwise, are to the designated
Articles, Sections, Subsections and other subdivisions of these Standard Trust
Agreement Terms. The words "herein," "hereof," "hereunder" and other words of
similar import when not related to a specific subdivision of these Standard
Trust Agreement Terms, refer to the Trust Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision of these Standard
Trust Agreement Terms or the Supplement."
"Trust Estate": With respect to an Issue of Securities, the meaning
specified in the Granting Clause of the Supplement for such Issue."
"Trustee": With respect to an Issue of Securities, the Person specified as
such in the Supplement for such Issue, until a successor Person shall have
become the Trustee pursuant to the applicable provisions of the Trust Agreement,
and thereafter "Trustee" shall mean such successor Person."
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"Trustee's Fee": The fee paid to the Trustee as the trustee fee pursuant
to Section 8.07 of the Trust Agreement."
"Vice President": With respect to the Company or the Trustee, any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
WHERE THE TERMS OF ANY DEFINITION OR PROVISION OF THIS STANDARD TERMS OF
TRUST AGREEMENT AND A SUPPLEMENT ARE INCONSISTENT, THE PROVISIONS OF THE
SUPPLEMENT SHALL SUPERSEDE THE PROVISIONS OF THESE STANDARD TERMS AND BE
CONTROLLING.
Section 1.02. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by the Trust
Agreement to be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders 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 it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of the Trust Agreement and (subject to Section 8.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Securities shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
Section 1.03. Notices, etc., to Trustee, Company and Servicer. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by the Trust Agreement to be made upon,
given or furnished to, or filed with:
(i) the Trustee by any Holder, by the Company or by the Servicer
shall be sufficient for every purpose hereunder if in writing, mailed,
first-class postage prepaid, to the Trustee addressed to it at the address
of the Trustee as indicated in the Supplement for such Issue, or at any
other address previously furnished in writing to
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the Company, the Holders and the Servicer and actually received by a
Responsible Officer of the Trustee; or
(ii) the Company by the Trustee, by the Servicer or by any Holder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at: Two Wall
Street, New York, New York 10005, Attention: Andrew L. Stidd, Vice
President, or at any other address previously furnished in writing to the
Trustee, the Holders and the Servicer by the Company; or
(iii) the Servicer by the Trustee, the Company or the Holders shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class postage prepaid, to the Servicer addressed to it at the address of
the Servicer as indicated in the Supplement for such Issue, or at any other
address previously furnished in writing to the Trustee, the Holders and the
Company.
Section 1.04. Notices to Holders; Waiver. Where the Trust Agreement
provides for notice to Holders of any event such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears on the Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders, and any
notice which is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.
Where the Trust Agreement provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of the Trust Agreement, then any manner of giving such notice
as shall be satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.
Section 1.05. 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 1.06. Successors and Assigns. All covenants and agreements in the
Trust Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
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Section 1.07. Separability. In case any provision in the Trust Agreement or
in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.08. Benefits of Trust Agreement. Nothing in the Trust Agreement
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto or any Person named in any Supplement, the Holders, and any
Paying Agent which may be appointed pursuant to the provisions hereof and any of
their successors hereunder, any benefit or any legal or equitable right, remedy
or claim under the Trust Agreement or under the Securities.
Section 1.09. Legal Holidays. Unless otherwise specifically provided
herein, in any case where the date of performance of any duty required by the
Trust Agreement or the date of any Payment Date, or the Stated Maturity of any
Securities, shall not be a Business Day, then (notwithstanding any other
provision of the Securities or the Trust Agreement but subject to any specific
overriding provision with respect thereto of any Supplement) performance of such
duty or payment of principal, interest, or premium, if any, need not be made on
such date but may be made on the next succeeding Business Day, with the same
force and effect as if made on the nominal date of any performance of such duty
or such Stated Maturity or Payment Date and, assuming such payment is actually
made on such subsequent Business Day, no interest shall accrue on the amount of
such payment for the period from and after any such nominal date.
Section 1.10. Governing Law. The Trust Agreement and each Security shall be
construed in accordance with and governed by the internal laws of the State of
Illinois applicable to agreements made and to be performed therein, and the
parties hereto hereby acknowledge and agree that the Trust Agreement and the
transactions contemplated thereunder were negotiated and entered into in the
State of Illinois.
Section 1.11. Corporate Obligation. No recourse may be taken, directly or
indirectly, against any incorporator, member, trustor, employee, agent,
Affiliate, officer or director of the Company or the Trustee or of any
predecessor or successor of the Company or the Trustee with respect to any of
the Company's obligations on the Securities or under the Trust Agreement or with
respect to the Trustee's obligations under the Trust Agreement or any
certificate or other writing delivered in connection herewith.
Section 1.12. Compliance Certificates and Opinions. Upon any application,
order or request by the Company or the Servicer to the Trustee to take any
action under any provision of the Trust Agreement for which a specific request
is required under the Trust Agreement, the Company or the Servicer, as
applicable, shall furnish to the Trustee an Officer's Certificate of the Company
or the Servicer, as applicable, stating that all conditions precedent, if any,
provided for in the Trust Agreement relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of a different certificate is specifically required by any
provision of the Trust Agreement relating to such particular application or
request, no additional certificate need be furnished.
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Every certificate or opinion with respect to compliance with a condition or
covenant provided for in the Trust Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.13. Rights and Remedies Cumulative. In connection with any Issue
of Securities, except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.07 and subject to the provisions of Section 6.09 and Section 7.08,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 1.14. Undertaking for Costs. All parties to the Trust Agreement
agree, and each Holder of any Securities by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under the Trust Agreement, or in any
suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 50% in principal amount, or Imputed Principal Amount, as the case may be,
of the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of, or premium, if any, or interest
on or any Distribution in respect of any Securities on or after the Stated
Maturity expressed in the Trust Agreement and in such Securities.
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ARTICLE TWO
FORM OF SECURITIES
Section 2.01. Form Generally. The Securities of any Issue and the
certificates of authentication shall be in substantially the form set forth in
the Supplement for such Issue, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Trust
Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon, as may, consistently herewith,
be determined by the officers executing such Securities, as evidenced by their
execution of the Securities.
The definitive Securities shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any manner acceptable to the initial purchasers of
the Securities, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
ARTICLE THREE
THE SECURITIES
Section 3.01. Denominations. The aggregate principal amount of Securities
which may be authenticated and delivered under the Trust Agreement shall be
specified in the Preliminary Statement of the Supplement, except for Securities
authenticated and delivered upon registration of transfer or in exchange for or
in lieu of, other Securities pursuant to Sections 3.04, 3.05, 3.07 or 10.05. The
Securities shall be issuable only as registered Securities without coupons in at
least the Minimum Denomination and integral multiples thereof; provided, that,
the foregoing shall not restrict or prevent the transfer in accordance with
Section 3.05 of any Security reflecting a remaining outstanding principal amount
or Imputed Principal Amount of less than the Minimum Denomination.
Section 3.02. Issues of Securities. The Securities of each Issue shall be
in such aggregate principal amount, shall be issuable in such classes or series
with such relative rights and benefits, shall bear such date or dates, shall be
payable at such place or places, shall mature on such date, shall bear interest
at such rate payable in such installments and on such dates, as shall be fixed
and determined by the Board of Directors, and as shall be specified in the
Supplement for such Issue.
Each Issue of Securities shall be created by a Supplement incorporating by
reference these Standard Terms of Trust Agreement, which shall be authorized by
a resolution of the Board of Directors delivered to the Trustee.
Section 3.03. Execution, Authentication, Delivery and Dating. Debt
Securities shall be executed on behalf of the Company by its President or one of
its Vice Presidents under its
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corporate seal imprinted or otherwise reproduced thereon. Pass-through
Securities shall be executed on behalf of the Trustee by an authorized officer
of the Trustee under its seal imprinted or otherwise reproduced thereon. The
signature of these officers on the Securities may be manual or by facsimile.
Securities bearing the manual signatures of individuals who were at any
time the proper officers of the Company or the Trustee shall bind the Company or
the Trustee, as the case may be, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication or delivery of
such Securities or did not hold offices at the date of authentication or
delivery of such Securities.
Each Security shall bear on its face the Delivery Date and be dated as of
the date of its authentication.
No Security shall be entitled to any benefit under the Trust Agreement or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication executed by the Trustee or, upon compliance with
Section 8.14, by any Authenticating Agent by the manual signature of one of its
authorized officers in substantially the following form:
This is one of the Securities referred to in the within-mentioned Trust
Agreement.
(Trustee),
As Trustee
By___________________________________________
Authorized Officer
Such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 3.04. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order, the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company to be maintained as provided in Section 12.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company, subject to Section 3.04, shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities
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of any authorized denominations and of a like initial aggregate principal amount
and Stated Maturity. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under the Trust Agreement as
definitive Securities.
Section 3.05. Registration, Registration of Transfer and Exchange. (a) The
Company shall cause to be kept at an office or agency to be maintained by the
Company in accordance with Section 12.02 a register (the "Debt Securities
Register"), in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Debt Securities and
the registration of transfers of Debt Securities. The Company hereby appoint as
"Debt Securities Registrar" for the purpose of registering Debt Securities and
transfers of Debt Securities as herein provided the Person so designated in the
applicable Supplement. The Trustee shall have the right to examine the Debt
Securities Register at all reasonable times and to rely conclusively upon a
Certificate of the Debt Securities Registrar as to the names and addresses of
the Holders of the Debt Securities and the principal amounts and numbers of such
Debt Securities as held. The Trustee shall cause to be kept at its Corporate
Trust Office a register (the "Pass-through Securities Register"), in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of the Pass-through Securities and the registration
and transfer of the Pass-through Securities. The Trustee is hereby appointed
"Pass-through Securities Registrar" for the purpose of registering the Pass-
through Securities and transfers of the Pass-through Securities as herein
provided. The Trustee shall have the right to rely conclusively upon an
examination of the Pass-through Securities Register for the purposes of
determining the names and addresses of the Holders of the Pass-through
Securities and the Percentage Interests and identifying numbers relating to such
Pass-through Securities as held.
(b) Upon surrender for registration of transfer of any Security at, in the
case of Debt Securities, the office or agency of the Company to be maintained as
provided in Section 12.02, or in the case of Pass-through Securities, at the
Corporate Trust Office of the Trustee, the Company or the Trustee, as
applicable, shall execute, and the Trustee or its agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations, and of a like aggregate
principal amount or Percentage Interest, as applicable, and Stated Maturity.
(c) At the option of the Holder, Securities may be exchanged for other
Securities of the same Issue, and if applicable, the same class and series and
Stated Maturity of any authorized denominations and of a like aggregate
principal amount or Percentage Interest, as applicable, of such Issue, class and
series and Stated Maturity, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
in the case of Debt Securities, the Company, or, in the case of Pass-through
Securities, the Trustee shall execute, and the Trustee or its agent shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
(d) All Debt Securities issued upon any registration of transfer or
exchange of Debt Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under the Trust
Agreement, as the Debt Securities surrendered
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upon the registration of such transfer or exchange. All Pass-through Securities
issued upon any registration of transfer or exchange of Pass-through Securities
shall be valid beneficial interests in the applicable Trust Estate, evidencing
the same undivided fractional interest, and entitled to the same benefits under
the related Trust Agreement, as the Pass-through Securities surrendered upon the
registration of such transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by, in the case of Debt Securities, the Company
or, in the case of Pass-through Securities, the Trustee, or, in any case, the
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
Any additional restrictions on the transferability of Securities of a
particular Issue shall be set forth in the Supplement for such Issue.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but, in the case of Debt Securities, the
Company or, in the case of Pass-through Securities, the Trustee, or, in any
case, the Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.04 or 10.05 not involving any registration of transfer.
Notwithstanding anything else to the contrary contained in the Trust
Agreement, (i) the obligation of the Company to pay the principal of and
interest on any Debt Securities is not a general obligation of the Company, but
is limited solely to the Collateral granted or deposited under the Trust
Agreement and (ii) the obligation of the Trustee (for the benefit of the Trust)
to make payments in respect of any Pass-through Securities is not a general
obligation of the Trust, but is limited solely to the Collateral granted or
deposited under the Trust Agreement.
Section 3.06. Reserved.
Section 3.07. Mutilated, Destroyed, Lost or Stolen Securities. If (i) any
mutilated Security is surrendered to the Registrar, or if the Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Security,
and (ii) there is delivered to the Registrar such security or indemnity as may
be required by the Registrar to save the Registrar, the Company and the Trustee
or any agent of any of them harmless, then, in the absence of notice to the
Registrar that such Security has been acquired by a bona fide purchaser, in the
case of Debt Securities, the Company or, in the case of Pass-through Securities,
the Trustee shall execute and the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of the same tenor, initial principal amount or
Percentage Interest, as the case may be, and Stated Maturity, bearing a number
not contemporaneously outstanding. If, after the delivery of such new Security,
a bona fide purchaser of the original Security in lieu of which such new
Security was issued presents for payment such original Security, the Company,
the Trustee and/or the Registrar shall be entitled to recover such new Security
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from the person to whom it was delivered or any person taking therefrom, except
a bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expenses
incurred by the Company, the Trustee and/or the Registrar or any agent of any of
them in connection therewith. If any such mutilated, destroyed, lost or stolen
Security shall have become or shall be about to become due and payable, or shall
have become subject to redemption in full, instead of issuing a new Security,
the Company or the Trust, as the case may be, may pay such Security without
surrender thereof, except that any mutilated Security shall be surrendered.
Upon the issuance of any new Security under this Section, the Company, the
Trustee and/or the Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and/or the Registrar) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute in the case of Debt
Securities, an original additional contractual obligation of the Company or, in
the case of Pass-through Securities, an original additional beneficial interest
in the Trust Estate, whether or not the destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of the Trust Agreement in accordance with the terms of the Trust Agreement and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.08. Payment of Principal and Interest; Principal and Interest
Rights Preserved. (a) Any Debt Securities issued hereunder shall bear interest
on the unpaid principal amount thereof from and including their respective
Delivery Date at their respective Interest Rates (calculated on the basis of a
360-day year consisting of 12 months of 30 days each unless otherwise specified
in the Supplement for such Issue), through the day immediately preceding the
first Payment Date following such Delivery Date and thereafter, on each Payment
Date from and including the most recent Payment Date through the day immediately
preceding the applicable Payment Date, until the last day preceding the Final
Payment Date.
(b) The principal of each Debt Security may be payable in installments
ending in any event no later than the Stated Maturity thereof unless such Debt
Security becomes due and payable at an earlier date by declaration of
acceleration, call for redemption or otherwise. All reductions in the principal
amount of a Debt Security effected by payments of installments of principal made
on any Payment Date shall be binding upon all future Holders of such Debt
Security and of any Debt Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such payment
is noted on such Debt Security.
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(c) The amount of principal and interest payable with respect to any Debt
Security on any Payment Date, or the method by which such amount is to be
calculated, shall be specified in the Supplement for the applicable Issue of
Debt Securities.
(d) The amount and timing of any Distributions relating to Pass-through
Securities shall be specified in the Supplement for the applicable Issue of
Pass-through Securities.
(e) The principal of and interest on any Debt Securities and Distributions
in respect of Pass-through Securities are payable by check mailed by first-class
mail to the Person whose name appears as the Registered Holder of such Security
on the Register at the address of such Person as it appears on the Register in
such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts. In the case of a
Registered Holder of at least, in the case of Debt Securities, $1,000,000 in
principal amount of Debt Securities of an Issue or, in the case of Pass-through
Securities, $1,000,000 of Imputed Principal Amount of such Pass-through
Securities of an Issue, payments of principal, premium, if any, and interest on
such Debt Securities and of Distributions in respect of Pass-through Securities
may be made by wire transfer in immediately available funds to an account
designated in writing by such Registered Holder. All payments on the Securities,
other than the payment due on the Final Payment Date, shall be paid without any
requirement of presentment. In the case of Debt Securities, the Company or, in
the case of Pass-through Securities, the Trustee shall notify the Person in
whose name a Security is registered at the close of business on the Record Date
next preceding the Payment Date on which the Company or the Trustee, as the case
may be, expects that the final installment of principal of such Security will be
paid that the Company or the Trustee, as the case may be, expects that such
final installment will be paid on such Payment Date. Such notice shall be mailed
no later than the tenth day prior to such Payment Date and shall specify the
place where such Security may be surrendered. Funds representing any such checks
returned undeliverable shall be held in accordance with Section 12.03. Each
Holder shall surrender its Security to the Company or the Trustee prior to the
final installment of principal of such Security being paid.
Section 3.09. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Security, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payments
of principal of and interest on or Distributions in respect of such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.10. Cancellation. All Securities surrendered to the Trustee, the
Company or the Registrar for payment, registration of transfer or exchange
(including Securities surrendered to any Person other than the Trustee, the
Company or the Registrar which shall be delivered to the Trustee, the Company or
the Registrar) shall be promptly canceled by the Trustee or, if received by the
Company or the Registrar, shall be promptly forwarded to the Trustee for
cancellation and upon receipt by the Trustee, such Securities shall be promptly
canceled. No Securities shall be authenticated in lieu of or in exchange for any
Securities
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canceled as provided in this Section 3.10, except as expressly permitted by the
Trust Agreement. All canceled Securities held by the Trustee shall be disposed
of by the Trustee as is customary with its standard practice.
ARTICLE FOUR
ORIGINAL AUTHENTICATION AND DELIVERY OF SECURITIES
Section 4.01. General Provisions. Each Issue of Securities originally may
be (i) in the case of Debt Securities, executed by, or at the direction of, the
Company and delivered to the Trustee for authentication concurrently with the
execution and delivery of the Trust Agreement and (ii) in the case of Pass-
through Securities, executed by the Trustee, and, in each case, the same shall
thereupon be authenticated and delivered by the Trustee upon Company Order upon
(a) compliance with the conditions of Section 4.02 and (b) receipt by the
Trustee of the following:
(1) a Board Resolution of the Company, authorizing, as applicable,
the execution and delivery of the Supplement, incorporating by reference
these Standard Terms of Trust Agreement, each other related document
contemplated hereby and thereby (the "Documents"), and the Securities;
(2) either (i) a certificate or other official document evidencing
the due authorization, approval or consent of any government body or
bodies, at the time having jurisdiction in the premises, together with an
Opinion of Counsel that the Trustee and, if so required, each purchaser of
said Securities, is entitled to rely thereon and that the authorization,
approval or consent of no other governmental body is required for valid
issuance of the Securities, or (ii) an Opinion of Counsel that no such
authorization, approval or consent of any governmental body is required;
(3) Opinions of Counsel (which may rely upon any Officer's
Certificate from the Company, the Trustee and/or the Servicer (if any) as
to matters of fact and subject to customary exceptions and assumptions)
substantially to the effect that (i) the Documents have been duly
authorized, executed and delivered and constitute the valid, legal and
binding obligations of the Company and the Servicer, as applicable,
enforceable in accordance with their respective terms and, in the case of
Debt Securities, such Debt Securities, when issued and authenticated in
accordance with the terms of the Trust Agreement, will be valid and binding
obligations of the Company enforceable in accordance with their terms or,
in the case of Pass-through Securities, such Pass-through Securities, when
issued and authenticated in accordance with the terms of the Trust
Agreement, will constitute valid fractional undivided beneficial ownership
interests in the Trust Estate; (ii) no consent, approval or authorization
of any governmental authority is required for the execution and delivery by
the Company of the Documents and the execution and delivery of the
Securities except such as may have been obtained; (iii) all instruments
furnished to the Trustee in connection with the Securities conform to the
requirements of the Trust Agreement
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and constitute sufficient authority for the Trustee to authenticate and
deliver the Securities; (iv) all laws and requirements with respect to the
form and execution by the Company, and/or the Trustee, as applicable, of
the Documents and the execution and delivery by the Company, and/or the
Trustee, as applicable, of the Securities have been complied with; (v) the
Company, the Trustee and the Servicer, as applicable, have corporate power
to execute and deliver the Documents and the Securities; (vi) the offer and
sale of the Securities is exempt from the registration requirements of the
Securities Act of 1933, as amended, and no qualification of the Trust
Agreement is required under the Trust Indenture Act of 1939 or the offering
of the Securities has been duly registered under the Securities Act of
1933, as amended and (if required in such instance) the Trust Agreement has
been qualified under the Trust Indenture Act of 1939; (vii) the Company is
not an "investment company" required to register as such under the
Investment Company Act of 1940; (viii) to the knowledge of such counsel,
the execution and delivery of the Documents and the issuance of the
Securities will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the certificate of
incorporation, by-laws or other organizational documents, as applicable, of
the Company or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it is bound, or any
order of any court or administrative agency entered in any proceeding to
which the Company is a party or by which it may be bound or to which it may
be subject; and (ix) such other matters as may be required by the
Supplement.
(4) an Officer's Certificate of the Company stating that the Company
is not in Default under the Trust Agreement and that the execution,
delivery and performance of the Trust Agreement and related documents and
the issuance of the Securities will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
Company's certificate of incorporation, by-laws or other organizational
documents, as applicable, or any material indenture, mortgage, deed of
trust or other agreement or instrument to which the Company is a party or
by which it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Company is a party or by which it
may be bound or to which it may be subject; and that all conditions
precedent provided in the Trust Agreement relating to the execution and
delivery of the Trust Agreement and related documents and to the
authentication and delivery of the Securities have been complied with;
(5) if required by the Supplement for such Issue of Securities, a
certificate or opinion of a firm of independent public accountants of
recognized national reputation to the effect and in a form acceptable to
the Company and counsel for the Company as to such matters as the Company
and the Trustee may agree;
(6) executed copies of the Documents;
(7) such other documents or actions as may be required in the related
Supplement; and
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(8) executed copies of the Loan Documents and such other documents as
the Trustee may reasonably require.
Section 4.02. Collateral. In addition to the requirements of Section
4.01, each Issue of Securities may be executed, authenticated and delivered only
upon delivery by the Company to the Trustee, and receipt by the Trustee, of the
following:
(1) An Officer's Certificate from the Company to the Trustee, dated
as of the date of the Company Order, to the effect that, each Loan Note,
Loan and related Loan Documents which, in the case of Debt Securities,
secure the Securities, or, in the case of Pass-through Securities, in which
the Securities represent undivided fractional interests:
(a) immediately prior to consummation of the transactions
contemplated hereby, the Company is the owner of such Loan Note, Loan,
related Loan Documents and Other Collateral and, if applicable, has a
security interest in the related Loan Collateral, the Company has not
assigned any interest or participation in such Loan Note, Loan, related
Loan Documents, Other Collateral or, if applicable, in the Company's
security interest in the related Loan Collateral (or, if any such interest
or participation has been assigned, such assignment has been released), and
the Company has full right to Grant such Loan Note, Loan, related Loan
Documents, Other Collateral and, if applicable, the Company's security
interest in the related Loan Collateral;
(b) the information set forth with respect to each Loan, Loan Note,
related Loan Documents and Other Collateral in the applicable Supplement is
correct; and
(c) the Company has Granted to the Trustee all of its right, title,
and interest in each Loan Note, Loan, related Loan Documents, Other
Collateral and, to the extent applicable, its security interest in the
related Loan Collateral;
(2) An Officer's Certificate of the Company to the effect that attached
thereto is a true and correct copy of a letter signed by the Rating Agency (or
other evidence satisfactory to the Trustee) confirming that the Securities have
been assigned the Required Rating.
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 5.01. Satisfaction and Discharge of Trust Agreement. In connection
with any Issue of Debt Securities, the Trust Agreement shall cease to be of
further effect (except to any surviving rights of registration of transfer and
exchange or payment) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments
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acknowledging satisfaction and discharge of the Trust Agreement and shall pay,
assign, transfer, without recourse, representation or warranty, and deliver to
the Company upon Company Order all cash, securities and other property held by
it as part of the Trust Estate (except for amounts required to pay and discharge
the entire remaining indebtedness of the Debt Securities), when
(1) either
(a) all Debt Securities theretofore authenticated and
delivered (other than (x) Debt Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 3.07, and (y) Debt Securities for whose payment money has
theretofore been deposited in trust, regardless of whether thereafter
repaid to the Company or discharged from such trust, as provided in
Section 12.03) have been delivered to the Trustee for cancellation; or
(b) all Debt Securities have become due and payable and the
Company has irrevocably deposited or caused to be deposited with the
Trustee, in trust for the purpose, an amount sufficient to pay and
discharge the entire indebtedness on such Debt Securities; and
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Debt Securities and to the
Trustee.
Notwithstanding the satisfaction and discharge of the Trust Agreement with
respect to the Debt Securities pursuant to the foregoing provisions of this
Section 5.01, the Company's obligations set forth in Sections 3.08, 8.07, 12.02
and 12.03, the Trustee's obligations set forth in Section 5.02 and the rights
and immunities of the Trustee under the Trust Agreement shall survive until the
Debt Securities are no longer Outstanding. Thereafter, the obligations of the
Company set forth in Section 8.07 and the Trustee set forth in Section 5.02 and
the rights and immunities of the Trustee under the Trust Agreement shall
survive.
Section 5.02. Application of Trust Money. Subject to the last paragraph of
Section 12.03 hereof, all monies deposited with the Trustee pursuant to Section
5.01 shall be held in trust and applied by it, in accordance with the provisions
of the Debt Securities and the Trust Agreement, to the payment, either directly
or through any Paying Agent, as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required herein or to the extent required by
law.
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ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. In connection with any Issue of Debt
Securities, "Event of Default" wherever used herein means any one of the
following events:
(1) Default in the payment of any interest upon the Debt Securities
issued pursuant to this Trust Agreement when the same becomes due and
payable; or
(2) Default in the payment of any principal of, or premium, if any,
on the Debt Securities issued pursuant to the Trust Agreement when the same
becomes due and payable; or
(3) Default in the performance of any covenant of the Company (other
than a default under Sections 6.01(1) or (2) above), or breach of any
material representation or warranty of the Company, in the Trust Agreement
or in any other material agreement or Document relating to the Debt
Securities (including, without limit, the Servicing Agreement) which is
specifically set forth in the applicable Supplement, and continuance of
such default or breach for a period of 30 days after the Company has actual
knowledge thereof;
(4) such other events as shall be specifically set forth in the
Supplement;
(5) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company under the Federal
Bankruptcy Code or any other applicable Federal or state law relating to
the bankruptcy, insolvency, reorganization or liquidation of the Company or
any arrangement with creditors or appointing a receiver, liquidation,
assignee, trustee, or sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; or
(6) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable Federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action.
Section 6.02. Acceleration of Maturity; Rescission and Annulment. In
connection with an Issue of Debt Securities, if an Event of Default occurs and
is continuing, then and in
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every such case the Determining Party (50.1%) (or the Trustee at the direction
of the Determining Party (50.1%) may declare the principal of all the Debt
Securities to be immediately due and payable upon written notice to the Company
and, if such notice is given by the Determining Party (50.1%), with a copy
thereof to the Trustee, and upon any such declaration such principal shall
become immediately due and payable without any presentment, demand, protest or
other notice of any kind (except such notices as shall be expressly required by
the provisions of the Trust Agreement), all of which are hereby expressly
waived.
At any time after such a declaration of acceleration has been made, but
before any sale of the Trust Estate has been made or a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Determining Party (66-2/3%), by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences (except that in the case of a payment default on the Debt
Securities, the consent of all the Holders shall be required to rescind and
annul such a declaration and its consequences) if:
(1) the Company has paid or irrevocably deposited in trust with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all such Debt
Securities,
(B) the principal of any Debt Securities which has become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by such Debt Securities from the time such
principal first became due until the date when paid,
(C) all sums paid or advanced by the Trustee or any Holder
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Trustee and such Holders, their agents and counsel to
the date of such payment or deposit, and
(D) all other amounts then due and payable under the Trust
Agreement and any related documents (including, without limit, the
Servicing Agreement); and
(2) all Events of Default, other than the nonpayment of the principal
of the Debt Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.15.
No such rescission or annulment shall affect any subsequent default or impair
any right consequent thereon.
Section 6.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. In connection with an Issue of Debt Securities, the Company covenants
that if an Event of Default shall occur and be continuing and such Debt
Securities have been declared due and
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payable and such declaration has not been rescinded and annulled, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
the Debt Securities, but only out of the Trust Estate, the whole amount then due
and payable for principal and interest, with interest upon the overdue principal
at the rate borne by the Debt Securities and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel for the Trustee and the Holders.
If an Event of Default occurs and is continuing, the Trustee may proceed to
protect and enforce its rights and the rights of the Holders, by such
appropriate proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in the Trust Agreement or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
Section 6.04. Remedies. In connection with an Issue of Debt Securities,
if an Event of Default shall have occurred and be continuing, the Trustee may do
one or more of the following, except to the extent otherwise prohibited or
limited by the applicable Supplement:
(a) institute Proceedings for the collection of all amounts then
payable on the Debt Securities, or under the Trust Agreement, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Company the monies adjudged due;
(b) sell the Trust Estate securing the Debt Securities, or any
portion thereof or rights or interests therein, at one or more sales called
and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of the Trust Agreement with respect to the Trust Estate
securing the Debt Securities;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code or other applicable law with respect to the Trust Estate
Granted under the Trust Agreement and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee or Holders of
the Debt Securities hereunder; and
(e) subject to any limitations otherwise contained herein, take any
other action or exercise any other remedy as may be directed by the
Determining Party (50.1%) or as may be specifically set forth in the
Supplement relating to such Issue.
Section 6.05. Optional Preservation of Trust Estate. (a) In connection
with an Issue of Debt Securities if (i) an Event of Default shall have occurred
and be continuing and (ii) the Securities shall not have been declared due and
payable or such declaration and its consequences have been annulled and
rescinded, the Trustee may, in its sole discretion, and shall, upon request from
the Determining Party (50.1%), in each case only to the extent permitted by
applicable law, elect, by giving written notice of such election to the Company
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and all Holders, to take possession of and retain the Trust Estate intact,
collect or cause the collection of the proceeds thereof and make and apply all
payments and deposits and maintain all accounts in accordance with the
provisions of the Supplement as if there had not been a declaration of
acceleration of the maturity of the Debt Securities, provided that:
(i) the Trustee shall have determined that the distributions and
other amounts receivable with respect to such Trust Estate are sufficient
to provide the funds required to pay the principal of and interest on the
Securities as and when such principal and interest would have become due
pursuant to the terms hereof and of the Securities if there had not been a
declaration of acceleration of the maturity of the Securities;
(ii) the Determining Party (50.1%) shall not have directed the
Trustee in accordance with Section 6.14 (subject, however, to Section
6.18(b)) to sell the Trust Estate;
(iii) the Trustee shall have received an Opinion of Counsel to the
effect that notwithstanding any acceleration of the maturity of the Debt
Securities, the failure to accelerate such Debt Securities or the annulment
of any such declaration of acceleration:
(A) in accordance with the provisions of this Section 6.05, the
Company is and remains legally obligated to make payments of principal
of and interest on the Debt Securities and to perform its other
obligations under the Trust Agreement and any related documents in the
same manner and amounts as it was legally obligated to make such
payments and perform such obligations prior to any acceleration of the
maturity of the Debt Securities or the taking of the actions
contemplated by this Section 6.05,
(B) such obligation of the Company is legally enforceable under
applicable law, subject to bankruptcy, reorganization, insolvency and
other laws affecting the enforcement of creditors' rights generally
and to general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law); and
(C) covering such other matters as may reasonably be requested
by the Trustee or the Deternining Party (50.1%); and
(iv) the Company shall have delivered to the Trustee, and the Company
hereby agrees to so execute and deliver, an agreement in writing consenting
to the Trustee's taking such action pursuant to this Section 6.05.
If the Trustee is unable to or is stayed from giving such notice to the
Company for any reason whatsoever, such election shall be effective as of the
time of such determination by the Trustee to elect to take possession of the
Trust Estate pursuant to this Section 6.05 or as of the time of the request by
the Determining Party (50.1%) that the Trustee take such
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possession, as the case may be, notwithstanding any failure to give such notice,
and the Trustee shall give such notice upon the removal or cure of such
inability or stay (but shall have no obligation to effect such removal or cure).
Any such election may be rescinded with respect to any portion of the Trust
Estate securing the Debt Securities remaining at the time of such rescission by
written notice to the Trustee and the Company from the Determining Party (66-
2/3%).
(b) The Trustee may, but shall not be required to, obtain and rely upon an
opinion of an Independent banking or accounting firm of national reputation or
other expert as to the feasibility of any action proposed to be taken in
accordance with subsection (a) of this Section 6.05 and as to the sufficiency of
the distributions and other amounts receivable with respect to the Trust Estate
to make the required payments of principal of and interest on the Debt
Securities, which opinion shall be conclusive evidence as to such feasibility or
sufficiency.
(c) If the conditions of clauses (i) through (iv) of subsection (a) of
this Section 6.05 are not satisfied or the Trustee does not determine to take
the action specified in said subsection (a), then all amounts collected by the
Trustee pursuant to this Article Six or otherwise shall be applied in accordance
with Section 6.08; provided, however, that if the Trustee shall have acquired
the entire Trust Estate by purchasing it at any public or private sale conducted
pursuant to Section 6.18, the Trustee may, in its sole discretion, apply all
distributions and other amounts receivable with respect to such Trust Estate
pursuant to Section 6.05(a) if the Trustee determines that the condition set
forth in Section 6.05(a)(i) is satisfied and if the Trustee obtains an Opinion
of Counsel, to the effect that: (i) such Trust Estate will not as a result of
such action be deemed an association taxable as a corporation under the Internal
Revenue Code of 1954, as amended (or any successor federal income tax statute),
and (ii) notwithstanding the acquisition of such Trust Estate (or the proceeds
thereof), the related Holders and the rights of such Holders shall continue to
be governed by the terms of the Trust Agreement.
Section 6.06. Trustee May File Proofs of Claim. In connection with any
Issue of Debt Securities, in case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial Proceeding relating to the Company or any other
obligor upon any of the Debt Securities or the property of the Company or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal of such Debt Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered (to the extent permitted by the
applicable Supplement), to intervene in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Debt
Securities issued under the Trust Agreement and to file such other papers
or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
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agents and counsel and any other amounts due the Trustee under Section 8.07
or the Servicer, if any, under the Servicing Agreement) and of the Holders
allowed in such judicial Proceeding, and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 8.07 or the Servicer, if any, under the
Servicing Agreement.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such Proceeding.
Section 6.07. Trustee May Enforce Claims Without Possession of Securities.
In connection with any Issue of Debt Securities, the Company agrees that all
rights of actions and claims under the Trust Agreement or the Debt Securities
may be prosecuted and enforced by the Trustee, as and to the extent permitted
hereby, without the possession of any of the Debt Securities or the production
thereof in any Proceeding relating thereto. Any such Proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee and
the Servicer, their agents and counsel (but only to the extent permitted by the
applicable Supplement), be for the benefit of the Holders of the Debt Securities
in accordance with Section 6.08.
Section 6.08. Application of Money Collected. If any Debt Securities have
been declared due and payable following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, any money collected
by the Trustee with respect to such Securities pursuant to this Article or
otherwise and any moneys that may then be held or thereafter received by the
Trustee as security for such Securities shall (unless such money is being
applied in accordance with Section 6.05(a)) be applied in the order, and on the
date or dates specified in the applicable Supplement for the relevant Issue of
Debt Securities.
Section 6.09. Limitation on Suits. No Holder of any Debt Securities shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
the Trust Agreement, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
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(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Determining Party (66-2/3%) shall have made written request
to the Trustee to institute Proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request and which is acceptable to the Trustee;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such Proceedings;
(5) the exercise of such right is not prohibited by or inconsistent
with the terms and provisions of the applicable Supplement; and
(6) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Determining Party
(66-2/3%).
Section 6.10. Right of Holders to Receive Principal and Interest.
Notwithstanding the provisions of Section 6.09 and unless otherwise specified in
the Supplement for such Issue, the Holder of any Securities shall have the
right, which is absolute and unconditional, to receive payment of the principal,
interest, and premium, if any, on such Debt Securities as such principal,
interest, and premium, if any, becomes due and payable and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section 6.11. Restoration of Rights and Remedies. In connection with any
Issue of Debt Securities, if the Trustee or any Holder of Debt Securities has
instituted any Proceeding to enforce any right or remedy under the Trust
Agreement and such Proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every case the Company, the Trustee and the Holders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such Proceeding had been
instituted.
Section 6.12 [Reserved].
Section 6.13. Delay or Omission; Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or any acquiescence therein. In connection with any Issue
of Debt Securities, every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by such Holders, as the case may
be.
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Section 6.14.Control by Holders. The Determining Party (50.1%) shall have
the right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Trustee with respect to the Debt Securities or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities; provided that:
(1) Such direction shall not be in conflict with any rule of law or
with the applicable Supplement or the Trust Agreement including, without
limitation, any provision thereof which expressly provides for a greater
percentage of principal of Outstanding Securities;
(2) Any direction to the Trustee by the Holders to undertake a
private sale of the Trust Estate shall be by the Holders of all Outstanding
Notes, unless the condition set forth in Section 6.18(b)(ii) is met;
(3) The Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction from the Determining
Party (50.1%) or with the provisions of this Trust Agreement;
(4) Subject to Section 8.01, the Trustee need not take any action
which the Trustee in good faith, by a Responsible Officer or Officers of
the Trustee, determines might involve it in liability or be unjustly
prejudicial to the Holders not consenting; and
(5) The Truste e has been furnished reasonable indemnity acceptable to
the Trustee.
Section 6.15.Waiver of Past Defaults. The Determining Party (66-2/3%) may
on behalf of the Holders of all Debt Securities, (and to the extent not
prohibited by or inconsistent with the applicable Supplement) waive any past
Default or Event of Default hereunder and its consequences, except a Default or
Event of Default:
(1) in the payment of the principal of, or premium, if any, or
interest on any Debt Securities, or an Event of Default described in
Sections 6.01(5) or (6), which Events of Default shall require the consent
of the Holders of all of the Outstanding Debt Securities affected to waive,
or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of all Holders of
each of the Outstanding Debt Securities affected, or
(3) that has caused the acceleration of the maturity of the Debt
Securities in which case the applicable provisions relating to the
rescission of acceleration must in addition to the provisions of this
Section 6.15, also be met.
Upon any such waiver, any such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of the Trust
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Agreement; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
Section 6.16. [Reserved].
Section 6.17. Waiver of Stay or Extension Laws. In connection with any
Issue of Debt Securities, the Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Trust Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 6.18. Sale of Trust Estate. (a) In connection with any Issue of
Debt Securities, the power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 6.04 is expressly subject to the provisions of
Section 6.05. If the conditions for retention of the Trust Estate set forth in
Section 6.05 are not satisfied, the power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Securities and under the
Trust Agreement with respect thereto shall have been paid. The Trustee may from
time to time postpone any Sale by public announcement made at the time and place
of such Sale.
(b) To the extent permitted by applicable law, the Trustee shall not in
any Sale sell to a third party the Trust Estate, or any portion thereof unless:
(i) the Holders of all Outstanding Securities consent to or direct the
Trustee to make such Sale; or
(ii) the proceeds of such Sale would not be less than the sum of all
amounts due to the Trustee and the Servicer hereunder, their agents and
counsel, and the entire unpaid principal amount of the Debt Securities and
interest due or to become due thereon on the Payment Date next succeeding
such Sale; or
(iii) the Trustee determines, in its sole discretion, that the
conditions for retention of such Trust Estate set forth in Section
6.05(a)(i) cannot be satisfied and the Determining Party (66-2/3%) consents
to such sale.
(c) The Trustee and/or the Holders may bid for and acquire any portion of
the Trust Estate in connection with a Sale thereof, and in lieu of paying cash
therefor, any Holder of any Debt Securities may make settlement for the purchase
price by crediting against amounts owing on the Debt Securities of such Holder
that portion of the net proceeds of such Sale to which such Holder would be
entitled, after deducting the reasonable costs, charges and expenses incurred by
the Trustee or the Holders, their agents and counsel, in
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connection with such Sale. The Debt Securities need not be produced in order to
complete any such Sale, or in order for the net proceeds of such Sale to be
credited against the Debt Securities. The Trustee or the Holders of Securities
may hold, lease, operate, manage or otherwise deal with any property so acquired
in any manner permitted by law.
(d) In connection with any Issue of Debt Securities, the Trustee shall
execute and deliver an appropriate instrument of conveyance transferring its
interest, without recourse, representation or warranty, in any portion of the
Trust Estate in connection with a Sale thereof. In addition, the Trustee is
hereby irrevocably appointed the agent and attorney-in-fact of the Company to
transfer and convey its interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such
Sale. No purchaser or transferee at such a sale shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or
any portion of the Trust Estate shall be commercially reasonable.
Section 6.19. Actions on Debt Securities. In connection with any Issue of
Debt Securities, the Trustee's right to seek and recover judgment on the
Securities or under the Trust Agreement shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to the Trust
Agreement. Neither the lien of the Trust Agreement nor any rights or remedies of
the Trustee or the Holders shall be impaired by the recovery of any judgment by
the Trustee against the Company or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Company.
ARTICLE SEVEN
EVENTS OF TERMINATION; REMEDIES
Section 7.01. Events of Termination. In connection with any Issue of Pass-
through Securities, "Event of Termination" wherever used herein means any one of
the following events:
(1) The inability or failure of the Trustee to make, or cause to be
made, any Distribution in respect of such Issue of Pass-through Securities
when the same is scheduled to be paid in accordance with the terms of the
applicable Supplement; or
(2) such other events as shall be specifically set forth in the
Supplement relating to such Issue of Pass-through Securities;
(3) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company under the Federal
Bankruptcy Code or any other applicable Federal or state law relating to
the bankruptcy, insolvency, reorganization or liquidation of the Company or
any arrangement with creditors or
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appointing a receiver, liquidation, assignee, trustee, or sequestrator (or
other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 90 consecutive days; or
(4) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable Federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action.
Section 7.02. Enforcement Actions; Rescission and Annulment. In connection
with an Issue of Pass-through Securities, if an Event of Termination occurs and
is continuing, then and in every such case the Trustee may, in accordance with
Section 7.03, or, at the direction of the Determining Party (50.1%) in
accordance with the provisions of Section 7.10, shall, subject to the provisions
of Section 8.01, do one or more of the following, except to the extent otherwise
prohibited or limited by the applicable Supplement (each a "Termination Act"):
(a) to the extent permitted by the Loan Documents or other underlying
agreements, institute Proceedings for the collection of all amounts then
payable on the Loan Notes, the Loan Documents or under any Other
Collateral, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Borrower or other obligor the monies
adjudged due;
(b) sell the Trust Estate, or any portion thereof or rights or
interest therein, at one or more sales called and conducted in any manner
permitted by law;
(c) exercise any remedies of a secured party under the Uniform
Commercial Code or other applicable law with respect to any Loan Collateral
included in the Trust Estate Granted under the Trust Agreement and take any
other appropriate action to protect and enforce the rights and remedies of
the Trustee or Holders of the Pass-through Securities hereunder; and
(d) take any other action or exercise any other remedy as may be
directed by the Determining Party (50.1%) or as may be specifically set
forth in the Supplement relating to such Issue.
The Trustee shall give all Holders prompt written notice of the
commencement of any Termination Act. At any time after such a Termination Act
has commenced, but before any sale of the Trust Estate has been made or a
judgment or decree for payment of the money
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due has been obtained by the Trustee as hereinafter in this Article provided,
the Determining Party (66-2/3%), by written notice to the Trustee, may rescind
and annul such declaration and its consequences if:
(1) the Trustee has paid all Distributions in respect of the
Pass-through Securities which were scheduled to be paid through the
date of such resc ission and annulment;
(2) payment has been made in respect of all sums paid or
advanced by the Trustee or any Holder hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee and
such Holders, their agents and counsel to the date of such payment;
(3) payment has been made in respect of all other amounts then
due and payable under the Trust Agreement and any related documents
(including, without limit, the Servicing Agreement);
and
(4) all Events of Termination have been cured or waived as
provided in Section 7.11.
No such rescission or annulment shall affect any subsequent Event of Termination
or impair any right consequent thereon.
Section 7.03. Suits for Enforcement by Trustee.
If an Event of Termination occurs and is continuing, subject, however to
the terms and provisions of the applicable Supplement, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders, by such appropriate proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in the Loan Documents, in the Trust
Agreement or in any related document or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy.
Section7.04.Optional Preservation of Trust Estate. (a) In connection with
an Issue of Pass-through Securities if (1) an Event of Termination shall have
occurred and be continuing and (2) a Termination Act shall not have been
commenced and be continuing or such Termination Act and its consequences have
been annulled and rescinded, the Trustee may, in its sole discretion, and shall,
upon request from the Determining Party (50.1%), in each case only to the extent
permitted by applicable law, elect, by giving written notice of such election to
the Company and all Holders, to maintain possession of and retain the Trust
Estate intact, collect or cause the collection of the proceeds thereof and make
and apply all payments and deposits and maintain all accounts in accordance with
the provisions of the Supplement as if no Event of Termination had occurred and
as if no Termination Act had been commenced, provided that:
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(i) the Trustee shall have determined that the distributions and
other amounts receivable with respect to such Trust Estate are sufficient
to provide the funds required to pay all Distributions as and when the same
are scheduled to become due as provided in the Supplement relating to such
Issue of Securities;
(ii) the Determining Party (50.1%) shall not have directed (pursuant
to its rights, if any, to so direct the Trustee under the applicable
Supplement) the Trustee in accordance with Section 7.02 (subject, however,
to Section 7.12(b)) to sell the Trust Estate; and
(iii) the Trustee shall have received an Opinion of Counsel to the
effect that notwithstanding the commencement of any Termination Act in respect
of the Pass-through Securities or the recission and annulment in respect of any
such Termination Act:
(A) in accordance with the provisions of this Section 7.04, each
Borrower (and any other obligor) is and remains legally obligated to
make payments of principal of and interest on the Loan Notes and, if
applicable, Other Collateral and to perform its other obligations
under the Loan Documents and any related documents in the same manner
and amounts as it was legally obligated to make such payments and
perform such obligations prior to any occurrence of an Event of
Termination, commencement of any Termination Act or the taking of the
actions contemplated by this Section 7,
(B) such obligations of each Borrower (and any other obligor)
are legally enforceable under applicable law, subject to bankruptcy,
reorganization, insolvency and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and
(C) covering such other matters as may reasonably be requested
by the Trustee or the Determining Party (50.1%).
If the Trustee is unable to or is stayed from giving such notice of its
election under this Section 7.04 for any reason whatsoever, such election shall
be effective as of the time of such determination by the Trustee to elect to
maintain possession of the Trust Estate pursuant to this Section 7.04 or as of
the time of the request by the Determining Party (50.1%) that the Trustee
maintain such possession, as the case may be, notwithstanding any failure to
give such notice, and the Trustee shall give such notice upon the removal or
cure of such inability or stay (but shall have no obligation to effect such
removal or cure). Any such election may be rescinded with respect to any portion
of the Trust Estate remaining at the time of such rescission by written notice
to the Trustee from the Determining Party (66-2/3%).
(b) The Trustee may, but shall not be required to, obtain and rely upon an
opinion of an Independent banking or accounting firm of national reputation
or other expert as to
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the feasibility of any action proposed to be taken in accordance with subsection
(a) of this Section 7.04 and as to the sufficiency of the distributions and
other amounts receivable with respect to the Trust Estate to make the required
Distributions on the Pass-through Securities, which opinion shall be conclusive
evidence as to such feasibility or sufficiency.
(c) If the conditions of clauses (i) through (iii) of subsection (a) of
this Section 7.04 are not satisfied or the Trustee does not determine to take
the action specified in said subsection (a), then all amounts collected by the
Trustee pursuant to this Article Seven or otherwise shall be applied in
accordance with Section 7.07; provided, however, that if the Trustee shall have
acquired the entire Trust Estate (if permitted by the applicable Supplement) by
purchasing it at any public or private sale conducted pursuant to Section 7.12,
the Trustee may, in its sole discretion, apply all distributions and other
amounts receivable with respect to such Trust Estate pursuant to Section 7.04(a)
if the Trustee determines that the condition set forth in Section 7.04(a)(i) is
satisfied and if the Trustee obtains an Opinion of Counsel, to the effect that:
(i) such Trust Estate will not as a result of such action be deemed an
association taxable as a corporation under the Internal Revenue Code of 1954, as
amended (or any successor federal income tax statute), and (ii) notwithstanding
the acquisition of such Trust Estate (or the proceeds thereof), the related
Holders and the rights of such Holders shall continue to be governed by the
terms of the Trust Agreement.
Section 7.05. Trustee May File Proofs of Claim. In connection with any
Issue of Pass-through Securities, in case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial Proceeding relating to the Borrower or any other
obligor upon any of the Loans or Other Collateral or the property of the
Borrower or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Loans or Other Collateral shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Borrower or such other
obligor for the payment of overdue principal or interest) shall be entitled and
empowered (to the extent permitted by the applicable Supplement), to intervene
in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Loans or
Other Collateral and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any
other amounts due the Trustee under Section 8.07 or the Servicer, if any,
under the Servicing Agreement) and of the Holders allowed in such judicial
Proceeding, and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments
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directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 8.07
or the Servicer, if any, under the Servicing Agreement.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Pass-
through Securities or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such Proceeding.
Section 7.06. Trustee May Enforce Claims Without Possession of
Securities. In connection with any Issue of Pass-through Securities, the
Holders agree that all rights of actions and claims under the Loan Notes and
Loan Documents may be prosecuted and enforced by the Trustee, as and to the
extent permitted hereby, without the possession of any of the Pass-through
Securities or the production thereof in any Proceeding relating thereto. Any
such Proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee and the Servicer, their agents and counsel (but only to
the extent permitted by the applicable Supplement), be for the benefit of the
Holders of the Pass-through Securities in accordance with Section 7.07.
Section 7.07. Application of Money Collected. If any Termination Act
shall have been commenced following an Event of Termination and such Termination
Act and its consequences have not been rescinded and annulled, any money
collected by the Trustee with respect to such actions pursuant to this Article
or otherwise and any moneys that may then be held or thereafter received by the
Trustee shall (unless such money is being applied in accordance with Section
7.04(a)) be applied in the order, and on the date or dates specified in the
applicable Supplement for the relevant Issue of Pass-through Securities.
Section 7.08. Limitation on Suits. No Holder of any Pass-through
Securities shall have any right to institute any Proceeding, judicial or
otherwise, with respect to the Loan Documents or Other Collateral, or for the
appointment of a receiver or trustee for any Borrower or other obligor, or for
any other remedy hereunder or under the Loan Documents or related documents and
agreements, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Termination;
(2) the Determining Party (66-2/3%) shall have made written request
to the Trustee to institute such Proceedings in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request and which is acceptable to the Trustee;
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(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such Proceedings;
(5) the exercise of such right is not prohibited by or inconsistent
with the terms and provisions of the applicable Supplement; and
(6) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Determining Party
(66-2/3%).
Section 7.09. Delay or Omission; Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Termination shall impair any such right or remedy or constitute a waiver of
any such Event of Termination or any acquiescence therein. In connection with
any Issue of Pass-through Securities, every right and remedy given by this
Article or by law to the Trustee or to the Holders of Pass-through Securities
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by such Holders, as the case may be.
Section 7.10. Control by Holders. The Determining Party (50.1%) shall
have the right to direct the time, method and place of conducting any Proceeding
for any remedy available to the Trustee with respect to the Loans or Other
Collateral or exercising any trust or power conferred on the Trustee with
respect to the Trust Estate; provided that:
(1) Such direction shall not be in conflict with any rule of law or
with the applicable Supplement or the Trust Agreement including, without
limitation, any provision thereof which expressly provides for a greater
Percentage Interest of Imputed Principal Amount of Outstanding Securities;
(2) Any direction to the Trustee by the Holders to undertake a
private sale of the Trust Estate shall be by the Holders of all Outstanding
Securities, unless the condition set forth in Section 7.12(b)(ii) is met;
(3) The Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction from the Determining
Party (50.1%) or with the provisions of this Trust Agreement;
(4) Subject to Section 8.01, the Trustee need not take any action
which the Trustee in good faith, by a Responsible Officer or Officers of
the Trustee, determines might involve it in liability or be unjustly
prejudicial to the Holders not consenting; and
(5) The Trustee has been furnished reasonable indemnity acceptable to
the Trustee.
Section 7.11. Waiver of Past Defaults. The Determining Party (66-2/3%) may on
behalf of the Holders of all Pass-through Securities, and to the extent not
prohibited by or
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inconsistent with the applicable Supplement, waive any past Event of Termination
hereunder and its consequences, except an Event of Termination:
(1) relating to the nonpayment of any Distribution, which Events of
Termination shall require the consent of the Holders of all of the
Outstanding Pass-through Securities affected to waive, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of all Holders of
each of the Outstanding Pass-through Securities affected, or
(3) that has caused the commencement of a Termination Act in which
case the applicable provisions relating to the rescission and annulment of
such Termination Act must, in addition to the provisions of this Section
7.11, also be met.
Upon any such waiver, any such Event of Termination shall cease to exist
and shall be deemed to have been cured for every purpose of the Trust Agreement;
but no such waiver shall extend to any subsequent or other Event of Termination
or impair any right consequent thereon.
Section 7.12. Sale of Trust Estate. (a) In connection with any Issue of
Pass-through Securities, the power to effect any sale (a "Sale") of any portion
of the Trust Estate pursuant to Section 7.02 is expressly subject to the
provisions of Section 7.04. If the conditions for retention of the Trust Estate
set forth in Section 7.04 are not satisfied, the power to effect any such Sale
shall not be exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire Trust
Estate shall have been sold or all amounts payable on the Securities and under
the Trust Agreement with respect thereto shall have been paid. The Trustee may
from time to time postpone any Sale by public announcement made at the time and
place of such Sale.
(b) To the extent permitted by applicable law, the Trustee shall not in
any Sale sell to a third party the Trust Estate, or any portion thereof
unless:
(i) the Holders of all Outstanding Securities consent to or direct
the Trustee to make such Sale; or
(ii) the proceeds of such Sale would not be less than the sum of all
amounts due to the Trustee and the Servicer hereunder, their agents and
counsel, and the aggregate Imputed Principal Amount of the Pass-through
Securities and interest due or to become due thereon on the Payment Date
next succeeding such Sale; o r
(iii) the Trustee determines, in its sole discretion, that the
conditions for retention of such Trust Estate set forth in Section
7.04(a)(i) cannot be satisfied and the Determining Party (66-2/3%) consents
to such Sale.
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(c) The Trustee and/or the Holders may bid for and acquire any portion of
the Trust Estate in connection with a Sale thereof, and in lieu of paying cash
therefor, any Holder of any Pass-through Securities may make settlement for the
purchase price by crediting against amounts any Distributions owing in respect
of the Pass-through Securities of such Holder that portion of the net proceeds
of such Sale to which such Holder would be entitled, after deducting the
reasonable costs, charges and expenses incurred by the Trustee or the Holders,
their agents and counsel, in connection with such Sale. The Pass-through
Securities need not be produced in order to complete any such Sale, or in order
for the net proceeds of such Sale to be credited against the Distributions in
respect of such Pass-through Securities. The Trustee or the Holders of
Securities may hold, lease, operate, manage or otherwise deal with any property
so acquired in any manner permitted by law.
(d) The Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest, without recourse, representation or
warranty, in any portion of the Trust Estate in connection with a Sale thereof
pursuant to the provisions of this Section 7.12. In addition, the Trustee is
hereby irrevocably appointed the agent and attorney-in-fact of the Holders to
transfer and convey their interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such
Sale. No purchaser or transferee at such a sale shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or any
portion of the Trust Estate shall be commercially reasonable.
Section 7.13. Restoration of Rights and Remedies. In connection with any
Issue of Pass-through Securities, if the Trustee or any Holder of Pass-through
Securities has instituted any Proceeding to enforce any right or remedy under
the Trust Agreement and such Proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every case the Company, the Trustee and the Holders shall, subject
to any determination in such Proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such Proceeding had been
instituted.
ARTICLE EIGHT
THE TRUSTEE
Section 8.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default or Event of Termination known to the Trustee
as provided in subsection (e) below:
(1) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in the Trust Agreement, and no implied
covenants or obligations shall be read into the Trust Agreement against the
Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of the Trust Agreement; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same and to determine whether
or not they conform to the requirements of the Trust Agreement.
(b) In case an Event of Default or Event of Termination known to the
Trustee as provided in subsection (e) below has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by the Trust
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of the Trust Agreement shall be construed to relieve the
Trustee from liability for its own gross negligent action, its own gross
negligent failure to act, or its own willful misconduct, except that:
(i) this subsection (c) shall not be construed to limit the effect
of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority (or other such percentage as may be
required by the terms hereof) in principal amount of the Outstanding Debt
Securities in accordance with Section 6.14 or with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of a majority (or such other percentage as may be required by the
terms hereof) of the Percentage Interests of the Outstanding Pass-through
Securities in accordance with the applicable provision of the relevant
Supplement for such Issue, in each case relating to the time, method and
place of conducting any Proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under the
Trust Agreement or the Servicing Agreement; and
(iv) no provision of the Trust Agreement shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers (except as provided in Section 4.02(k) of the
applicable Supplement concerning the Trustee's obligation to pay in the
event of a failure to deliver proper notices with respect to Credit
Enhancement provided by Eximbank), if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
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(d) Whether or not therein expressly so provided, every provision of the
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 8.01.
(e) For all purposes under the Trust Agreement, the Trustee shall not be
deemed to have notice of any Event of Default described in Section 6.01(5) or
6.01(6) or any Default or Event of Default described in Section 6.01(3) or of
any Event of Termination described in Sections 7.01(3) or 7.01(4) unless a
Responsible Officer assigned to and working in the Trustee's corporate trust
department has actual knowledge thereof or unless written notice of any event
which is in fact such a Default, Event of Default or Event of Termination is
received by the Trustee at the Corporate Trust Office, and such notice
references the Securities generally, the Company, the Trust Estate or the Trust
Agreement.
(f) The Trustee shall be under no obligation (except as otherwise provided
in the applicable Supplement) to institute any suit, or to take any remedial
proceeding under the Trust Agreement, or to enter any appearance or in any way
defend in any suit in which it may be made defendant, or to take any steps in
the execution of the trusts hereby created or in the enforcement of any rights
and powers hereunder until it shall be indemnified to its satisfaction against
any and all costs and expenses, outlays and counsel fees and other reasonable
disbursements and against all liability, except liability that is adjudicated,
in connection with any action so taken.
(g) Notwithstanding any extinguishment of all right, title and interest of
the Company in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of the Debt Securities,
whether such extinguishment occurs through a Sale of the Trust Estate to
another person, or the acquisition of the Trust Estate by the Trustee, the
rights of the Holders of Debt Securities shall continue to be governed by the
terms of the Trust Agreement. Upon the occurrence of any sale of the Trust
Estate following an Event of Termination in accordance with the provisions of
the Trust Agreement, notwithstanding whether such sale is to a third person,
another Holder or the Trustee, the rights of the Holders of Pass-through
Securities shall continue to be governed by the terms of the Trust Agreement.
Section 8.02. Notice of Default. Promptly after the occurrence of any
Event of Default or Event of Termination known to the Trustee (within the
meaning of Section 8.01(e) hereof) which is continuing, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear on the
Register, notice of such Event of Default or Event of Termination, as the case
may be, hereunder known to the Trustee, unless such Default, Event of Default or
Event of Termination shall have been promptly cured or waived.
Section 8.03. Certain Rights of Trustee. Except as otherwise provided in
Section 8.01,
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice,
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request, direction, consent, order, bond, note or other obligation, paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of the Trust Agreement the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel selected by the Trustee with due care or any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Trust Agreement at the request or
direction of any Holders pursuant to the Trust Agreement, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) 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, direction, consent, order,
bond, note or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, upon reasonable notice and at
reasonable times personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 8.04. Not Responsible for Recitals or Issuance of Securities. (a)
The recitals contained herein, in the Securities and in any offering materials
used to sell the Securities, except the certificates of authentication on the
Securities, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or condition of the Trust Estate or any part
thereof, or as to the title of the Company thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and
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deposited with the Trustee hereunder or as to the validity or sufficiency of the
Trust Estate, of the Trust Agreement or of the Securities. The Trustee shall not
be accountable for the use or application by the Company of Securities or the
proceeds thereof or of any money paid to the Company or upon Company Order under
any provisions hereof.
(b) Except as otherwise expressly provided herein, in any Supplement or in
the Servicing Agreement, the Trustee shall have no responsibility or liability
for or with respect to the existence or validity of any Loan, Loan Note, Loan
Document or Other Collateral, the perfection of any security interest (whether
as of the date hereof or at any future time), the maintenance of or the taking
of any action to maintain such perfection, the validity of the assignment of any
portion of the Trust Estate to the Trustee or of any intervening assignment, the
review of any Loan, Loan Note, Loan Document or Other Collateral (it being
understood that the Trustee has not reviewed and does not intend to review the
substance or form of any such Loan, Loan Note, Loan Document or Other
Collateral), the performance or enforcement of any Loan, Loan Note, Loan
Document or Other Collateral, the compliance by the Company or the Servicer with
any covenant or the breach by the Company or the Servicer of any warranty or
representation made hereunder or in any related document or the accuracy of any
such warranty or representation, the acts or omissions of the Company, the
Servicer, any action of the Servicer taken in the name of the Trustee, or the
validity of the Servicing Agreement.
(c) Except as otherwise expressly provided herein, in any Supplement or in
the Servicing Agreement, the Trustee shall not have any obligation or liability
under any Loan, Loan Note, Loan Document or Other Collateral by reason of or
arising out of the Trust Agreement or the granting of a security interest in
such Loan, Loan Note, Loan Document or Other Collateral hereunder or the receipt
by the Trustee of any payment relating to any Loan pursuant hereto, nor shall
the Trustee, other than as expressly provided herein, in the Supplement or in
the Servicing Agreement be required or obligated in any manner to perform or
fulfill any of the obligations of the Company under or pursuant to any Loan,
Loan Note, Loan Document or other Collateral, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by it,
or the sufficiency of any performance by any party, under any Loan, Loan Note,
Loan Document or Other Collateral.
Section8.05. May Hold Securities. The Trustee, the Servicer, any Paying
Agent, Registrar, any Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and if operative, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Servicer, Paying Agent, Registrar,
Authenticating Agent or such other agent.
Section8.06. Money Held in Trust. Money and investments held in trust by the
Trustee or any Paying Agent hereunder shall be held in one or more trust
accounts hereunder but need not be segregated from other funds except to the
extent required herein or required by law. The Trustee or any Paying Agent shall
be under no liability for interest on any money received by it hereunder except
as otherwise agreed, in the case of an Issue of
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Debt Securities, with the Company or, in the case of an Issue of Pass-through
Securities, with the Determining Party (66-2/3%) or as otherwise specifically
provided herein.
Section 8.07. Compensation and Reimbursement. (a) The Trustee shall be paid
a fee for its services hereunder, which fee shall be agreed upon by the Company
and the Trustee and shall be payable in the manner agreed.
(b) The Company agrees to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred (including, incurred
in the exercise of negligence, but excluding, if incurred in the exercise of
gross negligence) without gross negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder or in acting as Substitute Servicer pursuant to the Servicing
Agreement. Such indemnification shall survive the discharge of the Trust
Agreement or removal or resignation of the Trustee.
Upon the occurrence of, in connection with an Issue of Debt Securities, an
Event of Default resulting in an acceleration of maturity of the Securities that
has not been rescinded and annulled or, in connection with an Issue of Pass-
through Securities, upon the occurrence of an Event of Termination resulting in
the acceleration of the maturity of the Loans or the Sale of the Trust Estate,
the Trustee shall have (except as otherwise provided in or not inconsistent with
the applicable Supplement), as security for the performance of the Company under
this Section 8.07, a lien ranking senior to the lien of any Securities then
Outstanding with respect to which any claim of the Trustee under this Section
8.07 arose upon all property and funds held or collected as part of the Trust
Estate by the Trustee in its capacity as such.
Section 8.08. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a corporation or association
organized and doing business under the laws of the United States of America or
of any state, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by Federal or state authority and having an office
within the United States of America. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, 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. The Trustee shall not be affiliated with the Company and
shall not provide credit or credit enhancement to the Company. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to
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this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 8.10.
(b) The Trustee may resign at any time by giving 30 days written notice
thereof to each Holder and, if Debt Securities are Outstanding, to the Company.
If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee 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. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Determining Party
(66-2/3%) upon 30 days notice to the Trustee.
(d) If at any time:
(i) the Trustee shall cease to be eligible under Section 8.08 and
shall fail to resign after written request therefor by any Holder or, if
Debt Securities are Outstanding, by the Company, or
(ii) the Trustee shall become incapable of acting 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, in any such case, (i) to the extent any Debt Securities are Outstanding,
the Company by a Board Resolution may remove the Trustee, or (ii) subject to
Section 6.14 or 7.10, as applicable, any Holder who has been a Registered Holder
of any Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause with
respect to the Securities, the Company by a Board Resolution shall promptly
appoint a successor Trustee or a Trustee with respect to the Securities. If no
successor Trustee shall have been so appointed by the Company within 30 days of
notice of removal or resignation and shall have accepted appointment in the
manner hereinafter provided, the Company, the Trustee, or any Holder who has
been a Registered Holder of any Securities for at least six months may, on
behalf of itself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities.
(f) The Company shall give notice in the manner provided in Section 1.04
hereof of each resignation and each removal of the Trustee and each appointment
of a successor Trustee with respect to the Securities. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust Office.
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Section 8.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its reasonable out-of-
pocket costs and expenses, execute and deliver an instrument transferring
without recourse, representation or warranty to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver without recourse, representation or warranty to such
successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its lien, if any, provided for in Section
8.07. Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article.
Every successor Trustee shall give written notice to all Holders of its
acceptance of the appointment as Trustee and shall list the address of its
Corporate Trust Office in such notice.
Section 8.11. Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 8.12. Co-trustees and Separate Trustees. At any time or times, for
the purpose of meeting the legal requirements of any jurisdiction in which any
of the Trust Estate may at the time be located, the Company and the Trustee
shall have power to appoint, and, upon the written request of the Trustee or of
the Determining Party (25%), the Company shall for such purpose join with the
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Trustee, either to act as co-trustee, jointly with the Trustee of all or any
part of such Trust Estate, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Company does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
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case an Event of Default or Event of Termination has occurred and is continuing,
the Trustee alone shall have power to make such appointment.
Should any written instrument from the Company be reasonably required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Company.
If the Company does not execute, acknowledge and deliver any such
instruments within 15 days after receipt by it of such request, the Trustee
alone shall, and the Company does hereby appoint the Trustee its agent and
attorney-in-fact for such purposes, have the power to execute, acknowledge and
deliver such instruments
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms:
(i) The Securities shall be authenticated and delivered by, and all
rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely
by the Trustee;
(ii) The rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
by the Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee
or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(iii) The Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company evidenced by a Board Resolution,
may accept the resignation of or remove any co-trustee or separate trustee,
appointed under this Section, and, in case an Event of Default or Event of
Termination has occurred and is continuing, the Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Company. Upon the written request of
the Trustee, the Company shall join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. If the Company does not
execute, acknowledge and deliver any such instruments within 15 days after
receipt by it of such request, the Trustee alone shall, and the Company
does hereby appoint the Trustee its agent and attorney-in-fact for such
purposes, have the power to execute, acknowledge and deliver such
instruments A successor to any co-trustee or separate trustee that has so
resigned or been removed may be appointed in the manner provided in this
Section;
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(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee or any other such
trustee hereunder nor shall the Trustee be liable by reason of any act or
omission of any co-trustee or separate trustee selected by the Trustee with
due care or appointed in accordance with directions to the Trustee; and
(v) Any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
Section 8.13. Rights with Respect to the Servicer. (a) The Trustee may
discharge the Servicer at any time, but only pursuant to a Servicer Termination
Event (as defined in the Servicing Agreement) in accordance with the terms of
the Servicing Agreement.
(b) If the Company shall have knowledge of the occurrence of any Servicer
Termination Event, the Company shall promptly notify the Trustee and the Holders
of the Securities, and shall specify in such notice the action, if any, the
Company is taking in respect of such Servicer Termination Event. So long as any
Servicer Termination Event shall be continuing, the Trustee or the Determining
Party (66-2/3%) may, by written notice to the Servicer (and to the Trustee if
given by the Determining Party), terminate all of the rights and powers of the
Servicer under the Servicing Agreement pursuant to the terms thereof.
Section 8.14. Appointment of Authenticating Agent. The Trustee may appoint
an Authenticating Agent or Agents with respect to the Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue or upon exchange, registration of transfer or pursuant to
Section 3.05, and Securities so authenticated shall be entitled to the benefits
of the Trust Agreement and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in the Trust
Agreement to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication or the delivery of Securities to the
Trustee for authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent and delivery of the Securities to the Authenticating Agent
on behalf of the Trustee. Each Authenticating Agent shall be acceptable to the
Determining Party (50.1%) and, with respect to an Issue of Debt Securities, the
Company and shall at all times be a corporation having a combined capital and
surplus of not less than the equivalent of $50,000,000 and subject to
supervision or examination by Federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
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Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent; provided, such
corporation shall be otherwise eligible under this Section.
An Authenticating Agent may resign at any time by giving 30 days' written
notice thereof to the Trustee, the Holders and, if Debt Securities are
Outstanding, to the Company. The Trustee may at any time terminate the agency of
an Authenticating Agent by giving written notice thereof to such Authenticating
Agent, the Holders and, if Debt Securities are Outstanding, to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Determining Party (50.1%)
and, if Debt Securities are Outstanding, the Company and shall mail written
notice of such appointment by first-class mail, postage prepaid, to all Holders
of Securities, if any, with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 8.07.
If an appointment is made pursuant to this Section, the Securities may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned Trust
Agreement.
(TRUSTEE),
AS TRUSTEE
By______________________________________
As Authenticating Agent
By______________________________________
Authorized Officer
Section 8.15. Trustee to Hold Loan Documents. The Trustee hereby
acknowledges receipt of and shall hold the original, manually executed
counterpart of each Loan Note,
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together with any Loan Documents relating thereto and all Other Collateral that
may from time to time be delivered to the Trustee, until such time as such Loan
and/or Other Collateral is released from the lien of the Trust Agreement
pursuant to the terms hereof.
The Trustee shall be under no duty or obligation to inspect, review or
examine the Loan Notes, other Loan Documents and other Collateral to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.
ARTICLE NINE
SERVICER OBLIGATIONS
Section 9.01. Annual Servicer Report. On or before 120 days after the end of
each fiscal year of the Servicer, the Servicer shall deliver to the Trustee, any
Rating Agency rating the Securities, and, to the extent the subject Securities
are Debt Securities, the Company and upon written request, any Holder, an
Officer's Certificate to the effect that such Servicer has examined certain
documents and records relating to the servicing of the Loans and any Other
Collateral under the Trust Agreement and the related Servicing Agreement and
that, on the basis of such examination, nothing came to its attention which
caused it to believe that the Servicer has accounted for matters regarding the
Loans and any Other Collateral, otherwise than in accordance with the Trust
Agreement and the related Servicing Agreement, except for such insignificant
exceptions or errors on records that, in the opinion of such Servicer, it is not
required to report.
Section 9.02. Servicers Books and Records. The Servicer shall cause to be
maintained books and records showing the information needed for the following
calculations: (1) in the case of Debt Securities, the amount of principal,
interest and/or premium required to be distributed to Holders on each Payment
Date, (2) in the case of Pass-through Securities, the scheduled amount and
timing of Distributions relating to the Pass-through Securities, (3) the
aggregate amount of interest accrued on the Loan Notes for the period from the
preceding Payment Date until the day preceding the related Payment Date, (4) the
unpaid principal amount of the Loan Notes after giving effect to the payments to
be made on such Payment Date, and (5) such other information which the Trustee
or any holder of the Securities may reasonably request. Such books and records
will be available for inspection by the Trustee, the Company and any Holder upon
reasonable notice at any time during normal business hours. Notwithstanding
anything to the contrary herein, the Trustee shall have no duty or obligation to
request additional information from the Servicer.
ARTICLE TEN
SUPPLEMENTAL TRUST AGREEMENTS
Section 10.01. Supplemental Trust Agreements without Consent of Holders.
Without the consent of the Holders of any Outstanding Securities, the Company
and the Trustee, at
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any time and from time to time, may enter into one or more indentures
supplemental hereto, for any of the following purposes, so long as any such
supplemental indenture does not cause a downgrading of the rating on the
Securities or adversely affect the interests of the Holders:
(1) to correct or amplify the description of any property at any time
subject to the lien of the Trust Agreement, or better to assure, convey and
confirm unto the Trustee any property subject or required to be subjected
to the lien of the Trust Agreement, or to subject to the lien of the Trust
Agreement additional property; or
(2) to evidence the succession of another Person to the Company, and
the assumption by such successor of the covenants of the Company herein and
in the Securities contained, in accordance with Sections 12.10 and 12.12;
or
(3) to add to the covenants of the Company, for the benefit of the
Holders of all Securities, or to surrender any right or power herein
conferred upon the Company; or
(4) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee or the Trust Estate; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provisions
with respect to matters or questions arising under the Trust Agreement; or
(6) to evidence the succession of the Trustee pursuant to Article
Eight; or
(7) to add to any Events of Default or Events of Termination.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under the Trust
Agreement or otherwise.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section, the Company shall mail to the
Rating Agency a copy of such supplemental indenture.
Section 10.02. Supplemental Trust Agreements with Consent of Holders. With
the written consent of the Determining Party (100%), the Company and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Trust Agreement or of modifying in any manner the rights of
the Holders of the Securities under the Trust Agreement; provided, however, that
no such amendment shall, without the consent of the Holders of all Outstanding
Securities:
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(1) change the Stated Maturity of any Securities or the due date of
any scheduled Distribution, any installment of principal of, or any
installment of interest on, any Securities, or reduce the scheduled amount
of any Distribution, or the principal amount of any such Security or the
Interest Rate or change any place of payment where, or the coin or currency
in which, any Securities or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment; or
(2) reduce the Percentage Interest or percentage in principal amount
of the Outstanding Securities, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders
of which is required for any waiver of compliance with certain provisions
of the Trust Agreement or Events of Default or Events of Termination or
their consequences; or
(3) impair or adversely affect the Trust Estate except as otherwise
permitted herein; or
(4) modify or alter the provisions of the proviso to the definition
of the term "Outstanding"; or
(5) modify any of the provisions of this Section 10.02, except to
increase the percentage of Holders required for any modification or waiver
or to provide that certain other provisions of the Trust Agreement cannot
be modified or waived without the consent of the Holder of all Outstanding
Securities affected thereby; or
(6) permit the creation of any lien or additional interest ranking
prior to or on a parity with the lien of the Trust Agreement with respect
to any part of the Trust Estate or terminate the lien of the Trust
Agreement on any property at any time subject hereto or deprive the Holder
of any Securities of the security afforded by the lien of the Trust
Agreement; or
(7) modify any of Sections 6.01(1) or (2), 6.02, 6.03, 6.04, 6.18 or
7.01(1), 7.02, 7.03 and 7.12 of the Trust Agreement.
In the event any amendment of the Trust Agreement (other than the
amendments enumerated in paragraphs (1) through (7) of Section 10.01 above)
shall affect only one or more classes or series of Securities, if any, then such
amendment shall require the consent of the Holders of not less than 66-2/3% in
principal amount of the Outstanding Securities of such class or series so
affected if such amendment is an amendment other than those enumerated in
paragraphs (1) through (7) of this Section 10.02, and shall require the consent
of Holders of all Outstanding Securities of such class or series so affected if
such amendment is an amendment enumerated in paragraphs (1) through (7) of this
Section 10.02.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section, the Company shall mail to the
Holders of the Outstanding Securities and the Rating Agency a copy of such
supplemental indenture.
Section 10.03. Execution of Supplemental Trust Agreements. The Company and
the Trustee agree not to execute any supplemental indentures which adversely
affect the rights or obligations of the Servicer under the Trust Agreement
without the prior written consent of the Servicer.
In executing any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by the Trust Agreement, the Trustee
shall be entitled to receive upon request, and (subject to Section 8.0l) shall
be fully protected in relying in good faith upon, an Opinion of Counsel
reasonably acceptable to the Trustee stating that the execution of such
supplemental indenture is authorized or permitted by the Trust Agreement. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own duties or immunities under the Trust
Agreement or otherwise.
Section 10.04. Effect of Supplemental Trust Agreements. Upon the execution
of any supplemental indenture under this Article, the Trust Agreement shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of the Trust Agreement for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Section 10.05. Reference in Securities to Amendments. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Company shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE ELEVEN
SPECIAL REDEMPTION OF SECURITIES
Section 11.01. Special Redemption at the Option of the Company; Election to
Redeem. Except as otherwise provided in the applicable Supplement, the
Outstanding Securities of any class may be redeemed by the Company, in whole but
not in part, at any time after the aggregate principal amount or the aggregate
Imputed Principal Amount, as the case may be, of the then Outstanding Securities
of such class is less than 10% of the original aggregate principal amount or
original aggregate Imputed Principal Amount, as the case may be, of the
Securities of such class at the Special Redemption Price.
The Company shall set the Special Redemption Date and the Special
Redemption Record Date and give notice thereof to the Trustee pursuant to
Section 11.02.
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Distributions or installments of interest and principal, as the case may
be, due on or prior to a Special Redemption Date shall continue to be payable to
the Holders of Securities called for redemption as of the relevant Record Dates
according to their terms. The election of the Company to redeem any Securities
pursuant to this Section shall be evidenced by a Board Resolution directing the
Trustee to make the payment of the Special Redemption Price on all of the
Securities to be redeemed from monies deposited with the Trustee pursuant to
Section 11.04.
Section 11.02. Notice to Trustee. In the case of any redemption pursuant to
Section 11.01, the Company shall, at least 45 days prior to the Special
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Special Redemption Date.
Section 11.03. Notice of Special Redemption by the Company. Notice of
redemption pursuant to Section 11.01 shall be given by first-class mail, postage
prepaid, mailed not less than 30 days prior to the applicable Special Redemption
Date, to each affected Holder of Securities, at his address in the Register.
All notices of redemption shall state:
(1) the Special Redemption Date;
(2) the Special Redemption Price;
(3) whether the Securities are only payable upon presentation; and
(4) that on the Special Redemption Date, the Special Redemption Price
will become due and payable upon each of such Securities, and that interest
thereon shall cease to accrue on such date.
Notice of redemption of Securities shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Securities selected for redemption shall not impair or affect the validity
of the redemption of any other Securities.
Section 11.04. Deposit of the Special Redemption Price. On or before the
Business Day next preceding any Special Redemption Date, the Company shall
deposit with the Trustee or with the Paying Agent an amount of monies sufficient
to pay the Special Redemption Price of all Securities which are to be redeemed
on such Special Redemption Date (less any portion of such payment to be made
from monies on deposit in the Distribution Account).
Section 11.05. Securities Payable on Special Redemption Date. Notice of
redemption having been given as provided in Section 11.03, the Securities to be
redeemed shall, on the applicable Special Redemption Date, become due and
payable at the Special Redemption
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Price and on such Special Redemption Date (unless the Company shall default in
the payment of the Special Redemption Price) such Securities shall cease to bear
interest. The Holders of such Securities shall be paid the Special Redemption
Price by the Paying Agent on behalf of the Company; provided, however, that
Distributions and/or installments of principal and interest which are due on or
prior to the Special Redemption Date shall be payable to the Holders of such
Securities registered as such on the relevant Record Dates according to their
terms.
If the Holders of any Securities called for redemption shall not be so
paid, the principal or Imputed Principal Amount, as the case may be, and
premium, if any, shall, until paid, bear interest from the Special Redemption
Date at the related Interest Rate.
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal and Interest. In connection with any
Debt Securities, the Company will duly and punctually pay or cause to be paid
the principal of, premium, if any, and interest on the Debt Securities in
accordance with the terms of the Debt Securities, and the Trust Agreement;
provided, however, that the obligation of the Company to pay the principal of
and interest on the Debt Securities is not a general obligation of the Company
nor its officers and directors, but is limited solely to the Trust Estate
pledged under the Trust Agreement.
Section 12.02. Maintenance of Office or Agency. The Company will maintain an
office or agency within the United States of America where Securities may be
presented or surrendered for payment, where Debt Securities may be surrendered
for registration of transfer or exchange and where notices and demand to or upon
the Company in respect of the Debt Securities and the Trust Agreement may be
served. The Company hereby initially appoints the Trustee its office or agency
for each of said purposes. The Company will give 30 days prior written notice
to the Trustee and the Holders of any change in the location, of any such office
or agency. If at any time the Company shall fail to maintain any such office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Trustee and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Section 12.03. Money for Payments on Securities to Be Held in Trust. In
connection with an Issue of Debt Securities, the Company shall, on or before the
applicable Payment Date, deposit or cause to be deposited into the Distribution
Account a sum sufficient to pay the principal and interest so becoming due, such
sum to be held in trust for the benefit of the Holders entitled to such
principal and interest, and the Company will promptly notify the Trustee of its
action or failure so to act.
The Trustee shall hold all sums held by it for the payment of Distributions
on Pass-through securities or of principal of or interest on Debt Securities, as
the case may be, in
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trust for the benefit of the Holders entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided. If there is
any Paying Agent other than the Trustee, the Company will cause each Paying
Agent other than the Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee that, subject to the
provisions of this Section, such Paying Agent will (1) hold all sums held by it
for the payment of Distributions on Pass-through securities or of principal of
or interest on Debt Securities, as the case may be, in trust for the benefit of
the Holders entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided; (2) give the Trustee notice of any
Default by the Company (or any other obligor upon the Securities) in the making
of any payment of principal or interest; and (3) at any time during the
continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of the Trust Agreement or for any other purpose, pay, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of or interest on any Securities and remaining
unclaimed for two years after such Distribution or such principal or interest
has become due and payable shall be paid to the Company on Company Request; and
the Holder of such Securities shall thereafter, as an unsecured general
creditor, and subject to any applicable statute of limitations, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, shall at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the city in which the Corporate
Trust Office is located, give notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company. The Trustee may also adopt and employ, at the
expense of the Company, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Holders whose right to or interest in monies due and payable but not claimed is
determinable from the records of any Paying Agent, at the last address as shown
on the Register for each such Holder).
Section 12.04 Corporate Existence. (i) The Company will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
State of Delaware (unless it becomes incorporated under the laws of any other
State of the United States of America, in which case the Company will keep in
full effect its existence, rights and franchises as a corporation under the laws
of such other jurisdiction), will operate in accordance with, and subject to the
limitations set forth in, its certificate of incorporation,
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and will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Trust Agreement or
the Securities.
(ii) The Company will, at all times, (a) maintain (A) corporate books and
records separate from those of any other Person and (B) minutes of the meetings
and other proceedings of its shareholders and board of directors; (b)
continuously maintain the resolutions, agreements and other instruments
underlying the transactions contemplated hereby, and the Servicing Agreement as
official records of the Company; and (c) pay all of its operating expenses and
liabilities from its own funds.
Section 12.05. Protection of Trust Estate; Protective Filing. The Company
will from time to time execute and deliver all such supplements hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other actions as may be
reasonably necessary or advisable to:
(i) grant more effectively all or any portion of the Trust Estate;
(ii) maintain or preserve the lien of the Trust Agreement or carry out
more effectively the purposes hereof;
(iii) perfect, publish notice of, or protect the validity of any Grant
or deposit made or to be made by the Trust Agreement;
(iv) enforce any of the Loans or, where appropriate, any security
interest in the Loan Collateral securing such Loans and the proceeds
thereof; or
(v) preserve and defend title to the Trust Estate and the rights of
the Trustee and the Holders therein against the claims of all persons and
parties.
The Company, upon its failure to do so, hereby designates the Trustee, its
agent and attorney-in-fact to execute any financing statement, continuation
statement or other instrument required pursuant to this Section 12.05; provided,
however, that such designation shall not be deemed to create a duty in the
Trustee to monitor the compliance of the Company with the foregoing covenants
and provided further, that the duty of the Trustee to execute any instrument
required pursuant to this Section 12.05 shall arise only if the Trustee has
knowledge in the manner contemplated by Section 8.01(e) of any failure of the
Company to comply with provisions of this Section 12.05.
Section 12.06. Negative Covenants. The Company will not:
(i) sell, transfer, exchange or otherwise dispose of any of the Trust
Estate except as provided in the Trust Agreement or the Servicing
Agreement;
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(ii) claim any credit on, or make any deduction from, any Scheduled
Distribution or from the principal or interest payable in respect of the
Securities by reason of the payment of any taxes levied or assessed upon
any of the Trust Estate;
(iii) (a) permit the validity or effectiveness of the Trust
Agreement, or any Grant hereunder to be impaired, or permit the Trust
Agreement to be amended, hypothecated, subordinated, terminated or
discharged or permit any person to be released from any covenants or
obligations under the Trust Agreement, except as may be expressly permitted
hereby and thereby, (b) except as provided in any agreement or instrument
evidencing a Liquidity Facility or Credit Enhancement, permit any lien,
charge, security interest, mortgage or other encumbrances (other than the
lien of the Trust Agreement) to be created on or extended to or otherwise
arise upon or burden the Trust Estate or any part thereof or any interest
therein or the proceeds thereof or (c) except as provided in any agreement
or instrument evidencing a Liquidity Facility or Credit Enhancement, permit
the Trust Agreement not to constitute a valid first priority perfected
security interest in the Trust Estate;
(iv) dissolve or liquidate in whole or in part;
(v) not consent to the modification or amendment of a Loan, or any
deviation from the provisions thereof, including without limitation a
change in the interest rate, payment terms or place of payment of any Loan
Note without the consent of the applicable party providing Credit
Enhancement (if such party has such consent rights under the Credit
Enhancement); or
(vi) modify or amend a Loan in any manner which would have a material
adverse effect upon the interests of the Holders, other than in connection
with any enforcement action taken with respect to a Defaulted Loan or
otherwise as required by the terms of any Loan. Any modification or
amendment of a Loan shall not be deemed to have a material adverse effect
upon the interests of the Holders unless such modification or amendment (1)
results in a reduction in amounts payable with respect to a Loan, (2)
results in a change in the priority of, the claim on a Borrower's assets
represented by a Loan, (3) changes the timing of any amounts payable in
respect of such Loan or (4) results in a downgrade in any rating maintained
in respect of such Loan or results in, or would result in, a downgrade in
the rating afforded the Securities.
Section 12.07. Information as to Company. If required in the applicable
Supplement, the Company shall deliver to the Trustee, the Rating Agency and,
upon request, to each Holder of Outstanding Securities (and, upon the request of
any Holder, to any prospective transferee of any Securities):
(i) within 120 days after the end of each fiscal year of the Company,
a copy of:
(a) a balance sheet of the Company, at the end of that year, and
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(b) statements of income, retained earnings and cash flow of the
Company for that year, setting forth in each case in comparative form
the figures for the previous fiscal year,
all in reasonable detail and accompanied by an opinion of a firm of
Independent certified public accountants of recognized national standing
stating that such financial statements present fairly the financial
condition of the Company and its consolidated subsidiaries and have been
prepared in accordance with generally accepted accounting principles
consistently applied (except for changes in application in which such
accountants concur), and that the examination of such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards, and accordingly included such tests
of the accounting records and such other auditing procedures as were
considered necessary in the circumstances;
(ii) with each set of financial statements delivered pursuant to
Section 12.07 (i), the Company will deliver an Officer's Certificate
stating that such officer has reviewed the relevant terms of the Trust
Agreement and the Servicing Agreement and has made, or caused to be made,
under such officer's supervision, a review of the transactions and
conditions of the Company during the period covered by the income
statements then being furnished and that the review has not disclosed the
existence of any Event of Default or Event of Termination, or, if an Event
of Default or Event of Termination exists, describing its nature;
(iii) immediately upon becoming aware of the existence of any
condition or event which constitutes a Default, an Event of Default or an
Event of Termination, a written notice describing its nature and period of
existence and what action the Company is taking or proposes to take with
respect thereto;
(iv) promptly upon the Company's becoming aware of
(a) any proposed or pending investigation of it by any
governmental authority or agency, or
(b) any pending or proposed court or administrative
proceeding which involves or may involve the possibility of materially
and adversely affecting the properties, business, prospects, profits
or condition (financial or otherwise) of the Company, a written notice
specifying the nature of such investigation or proceeding and what
action the Company is taking or proposes to take with respect thereto
and evaluating its merits; and
(v) with reasonable promptness any other data and information which
may be reasonably requested from time to time, including without limitation
any information that may be required to be delivered at any time to any
prospective transferee of any Notes in order to satisfy the requirements of
Rule 144A under the Securities Act of 1933, as amended.
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Section 12.08. Investment Company Act. The Company will conduct its
operations in a manner which will not subject it to registration as an
"Investment Company" under the Investment Company Act of 1940.
Section 12.09. Enforcement of Servicing Agreement. The Company and the
Trustee will each take all actions necessary, and diligently pursue all remedies
available to it, to the extent commercially reasonable, to enforce the
obligations of the Servicer under the Servicing Agreement and to secure its
rights thereunder.
Section 12.10. Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate or merge with or into any other Person or convey
or transfer its properties and assets substantially as an entirety to any
Person, unless:
(1) the person formed by or surviving such consolidation or merger or
which acquires by conveyance or transfer the properties and assets of the
Company substantially as an entirety shall be a Person organized and
existing as a limited purpose corporation under the laws of the United
States of America or any state thereof or the District of Columbia, and (if
other than the Company) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, the due and
punctual payment of the principal of and interest on all Securities and the
performance of every covenant of the Trust Agreement on the part of the
Company to be performed or observed; and
(2) the Trustee shall have received written confirmation from the
Rating Agency rating any Outstanding Securities at the request of the
Company to the effect that the rating issued with respect to the Securities
is confirmed, notwithstanding the consummation of such merger,
consolidation, transfer or conveyance; and
(3) immediately after giving effect to such transaction, no Default,
Event of Default or Event of Termination shall have occurred and be
continuing; and
(4) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer and such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with; and
(5) such consolidation, merger, conveyance or transfer shall be on
such terms as shall fully preserve the lien and security hereof, the
perfection and priority thereof and the rights and powers of the Trustee
and the Holders of the Securities hereunder; and
(6) the surviving corporation shall have an organizational charter
substantially similar to the Certificate of Incorporation of the Company.
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Section 12.11. Taxes. The Company shall pay when due all taxes owed by it or
levied or assessed against its assets, properties or income, including, to the
extent applicable, any part of the Trust Estate.
Section 12.12. Successor Substituted. Upon any consolidation or merger, or
any conveyance or transfer of the properties and assets of the Company
substantially as an entirety in accordance with Section 12.10, the Person formed
by or surviving such consolidation or merger (if other than the Company) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Trust Agreement with the same effect as if such Person had been named as the
Company herein. In the event of any such conveyance or transfer, the Person
named as the "Company" in the first paragraph of this instrument or any
successor which shall theretofore have become such in the manner prescribed in
this Article shall be released from its liabilities as obligor and maker on all
the Securities and from its obligations under the Trust Agreement and may be
dissolved, wound-up and liquidated at any time thereafter.
Section 12.13. Opinions as to Trust Estate. If required in the applicable
Supplement, on or before December 31 in each calendar year, the Company shall
furnish to the Trustee an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken during the immediately preceding 12-
month period with respect to the recording, filing, re-recording and refiling of
the Trust Agreement, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the lien and
security interest created by the Trust Agreement and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, rerecording and refiling of the Trust
Agreement, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to maintain
the lien and security interest of the Trust Agreement until December 31 in the
following calendar year.
Section 12.14. Performance of Obligations. The Company will not take any
action and will use its best efforts not to permit any action to be taken by
others that would release any Person from any of such Person's covenants or
obligations under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument, except as
expressly provided in the Trust Agreement or the Servicing Agreement or such
other instrument.
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ARTICLE THIRTEEN
ACCOUNTS, ACCOUNTINGS AND DISTRIBUTIONS
Section 13.01. Accounts. Contemporaneously with the execution of the Trust
Agreement, the Trustee shall establish a special purpose demand deposit account
at its corporate office in the name of the Trustee for its sole and exclusive
benefit (the "Revenue Account"). Pursuant to the Servicing Agreement, the
Servicer shall, on or before the Servicer Remittance Date for each Collection
Period, remit to the Revenue Account all collections received by the Servicer
during such Collection Period with respect to the Loans and any Other Collateral
and shall, concurrently therewith, deliver to the Trustee the Servicer
Remittance Report. The Servicer shall also deposit to the Revenue Account the
proceeds, if any, received from a draw upon any Liquidity Facility (other than a
drawing required to be deposited to the Liquidity Account as provided in Section
13.03 below), upon any Liquidity Facility, or upon any Credit Enhancement. The
Company shall have no legal, equitable or beneficial interest in the Revenue
Account.
(b) All monies deposited from time to time in the Revenue Account, pending
application as provided herein, shall upon Company Order be invested in Eligible
Investments. The Company Order shall specify the Eligible Investments in which
the Trustee shall invest, shall state that the same are Eligible Investments and
shall further specify the percentage of funds to be invested in each Eligible
Investment. No such Eligible Investment shall mature later than the Business Day
preceding the next following Servicer Remittance Date. In the absence of a
Company Order, the Trustee shall invest funds in the Revenue Account in Eligible
Investments described in clause (i) of the definition thereof.
(c) Any income or other gain from investment in Eligible Investments as
outlined in (b) above shall be credited to the Revenue Account and any loss
resulting from such investments shall be charged to such account; provided,
however, that the Company shall make or cause to be made on any Servicer
Remittance Date a deposit to the Revenue Account to the extent of any losses
therein caused as a result of the Company's investment instructions provided for
herein. The Trustee shall not be liable for any loss incurred on any funds
invested in Eligible Investments pursuant to the provisions of this Section
13.01.
(d) On each Special Payment Date, if any, applicable to an Issue of
Securities the Trustee shall withdraw from the Revenue Account such amounts as
are required in the applicable Supplement to make the payments therein provided.
(e) On each Servicer Remittance Date, if either (1) no Default, Event of
Default or Event of Termination shall have occurred and be continuing or (2) a
Default, Event of Default or Event of Termination shall have occurred and be
continuing but, in the case of Debt Securities, the entire unpaid principal
amount of the Securities shall not have been declared due and payable pursuant
to Section 6.02 hereof or, in the case of Pass-through Securities, then on such
Servicer Remittance Date, the Trustee shall withdraw from the Revenue Account
(other than amounts representing payments of Loans due after the Cut-Off
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Date immediately preceding such Servicer Remittance Date) including the
Reinvestment Income therein, and shall make the following disbursements in the
following order:
(i) to pay to the Servicer any unpaid Servicing Fee currently due or
Additional Servicing Fee, if any; and
(ii) to pay the amount, if any, payable to the Trustee under Section
8.07(a) of the Trust Agreement.
After making such payments, the Trustee shall then transfer to the
Distribution Account amounts remaining in the Revenue Account (other than
amounts representing payments of Loans due after the Cut-Off Date immediately
preceding such Payment Date).
Section 13.02. Distribution Account. (a) Contemporaneously with the
execution of the Trust Agreement, the Trustee shall establish a special purpose
trust account at its corporate trust office in the name of the Trustee for the
benefit of the Holders, for receipt of amounts transferred from the Revenue
Account pursuant to Section 13.01 above. Funds in the Distribution Account shall
not be commingled with any other monies. All funds deposited from time to time
in the Distribution Account pursuant to the Trust Agreement shall be held by the
Trustee as part of the Trust Estate as herein provided.
(b) The Trustee shall, concurrently with the establishment of the
Distribution Account establish, as subaccounts of the Distribution Account, the
Payment Accounts. On each Payment Date, the Trustee shall withdraw from the
Distribution Account to the extent available and in accordance with the
distribution instructions in the applicable Supplement (i) funds equal to the
amount required to be distributed to any Liquidity Provider pursuant to the
applicable Supplement as reflected on the Servicer Remittance Report, (ii) funds
equal to the Interest Amount as reflected on the Servicer Remittance Report, and
(iii) funds equal to the Principal Amount as reflected on the Servicer
Remittance Report, and shall deposit such funds into the identified Payment
Accounts in accordance with the instructions contained in the Servicer
Remittance Report.
(c) On each Payment Date, if either (1) no Default, Event of Default or
Event of Termination shall have occurred and be continuing or (2) a Default,
Event of Default or Event of Termination shall have occurred and be continuing
but, in the case of Debt Securities, the entire unpaid principal amount of the
Securities shall not have been declared due and payable pursuant to Section 6.02
or, in the case of Pass-through Securities, then on such Payment Date, the
Trustee shall withdraw from the indicated Payment Accounts, and shall make the
following disbursements in the following order:
(i) Deduct from the Level 1 Interest Accounts, or to the extent funds
are not available in such Accounts, from the lower priority Interest
Accounts in inverse of priority, an amount equal to the Level 1 Interest
Amount, and pay such Amount to the Level 1 Parties;
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(ii) In the same manner and to the extent necessary, deduct from the
Level 2 Interest Accounts, or to the extent funds are not available in such
Accounts, from the lower priority Interest Accounts in inverse of priority,
an amount equal to the Level 2 Interest Amount, and pay such Amount to the
Level 2 Parties;
(iii) In the same manner and to the extent necessary with respect to
each Level of priority, deduct from the respective Interest Accounts in
order of priority, or to the extent funds are not available in such
Accounts from the lower priority Interest Accounts in inverse of priority
an amount equal to the Interest Amount of such Level and pay such amount to
the parties of such Level;
(iv) Deduct from the Level 1 Principal Accounts or to the extent funds
are not available in such Accounts, from the lower priority Principal
Accounts in inverse of priority, an amount equal to the Level 1 Principal
Amount and pay such Amount to the Level 1 Parties;
(v) In the same manner and to the extent necessary, deduct from the
Level 2 Principal Accounts or to the extent funds are not available in such
Accounts, from the lower priority Principal Accounts in inverse of
priority, an amount equal to the Level 2 Principal Amount and pay such
amount to the Level 2 Parties;
(vi) In the same manner and to the extent necessary with respect to
each Level of priority, deduct from the respective Principal Accounts in
order of priority, or to the extent funds are not available in such
Accounts, from the lower priority Principal Accounts in inverse order of
priority, an amount equal to the Principal Amount of such Level and pay
such amount to the Parties of such Level.
All payments required by this subsection (b) to be made from aggregate
amounts shall be paid pro rata to the parties entitled thereto unless otherwise
provided in the applicable Supplement for a particular Issue of Securities.
Section 13.03. Liquidity Account. Upon receipt of any notice from the
Servicer, pursuant to the terms of any Liquidity Facility, that the Servicer is
delivering to the provider of such Liquidity Facility a demand or draw for the
entire amount available to be drawn under such Liquidity Facility in connection
with the failure to extend or substitute the Liquidity Facility, the Trustee
shall promptly establish a separate special purpose trust account at its trust
office in the name of the Trustee for the benefit of the Holders. The Trustee
shall invest any amounts deposited by the Servicer into the Liquidity Account in
such Eligible Investments as the Company shall direct by Company Order, with
investment earnings (net of losses) to be payable to the issuer of the Liquidity
Facility. The Trustee shall, upon receipt of a demand or draw from the Servicer
substantially in the form required by the terms of the Liquidity Facility,
disburse such funds to the Servicer or upon its order. Upon receipt of a Company
Order to release the funds remaining in the Liquidity Account to the provider of
the Liquidity Facility and fulfillment of any conditions precedent to such
release to the satisfaction of the Trustee, the Trustee shall release such funds
to the provider of the Liquidity Facility.
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Section 13.04. Credit Enhancement. The Trustee, in coordination with the
Servicer, will take appropriate actions to secure the benefit of any Credit
Enhancement that may be provided in connection with an Issue of Securities and,
notwithstanding any contrary provisions of this Trust Agreement, will comply
with the terms of any reimbursement and other provisions of such Credit
Enhancement instruments.
Section 13.05. Reports by Trustee to Holders. (a) On each Payment Date, the
Trustee shall account to each Holder of Securities upon which Distributions or
payments of principal and interest, as the case may be, are then being made the
amount which represents principal or Imputed Principal, as the case may be, and
the amount which represents interest or Imputed Interest, as the case may be,
and shall contemporaneously advise the Company of all such payments. On or
before the 15th day prior to the Final Payment Date the Trustee shall provide
notice to the Holders of the Securities of the Final Payment Date. Such notice
shall include (1) a statement that interest shall cease to accrue as of the last
day preceding the date on which the Final Payment Date occurs, and (2) shall
specify the place or places at which presentation and surrender may be made.
(b) The Trustee shall, on a quarterly basis, confirm the credit rating or,
if more than one credit rating has been assigned, each such credit rating of
each institution in which funds are invested pursuant to clause (iv) of the
definition of Eligible Investments and shall promptly notify the Holders if any
such credit rating has been lowered.
Section 13.06. Trust Estate. The Trustee may, and when required by the
provisions of Articles Eight and Twelve of the Trust Agreement shall, execute
instruments to release property from the lien of the Trust Agreement, or convey
the Trustee's interest in the same, in a manner and under circumstances which
are not inconsistent with the provisions of the Trust Agreement. No party
relying upon an instrument executed by the Trustee as provided in this Article
Thirteen shall be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
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EXHIBIT 4.2
U.S. TRADE FUNDING CORP.
SUPPLEMENTAL TRUST AGREEMENT
This Supplemental Trust Agreement, dated as of October 1, 1996 (referred to
herein as this "Supplement"), is made by and among U.S. Trade Funding Corp., a
Delaware corporation (the "Company"), LaSalle National Bank, a national banking
association, as trustee (the "Trustee"), and ABN AMRO Bank N.V., a bank
organized under the laws of The Netherlands and acting through its Chicago
Branch (the "Servicer").
PRELIMINARY STATEMENT
This Supplement incorporates by reference the Standard Terms and Conditions
of Trust Agreement, dated as of January 1, 1995 attached hereto as Appendix A
(the "Standard Terms of Trust Agreement"), and together this Supplement and the
Standard Terms of Trust Agreement form the Trust Agreement entered into to
effect the financing described below.
The Trust is being created for the primary purposes of (i) acquiring from
the Company and holding two (2) promissory notes (each constituting a "Loan
Note" under the Trust Agreement), each converted from a floating to a fixed rate
of interest and reissued and dated the date of conversion, and originally issued
by the Borrower (as defined herein) to ABN AMRO Bank N.V. (in such capacity, the
"Seller") in the principal amounts of $50,952,326.31 and $50,719,872.97 and (ii)
issuing the Securities. The Company has the right to acquire the Loan Notes
from the Seller pursuant to that certain Purchase Agreement dated as of January
1, 1995 between the Company and the Seller. The principal amount of each of the
Loan Notes is payable in 24 installments of principal, such installments to be
paid on February 15 and August 15 of each year, commencing February 15, 1997 and
having a final maturity of August 15, 2008. The payments of principal of and
interest (at the Guaranteed Interest Rate as defined in the Guarantee Agreement
hereinafter referred to) on the Loan Notes are guaranteed by the Export-Import
Bank of the United States ("Eximbank"), an agency of the government of the
United States of America, under the Guarantee Agreement (as defined herein),
which guarantee is backed by the full faith and credit of the United States of
America.
The beneficial interests in the Trust shall be evidenced by the Securities.
All covenants and agreements made by the Company, the Trustee and the Servicer
herein are for the benefit of the holders of the Securities.
All things necessary to make the Trust Agreement a valid agreement of the
Company, the Trustee and the Servicer in accordance with its terms have been
done.
GRANTING CLAUSE
In consideration of the Trustee's delivery to, or upon the order of, the
Company of authenticated Securities, in authorized denominations in an aggregate
Imputed Principal
<PAGE>
Amount equal to the amount specified in the Preliminary Statement of this
Supplement, the Company hereby sells, transfers, assigns and conveys, without
recourse, to the Trustee, upon the terms and conditions hereof, all of its right
title and interest in and to the Loans, Loan Notes, Loan Documents, the
Liquidity Facility and other assets, all as identified on Schedule I hereto (the
"Trust Estate"). The sale, transfer, assignment and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by the
Trustee or any Holder of any remaining obligation of the Company to the Borrower
or any other Person in connection with the Loans and the rest of the Trust
Estate or any agreement document or instrument related thereto.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein
required to the best of its ability to the end that the interests of the Holders
may be adequately and effectively protected.
ARTICLE ONE
SPECIFIC DEFINITIONS AND PROVISIONS
Section 1.01. Definitions. The Standard Terms of Trust Agreement provide
that certain terms used in the Trust Agreement shall be defined in this
Supplement. All other terms used in the Trust Agreement have the applicable
meanings assigned to them in the Standard Terms of Trust Agreement. With respect
to this Issue of Securities, the following definitions shall apply:
"Assignment": shall mean, with respect to a Loan Note, the Assignment
executed by the Trustee and delivered by the Trustee (or by the Servicer on
behalf of the Trustee), on behalf of the Trust, to Eximbank as provided in
Sections 4.02(d), (e), and (f) in substantially the form of Annex C to the
Guarantee Agreement.
"Borrower" or "Borrowers": shall mean YA96A Limited, a company
incorporated under the laws of the Cayman Islands and having its registered
office at Ugland House, South Church Street, P.O. Box 309, Grand Cayman, Cayman
Islands, British West Indies.
"Business Day": shall mean a day which is not a Saturday or Sunday and a
day on which banks are open for the transaction of business in Chicago, Illinois
and New York, New York.
"Collection Period": shall mean, for any Security, the period from and
including the day immediately following the most recent relevant Payment Date
(or, with respect to the initial Payment Date, from and after the Delivery Date)
to and including the next succeeding relevant Payment Date.
"Corporate Trust Office": shall mean the office of the Trustee located at
135 S. LaSalle Street, Chicago, Illinois 60603.
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"Credit Enhancement": shall mean the Guarantee Agreement.
"Cut-Off Date": shall mean the last day of any Collection Period.
"Delivery Date": shall mean October 25, 1996.
"DTC": means The Depository Trust Company, a limited-purpose trust company
organized under the laws of the State of New York, as depository of the
Securities, and any successor depository of the Securities.
"DTC Letter": means the letter of representations executed by the Trustee
on behalf of the Trust and acknowledged by DTC substantially in the form of
Exhibit F hereto.
"DTC Participants": means the securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations which participate in or
have access to DTC's system for the electronic clearance and settlement of
securities transactions.
"Eximbank": shall mean Export-Import Bank of the United States, or any
successor thereto.
"Eximbank Payment Certificate": shall mean the certificate, in
substantially the form of Annex D to the Guarantee Agreement, issued by Eximbank
to the Trust on behalf of the Holders in accordance with the Guarantee
Agreement, pursuant to which Eximbank agrees to make timely payments to the
Trust on behalf of the Holders of the Guaranteed Amounts due on the Loan Notes,
on each subsequent related Note Payment Date, until the scheduled maturity
thereof.
"Eximbank Payment Demand Date": shall mean, with respect to a Loan Note
and in connection with the failure of the Borrower to pay in full on the
relevant Note Payment Date an installment of principal or interest on such Loan
Note, the first Business Day occurring on or after the later of (i) fifteen (15)
calendar days following the date upon which the Trustee (or the Servicer on
behalf of the Trustee) has delivered a Payment Demand to the Borrower, the
Lessee and the Industrial and Commercial Bank of China in accordance with the
provisions of the Servicing Agreement and Guarantee Agreement and (ii) thirty
(30) calendar days following such Note Payment Date.
"Eximbank Payment Event": shall have the meaning set forth in Section
4.02(f).
"Guarantee": shall mean the obligation of Eximbank, pursuant to and
subject to the terms and conditions of the Guarantee Agreement, to make payment
of (i) the outstanding principal amount of each Loan Note, (ii) the accrued
interest on the outstanding principal amount of each Loan Note at the Guaranteed
Interest Rate and (iii) the accrued post-maturity interest on any due and unpaid
principal of, and any due and unpaid accrued interest on, each Loan Note at the
applicable Guaranteed Interest Rate for such Loan Note.
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"Guarantee Agreement": shall mean the Guarantee Agreement dated as of
September 11, 1996, between the Seller (as Facility Agent) and Eximbank,
relating to the Loan Notes, as amended, supplemented or otherwise modified and
in effect from time to time in accordance with its terms.
"Guaranteed Amounts": shall mean the "Guaranteed Amounts" as defined in
the Guarantee Agreement.
"Guaranteed Interest Rate": shall have the meaning assigned to such term
in the Guarantee Agreement.
"Guaranteed Loan Agreement": shall mean the Guaranteed Loan Agreement
dated as of August 27, 1996 by and among the Borrower, the Lenders (as defined
therein), the Seller (as Facility Agent), Eximbank and Wilmington Trust Company
(as Security Trustee).
"Imputed Interest Amount": shall mean an amount determined as of any
Payment Date equal to the amount of interest scheduled to be paid on the Loan
Notes on the related Note Payment Date, and as of any other date, the aggregate
amount of Imputed Interest due and outstanding on such date.
"Interest Rate": shall mean the Guaranteed Interest Rate.
"Lessee": shall mean China Yunnan Airlines, a state-owned legal entity
organized and existing under the laws of the People's Republic of China.
"Level 1 Parties": shall mean the Holders of the 6.75% Trade Trust Series
1996-A Certificates.
"Liquidity Facility": shall mean that certain Irrevocable Revolving Credit
Agreement dated as of January 1, 1995, among the Liquidity Provider, the
Servicer, the Company and the Trustee in favor of the Trustee, or any
Replacement Facility.
"Liquidity Provider": means ABN AMRO Bank N.V., in its capacity as Lender
under (and as defined in) the Liquidity Facility, or any successor Liquidity
Provider.
"Minimum Denomination": shall mean $100,000.
"Mortgage": shall mean the mortgage on the relevant aircraft securing the
Loan Notes in favor of Wilmington Trust Company, as security trustee.
"Note Payment Date": shall mean the scheduled dates under the Loan Notes
for payments of principal and/or interest thereon. The Loan Notes, on the
Delivery Date, have Note Payment Dates on February 15 and August 15 of each year
and if any of such dates are not a Business Day, such Note Payment Date shall be
the next succeeding Business Day, provided that if August 15, 2008 shall not be
a Business Day, such Note Payment Date shall be the next preceding Business Day.
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"Payment Date": shall mean the dates upon which Distributions are required
to be made on the Securities, which shall be February 15 and August 15 of each
year, commencing with February 15, 1997 or if any of such Payment Dates are not
a Business Day, the Payment Date shall be the next succeeding Business Day,
provided that if August 15, 2008 shall not be a Business Day, such Payment Date
shall be the next preceding Business Day.
"Payment Demand": shall mean any written demand, delivered by the Trustee
(or by the Servicer on behalf of the Trustee for the benefit of the Trust) as
provided in the Servicing Agreement, executed by an authorized officer of the
Trustee, and addressed to the Borrower, the Lessee, the Industrial and
Commercial Bank of China or Eximbank, for payment of amounts due and unpaid
under any Loan Note, the guarantee issued by the Industrial and Commercial Bank
of China to Eximbank, or the Guarantee, as the case may be, substantially in the
forms attached as Exhibit C hereto (in the case of the Borrower and the Lessee),
Exhibit D hereto (in the case of the Industrial and Commercial Bank of China)
and Exhibit E hereto (in the case of Eximbank).
"Rating Agency": shall mean Standard & Poor's Ratings Group, a division of
the McGraw-Hill Companies or any successor.
"Record Date": shall mean, in respect of any Payment Date, the fifteenth
day preceding such Payment Date, and in respect of any other event, the
fifteenth day preceding the occurrence of such event.
"Replacement Facility": shall mean a replacement irrevocable liquidity
facility substantially identical to the initial Liquidity Facility and issued by
an institution with a short-term unsecured debt rating of A-1+ by the Rating
Agency and which is acceptable to Eximbank.
"Required Rating": shall mean a minimum rating in respect of the
Securities of "AAA" by the Rating Agency.
"Servicer Remittance Date": shall mean the related Payment Date.
"Servicer Remittance Report": shall mean the report required to be
delivered by the Servicer to the Trustee substantially in the form attached
hereto as Exhibit B.
"Servicing Agreement": means the Servicing Agreement dated as of January
1, 1995 among the Company, the Servicer and the Trustee.
"Special Payment Date": means the date on which there shall have been
deposited in the Revenue Account an amount, derived from collections in respect
of a Loan Note (and/or related Guarantee) as to which an Advance (as defined in
the related Liquidity Facility) has been made and remains outstanding,
sufficient to pay the principal amount of such Advance together with accrued
interest thereon to the Special Payment Date as provided in the Liquidity
Facility.
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"Stated Maturity": shall mean August 15, 2008.
"Transfer Agreement": means the Transfer Agreement dated as of October 1,
1996 among the Borrower, ABN AMRO Bank N.V., as Facility Agent and Lender, and
the Trustee, in substantially the form attached as Appendix 4 to the Loan
Agreement.
"Underwriting Agreement": shall mean that certain Underwriting Agreement,
dated October 25, 1996 by and between ABN AMRO Securities (USA) Inc., as
Underwriter and the Company.
Section 1.02. The Standard Terms of Trust Agreement provide that certain
accounts required to be established by the Trustee for this Issue of Securities
will be more specifically identified in this Supplement. Accordingly, the
following is a list of such accounts:
(a) The Distribution Account is established with LaSalle National
Bank, Account Number: 677635401.
(b) One (1) Level 1 Interest Account is established as a sub-account
of the Distribution Account with LaSalle National Bank, Account Number:
677635419.
(c) No Level 2 or lower priority Interest Accounts are established.
(d) One (1) Level 1 Principal Account is established, as a
sub-account of the Distribution Account, with LaSalle National Bank,
Account Number: 677635427.
(e) No Level 2 or lower priority Principal Account is established.
(f) The Revenue Account is established with LaSalle National Bank,
Account Number: 677635435.
Section 1.03. Addresses for Notices.
(a) The address to which notices under the Trust Agreement should be
mailed to the Trustee is LaSalle National Bank, 135 South LaSalle Street,
Chicago, Illinois 60603 - Attention: Corporate Trust Department;
(b) The address to which notices under the Trust Agreement should be
mailed to the Servicer is ABN AMRO Bank N.V., Chicago Branch, 135 South
LaSalle Street, Chicago, Illinois 60603 - Attention: Structured Trade
Finance, Suite 725.
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ARTICLE TWO
FORM OF SECURITIES
Section 2.01. The Securities shall be in substantially the form of Exhibit
A hereto, which form is hereby incorporated in and made a part of this
Supplement.
ARTICLE THREE
APPLICATION OF MONEYS COLLECTED
Section 3.01. Notwithstanding any provisions of the Standard Terms and
Conditions of Trust Agreement to the contrary (including without limitation
Section 8.07(b) thereof), any money deposited in the Revenue Account and to be
distributed to the Distribution Account and Payment Accounts in accordance with
the Standard Terms and Conditions of Trust Agreement shall be applied for
distribution in the following order of priority (and the Servicer Remittance
Report shall so reflect such allocation):
First: To the payment of all amounts due to the Liquidity Provider in
respect of outstanding principal and interest on Advances (as defined in
the Liquidity Agreement), (but only to the extent that the proceeds of such
Advances have been used to pay Certificateholders amounts due them on the
most recent Payment Date).
Second: To the payment of amounts due in respect of the Imputed
Interest Amount (but not Imputed Interest Amounts related to default
interest on Loan Notes) on the Securities.
Third: To the payment of amounts due in respect of the Imputed
Principal Amount of the Securities.
Fourth: To the payment of amounts due in respect of the Imputed
Interest Amount related to default interest on unpaid principal and
interest on Loan Notes.
Fifth: To the payment of any supplemental fee due the Liquidity
Provider pursuant to Section 2.06(b) of the Liquidity Facility.
Notwithstanding any provisions of the Standard Terms and Conditions to the
contrary (including without limitation Section 8.07 thereof), any other
obligations, payments, debts, liens or encumbrances created hereunder or under
any other agreement or document shall in all events be subordinate and junior to
the rights of Holders to receive payments of principal and interest with respect
to the Certificates.
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ARTICLE FOUR
MODIFICATIONS AND SUPPLEMENTS TO PROVISIONS
OF
STANDARD TERMS OF TRUST AGREEMENT
Section 4.01. Additional Closing Conditions. As further conditions to the
issuance of the Securities, the following events shall have occurred prior to,
or shall occur simultaneously with, the issuance of the Securities:
(a) execution and delivery of the Transfer Agreement by the parties
thereto, and satisfaction of all the conditions set forth therein to the
acquisition by the Trustee, on behalf of the Trust, of the Loan Notes and the
other property comprising the Trust Estate assigned pursuant to such Transfer
Agreement;
(b) receipt by the Trustee, on behalf of the Trust, of each relevant Loan
Note and the other property comprising the Trust Estate;
(c) execution and delivery of the Liquidity Facility by the parties
thereto and satisfaction of all conditions precedent set forth in Section 3.01
of the Liquidity Facility;
(d) the Securities shall have been rated "AAA" by the Rating Agency;
(e) receipt by the Trustee of fees to be paid to the Trustee on the
Delivery Date;
(f) compliance by all parties to the Underwriting Agreement with their
respective obligations set forth in the Underwriting Agreement and satisfaction
of all conditions precedent set forth in the Underwriting Agreement;
(g) satisfaction of all conditions precedent set forth in Section 4 of the
Guarantee Agreement;
(h) the Trustee shall have pre-executed and delivered to the Servicer
forms of Payment Demand for each Loan Note, substantially in the forms attached
as Exhibit C hereto (in respect of the Borrower and Lessee), Exhibit D hereto
(in respect of the Industrial and Commercial Bank of China), and Exhibit E
hereto (in the case of Eximbank); and
(i) the legend evidencing the Guarantee shall have been endorsed on all
Loan Notes to be assigned to the Trust.
Section 4.02. Modifications of Trustee Duties; Powers, etc. (a) Except as
provided in Sections 4.02(d), (e) and (f), the Trustee will not sell, assign,
pledge or otherwise transfer any Loan Note, the Guarantee, the Guarantee
Agreement, any Eximbank Payment Certificate, if any, any Transfer Agreement, any
other property contained in the Trust
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Estate or any interest of the Trust therein, to any Person or Persons, except to
a successor trustee as provided in Section 8.10 of the Standard Terms of Trust
Agreement, notwithstanding any default under any Loan Note or Guarantee. This
Section 4.02(a) shall not be construed to prohibit transfers of the Securities.
(b) Notwithstanding any provisions contained in the Standard Terms of
Trust Agreement, the Trustee shall not agree to any material amendment,
supplement or other modification of a Loan Note, the Loan Agreement, the Lease
Agreement, the Mortgage, the Guarantee Agreement, the Securities, the Liquidity
Facility or the Transfer Agreement or any waiver of any material provision
thereof or consent to any material deviation from the provisions thereof,
without the prior written consent of Eximbank and the Borrower (or its
designee); and provided further, after the initial issuance of the Securities,
the Trustee shall not agree to any material amendment, supplement or other
modification of a Loan Note, the Loan Agreement, the Mortgage, the Guarantee
Agreement, the Securities, the Liquidity Facility or the Transfer Agreement or
any waiver of any material provision thereof or consent to any material
deviation from the provisions thereof, if such amendment, supplement or
modification would diminish, delay or adversely affect the Distributions which
would otherwise be made to the Holders pursuant to the Trust Agreement; and
provided further, no such amendment, as evidenced by an Opinion of Counsel,
shall cause the Trust to be treated other than as a grantor trust for United
States Federal income tax purposes. No amendment or supplement to, and no
modification or rescission of, this Trust Agreement which materially adversely
affects the Borrower or Eximbank, as determined by written notice to such effect
from the Borrower (or its designee) or Eximbank, as the case may be, shall be
effective unless approved in writing by the Borrower (or its designee) or
Eximbank, as the case may be, nor shall any waiver of any rights under this
Trust Agreement which adversely affects in any material respect the interests of
the Borrower or Eximbank, as the case may be, be effective against the Borrower
or Eximbank, as the case may be, unless such waiver has been approved in writing
by the Borrower (or its designee) or Eximbank. The Trustee shall give prior
written notice to Eximbank and the Borrower (or its designee) of every proposed
amendment, supplement or modification, and every proposed waiver of rights,
stating the exact terms thereof. Notwithstanding any provisions contained in the
Standard Terms of Trust Agreement, the Trustee shall not agree to any amendment,
supplement or other modification of the Standard Terms of Trust Agreement or
this Supplement that, as evidenced by an Opinion of Counsel, shall cause the
Trust to be treated as other than a grantor trust for United States Federal
income tax purposes.
(c) In addition to the other obligations and duties of the Trustee set
forth in the Standard Terms of Trust Agreement and herein, the Trustee shall (or
shall cause the Servicer to), subject to Section 8.07(b) of the Standard Terms
and Conditions of Trust Agreement and Section 9.1 of the Servicing Agreement:
(i) promptly prepare (at no additional expense to the Trust or the
Borrower) and deliver to the appropriate tax authorities copies of tax
filings (including without limitation state income tax returns) for the
Trust in accordance with requirements for reporting each Trust as a grantor
trust;
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(ii) for so long as the Trust is subject to the reporting
requirements of the Exchange Act, cause (at no additional expense to the
Trust) an independent certified public accountant approved by Eximbank to
audit the books and records of the Trust on an annual basis, such annual
audit to be made within 90 days following the end of the calendar year;
(iii) file (at no additional cost to the Trust) information,
documents and other reports with the Commission as may be required under
Section 13 or 15(d) of the Exchange Act, or, if not required to file
information, documents or reports pursuant to either of said Sections, file
with the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a United States national securities exchange as may be
prescribed from time to time in such rules and regulations, if applicable;
provided, however, the filing requirements of this Section 4.02(c)(iii)
shall not apply to the extent that the Trustee is advised by the Commission
or its staff or by counsel that any of the foregoing requirements do not
apply or if the Trustee is advised in writing by the Division of
Corporation Finance or the staff of the Commission that it will not
recommend enforcement action if the Trustee does not file any of the
foregoing information, documents or reports. The Trustee may retain counsel
to meet its obligations under this paragraph and the fees of such counsel
shall be an obligation of the Borrower;
(iv) file (at no additional cost to the Trust) with the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports with
respect to compliance by the Trustee with the conditions and covenants of
this Trust Agreement as may be required from time to time by such rules and
regulations;
(v) transmit (at no additional cost to the Trust) by mail to all
Holders, as their names and addresses appear in the Register, such
summaries of any information, documents and reports required to be filed by
the Trustee pursuant to subsections (iii) and (iv) of this Section 4.02(c)
as may be required by rules and regulations prescribed from time to time by
the Commission;
(vi) provide to Eximbank, the Borrower, the Lessee, the Liquidity
Provider or the Company, as the case may be, any information reasonably
requested by any of them in the possession of the Trustee or the Servicer,
on behalf of the Trust, concerning the Trust, any Loan Note, the Loan
Agreement, the Mortgage, any Transfer Agreement, the Guarantee, the
Guarantee Agreement, any Eximbank Payment Certificate, the Securities, the
Holders or the compliance by the Trustee with its obligations hereunder or
under any of the other documents referred to herein;
(vii) comply with all obligations of the Trustee contained in the
Transfer Agreement which survive the issuance and sale of the Securities to
the Underwriter; and
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(viii) send promptly (at no additional cost to the Trust) to any
Rating Agency that then maintains a rating for the Securities (a) a copy of the
report of the accountants referred to in Section 4.02(c)(ii) hereof, (b) a copy
of each notice or report provided by the Trustee to the Holders under this
Section and (c) a report describing the occurrence of any of the following
events:
(1) any change in the Trustee;
(2) any default by Eximbank in its obligation to make payment
pursuant to the Guarantee any default by the Liquidity Provider in its
obligations to make payment under the Liquidity Facility, or any default by
the Borrower of its obligation to make payments pursuant to a Loan Note;
(3) thirty days prior to the effectiveness thereof, any
amendment to the Trust Agreement, any Loan Note, the Loan Agreement, the
Mortgage, the Guarantee, the Guarantee Agreement, the Liquidity Facility,
(including any extension of the Expiry Date thereof) the Servicing
Agreement or any Transfer Agreement;
(4) final payment on the Securities; and
(5) any Eximbank Payment Event.
(d) In accordance with Section 7(b) of the Guarantee Agreement,
upon written notification to the Trustee from Eximbank that (i) a Total
Loss (as defined in the Guarantee Agreement) has occurred in relation to an
aircraft or (ii) a Lease Agreement is terminated due to obsolescence
pursuant to Clause 3.03 thereof, and that the other conditions of such
Section 7(b) have been met, the Trustee shall, in accordance with such
Section 7(b), tender to Eximbank the relevant Loan Note or Loan Notes (duly
endorsed to the order of Eximbank) and the Eximbank Guarantee legend
thereon and assign to Eximbank all of its rights with respect to such Loan
Note or Loan Notes and under the Guaranteed Loan Agreement with respect
thereto and the Transfer Agreement, through an Assignment, and perform all
other obligations required under Section 7(b) of the Guarantee Agreement in
exchange for the issuance by Eximbank to the Trust of an Eximbank Payment
Certificate, which shall be delivered to the Trustee on behalf of the Trust
(to be held in trust for the benefit of the Holders) within five Business
Days of the fulfillment of the conditions set forth in such Section 7(b).
(e) In accordance with Section 7(c) of the Guarantee Agreement,
if Eximbank accelerates a Loan Note or Loan Notes pursuant to the Guaranteed
Loan Agreement due to a non-payment default thereunder and the Borrower makes
timely payment of the accelerated amounts to Eximbank, upon receipt of a letter
of instruction from Eximbank setting forth such facts, the Trustee shall, in
accordance with the letter of instruction, tender to Eximbank the relevant Loan
Note or Loan Notes (duly endorsed to the order of Eximbank) and assign to
Eximbank its rights with respect to the Loan Note or Loan Notes and under the
Guaranteed Loan Agreement with respect thereto and the Transfer Agreement,
through an Assignment, in exchange for the issuance by Eximbank to the Trust of
an Eximbank
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Payment Certificate, which shall be delivered to the Trustee on behalf of the
Trust (to be held in trust for the benefit of the Holders) within five Business
Days of the fulfillment of the conditions set forth in such Section 7(c).
(f) In the event of the delivery by the Servicer (in the name and on
behalf of the Trustee and the Trust) to Eximbank of any Payment Demand pursuant
to the Servicing Agreement, the Trustee shall, upon the written instruction of
the Servicer and in accordance with the terms of Section 7(a) of the Guarantee
Agreement, tender to Eximbank the relevant Loan Note or Loan Notes (duly
endorsed to the order of Eximbank) and assign to Eximbank all of its rights with
respect to such Loan Note or Loan Notes, and under the Guaranteed Loan Agreement
with respect thereto and the Transfer Agreement, through an Assignment, and
perform all other obligations required under Section 7(a) of the Guarantee
Agreement (such tender and assignment to Eximbank of a Payment Demand together
with the other documents, security and rights described above and performance of
all other obligations under Section 7(a) of the Guarantee Agreement is referred
to as an "Eximbank Payment Event"), in exchange for the payment by Eximbank of
amounts specified in Section 7(b)(ii) of the Guarantee Agreement and the
issuance by Eximbank to the Trust of an Eximbank Payment Certificate, which
shall be delivered by Eximbank to the Trustee on behalf of the Trust (to be held
in trust for the benefit of the Holders).
(g) The Trustee acknowledges that, notwithstanding any resignation or
removal of the Trustee as provided herein and any appointment of a successor
Trustee as provided in Section 8.09 of the Standard Terms of Trust Agreement, it
may only transfer its rights, duties and obligations as Facility Agent (acquired
pursuant to the Transfer Agreement) to another Person with Eximbank's prior
written consent pursuant to Section 10(g) of the Guarantee Agreement. If any
successor Trustee is not also assigned the rights, duties and obligations of the
Facility Agent, the Trust Agreement shall be amended as provided in Section
10.01 of the Standard Terms of Trust Agreement to cure any inconsistencies that
may be contained herein with respect to such situation.
(h) Notwithstanding the rights and powers granted to the Trustee pursuant
to the Trust Agreement, so long as the Guarantee remains in effect, neither the
Trustee nor the Servicer acting on behalf of the Trustee for the benefit of the
Trust is authorized or empowered to proceed against the Borrower without the
consent of Eximbank (other than delivery of a Payment Demand hereunder) or
accelerate any Loan Note.
(i) In addition to the obligations and duties of the Trustee contained in
the Standard Terms of Trust Agreement, subject to Section 4.02(j) below, the
Trustee will enforce, or will cause the Servicer to enforce, on behalf of the
Trust, each Loan Note and the Transfer Agreement in accordance with their
respective terms and will provide or will cause the Servicer to provide to the
Borrower any information reasonably requested by the Borrower or the Lessee to
facilitate payment by the Borrower of the Loan Notes. Notwithstanding the
preceding sentence, neither the Trustee nor the Servicer shall proceed against
the Borrower without the consent of Eximbank (other than delivery of a Payment
Demand hereunder) and shall in no event have the right to accelerate payment of
any Loan Note. Failure by the
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Trustee or the Servicer to take any action to enforce any right under any Loan
Note or any Transfer Agreement shall not constitute a waiver of such right.
(j) Subject to the other duties of the Trustee set forth in the Trust
Agreement, if no event of default has occurred and is continuing under the Loan
Notes or Loan Documents, the Trustee shall have no responsibility or liability
for or with respect to the enforcement of any such Loan Note, Loan Document, the
Mortgage or the Guarantee. If no default under an Eximbank Payment Certificate
has occurred, the Trustee shall have no responsibility or liability for or with
respect to the enforcement of such Eximbank Payment Certificate. Except as
provided in subsection (k) of this Section below and except for such liability,
if any, as is finally determined to have resulted from the Trustee's gross
negligence, willful misconduct or bad faith or its wrongful breach of any of its
covenants, agreements and obligations hereunder, (i) no recourse shall be had
for any claim based on any provision of this Trust Agreement, the Certificates,
the Underwriting Agreement, the Guarantee, the Guarantee Agreement, the
Servicing Agreement, the Liquidity Facility or the Transfer Agreement against
the Trustee in its individual capacity, (ii) the Trustee shall not have any
obligation, liability or duty whatsoever, in its individual capacity, to any
Holder or any other Person with respect to any such claim, and (iii) any such
claim shall be asserted solely against the Trust.
(k) In the event that the Servicer shall fail to serve the notices
required to be given under Section 3.1 or 3.2 of the Servicing Agreement, the
Trustee shall either cause the Servicer to serve such notices or the Trustee
itself shall directly serve such notices in accordance with Section 3.1 or 3.2
of the Servicing Agreement, Sections 2.02 and 2.13 of the Liquidity Agreement
and the Guarantee Agreement. In the event that, after the occurrence of a
default by the Borrower in payment of any installment of principal and/or
interest due with respect to a Loan Note on a Note Payment Date, the Guarantee
shall terminate with respect to such payment on such Loan Note by reason of
Section 3(d)(i) of the Guarantee Agreement, the Trustee, notwithstanding any
provision herein to the contrary and in its individual capacity, shall be
irrevocably obligated to pay to the Trust the amount of such installment of
principal and/or interest not paid by the Borrower on such Note Payment Date,
and for the payment of which Eximbank is no longer obligated, and interest on
such installment of principal and/or interest at the Guaranteed Interest Rate
with respect to such Loan Note through the date of payment. Such payment shall
be made by the Trustee promptly (but within two Business Days) for deposit into
the Revenue Account, without a requirement of notice or demand, following any
such termination of such Guarantee.
Section 4.03. Book Entry. Anything in the other provisions of this Trust
Agreement to the contrary notwithstanding, beneficial ownership of the
Securities in the Initial Amount of $101,672,199.30 will be evidenced by book
entry except as provided below in this Section 4.03. For such purpose, effective
as of the Delivery Date, the Trustee shall execute and deliver to DTC a single
global certificate for the Securities, in substantially the form of Exhibit A
hereto, registered in the name of Cede & Co., DTC's nominee, for deposit with
DTC. On or prior to the Delivery Date, the Trustee shall enter into the DTC
Letter, the terms of which shall take precedence over any provisions in the
Trust Agreement to the contrary with respect to the matters to which such terms
relate. At any time during the term
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of the Trust Agreement, the Trustee (with the consent of the Company, and
Eximbank, such consents not to be unreasonably withheld or delayed) shall have
the right, upon not less than thirty (30) days' notice to DTC, to replace DTC as
securities depository for the Securities. In such event, the Trustee (with the
consent of the Company, and Eximbank, such consents not to be unreasonably
withheld or delayed) will designate a successor securities depository (if such
successor depository is reasonably obtainable) for the Securities (or if such
successor is not so appointed within 60 days of such notice, Eximbank may
designate any legally authorized successor securities depository), subject to
the terms and conditions of the Trust Agreement at the expense of the Company;
provided that the appointment of such successor securities depository would not
cause a reduction, suspension or withdrawal in the Required Rating of the
Securities. If no successor depository is so designated, and in no other event,
definitive Securities will be issued to the Holders of the Securities.
Section 4.04. Third-Party Beneficiaries. The provisions of and rights
created by the Trust Agreement shall inure to, and are intended for, the benefit
of the Holders, the Borrower, Eximbank, the Servicer, the Liquidity Provider,
the Company and the Trustee (collectively, the "Beneficiaries"), each to the
extent provided herein, and each Beneficiary shall be deemed to be a third-party
beneficiary with respect thereto, entitled to enforce directly and in its own
name any rights or claims it may have under this Trust Agreement. No provision
of this Trust Agreement shall create any rights for or be enforceable by any
Person other than a Beneficiary or any other party hereto.
Section 4.05. Lessee as Designee. Until an event of default has occurred
and is continuing under the Loan Notes and the Borrower notifies the Trustee in
writing, the Trustee shall be entitled to deem the Lessee as the designee of the
Borrower under any of the Trust Documents.
Section 4.06. Payment of Trustee's Fee. The Trustee hereby acknowledges
receipt of the Trustee's Fee, which shall be the sole compensation payable from
the Trust Estate to the Trustee for the services to be performed by the Trustee
hereunder and the expenses incurred by the Trustee in the performance of such
services.
Section 4.07. Special Redemption. Notwithstanding the provisions of
Article Eleven of the Standard Terms of Trust Agreement, the Company shall not
be entitled to redeem the Securities under any circumstances.
Section 4.08. Investment Direction. To the extent that the Trust Agreement
provides that investments in Eligible Investments are to be made at the
direction of the Company, the Company and the Trustee agree that such direction
shall be in writing and substantially in the form attached as Exhibit 4.08
hereto.
Section 4.09. Bankruptcy Petition against the Company. The Trustee hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all Securities, it will not institute against, or join
any other person in instituting against, the Company any bankruptcy,
reorganization, arrangement, insolvency or
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<PAGE>
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Trust
Agreement to be executed on their behalf as of the date first written above.
U.S. TRADE FUNDING CORP.
By:________________________________
LASALLE NATIONAL BANK, as Trustee
By:________________________________
ABN AMRO Bank N.V., as Servicer
By:________________________________
By:________________________________
-15-
<PAGE>
FORM OF SECURITY
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Cede & Co. or its agent for
registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co.
or in 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.
INITIAL IMPUTED
Certificate No.: 1 Principal Amount: $101,672,199.28
Stated Maturity: August 15, 2008 Delivery Date: October 25, 1996
CUSIP No.: 90338HAC0 Percentage Interest: 100%
6.75% TRADE TRUST CERTIFICATE, SERIES 1996-A
Evidencing an undivided fractional share in all payments of principal and
interest made on two (2) promissory notes (each a "Loan Note"), each dated
September 11, 1996 of YA96A Limited (the "Borrower"). The payment of 100% of all
scheduled payments of principal and interest due on the Loan Notes is guaranteed
by the Export-Import Bank of the United States pursuant to the Guarantee (as
hereinafter defined). The Loan Notes and the Guarantee are held in trust by
U.S. TRADE TRUST, SERIES 1996-A
(This Certificate does not represent an obligation of, or guarantee by, the
Export-Import Bank of the United States, the Borrower, the Lessee or the
Industrial and Commercial Bank of China referenced herein, U.S. Trade Funding
Corp. or the Trustee (as defined below). All capitalized terms not defined
herein have the meanings assigned to them in the Trust Agreement (as defined
below).)
This certifies that Cede & Co. is the registered owner of an undivided
fractional interest in certain payments made on or in respect of the Loan Notes.
Each Distribution in respect of the Imputed Principal Amount due on this
Certificate on any Payment Date is determined by multiplying the Percentage
Interest hereby represented by the payment of
<PAGE>
principal of the Loan Notes due on such Payment Date. Each Distribution in
respect of the Imputed Interest Amount on this Certificate on any Payment Date
is determined by multiplying the Percentage Interest hereby represented by the
interest due on the outstanding principal amount of the Loan Notes on such
Payment Date.
The Loan Notes will be held in trust by U.S. Trade Trust, Series 1996-A
(the "Trust"). The Trust has been created pursuant to the Supplemental Trust
Agreement dated as of October 1, 1996 (the "Supplement") among U.S. Trade
Funding Corp., a Delaware corporation (the "Company"), the Servicer (as defined
below) and LaSalle National Bank, as Trustee of the Trust (the "Trustee"). The
Supplement incorporates by reference the Standard Terms and Conditions of Trust
Agreement (the "Standard Terms") dated as of January 1, 1995 (the Supplement and
the Standard Terms being herein collectively referred to as the "Trust
Agreement"). The assets of the Trust include the two (2) Loan Notes transferred
to the Trust by the Company, the corresponding rights to receive payment under
the Guarantee (as defined below) and the right to make borrowings under an
Irrevocable Revolving Credit Agreement dated as of January 1, 1995 among the
Company, ABN AMRO Bank N.V. as Lender thereunder (the "Liquidity Provider"), the
Servicer and the Trustee (the "Liquidity Facility"). Payments on the Loan Notes
are guaranteed by and in accordance with a guaranty (the "Guarantee") issued by
the Export-Import Bank of the United States ("Eximbank") as to the payment of
the outstanding principal amount of each Loan Note, the accrued interest on the
outstanding principal amount of each Loan Note at the Interest Rate (as set
forth in the Trust Agreement) and accrued post-maturity interest on any due and
unpaid principal of, and any due and unpaid accrued interest on, each Loan Note
at said Interest Rate. The Guarantee is backed by the full faith and credit of
the United States of America. The Guarantee is issued pursuant to a Guarantee
Agreement dated as of
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<PAGE>
September 11, 1996 (the "Guarantee Agreement") between Eximbank and ABN AMRO
Bank N.V., as Facility Agent.
Collection of payments, certain administrative functions relating to the
Loan Notes and certain other specified duties will be performed by ABN AMRO Bank
N.V., as Servicer (the "Servicer"), pursuant to the Servicing Agreement dated as
of October 1, 1996 among the Company, the Trustee and the Servicer (the
"Servicing Agreement"). The Servicing Agreement provides that in the event that
payments on the Loan Notes have not been received by the Servicer prior to 1:00
P.M. New York time on any Payment Date, the Servicer, on behalf of the Trust,
shall make a demand for immediate payment upon the Liquidity Provider pursuant
to the Liquidity Facility.
The Liquidity Provider is entitled to reimbursement for all amounts drawn
under the Liquidity Facility from any amounts subsequently collected by the
Servicer or the Trustee pursuant to the Loan Notes or the Guarantee, provided
that all scheduled Distributions in respect of the Certificates have been made.
THE TRUSTEE SHALL IN NO EVENT HAVE ANY RIGHT TO ACCELERATE PAYMENT OF ANY
LOAN NOTE. ACCELERATION OF A LOAN NOTE BY EXIMBANK WILL NOT RESULT IN AN
ACCELERATION OF THE SCHEDULED DISTRIBUTIONS ON THIS CERTIFICATE.
To the extent not defined herein, all capitalized terms shall have the
meanings assigned to such terms in the Trust Agreement. This Certificate is one
of the Pass-through Securities described in the Trust Agreement and is issued
under and subject to the terms, provisions and conditions of the Trust
Agreement. By acceptance of this Certificate, the holder assents to and becomes
bound by the Trust Agreement.
Except as otherwise provided in the Trust Agreement, Distributions on the
Certificates will be made by check mailed to the holder (a "Holder") of record
of such Certificate on the
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<PAGE>
Record Date at the address for such Holder appearing on the Register without
presentation or surrender of the Certificate or the making of any notation
hereon. Notwithstanding the foregoing, the final distribution on this
Certificate will be made only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose by the Trustee
in Chicago, Illinois. The Trustee initially designates for this purpose LaSalle
National Bank, Attention: Asset-Backed Securities Trust Services, 135 South
LaSalle Street, Suite 200, Chicago, Illinois 60603.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate does not purport to summarize all provisions of the Trust
Agreement, the Guarantee Agreement, the Servicing Agreement and the Liquidity
Facility and reference is made to each of said documents for information with
respect to the interest, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and immunities of the Trustee. Copies of
the Trust Agreement, the Guarantee Agreement, the Servicing Agreement and the
Liquidity Facility and all amendments thereof will be provided to any Holder
free of charge upon written request to the Trustee at LaSalle National Bank,
Attention: Asset-Backed Securities Trust Services, 135 South LaSalle Street,
Suite 200, Chicago, Illinois 60603.
Unless this Certificate has been executed by the Trustee, by manual or
facsimile signature of a duly authorized signatory under the facsimile of its
corporate seal and the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee, this Certificate shall not be entitled
to any benefit under the Trust Agreement or be valid for any purpose.
-4-
<PAGE>
IN WITNESS WHEREOf, the Trustee has caused this instrument to be duly
executed under its corporate seal.
U.S. TRADE TRUST, SERIES 1996-A
Date: October 25, 1996
By: LaSalle National Bank, as Trustee
By:___________________________________
Its: Vice President
(Seal)
Trustee's Certificate of Authentication
- ---------------------------------------
This is one of the Securities described in the
within-mentioned Trust Agreement.
By: LaSalle National Bank, as Trustee
By:________________________________________
Authorized Officer
-5-
<PAGE>
[Reverse of Certificate]
This Certificate does not represent an obligation of and is not guaranteed
by Eximbank, the Borrower, the Lessee (as defined below), the Industrial and
Commercial Bank of China, the Company or the Trustee. This Certificate is
limited in right of payment to collections with respect to the Loan Notes, the
Liquidity Facility, the Guarantee and the Eximbank Payment Certificates, all as
more specifically set forth herein and in the Trust Agreement.
The aggregate of the scheduled payments on the Loan Notes with respect to
each Payment Date (as hereinafter defined) is in an amount sufficient to satisfy
the corresponding scheduled Distributions on the Certificates. After the Trust
receives payments on the Loan Notes from the Servicer in accordance with the
Servicing Agreement, the Trustee will distribute to the Certificateholders from
the payments on the Loan Notes the amounts due on the Certificates in accordance
with the Trust Agreement.
Under the terms of the Guarantee Agreement, if the Borrower fails to make a
scheduled payment when due of any installment of principal or interest with
respect to any Loan Note, and such failure has continued for 30 calendar days,
Eximbank, within five Business Days of receipt of a written demand (unless
Eximbank determines that additional time is required due to the large number of
claims then pending at Eximbank, in which case fifteen (15) Business Days
thereafter) for payment by the Trustee (or the Servicer on behalf of the
Trustee) on any Business Day subsequent to such 30-day period (and provided that
the Trustee has made a written payment demand upon the Borrower, China Yunnan
Airlines (the "Lessee") and the Industrial and Commercial Bank of China at least
15 calendar days prior thereto, all pursuant to and in accordance with the terms
and provisions of the Guarantee Agreement, and provided further that the Trustee
(or the Servicer on behalf of the Trustee) has made the written demand for
payment on Eximbank not later than 150
-6-
<PAGE>
calendar days after the scheduled payment date on such Loan Note) and
simultaneously with the tender to Eximbank by the Trustee (or the Servicer on
behalf of the Trustee) of the Loan Notes (duly endorsed to the order of
Eximbank) and an assignment of all of the Trustee's rights under the Loan Notes
and such other documents and security as may be required under the Guarantee
Agreement to Eximbank (the "Eximbank Payment Event"), is obligated to pay to the
Trust within five Business Days (unless Eximbank determines that additional time
is required due to the large number of claims then pending at Eximbank, in which
case fifteen (15) Business Days thereafter) of such demand one hundred percent
(100%) of all principal and scheduled interest due and unpaid on the Loan Notes,
from the original date such amount was due thereon to, but excluding, the actual
date of payment by Eximbank (the "Guaranteed Amounts") and deliver an Eximbank
Payment Certificate to the Trustee. The Eximbank Payment Certificate will
evidence Eximbank's obligation to make timely payments as described in the
following sentence. On each subsequent Note Payment Date following the Eximbank
Payment Event, the Guarantee Agreement provides that Eximbank will directly and
timely pay to the Trustee the Guaranteed Amounts due on the Loan Notes assigned
to Eximbank, on each Note Payment Date until the originally scheduled maturity
of such Loan Notes (regardless of any acceleration of any Loan Note), without
any requirement of further demand on or notice to the Borrower, the Lessee, the
Industrial and Commercial Bank of China or Eximbank for such payment. The term
"Borrower," as used herein, and in the Trust Agreement, means YA96A Limited.
Subject to the terms of the Trust Agreement, the Trustee shall make
Distributions to the holders of Certificates, on the Payment Dates set forth on
Schedule 1 (or the next following Business Day if such date is not a Business
Day, except in the case of the final Payment Date of August 15, 2008, in which
case the Payment Date shall be the next
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<PAGE>
preceding Business Day) of each year, in an amount equal to the sum of the
Imputed Principal Amount and Imputed Interest Amount shown in the table on
Schedule 1 hereto. To the extent such amounts are received by the Trustee
(whether from the Borrower, the Servicer, the Liquidity Provider or Eximbank),
the Percentage Interest to which the Holder of record of this Certificate on the
Record Date is entitled will be multiplied against such payments and the
resulting amount will be distributed to such Holder on such Payment Date.
Accordingly, the outstanding Imputed Principal Amount of this Certificate at any
time may be less than the initial Imputed Principal Amount set forth on the
front hereof.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Holders under the Trust Agreement at any time by the Trustee, with the consent
of, inter alia, Holders representing at least 66-2/3% of the aggregate Imputed
Principal Amount of the Outstanding Securities and Eximbank. Any such amendment
and any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued in exchange hereof or in lieu hereof whether or not
notation thereof is made upon the Certificate. The Trust Agreement also
permits, under certain circumstances, the amendment thereof by the Trustee
without the consent of any of the Holders.
The Certificates are issuable only as registered Certificates without
coupons, in denominations of $100,000 and integral multiples thereof, except
that one Certificate may be in an amount less than $100,000. As provided in the
Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates, of authorized denominations,
of like tenor and like aggregate Percentage Interest, all as requested by the
Holder surrendering the same.
-8-
<PAGE>
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
office or agency maintained by the Trustee in Chicago, Illinois accompanied by a
written instrument of transfer in form satisfactory to the Trustee or any
Registrar duly executed by the Holder or such Holder's attorney duly authorized
in writing. Thereupon one or more new Certificates, of like tenor and authorized
denominations and for the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
No service charge may be imposed for any such registration of transfer or
exchange but the Trustee or any Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
The Trustee, the Registrar, if other than the Trustee, any paying agent and
any authenticating agent and any agent of any of them may treat the person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Trustee, the Registrar, if other than the Trustee, any paying
agent, any authenticating agent, or any agent of any such agent shall be
affected by notice to the contrary.
The Trust Agreement shall terminate after the aggregate amount distributed
to all Holders equals the full amount due and payable in respect of all the
Certificates and all other amounts held by the Trustee have been distributed in
accordance with the terms of the Trust Agreement, with certain exceptions set
forth in the Trust Agreement.
-9-
<PAGE>
SCHEDULE 1
PAYMENT SCHEDULE FOR CERTIFICATE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REMAINING
IMPUTED IMPUTED PRINCIPAL BALANCE
CERTIFICATE PRINCIPAL INTEREST AFTER SCHEDULED
PAYMENT DATE/1/ PAYMENT PAYMENT PAYMENT
2/15/97 $2,817,141.60 $2,096,989.11 $98,855,057.68
8/15/97 $2,912,220.13 $3,336,358.20 $95,942,837.55
2/15/98 $3,010,507.55 $3,238,070.77 $92,932,330.00
8/15/98 $3,112,112.19 $3,136,466.13 $89,820,217.81
2/15/99 $3,217,145.97 $3,031,432.35 $86,603,071.84
8/15/99 $3,325,724.65 $2,922,853.67 $83,277,347.19
2/15/00 $3,437,967.85 $2,810,610.47 $79,839,379.34
8/15/00 $3,553,999.27 $2,694,579.06 $76,285,380.07
2/15/01 $3,673,946.75 $2,574,631.58 $72,611,433.32
8/15/01 $3,797,942.45 $2,450,635.87 $68,813,490.87
2/15/02 $3,926,123.00 $2,322,455.32 $64,887,367.87
8/15/02 $4,058,629.66 $2,189,948.66 $60,828,738.21
2/15/03 $4,195,608.41 $2,052,969.91 $56,633,129.80
8/15/03 $4,337,210.19 $1,911,368.13 $52,295,919.61
2/15/04 $4,483,591.04 $1,764,987.29 $47,812,328.57
8/15/04 $4,634,912.23 $1,613,666.09 $43,177,416.34
2/15/05 $4,791,340.53 $1,457,237.80 $38,386,075.81
8/15/05 $4,953,048.26 $1,295,530.06 $33,433,027.55
2/15/06 $5,120,213.64 $1,128,364.68 $28,312,813.91
8/15/06 $5,293,020.86 $955,557.47 $23,019,793.05
2/15/07 $5,471,660.31 $776,918.01 $17,548,132.74
8/15/07 $5,656,328.84 $592,249.48 $11,891,803.90
2/15/08 $5,847,229.94 $401,348.38 $6,044,573.96
8/15/08 $6,044,573.96 $204,004.37 $0.00
</TABLE>
__________________________
/1/ If not a Business Day, the next following Business Day except in the case
of August 15, 2008, in which event the next preceding Business Day.
-10-
<PAGE>
ASSIGNMENT
For value received the undersighed, subject to the provisions of Article 3
of the Trust Agreement, sells, assigns and transfers unto (name, address
including zip code and taxpayer I.D. or Social Security number of assignee)_____
________________________________________________________________________________
________________________________________________________________________________
the within Certificate and does hereby irrevocably constitute and appoint
___________________________________________________________________________
attorney to transfer the said Certificate on the books kept for registration
thereof with full power of substitution on the premises.
Dated: _____________________________
_____________________________________
Signature by or on behalf of assignor
-11-
<PAGE>
EXHIBIT B
SERVICER REMITTANCE REPORT
For the [ ] Payment Date
I. AMOUNT SCHEDULED TO BE PAID ON CERTIFICATES ON CURRENT PAYMENT DATE
A. Imputed Principal $__________
B. Imputed Interest $__________
C. Total (IA + IB) $__________
II. AMOUNTS COLLECTED DURING COLLECTION PERIOD AND AVAILABLE FOR DISBURSEMENT
FROM REVENUE ACCOUNT
A. In respect of Loan Note dated October 25, 1996 in principal amount of
$50,952,326.31 ("Note A")
1. Interest allocable to current Collection Period $__________
2. Principal allocable to current Collection Period $__________
3. Total for current Collection Period (IIA1 + IIA2) $__________
4. Defaulted interest received in current Collection
Period relating to shortfalls from prior Collection
PERIOD
a. $_______ of IIA4 represents "default interest"
on unpaid principal and unpaid interest
5. Defaulted principal received in current Collection
Period relating to shortfalls from prior Collection
Period
B. In respect of Loan Note dated October 25, 1996 in principal amount of
$50,719,872.97 ("Note B")
1. Interest allocable to current Collection Period $__________
2. Principal allocable to current Collection Period $__________
3. Total for current Collection Period (IIB1 + IIB2) $__________
-1-
<PAGE>
4. Defaulted interest received in current Collection
Period relating to shortfalls from prior Collection
Period $__________
a. $_______ of IIB4 represents "default interest"
on unpaid principal and unpaid interest
5. Defaulted principal received in current Collection
Period relating to shortfalls from prior collection
Period $__________
C. Shortfall for current Collection Period (IC less sum of
IIA3 + IIB3) $__________
1. $_______ attributable to Loan A
2. $_______ attributable to Loan B
D. Amount realized from Liquidity Facility (or Liquidity
Account, if applicable) in respect of current Collection
Period shortfall (applies only if Eximbank Payment Event
has not yet occurred) (if applicable, should equal
amount in IIC) $__________
1. $_______ allocable to interest shortfall
2. $_______ allocable to principal shortfall
E. Amount realized from Eximbank Guaranty pursuant to Payment Demand
1. Amounts paid by Eximbank in respect of initial
Payment Demand (applies only to initial shortfall
from prior Collection Period previously covered
by Liquidity Facility or Liquidity Account drawing) $__________
a. $_______ allocable to interest
b. $_______ allocable to principal
c. $_______ allocable to default interest
2. Amount realized from Eximbank in respect of
Eximbank Payment Certificates $__________
a. $_______ allocable to interest on Note A
-2-
<PAGE>
b. $_______ allocable to interest on Note B
c. $_______ allocable to principal on Note A
d. $_______ allocable to principal on Note B
III. AMOUNTS DISBURSED FROM REVENUE ACCOUNT ON SPECIAL PAYMENT DATE (IF
APPLICABLE) OCCURRING ON [___] DURING CURRENT COLLECTION PERIOD
A. Principal amount of previous Advance under outstanding
Liquidity Facility (or from Liquidity Account, if
applicable) $__________
B. Interest on unreimbursed Advances to Special Payment
Date $__________
C. Total owed to Liquidity Provider as of Special Payment
Date (IIIA + IIIB) $__________
D. Amount that was distributed from Revenue Account to
Liquidity Provider on Special Payment Date (sum of
IIA4 (including IIA4a), IIA5, IIB4 (including IIB4a),
IIB5, IIE1) (must equal amount in IIIC, otherwise
conditions permitting Special Payment Date to occur
not met) $__________
IV. AMOUNTS TO BE DISBURSED FROM DISTRIBUTION ACCOUNT TO SUB-ACCOUNTS
THEREOF (I.E. PAYMENT ACCOUNTS) ON CURRENT PAYMENT DATE
A. To Level 1 Interest Account, from amounts in IIA1,
IIB1, IID1, IIE2a and/or b, c, d $__________
B. TO Level 1 Principal Account, from amounts in IIA2,
IIB2, IID2, IIE2e and/or f, g, h $__________
V. AMOUNTS TO BE DISBURSED FROM PAYMENT ACCOUNTS TO CERTIFICATEHOLDERS
ON CURRENT PAYMENT DATE
A. From Level 1 Interest Account (same as amount in IVA) $__________
B. From Level 1 Principal Account (same as amount in IVB) $__________
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<PAGE>
EXHIBIT C
BORROWER AND LESSEE PAYMENT DEMAND
____________, ____
YA96A Limited
P.O. Box 309
Ugland House
South Church Street
Grand Cayman
Cayman Islands
British West Indies
China Yunnan Airlines
Wu Jia Ba Airport
Kunming, Yunnan
People's Republic of China
Gentlemen:
The undersigned hereby notifies you of a payment default under the
Promissory Note[s] dated __________________, 1996 (the "Promissory Note[s]")
executed by YA96A Limited and assigned to the Trust referred to below by U.S.
Trade Funding Corp., as transferee of ABN AMRO Bank N.V.
The undersigned further notifies you that $__________ of principal,
$__________ of interest and $__________ of post-maturity interest on the
Promissory Note[s] remain unpaid as of the date hereof (but not including such
date), which amounts represent the unpaid amount in respect of the $__________
payable on the Note Payment Date occurring on __________, ____. The undersigned
hereby demands immediate payment in full of such amounts in immediately
available funds.
This notice is being provided by the undersigned on behalf of U.S. Trade
Trust, Series 1996-A and constitutes a "Payment Demand" referred to in the Trust
Agreement.
-1-
<PAGE>
Very truly yours,
LaSalle National Bank, as Trustee
By:_____________________________________
Title:
-2-
<PAGE>
EXHIBIT D
DEMAND ON THE INDUSTRIAL AND COMMERCIAL BANK OF CHINA
To: The Industrial and Commercial Bank of China
15 Cuiwei Road
Haidian District
Beijing 100036
People's Republic of China
Via Telecopy: 011-86-10-68217273
cc: China Yunnan Airlines
Wu Jia Ba Airport
Kunming, Yunnan
People's Republic of China
Via Telecopy: 011-86-(871) 717-1521
Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Attention: Vice President - Aircraft Finance Division
Via Telecopy: 202-565-3558
From: LaSalle National Bank, as Trustee, on Behalf of
the Export-Import Bank of the United States
Date: ____________
Re: Demand for payment under the letter agreement dated __________,
______, pursuant to the loan agreement dated as of __________,
______, in connection with the Eximbank supported financing by certain
lenders for Two (2) Boeing 767-300 aircraft for China Yunnan Airlines -
Eximbank Guarantee No. APO70425
-----------------------------------------------------------------------
You are hereby notified that a payment of _____________ in an amount equal
to $_______________ (the "Defaulted Amount") that was required to be made by
China Yunnan Airlines under the Aircraft Lease Agreement dated August 27, 1996
between YA96A Limited, and China Yunnan Airlines was not received when due on
__________________.
The defaulted amount is guaranteed to Eximbank by The Industrial and
Commercial Bank of China pursuant to the Letter Agreement referred to above. We
hereby demand, on behalf of Eximbank, that The Industrial and Commercial Bank of
China immediately pay, via wire transfer of immediately available funds, the
defaulted amount (plus default interest
-1-
<PAGE>
thereon calculated at ___% per annum through the date of payment) to the
following account:
Name of Account: ___________________
Number of Account: ___________________
Location of Account: ___________________
___________________
___________________
Other Specific Wire
Transfer Instructions: ___________________
Reference: China Yunnan Airlines/YA96A Limited -
Lease No. ____________
(ABN AMRO Bank N.V.)
Thank you for your prompt attention to this matter. If you have any
questions, please telecopy the Corporate Trust Department of LaSalle National
Bank at _________________ or telephone the Corporate Trust Department of LaSalle
National Bank at ________________.
LaSalle National Bank, as Trustee
By______________________________________
Name:_________________________________
Title:________________________________
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<PAGE>
EXHIBIT E
EXIMBANK PAYMENT DEMAND
FOR EACH PROMISSORY NOTE
____________, _____
Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Reference: U.S. Trade Trust, Series 1996-A Eximbank
Guarantee No. APO70425
Attention: Vice President - Contract Administration
Gentlemen:
Pursuant to Section 7 of the Guarantee Agreement dated as of September 11,
1996 (the "Guarantee Agreement") between you and ABN AMRO Bank N.V. ("ABN
AMRO"), the undersigned (as a successor Agent pursuant to Section 10(g) of the
Guarantee Agreement and as Trustee under the Trust Agreement) in its capacity as
Facility Agent under the Guarantee Agreement and on behalf of the Trust referred
to below, hereby notifies you of a payment default under Promissory Note due
__________________ in the original aggregate principal amount of
$_______________ in respect of ___________________________, MSN _______ dated
____________________, 1996 (the "Promissory Note(s)") executed by YA96A Limited
(the "Borrower"), in favor of the Trust referred to below (as successor by
assignment to the Company).
Name of Noteholder: U.S. Trade Trust, Series 1996-A.
The undersigned notifies you that on the Payment Date (as defined in the
Declaration of Trust as defined in the Guarantee Agreement) occurring on
__________, ____, $__________ of principal and $__________ of interest was due
on the Promissory Note and as of the date hereof $__________ in respect thereof
has been received by the Noteholder. As of the date hereof (but not including
such date), $__________ of principal, $__________ of interest and $__________ of
post-maturity interest calculated at the applicable Guaranteed Interest Rate on
the Promissory Note remain unpaid, all as calculated in accordance with the
Guarantee Agreement. [As of the date hereof (but not including such date),
$_________ of principal and $_________ of interest remain unpaid pursuant to a
Liquidity Advance made as a result of a payment default under the above
described Promissory Note, all as calculated in accordance with the Guarantee
Agreement.]. The undersigned hereby demands payment in full of the unpaid
amount of principal and interest on the Promissory Note specified in the
preceding sentence until the date of payment thereof by you in accordance with
the provisions of the Guarantee Agreement. The Installment Payment Method is
applicable in accordance with the provisions of the Guarantee Agreement.
-1-
<PAGE>
The undersigned hereby certifies that (1) written payment demands (a true
and complete copy of each of which is enclosed) were made by undersigned on the
Borrower, the Company and the Industrial and Commercial Bank of China at least
15 calendar days prior to the date of this letter, and (2) the payment demand
made on Eximbank in this letter is being made more than thirty (30) calendar
days but not later than 150 calendar days from the Payment Date for which
payment has not been received by the Noteholder referenced above.
We undertake, on behalf of the Trust, to provide to you the following
documents: (a) the Promissory Note endorsed without recourse to the order of
Eximbank and an assignment of rights thereunder of the Noteholder to Eximbank in
the form of Annex C to the Guarantee Agreement; and (b) assignment of rights to
Eximbank of the undersigned under the Loan Agreement with respect to such
Promissory Note and, to the extent that such right, title and interest relates
to the Guaranteed Amount or any security therefor, under the other Operative
Documents (as defined in the Guarantee Agreement), excluding from such
assignment the items set forth in clauses (i) and (ii) of the last paragraph of
Section 6 of the Guarantee Agreement.
This notice is being provided on behalf of the Holder and constitutes a
demand referred to in Sections 6 and 7 of the Guarantee Agreement.
-2-
<PAGE>
Very truly yours,
LASALLE NATIONAL BANK,
as Successor Facility Agent
By:_____________________________________
Title:__________________________________
-3-
<PAGE>
Exhibit F
FORM DTC LETTER
BOOK-ENTRY-ONLY CORPORATE DEBT ISSUES
Letter of Representations
[To be Completed by Issuer and Agent]
U.S. Trade Trust, Series 1996-A
-------------------------------------
[Name of Issuer]
LaSalle National Bank
-------------------------------------
[Name of Agent]
October 23, 1996
----------------------
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: Trade Trust Certificates, Series 1996-A
--------------------------------------------------
$101,672,199.30 Maturity August 15, 2008
--------------------------------------------------
--------------------------------------------------
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Agent will act as
trustee, paying agent, fiscal agent, or other agent of Issuer with respect to
the Securities. The Securities will be issued pursuant to a trust indenture,
resolution, or other such document authorizing the issuance of the Securities
dated as of October 1, 1996 (the "Document"). ABN AMRO Securities (USA) Inc. is
distributing the Securities
- ------------------------------
("Underwriter")
<PAGE>
through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the Securities, Issuer and
Agent make the following representations to DTC:
1. Prior to closing on the Securities on October, 1996, there shall be
deposited with DTC one Security certificate registered in the name of DTC's
nominee, Cede & Co., for each stated maturity of the Securities in the face
amounts set forth on Schedule A hereto, the total of which represents 100% of
the principal amount of such Securities. If, however, the aggregate principal
amount of any maturity exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("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 in 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.
2. In the event of any solicitation of consents from or voting by holders
of the Securities, Issuer or Agent shall establish a record date for such
purposes (with no provision for revocation of consents or votes by subsequent
holders) and shall send notice of such record date to DTC not less than 15
calendar days in advance of such record date. Notices to DTC pursuant to this
Paragraph by telecopy shall be sent to DTC's Reorganization Department at (212)
709-6896 or (212) 709-6897, and receipt of such notices shall be confirmed by
telephoning (212) 709-6870. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to DTC's Reorganization Department as indicated
in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Agent shall send
a notice to DTC specifying: (a) the amount of the redemption or refunding; (b)
in the case of a refunding, the maturity date(s) established under the
refunding; and (c) the date such notice is to be mailed to Security holders or
published (the "Publication Date"). Such notice shall be sent to DTC by a secure
means (e.g., legible telecopy, registered or certified mail, overnight delivery)
in a timely manner designed to assure that such notice is in DTC's possession no
later than the close of business on the business day before or, if possible, two
business days before the Publication Date. Issuer or Agent shall forward such
notice either in a separate secure transmission for each CUSIP number or in a
secure transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP
-2-
<PAGE>
number submitted in that transmission. (The party sending such notice shall have
a method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to this
Paragraph by telecopy shall be sent to DTC's Call Notification Department at
(516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant to
this Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Agent to
Security holders specifying the terms of the tender and the Publication Date of
such notice shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notices to DTC pursuant to this Paragraph and notices
of other corporate actions by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-1093 or (212) 709-1094, and receipt of such notices
shall be confirmed by telephoning (212) 709-6884. Notices to DTC pursuant to
the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. In the event of a change in the interest rate, Agent shall send notice
of such change to Standard & Poor's Corporation. Such notice, which shall also
include Agent contact's name and telephone number, shall also be sent to DTC's
Dividend Department either by telecopy to (212) 709-1723, or if by mail or by
any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
7. Agent must provide DTC, no later than noon (Eastern Time) on the payment
date, CUSIP numbers for each issue for which payment is being sent, as well as
the dollar amount
-3-
<PAGE>
of the payment for each issue. Notification of payment details should be sent
using automated communications.
8. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Agent and DTC). Absent any other arrangements between Issuer
or Agent and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Agent shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no such
service exists, Issuer agrees that it or Agent shall provide this information
directly to DTC in advance of the interest record date as soon as the
information is available. This information should be conveyed directly to DTC
electronically. If electronic transmission is not available, absent any other
arrangements between Agent and DTC, such information should be sent by telecopy
to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and receipt of
such notices shall be confirmed by telephoning (212) 709-1270. Notices to DTC
pursuant to the above by mail or by any other means shall be sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
9. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between Agent and DTC, such
payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DTC's SDFS Paying Agent Operating Procedures, a copy of which has previously
been furnished to Agent.
10. DTC shall receive all reorganization payments and CUSIP-level detail
resulting from corporate actions (such as tender offers, remarketings, or
mergers) on the first payable date
-4-
<PAGE>
in same-day funds by 2:30 p.m. (Eastern Time). Absent any other arrangements
between Agent and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
11. DTC may direct Issuer or Agent to use any other number or address as
the number or address to which notices or payments of interest or principal may
be sent.
12. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or Agent's
invitation) necessitating a reduction in the aggregate principal amount of
Securities outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or Agent to issue
and authenticate a new Security certificate; or (b) may make an appropriate
notation on the Security certificate indicating the date and amount of such
reduction in principal except in the case of final maturity, in which case the
certificate will be presented to Issuer or Agent prior to payment, if required.
13. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer or
Agent shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
14. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent (at which time DTC will confirm with Issuer or Agent the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Agent shall cooperate fully with DTC by taking appropriate
action to make available one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC accounts.
15. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificate(s) by virtue of submission of such certificate(s) to DTC.
-5-
<PAGE>
16. Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
NOTES:
- -----
A. If there is an Agent (as defined in this Letter of Representations), Agent,
as well as Issuer, must sign this Letter. If there is no Agent, in signing this
Letter Issuer itself undertakes to perform all of the obligations set forth
herein.
B. Schedule B contains statements that DTC believes accurately describe DTC,
the method of effecting book-entry transfers of securities distributed through
DTC and certain related matters.
Very truly yours,
U.S. Trade Trust, Series 1996-A
-----------------------------------------
(Issuer)
By:
--------------------------------------
(Authorized Officer's Signature)
LaSalle National Bank
-----------------------------------------
(Agent)
By:
--------------------------------------
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:
--------------------------
cc: Underwriter
Underwriter's Counsel
-6-
<PAGE>
SCHEDULE A
----------
U.S. Trade Trust, Series 1996-A
---------------------------------------------------------------------
$101,672,199.30 Maturity August 15, 2008
---------------------------------------------------------------------
(Describe Issue)
CUSIP Number Principal Amount Maturity Date Interest Rate
----------- ---------------- ------------- -------------
90338HAC0 $101,672,199.30 August 15, 2008 6.75%
<PAGE>
SCHEDULE B
----------
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(Prepared by DTC-bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as fully-registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully-registered Security certificate will be
issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $200 million, one certificate
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participant, include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
<PAGE>
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each Direct Participant in such issue to be
redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, Agent, or Issuer, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of Issuer or
Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to [Tender/Remarketing] Agent,
and shall effect delivery of such Securities by causing the Direct Participant
to transfer the Participant's interest in the Securities on DTC's records, to
[Tender/Remarketing] Agent. The requirement for physical delivery of Securities
in connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the Securities are transferred by Direct
Participants on DTC's records and followed by a book-entry credit of tendered
Securities to [Tender/DTC Remarketing] Agent's account.]
-2-
<PAGE>
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable, but
Issuer takes no responsibility for the accuracy thereof.
-3-
<PAGE>
EXHIBIT 4.08
FORM OF INVESTMENT DIRECTION
[To Come]
-5-
<PAGE>
SCHEDULE 1 TO SUPPLEMENT
LOAN
Aggregate Principal Amount: $101,672,199.28
Lender: ABN AMRO Bank N.V.
Borrower: YA96A Limited
LOAN NOTES
Note issued by Borrower to Lender dated October 25, 1996 in principal
amount of $50,952,326.31
#1
Note issued by Borrower to Lender dated October 25, 1996 in principal
amount of $50,719,872.97
#2
LOAN DOCUMENTS
Guaranteed Loan Agreement, dated as of August 27, 1996 by and among YA96A
Limited, as Borrower, ABN AMRO Bank N.V., as Facility Agent , the
Lenders named therein, the Export-Import Bank of the United States and
Wilmington Trust Company.
Guarantee Agreement, dated as of September 11, 1996 between Export Import
Bank of the United States and ABN AMRO Bank N.V., as Facility Agent.
Loan Notes (described above)
Liquidity Facility dated as of January 1, 1995 by and among the Company,
the Liquidity Provider, the Servicer and the Trustee.
-6-
<PAGE>
EXHIBIT 5.1
October 25, 1996
ABN AMRO Securities, (USA) Inc.
181 West Madison
Suite 3201
Chicago, Illinois 60602
ABN AMRO Bank, N.V.
135 South LaSalle Street
Chicago, IL 60603
LaSalle National Bank
181 West Madison
Chicago, Illinois 60602
Re: U.S. Trade Trust, Series 1996-A
-------------------------------
Ladies and Gentlemen:
We have acted as special counsel to U.S. Trade Funding Corp., a Delaware
corporation (the "Company"), in connection with the proposed issuance by a trust
to be created and to be known as U.S. Trade Trust, Series 1996-A (the "Trust"),
of 6.75% Trade Trust Certificates, Series 1996-A (the "Certificates") pursuant
to a proposed Supplemental Trust Agreement dated as of October 1, 1996,
incorporating therein the Standard Terms and Conditions of Trust Agreement dated
as of January 1, 1995 (as the same may be amended from time to time, the "Trust
Agreement") among the Company, LaSalle National Bank, as trustee (the
"Trustee"), and ABN AMRO Bank, N.V., as Servicer, a proposed Transfer Agreement
(the "Transfer Agreement") between the Company, YA96A Limited, ABN AMRO Bank
N.V. and the Trustee on behalf of the Trust, a proposed Purchase Agreement dated
as of January 1, 1995 (the "Purchase Agreement") between the Company and ABN
AMRO Bank N.V., as Seller and a proposed Underwriting Agreement (the
"Underwriting Agreement") among the Company and ABN AMRO Securities (USA) Inc.
The forms of the Trust Agreement, Purchase Agreement and Transfer Agreement
(attached as Appendix 5 to the Loan Agreement filed as Exhibit 10.2) included as
exhibits to the Registration Statement are referred to herein collectively as
the "Trust Documents." Except as otherwise herein defined, all capitalized
terms used herein shall have the same meanings as the terms used in the Trust
Documents.
<PAGE>
ABN AMRO Securities (USA) Inc.
ABN AMRO Bank, N.V.
LaSalle National Bank
October 25, 1996
Page 2
In this connection, we have (a) reviewed the forms of the Trust Documents
and the Underwriting Agreement included as exhibits to the Registration
Statement; and (b) made such examinations of law as we believe necessary or
appropriate to render this opinion. We are members of the Bar of the State of
Illinois and each of the opinions expressed below is restricted to matters
controlled by federal laws of the United States of America and the laws of the
State of Illinois.
In rendering this opinion, we have assumed the genuineness of all
signatures, the authenticity of all agreements, instruments, certificates or
documents examined or relied upon by us, the conformity with the original
documents of all documents submitted to us as copies and the legal capacity of
all individuals executing documents. We have also assumed that the documents
referred to herein to be executed and delivered on or prior to the closing date
for this issuance (the "Closing Date") will be in substantially the forms
included as exhibits to the Registration Statement.
We have also assumed, without investigation, (a) as to all parties other
than the Company, the due execution and delivery of documents recited herein or
delivered on or prior to the Closing Date and the validity and enforceability
thereof against all parties thereto other than the Company, (b) each party other
than the Company will have full power, authority and legal right, under its
charter and other governing documents, corporate and regulatory legislation and
the law of its jurisdiction of incorporation or organization, to execute and
deliver the documents to which it is a party and to carry out the transactions
contemplated thereunder and (c) the required conditions will be satisfied and
the required documents and opinions and the purchase price for the Certificates
will be delivered and received in accordance with the terms of the Underwriting
Agreement.
With respect to matters of fact, we have relied without investigation on,
and assumed the accuracy and completeness of, the certificates, representations
and warranties of the Company and other parties contained in or to be made
pursuant to the Trust Documents, the Underwriting Agreement and in the
instruments and documents to be delivered on the Closing Date.
Based on the foregoing, and subject to the assumptions, qualification and
limitations herein contained, we are of the opinion that:
1. Upon execution and delivery of the Trust Agreement by the Company,
the Trustee and the Servicer and upon the consummation on the Closing Date
of the other transactions contemplated by the Trust Documents and the
Underwriting Agreement, the Trust will be duly created and validly existing
under the laws of the
<PAGE>
ABN AMRO Securities (USA) Inc.
ABN AMRO Bank, N.V.
LaSalle National Bank
October 25, 1996
Page 3
State of Illinois with power and authority to consummate the transactions
contemplated by the Underwriting Agreement and by the Trust Documents; and
the Trust Agreement will be a legal, valid and binding instrument,
enforceable against the Trust in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in
equity or at law.
2. Upon execution and delivery of the Trust Agreement by the Company,
the Trustee and the Servicer, and upon execution and authentication of the
Certificates by the Trustee, the Certificates will be validly issued and
outstanding, and constitute binding obligations of the Trust, enforceable
against the Trust in accordance with their terms and will be entitled to
the benefits of the Trust Agreement, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and to general principles of equity regardless of whether
enforcement is sought in a proceeding in equity or at law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and consent further to the references to our firm under
the caption "Legal Matters" in the prospectus contained in the Registration
Statement.
Very truly yours,
Chapman and Cutler
<PAGE>
EXHIBIT 8.1
October 25, 1996
LaSalle National Bank, as Trustee Standard & Poor's, a division of the
Chicago, Illinois McGraw-Hill Companies
New York, New York
U.S. Trade Funding Corp.
New York, New York ABN AMRO Securities (USA) Inc.
Chicago, Illinois
ABN AMRO Bank N.V.
Chicago, Illinois
Re: U.S. Trade Trust Series 1996-A (the "Trust")
Ladies and Gentlemen:
We have served as special United States tax counsel to the above-referenced
Trust in connection with the Trust's issuance of the $106,678,418 6.75% Trade
Trust Certificates, Series 1996-A (the "Certificates"). The Certificates are to
be issued pursuant to that certain Supplemental Trust Agreement dated as of
October 1, 1996 incorporating the proposed Standard Terms and Conditions of
Trust Agreement, dated as of January 1, 1995, (collectively, the "Trust
Agreement"), by and among U.S. Trade Funding Corp. (the "Company"), LaSalle
National Bank, as trustee (the "Trustee") and ABN AMRO Bank N.V., as servicer
(the "Servicer"). The Certificates evidence ownership of a beneficial interest
in two specified loan notes (the "Loan Notes") and any other assets held by the
Trust. All of the scheduled amounts of principal of and interest on the Loan
Notes will be guaranteed by the Export-Import Bank of the United States
("Eximbank") pursuant to the terms of the Guarantee Agreement, dated as of
September 11, 1996, by and between Eximbank and ABN AMRO Bank N.V., as facility
agent (the "Facility Agent"), which guarantee is backed by the full faith and
credit of the United States of America. Capitalized terms used herein but not
otherwise defined shall have the same meaning as set forth in the Trust
Agreement.
As such counsel, we have examined such pertinent records, documents and
matters of law as we have deemed necessary, including, but not limited to, the
Trust Agreement and certain representations of even date herewith submitted to
us by ABN AMRO Bank N.V. in various capacities.
Based solely upon the foregoing, and upon our review of such matters of law
as we consider to be applicable, as of the date hereof, we are of the opinion
that, under existing federal income tax law:
<PAGE>
(i) the Trust will not be classified as an association taxable as a
corporation and should be taxed as a grantor trust;
(ii) each Certificateholder will be considered the owner of a pro
rata portion of each of the Trust's assets in the proportion that the
Imputed Principal Amount of the Certificates held by such Certificateholder
bears to the aggregate Imputed Principal Amount then outstanding;
(iii) each Certificateholder will recognize taxable income derived
from the assets held by the Trust as if such Certificateholder directly
held its pro rata portion of the assets of the Trust;
(iv) each Certificateholder will have a taxable event when an asset
of the Trust (including any Loan Note) is disposed of (whether by sale,
exchange, redemption or payment at maturity) or when the
Certificateholder's Certificate is redeemed or sold; and
(v) the summary of federal income tax consequences to the
Certificateholders set forth under the heading "Certain Federal Income Tax
Consequences" in the Registration Statement is materially correct.
The scope of this opinion is expressly limited to the matters set forth
herein, and except to the extent addressed herein we express no opinion with
respect to any other matters of federal income tax law, any other taxes or
collateral tax consequences with respect to the Loan Notes, the Trust or the
Certificateholders with regard to the purchase, ownership and disposition of the
Certificates or distributions from the Trust. In addition, we express no opinion
herein with respect to the application of any foreign, state or local taxes
imposed on the Trust.
Respectfully submitted,
SGFrost
-2-
<PAGE>
*
_________________________________________________
GUARANTEE AGREEMENT
DATED AS OF
SEPTEMBER 11, 1996
BETWEEN
ABN AMRO BANK N.V., CHICAGO BRANCH
AS FACILITY AGENT
-AND-
EXPORT-IMPORT BANK OF THE UNITED STATES
EXIMBANK GUARANTEE NO. AP070425 - PEOPLE'S REPUBLIC OF CHINA
(CHINA YUNNAN AIRLINES)
RELATING TO
TWO (2) BOEING MODEL 767-300 AIRCRAFT EACH WITH
TWO (2) INSTALLED ROLLS-ROYCE MODEL RB211-524H-36 ENGINES
ONE (1) ROLLS-ROYCE QECU SPARE ENGINE
__________________________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
(This Table of Contents is not part of this Agreement
and is for convenience of reference only)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Definitions............................................................... 3
SECTION 2. The Guarantee............................................................. 7
SECTION 3. Scope and Binding Nature of the Guarantee, and Termination Thereof........ 7
SECTION 4. Endorsement of the Guarantee Legend....................................... 9
(a) Endorsement of Floating Rate Note(s)...................................... 9
(b) Endorsement of the Fixed Rate Notes....................................... 10
SECTION 5. Payment Method............................................................ 11
SECTION 6. Procedures for Making Demand on Eximbank following First Default.......... 11
SECTION 7. Payment of the Guaranteed Amount.......................................... 12
(i) Accelerated Payment Method.......................................... 13
(ii) Installment Payment Method.......................................... 13
(b) Payment Certificates Issued in Exchange for Fixed Rate Notes Upon a
Total Loss of an Aircraft or Upon a Termination Due to Obsolescence
of an Aircraft............................................................ 13
(c) Payment Certificates Issued In Exchange for Fixed Rate Notes Upon an
Event of Default.......................................................... 14
(d) Payments under a Payment Certificate...................................... 15
(e) Failure to Make Claim Payment............................................. 15
SECTION 8. Application of Partial Payments and Eximbank Payments..................... 15
SECTION 9. Collections; Subsequent Payments by Eximbank.............................. 16
SECTION 10.Undertakings of the Facility Agent........................................ 16
(a) Note Register............................................................. 16
(b) Notice of Default......................................................... 16
(c) Amendments to the Loan Agreement, Lease Agreements or Notes............... 16
(d) Notice of Interest Rates.................................................. 17
(e) Disbursements............................................................. 17
(f) Payments on a Note after Payment by Eximbank.............................. 17
(g) Transfer of Rights, Duties, Obligations and Responsibilities under this
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Guarantee Agreement....................................................... 17
(h) Indemnification........................................................... 18
SECTION 11.Eximbank Payments; Discharge of Liability................................. 18
SECTION 12.Governing Law............................................................. 19
SECTION 13.Notification.............................................................. 19
SECTION 14.Parties Bound............................................................. 19
</TABLE>
ANNEXES
Annex A - Form of Guarantee Legend
Annex B-1 - Request for Guarantee Legend (Floating Rate Note)
Annex B-2 - Request for Guarantee Legend (Fixed Rate Note)
Annex C - Assignment
Annex D - Payment Certificate
ii
<PAGE>
GUARANTEE AGREEMENT
-------------------
THIS GUARANTEE AGREEMENT, entered into as of the 11th day of
September, 1996, ("GUARANTEE AGREEMENT") between ABN AMRO Bank N.V., Chicago
Branch, acting in its capacity as facility agent under the Loan Agreement (as
hereinafter defined) (together with its successors and permitted assigns, the
"FACILITY AGENT") and Export-Import Bank of the United States, an agency of the
United States of America ("EXIMBANK").
W I T N E S S E T H:
-------------------
WHEREAS, China Aviation Supplies Corporation, a state-owned legal
entity organized under the applicable laws of the People's Republic of China
("CASC") and The Boeing Company (the "SELLER") have entered into that certain
Purchase Agreement No. 1844 dated December 3, 1994 (the "PURCHASE AGREEMENT")
for the purchase of, inter alia, two (2) Boeing Model 767-300 airframes
----- ----
(individually, an "AIRFRAME" and collectively as the context may require, the
"AIRFRAMES") each with two (2) installed Rolls-Royce RB211-524H-36 engines (the
Airframes together with the engines are referred to herein individually as an
"AIRCRAFT" and collectively, as the context may require, as the "AIRCRAFT");
WHEREAS, pursuant to those certain Purchase Agreement Assignments each
to be dated the date of execution and delivery thereof between CASC, China
Yunnan Airlines, a legal entity organized under the applicable laws of the
People's Republic of China (the "COMPANY"), YA96A Limited, a company organized
under the laws of the Cayman Islands (the "BORROWER"), CASC and, by way of
execution of the consent and agreement referred to therein, the Seller, CASC
assigned, or will assign, its right to take title to the Aircraft to the
Borrower;
WHEREAS, pursuant to that certain Spare Engine Sale Agreement dated
the date of execution and delivery thereof between the Company and the Borrower,
the Borrower has agreed to purchase one (1) Rolls-Royce QECU spare engine (the
"SPARE") from the Company;
WHEREAS, pursuant to separate Aircraft Lease Agreements each to be
dated the date of execution and delivery thereof between the Company, as lessee,
and the Borrower, as lessor (as each thereof may be amended, supplemented or
otherwise modified from time to time, a "LEASE AGREEMENT" and collectively, the
"LEASE AGREEMENTS"), the Borrower has agreed, or will agree, to lease the
Aircraft and the Spare to the Company;
WHEREAS, the Lenders (as hereinafter defined) have established a
credit in favor of the Borrower in the amount of U.S. $103,000,000 (the
"CREDIT") pursuant to the terms of that certain Guaranteed Loan Agreement dated
August 27, 1996 (the "LOAN
<PAGE>
[GUARANTEE AGREEMENT]
AGREEMENT") by and among the Borrower, the Financial Institutions listed on the
signature page thereto as Lenders (the "LENDERS"), the Facility Agent,
Wilmington Trust Company, not in its individual capacity, except as expressly
stated therein, but solely as security trustee (the "SECURITY TRUSTEE") and
Eximbank in order to enable the Borrower to finance the sum of up to (i) 85
percent (85%) of the total Eximbank-approved cost incurred by the Borrower for
the purchase of the Airframes (the "FINANCED PORTION"), (ii) 100 percent (100%)
of the amount of Eximbank's exposure fee ("EXPOSURE FEE") payable pursuant to
paragraph C of Article III of the Reimbursement and Indemnity Agreement (as
hereinafter defined), and (iii) 85 percent (85%) of the total Eximbank-approved
cost of certain legal and other services (the "APPROVED SERVICES");
WHEREAS, the Lenders have agreed to make one or more advances under
the Loan Agreement in such amounts as shall not in the aggregate exceed the
Credit and on such dates as requested by the Borrower in order to enable the
Borrower to finance the sums described above when and as necessary upon delivery
of the Aircraft (or as shall otherwise be agreed by the Lenders, the Facility
Agent, Eximbank and the Borrower);
WHEREAS, the Company, the Borrower and Eximbank have entered into a
Reimbursement and Indemnity Agreement dated as of September 11, 1996 (the
"REIMBURSEMENT AND INDEMNITY AGREEMENT") setting forth, among other things, the
terms and conditions on which this Guarantee Agreement is to be issued;
WHEREAS, as of each Utilization Date (as hereinafter defined), the
Borrower will evidence its obligation to repay that portion of the Credit used
to finance the Airframes to be settled for on such Utilization Date and the
amount of the Exposure Fee and Approved Services, if any, related thereto,
together with the accrued interest thereon, by issuing and delivering to the
Facility Agent on behalf of the Lenders on such Utilization Date one (1)
floating rate note for each Airframe so financed on such Utilization Date;
WHEREAS, upon compliance with certain terms and conditions specified
in the Loan Agreement and this Guarantee Agreement, the Borrower will exchange
the Floating Rate Notes (as hereinafter defined) for one or more Fixed Rate
Notes (as hereinafter defined), which Fixed Rate Notes will collectively
evidence the then outstanding principal amount of the Loan (as hereinafter
defined) at the time of such exchange;
WHEREAS, as provided in the Loan Agreement, it is the intention of the
Lenders, the Company and the Borrower that the Fixed Rate Notes, if and when
issued, be sold, assigned and transferred to a special purpose securities trust
(the "TRUST") which will succeed to all of the rights, duties and obligations of
the Facility Agent and the Lenders under the Loan Agreement, the Floating Rate
Notes and the Operative Documents (as hereinafter defined);
WHEREAS, the Trust, subject to compliance with applicable securities
laws,
2
<PAGE>
[GUARANTEE AGREEMENT]
will issue certificates representing beneficial interests in the assets of such
Trust (which are comprised of the Fixed Rate Notes);
WHEREAS, it is a condition precedent to the making of the Credit and
the issuance of each Floating Rate Note that Eximbank provide a guarantee of the
principal of, and interest on, each such Floating Rate Note in an amount equal
to the Guaranteed Amount (as hereinafter defined) relating to such Floating Rate
Note (the "EXIMBANK FLOATING RATE GUARANTEE");
WHEREAS, it is a condition precedent to the exchange of the Floating
Rate Notes for the Fixed Rate Notes that the Eximbank Floating Rate Guarantee
with respect to each Floating Rate Note be cancelled and Eximbank provide a
guarantee of the principal of, and interest on, each Fixed Rate Note in an
amount equal to the Guaranteed Amount relating to such Fixed Rate Note (THE
"EXIMBANK FIXED RATE GUARANTEE");
WHEREAS, it is a condition precedent to the sale, assignment and
transfer of the Assigned Property (as hereinafter defined) by the Facility Agent
and the Lenders to the Trust that the Trustee (as hereinafter defined) accept
all of the duties and obligations of the Facility Agent and the Lenders in
respect of the Assigned Property under the Loan Agreement, this Guarantee
Agreement and the other Operative Documents;
WHEREAS, ABN AMRO Bank N.V. ("ABN AMRO") will enter into that certain
Irrevocable Revolving Credit Agreement with U.S. Trade Funding Corporation, in
form and substance satisfactory to Eximbank (as such Irrevocable Revolving
Credit Agreement may be amended, supplemented or modified from time to time with
the consent of Eximbank, the "LIQUIDITY AGREEMENT"); and
WHEREAS, an advance (a "LIQUIDITY ADVANCE") may be drawn by, or for
the benefit of, the Trustee under the Liquidity Agreement, so that the Trust
will have sufficient funds to make payment on outstanding certificates
(representing the respective beneficial interests in the Trust) notwithstanding
failure by the Company to make timely payment of principal of, and interest on,
the Fixed Rate Notes pending satisfaction of the conditions set forth in Section
7 hereof for payment of such amounts by Eximbank pursuant to this Guarantee
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
-----------
For the purposes of this Agreement, the following terms shall have the
following meanings and all terms defined in this Section 1, or in the Recitals
or other provisions of this Agreement in the singular to have the same meaning
when used in the
3
<PAGE>
[GUARANTEE AGREEMENT]
plural and vice versa:
---- -----
"ACCELERATED PAYMENT METHOD" means the method by which Eximbank shall
pay a claim under this Agreement with respect to the Floating Rate Notes as set
forth in Section 7(a)(i) hereof;
"APPLICABLE RATE" shall have the meaning ascribed thereto in the Loan
Agreement;
"ASSIGNED PROPERTY" means all of the Facility Agent's and the Lenders'
rights, benefits and obligations under the Loan Agreement, the Floating Rate
Notes and this Guarantee Agreement in respect thereof as assigned to the Trust
pursuant to the Transfer Agreement;
"ASSIGNMENT" shall have the meaning ascribed thereto in the third
paragraph of Section 6 hereof;
"AVAILABILITY DATE" means June 30, 1997;
"BUSINESS DAY" means any day except one on which the Federal Reserve
Bank of New York is closed;
"CONVERSION" shall have the meaning ascribed thereto in the Loan
Agreement;
"CONVERSION DATE" shall have the meaning ascribed thereto in the Loan
Agreement;
"DECLARATION OF TRUST" shall have the meaning ascribed to the term
"Trust Agreement" in the Loan Agreement;
"DETERMINATION DATE" shall have the meaning ascribed thereto in the
Loan Agreement;
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such a day is not a Business Day, for the next preceding Business
Day) by the Board of Governors of the Federal Reserve System in Statistical
Release H.15 (519) or any successor publication thereto, or, if such rate is not
published for any day which is a Business Day, the rate specified as the
"offered" Federal funds rate on such day in The Wall Street Journal (Eastern
-----------------------
Edition, U.S.) under the table entitled "Money Rates;"
4
<PAGE>
[GUARANTEE AGREEMENT]
"FIXED RATE NOTE" or "FIXED RATE NOTES" means the note or notes, as
the context may require, delivered in exchange for the Floating Rate Notes and
issued to the Trustee upon Conversion pursuant to the Loan Agreement, which note
or notes bear interest at the fixed rate per annum notified by the Underwriter
in the Notice of Conversion and which are in substantially the form of Part 2 to
Appendix 3 to the Loan Agreement;
"FLOATING RATE NOTE" or "FLOATING RATE NOTES" means, as the context
may require, the note or notes issued on each Utilization Date to the Facility
Agent on behalf of the Lenders pursuant to the Loan Agreement bearing interest
at a floating rate per annum and which are in substantially the form of Part 1
to Appendix 3 to the Loan Agreement;
"GUARANTEE" means Eximbank's guarantee of payment of the Guaranteed
Amount pursuant to this Guarantee Agreement;
"GUARANTEED AMOUNT" means all amounts specified in Section 2(a), (b)
and (c) of this Guarantee Agreement;
"GUARANTEED INTEREST RATE" means (i) in the case of each Floating Rate
Note, the per annum rate of interest applicable thereto as calculated from time
to time in accordance with the Loan Agreement (without regard to any default
interest) except that the Applicable Rate shall be the same for the purpose of
ascertaining the Guaranteed Interest Rate under both Sections 2(b) and 2(c)
hereof, and (ii) in the case of the Fixed Rate Notes, the per annum fixed rate
of interest notified by the Underwriter in the Notice of Conversion calculated
in accordance with the Loan Agreement (without regard to any default interest)
except that the Applicable Rate shall be the same for the purpose of
ascertaining the Guaranteed Interest Rate under both Sections 2(b) and 2(c)
hereof, and (iii) in the case of a Liquidity Advance, the per annum rate of
interest that is determined from time to time in accordance with the definition
of "Interest Rate" (without regard to any default interest) set forth in the
Liquidity Agreement;
"ICBC" means The Industrial and Commercial Bank of China acting
through its Head Office, Beijing, People's Republic of China;
"INSTALLMENT PAYMENT METHOD" means the method by which Eximbank shall
pay a claim under this Guarantee Agreement with respect to the Fixed Rate Notes
as set forth in Section 7(a)(ii) hereof;
"LOAN" means the aggregate principal amount of the Credit (as reduced
by repayment or prepayment) from time to time outstanding under the Loan
Agreement as evidenced by (i) the Floating Rate Notes, and (ii) on and after the
Conversion Date, the Fixed Rate Notes;
"NOTE" or "NOTES" means, as the context may require, one or more of
the
5
<PAGE>
[GUARANTEE AGREEMENT]
Floating Rate Notes issued by the Borrower to the Facility Agent on behalf of
the Lenders in accordance with the terms of the Loan Agreement and, if issued in
exchange for cancelled Floating Rate Notes, as the context may require, one or
more of the Fixed Rate Notes issued by the Borrower to the Trustee in accordance
with the terms of the Loan Agreement, including any replacement note issued
pursuant to Clause 2.08(C) thereof;
"NOTEHOLDER" or "HOLDER" means each person or entity listed as the
holder of an interest in a Note on the register maintained by the Facility Agent
or Trustee, as applicable, pursuant to Section 10 hereof;
"NOTICE OF CONVERSION" shall have the meaning ascribed thereto in the
Loan Agreement;
"OPERATIVE DOCUMENTS" shall have the meaning ascribed thereto in the
Loan Agreement;
"PAYMENT CERTIFICATE" shall have the meaning ascribed thereto in
Section 7(a)(ii) hereof;
"PAYMENT METHOD" shall mean either the Accelerated Payment Method or
the Installment Payment Method, as the case may be;
"RELEVANT PARTY" shall mean (i) prior to the date of Conversion, the
Facility Agent, and (ii) on and after the date of Conversion, the Trustee
(acting as Trustee pursuant to the Securitization Documents);
"SECURITIZATION DOCUMENTS" shall have the meaning ascribed thereto in
the Loan Agreement;
"TERMINATION DATE" with respect to an Aircraft shall have the meaning
ascribed thereto in the Lease Agreement related to such Aircraft;
"TOTAL LOSS" with respect to an Aircraft shall have the meaning
ascribed thereto in the Lease Agreement related to such Aircraft;
"TRANSFER AGREEMENT" shall have the meaning ascribed thereto in the
Loan Agreement;
"TRUSTEE" shall have the meaning ascribed thereto in the Loan
Agreement;
"UNDERWRITER" shall have the meaning ascribed thereto in the Loan
Agreement; and
6
<PAGE>
[GUARANTEE AGREEMENT]
"UTILIZATION DATE" shall have the meaning ascribed thereto in the
Reimbursement and Indemnity Agreement.
SECTION 2. THE GUARANTEE.
-------------
Subject to the terms and conditions hereinafter set forth, Eximbank
hereby guarantees to the Relevant Party payment of:
(a) the disbursed and outstanding principal amount of the Loan
as evidenced (i) by the Floating Rate Notes, or (ii) on and after the date
of Conversion, by the Fixed Rate Notes (or Liquidity Advance, if any, made
as a result of a payment default under any Fixed Rate Note);
(b) the interest accrued from time to time at the Guaranteed
Interest Rate on the disbursed and outstanding principal amount of the Loan
as evidenced (i) by the Floating Rate Notes, or (ii) on and after the date
of Conversion, by the Fixed Rate Notes (or if an advance is made under the
Liquidity Agreement as a result of a payment default under any Fixed Rate
Note, the Liquidity Advance); and
(c) the interest accrued at the Guaranteed Interest Rate on any
due and unpaid amount described in sub-sections (a) and/or (b) above from
and including the due date for the payment thereof to the actual date of
payment thereof by Eximbank.
If and to the extent ABN AMRO shall have made a Liquidity Advance under the
Liquidity Agreement, Eximbank shall thereafter (subject only to Section 3(c)
hereof) have no further obligation hereunder (either as to principal or
interest) in respect of that portion of the Loan which was due and payable and
resulted in such Liquidity Advance being made; provided that the foregoing shall
not affect the obligations of the Facility Agent and/or the Trustee pursuant to
Section 6 hereof; provided, further, nothing in this sentence shall be construed
so as to affect Eximbank's guarantee of any Liquidity Advance and accrued
interest thereon in accordance with the terms hereof. ABN AMRO, as liquidity
provider, shall have no rights hereunder except to the extent amounts paid by
Eximbank hereunder are distributed to ABN AMRO in accordance with the
Declaration of Trust. In no event shall the liability of Eximbank under this
Guarantee Agreement exceed the aggregate principal amount of U.S.
$101,672,199.28 plus the accrued interest and the accrued post-maturity interest
thereon specified in sub-sections (b) and (c) above, respectively, at the
Guaranteed Interest Rate.
7
<PAGE>
[GUARANTEE AGREEMENT]
SECTION 3. SCOPE AND BINDING NATURE OF THE GUARANTEE, AND TERMINATION
----------------------------------------------------------
THEREOF.
- -------
(a) The Guarantee shall only be effective (without duplication) with
respect to the Guaranteed Amount represented by any Note (and Liquidity Advance,
if any, made as a result of a payment default under such Note) so long as such
Note bears Eximbank's guarantee legend in the form of Annex A to this Guarantee
Agreement, said legend having been manually executed by an authorized officer of
Eximbank pursuant to the procedures set forth in Section 4 hereof (the
"GUARANTEE LEGEND").
(b) After Eximbank has placed its Guarantee Legend on a Note, the
Guarantee with respect to such Note (and Liquidity Advance, if any, made as a
result of a payment default under such Note) shall be binding on Eximbank (and
shall constitute the direct, general and unconditional obligation of Eximbank
(but only upon the Facility Agent's, each Lender's, the Trustee's, and each
Noteholder's observance of, and in strict accordance with, the terms of this
Guarantee Agreement) and a continuing guarantee of payment), notwithstanding
that the payment under the Loan Agreement and/or any Note is unenforceable,
except to the extent that the Guarantee has been terminated pursuant to sub-
sections (d)(i) or (d)(ii) below.
(c) The Guarantee shall be deemed to continue to be binding on
Eximbank with respect to any payment, or any part thereof, of the Guaranteed
Amount received by the Facility Agent, any Lender, the Trustee, any Noteholder
or ABN AMRO which is rescinded or must otherwise be returned by the Facility
Agent, any Lender, the Trustee, any Noteholder or ABN AMRO, as the case may be;
provided such rescission or return of payment has been compelled by law as the
result of the bankruptcy or insolvency of the Borrower and/or the Company, or as
a result of any law, regulation or decree applicable to the Borrower and/or the
Company, now or hereinafter in effect. A demand on Eximbank for payment
pursuant to the Guarantee of any such returned amount must be made promptly but
in no event later than thirty (30) days after the Facility Agent, such Lender,
the Trustee, such Noteholder or ABN AMRO has actually returned such amount. At
least fifteen (15) days prior to making such demand on Eximbank, the Relevant
Party shall have made demand for payment on the Borrower, the Company or ICBC,
whichever is the party(ies) unaffected by the recision action.
(d) (i) In the event that the Relevant Party fails to make a
demand on Eximbank within the time period and in accordance with the
procedures set forth in Section 6 hereof, the Guarantee with respect to the
unpaid installment of principal or the unpaid accrued interest (or any
Liquidity Advance related to either thereof) as to which such timely demand
was not made shall automatically terminate. Such termination shall be
without prejudice to the right of the Relevant Party to make demand on
Eximbank, or diminish or otherwise affect Eximbank's obligations, under
this Guarantee Agreement with respect to any other unpaid installments of
principal of
8
<PAGE>
[GUARANTEE AGREEMENT]
or unpaid accrued interest on the Loan that is not paid when due (or any
Liquidity Advance related to either thereof); and
(ii) In the event that the Facility Agent, any Lender, the
Trustee or any Noteholder without Eximbank's prior written consent, agrees
to an amendment or deviation prohibited by sub-section 10(c) below, the
Guarantee shall automatically terminate unless the amendment or deviation,
as the case may be, is rescinded or otherwise remedied to the satisfaction
of Eximbank within thirty (30) calendar days after written notice to the
Relevant Party from Eximbank (the "GUARANTEE TERMINATION DATE"). Such
termination will be effective as of the Guarantee Termination Date without
further notice to the Facility Agent, the Lenders, the Trustee, ABN AMRO or
the Noteholders unless the amendment or deviation giving rise to such
termination shall have been remedied to the satisfaction of Eximbank as
aforesaid.
(E) NO DISCHARGE. Eximbank's liability under this Guarantee
------------
Agreement shall be irrevocable, absolute and unconditional (but only upon the
Facility Agent's, each Lender's, the Trustee's, and each Noteholder's observance
of, and in strict accordance with, the terms hereof) irrespective of any lack of
validity or enforceability of the Loan Agreement, any Note, any other Operative
Document, the ICBC A Guarantee and the ICBC/EXIM Guarantee (each as defined in
the Lease Agreements) (including, without limitation, incapacity (for any
purpose) or the lack of any governmental approval or failure of consideration or
any bankruptcy, insolvency, dissolution, liquidation, reorganization,
adjustment, composition or similar circumstance of or relating to the Borrower
and/or the Company or any other person or entity or for any other reason
whatsoever).
(F) CONDITIONS OF GUARANTEE. Eximbank hereby waives diligence,
-----------------------
presentment, protest and any requirement that the Facility Agent, any Lender,
ABN AMRO, the Trustee or any Noteholder exhaust any right or take any action
against or give notice to the Borrower, the Company, ICBC or Eximbank, except
for the written demands for payment and notices by the Facility Agent, the
Lenders, the Trustee or the Noteholders on the Borrower, the Company, ICBC and
Eximbank required under this Guarantee Agreement.
SECTION 4. ENDORSEMENT OF THE GUARANTEE LEGEND.
-----------------------------------
(A) ENDORSEMENT OF FLOATING RATE NOTE(S). Upon compliance with the
------------------------------------
conditions set forth in Clause 3 of the Loan Agreement regarding advances
thereunder used or to be used in connection with the financing of each of the
Airframes and the Exposure Fee and Approved Services related thereto and at any
time after any portion of the Credit related thereto has been advanced under the
Loan Agreement and upon issuance of a Floating Rate Note related to such
Airframe, the Facility Agent may request Eximbank to evidence the Guarantee with
respect to that portion of the Credit as evidenced by each such Floating Rate
Note by placing its Guarantee Legend in the form of Annex A to this Guarantee
Agreement
9
<PAGE>
on such Floating Rate Note. The Facility Agent's request ("REQUEST FOR FLOATING
RATE GUARANTEE LEGEND") shall be in the form of Annex B-1 to this Guarantee
Agreement and be accompanied by the Floating Rate Note related to the Airframe
financed with that portion of the Credit to which such Request for Floating Rate
Guarantee Legend relates. Eximbank shall not be obligated to so endorse any
Floating Rate Note unless a complete and duly executed Request for Floating Rate
Guarantee Legend in the form of Annex B-1 is received by it no later than the
Availability Date (or such later date as may be agreed by Eximbank and the
Facility Agent) and the conditions set forth in Article V of the Reimbursement
and Indemnity Agreement have been satisfied or waived by Eximbank in its sole
discretion.
(B) ENDORSEMENT OF THE FIXED RATE NOTES.
(i) Subject to the receipt by Eximbank of the documents set forth
in Section 4(b)(ii) below, upon issuance by the Borrower of the Fixed Rate
Notes, the Facility Agent may request Eximbank to evidence the Guarantee
with respect to the Loan as evidenced by the Fixed Rate Notes (and any
Liquidity Advance related thereto) by placing its Guarantee Legend in the
Form of Annex A to this Guarantee Agreement on each of the Fixed Rate
Notes. The Facility Agent's request ("REQUEST FOR FIXED RATE GUARANTEE
LEGEND") regarding the Guarantee of the Fixed Rate Notes shall be in the
form of Annex B-2 to this Guarantee Agreement and be accompanied by the
Fixed Rate Notes. Eximbank shall not be obligated to so endorse any of the
Fixed Rate Notes unless a complete and duly executed Request for Fixed Rate
Guarantee Legend is received by it no later than the close of business on
the Conversion Date (or such later date as may be agreed by Eximbank, the
Facility Agent and the Trustee).
(ii) The obligation of Eximbank to place its Guarantee Legend on
each of the Fixed Rate Notes is subject to the receipt by Eximbank of the
following documents, each of which shall be satisfactory to Eximbank in
form and substance:
(A) a duly executed Request for Fixed Rate Guarantee Legend
substantially in the form of Annex B-2 hereto;
(B) the originally executed Eximbank Guarantee Legend to
the Floating Rate Notes and evidence that all of the Floating Rate
Notes have been cancelled;
(C) a duly executed original of each of the Securitization
Documents and the Transfer Agreement;
(D) a duly executed certificate of a senior officer of the
Borrower, dated the Conversion Date, stating that no Potential Event
of Default or Event of Default under the Loan Agreement shall have
occurred
10
<PAGE>
[GUARANTEE AGREEMENT]
and be continuing as of such date;
(E) a duly executed certificate of an authorized officer of
the Facility Agent, dated the Conversion Date, stating that the
Borrower is not in default as to the payment of principal of, or
interest on, any of the Floating Rate Notes as of such date;
(F) a duly executed certificate of a senior officer of the
Company, dated the Conversion Date, stating that no Termination Event
under any Lease Agreement has occurred and is continuing as of such
date;
(G) the executed Fixed Rate Notes and evidence indicating
that each such Fixed Rate Note has been duly executed and delivered by
the Borrower; and
(H) such other documents, certificates and opinions of
counsel relating to the Conversion and/or the sale, assignment and
transfer of the Assigned Property to the Trust as Eximbank may
reasonably request.
SECTION 5. PAYMENT METHOD.
--------------
(a) All payments made by Eximbank under this Guarantee Agreement in
respect of the Floating Rate Notes shall be made in accordance with the
Accelerated Payment Method.
(b) All payments made by Eximbank under this Guarantee Agreement in
respect of any Fixed Rate Note shall be made in accordance with the Installment
Payment Method.
(c) The Payment Methods set forth in this Section 5 shall not be
subject to change.
SECTION 6. PROCEDURES FOR MAKING DEMAND ON EXIMBANK FOLLOWING FIRST
--------------------------------------------------------
DEFAULT. In the event that (i) the Borrower fails for any reason (including,
- -------
without limitation, a failure to pay resulting from debt relief accorded by the
United States of America to the People's Republic of China; or the Company's
failure to satisfy its obligations to pay rent under any Lease Agreement; or the
imposition of withholding taxes) for more than thirty (30) calendar days to pay
any part of the Guaranteed Amount as required by the Loan Agreement, and (ii) a
period of at least fifteen (15) calendar days has elapsed since written demand
for payment was made on the Borrower, the Company and ICBC by the Relevant Party
(which demand may be omitted only if and to the extent that the making thereof
would be prohibited by any applicable law governing the bankruptcy or insolvency
of the Borrower, the Company or ICBC, as applicable), the Relevant Party may
11
<PAGE>
[GUARANTEE AGREEMENT]
make a demand on Eximbank for payment under the Guarantee.
Each written demand on Eximbank pursuant to this Section 6 shall (i)
be made only by the Relevant Party, (ii) identify the Note or Notes with respect
to which the payment default has occurred and specify the due and unpaid
installment of principal of, and the accrued interest on, the Note or Notes (or
Liquidity Advance, if any, made as a result of a payment default under such Note
or Notes) as of the date of such demand (calculated at the applicable Guaranteed
Interest Rate), and the accrued post-maturity interest on the due and unpaid
principal of and interest on the Note or Notes (or Liquidity Advance, if any,
made as a result of a payment default under such Note or Notes) as of the date
of such demand (calculated at the applicable Guaranteed Interest Rate), (iii)
identify the holders of the Note or Notes, (iv) state the Payment Method which
is applicable to the Note or Notes for which such demand on Eximbank is being
made, (v) be accompanied by a copy of the written demand for payment on the
Borrower, the Company and ICBC (or, in the event such demand was omitted with
respect to the Company, the Borrower or ICBC pursuant to the preceding
paragraph, evidence of (x) such party's bankruptcy or insolvency, (y) the
applicable prohibition and (z) the Relevant Party's demand for payment on those
parties not subject to such prohibition), and (vi) be made not later than 150
calendar days from the date as of which the due and unpaid installment of
principal and/or accrued interest was originally scheduled to be paid.
In connection with any demand on Eximbank pursuant to this Section 6,
the Relevant Party and the Noteholders shall be obligated to (A) assign to
Eximbank, in substantially the form of Annex C hereto (an "ASSIGNMENT") all of
their respective right, title and interest in and to the Note or Notes to which
such demand relates (including all rights, title and interests to any post-
default interest) and in, to and under the Loan Agreement and, to the extent
that such right, title and interest relates to the Guaranteed Amount or any
security therefor, the other Operative Documents, (B) deliver such Assignment
and the Note or Notes (and security, if any) to Eximbank, and (C) endorse the
Notes (and security, if any) to the order of Eximbank, without recourse.
Notwithstanding the foregoing, none of the Facility Agent, the Trustee, ABN
AMRO, any Lender nor any Noteholder shall be required to assign to Eximbank (i)
any of its right, title and interest in and to the letter from the Borrower to
the Facility Agent accepted by the Company dated as of September 11, 1996 (a
copy of which has been provided to Eximbank) or (ii) any security (the "EXCLUDED
SECURITY") given by any Person (other than the Borrower and/or the Company) to
secure any obligations of the Borrower and/or the Company under the Operative
Documents (other than the Loan Agreement and Note(s)) to the extent related to
amounts which are not guaranteed by Eximbank under this Guarantee Agreement.
Excluded Security may consist of, but is not limited to, one or more standby
letters of credit or other third party guarantees or indemnities, in each case,
approved in writing by Eximbank.
SECTION 7. PAYMENT OF THE GUARANTEED AMOUNT.
--------------------------------
12
<PAGE>
[GUARANTEE AGREEMENT]
(A) PAYMENT METHODS. Upon receipt of the Relevant Party's demand for
---------------
payment with respect to a Note (or a Liquidity Advance) in accordance with the
provisions of Section 6 hereof, Eximbank, within five (5) Business Days
thereafter (unless Eximbank determines that additional time is required due to
the large number of claims then pending at Eximbank, in which case within
fifteen (15) Business Days thereafter), shall pay to the Relevant Party, the
Guaranteed Amount (the date as of which Eximbank initially makes such payment
shall hereinafter be referred to as the "INITIAL EXIMBANK PAYMENT DATE") as
follows:
(I) ACCELERATED PAYMENT METHOD. With respect to each Floating
--------------------------
Rate Note, on the Initial Eximbank Payment Date, an amount equal to the sum
of (A) the unpaid principal amount of such Floating Rate Note, (B) the due
and unpaid accrued interest on the principal amount of such Floating Rate
Note at the Guaranteed Interest Rate to the due date for payment thereof as
provided in the Loan Agreement, and (C) the accrued post-maturity interest
at the Guaranteed Interest Rate on any due and unpaid amount described in
(A) and/or (B) above from and including the initial due date for such
amounts to (but excluding) the earlier of the date such amounts were paid
and the Initial Eximbank Payment Date (the "ACCELERATED PAYMENT METHOD").
(II) INSTALLMENT PAYMENT METHOD. With respect to each Fixed Rate
--------------------------
Note (or Liquidity Advance, if any, made as a result of a payment default
under any such Fixed Rate Note), on the Initial Eximbank Payment Date (A)
an amount equal to the sum of (X) the scheduled installment (without regard
to any acceleration) then due and unpaid of principal on such Fixed Rate
Note (or the amount of the Liquidity Advance, if any, made as a result of a
payment default under such Fixed Rate Note), (Y) the due and unpaid accrued
interest on such installment of such Fixed Rate Note (provided that if a
Liquidity Advance is made as a result of a payment default under such Fixed
Rate Note, the amounts set forth in this clause (B) shall be limited to
that portion of the due and unpaid accrued interest not included in the
determination of the amount of such Liquidity Advance) at the Guaranteed
Interest Rate to the due date for payment thereof as provided in the Loan
Agreement or Liquidity Agreement, as applicable, and (Z) the accrued post-
maturity interest at the Guaranteed Interest Rate on any due and unpaid
amount described in (A)(X) and/or (A)(Y) above from and including the
initial due date for such amounts to (but excluding) the earlier of the
date such amounts were paid and the Initial Eximbank Payment Date, and (B)
the issuance and delivery to the Trustee, in exchange for such Fixed Rate
Note, of a payment certificate (the "PAYMENT CERTIFICATE") in the form of
Annex D to this Guarantee Agreement, which Payment Certificate shall (X) be
in a face amount equal to the then outstanding (but not yet due) principal
amount of such Fixed Rate Note (after giving effect to any payment made by
Eximbank on the Initial Eximbank Payment Date), (Y) be payable on the same
payment dates and in the same principal installments as such Fixed Rate
Note, and (Z) accrue interest at the Guaranteed Interest Rate that was
applicable to such Fixed Rate Note, (the "INSTALLMENT PAYMENT
13
<PAGE>
[GUARANTEE AGREEMENT]
METHOD").
(B) PAYMENT CERTIFICATES ISSUED IN EXCHANGE FOR FIXED RATE NOTES UPON
-----------------------------------------------------------------
A TOTAL LOSS OF AN AIRCRAFT OR UPON A TERMINATION DUE TO OBSOLESCENCE OF AN
- ---------------------------------------------------------------------------
AIRCRAFT. If (i) a Total Loss occurs in relation to an Aircraft or if any Lease
- --------
Agreement is terminated with respect to an Aircraft due to obsolescence pursuant
to Clause 3.03 thereof (the affected Aircraft in either case being hereinafter
referred to as the "AFFECTED AIRCRAFT") at a time when one or more Fixed Rate
Notes have been issued and are outstanding, (ii) such Affected Aircraft is not,
in the case of a Total Loss, replaced in accordance with the terms of Clause
16.08 of the related Lease Agreement, (iii) no Liquidity Advance shall be
outstanding under the Liquidity Agreement, and (iv) Eximbank (or a paying agent
designated by Eximbank) (the "PAYING AGENT") has received all amounts due under
Clause 6.03 of the Loan Agreement, in the case of a Total Loss, and Clause 6.04
of the Loan Agreement in the case of obsolescence (which amounts, at all times,
shall at least equal the aggregate of (A) the outstanding principal amount of
the Fixed Rate Note attributable (by designation on the face of said Fixed Rate
Note) to such Affected Aircraft (an "AFFECTED AIRCRAFT NOTE"), plus (B) all
accrued and unpaid interest thereon, plus (C) all other amounts then due and
payable under such Affected Aircraft Note or under the Loan Agreement or the
other Operative Documents in connection with such Affected Aircraft or such
Affected Aircraft Note, plus (D) in the case of an obsolescence termination, the
Make-Whole Amount payable pursuant to Clause 6.04 of the Loan Agreement) then
the Trustee shall, upon notice from Eximbank, (I) assign to Eximbank, in
substantially the form of the Assignment, all of the Trustee's rights, title and
interests in and to any such Affected Aircraft Note and in, to and under any
related rights the Trustee may have under the Loan Agreement with respect to any
such Affected Aircraft Note and, to the extent that such right, title and
interest relates to the Guaranteed Amount or any security therefor, the other
Operative Documents related to such Affected Aircraft, (II) deliver such
Assignment and Affected Aircraft Note to Eximbank, and (III) endorse any such
Affected Aircraft Note to the order of Eximbank, without recourse.
Upon compliance with the requirements set forth in the immediately
preceding paragraph, Eximbank, within five (5) Business Days thereafter (unless
Eximbank determines that additional time is required due to the large number of
claims then pending at Eximbank, in which case within fifteen (15) Business Days
thereafter), shall issue and deliver to the Trustee one or more Payment
Certificates, which shall (i) be in an aggregate face amount equal to the then
outstanding (but not yet due) principal amount of such Affected Aircraft Note
(after giving effect to any payments made by the Borrower and/or the Company
since the Total Loss of such Affected Aircraft occurred or receipt of notice of
such obsolescence termination, as the case may be), (ii) be payable on the same
payment dates and in the same principal installments as such Affected Aircraft
Note, and (iii) accrue interest at the Guaranteed Interest Rate.
(C) PAYMENT CERTIFICATES ISSUED IN EXCHANGE FOR FIXED RATE NOTES UPON
-----------------------------------------------------------------
AN EVENT OF DEFAULT. If (i) any Fixed Rate Note is outstanding, (ii) an Event
- -------------------
of Default
14
<PAGE>
[GUARANTEE AGREEMENT]
(other than an Event of Default based upon the failure by the Borrower to pay
when due any of the Guaranteed Amounts) shall have occurred and be continuing,
(iii) no Liquidity Advance shall be outstanding under the Liquidity Agreement,
(iv) Eximbank shall have accelerated the Loan under the Loan Agreement pursuant
to Clause 13.02 of the Loan Agreement, and (v) the Borrower and/or the Company
shall have paid, and Eximbank (or a paying agent designated by Eximbank) shall
have received all such amounts then due and payable under the Loan Agreement and
the other Operative Documents, then the Trustee shall, upon notice from Eximbank
(A) assign to Eximbank, in substantially the form of the Assignment, all of the
Trustee's rights, title and interests in and to the Fixed Rate Notes and the
Loan Agreement and, to the extent that such right, title and interest relates to
the Guaranteed Amount or any security therefor, the other Operative Documents,
(B) deliver such Assignment and the Fixed Rate Notes to Eximbank, and (C)
endorse the Fixed Rate Notes to the order of Eximbank, without recourse.
Upon compliance with the requirements set forth in the immediately
preceding paragraph, Eximbank, within five (5) Business Days thereafter (unless
Eximbank determines that additional time is required due to the large number of
claims then pending at Eximbank, in which case within fifteen (15) Business Days
after the date of demand), shall issue and deliver to the Trustee, one or more
Payment Certificates, which shall (i) be in an aggregate face amount equal to
the then outstanding (but not yet due) principal amount of the Fixed Rate Notes
(other than those principal payments originally scheduled to be due prior to the
acceleration of the Loan), (ii) be payable on the same payment dates and in the
same principal installments as such Fixed Rate Notes, and (iii) accrue interest
at the Guaranteed Interest Rate.
(D) PAYMENTS UNDER A PAYMENT CERTIFICATE. In accordance with the
------------------------------------
terms of a Payment Certificate, Eximbank shall pay the principal amount of such
Payment Certificate in installments on the payment dates and in the amounts set
forth therein, together with the accrued interest thereon at the Guaranteed
Interest Rate. Each payment under a Payment Certificate shall be made to the
Trustee.
(E) FAILURE TO MAKE CLAIM PAYMENT. In the event Eximbank fails to
-----------------------------
make claim payment within fifteen (15) Business Days after demand in accordance
with Section 7(a), for each additional day after the fifteenth Business Day up
to the day on which Eximbank makes claim payment, Eximbank shall pay the
Relevant Party an additional amount equal to the difference between (i) interest
accrued on the defaulted installment(s) of principal and/or interest at the
Guaranteed Interest Rate as provided in Section 7(a) and (ii) interest on such
installment(s) calculated at a rate per annum equal to the sum of (x) one
percent (1%) and (y) the higher of the Guaranteed Interest Rate or the Federal
Funds Rate.
SECTION 8. APPLICATION OF PARTIAL PAYMENTS AND EXIMBANK PAYMENTS. In
-----------------------------------------------------
calculating the amount of Eximbank's first payment to be made under this
Guarantee Agreement, any partial payments received by the Facility Agent, any
Lender, the Trustee or
15
<PAGE>
[Guarantee Agreement]
ABN AMRO from the Borrower and/or the Company with respect to the applicable
Note (or Liquidity Advance, as applicable) prior to the Initial Eximbank Payment
Date shall be applied in accordance with Clause 10.03 of the Loan Agreement.
Further, if the Guarantee terminates pursuant to Section 3(d) hereof
with respect to one or more installments of principal of or interest on a Note
(or a Liquidity Advance, as applicable) all such installments of principal of or
interest on such Note (and such Liquidity Advance, as applicable) as to which
the Guarantee has terminated shall be deemed to have been paid in full when and
as due for the purposes of determining the amounts payable under Section 6
hereof and making the calculations required under Section 7 hereof.
SECTION 9. COLLECTIONS; SUBSEQUENT PAYMENTS BY EXIMBANK. On the
--------------------------------------------
Initial Eximbank Payment Date with respect to a Note or the issuance of a
Payment Certificate by Eximbank, as applicable, (i) Eximbank, by virtue of any
Assignment contemplated hereby, shall be entitled, in its sole discretion, to
pursue for its own account collection of all amounts due or to become due on
such Note and, to the extent applicable, the Notes or under the Loan Agreement,
and (ii) if payment by Eximbank was made in accordance with the Installment
Payment Method, after the Initial Eximbank Payment Date the Trustee shall be
entitled only to payments from Eximbank in accordance with the Payment
Certificate issued to the Trustee in exchange for such Note.
SECTION 10. UNDERTAKINGS OF THE FACILITY AGENT. The Facility Agent
----------------------------------
agrees that so long as Eximbank remains liable under this Guarantee Agreement:
(A) NOTE REGISTER. The Facility Agent shall establish and maintain a
-------------
register with respect to the Noteholders and the Notes for the purpose of
recording (i) the name and address of each current and past Noteholder, (ii) the
date of issuance and transfer of each Note and the face amount of each such
Note, and (iii) the date and amount of each payment (indicating the amount of
principal and interest included in each payment) made by or on behalf of the
Borrower on each Note. The Facility Agent shall maintain such register with
respect to the Note until such time as Eximbank has issued a Payment Certificate
or Payment Certificates with respect thereto and shall make such register
available to Eximbank for inspection and copying, on Eximbank's written request.
After such time, the Facility Agent need not maintain the register, provided the
Facility Agent shall have first delivered to Eximbank's Claims and Recoveries
Division a copy of the register, certified by the Facility Agent as a true,
complete and correct copy, which copy Eximbank shall have found to be
satisfactory in form and substance.
(B) NOTICE OF DEFAULT. Upon receipt of knowledge of the occurrence of
-----------------
any Event of Default under the Loan Agreement (including any event whereby ABN
AMRO shall become obligated to make a Liquidity Advance) or Termination Event
under any Lease Agreement, or the receipt of knowledge that any payment
previously made by, or on behalf
16
<PAGE>
[Guarantee Agreement]
of, the Borrower and/or the Company to any Lender or Noteholder is required to
be returned under the circumstances referred to in Section 3(c) hereof, the
Facility Agent will promptly notify Eximbank thereof.
(C) AMENDMENTS TO THE LOAN AGREEMENT, LEASE AGREEMENTS OR NOTES. The
-----------------------------------------------------------
Facility Agent, without Eximbank's prior written consent, shall not agree (nor
permit any Lender or any Noteholder to agree) to any material amendment,
supplement or modification of the terms of the Loan Agreement, the Liquidity
Agreement, any Lease Agreement or the terms of the Notes, or waive any material
provision thereof or otherwise consent to any material deviation from the
provisions thereof, including, without limitation, any change in the amount of
payment, the dates of payment, the place of payment or any other payment terms
of the Loan Agreement, the Liquidity Agreement, any Lease Agreement or the
Notes. The Facility Agent shall promptly inform Eximbank of each amendment,
supplement or modification to the terms of the Loan Agreement, the Liquidity
Agreement, any Lease Agreement or any Note that is proposed in writing to, or
by, the Facility Agent or executed by the Facility Agent, and of each waiver or
consent to any deviation from the terms thereof that is proposed in writing to,
or by, the Facility Agent or executed by the Facility Agent, and shall provide
copies thereof to Eximbank as soon as practicable after such copies are
available.
(D) NOTICE OF INTEREST RATES. Upon Eximbank's request, the Facility
------------------------
Agent shall promptly notify Eximbank of the per annum rate of interest
applicable to each day or period with respect to which Eximbank is required to
make a payment of a Guaranteed Amount hereunder.
(E) DISBURSEMENTS. The Facility Agent shall (i) ensure that the
-------------
Lenders make the Credit available in accordance with the terms of the Loan
Agreement and as approved by Eximbank, (ii) retain the documents required for
making each advance under the Credit, (iii) make such documents available to
Eximbank at Eximbank's request, and (iv) not dispose of such documents without
Eximbank's prior written consent.
(F) PAYMENTS ON A NOTE AFTER PAYMENT BY EXIMBANK. After the Initial
--------------------------------------------
Eximbank Payment Date with respect to a Note or the issuance of a Payment
Certificate with respect to a Note, as applicable, and until all principal of
and interest on such Note has been paid in full and received by Eximbank, the
Facility Agent shall forward (and shall cause each Lender and Noteholder to
forward) promptly to Eximbank any payments on such Note or any related payment
under the Loan Agreement (other than payments related to Excluded Security or to
the letter described in clause (i) of the last paragraph of Section 6 hereof)
that such Lender or Noteholder receives from any Person other than Eximbank
after the Initial Eximbank Payment Date or such date of issuance, as applicable.
(G) TRANSFER OF RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES UNDER
------------------------------------------------------------------
THIS GUARANTEE AGREEMENT. The Facility Agent, without Eximbank's prior written
- ------------------------
consent,
17
<PAGE>
[Guarantee Agreement]
will not assign, delegate or otherwise transfer (i) its right and obligation to
make demand on Eximbank for payment, and to receive payment from Eximbank in
accordance with the provisions of Sections 6 and 7 hereof, or (ii) any of its
other rights, duties, obligations or responsibilities under this Guarantee
Agreement and the other Operative Documents.
Notwithstanding the foregoing, the Facility Agent and Eximbank hereby
agree in connection with the Conversion that (i) the Facility Agent shall
transfer to the Trustee all of its rights, duties, obligations and
responsibilities under this Agreement (and for all purposes of this Section 10,
the term "FACILITY AGENT" shall be deemed to mean the Trustee from and after the
Conversion Date), and (ii) the Facility Agent shall, and shall cause each Lender
and Noteholder to, transfer to the Trustee all of the respective rights, duties,
obligations and responsibilities of the Facility Agent, the Lenders and the
Noteholders under the Loan Agreement and the other Operative Documents. The
Facility Agent and Eximbank hereby agree that such transfer shall be an
assignment, delegation and transfer of all of the respective rights, duties,
obligations and responsibilities of the Lenders and the Facility Agent under
this Guarantee Agreement, the Loan Agreement and each of the other Operative
Documents to which either thereof is a party and shall be pursuant to the
Transfer Agreement which shall be in form and substance satisfactory to
Eximbank, duly executed by the Lenders, the Facility Agent and the Trustee and
consented to by Eximbank. From and after the Conversion, the Trustee, without
Eximbank's prior written consent, will not assign, delegate or otherwise
transfer any of the rights, duties, obligations or responsibilities specified in
clauses (i) or (ii) of the first sentence of this Section 10(g).
Nothing in this Section 10(g) is intended to restrict or otherwise
limit the right of the Lenders after the Determination Date, as set forth in the
Loan Agreement, to assign or otherwise transfer all or any portion of the
Floating Rate Notes held by it as a Noteholder, and any such transfer may be
effected at any time without Eximbank's prior written consent.
(H) INDEMNIFICATION. If the Facility Agent (or Trustee, as the case
---------------
may be) fails to comply with any undertaking set forth in this Section 10 or
with any other obligation under the Operative Documents, the Facility Agent (or
the Trustee, as the case may be) shall be liable to Eximbank for all of the
actual damages suffered, or costs reasonably incurred, by Eximbank as a result
thereof (including all legal costs and expenses related thereto or arising
therefrom), and shall indemnify Eximbank for such damages, costs and expenses.
Neither the Facility Agent nor the Trustee shall in any event be liable for
incidental or consequential damages. The coverage of this Guarantee Agreement
with respect to any interest in the Note held by the Facility Agent in its
capacity as a Lender shall not be affected by such failure by the Facility Agent
in its capacity as Facility Agent, and such failure shall not impair the rights
of any other Lender under this Guarantee Agreement. Eximbank may enforce its
rights under this Section 10(h), and pursue all remedies available with respect
thereto, in any court of competent jurisdiction. Notwithstanding anything to
the contrary stated herein, the agreements set forth in this Section 10(h) shall
survive the termination of this Agreement and the payment of all or any portion
of the Guaranteed
18
<PAGE>
[Guarantee Agreement]
Amount.
SECTION 11. EXIMBANK PAYMENTS; DISCHARGE OF LIABILITY. All amounts
-----------------------------------------
payable by Eximbank under this Guarantee Agreement or under any Payment
Certificate shall be made (i) prior to the date of Conversion, to the Facility
Agent, and (ii) on and after the date of Conversion, to the Trustee, as the case
may be, as provided for in this Guarantee Agreement. Payment of any such amount
by Eximbank shall discharge fully and completely Eximbank's liability to the
Facility Agent, the Lenders, the Trustee or ABN AMRO, as the case may be, under
this Guarantee Agreement or the Payment Certificate(s), as the case may be, with
respect to such amounts.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 13. NOTIFICATION. All notices, requests, consents and
------------
demands hereunder shall be in writing and telexed, telecopied, cabled or
delivered to the intended recipient at the address specified beneath its name on
the signature pages hereto or at such other address as shall be designated by
such party in a notice to the other parties hereto. All such communications
shall be deemed to have been given when received by the party to which such
communication was addressed. All communications from Eximbank shall be
addressed and sent (i) prior to the date of Conversion, to the Facility Agent,
and (ii) on and after the date of Conversion, to the Trustee at such address as
shall be specified in the writing to Eximbank and shall be deemed to have been
given upon receipt of such communication.
SECTION 14. PARTIES BOUND. This Guarantee Agreement is binding upon,
-------------
and inures to the benefit of each party hereto and their respective successors
and permitted assigns.
* * *
19
<PAGE>
[Guarantee Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed, in duplicate, as of the date first above written.
ABN AMRO BANK N.V.,CHICAGO BRANCH, EXPORT-IMPORT BANK OF THE
as Facility Agent UNITED STATES
By: ABN AMRO NORTH AMERICA, INC.,
its Agent By: /s/ Julie Panaro
--------------------------------
(Signature)
Name: /s/ Julie J. Panaro
------------------------------
By: /s/ John J. Neblo (Print)
-----------------------------
(Signature) Title: VICE PRESIDENT
-----------------------------
Name: John J. Neblo
---------------------------
(Print) 811 Vermont Avenue, N.W.
Title: VICE PRESIDENT Washington, D.C. 20571
-------------------------- Attn: Vice President - Aircraft
Finance Division
By: /s/ James B. Kaiser Re: Eximbank Guarantee No.
-----------------------------
AP070425 - People's Republic of
Name: James B. Kaiser China (China Yunnan Airlines)
---------------------------
(Print)
Title: ASSISTANT VICE PRESIDENT Telephone: (202) 565-3550
--------------------------
Telefax: (202) 565-3558
135 South LaSalle Street Telex Number: 197681
Chicago, Illinois 60603 Answerback: EXIM UT
Attn: Structured Trade Finance
copy to:
Telephone: (312) 904-7343
Telefax: (312) 904-7399 Vedder, Price, Kaufman & Kammholz
Telex Number: 6732700 222 North LaSalle Street
Answerback: ABN AMRO CGO Chicago, Illinois 60601-1003
Attn: Dean N. Gerber
Telefax: (312) 609-5005
Annexes:
A - Guarantee Legend
B-1 - Request for Guarantee Legend (Floating Rate Notes)
B-2 - Request for Guarantee Legend (Fixed Rate Notes)
C - Assignment
D - Payment Certificate
20
<PAGE>
[Guarantee Agreement]
Annex A
[Form of Guarantee Legend]
GUARANTEE
This note is guaranteed by the Export-Import Bank of the United States
("EXIMBANK") as provided in the Guarantee Agreement dated as of September 11,
1996, between ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and
Eximbank, and said guarantee is expressly made subject to all of said provisions
therein as if all of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF
THE UNITED STATES
By:__________________________________________
(Signature)
Name:________________________________________
(Print)
Title:_______________________________________
Eximbank Guarantee No. AP070425 - People's Republic of China (China Yunnan
Airlines)
21
<PAGE>
[Guarantee Agreement]
Annex B-1
REQUEST FOR GUARANTEE LEGEND
(Floating Rate Notes)
Date: _______ __, 199__
Export-Import Bank
Of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Attention: Vice President - Contract Administration
Subject: Eximbank Guarantee No. AP070425 - People's Republic of China
(China Yunnan Airlines)
Ladies and Gentlemen:
In accordance with the terms of the guarantee agreement ("GUARANTEE
AGREEMENT") dated as of September 11, 1996, between ABN AMRO Bank N.V., Chicago
Branch, as Facility Agent, and Export-Import Bank of the United States, we
hereby request that you issue your guarantee by endorsing the Guarantee Legend
which appears on the promissory note(s) ("NOTE(S)") described below and which
accompanies this Request for Guarantee Legend. We certify that the Note(s)
fully evidence disbursements related to the Airframe and made pursuant to the
terms and conditions of the Loan Agreement.
Airframe Note Note Principal
MSN No. Date Amount
--- --- ---- ------
* * *
22
<PAGE>
[Guarantee Agreement]
Unless otherwise provided herein, the defined terms used in this
Request for Guarantee Legend shall have the respective meanings specified in the
Guarantee Agreement.
ABN AMRO Bank N.V., CHICAGO BRANCH,
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
23
<PAGE>
[Guarantee Agreement]
Annex B-2
REQUEST FOR GUARANTEE LEGEND
(Fixed Rate Notes)
Date: _________ __, 199__
Export-Import Bank
Of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Attention: Vice President - Contract Administration
Subject: Eximbank Guarantee No. AP070425 - People's Republic of China
(China Yunnan Airlines)
Ladies and Gentlemen:
In accordance with the terms of the guarantee agreement ("GUARANTEE
AGREEMENT") dated as of September 11, 1996, between ABN AMRO Bank N.V., Chicago
Branch, as Facility Agent, and Export-Import Bank of the United States, we
hereby request that you issue your guarantee by endorsing the Guarantee Legend
which appears on the promissory notes ("NOTES") described below and which
accompany this Request. We certify that the Notes are issued in exchange for
the outstanding aggregate principal amount of the Floating Rate Notes issued
pursuant to the Loan Agreement and guaranteed pursuant to the Guarantee
Agreement and that the Notes listed below fully evidence the entire amount of
Floating Rate Notes converted to a fixed interest rate pursuant to and in
accordance with the terms and conditions of the Loan Agreement:
Airframe Note Note Principal
MSN No. Date Amount
--- --- ---- ------
The Facility Agent hereby further certifies that on the Conversion
Date the Borrower was not in default as to the payment of either principal of or
interest on the Floating Rate Notes.
* * *
24
<PAGE>
[Guarantee Agreement]
Unless otherwise provided herein, the defined terms used in this
Request for Guarantee Legend shall have the respective meanings specified in the
Guarantee Agreement.
ABN AMRO Bank N.V., CHICAGO BRANCH,
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
25
<PAGE>
[Guarantee Agreement]
ASSIGNMENT Annex C
For value received, ___________________________________ (the
"NOTEHOLDER") hereby assigns to the Export-Import Bank of the United States
("EXIMBANK"), without recourse, all of its right, title and interest in, and all
sums of money now due or to become due to the Noteholder under, the promissory
note (the "NOTE") of YA96A Limited (the "BORROWER"), dated __________, 199_, in
the principal amount of U.S. $___________________, the [related rights of the
Noteholder under the]/1/ Loan Agreement pursuant to which the Note was issued,
and any other Operative Documents [related to such Affected Aircraft]/1/ and any
and all security related thereto. Notwithstanding the foregoing, the Noteholder
shall not be required to assign to Eximbank (i) any of its right, title and
interest in and to the letter from the Borrower to the Facility Agent accepted
by the Company dated as of September 11, 1996 or (ii) any security (the
"EXCLUDED SECURITY") given by any Person (other than the Borrower and/or the
Company) to secure any obligations of the Borrower and/or the Company under the
Operative Documents (other than the Loan Agreement [(to the extent assigned
above)]/1/ and Note) to the extent related to amounts which are not guaranteed
by Eximbank under the Guarantee Agreement described below. Excluded Security may
consist of, but is not limited to, one or more standby letters of credit or
other third party guarantees or indemnities, in each case, approved in writing
by Eximbank.
This Assignment is made pursuant to the terms of a guarantee agreement
(the "GUARANTEE AGREEMENT") dated as of September 11, 1996 between ABN AMRO Bank
N.V., Chicago Branch, as Facility Agent, and Eximbank and identified as Eximbank
Guarantee No. AP070425. The Noteholder acknowledges and agrees that this
Assignment is subject to the terms of the Guarantee Agreement, including,
without limitation, the provisions of Section 6 thereof.
In the event that the Noteholder receives any payment on the Loan as
evidenced by the Notes after Eximbank's payment with respect to the Loan under
the Guarantee Agreement, the Noteholder agrees to promptly forward such payment
to Eximbank.
Unless otherwise provided herein, the defined terms used in this
Assignment shall have the respective meanings specified in the Guarantee
Agreement.
* * *
________________________
/1/ To be included only in connection with an Assignment pursuant to
Section 7(b) of the Guarantee Agreement defined herein.
26
<PAGE>
[Guarantee Agreement]
IN WITNESS WHEREOF, the Noteholder has caused this instrument to be
sealed this _____ day of ________________, ____.
(Name of Noteholder)
By:__________________________________________
(Signature)
Name:________________________________________
(Print)
Title:_______________________________________
27
<PAGE>
[Guarantee Agreement]
ANNEX D
PAYMENT CERTIFICATE
No. ____________
____________________, ____
TO: [Trustee]
The Export-Import Bank of the United States ("EXIMBANK") hereby
acknowledges the assignment, without recourse, to Eximbank of all of
________________'s right, title and interest in and to the fixed rate promissory
note of YA96A Limited dated _____________, 199_ in the face amount of
US$___________________, the payment of which is guaranteed by Eximbank pursuant
to the terms of a guarantee agreement (the "GUARANTEE AGREEMENT") dated as of
September 11, 1996 between Eximbank and ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent and identified as Eximbank Guarantee No. AP070425.
Eximbank hereby agrees to pay to ____________________, or
_________________________'s registered assigns, the principal amounts set forth
in item 3 below on the dates (each a "PAYMENT DATE") so set forth and interest
at the Guaranteed Interest Rate (as defined in the Guarantee Agreement) and
calculated in the manner set forth in the Guarantee Agreement.
1. Face Amount of the Note: $____________
2. Total Principal Amount
Outstanding under the Note
at [Date of Certificate]: $____________
3. Schedule of Payments:
Payment Principal
Date Amount
____________________ $___________________
____________________ ___________________
____________________ ___________________
____________________ ___________________
____________________ ___________________
28
<PAGE>
[Guarantee Agreement]
The transfer of this Payment Certificate must be registered by the
registered holder hereof (or by such holder's attorney-in-fact duly authorized
in writing) on the books of Eximbank maintained for such purpose at its offices
at 811 Vermont Avenue, N.W., Washington, D.C. 20571. All payments of principal
and interest on this Payment Certificate shall be made to the person in whose
name this Payment Certificate is so registered at the close of business on the
day which is 15 calendar days next preceding a Payment Date (each a "RECORD
DATE") and by wire transfer in immediately available funds to such person's
account at a commercial bank in the United States as such account shall appear
on the registry books of Eximbank.
Eximbank shall not be required to register the transfer of this
Payment Certificate during the period from and including the Record Date for any
Payment Date to and including such Payment Date, and, prior to due presentment
for registration of transfer of this Payment Certificate, Eximbank may deem and
treat the person in whose name this Payment Certificate is registered upon the
registry books of Eximbank as the absolute owner of this Payment Certificate
(notwithstanding any notation of ownership or other writing hereon) for the
purpose of receiving payment of or on account of the unpaid principal and
interest due hereon and for all other purposes, and Eximbank shall not be
affected by any notice to the contrary.
This Payment Certificate is issued pursuant to the terms and
conditions of the Guarantee Agreement and is subject to those terms and
conditions and is entitled to the benefits thereof.
EXPORT-IMPORT BANK OF THE UNITED STATES
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
29
<PAGE>
EXHIBIT 10.2
EXECUTION COPY
--------------
Dated as of 27 August 1996
--------------------------
YA96A LIMITED
as Borrower
THE BANKS AND OTHER
FINANCIAL INSTITUTIONS named herein
as Lenders
ABN AMRO BANK N.V., CHICAGO BRANCH
as Facility Agent
WILMINGTON TRUST COMPANY
(not in its individual capacity,
but solely as security trustee)
as Security Trustee
and
EXPORT-IMPORT BANK OF THE UNITED STATES
---------------------------------------
GUARANTEED LOAN AGREEMENT
TERM LOAN FACILITY
of up to US$103,000,000
relating to two (2) Boeing 767-300 Airframes
with Rolls-Royce RB211-524H-36 Engines
EXIM Guarantee No. AP070425
People's Republic of China
(China Yunnan Airlines)
--------------------------------------
BAKER & MCKENZIE
14TH FLOOR, HUTCHISON HOUSE
HONG KONG
ONE PRUDENTIAL PLAZA
CHICAGO, ILLINOIS 60601
<PAGE>
CONTENTS
--------
<TABLE>
<CAPTION>
NUMBER CLAUSE HEADING PAGE
- ------ -------------- ----
<S> <C> <C>
1. INTERPRETATION........................................................ 2
2. THE FACILITY.......................................................... 15
3. CONDITIONS PRECEDENT.................................................. 18
4. CONVERSION TO FIXED RATE.............................................. 19
5. INTEREST.............................................................. 23
6. REPAYMENT, PREPAYMENT AND CANCELLATION................................ 23
7. CHANGE OF LAW OR CIRCUMSTANCES........................................ 27
8. TAXES AND OTHER DEDUCTIONS............................................ 29
9. FEES, EXPENSES AND OTHER INDEMNITIES.................................. 31
10. PAYMENTS AND EVIDENCE OF DEBT......................................... 32
11. REPRESENTATIONS AND WARRANTIES........................................ 34
12. UNDERTAKINGS.......................................................... 38
13. EVENTS OF DEFAULT..................................................... 41
14. DEFAULT INTEREST...................................................... 44
15. SET-OFF AND PRO-RATA SHARING.......................................... 45
16. THE FACILITY AGENT AND THE SECURITY TRUSTEE........................... 46
17. AMENDMENT............................................................. 51
18. WAIVER AND SEVERABILITY............................................... 52
19. MISCELLANEOUS......................................................... 52
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
20. ASSIGNMENT, TRANSFER AND LENDING OFFICES............................... 52
21. NOTICES................................................................ 54
22. GOVERNING LAW AND JURISDICTION......................................... 56
23. COUNTERPARTS........................................................... 57
SCHEDULE 1.................................................................. 59
APPENDIX 1.................................................................. 1-1
APPENDIX 2.................................................................. 2-1
PART I................................................................. 2-1
PART II................................................................ 2-2
PART III............................................................... 2-4
APPENDIX 3.................................................................. 3-1
APPENDIX 4.................................................................. 4-1
APPENDIX 5.................................................................. 5-1
APPENDIX 6.................................................................. 6-1
</TABLE>
<PAGE>
THIS GUARANTEED LOAN AGREEMENT (this "Agreement" or this "Guaranteed Loan
Agreement") is made as of the 27th day of August 1996
BY AND AMONG:
(1) YA96A LIMITED, a company incorporated under the laws of the Cayman
Islands and having its registered office at Ugland House, South Church
Street, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies
as borrower (the "Borrower");
(2) THE BANKS AND OTHER FINANCIAL INSTITUTIONS listed in Schedule 1 as
Lenders (each, a "Lender" and collectively, the "Lenders");
(3) ABN AMRO BANK N.V., CHICAGO BRANCH, as facility agent for the Lenders
(the "Facility Agent");
(4) WILMINGTON TRUST COMPANY not in its individual capacity, except as
expressly stated herein, but solely as security trustee (the "Security
Trustee");
and
(5) EXPORT-IMPORT BANK OF THE UNITED STATES ("EXIM").
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to establish a credit
facility in Dollars in its favor in an amount equal to the Aggregate Commitment
so that the Borrower may hereunder finance, or refinance indebtedness incurred
to finance, up to (a) 85% of the purchase price paid or payable by the Borrower
in respect of the purchase in the United States and the export to the People's
Republic of China of two (2) Boeing 767-300 airframes which items are of U.S.
manufacture and have been approved by EXIM as eligible for financing under this
Agreement (the two (2) Boeing 767-300 airframes being hereinafter referred to as
the "Items"), (b) 100% of the Exposure Fee payable by the Borrower to EXIM in
respect of the Items and the Approved Services and (c) 85% of the cost of the
Approved Services payable by the Borrower in respect of the Items;
WHEREAS, the Borrower has requested the ECGD Lenders to establish a
credit facility in Dollars in its favor to finance the purchase by the Borrower
of, or to refinance indebtedness incurred by the Borrower to purchase, four (4)
Rolls Royce RB211-524H-36 engines which are to be installed (two in respect of
each airframe) on the Boeing 767-300 airframes referred to above, it being
understood that no reference herein to parties hereto which may also be ECGD
Lenders shall be deemed to refer to such parties in their capacity as ECGD
Lenders or to any rights they may have in respect of the ECGD Loan;
WHEREAS, the Borrower has made or is prepared to make cash payments
aggregating not less than 15% of the aggregate purchase price of the Items and
the Approved Services which payments will be financed by way of a loan from the
Commercial Lenders on the terms and subject to the conditions set out in the
Commercial Loan Agreement, it being
<PAGE>
understood that no reference herein to parties hereto which may also be lenders
under the Commercial Loan Agreement shall be deemed to refer to such parties in
their capacity as lenders under the Commercial Loan Agreement or to any rights
they may have thereunder;
WHEREAS, the Borrower has agreed to lease each Aircraft to China Yunnan
Airlines, a legal entity organized and existing under the laws and decrees of
the People's Republic of China, pursuant to the terms of a Lease with respect to
such Aircraft;
WHEREAS, on the terms and conditions hereinafter set forth, the Lenders
are prepared to establish the Facility in favor of the Borrower for the purpose
of providing the Borrower with the financing requested by the Borrower to enable
it to purchase, or to refinance indebtedness incurred to purchase, the Items;
WHEREAS, EXIM is prepared to issue, for the benefit of the Lenders, its
guarantee of repayment in respect of the principal amount of each Disbursement
made pursuant to this Guaranteed Loan Agreement together with interest thereon,
in accordance with the terms and conditions stated in the EXIM Guarantee;
WHEREAS, upon the terms and conditions set forth herein, the Facility
Agent is prepared to act as agent for the Lenders and shall perform those
functions and duties assigned to it hereunder;
WHEREAS, upon the terms and conditions set forth in the Proceeds
Agreement (as hereinafter defined), the Security Trustee is prepared to act as
security trustee for purposes of holding security granted pursuant to the
Security Documents;
WHEREAS, upon the agreement of the Lenders, the Borrower and EXIM the
Floating Rate Notes issued hereunder may be converted to Fixed Rate Notes; and
WHEREAS, the establishment of the Facility will facilitate exports and
imports and the exchange of commodities between the United States and the
People's Republic of China.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. INTERPRETATION
--------------
1.01 Definitions. In this Agreement, unless the context requires otherwise:
-----------
"Aggregate Commitment" means, on any date, an amount equal to the
aggregate of the Commitments of all Lenders as determined on such day;
2
<PAGE>
"Aircraft" means either or both, as the context may require, of the
Airframes, in each case with installed engines purchased by the Borrower
pursuant to the Aircraft Purchase Agreement (as assigned to the Borrower,
in respect of such Aircraft, pursuant to the relevant Purchase Agreement
Assignment);
"Aircraft Purchase Agreement" means the purchase agreement No. 1844 dated
as of 3rd December 1994 between The Boeing Company, as seller, and China
Aviation Supplies Corporation, as buyer, as such agreement relates to the
Aircraft;
"Airframe" or "Airframes" means either or both, as the context may
require, of the two (2) Boeing 767-300 airframes bearing manufacturer's
serial numbers 28148 and 28149 (excluding the Engines or any engines from
time to time installed thereon);
"Applicable Margin" means with respect to each Disbursement while bearing
interest at the Floating Rate, 0.08% (eight basis points);
"Applicable Rate" means, with respect to any Interest Period for each
Disbursement, the rate per annum equal to:
(i) if such Interest Period ends on or prior to the Conversion Date,
if any, the Floating Rate for such Interest Period; and
(ii) if such Interest Period begins on or after the Conversion Date,
the Fixed Rate;
"Approved Services" shall have the meaning ascribed to such term in the
Reimbursement and Indemnity Agreement;
"Available Commitment" means, with respect to each Lender, on any day, an
amount which equals the Commitment of such Lender as determined on such
day less (i) such Lender's Pro-Rata Share of the outstanding principal
amount of the Loan on such day and (ii) any repayments or prepayments of
the principal amount of the Loan on or prior to such day;
"Availability Period" means the period commencing on the date of this
Agreement and ending on the earlier of (i) October 31, 1996 (or such
later date as may be agreed by the Borrower, the Facility Agent, the
Lenders, EXIM and the Lessee), (ii) the date on which the Available
Commitment of each Lender is reduced to zero in accordance with the terms
hereof, (iii) the date on which the Disbursement is made in respect of
the last Aircraft to be financed hereunder, and (iv) the date on which
the Borrower notifies the Facility Agent that the Availability Period is
terminated;
"Banking Day" means (i) a day which is not a Saturday or Sunday and (ii)
a day on which banks are open for the transaction of business of the
nature required by
3
<PAGE>
this Agreement and the Operative Documents (A) prior to or on the
Conversion Date, in Hong Kong, Shanghai, London and New York City and,
for the purposes of Clause 13.01(a), Beijing and (B) after the Conversion
Date, in New York City and Hong Kong (for all purposes other than in
determining a Payment Date) and, for the purposes of Clause 13.01(a),
Beijing;
"Bare Trust Agreement" means the bare trust agreement executed and
delivered, or as the context may require, to be executed and delivered by
the Lessor Parent, as trustee, and the Lessee, as beneficiary, as amended
or supplemented from time to time;
"Boeing Warranties Agreement" means, in respect of each Aircraft, the
agreement to be entered into in respect of such Aircraft by the Lessee,
China Aviation Supplies Corporation, the Borrower and the Security
Trustee and (by way of the execution of the consent and agreement
thereto) The Boeing Company;
"Borrowing Date" means, with respect to a Disbursement, the date, which
date shall be a Banking Day, designated by the Borrower in a Notice of
Drawing as the date on which such Disbursement shall be made subject to
fulfillment or waiver of the terms and conditions of this Agreement;
"Bridge Financing Documents" means, in respect of the Aircraft bearing
manufacturer's serial number 28148, the respective financing and security
documents entered into between the Borrower, the Lessee, ABN AMRO Bank
N.V. (as facility agent and as security agent) and the Lenders as defined
therein, as applicable, in connection with the acquisition of such
Aircraft by the Borrower and the leasing of such Aircraft by the Borrower
to the Lessee;
"Commercial Facility Agent" means ABN AMRO Bank N.V., Shanghai Branch, as
facility agent under the Commercial Loan Agreement.
"Commercial Lenders" has the meaning ascribed to the term "Lenders" in
the Commercial Loan Agreement;
"Commercial Loan" has the meaning ascribed to the term "Loan" in the
Commercial Loan Agreement;
"Commercial Loan Agreement" means the commercial loan agreement (tranche
C) of even date herewith by and among the Borrower, the banks and
financial institutions named therein as lenders, and the Commercial
Facility Agent;
"Commitment" means, in relation to each Lender, the principal amount set
forth opposite that Lender's name in Schedule 1, as the same may be
reduced in accordance with the terms hereof;
4
<PAGE>
"Conversion" means the conversion of interest payable in respect of the
Loan to the Fixed Rate from the Floating Rate as contemplated in the
Notice of Conversion;
"Conversion Date" means, prior to Conversion, the date set forth in the
Notice of Conversion as the Conversion Date, which date shall be a
Banking Day occurring on or prior to March 12, 1997 (or such later date
as the Borrower, EXIM, the Underwriter and the Facility Agent may agree)
and, on or after the Conversion, the date of such Conversion provided
that if the Conversion has not occurred on or prior to March 12, 1997 (or
such later date as the Borrower, EXIM, the Underwriter and the Facility
Agent may agree) Conversion Date shall have no meaning;
"Co-ordination Agreement" means the co-ordination agreement entered into,
or as the context may require, to be entered into between EXIM, ECGD, the
Facility Agent, the Lenders, the Commercial Lenders, the ECGD Lenders,
the Commercial Facility Agent, the ECGD Lender and the Security Trustee;
"Default" means any event which with the giving of notice or lapse of
time or both would constitute an Event of Default;
"Determination Date" means the earlier of (i) the date on which the
Underwriter and the Borrower determine not to effect the Securitization
of the Loan and provide notice thereof to the Facility Agent and EXIM and
(ii) if the Conversion has not occurred on or prior to March 12, 1997 (or
such later date as the Borrower, EXIM, the Underwriter and the Facility
Agents may agree) March 12, 1997 (or such later date);
"Disbursement" shall have the meaning ascribed to such term in Clause
2.01 hereof;
"Dollars" and "US$" mean the lawful currency for the time being of the
United States of America;
"ECGD" means the Export Credits Guarantee Department of the United
Kingdom;
"ECGD Facility Agent" means ABN AMRO BANK, N.V., London Branch, in its
capacity as facility agent under the ECGD Loan Agreement for and on
behalf of the ECGD Lenders;
"ECGD Lenders" has the meaning ascribed to the term "Lenders" in the ECGD
Loan Agreement;
"ECGD Loan" means the principal amount for the time being outstanding
under the ECGD Loan Agreement;
5
<PAGE>
"ECGD Loan Agreement" means the loan agreement entered into or, as the
context may require, to be entered into between the Borrower, the ECGD
Facility Agent, the financial institutions named therein as lenders and
ECGD;
"Event of Default" means any event specified as such in Clause 13;
"EXIM Eligible Amount" means, with respect to each Airframe, the amount
of the purchase price of such Airframe and related fees and expenses
which have been approved by EXIM to be eligible for EXIM support and
which amount shall not exceed the sum of (i) 85% of the EXIM-approved
cost for the Airframe, (ii) 100% of the Exposure Fee payable by the
Borrower to EXIM pursuant to the terms of the Reimbursement and Indemnity
Agreement, and (iii) 85% of the cost of Approved Services payable by the
Borrower in respect of such Airframe;
"EXIM Guarantee" means, the Guarantee Agreement dated as of the first
Borrowing Date hereunder between the Facility Agent, the Lenders and
EXIM;
"Exposure Fee" shall have the meaning ascribed to such term in the
Reimbursement and Indemnity Agreement;
"Facility" means the loan facility to be made available to the Borrower
under Clause 2 of this Agreement;
"Facility Agent" means (i) on or prior to the Conversion Date, ABN AMRO
BANK, N.V., Chicago Branch of 135 South LaSalle Street, Chicago,
Illinois, in its capacity as facility agent for the Lenders hereunder or
any successor thereto in accordance with the terms of this Agreement and
(ii) thereafter, the Trustee;
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the average
rate quoted to the Facility Agent on such day for the purchase by the
Facility Agent of federal funds;
"Final Maturity Date" means August 15, 2008 or, if such date is not a
Banking Day, the first preceding Banking Day;
"Financed Aircraft" means, with respect to a Disbursement, the Aircraft
for which the proceeds of such Disbursement will be used, in substantial
part, in connection with the acquisition of, or the refinancing of
indebtedness incurred to acquire, such Aircraft;
"Fixed Rate" means the fixed rate of interest determined in accordance
with the pricing procedure described in Appendix 7 and specified in the
Notice of Conversion (or, after the submission of the Notice of
Conversion but prior to the Conversion Date, such other subsequent
written agreement specifying the Fixed Rate to which the Borrower, the
Facility Agent, EXIM and the Trustee are party)
6
<PAGE>
as applicable to the Loan (and evidenced by the Fixed Rate Notes) for
each Interest Period commencing on and after the Conversion Date;
"Fixed Rate Note" or "Fixed Rate Notes" means either or both, as the
context may require, of the promissory notes issued by the Borrower on
the Conversion Date which collectively evidence the Loan at such time as
interest thereon accrues at the Fixed Rate and which are substantially in
the form of Part 2 of Appendix 3 hereto;
"Fixed Rate Payment Date" means (i) each Semi-annual Date occurring after
the Conversion Date and (ii) the Final Maturity Date, provided, if any
Fixed Rate Payment Date would otherwise be a day that is not a Banking
Day, such Fixed Rate Payment Date shall be the first preceding Banking
Day. For purposes of this definition, "Semi-annual Date" shall mean each
----------------
February 15 and August 15 of each year commencing February 15, 1997;
"Floating Rate" means, with respect to an Interest Period while the Loan
bears interest at the Floating Rate, the aggregate rate per annum equal
to LIBOR plus the Applicable Margin on the date of determination,
----
provided however if such Interest Period has a duration of one (1) day or
one (1) week pursuant to Clause 2.04 or 4.05, the Floating Rate for each
day during such period shall be the Federal Funds Rate plus the
Applicable Margin;
"Floating Rate Note" or "Floating Rate Notes" means either or both, as
the context may require, of the promissory notes issued by the Borrower
which collectively evidence the Loan at such time as interest thereon
accrues at the Floating Rate and which are substantially in the form of
the Part 1 of Appendix 3 hereto;
"Floating Rate Payment Date" means (i) each Semi-annual Date occurring
during the term of this Agreement and (ii) the Final Maturity Date,
provided, (x) if any Floating Rate Payment Date would otherwise be a day
that is not a Banking Day, such Floating Rate Payment Date shall be the
first preceding Banking Day and (y) if the Conversion shall have
occurred, the Conversion Date shall be the final Floating Rate Payment
Date. For purposes of this definition "Semi-annual Date" shall mean each
----------------
February 15 and August 15 of each year commencing February 15, 1997;
"Guaranteed Amount" shall have the meaning ascribed to such term in the
EXIM Guarantee;
"Guaranteed Interest Rate" shall have the meaning ascribed to such term
in the EXIM Guarantee;
"ICBC" means The Industrial & Commercial Bank of China, acting through
its head-office at 15 Cuwei Road, Haidian District, Beijing, People's
Republic of China;
7
<PAGE>
"ICBC/EXIM Guarantee" means that certain contract of guaranty dated as of
the date thereof between ICBC and EXIM relating to EXIM Credit Number
AP070425 and the Aircraft, as the same may be modified, amended or
supplemented from time to time in accordance with the provisions thereof;
"Insurance Proceeds" means any and all amounts payable in consequence of
a claim under any of the Insurances in respect of a Total Loss;
"Insurances" means, in respect of an Aircraft, any and all contracts or
policies of insurance required to be maintained and effected in respect
of such Aircraft under the relevant Lease;
"Interest Period" means:
(i) with respect to each Disbursement while bearing interest at the
Floating Rate, the period commencing on and including the date on
which the proceeds of such Disbursement are made available to the
Borrower to, but excluding the day which is one (1) day, one (1)
week, or one (1), three (3) or six (6) months from such date, in
any case, as determined in accordance with Clause 2.04; and
thereafter each successive period commencing on and including the
last day of the next preceding Interest Period to, but excluding,
the day which is one (1) day, one (1) week, or one (1), three (3)
or six (6) months from such date, in any case, as determined in
accordance with Clause 2.04 provided that, subject to the proviso
hereto, any Interest Period in respect of any such Disbursement
beginning after the Determination Date shall have a duration of
six (6) months; and
(ii) with respect to each Disbursement while bearing interest at the
Fixed Rate, the period commencing on, and including, the
Conversion Date to, but excluding, the first Fixed Rate Payment
Date thereafter; and thereafter each successive period commencing
on and including the last day of the next preceding Interest
Period to, but excluding, the next succeeding Fixed Rate Payment
Date;
provided however that notwithstanding anything in this Agreement to the
contrary, (x) an Interest Period that would otherwise extend beyond a
Payment Date shall end on such Payment Date, (y) the final Interest
Period shall end on the Final Maturity Date and (z) if the last day of an
Interest Period would otherwise be a day that is not a Banking Day, such
last day shall be the next succeeding Banking Day unless, in the case of
an Interest Period of 1, 3 or 6 months when a Disbursement bears interest
at the Floating Rate, such next succeeding Banking Day falls in the next
calendar month in which case the last day of the relevant Interest Period
shall be the next preceding Banking Day;
8
<PAGE>
"Lease" means, with respect to each Aircraft, the aircraft lease
agreement in such form as may reasonably be acceptable to EXIM and the
Facility Agent entered into or, as the context may require, to be entered
into between (1) the Borrower and (2) the Lessee under which the
Borrower, as lessor, agrees to lease such Aircraft to the Lessee, as
lessee, and "Leases" shall mean, collectively, all of such Leases;
"Lending Office" means, in relation to a Lender, the office identified
below its name in Schedule 1 or such other office which becomes its
lending office in accordance with the terms hereof;
"Lessee" means China Yunnan Airlines, a legal entity organized under
applicable laws and decrees of the People's Republic of China having its
principal office at Wu Jia Ba Airport, Kunming, Yunnan, People's Republic
of China;
"Lessor Parent" means Trident Trust Company (Cayman) Limited, a company
incorporated and organized under applicable law of Cayman Islands whose
registered office is at P.O. Box 847, George Town, Grand Cayman, Cayman
Islands, British West Indies;
"LIBOR" means, with respect to any Interest Period for which the same is
to be calculated, the rate per annum (expressed as a decimal) for
deposits in U.S. Dollars for a period equal or comparable to such
Interest Period which appears on the Telerate Page 3750 (or such other
page as may replace such Telerate Page 3750 for the purpose of displaying
London interbank offered rates for U.S. Dollar deposits), at
approximately 11:00 A.M. London time on the day which is two (2) Banking
Days (or such shorter period as may be agreed by the Facility Agent and
the Borrower) prior to the first day of such Interest Period provided,
that if for any such Interest Period or comparable period no such rate
appears on the Telerate Page 3750 (or replacement page), LIBOR in respect
of such Interest Period shall be the rate per annum quoted by the
Reference Bank at approximately 11:00 A.M. London time (or as soon
thereafter as practicable) on the day which is two (2) Banking Days (or
such shorter period as may be agreed by the Facility Agent and the
Borrower) prior to the first day of such Interest Period for the offering
by the Reference Bank to leading banks in the London interbank market of
U.S. Dollar deposits having a term comparable to such Interest Period and
in an amount comparable to the amount for which LIBOR is to be
calculated;
"Liquidity Agreement" means, in connection with the Securitization, if
any, the irrevocable revolving liquidity agreement entered into by the
Liquidity Provider, as such agreement may be amended, modified or
supplemented from time to time hereafter with the consent of EXIM and in
accordance with the terms thereof;
"Liquidity Provider" means, ABN AMRO BANK N.V., Seattle Branch, or any
successor thereunder under the Liquidity Agreement;
"Loan" or "Loans" has the meaning ascribed to such term in Clause 2.01
hereof;
9
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"Losses" means any losses, costs, charges, expenses, interest, fees
(including, without limitation, reasonable legal fees), payments,
demands, liabilities, claims, actions, proceedings, penalties, damages,
adverse judgements, orders or other sanctions, but excludes Taxes;
"Majority Lenders" means, on any day, (a) if the Loan is not outstanding
on such day, a group of Lenders whose Commitments on such day amount or
aggregate to more than sixty seven per cent (67%) of the Aggregate
Commitment on such day; and (b) if the Loan is outstanding on such day, a
group of Lenders to which an aggregate of more than sixty seven per cent
(67%) of the Loan then outstanding is (or, immediately prior to its
repayment, was then) owed;
"Make-Whole Amount" means, with respect to a Fixed Rate Note the
principal of which is being prepaid pursuant to Clause 6.04 hereof, an
amount (if greater than zero) equal to (a) the discounted cash flow of
the remaining installments of principal and interest payable in respect
of such Fixed Rate Note as determined on the date of the payment required
or permitted to be made by the Borrower in respect thereof minus (b) the
outstanding principal of such Fixed Rate Note on the date of such payment
in each case without giving effect to the prepayment. In determining the
discounted cash flow, the discount rate to be applied shall be the U.S.
Treasury Rate for maturities similar to the weighted average term on the
installments of such Fixed Rate Note to be paid. For purposes of this
definition, "U.S. Treasury Rate" shall mean that rate which, for the day
which is five (5) Banking Days prior to the date of prepayment of a Fixed
Rate Note, is specified in the Federal Reserve Statistical Release, H.15
(519) Selected Interest Rates for the category entitled "Treasury Bills,
Secondary Market" or, if not included in such category, the category
entitled "Treasury Constant Maturities" having maturities as close as
practicable to the then weighted average life to final maturity of the
Fixed Rate Note or Fixed Rate Notes the principal of which is being
prepaid;
"Mortgage" means, in respect of each Aircraft, the deed of mortgage
relating to, inter alia, the mortgage of such Aircraft entered into, or
as the context may require, to be entered into between the Borrower and
the Security Trustee;
"New York Banking Day" means any day (other than a Saturday or Sunday) on
which commercial banks in New York, New York are open for the conduct of
a commercial lending business;
"Note" means, on any day, any Fixed Rate Note or Floating Rate Note
outstanding on such day and "Notes" means collectively all of the Fixed
Rate Notes or Floating Rate Notes, as applicable, outstanding on such
day;
"Notice of Conversion" shall have the meaning set forth in Clause 4.01;
"Notice of Drawing" means a notice in the form, or substantially in the
form, set out in Appendix 1;
10
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"Operative Documents" means this Agreement, each Note, each Lease, the
Reimbursement and Indemnity Agreement and the Security Documents;
"Payment Date" means prior to or on the Conversion Date, each Floating
Rate Payment Date and, thereafter, each Fixed Rate Payment Date;
"Pro-Rata Share" has the meaning ascribed to such term in Clause 2.01
hereof;
"Proceeds Agreement" means the proceeds agreement entered into or, as the
context may require, to be entered into between the Borrower, the Lessee,
EXIM, ECGD, the Facility Agent, the Lenders, the ECGD Facility Agent, the
ECGD Lenders the Commercial Facility Agent, the Commercial Lenders and
the Security Trustee;
"Purchase Agreement Assignment" means with respect to each Aircraft, the
purchase agreement assignment by and among China Aviation Supplies
Corporation, as assignor, the Borrower, as assignee, and the Lessee, as
lessee, pursuant to which the Borrower has acquired certain rights under
the Aircraft Purchase Agreement in respect of such Aircraft;
"Reference Bank" means ABN AMRO BANK, N.V., Chicago branch, or such other
financial institution, acceptable to EXIM, as may be selected from time
to time by the Facility Agent;
"Reimbursement and Indemnity Agreement" means the Reimbursement and
Indemnity Agreement dated as of the date of the initial Disbursement
hereunder among EXIM, the Borrower and the Lessee;
"Relevant Fraction" means, as of any date of determination and in respect
of an Aircraft, that portion of the principal amount of the Loan
outstanding on such date determined by the Facility Agent, the Borrower
and EXIM to be attributable to the EXIM-approved cost of the Aircraft
included in the outstanding principal amount of the Disbursement made in
respect of such Aircraft and, without duplication, a pro-rata portion of
the aggregate Exposure Fee and aggregate Approved Services included in
the outstanding principal amount of all Disbursements made hereunder on
or prior to such date;
"Rolls Royce Warranties Agreement" means the agreement to be entered into
in respect of the Aircraft by the Lessee, China Aviation Supplies
Corporation, the Borrower, the Security Trustee and Rolls Royce
Commercial Aero Engines Limited, as agent for and on behalf of the Engine
Manufacturer;
"Secured Property" means the property and/or assets subject to the
Security Interests created pursuant to the Security Documents;
11
<PAGE>
"Securitization" means a securitization of the Fixed Rate Notes pursuant
to which the same may be assigned to the Trustee;
"Securitization Documents" means any trust indenture, certificate,
underwriting agreement or other instrument, document or agreement
relating to the Securitization including, without limitation, the
Underwriting Agreement, the Liquidity Agreement and the Trust Agreement.
"Security Assignment" means the deed of security assignment relating to,
inter alia, the assignment of the Lease, ICBC Guarantees and Insurances
entered into among the Borrower, the Lessee and the Security Trustee;
"Security Documents" means each Mortgage, the Share Mortgage, each
Security Assignment, the Proceeds Agreement, the Boeing Warranties
Agreement, the Rolls-Royce Warranties Agreement and the Co-ordination
Agreement;
"Security Interest" means (a) any lien, mortgage, charge, deed of trust,
encumbrance, pledge, hypothecation, attachment, license, assignment by
way of security or security interest, in each case of any kind and
howsoever arising (including, without limitation, pursuant to applicable
law), (b) any other preferential arrangement resulting in a secured
transaction or having the same economic or legal effect as any of the
foregoing, (c) any agreement to give any of the foregoing, or (d) any
arrangement to prefer one creditor over another creditor;
"Taxes" means any and all present and future gross or net income,
receipts, franchise, business, transfer, capital, property, excise or
stamp taxes, levies, withholdings, assessments, imposts, duties, fees or
charges of whatever nature, including, without limitation, any
documentation, registration, landing, sales, use, value added or similar
tax imposed by any government agency or taxing authority of any
jurisdiction or any political subdivision thereof together with any
penalties, fines or interest thereon, and "Taxation" shall be construed
accordingly;
"Transfer Agreement" means the transfer agreement executed or to be
executed by the Lenders, the Borrower and the Trustee substantially in
the form of Appendix 4 hereto, in connection with a transfer to the
Trustee of the Loan in connection with a Securitization;
"Trust" means the trust to be established in connection with the
Securitization by the Trustee pursuant to the Trust Agreement;
"Trust Agreement" means the Declaration of Trust to be entered by the
Trustee establishing the Trust;
"Trustee" means LaSalle National Bank or such other financial institution
reasonably acceptable to the Borrower and EXIM which acts as the trustee
of the
12
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Trust under the Trust Agreement and any successor thereto in accordance
with the terms of the Trust Agreement;
"Underwriter" means ABN AMRO BANK N.V. or any of its affiliates;
"Underwriting Agreement" means the underwriting agreement to be entered
into in respect of the Trust;
"U.S. Trade" means U.S. Trade Funding Corporation, a Delaware
corporation.
1.02 Construction. In this Agreement, unless otherwise defined herein or
------------
unless the context requires otherwise, terms and expressions defined in a
Lease have the same meanings when used in this Agreement, a reference to
the singular shall include the plural and vice versa and any reference
to:
an "authorization" includes any approvals, consents, licenses, permits,
franchises, permissions, registrations, resolutions, directions,
declarations and exemptions;
"indebtedness" includes any obligation of any person for the payment or
repayment of money, whether present or future, actual or contingent
including, but not limited to, any such obligation:
(a) under or in respect of any acceptance, bill, bond, debenture, note
or similar instrument;
(b) under or in respect of any guarantee, indemnity, counter-security
or other assurance against financial loss;
(c) in respect of the purchase, hire or lease (financial or otherwise)
of any asset or service; or
(d) in respect of any indebtedness of any other person whether or not
secured by or benefiting from a Security Interest on any property
or asset of such person;
"law" and/or "regulation" includes any constitutional provisions,
treaties, conventions, statutes, acts, laws, decrees, ordinances,
subsidiary and subordinate legislation, orders, rules and regulations
having the force of law and rules of civil and common law and equity;
an "order" includes any judgment, injunction, decree, determination or
award of any court, arbitration or administrative tribunal;
a "person" includes any individual, company, body corporate or
unincorporate or other juridical person, partnership, association, firm,
joint venture or trust or any
13
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federation, state or subdivision thereof or any government or agency of
any thereof;
"applicable law" includes, without limitation (i) applicable laws,
statutes, decrees, acts, codes, legislation, treaties and similar
instruments and, in respect of any of the foregoing, any instrument
passed in substitution therefor or for the purposes of consolidation
thereof with any other instrument or instruments, (ii) final judgments,
orders, determinations or awards of any court from which there is no
right of appeal or if there is a right of appeal such appeal is not
prosecuted within the allowable time, and (iii) rules, regulations,
permits, authorizations, approvals, certificates and consents of,
registrations and filings with and exemptions by any person;
"government agency" includes any federal government or government of a
state or subdivision thereof and any ministry, department, authority,
official, commission, bureau or other agency of any such government or
subdivision; and
"hereof", "herein" and "hereunder" and other words of similar import mean
this Agreement as a whole and not any particular part hereof.
1.03 Successors, Transferees and Assigns. The expressions "Borrower",
-----------------------------------
"Lenders", "Facility Agent", "Lessee", "Security Trustee", "Lessor
Parent", "Trustee", "ECGD Lenders", "ECGD Facility Agent", "Commercial
Lenders", "ECGD", "ICBC", "Commercial Facility Agent" and "EXIM" shall
where the context permits include their respective successors,
transferees and permitted assigns and any persons deriving title under
them. All references herein to "EXIM" shall be construed, where the
context permits, so as to include a reference to EXIM as an assignee or
transferee of the Lenders as a result of any assignment or transfer by
the Lenders to EXIM pursuant to the EXIM Guarantee.
1.04 Miscellaneous. In this Agreement, unless the context requires otherwise,
-------------
references to statutory provisions shall be construed as references to
those provisions as replaced, amended, modified or re-enacted from time
to time; words importing the singular include the plural and vice versa
and words importing a gender include every gender; references to this
Agreement or any Operative Document shall be construed as references to
such document as the same may be amended, modified, varied, novated or
supplemented from time to time; unless otherwise stated, references to
Clauses, Schedules and Appendices are to clauses of and schedules and
appendices to this Agreement. Unless the context otherwise requires all
references to this Agreement and/or the "Loan Agreement" in any other
Operative Document shall be construed so as to include the Notes. Clause
headings are inserted for reference only and shall be ignored in
construing this Agreement.
14
<PAGE>
2. THE FACILITY
------------
2.01 Disbursements. Subject to the terms and conditions set forth in this
-------------
Guaranteed Loan Agreement, each Lender hereby severally and not jointly
agrees, from time to time during the Availability Period, to make one or
more disbursements (all such disbursements made on a single Borrowing
Date in respect of an Aircraft being a "Disbursement" and, as of any
date, the then aggregate outstanding principal amount of all
Disbursements made on or prior to such date, as evidenced, prior to the
Conversion Date, by the Floating Rate Notes, and thereafter, by the Fixed
Rate Notes, being herein referred to as the "Loan"), in Dollars, to the
Borrower on each Borrowing Date in an amount in respect of each
Disbursement which equals the same proportion of such Disbursement as its
Commitment on such Borrowing Date bears to the Aggregate Commitments on
such Borrowing Date (such Lender's "Pro-Rata Share") provided, however,
-------- -------
that (i) a Lender's Pro-Rata Share of the principal amount of a
Disbursement shall not exceed the Available Commitment of the Lender,
(ii) the aggregate principal amount of a Disbursement shall not exceed
the EXIM Eligible Amount in respect of the relevant Financed Aircraft
except that the aggregate principal amount of a Disbursement may also
include up to 85% of the aggregate cost of Approved Services payable by
the Borrower in respect of another Aircraft and not included in another
Disbursement or otherwise previously financed hereunder and (iii) after
giving effect to such Disbursement, the aggregate principal amount of the
Loan shall not exceed the Aggregate Commitment.
2.02 Several Commitments. Each Disbursement under this Guaranteed Loan
-------------------
Agreement shall be made by the Lenders simultaneously and proportionately
to their respective Pro-Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Disbursement hereunder and that the Commitment of
any Lender shall not be increased or decreased without the prior written
consent of such Lender as a result of the failure by any other Lender to
perform its obligation to make a Loan. The failure of any Lender to make
available to the Facility Agent its Pro-Rata Share of any Disbursement
shall not relieve any other Lender of its obligation hereunder to make
available to the Facility Agent such other Lender's Pro-Rata Share of
such Disbursement on the date such funds are to be made available
pursuant to the terms of this Guaranteed Loan Agreement.
2.03 Purpose. The proceeds of the Facility shall be used towards financing
-------
the acquisition of, or refinancing indebtedness, if any, incurred to
acquire, the Aircraft and the payment of certain fees and expenses
relating thereto or in such other manner as the Facility Agent and EXIM
may approve, but failure of the Borrower to comply with this Clause 2.03
shall not prejudice the rights of the Facility Agent and/or Lenders or
EXIM under this Agreement or any other Operative Documents. None of the
Facility Agent, EXIM or any Lender shall have any responsibility to see
to the application of the proceeds by the Borrower.
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2.04 Availability. Subject to the conditions set forth in Clauses 3.01 and
------------
3.02 hereof, the Borrower may request one or more Disbursements on any
Banking Day during the Availability Period by delivering to the Facility
Agent and EXIM a Notice of Drawing no later than 12:00 noon (New York
City time) at least three (3) Banking Days (or such shorter period to
which the Facility Agent and EXIM may agree) in advance of the proposed
Borrowing Date. The Notice of Drawing shall specify (a) the Borrowing
Date (which shall be a Banking Day) in respect of the Disbursement or
Disbursements, as relevant, (b) subject to Clause 2.01, the amount of the
proposed Disbursement or Disbursements, as relevant and (c) if such
Disbursement initially will bear interest at the Floating Rate, the
duration of the initial Interest Period in respect of such Disbursement
which duration shall be a period of one (1) day, one (1) week or one (1),
three (3) or six (6) months in any case as may be agreed by the Facility
Agent and the Borrower, provided, however, if the Facility Agent and the
Borrower cannot agree on the duration of an Interest Period, the duration
shall be one (1) month. At least three (3) Banking Days (or such shorter
period to which the Facility Agent may agree) prior to the end of each
Interest Period, the Borrower shall notify the Lender of the duration
which it has selected for the next succeeding Interest Period. Subject
to the provisions of the definition of "Interest Period," such duration
shall be one (1) day, one (1) week or one (1), three (3) or six (6)
months as may be agreed between the Facility Agent and the Borrower,
provided, however, if the Facility Agent and the Borrower cannot agree on
the duration of an Interest Period, the duration shall be one (1) month.
In the event that the Borrower fails to select the duration of an
Interest Period in accordance with the provisions of this Clause 2.03,
the Borrower shall be deemed to have selected an Interest Period with a
duration of one (1) month unless the existing Interest Period has a
duration of one (1) week or one (1) day in which case the Borrower shall
be deemed to have selected an Interest Period with a duration of one (1)
day.
2.05 Notification. The Facility Agent shall promptly notify the Lenders of
------------
the Notice of Drawing whereupon each Lender shall, subject to the
provisions of this Agreement, make available to the Borrower on the
relevant Borrowing Date its Pro-Rata Share of the Disbursement
ascertained in accordance with Clause 2.01, in the manner specified in
Clause 10.01.
2.06 Notice of Drawing Irrevocable. The Notice of Drawing once given shall be
-----------------------------
irrevocable and the Borrower shall be bound to borrow the Disbursement in
accordance therewith, except as otherwise provided in this Agreement.
Subject to any agreement to the contrary, if for any reason (other than a
default by the Facility Agent or any Lender) a Disbursement is not made
on the Borrowing Date specified in the relevant Notice of Drawing, the
Borrower shall on demand pay to the Facility Agent for the account of
each Lender such amount (if any) as such Lender may certify to be
necessary to compensate it for any Losses (but not to include loss of the
Applicable Margin) in liquidating, placing or redeploying funds arranged
for the purpose of the Disbursement or otherwise as a consequence of the
Disbursement not having been made on the Borrowing Date specified in the
16
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relevant Notice of Drawing provided however that if (A) the Borrower has
notified the Facility Agent that a Disbursement cannot be made on the
Borrowing Date specified in the relevant Notice of Drawing because the
conditions precedent in Clause 3 cannot be satisfied as a result of the
failure of the Manufacturer to obtain an FAA Certificate of Airworthiness
for the relevant Aircraft or due to such Aircraft failing to be
technically acceptable to the Borrower (in the exercise of its reasonable
discretion); and (B) the Facility Agent and the Borrower reasonably
expect that such certificate will be obtained or that such Aircraft will
be technically acceptable to the Borrower within seven (7) Banking Days,
then, notwithstanding any instructions to the contrary in the Notice of
Borrowing, the proceeds of such Disbursement shall be disbursed to an
account with the Facility Agent in the name of the Borrower. If such
conditions precedent are subsequently satisfied and the EXIM Guarantee
obtained within seven (7) Banking Days of the originally scheduled
Borrowing Date, on such date, the funds held in the Borrower's account
shall be disbursed in accordance with the instructions of the Borrower
and the Disbursement shall be deemed to have been made on the originally
scheduled Borrowing Date. If such conditions precedent cannot be
satisfied or the EXIM Guarantee cannot be obtained within such seven (7)
Banking Days period, then on the next Banking Day the Facility Agent
shall apply all funds in the Borrower's account to prepay the relevant
Disbursement, together with interest accrued thereon, and any losses,
certified by each Lender, incurred as a result of such prepayment. To
the extent such proceeds are not sufficient to pay such amounts in full,
the Borrower shall, on demand, pay the Facility Agent for the account of
the Lenders the amount of such deficiency. In either case, the Borrower
will be credited, at the time of disbursement or application with
interest on the amount held in the Borrower's account, at the available
overnight interest rate, for the period from and including the date of
deposit to but excluding the date of disbursement or application.
2.07 Cancellation. Any part of any Commitment which is not drawn at the
------------
expiry of the Availability Period shall automatically be cancelled.
2.08 Notes.
-----
(A) Simultaneously upon each Disbursement being made hereunder, the
Borrower shall execute and deliver a Floating Rate Note (if such
Disbursement occurs prior to the Conversion Date) or a Fixed Rate
Note (if such Disbursement occurs on the Conversion Date) to the
Facility Agent evidencing the principal amount of such
Disbursement, in the form or substantially in the form set out in
Part 1 of Appendix 3 or Part 2 of Appendix 3, respectively, and
indicating the Aircraft to which such Note relates, provided that
the schedule to such Note shall be in a form agreed by the
Borrower, the Lessee, the Facility Agent and EXIM.
(B) Each repayment and permitted prepayment by the Borrower made on
account of principal of any Note shall be recorded (i) prior to
the
17
<PAGE>
Conversion Date, by the Facility Agent and the relevant Lender on
their respective books and by the Facility Agent on the schedule
attached to such Note, and (ii) on and after the Conversion Date,
by the Trustee on its books and on the schedule attached to such
Note. Failure by the Facility Agent or the Trustee, as the case
may be, to make correctly such notation shall not affect the
obligations of the Borrower hereunder or under the Notes. Upon
payment in full by the Borrower of all amounts owing under, or in
respect of, any Note, such Note will be cancelled by the Facility
Agent and returned to the Borrower through EXIM.
(C) If any Note is mutilated, lost, stolen or destroyed, the Borrower
shall issue a new Note of the same type, date, maturity and
denomination as the Note so mutilated, lost, stolen or destroyed,
provided, in the case of a mutilated Note such mutilated Note
shall be delivered to the Borrower through EXIM and in the case of
a lost, stolen or destroyed Note, there shall first be furnished
to the Borrower and EXIM an instrument of indemnity and evidence
of such loss, theft or destruction in each case reasonably
satisfactory to the Borrower and EXIM.
3. CONDITIONS PRECEDENT
--------------------
3.01 Conditions to Initial Disbursement. Except as otherwise provided herein,
----------------------------------
the obligation of each Lender to advance its Pro-Rata Share of each
Disbursement requested by the Borrower on the initial Borrowing Date to
occur hereunder shall be subject to the receipt, on or prior to such
Borrowing Date, by the Facility Agent and EXIM of the documents set out
in Part I of Appendix 2 hereto.
3.02 Conditions to all Disbursements. Except as otherwise provided herein,
-------------------------------
the obligation of each Lender to advance its Pro-Rata Share of any
Disbursement shall be subject to the satisfaction, or waiver by EXIM and
the Facility Agent, of each of the following conditions precedent:
(i) the Facility Agent and EXIM shall have received a duly executed
Notice of Drawing in accordance with the provisions of Section
2.04;
(ii) each of the Facility Agent and EXIM shall have satisfied itself
that all conditions precedent to the leasing of the Aircraft
related to such Disbursement under the terms of the Lease
applicable thereto have been, or will on the relevant Borrowing
Date be, fulfilled, satisfied or waived to its satisfaction and
each of the Facility Agent and EXIM shall have received such
original or certified copies of each of the documents delivered to
the Borrower by the Lessee or to the Lessee by the Borrower
pursuant to Clause 4 of such Lease;
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<PAGE>
(iii) the Borrower shall deliver to the Facility Agent and EXIM the
documents specified in Part II of Appendix 2, on or before the
relevant Borrowing Date;
(iv) all of the representations and warranties of the Borrower
contained in or repeated pursuant to Clause 11 (other than
representations and warranties, if any, which expressly speak only
as of a different day) shall be true and correct in all material
respects on and as of the relevant Borrowing Date as though made
on and as of such date both before and after taking into account
the Disbursement to be made;
(v) no Default or Event of Default shall have occurred and be
continuing or would result from the making of the Disbursement;
and
(vi) all of the Operative Documents in respect of the Aircraft related
to such Disbursement shall be in full force and effect on the
relevant Borrowing Date.
The submission of a Notice of Drawing shall be deemed to be a
representation by the Borrower that all of the conditions set forth in
sub-clauses (iv), (v) and (vi) above have been satisfied in respect of
the related Disbursement.
3.03 Facility Agent's and EXIM's Approval. All the documents and evidence
------------------------------------
referred to in Clauses 3.01 and 3.02 shall be in form and substance
satisfactory to the Facility Agent and EXIM. Copies required to be
certified shall be certified in a manner satisfactory to the Facility
Agent and EXIM by a director or responsible officer of the Borrower, the
Lessee or other relevant parties concerned.
4. CONVERSION TO FIXED RATE
------------------------
4.01 Provided that no Default or Event of Default has occurred and is
continuing and subject to the conditions precedent set forth in Section
4(b) of the EXIM Guarantee and in Part III of Appendix 2 hereto having
been fulfilled or waived on or prior to the Conversion Date, (i) upon
receiving instructions from the Underwriter, the Borrower may, and if the
Borrower shall have approved the Fixed Rate in accordance with the
pricing procedure set forth in Appendix 6 or (ii) if the Conversion shall
not have then occurred, on March 5, 1997 (or such later date as the
Borrower and the Facility Agent may agree), the Borrower shall by notice
delivered to EXIM and the Facility Agent at least five (5) New York
Banking Days (or such shorter period as may be agreed by EXIM, the Lender
and the Borrower) prior to the Conversion Date, specify that on the
Conversion Date interest on the Loan shall be converted, in whole and not
in part, from the Floating Rate to the Fixed Rate, provided, however, if
the Conversion Date is not the last day of an Interest Period or if the
Conversion does not occur on such date as a result of the relevant
conditions herein not being satisfied or waived (except for those
conditions
19
<PAGE>
set forth in Section 4(b) of the EXIM Guarantee which have not been
fulfilled by the Lenders), the Borrower shall pay to the Lenders all
amounts required to be paid in respect of the Loan pursuant to Clause
6.07(b) hereof. Notwithstanding the foregoing and anything herein or in
any other Operative Document to the contrary, the Fixed Rate shall under
no circumstances become applicable to the Loan (nor shall the Conversion
occur) unless the conditions to the Conversion set forth herein have been
satisfied (or waived in writing by EXIM, in the case of any condition set
forth in Section 4(b) of the EXIM Guarantee, and by EXIM and the Facility
Agent, in the case of Part III of Appendix 2). Absent the satisfaction
(or waiver in accordance with the terms hereof) of such conditions, the
Loan shall continue to bear interest at the Applicable Rate referred to
in clause (i) of the definition thereof. Subject as herein provided, any
such notice shall be substantially in the form of Appendix 5 hereto
(hereinafter a "Notice of Conversion"), shall be irrevocable and binding
--------------------
on each of the parties hereto, and shall specify the Fixed Rate. A
Notice of Conversion shall be deemed effective upon its signature by the
Borrower and the Underwriter and its receipt by EXIM and the Facility
Agent. Upon receipt of a Notice of Conversion, the Facility Agent
promptly shall notify the Lenders of the Conversion Date.
4.02 If a Notice of Conversion has been delivered by the Borrower as
contemplated by Clause 4.01 then:
(i) each of the Lenders shall and hereby agrees and undertakes that
not later than 9:00 a.m. New York time on the Conversion Date it
shall deliver to the Trustee a duly executed Transfer Agreement
whereby, upon (a) the due execution thereof by the Trustee, the
Facility Agent and the Borrower, and (b) satisfaction (or waiver)
of all conditions precedent specified therein, such Lender shall,
with effect from the Conversion Date, assign and transfer to the
Trustee all of its rights, obligations and benefits hereunder and
to and under the Floating Rate Notes with respect to its ratable
share of the Disbursements and thereupon be released from all of
its obligations hereunder and thereunder;
(ii) the Borrower shall and hereby agrees and undertakes that it shall
(a) immediately upon receipt of the same, execute the Transfer
Agreement, and (b) not later than 10:00 a.m. New York time on the
Conversion Date deliver to the Trustee in Washington, D.C. (or
such other location as may be agreed between the Borrower, EXIM
and the Trustee) a Fixed Rate Note for each Aircraft in a
principal amount equal to the Relevant Fraction for such Aircraft
on the date of issuance of such Note, provided, however, that the
aggregate principal amount of all Fixed Rate Notes so delivered on
the Conversion Date shall equal the aggregate principal amount of
the Loan outstanding on the Conversion Date (after giving effect
to any principal payments in respect of the Loan made on the
Conversion Date in accordance with the provisions hereof). Each
such Note (i) subject to the terms hereof, with effect from the
20
<PAGE>
Conversion Date shall bear interest at the Fixed Rate, (ii) shall
be made payable to the order of the Trustee at the account and
address specified by the Trustee, (iii) shall be dated the date of
its issuance hereunder, (iv) shall be repayable as to principal in
accordance with the provisions of Clause 6.01, and (v) shall
indicate the Aircraft to which the Note relates;
(iii) EXIM, upon (a) return of the Floating Rate Notes with the EXIM
guarantee legend thereon or attached thereto, (b) receipt of the
Transfer Agreement duly executed by the Trustee, the Lenders, the
Facility Agent and the Borrower evidencing the Trustee's
acceptance of the duties and obligations of the Facility Agent and
the Lenders under the EXIM Guarantee, and (c) satisfaction of all
relevant conditions precedent to the Conversion as specified in
the EXIM Guarantee and on Part III of Appendix 2, shall and hereby
agrees and undertakes that it shall on the Conversion Date endorse
each Fixed Rate Note with EXIM's guarantee legend and return each
Floating Rate Note to the Borrower for cancellation (after
cancelling EXIM's guarantee legend thereon); and
(iv) the Facility Agent shall and hereby agrees and undertakes that it
shall (a) immediately upon receipt of the Transfer Agreement
executed by each of the Lenders and the Borrower, execute the
Transfer Agreement and deliver the Transfer Agreement to the
Trustee for execution by the Trustee and (b) return to EXIM the
Floating Rate Notes with the EXIM guarantee legend thereon or
attached thereto.
4.03 Notwithstanding anything herein to the contrary, it is hereby agreed
that, if on the Conversion Date the conditions set forth in Section 4 of
the Transfer Agreement have been duly satisfied and provided EXIM shall
have endorsed its guarantee legend on the Fixed Rate Notes, then, on and
with effect from the Conversion Date (i) the Trustee shall succeed to all
the rights, benefits and obligations expressed to be assigned and
transferred to it pursuant to such Transfer Agreement, (ii) neither the
Facility Agent nor the Lenders shall have any further rights or benefits
hereunder with respect to the Loan or under such Notes and shall be
released from all of their respective obligations hereunder and (iii) all
references herein to the Facility Agent shall be deemed to be references
to the Trustee.
4.04 Subject to Clauses 4.01 and 4.02 hereof, if a Notice of Conversion is
issued but for any reason the Trustee fails by 3:00 p.m. New York time
(or, such later time on which the Trustee and the Facility Agent may
mutually agree) on the Conversion Date to pay the full amount payable by
it to the Lenders pursuant to the Transfer Agreement, the Facility Agent
shall advise the Borrower and EXIM and such Conversion shall not take
effect on such Conversion Date but shall be postponed until the next
Banking Day (such date or any subsequent day to which such Conversion is
postponed pursuant to this Clause 4.04, a "Postponed Conversion Date")
-------------------------
and the provisions of Clause 4.01 and 4.02 shall apply thereto as though
the Postponed Conversion Date were the Conversion Date. If the
21
<PAGE>
Trustee fails to pay the full amount payable by it to the Lenders as
aforesaid by 3:00 p.m. New York time (or such later time as the Trustee
and the Facility Agent may mutually agree) on any Postponed Conversion
Date, the Facility Agent shall advise the Borrower and EXIM thereof and
such Conversion shall be further postponed until the next Banking Day
(provided that such Conversion may not be postponed more than five times)
and the provisions of Clauses 4.01 and 4.02 shall apply thereto as though
the Postponed Conversion Date were the Conversion Date. If after five
Postponed Dates (or such other number of Postponed Conversion Dates as
the Borrower, EXIM and the Facility Agent may agree) such Conversion has
not occurred, such Conversion shall not take effect and the provisions of
Clause 4.06 shall apply as from the last Postponed Conversion Date.
4.05 With respect to the Conversion Date and any Postponed Conversion Date, if
the provisions of Clause 4.04 apply, then each period between such
Conversion Date and each day to which such Conversion is postponed shall
be deemed to be an Interest Period and the rate of interest applicable to
the Loan during such Interest Period shall be the sum of the Federal
Funds Rate applicable to such Interest Period and the Applicable Margin.
4.06 With respect to the Conversion, if after five Postponed Conversion Dates
(or such other number of Postponed Conversion Dates as the Borrower, EXIM
and the Facility Agent may agree), the Conversion shall not have
occurred, then:
(i) the duration of the Interest Period starting on the last such
Postponed Conversion Date shall end on the next Floating Rate
Payment Date;
(ii) the Floating Rate during such Interest Period shall be the rate
per annum which is the sum of the Applicable Margin and the rate
per annum determined by the Facility Agent to be the rate (rounded
upwards, if not already such a multiple, to the nearest whole
multiple of one-sixteenth of one percent (1/16%)) on the last day
of such Interest Period to be equal to that which expresses as a
percentage rate per annum the cost to the Lenders of funding from
whatever sources each may select during such Interest Period; and
(iii) the Interest Periods with respect to the Loan commencing on and
after such Floating Rate Payment Date and the rate of interest
applicable thereto shall be established in accordance with Clause
5.02 hereof.
4.07 Upon any Conversion taking effect, interest shall accrue, and be payable,
on the Loan at the Fixed Rate in accordance with Clause 5.02 hereof.
4.08 Each of the Facility Agent, the Lenders, EXIM and the Security Trustee
hereby agree to execute such documents and to take such actions as the
Borrower or the Underwriter may reasonably request in order to effect the
Conversion. Without limiting the foregoing or any other provision of
this Agreement, the Facility Agent
22
<PAGE>
and each Lender undertakes and agrees with the Borrower that on or prior
to the Conversion Date (i) the Facility Agent and the Lenders will not
agree to any amendment to the EXIM Guarantee without first obtaining the
consent of the Borrower, which consent shall not be unreasonably withheld
or delayed, (ii) the Facility Agent and the Lenders will perform their
respective obligations under the EXIM Guarantee, and (iii) the Facility
Agent will deliver, or cause to be delivered, to EXIM, in connection with
the Conversion and as a condition thereto, the Floating Rate Notes marked
"cancelled".
5. INTEREST
--------
5.01 Interest. The Borrower shall pay interest in respect of the Loan at the
--------
Applicable Rate for each day from, and including, the Borrowing Date to,
but excluding, the date on which the Loan is repaid in full in accordance
with the provisions of this Clause.
5.02 Rate and Calculation. When evidenced by a Floating Rate Note, the Loan
--------------------
shall bear interest at the then applicable Floating Rate. When evidenced
by a Fixed Rate Note, the Loan shall bear interest at the Fixed Rate.
Interest shall accrue from day to day during each Interest Period,
including the first day of such Interest Period but excluding the last,
and (i) on or prior to the Conversion or if the Determination Date has
occurred, shall be paid, in arrears, on the last day of each Interest
Period (or, in the case of an Interest Period with a duration of less
than one (1) month, such later date as the Facility Agent may agree) and
(ii) after the Conversion, shall be paid in arrears on each Payment Date.
The Floating Rate shall be calculated on the basis of a year of 360 days
and actual days elapsed. The Fixed Rate shall be calculated on the basis
of a 360-day year consisting of twelve (12) months of thirty (30) days
each. Default interest shall accrue from day to day and shall be
calculated on the basis of a year of 360 days and the actual number of
days elapsed and shall otherwise be payable in accordance with Clause 14.
6. REPAYMENT, PREPAYMENT AND CANCELLATION
--------------------------------------
6.01 Repayment. Subject to the provisions of this Agreement, the Borrower
---------
shall repay the principal amount of each Note in installments on each
Payment Date in the amounts set out therein provided, however, the
principal payable on the Final Maturity Date for the Loan shall in all
cases be in an amount equal to the entire principal amount of the Loan
outstanding on such date, and such principal installment shall be paid
together with all accrued and unpaid interest and all other amounts then
owing hereunder in respect thereof. The parties hereto acknowledge and
agree that, to the extent applicable, payment by the Liquidity Provider
of any amount under the Liquidity Agreement shall in no event constitute
(or be deemed to constitute) payment of any amounts under this Agreement
(or cure (or be
23
<PAGE>
deemed to cure) any Event of Default which results from any failure to
pay any amount under this Agreement).
6.02A Prepayments. (a) The Borrower may prepay all or part of the Floating
-----------
Rate Notes relating to any Aircraft on the last day of any applicable
Interest Period, provided that:
(i) the Borrower shall have given to the Lender and EXIM not
less than thirty (30) days' prior written notice specifying
the amount and date of prepayment; and
(ii) the amount of any partial prepayment shall be at least five
million Dollars (US$5,000,000) in aggregate among such
Notes;
(b) the Borrower shall be required to prepay all or part of the
Floating Rate Notes relating to any Aircraft, if on any date
pursuant to clause 4.8 and clause 4.10 of the ECGD Loan Agreement,
the Borrower:
(i) prepays the whole of the ECGD Loan, then on such date the
Borrower shall be obliged to prepay the entire outstanding
principal amount of the Floating Rate Notes applicable to
the Aircraft; or
(ii) prepays part of the ECGD Loan, then on such date the
Borrower shall be obliged to prepay the same proportion of
the outstanding principal amount of the Floating Rate Notes
applicable to the Aircraft as the principal amount of the
relevant ECGD Loan which is prepaid bore to the principal
amount of the relevant ECGD Loan immediately prior to such
prepayment;
(c) if the Borrower gives any notice to prepay the whole or part of
the ECGD Loan pursuant to clause 4.8 or clause 4.10 of the ECGD
Loan Agreement, the Borrower shall simultaneously with the giving
thereof provide a copy to the Lender and EXIM provided that any
failure or delay by the Borrower in providing such copy to the
Lender or EXIM shall not prejudice the Borrower's obligations
under Clause 6.02A(b)(i) and (ii);
(d) all accrued interest on the Floating Rate Note(s) to be prepaid
and all other sums then due and payable under this Agreement and
any other Operative Document relating to the relevant Aircraft
shall have been paid to the Lender and EXIM;
24
<PAGE>
(e) promptly following any prepayment contemplated by this Clause
6.02A the Lender and the Lessee shall prepare a substitute payment
schedule (in respect of the payments of principal and interest
payable by the Borrower hereunder after such prepayment has been
made), which substitute payment schedule shall be subject to the
prior approval of EXIM, and substitute Schedule 5 and Part 1 of
Schedule 6 to the relevant Lease (in respect of payments of A Rent
and A Termination Sum to be made by the Lessee under the relevant
Lease after such prepayment has been made) which substitute
schedules shall in the absence of manifest error be substituted
for the then existing payment schedule and Schedule 5 and Part 1
of Schedule 6 to the relevant Lease and be binding on all parties
hereto and on the Lessee. If any payment schedule is substituted
for the then existing payment schedule then such substitute
payment schedule shall become the payment schedule for all
purposes of this Agreement and this Agreement shall be construed
accordingly.
6.02B Limited Prepayment Rights After Conversion Date. The Borrower shall not
-----------------------------------------------
be entitled to prepay all or any part of a Fixed Rate Note except
pursuant to Clause 6.03 or Clause 6.04.
6.03 Casualty. If a Total Loss occurs in relation to any Aircraft (the "Lost
--------
Aircraft"), unless the Borrower shall have previously obtained EXIM's
written consent to the purchase by the Borrower of a Qualified
Replacement Aircraft (as hereinafter defined) and said aircraft shall
become subject to the terms of the related Lease, then on the Total Loss
Prepayment Date (as hereinafter defined) the Borrower shall prepay (i) if
the Total Loss Payment Date occurs prior to the Conversion Date, the then
outstanding principal amount of the Floating Rate Note or Floating Rate
Notes issued in respect of such Lost Aircraft, and (ii) if the Total Loss
Payment Date occurs on or after the Conversion Date, the then outstanding
principal amount of the Fixed Rate Note or Fixed Rate Notes issued in
respect of such Lost Aircraft (the amount to be prepaid in accordance
with (i) or (ii) above, being the "Lost Aircraft Amount"), together, in
either case, with accrued interest thereon to but excluding the date of
payment and all other sums due and payable under this Agreement and the
other Operative Documents relating to such Lost Aircraft Amount or the
Lost Aircraft to the Facility Agent, in the case of (i) above, or to EXIM
(or a paying agent designated by EXIM) (the "Total Loss Payment Agent")),
in the case of (ii) above. Such amount shall fall due and be payable by
the Borrower (regardless of whether any Insurance Proceeds in respect of
such Total Loss are actually paid or received by any Person) on the date
(the "Total Loss Prepayment Date"), which is the earlier of (i) the date
on which the Insurance Proceeds in respect of such Lost Aircraft are
received, (ii) the date on which Lessee is required, pursuant to Clause
16.03 of the relevant Lease, to make payment for a Total Loss with
respect to the Lost Aircraft and (iii) such earlier date as the Loan
becomes payable pursuant to Clause 13.02.
25
<PAGE>
For the purposes of this Clause 6.03, a "Qualified Replacement Aircraft"
shall mean an aircraft that (i) is either (a) a new aircraft of U.S.
manufacture, or (b) a used aircraft of U.S. manufacture that has not
previously been exported from the United States and, in either case, is
eligible for EXIM financing, (ii) complies with the terms of Clause 12 of
the Lease, (iii) is not subject to any Security Interest and (iv) is duly
subjected to the Security Interest of the Mortgage related thereto.
6.04 Voluntary Termination of Lease. If, at any time, the Lessee shall become
------------------------------
entitled to terminate a Lease pursuant to Clause 3.02 (voluntary
termination prior to or on the Conversion Date) or Clause 3.03 (voluntary
termination after the Conversion Date) thereof with respect to the
related Aircraft (for the purposes of this Clause 6.04, the "Terminated
Aircraft"), then on the date on which the Lessee is required to pay the
Termination Sum and any other amount in respect thereof, the Borrower
shall prepay (a) if the termination occurs prior to the Conversion Date,
the then outstanding principal amount of the Floating Rate Note or
Floating Rate Notes issued in respect of the Terminated Aircraft, and (b)
if the termination occurs on or after the Conversion Date, the then
outstanding principal amount of the Fixed Rate Note or Fixed Rate Notes
issued in respect of such Terminated Aircraft, together, in either case,
with (i) accrued interest thereon, (ii) all other sums due and payable
under this Agreement and any other Operative Document relating to such
Terminated Aircraft and (iii) in the case of a prepayment resulting from
a termination pursuant to Clause 3.03 of a Lease after the Conversion
Date, the relevant Make-Whole Amount. After the Conversion Date, any
payment under this Clause 6.04 shall be made to EXIM (or a paying agent
designated by EXIM).
6.05 Assignment of Prepaid Fixed Rate Notes to EXIM. Upon the occurrence of a
----------------------------------------------
prepayment of a Fixed Rate Note described in Clauses 6.03 or 6.04, each
Lender shall assign to EXIM pursuant to the EXIM Guarantee the applicable
Fixed Rate Note and the related rights hereunder.
6.06 Provisions Applicable to Prepayments. Any notice of prepayment given by
------------------------------------
the Borrower under any provision of this Agreement shall be irrevocable
and the Borrower shall be bound to make a prepayment in accordance
therewith. The Borrower may not prepay the Loan or any part thereof
except in accordance with the express terms of this Agreement. Amounts
prepaid may not be reborrowed under this Agreement.
6.07 Other Amounts. If the principal amount of a Floating Rate Note or any
-------------
part thereof is prepaid or repaid under any provision of this Agreement,
the Borrower shall pay to the Facility Agent for the account of each
Lender concerned:
(a) at the time of prepayment, such Lender's proportion of interest in
respect of such Floating Rate Note accrued to but excluding the
date of prepayment and all other sums due and payable by the
Borrower under this Agreement and the other Operative Documents to
which it is a party for the account of such Lender; and
26
<PAGE>
(b) if the date of such repayment or prepayment is not a Payment Date
or is not the last day of an Interest Period or is not made on
any date specified in a notice of prepayment given by the
Borrower or if the Borrower does not make a principal payment on
the relevant Payment Date, in any case, such amount as such
Lender may certify to be necessary to compensate it for any
Losses incurred as a consequence of such repayment, prepayment or
failure to pay including, without limitation, any Losses incurred
in connection with liquidating, placing or redeploying deposits
or funds (but excluding any loss of Applicable Margin) obtained
to fund such Lender's participation in the Floating Rate Note.
7. CHANGE OF LAW OR CIRCUMSTANCES
------------------------------
7.01 Unlawfulness (Lender). If after the date hereof and prior to the end of
---------------------
the Availability Period, any change in or introduction of any law,
regulation or regulatory requirement or any request of any central bank,
monetary, regulatory or other authority with which a Lender is bound to
comply or any order of any court renders it unlawful for any Lender to
give effect to or maintain its Available Commitment hereunder, such
Lender shall, through the Facility Agent, deliver to the Borrower a
notice (i) stating that a change or introduction or request referred to
above has occurred and (ii) specifying in reasonable detail the nature of
such change, introduction or request giving rise to the illegality. Upon
delivery of such notice, such Lender's Available Commitment shall be
reduced to zero provided always that, if requested by the Borrower, the
Lenders, the Facility Agent and the Borrower shall negotiate in good
faith with each other in accordance with Clause 7.03 with a view to
restructuring the transactions contemplated by this Agreement on an
alternative basis acceptable to the Lenders, the Facility Agent, EXIM and
the Borrower which would avoid the relevant circumstances referred to
above.
7.02 Increased Cost. If a Lender or the Facility Agent determines that after
--------------
the date hereof and prior to the Conversion Date any change in any
applicable law or regulation or any change in the interpretation or
application thereof or compliance by such Lender or the Facility Agent
with any applicable direction, request or requirement with which a Lender
is bound to comply (whether or not having the force of law) of any
central bank or competent governmental or other authority does or will
subject the Lender or the Facility Agent to any increase in the cost to
the Lender or the Facility Agent of agreeing to make or making, funding
or maintaining its Available Commitment or any Disbursement bearing
interest at the Floating Rate, such Lender shall promptly after first
becoming aware thereof through the Facility Agent so notify the Borrower,
and the Borrower shall from time to time upon demand pay to the Facility
Agent for the account of such Lender or the Facility Agent, as the case
may be, such additional amounts as shall be required to compensate the
Lender or the Facility Agent for such increased costs. Notwithstanding
anything to the contrary in this Agreement, no demand hereunder in
respect of any increased cost shall be made, and the Borrower shall not
be
27
<PAGE>
obligated to pay any amount in respect of an increased cost, after the
45th day following the earliest to occur of (i) the discovery of such
increased cost, (ii) the Conversion Date and (iii) the payment in full of
such Lender's Pro-Rata Share of the Loan and all interest accrued
thereon. So long as no Event of Default has occurred and is continuing,
the Borrower and the Facility Agent in consultation with such Lender
shall discuss in good faith in accordance with Clause 7.03 whether any
alternative arrangement may be made (at the Borrower's expense) to avoid,
mitigate or limit the extent of such increased cost including, without
limitation, the affected Lender or the Facility Agent transferring its
rights and obligations hereunder, although the Lender will not be
obligated to do so. So long as the circumstances giving rise to such
increased cost continue, and the Conversion Date shall not have occurred
prior to the date of prepayment hereinafter referred to, the Borrower
may, after giving the Facility Agent not less than three (3) Banking
Days' prior written notice, prepay all (but not less than all) of such
Lender's Pro-Rata Share of the Loan together with accrued but unpaid
interest thereon to the date of prepayment and any other amounts,
including amounts for which the Borrower is liable pursuant to this
Clause 7.02 or Clause 15.01, then due and payable by the Borrower to such
Lender under any of the Operative Documents to which it is a party, and
upon the giving of such notice such Lender's Commitment shall be
cancelled. Notwithstanding the foregoing, in no event shall the Borrower
be obligated to reimburse any Lender or the Facility Agent for any
increased cost arising after the Conversion Date.
7.03 Consultation. So long as no Event of Default has occurred and is
------------
continuing, if, in respect of the Facility Agent, any Lender or the
Borrower, as the case may be, circumstances arise which would or would
upon the giving of notice result in:
(a) an increase in the amount of any payment to be made to it or for
its account pursuant to Clause 8.01;
(b) a claim for indemnification under Clause 8.01; or
(c) the cancellation of such Lender's Commitment pursuant to Clause
7.01 or Clause 7.02 or claim for repayment pursuant to Clause
7.02,
then without prejudice to the provisions of Clauses 7.01, 7.02, or 8.01
or any of the obligations of the Borrower, the Facility Agent or the
affected Lender under this Agreement or the rights of the Facility Agent
or the Lenders under this Agreement, the Facility Agent or such Lender
shall, promptly upon its Lending Office becoming aware of the same, or
the Borrower shall promptly upon becoming aware of the same, notify the
Facility Agent, whereupon the Facility Agent shall promptly notify the
Borrower, as the case may require, and the Lessee thereof and, in
consultation with the Facility Agent and the Borrower, the Lenders, the
Facility Agent and the Borrower shall, for a period of up to sixty (60)
days after the date on which the Borrower and the Lessee were notified as
aforesaid, negotiate with each other and the Lessee in good faith with a
view to restructuring
28
<PAGE>
arrangements (at the Borrower's expense) so that payments can be made
hereunder or obligations maintained and performed in such manner, place,
currency and other circumstances as shall be lawful or as shall not give
rise to such increased payment, claim for such indemnity or occurrence
and so as to achieve substantially the same result as would have been
achieved had such claim, increased payment, reduction in Commitments and
claim for repayment or occurrence not occurred and in any event shall
consider requesting and permitting, but shall be under no obligation to
procure, any affected Lender to transfer its rights and obligations
hereunder.
7.04 Application. Any repayment or prepayment of any part of the Loan by the
-----------
Borrower pursuant to Clauses 7.02 or 8.02 shall reduce rateably the
remaining installments of principal of the Loan and the Schedules to the
Notes shall be adjusted appropriately in the manner set forth in Section
6.02A(e).
8. TAXES AND OTHER DEDUCTIONS
--------------------------
8.01 Taxes. All sums payable by the Borrower under this Agreement shall be
-----
paid in full without set-off or counterclaim or any restriction or
condition and free and clear of any Tax or other deductions or
withholdings of any nature now or hereafter imposed and the Borrower
shall, upon the demand of the Facility Agent or EXIM, indemnify EXIM, the
Facility Agent and the Lenders against any Taxes (other than Taxes on the
overall net income of the Lenders or the Facility Agent, as the case may
be, in the jurisdiction of its principal office or Lending Office, such
Taxes being "Excluded Taxes") which may be imposed, levied, collected,
assessed or otherwise claimed on, from or against the Lenders or EXIM or
the Facility Agent in respect of any sum paid or payable by or on behalf
of the Borrower under this Agreement and against all costs, losses,
expenses and liabilities which may be incurred or suffered by the Lenders
or EXIM or the Facility Agent as a result of any levy, collection,
assessment, imposition or claim contemplated by this Clause 8.01. If the
Borrower is required to make any deduction or withholding (on account of
Tax or otherwise) from any payment for the account of any Lender, the
Facility Agent or EXIM, the Borrower shall, together with such payment,
pay such additional amount as will ensure that such Lender, EXIM or the
Facility Agent receives (free and clear of any Tax or other deductions or
withholdings) the full amount which it would have received if no such
deduction or withholding had been required. The Borrower shall promptly
forward to the Facility Agent or EXIM, as appropriate, copies of official
receipts or other evidence showing that the full amount of any such
deduction or withholding has been paid over to the relevant Taxation or
other authority. If any Lender or the Facility Agent shall receive any
amount in respect of an Excluded Tax, such person hereby agrees promptly
to refund such amount to the Borrower.
8.02 Mitigation. Should the circumstances described in Clause 8.01 arise or
----------
have arisen, so long as no Event of Default has occurred and is
continuing, the Facility
29
<PAGE>
Agent, EXIM (if EXIM shall be so affected) and the Borrower shall discuss
in accordance with Clause 7.03 arrangements satisfactory to each of the
Facility Agent, the relevant Lender, EXIM (if EXIM shall be so affected)
and the Borrower which would mitigate or limit the amount and extent of
any such withholdings or deductions. Should the parties fail to make
satisfactory arrangements to mitigate or limit the amount and extent of
any such deductions or withholdings as aforesaid, the Borrower shall have
the option at any time after such discussion period but prior to the
Conversion Date to give notice to the Facility Agent to prepay such
Lender's Pro-Rata Share the Loan whereupon the outstanding principal
amount of the Loan together with all accrued but unpaid interest thereon
calculated to the date of prepayment and any other amounts (including,
without limitation, amounts due from the Borrower under this Clause 8.02
and Clause 15.01) payable by the Borrower hereunder and under any of the
Operative Documents shall become due and payable on the date specified in
the Borrower's notice of prepayment.
8.03 Transfers. Without regard to any assignment to EXIM pursuant to the EXIM
---------
Guarantee (it being agreed that the provisions of this Clause 8.03 and
Clause 8.04 shall not apply to EXIM as a result of such an assignment),
if a Lender lends through any office or offices other than the office
specified in Schedule 1 or assigns or disposes of all or any part of its
rights or benefits or transfers all or any part of its obligations under
this Agreement and, solely as of the effective date and as a consequence
of such change of office, assignment, disposal or transfer any additional
costs would, but for this Clause 8.03 or Clause 20.04, be payable by the
Borrower under any of Clause 7.02 or Clause 8.01, then the obligations of
the Borrower under Clause 7.02 or Clause 8.01 to the Lender lending
through its other office shall not, unless the Borrower and the Lessee
have consented otherwise (it being understood that the Borrower's
execution and delivery of a Fixed Rate Note shall constitute such a
consent) or unless a transfer is made pursuant to Clause 8.02, exceed
what its obligations would have been (calculated rateably in the case of
a partial assignment or transfer) had no such change of office,
assignment or disposal or transfer taken place.
8.04 Tax Credits. If:
-----------
(i) the Facility Agent or any Lender in its sole opinion determines
that it has obtained the benefit of, or without being in any way
obliged so to do utilizes, any credit against tax or actually
receives any repayment of tax, which credit or repayment is
referable to any additional amount paid by the Borrower to or for
the account of the Facility Agent or such Lender, as appropriate,
pursuant to the provisions of Clause 8.01; and
(ii) the Facility Agent or such Lender in its sole opinion determines
that the aggregate of the net amount of the credit or repayment
and the net amount received by the Facility Agent or such Lender,
as appropriate, (in each case after deducting any applicable tax)
exceeds the amount
30
<PAGE>
which would have been received by the Facility Agent or such
Lender, as appropriate, if no such deduction or withholding had
been made or been required to be made,
then the Facility Agent or such Lender, as appropriate, shall, to the
extent that it can do so without prejudice to the retention of the amount
of such credit or repayment and provided that no Event of Default shall
have occurred and be continuing and that the Facility Agent or such
Lender, as appropriate, shall not thereby be in a less favorable position
than it would have been in if the Borrower had not been compelled to pay
any such additional amount pursuant to the provisions of Clause 8.01, pay
to the Borrower such amount as the Facility Agent or such Lender, as
appropriate, shall in its sole assessment have determined to be
attributable to the relevant deduction, withholding or payment. Nothing
herein contained shall interfere with the right of the Facility Agent or
such Lender, as appropriate, to arrange its tax affairs in whatever
manner it thinks fit and, in particular, neither the Facility Agent nor
any Lender shall be under any obligation to claim credit, relief,
remission or repayment from or against its corporate profits or similar
tax liability in respect of the amount of such deduction, withholding or
payment in priority to any other claims, reliefs, credits or deductions
available to it. Nothing herein shall be construed to give the Borrower
any right of access to, or inspection of, the books or tax returns of the
Facility Agent or any Lender.
9. FEES, EXPENSES AND OTHER INDEMNITIES
------------------------------------
9.01 Fees and Expenses. The Borrower shall pay the Facility Agent, for itself
-----------------
and on behalf of the Lenders, such fees and expenses (including legal
expenses) applicable to the Loan at the times and in the amounts as may
be agreed in writing between the Facility Agent and the Borrower.
9.02 Enforcement Costs. The Borrower shall from time to time forthwith on
-----------------
demand pay to or reimburse each of EXIM, the Facility Agent, the Lenders
and the Security Trustee for all Losses (including legal and other fees
on a full indemnity basis and all other out-of-pocket expenses) incurred
by it in exercising or seeking to exercise any of its rights or powers
under this Agreement or any other Operative Document or in suing for or
seeking to recover any sums due under this Agreement or any Operative
Document following the occurrence of any Default or Event of Default or
otherwise preserving or enforcing its rights under this Agreement or any
Security Document following the occurrence of any Default or Event of
Default or in defending any claims brought against it in respect of this
Agreement or in releasing or re-assigning any Security Document or in
connection with any actual or proposed modification, amendment or waiver
of any Operative Document requested by the Borrower or the Lessee.
9.03 Taxes. The Borrower shall pay all Taxes which may be payable in the
-----
People's Republic of China, the States of Delaware or New York (U.S.A.),
England or the
31
<PAGE>
Cayman Islands in respect of this Agreement or any other Operative
Document and shall indemnify each of EXIM, the Facility Agent, the
Lenders and the Security Trustee for, from and against all Losses which
may result from any default in paying such Taxes.
9.04 Operational Indemnities. The Borrower agrees to indemnify each of the
-----------------------
Security Trustee (in its individual capacity and as trustee), the
Facility Agent, the Lenders and EXIM (each an "Indemnified Person") and
each of their respective officers, directors, employees, servants and
agents on the same terms as the Lessee undertakes to indemnify the
Borrower in Clause 8.03, 8.08, 9.03, 9.04 and 15.03(g) of the Lease and
subject to the provisions of Clauses 8.04 and 8.05 of the Lease except
that all references therein regarding any such indemnity to "Lessee"
shall be to "Borrower" and all references therein regarding any such
indemnity to "Lessor" shall be to each "Indemnified Person", provided,
however, that any Operational Taxes (as such term is defined in the
Lease) which the Borrower may be required to indemnify any Indemnified
Person (other than EXIM) for under this Agreement shall exclude any
Income Taxes (as such term is defined in the Lease) imposed by any taxing
authority of (i) the jurisdiction in which the Indemnified Person is
organized, (ii) the jurisdiction in which the lending office, if any, of
the Indemnified Person is located or (iii) any other jurisdiction through
which the Indemnified Person acts for purposes of this Agreement (each an
"Indemnitee Jurisdiction") and shall also exclude any other Taxes except
to the extent such Taxes arise as a result of or in connection with this
Agreement or the transactions contemplated hereby.
9.05 Certain Taxes. The Borrower shall pay or procure the payment of and hold
-------------
harmless each of the Indemnified Persons for, from and against all Taxes
(other than (excluding as to EXIM) net income taxes) which are legally
payable in respect of the Secured Property and/or any part thereof and
shall forthwith pay and discharge or procure the payment and discharge
of, all debts, damages, liabilities which may give rise to any Security
Interest on or claim against the Secured Property.
10. PAYMENTS AND EVIDENCE OF DEBT
-----------------------------
10.01 Loan. Amounts to be advanced by the Lenders to the Borrower under this
----
Agreement shall be made available to the Facility Agent not later than
11:00 a.m. (New York time) on the relevant Borrowing Date by remittance
in Dollars to the account of the Facility Agent with ABN AMRO BANK N.V.,
New York, New York, ABA No. 026009580, Account No. 6510010111-42 (or such
other account or bank as the Facility Agent may have specified in writing
for that purpose). On the relevant Drawdown Date, the Facility Agent
shall make available to the Borrower the amounts received by it by
payment to such account or accounts as the Borrower shall have previously
agreed with the Facility Agent as specified in the relevant Notice of
Drawing or another writing. The Borrower shall be deemed
32
<PAGE>
to have borrowed the relevant amount when such payment is made by the
Facility Agent.
10.02 Payments by Borrower. All payments by the Borrower under this Agreement
--------------------
shall be made in Dollars in immediately available funds (or in such other
funds as may then be customary for the settlement in Dollars of
transactions of this nature). All payments by the Borrower under this
Agreement on or prior to the Conversion shall be made no later than 11:00
a.m. (New York time) on the relevant due date to the account of the
Facility Agent with ABN AMRO Bank N.V., New York, New York, ABA No.
026009580, Account No. 6510010111-42 (or such other account or bank as
the Facility Agent may have specified in writing for this purpose by not
less than five (5) Banking Days' notice). All payments by the Borrower
under this Agreement after the Conversion Date shall be made no later
than 11:00 a.m. (New York time) on the relevant due date to the account
of the Facility Agent with LaSalle National Bank, Chicago, Illinois,
Trust Acct. No. 677286809 (or such other account or bank as the Facility
Agent may have specified in writing for this purpose by not less than
five (5) Banking Days' notice). The Facility Agent shall give notice in
writing to the Borrower, EXIM and the Lessee if any payment due from the
Borrower hereunder is not received by the Facility Agent on the due date
for payment thereof, provided that any failure of the Facility Agent to
give, or delay by the Facility Agent in giving, such notice shall not
prejudice the rights of the Facility Agent, the Security Trustee or EXIM
under the Operative Documents. Notwithstanding the foregoing, any amount
payable to EXIM shall be paid in accordance with Article III, paragraph E
of the Reimbursement and Indemnity Agreement.
10.03 Allocation of Receipts. Subject to the provisions of Clause 2 of the
----------------------
Proceeds Agreement, if any amount received from the Borrower is less than
the full amount due, such amount shall be allocated towards principal,
interest and/or other sums owing hereunder in the following order:
(a) First, in or towards payment of all interest (but not default
interest or interest due on amounts payable hereunder other than
principal) payable in respect of the Notes hereunder which is
accrued, due and unpaid, pro rata to the Notes on the basis of the
then outstanding principal amounts of such Notes;
(b) Secondly, in or towards payment of all amounts of principal
payable in respect of the Notes hereunder which is due and unpaid,
pro rata to the Notes on the basis of the then outstanding
principal amounts of such Notes;
(c) Thirdly, on a pro rata basis, in or towards payment of all amounts
of default interest, or interest due on amounts other than
principal, payable hereunder which is accrued, due and unpaid; and
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<PAGE>
(d) Fourthly, on a pro rata basis, in or towards payment of all other
amounts payable hereunder which are due and unpaid, including,
without limitation, any and all Losses payable under Clause 9.04.
10.04 Non-Receipt of Funds by the Facility Agent. Unless the Facility Agent
------------------------------------------
shall have been notified by a Lender or the Borrower (the "Payor") prior
to the date on which the Payor is scheduled to make payment to the
Facility Agent of (in the case of a Lender) the amount required to be
paid pursuant to Clause 10.01 on such date or (in the case of the
Borrower) an amount for the account of one or more of the Lenders
hereunder (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Facility Agent, the Facility
Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such date and,
if the Payor has not in fact made the Required Payment to the Facility
Agent, the recipient(s) of such payment shall, on demand, repay to the
Facility Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date
such amount was so made available by the Facility Agent until the date
the Facility Agent recovers such amount at a rate per annum certified by
the Facility Agent to be equal to the cost (expressed as a rate per
annum) to the Facility Agent (as reasonably determined by the Facility
Agent) of funding such amount of the Required Payment so made available
and, if such recipient(s) shall fail promptly to make such payment, the
Facility Agent shall be entitled to recover such amount, on demand, from
the Payor, together with interest as aforesaid.
10.05 Banking Days. If any payment (other than principal or interest accruing
------------
in respect thereof pursuant to Clause 5.01) due under this Agreement
would otherwise be due on a day which is not a Banking Day the due date
for payment shall be the next succeeding Banking Day and the amount, if
any, of interest thereon shall be adjusted accordingly.
10.06 Certificate Conclusive and Binding. Where any provision of this
----------------------------------
Agreement provides that a Lender, EXIM, the Facility Agent or the
Security Trustee may certify or determine an amount or rate payable by
the Borrower, a certificate by such Lender, EXIM, the Facility Agent or
the Security Trustee as to such amount or rate and specifying in
reasonable detail the basis of computation of the relevant amount, shall
be conclusive and binding on the Borrower in the absence of manifest
error.
11. REPRESENTATIONS AND WARRANTIES
------------------------------
11.01 The Borrower represents and warrants to each of the Lenders, the Facility
Agent and EXIM that:
34
<PAGE>
(a) the Borrower is validly existing as a legal entity under the laws
of the Cayman Islands and has the power to carry on its business
as it is now being conducted and to own its property and other
assets;
(b) the Borrower has the power to execute and deliver, and to perform
its obligations under, this Agreement and the other Operative
Documents to which the Borrower is or will become a party and all
necessary action has been taken to authorize the execution,
delivery and performance of this Agreement and the other Operative
Documents to which the Borrower is or will become a party;
(c) this Agreement and the Operative Documents to which it is or will
become a party constitute or, as the case may be, will constitute
legal, valid and binding obligations of the Borrower in each case
enforceable against the Borrower in accordance with its respective
terms subject to the qualifications that:
(i) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization and other similar laws of
general application relating to or affecting the rights of
creditors generally;
(ii) enforcement may be limited by general principles of equity;
(iii) claims may become barred under statutes of limitation or
may be or become subject to defenses of set-off or
counterclaim; and
(iv) in the event of any proceedings being brought in the Cayman
Islands' courts in respect of a monetary obligation
expressed to be payable in a currency other than Cayman
Islands' dollars, a Cayman Islands' court would give
judgment expressed as an order to pay such currency or its
Cayman Islands' dollar equivalent at the time of payment or
enforcement of the judgment. With respect to winding up
proceedings, Cayman Islands' law may require that all
claims or debts are converted either into Cayman Islands'
dollars or the Borrower's functional currency of account at
the exchange rate ruling at the date of commencement of the
winding up; currency indemnity provisions not having been
tested in the courts of the Cayman Islands;
(d) the execution and delivery of, and the performance of its
obligations under, this Agreement and the Operative Documents to
which it is or will become a party do not and will not (i)
contravene any existing applicable law, enactment, rule or
regulation or any judgment, decree,
35
<PAGE>
authorization, license or permit to which the Borrower or any of
its properties is subject, (ii) upon discharge of the Bridge
Financing Documents, conflict with, or result in any breach of any
of the terms of, or constitute a default under, any agreement or
other instrument or document to which the Borrower is a party or
is subject or by which its assets are bound, (iii) contravene or
conflict with any provision of the Borrower's Memorandum of
Association, or (iv) result in the creation or imposition of, or
oblige the Borrower to create, any Security Interest on or over
any of its undertakings, properties, assets, rights or revenues
(other than pursuant to the Operative Documents);
(e) every consent, authorization, license or approval of or
registration with or declaration to a governmental or public body
or authority or court required in the Cayman Islands or in New
York by the Borrower to authorize or in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of this Agreement and
the Operative Documents to which it is or will become a party or
the performance by the Borrower of any of its obligations under
this Agreement and the Operative Documents to which it is or will
become a party has been duly obtained or made and is in full force
and effect;
(f) under the laws of its jurisdiction of incorporation in force at
the date hereof, the Borrower's obligations under this Agreement
and the Notes are (or will be when issued for value) direct,
general and unconditional obligations of the Borrower and rank (or
will rank when issued for value) at least pari passu in priority
---- -----
of payment with all its other unsecured and unsubordinated
indebtedness for borrowed money with the exception of indebtedness
mandatorily preferred by law and not by contract;
(g) under the laws of its jurisdiction of incorporation in force at
the date hereof, all payments to be made by the Borrower under
this Agreement and the Operative Documents to which it is or will
become a party may be made by the Borrower free and clear of, and
without deduction for, any Taxes and no deductions or withholdings
are required to be made therefrom;
(h) under the laws of its jurisdiction of incorporation in force at
the date hereof, it is not necessary to ensure the legality,
validity, priority, enforceability against the Borrower,
admissibility in evidence, effectiveness of this Agreement against
the Borrower or the Operative Documents to which the Borrower is
or will become a party or the creation or preservation of any
Security Interest created in favor of the Lenders, EXIM or the
Security Trustee in the other Operative Documents that this
Agreement, such Operative Documents or any other
36
<PAGE>
instrument or document be filed, recorded, registered or enrolled
in any court, public office or registry or elsewhere in the Cayman
Islands or that any stamp, documentary, registration or similar
Tax be paid in the Cayman Islands on or in relation to this
Agreement or such Operative Documents, provided however, that (A)
entries must be made by the Borrower in the Register of Mortgages
and Charges maintained at its registered office in the Cayman
Islands in respect of the Security Interests created under any of
the Operative Documents to which the Borrower is a party (notably
in the Mortgage and the Security Assignment) in order to comply
with Section 53 of the Companies Law (Revised) of the Cayman
Islands, (B) failure to enter such details would not affect the
legality, validity, enforceability or admissibility in evidence of
such documents, but might affect the priority of the security
granted thereby, and (C) stamp duty will be payable if any of the
Operative Documents are executed in, brought to or produced before
a court of, the Cayman Islands, although such duty will be
nominal;
(i) this Agreement is, and the other Operative Documents to which the
Borrower is, or will become, a party when executed will be, in
proper form for their enforcement in the courts of the Cayman
Islands;
(j) no litigation, arbitration or administrative proceeding is taking
place or pending or, to the best of the Borrower's knowledge,
threatened against, or against any of the assets of, the Borrower
which is likely to have a material and adverse effect on the
ability of the Borrower to perform its obligations hereunder;
(k) subject always to the qualifications under Cayman Islands law set
forth in the opinion of Maples & Calder referred to in Part II of
Appendix 2 hereto, the choices by the Borrower of English law to
govern each Lease, each Mortgage, each Security Assignment, the
Share Mortgage, the Co-ordination Agreement, the Proceeds
Agreement and the Rolls Royce Warranties Agreement and of the laws
of the State of New York to govern this Agreement and the
Reimbursement and Indemnity Agreement and the submission by the
Borrower to the non-exclusive jurisdiction of the English Courts
and of the courts of New York State are valid and binding under
the laws of the Cayman Islands;
(l) the Borrower has conducted, and from and after the date hereof
will conduct, no business other than in connection with the
transactions contemplated by the Bridge Financing Documents and
the Operative Documents to which it is or will become a party and
the Borrower has no indebtedness other than indebtedness incurred
pursuant to the Bridge Financing Documents or the Operative
Documents and as required for the maintenance of its corporate
records and existence;
37
<PAGE>
(m) the Borrower does not have a place of business outside the Cayman
Islands;
(n) the Lessor Parent is the legal owner of record and the Lessee is
the beneficial owner of all of the issued and outstanding shares
in the capital of the Borrower and the same is free and clear of
all Security Interests (other than Security Interests created
pursuant to the Bare Trust Agreement and the Share Mortgage);
(o) the Bare Trust Agreement is in full force and effect;
(p) no Event of Default has occurred and is continuing;
(q) the Borrower's only business is that of leasing the Aircraft and
the entering into of arrangements relating to the financing or
refinancing of the acquisition of ownership thereof and any other
business incidental thereto and it has not undertaken any other
business prior to the date hereof other than in conjunction with
the Bridge Financing Documents or otherwise as disclosed to the
Facility Agent and EXIM prior to the date hereof; and
(r) in any proceedings taken in its jurisdiction of incorporation in
relation to this Agreement, the Notes or any other Operative
Document to which it is or will become a party, the Borrower will
not be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process.
11.02 It is hereby agreed that all the representations and warranties made by
the Borrower in this Clause 11 shall survive the execution and delivery
of this Agreement.
12. UNDERTAKINGS
------------
12.01 Affirmative undertakings. The Borrower undertakes and agrees throughout
------------------------
the continuance of this Agreement and so long as any sum remains owing
hereunder that the Borrower will, unless EXIM and, prior to the
Conversion Date, the Majority Lenders otherwise agree in writing:
(a) promptly after becoming aware of the same, inform the Facility
Agent, the Security Trustee and EXIM of the occurrence of any
Default or Event of Default (and provide the Facility Agent, the
Security Trustee and EXIM with full details of the same and of the
actions, if any, which the Borrower has taken or proposes to take
to remedy the Default or Event of Default in question) and, upon
receipt of a written request to that effect from EXIM, the
Facility Agent or the Security Trustee
38
<PAGE>
(provided that reasonable grounds exist for the submission of such
request), confirm to EXIM, the Facility Agent or the Security
Trustee, as relevant, that except as previously notified or as
notified in such confirmation, no Default or Event of Default has
occurred and is continuing;
(b) without prejudice to Clauses 3 and 11, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with all consents, authorizations, licenses or
approvals required in or by applicable laws and regulations to
enable it to enter into and perform its obligations under this
Agreement and the other Operative Documents to which the Borrower
is, or will be, a party and to ensure the validity, enforceability
or admissibility in evidence of, this Agreement and the other
Operative Documents to which it is, or will be, a party;
(c) use the Loan exclusively for the purposes specified in Clause
2.03;
(d) promptly file or cause to be filed all tax returns required to be
filed in all applicable jurisdictions and pay or cause to be paid
all Taxes shown to be due and payable on such returns or any
assessments made against it or its properties and assets prior to
the date from which penalties attach for failure to pay the same
(other than those being contested in good faith and in respect of
which such payment may be lawfully withheld and adequate reserves
have been set aside);
(e) execute, acknowledge, deliver, file and register all such
additional agreements, instruments, certificates, documents and
assurances and perform such other acts or things as the Facility
Agent, the Security Trustee or EXIM shall reasonably request to
effectuate the purposes of this Agreement and each of the other
Operative Documents to which the Borrower is, or will be, a party
or the transactions contemplated hereby or thereby; and
(f) promptly after receipt by the Borrower, deliver to EXIM, the
Security Trustee and the Facility Agent a copy of any notice,
document or instrument which EXIM, the Security Trustee or the
Facility Agent is not otherwise entitled to receive under this
Agreement or any other Operative Document and which is received by
the Borrower from any other party pursuant to or in connection
with this Agreement or any other Operative Document to which it
is, or will be, a party.
12.02 Negative Undertakings. The Borrower undertakes and agrees throughout the
---------------------
continuation of this Agreement and so long as any sum remains owing
hereunder that the Borrower will not, unless EXIM and, prior to the
Conversion Date, the Majority Lenders otherwise agree in writing:
39
<PAGE>
(a) create any Security Interest on or over any of its present or
future assets or revenues, including, in particular, but without
limitation, any Aircraft other than any Permitted Lien; or
(b) sell, transfer, assign, lease or otherwise dispose of any revenues
or all or substantially all of its assets, including any Aircraft,
except as expressly contemplated by this Agreement or the other
Operative Documents; or
(c) conduct any business or maintain any bank account (unless the same
is pledged to the Security Trustee for the benefit of EXIM and the
Lenders) other than in connection with the transactions
contemplated by the Operative Documents to which it is a party and
will incur no indebtedness or liability other than under, or as
expressly contemplated by, the Operative Documents and as required
for the maintenance of its corporate records and existence or the
administration of its affairs; or
(d) to the extent the Borrower may lawfully so agree (i) commence any
case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect
to it or its debts, (ii) seek appointment of a receiver, trustee,
custodian or other similar official for it or for all or any
substantial part of its assets, or make a general assignment for
the benefit of its creditors, or (iii) take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth above; or
(e) consolidate with or merge into any other person or, to the extent
Borrower may lawfully so agree, declare and pay dividends or make
distributions in respect of its capital stock except as expressly
permitted by the Operative Documents.
12.03 Lease Undertakings. The Borrower undertakes and agrees, throughout the
------------------
continuation of this Agreement and for so long as any sum remains owing
hereunder, that it will, unless EXIM and, prior to the Conversion Date,
the Majority Lenders otherwise agree in writing, comply with all of its
undertakings and perform all of its obligations under each Lease.
40
<PAGE>
13. EVENTS OF DEFAULT
-----------------
13.01 Events of Default. Each of the following events shall be an Event of
-----------------
Default:
(a) the Borrower fails to pay any sum payable by it under this
Agreement within seven (7) Banking Days of the date on which such
sum is due, provided, that where any such payment of any such sum
shall have been made by the Borrower but the same has not been
received by, or on behalf of, the Facility Agent, the Security
Trustee, the Lenders or EXIM, as appropriate, by reason of a
technical failure (outside the Borrower's control) in the banking
system, it shall not be an Event of Default under this paragraph
(a) if such failure shall have been remedied within seven (7)
Banking Days (which period may run concurrently with the seven (7)
Banking Days' grace period specified above) of receipt by the
Borrower of written notification from the Facility Agent pursuant
to Clause 10.02 hereof or the Security Trustee or EXIM, as
appropriate, that payment of any such sum has not been received by
the appropriate person and provided further that it shall be
deemed an Event of Default hereunder if any sum payable by
Borrower under this Agreement shall not have been paid within
fifteen (15) days of the date such sum is due; or
(b) the Borrower commits any breach of or omits to observe any of its
covenants, agreements or obligations under this Agreement (other
than as referred to in Clause 13.01(a)) or under any of the other
Operative Documents to which it is or will become a party and the
Borrower does not remedy the same within forty-five (45) days of
receipt by the Borrower of written notice from the Facility Agent,
the Security Trustee or EXIM requiring the same to be remedied; or
(c) any representation or warranty made or deemed to be made by the
Borrower in or pursuant to this Agreement or any of the Operative
Documents is or proves to have been untrue or incorrect in any
material respect when made or deemed to be made or would have been
untrue or incorrect if repeated at any time when any moneys are
owing under this Agreement or any other Operative Documents with
reference to the facts and circumstances existing at such time and
in any such case the rights of the Facility Agent, EXIM, the
Security Trustee or the Lenders are materially prejudiced as a
result thereof and such representation or warranty remains
material and incorrect for a period of forty-five (45) days after
receipt by the Borrower of written notice from the Facility Agent,
EXIM or the Security Trustee of the existence of such situation;
or
(d) any consent, authorization, license or approval of or filing or
registration with or declaration to any governmental or public
body or authority or
41
<PAGE>
court required to authorize, or required in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of this Agreement or
any of the Operative Documents or the performance by the parties
hereto or thereto of any of their obligations under this Agreement
or any of the Operative Documents is modified in a manner
unacceptable to the Lenders, EXIM or the Security Trustee or is
revoked or terminated or expires and is not renewed or otherwise
ceases to be in full force and effect; or
(e) an encumbrancer takes possession of or a receiver or similar
officer is appointed for the whole or any material part of the
undertakings, properties, assets, rights or reserves of the
Borrower or of ICBC or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against the
Borrower or ICBC, or any material part of their respective
undertakings, properties, assets, rights or revenues and is not
discharged within sixty (60) days; or
(f) the Borrower or ICBC shall (i) admit in writing its inability to
pay its debts generally as they become due, (ii) 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 allegations of a petition filed against the Borrower or
ICBC, as the case may be, or the Borrower or ICBC, as the case may
be, shall by voluntary petition, answer or consent, seek relief
under the provisions of any other now existing or future
bankruptcy or other similar law providing for the reorganization
or winding-up of corporations, or providing for an agreement,
composition, extension or adjustment with its creditors, (iii)
make a general assignment for the benefit of creditors, (iv)
consent to the appointment of a receiver, administrator,
administrative receiver, trustee or liquidator or itself or of a
substantial part of its property or (v) cease or threaten to cease
to carry on its business; or
(g) a proceeding or a case shall be commenced, without the application
or consent of the Borrower or ICBC, as the case may be, in any
court of competent jurisdiction, which shall not be struck out
within sixty (60) days of commencement and which seeks (i) the
liquidation, reorganization, dissolution, winding-up, or
composition or readjustment of debts of the Borrower or ICBC, as
the case may be, (ii) the appointment of a trustee, receiver,
administrator, administrative receiver, custodian, liquidator or
the like of the Borrower or ICBC, as the case may be, or of all or
any substantial part of the properties of the Borrower or ICBC, as
the case may be, or (iii) similar relief in respect of the
Borrower under any law providing for the relief of debtors, or an
order for relief against the Borrower or ICBC, as the case may be,
shall be entered in an involuntary case under such bankruptcy law;
or
42
<PAGE>
(h) a Termination Event under any Lease shall have occurred and be
continuing (any applicable grace or cure period having expired and
any notice required to have been given having been given) provided
that if the Termination Event refers to an opinion, consideration
or determination of, or notice to be given by, the Borrower then
regardless of the opinion, consideration, determination or notice
of the Borrower such event shall be deemed to have occurred if
EXIM is of the relevant opinion or consideration or so determines
or has given the relevant notice; or
(i) a default under the Commercial Loan has occurred and is continuing
and as a result thereof the principal amount of the indebtedness
outstanding thereunder shall have become due and payable prior to
such time as such principal amount otherwise would have been due
and payable; or
(j) a default under the ECGD Loan has occurred and is continuing and
as a result thereof the principal amount of the indebtedness
outstanding thereunder shall have become due and payable prior to
such time as such principal amount otherwise would have been due
and payable; or
(k) the Lessee shall fail to pay when due after lapse of any
applicable grace period relating thereto any amount due and
payable under any agreement or document to which the Lessee and
EXIM are party which relates to any financing to or for the
benefit of Lessee which shall have the benefit of an EXIM
Guarantee or other credit support provided by EXIM; or
(l) this Agreement or any Security Document shall become invalid or
unenforceable against the Borrower or the Reimbursement and
Indemnity Agreement shall become invalid or unenforceable against
the Borrower or the Lessee; or
(m) ICBC commits any breach of or omits to observe any of its
undertakings, covenants, agreements or obligations under the
ICBC/EXIM Guarantee and ICBC does not remedy the same within
thirty (30) days of receipt by ICBC of written notice from EXIM
requiring the same to be remedied; or
(n) any representation or warranty made, repeated or deemed to be made
by ICBC in or pursuant to the ICBC/EXIM Guarantee proves to have
been untrue or incorrect in any material respect when made or
deemed to be made or repeated or would have been untrue or
incorrect in any material respect if repeated at any time when any
moneys are owing under this Agreement with reference to the facts
and circumstances existing at such time; and in any such case the
rights of EXIM are, in its opinion, materially prejudiced as a
result thereof and such representation or warranty remains
incorrect or untrue in any material respect for a period
43
<PAGE>
of thirty (30) days after written notice from EXIM to ICBC of such
situation; or
(o) any consent, authorization, license or approval of or registration
with or declaration to any governmental agency or courts required
by ICBC to authorize, or required by ICBC in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of the ICBC/EXIM
Guarantee is modified in a manner unacceptable to EXIM or is not
granted or is revoked or terminated or expires and is not renewed
or otherwise ceases to be in full force and effect; and, in any
such case, the rights of EXIM are, in its opinion, materially
prejudiced as a result thereof; or
(p) the ICBC/EXIM Guarantee shall not be or shall cease to remain in
full force and effect or ICBC shall deny any of its payment
obligations under the ICBC/EXIM Guarantee or shall consent in
writing that any of its obligations thereunder are invalid or
unenforceable; or
(q) any other event occurs or any other circumstance arises (other
than an Event of Loss) which, in the reasonable judgment of EXIM,
is likely materially and adversely to affect the ability of ICBC,
the Lessee or the Borrower to perform its respective obligations
under the ICBC/EXIM Guarantee (in the case of ICBC), the Lease or
the Reimbursement and Indemnity Agreement (in the case of the
Lessee) or the Guaranteed Loan Agreement or the Reimbursement and
Indemnity Agreement (in the case of the Borrower).
13.02 Declarations. If an Event of Default has occurred and is continuing EXIM
------------
may by written notice to the Borrower:
(a) declare the Loan, accrued interest and all other sums payable
hereunder to be, whereupon they shall become, immediately due and
payable without further demand, notice or other legal formality of
any kind, all of which are hereby expressly waived by the
Borrower; and
(b) declare that the Facility is cancelled forthwith, whereupon the
same shall be so cancelled and each Lender's Commitment shall be
reduced to zero.
14. DEFAULT INTEREST
----------------
If the Borrower fails to pay any amount payable under this Agreement when
due, the Borrower shall pay interest on such amount (including overdue
interest, to the extent permitted by applicable law) from and including
the date on which such amount was due to the date of actual payment of
such amount (as well after as before judgment) at the rate per annum
determined by the Facility Agent to be the
44
<PAGE>
higher of (x) the aggregate of (i) one percent (1%) and (ii) the rate of
interest then in effect just prior to default, (y) the aggregate of (i)
one percent (1%) plus (ii) the Applicable Margin plus (iii) the Federal
Funds Rate and (z) if such overdue amount is of principal or interest on
a Fixed Rate Note, any other interest rate set forth in the Liquidity
Agreement applicable to the repayment of advances made by the Liquidity
Provider, as the Liquidity Agreement may be modified or amended after the
date hereof in accordance with the requirements of the Transfer Agreement
provided that for purposes of this subclause (z) any amendment or
modification to such interest rate which does not comply with such
requirements shall not be effective. Interest payable under this Clause
14 shall be computed on the basis set forth in Clause 5.02 hereof and
shall be payable on demand. Notwithstanding the foregoing, default
interest payable to EXIM by the Borrower, including, without limitation,
any amount which may be payable to EXIM by virtue of the assignment to
EXIM of the Lenders' rights under this Agreement and the Notes pursuant
to the EXIM Guarantee shall be paid in accordance with Article III,
paragraph B of the Reimbursement and Indemnity Agreement.
15. SET-OFF AND PRO-RATA SHARING
----------------------------
15.01 Currency Indemnity. Dollars shall be the currency of account and of
------------------
payment in respect of all amounts payable under this Agreement. If an
amount is received in another currency, pursuant to a judgment or order
or in the liquidation of the Borrower or otherwise, the Borrower's
obligations under this Agreement shall be discharged only to the extent
that the Facility Agent on behalf of the Lenders, EXIM or the Security
Trustee (as the case may be) may purchase Dollars with such other
currency in accordance with normal banking procedures upon receipt of
such amount. If the amount in Dollars which may be so purchased, after
deducting any costs of exchange and any other related costs, (using the
exchange rate available on the date of receipt, or if no exchange can be
effected on such day, the exchange rate on the next day such exchange can
be effected) is less than the relevant sum payable under this Agreement,
the Borrower shall indemnify the Facility Agent on behalf of the Lenders,
EXIM or the Security Trustee (as the case may be) against such shortfall.
This indemnity shall be an obligation of the Borrower independent of and
in addition to its other obligations under this Agreement and shall take
effect notwithstanding any time or other concession granted to the
Borrower or any judgment or order being obtained or the filing of any
claim in the liquidation, dissolution or bankruptcy (or analogous
process) of the Borrower.
15.02 Set-Off. If an Event of Default has occurred but subject to the terms of
-------
the Proceeds Agreement, each Lender and the Facility Agent shall (without
prejudice to any general or banker's lien, right of set-off or any other
right to which it may be entitled) have the right, without notice to the
Borrower or any other person, to set off and apply any credit balance on
any account (whether subject to notice or not and whether matured or not
and in whatever currency) of the Borrower with
45
<PAGE>
such Lender or the Facility Agent (as the case may be) and any other
indebtedness owing by such Lender or the Facility Agent (as the case may
be) to the Borrower, against the liabilities of the Borrower under this
Agreement, and each Lender and the Facility Agent is authorized to
purchase with the monies standing to the credit of any such account such
other currencies as may be necessary for this purpose.
15.03 Pro-Rata Sharing. If at any time any Lender receives any amount from the
----------------
Borrower or otherwise in respect of amounts due from the Borrower
hereunder (other than through the Facility Agent pursuant to Clause
10.02) whether by way of voluntary or involuntary payment, set-off or
otherwise, it will promptly pay to the Facility Agent the amount so
received for distribution to the Lenders pro rata in accordance with
their respective participations in such amount. The Facility Agent shall
treat such amount as if it were a payment by the Borrower directly to the
Facility Agent on account of amounts due from the Borrower hereunder so
that, as between the Borrower and the Lender who originally received the
amount, the amount shall not be treated as having been paid and such
Lender shall retain all its rights against the Borrower or otherwise with
respect to such amount (except to the extent of any sum received by it
from such distribution by the Facility Agent). Notwithstanding the
foregoing provisions of this Clause 15.03 but subject to the provisions
of the Proceeds Agreement, (i) no Lender shall be required to share any
amount which it has received as a result of any legal proceedings
commenced against the Borrower to recover sums owing to it under this
Agreement with any other Lender which has a legal right to but does not
join in such legal proceedings after having been given reasonable
opportunity so to do or which does not commence a separate action to
enforce its rights against the Borrower and (ii) if any Lender is
required to repay to the Borrower any part of an amount originally
received by it from the Borrower (which amount such Lender has shared
with the other Lenders in accordance with this Clause 15.03), the other
Lenders shall promptly pay to the Facility Agent, for onward payment to
such Lender, their pro rata portion of the amount which such Lender shall
be required to repay to the Borrower, and the Facility Agent shall pay to
such Lender the amounts actually received from the other Lenders.
16. THE FACILITY AGENT AND THE SECURITY TRUSTEE
-------------------------------------------
16.01 Appointment of the Facility Agent. Each Lender hereby irrevocably
---------------------------------
appoints the Facility Agent to act as its agent for the purposes set out
in this Agreement and irrevocably authorizes the Facility Agent to take
such action on its behalf and to exercise and enforce such rights, powers
and discretions as are expressly or by implication delegated to the
Facility Agent by the terms hereof and such rights, powers and
discretions as are reasonably incidental thereto.
16.02 Scope of Duties of the Facility Agent. In respect of its duties and
-------------------------------------
functions hereunder the Facility Agent shall be considered to be acting
solely as an agent of the Lenders in an administrative capacity only and
shall not be deemed an agent or
46
<PAGE>
trustee of the Borrower for any purpose. The Facility Agent shall not
have any duties or obligations except those provided for in this
Agreement.
16.03 Specific Duties and Obligations of the Facility Agent. Prior to the
-----------------------------------------------------
Conversion Date, the Facility Agent shall:
(a) promptly account to each Lender for its due proportion of all
payments received by the Facility Agent from, or on behalf of, the
Borrower or otherwise in connection with the Loan in accordance
with the provisions of this Agreement;
(b) promptly inform each Lender of:
(i) the contents of any document for distribution to the
Lenders which the Facility Agent receives in respect of the
Facility; and
(ii) any Event of Default of which the personnel of the Facility
Agent having functional responsibility for the
administration of the Loan has actual notice;
(c) subject to the limitations set out in this Agreement, take or
refrain from taking any action in accordance with any lawful and
proper instructions given to it by the Majority Lenders and any
such action taken or refrained from being taken shall be binding
on all the Lenders;
(d) consult with the Lenders to the extent practicable before
effecting any amendment or waiver under Clause 17 or Clause 18;
and
(e) take all such actions (including, without limitation, submission
of any claim or demand on EXIM) in a timely manner and otherwise
in accordance with the terms of the EXIM Guarantee.
Subject to the provisions of the Security Documents in respect of any
Event of Default and except as otherwise expressly provided herein, the
Facility Agent shall not take any actions, make any determinations or
issue any declarations or approvals hereunder without the approval of the
Majority Lenders (or, all of the Lenders in the case of Clause 3).
16.04 Rights and Powers of the Facility Agent. Prior to the Conversion Date,
---------------------------------------
the Facility Agent may:
(a) perform any of its duties and functions hereunder through its
directors, officers, employees or agents;
47
<PAGE>
(b) engage and pay for the advice or services of lawyers, accountants
or other experts or professional advisers as the Facility Agent
may consider necessary or desirable and rely and act upon such
advice;
(c) assume that any representation or warranty made or deemed to be
made by any person in or in connection with any of the Operative
Documents is true and correct unless the personnel of the Facility
Agent having functional responsibility for the administration of
the Loan have actual notice to the contrary;
(d) assume that any right, power, authority or discretion vested
herein upon the Majority Lenders, the Lenders or any other person
or group of persons has not been exercised unless the personnel of
the Facility Agent having functional responsibility for the
administration of the Loan have actual notice to the contrary;
(e) refrain from exercising any right, power or discretion vested in
it as agent hereunder unless and until instructed by the Majority
Lenders as to whether or not such right, power or discretion is to
be exercised and, if it is to be exercised, as to the manner in
which it should be exercised provided, however, that, in the
absence of such instructions, the Facility Agent may (but shall
not be required to) exercise any right, power or discretion as it
may deem necessary or appropriate;
(f) refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal suit, action or proceedings
arising out of or in connection with this Agreement until it shall
have received such security as it may require (whether by way of
payment in advance or otherwise) for any and all costs, claims,
expenses (including legal fees) and liabilities which it will or
may expend or incur in complying with such instructions;
(g) assume that no Default or Event of Default has occurred and that
no party is in breach of its obligations under this Agreement or
any Security Document unless the personnel of the Facility Agent
having functional responsibility for administration of the Loan
have actual notice to the contrary;
(h) rely upon any communication or document believed by it to be
genuine and the Facility Agent shall not be liable for acting on
or in relation to any such communication or document;
(i) assume that the Lending Office of each Lender is that identified
in Schedule 1 attached hereto (or, in the case of a Transferee, at
the end of the Transfer Certificate to which it is a party as
Transferee) until it has received from such Lender a notice
designating some other office of such
48
<PAGE>
Lender to replace its Lending Office and act upon any such notice
until the same is superseded by a further such notice:
(j) rely as to any matters of fact which might reasonably be expected
to be within the knowledge of the Borrower upon a certificate
signed by or on behalf of the Borrower.
16.05 No Liability of the Facility Agent to Lenders. Neither the Facility
---------------------------------------------
Agent nor its respective directors, officers, any employees or agents
shall, have any liability or obligation to any Lender:
(a) as a result of any failure or delay by the Borrower or any other
party in performing its respective obligations under this
Agreement, the Bare Trust Agreement or any other Operative
Document;
(b) for the authorization, execution, legality, validity,
enforceability, effectiveness, genuineness or sufficiency of this
Agreement, any other Operative Document or any other document
relevant to this transaction, or for the accuracy of any
representation, warranty or statement made in or in connection
with this Agreement or any other Operative Document, or for the
accuracy or completeness of any information supplied by any person
whether or not such information was or is circulated by the
Facility Agent;
(c) to take any steps to ascertain whether a Default or an Event of
Default has occurred or whether the Borrower or any other party is
otherwise in breach of any of its respective obligations under
this Agreement or any other Operative Document;
(d) to provide any credit or other information concerning the
financial or other condition of the Borrower or the Lessee other
than as expressly provided for herein;
(e) to account for any sum received by the Facility Agent (other than
for the account of the Lenders) by way of fees or reimbursement of
expenses in connection with this Agreement or for any benefit
received by it arising out of any present or future banking or
other relationship with the Borrower or any other party to any
Operative Document;
(f) for anything done or not done by it or any of them under or in
connection with this Agreement or the Operative Documents except
in the case of its or their own gross negligence, fraud or wilful
misconduct.
16.06 Banking Relationships with Lessee. The Facility Agent and the Lenders
---------------------------------
may (without liability to account for any profit) accept deposits from,
lend money to
49
<PAGE>
and generally engage in any kind of banking or other business with the
Borrower or the Lessee.
16.07 No Liability of Facility Agent to Borrower. The Facility Agent shall
------------------------------------------
have no liability or obligation to the Borrower as a result of any
failure or delay by any Lender, the Facility Agent (except to the extent
attributable to it gross negligence, fraud or wilful misconduct) or any
other party in performing its respective obligations under this Agreement
or any other Operative Document.
16.08 Liability and Indemnity of Facility Agent. Neither the Facility Agent
-----------------------------------------
nor any of its directors, officers, employees or agents shall be liable
for any action taken or omitted to be taken in connection with this
Agreement unless resulting directly from its or their gross negligence,
fraud or wilful misconduct. Each Lender shall indemnify the Facility
Agent (to the extent not reimbursed by the Borrower) in proportion to
such Lender's respective participations in the Loan or, if there is no
outstanding Loan, in proportion to their respective Commitments from and
against all claims, actions, liabilities, damages, penalties, losses,
costs and expenses (including legal fees, but excluding any agency or
other like fees, due to the Facility Agent) which the Facility Agent may
incur in any way relating to or arising out of this Agreement or any
Security Document or any action taken or omitted by the Facility Agent
(in compliance with the terms of this Agreement) in seeking to protect or
enforce the rights of the Lenders and the Facility Agent or otherwise in
connection with the Facility, except to the extent that any of the
foregoing results directly from the Facility Agent's gross negligence,
fraud or wilful misconduct.
16.09 Acknowledgment by Lenders. Each Lender acknowledges to and agrees with
-------------------------
the Facility Agent that:
(a) it has itself been and will continue to be solely responsible for
making its own analysis of and investigations into the status,
creditworthiness, prospects, business, operations, assets and
condition of the Borrower, EXIM and any other person referred to
herein and for making its own decisions as to the entering into or
the taking or not taking of any action in connection with this
transaction;
(b) it has not relied upon any representation or statement made by the
Facility Agent as an inducement to it entering into this
Agreement.
16.10 Resignation and Removal of Facility Agent. Prior to the Conversion Date,
-----------------------------------------
the Facility Agent may resign its appointment at any time by giving not
less than thirty (30) days' prior written notice to EXIM, the Lenders and
the Borrower. The Lenders shall have the right to appoint a successor
Facility Agent, but if they do not do so within the thirty (30) day
notice period the retiring Facility Agent may do so on their behalf. The
Majority Lenders may at any time by giving not less than seven (7) days'
prior written notice to the Lenders, the Borrower, EXIM and
50
<PAGE>
the Facility Agent remove the Facility Agent as agent and appoint a
successor Facility Agent. The Facility Agent's resignation or removal
shall not take effect until a successor Facility Agent has been
appointed. Upon such appointment the successor Facility Agent shall
succeed to and become vested with all the rights, powers, discretions and
duties of the retiring Facility Agent and the retiring Facility Agent
shall be discharged from any further duties and obligations hereunder.
16.11 Facility Agent as Lender. The Facility Agent shall have the same rights
------------------------
and powers with respect to its participation in the Loan as any other
Lender and may exercise such rights and powers as if it were not acting
as agent under this Agreement.
16.12 Representations of Security Trustee. For the benefit of the Lenders, the
-----------------------------------
Facility Agent, the Borrower and EXIM, the Security Trustee hereby
represents and warrants to each of the Lenders, the Facility Agent, the
Borrower and EXIM, mutatis mutandis in its individual capacity, each of
the representations and warranties of the Security Trustee contained in
Clause 6.19 of the Proceeds Agreement, as if such representations and
warranties were set out in full herein.
16.13 Covenants of Security Trustee. For the benefit of the Lenders, the
-----------------------------
Facility Agent, the Borrower and EXIM, the Security Trustee hereby
covenants and agrees that it will perform its obligations under Clause 6
of the Proceeds Agreement, to the same extent as if such obligations were
set forth herein, mutatis mutandis.
17. AMENDMENT
---------
Any amendment, supplement, modification or waiver of any provision of
this Agreement or of any Note and any waiver of any default under this
Agreement shall only be effective if made in writing and signed by or on
behalf of the Borrower, the Facility Agent, EXIM and, prior to the
Conversion Date, the Majority Lenders provided, however, that prior to
the Conversion Date (i) no such amendment, supplement, modification or
waiver shall (a) increase the Commitment of a Lender, (b) reduce the
amount or extend the maturity of a Note or any installment thereof, (c)
reduce the rate or extend the time of payment of interest thereon, or (d)
amend the definition of "Majority Lenders" or the provisions of this
Clause 17, in each case, without the consent of all Lenders, and (ii) no
such amendment, supplement modification or waiver shall reduce any fee
payable hereunder to the Facility Agent or any Lender without the consent
of the Lender affected thereby.
51
<PAGE>
18. WAIVER AND SEVERABILITY
-----------------------
Time is of the essence of this Agreement but no failure or delay by the
Facility Agent, EXIM, the Security Trustee or any Lender in exercising
any right, power or remedy hereunder shall impair such right, power or
remedy or operate as a waiver thereof, nor shall any single or partial
exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and
remedies herein provided are cumulative and do not exclude any other
rights, powers and remedies provided by law. If at any time any
provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, the
legality, validity and enforceability of such provision under the law of
any other jurisdiction, and of the remaining provisions of this
Agreement, shall not be affected or impaired thereby.
19. MISCELLANEOUS
-------------
19.01 Entire Agreement. This Agreement and the documents referred to herein
----------------
constitute the entire obligation of the Lenders and the Facility Agent
and supersede any previous expressions of intent or understandings in
respect of this transaction.
19.02 Publicity. Except as necessary to effect a Securitization and except as
---------
required by applicable law (or, with respect to EXIM, its internal
policies), no announcement or other publicity in connection with this
Agreement or relating in any way to the Loan shall be made or arranged
except with the prior written consent of the Facility Agent and the
Borrower.
20. ASSIGNMENT, TRANSFER AND LENDING OFFICES
----------------------------------------
20.01 Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall be binding on and inure to the benefit of the Borrower,
the Facility Agent, the Lenders, the Security Trustee and EXIM and their
respective successors and permitted assigns and transferees, except that
the Borrower may not assign all or part of its rights or obligations
hereunder or under any of the other Operative Documents without the
express prior written consent of the Facility Agent, acting (prior to the
Conversion Date) with the approval of all the Lenders and EXIM.
20.02 Lending Office and Assignment. Prior to the Conversion, any Lender may
-----------------------------
(subject to giving prior written notice to the Facility Agent and the
Borrower but without the need for any consent of the Facility Agent or
the Borrower) change its Lending Office. Other than in connection with
the Securitization or any transfer to EXIM, no Lender may assign or
transfer or grant or sell any participating interest in the whole or any
part of its rights or obligations under this Agreement without the prior
written consent of EXIM and, prior to the Conversion, the Borrower.
52
<PAGE>
20.03 Facility Agent and Lenders. If any Lender assigns (which assignment
--------------------------
shall be subject to Section 9 of the EXIM Guarantee) all or any of its
rights and benefits hereunder in accordance with Clause 20.02 (other than
an assignment to EXIM), then, unless and until the assignee has agreed
with the Facility Agent and the other Lenders that it shall be under the
same obligations towards each of them as it would have been under if it
had been a party hereto as a Lender, the Facility Agent and the other
Lenders shall not be obliged to recognize such assignee as having the
rights against each of them which it would have had if it had been such a
party hereto.
20.04 Liability. Other than in the case of a transfer to EXIM pursuant to the
---------
EXIM Guarantee (in which case the provisions of this Clause 20.04 shall
not apply) the Borrower shall not become subject to any greater
obligation or liability under Clause 7.02 or 8.01 or any provision of
Clause 9 hereof (A) towards an assignee of a Lender than would have been
owed to such Lender with respect to the rights assigned or transferred to
such assignee or (B) towards a Lender which changes its Lending Office
than would have been owed to such Lender had it not changed its Lending
Office, unless:
(i) such assignment or transfer or change of Lending Office was made
with the approval of the Lessee to mitigate or avoid the
requirement for payment of increased costs to make any withholding
or deductions pursuant to Clause 8.01 hereof or to avoid any
unlawfulness pursuant to Clause 7.01; or
(ii) such greater obligation or liability results from a change of law,
regulation, regulatory requirement or official directive, ruling,
request or guideline having the force of law (or, if not having
the force of law, the observance of which is in accordance with
the reasonable practice of banks or other similar financial
institutions in the jurisdiction concerned) or in the
interpretation or application thereof by any person charged with
the administration or interpretation thereof which occurred after
the date of the relevant assignment, transfer or change of Lending
Office (which date shall be, in the case of an assignment or
transfer of a Note to the Trustee in relation to a Securitization,
if any, the Conversion Date) and was not reasonably foreseeable on
such date.
21. NOTICES
-------
21.01 Delivery. Each notice, demand or other communication to be given or
--------
made under this Agreement shall be in writing and delivered or sent to
the relevant party at its address or telex number or fax number set out
below (or such other address or telex number or fax number as the
addressee has by five (5) days' prior written notice specified to the
other parties):
53
<PAGE>
To the Borrower: YA96A Limited
P.O. Box 309
Ugland House
South Church Street
Grand Cayman
Cayman Islands
British West Indies
Telex Number: CP (0293) 4212
Fax Number: (809) 949-8080
Attention: The Secretary
With copies to: China Yunnan Airlines
Wu Jia Ba Airport
Kunming, Yunnan
People's Republic of China
Fax Number: 86 (871) 717-1521
Attention: The President
Baker & McKenzie
130 E. Randolph
Chicago, IL 60601
U.S.A.
Fax Number: (312) 861-2898
Attention: Michael P. O'Brien
To the Facility Agent: ABN AMRO Bank N.V., Chicago Branch
135 South LaSalle Street
Suite 760
Chicago, Illinois 60674-9135
U.S.A.
Telex Number: 6732700
Answerback: ABNAMRO CGO
Fax Number: (312) 904-7399
Attention: Senior Vice President
Structured Trade Finance
54
<PAGE>
To the Wilmington Trust Company
Security Trustee: Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
U.S.A.
Telex Number: 835437
Answerback: WILMTR
Fax Number: (302) 651-8882
Attention: Corporate Trust
Administration
To EXIM: Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
U.S.A.
Telex Number: 89461
Answerback: EXIM UT
Fax Number: (202) 565-3558
Attention: Vice President
- Aircraft Finance Division
Subject: EXIM Guarantee No. AP070425
People's Republic of China
(China Yunnan Airlines)
With a copy to: Vedder, Price, Kaufman & Kammholz
222 N. La Salle Street
Chicago, Illinois 60601
U.S.A.
Fax Number: (312) 609-5005
Attention: Dean N. Gerber
and to the Lenders at their respective Lending Offices.
21.02 Deemed Delivery. Any notice, demand or other communication so addressed
---------------
to the relevant party shall be deemed to have been delivered (a) if given
or made by letter, when actually delivered to the relevant address; (b)
if given or made by telex, when dispatched with confirmed answerback and
(c) if given or made by fax, when receipt is confirmed by the intended
recipient to the transmitting party provided that notwithstanding the
foregoing no notice to EXIM shall be effective until received by the
appropriate officer referred to in Clause 21.01 above.
55
<PAGE>
21.03 Facility Agent. All communications between the Lenders and the Borrower
--------------
in relation to this Agreement shall be made through the Facility Agent.
21.04 Language. Each notice, demand or other communication hereunder shall be
--------
either in English or accompanied by a certified translation thereof into
the English language.
22. GOVERNING LAW AND JURISDICTION
------------------------------
22.01 Law. This Agreement shall be governed by, and construed in accordance
---
with, the laws of the State of New York, without reference to the
principles of conflicts of law.
22.02 Jurisdiction. Any suit, legal action or proceeding against the Borrower
------------
or its assets with respect to this Agreement or any other Operative
Document or on any judgment entered by any court in respect thereof
(hereinafter referred to as "Proceedings"), may be brought in any New
York State court sitting in New York City and in the United States
District Court for the Southern District of New York. The Borrower
hereby irrevocably submits to and accepts the non-exclusive jurisdiction
of such courts for the purpose of any Proceedings. The Borrower hereby
agrees that the service upon it of all writs, processes and summonses in
any such Proceedings shall be sufficiently served if delivered to
Corporation Service Company, 375 Hudson Street, New York, NY 10014,
United States of America or to any other person in New York duly
authorized by the Borrower to receive the same, and any such address or
person so designated in such jurisdiction shall be for the purposes of
this Clause 22 a "Process Agent". If any Process Agent appointed
pursuant to this Clause 22 shall cease or desire to cease or shall not be
capable or qualified to act, the Borrower shall promptly upon becoming
aware of the same irrevocably designate and appoint another address
and/or person acceptable to the Facility Agent and EXIM. Failing any
such designation by the Borrower within seven (7) days after written
demand therefor, the Facility Agent and EXIM shall be entitled at the
cost of the Borrower to designate and appoint another such address and/or
person on behalf of the Borrower and the Borrower hereby appoints the
Facility Agent and EXIM its duly authorized attorney for such purpose.
The Borrower agrees that service on any such person in New York shall be
deemed due service for the purpose of Proceedings in such courts without
prejudice to any other mode of service and agrees that the failure of the
person authorized in New York to give any notice of any such service to
it shall not impair or affect the validity of such service or of any
judgment rendered in any Proceeding based thereon.
22.03 Waiver of Objection to Venue. The Borrower hereby irrevocably waives, to
----------------------------
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any Proceedings brought in any
New York State court or United States District Court located in New York
City.
56
<PAGE>
22.04 No Limit to Proceedings in Other Jurisdictions. The foregoing
----------------------------------------------
shall not limit the right of the Facility Agent, the Security Trustee or
EXIM to bring any Proceedings against the Borrower in any other
appropriate jurisdiction, and to initiate Proceedings and serve legal
process in any manner authorized by the laws of such jurisdiction upon
the Borrower, nor shall the bringing of Proceedings in one or more
jurisdictions preclude the bringing of Proceedings in any other
jurisdiction, whether concurrently or not. The Borrower agrees that final
judgment against it in any Proceedings shall be conclusive and may be
enforced in New York or any other jurisdiction within or outside the
United States by suit on the judgment, as provided by law.
22.05 Waiver of Sovereign Immunity. The Borrower agrees that in any
----------------------------
Proceedings no immunity from such Proceedings (which shall include,
without limitation, suit, attachment prior to judgment, other attachment,
the obtaining of judgment, execution or other enforcement) shall be
claimed (whether on the basis of sovereign immunity or otherwise) by or
on behalf of the Borrower or with respect to its assets, and irrevocably
waives any such right of immunity which it or its assets now have or may
hereafter acquire or which may be attributed to it or its assets and
consents generally in respect of any such Proceedings to the giving of
any relief or the issue of any process in connection with such
Proceedings including, without limitation, the making, enforcement or
execution against any property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in such
Proceedings.
23. COUNTERPARTS
------------
This Agreement may be executed in counterparts and by different parties
on separate counterparts which may be in the form of facsimile
transmitted copies and which when taken together shall be deemed to
constitute one agreement. This Agreement shall be effective between
parties which have executed this Agreement, upon such execution,
notwithstanding that other parties may execute this Agreement at a later
date.
57
<PAGE>
IN WITNESS WHEREOF this Guaranteed Loan Agreement has been executed by the duly
authorized representatives of the parties hereto as of the day and year first
above written and by EXIM on the date of the first Disbursement hereunder and is
intended to be effective (with respect to all parties hereto other than EXIM) as
of the day and year first above written and (with respect to EXIM) as of the
date of the first Disbursement hereunder.
THE BORROWER THE FACILITY AGENT
- ------------ ------------------
YA96A Limited, as Borrower ABN AMRO Bank, N.V., Chicago
Branch, as Facility Agent
By: ABN AMRO NORTH AMERICA,
INC., its agent
By: By: /s/ John B. Neblo
--------------------------------
Its: Vice President
-------------------------------
Title:
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Date: Its: Assistant Vice President
-------------------------------
Date:______________________________
EXIM THE SECURITY TRUSTEE
- ---- --------------------
The Export-Import Bank of Wilmington Trust Company
The United States (not in its individual capacity,
except as expressly provided
By: herein, but only in its capacity
as security trustee)
Title:
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Date:
Title: Vice President
-----------------------------
Date:
THE LENDER
- ----------
ABN AMRO Bank N.V., Chicago Branch, as Lender
By: ABN AMRO NORTH AMERICA,
INC., its agent
By: /s/ John B. Neblo
--------------------------------
Its: Vice President
-------------------------------
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Its: Assistant Vice President
-------------------------------
Date:______________________________
<PAGE>
SCHEDULE 1
THE LENDERS
-----------
Name and Lending Office Commitment
- ----------------------- ----------
ABN AMRO Bank N.V., Chicago Branch US$103,000,000
135 South LaSalle Street, Suite 760
Chicago, Illinois 60674-9135
U.S.A.
Telex Number: 6732700
Answerback: ABNAMRO CGO
Fax Number: (312) 904-7399
Attention: Senior Vice President
Structured Trade Finance
59
<PAGE>
APPENDIX 1
FORM OF NOTICE OF DRAWING
-------------------------
From: YA96A LIMITED
To: ABN AMRO Bank N.V., Chicago Branch, as Facility Agent
Export-Import Bank of the United States
_________________ 1996
Dear Sirs,
LOAN FACILITY OF UP TO US$103,000,000
GUARANTEED LOAN AGREEMENT DATED AS OF 27 AUGUST 1996
- ----------------------------------------------------
We refer to the above Guaranteed Loan Agreement, and hereby give notice that we
request a Disbursement under the Facility on _________________________________
1996 in the amount of US$______________________ in respect of the financing of
two Boeing 767-300 aircraft bearing manufacturer's serial numbers 28148 and
28149.
The proceeds of the Disbursement are to be used exclusively for the purposes
specified in Clause 2.03 of the Guaranteed Loan Agreement, and shall be
disbursed pursuant to payment instructions as agreed between the Borrower and
the Lender.
The initial Interest Period shall have a duration of ________________.
We confirm that:
(a) the representations and warranties set out in Clause 11 of the Guaranteed
Loan Agreement, repeated with reference to the facts and circumstances
subsisting at the date of this notice, remain true and correct; and
(b) no Default has occurred which remains unwaived or unremedied.
Terms defined in the Guaranteed Loan Agreement have the same meanings when used
in this notice.
For and on behalf of
YA96A LIMITED
_____________________
We agree to the above.
_____________________
For and on behalf of
Yunnan Airlines
- 1-1 -
<PAGE>
APPENDIX 2
LIST OF DOCUMENTS AND EVIDENCE
------------------------------
PART I
------
1. A certified true copy of each of the following documents: (i) the
Borrower's Certificate of Incorporation, Memorandum and Articles of
Association; (ii) a list of directors and officers of the Borrower
together with their specimen signatures; (iii) the Register of Members of
the Borrower; and (iv) the Power of Attorney and the resolutions of the
Board of Directors of the Borrower approving the transactions
contemplated by this Agreement and the Operative Documents to which it is
a party and authorizing a person or persons to execute the same together
with any other notices or documents required in connection herewith or
therewith, under hand or by affixing and witnessing the common seal.
2. A certified true copy of the certificate as to the authority of the
Lessee, issued by the President of the Lessee, duly authorizing the lease
by the Lessee of the Aircraft under the Lease related thereto and the
execution, delivery and performance by the Lessee of its obligations
under such Lease and each other document required to be executed and
delivered by the Lessee in accordance with the provisions thereof and
naming the person or persons authorized to execute and deliver all such
documents and including the specimen signatures of such person or
persons.
3. An executed copy of the EXIM Guarantee.
4. A certified extract of the Aircraft Purchase Agreement.
5. An executed copy of the Share Mortgage and all documents contemplated
thereby.
6. An executed copy of the Bare Trust Agreement.
7. An executed copy of the Proceeds Agreement and an executed copy of the
Co-ordination Agreement.
8. Evidence that the process agent appointed pursuant to Clause 22.02 has
accepted its appointment.
9. The opinion of Potter, Anderson & Corroon, counsel to the Security
Trustee.
10. Evidence satisfactory to the Facility Agent and EXIM that all of the
conditions precedent under the Commercial Loan Agreement and the ECGD
Loan Agreement to the Commercial Lenders' and the ECGD Lenders'
obligations to make the Commercial Loan and the ECGD Loan, respectively,
to the Borrower shall have been satisfied or waived.
- 2-1 -
<PAGE>
PART II
-------
A. With respect to each Aircraft to be financed on a Borrowing Date
----------------------------------------------------------------
1. A certified copy of an insurance certificate from the People's Insurance
Company of China in or substantially in the form of Schedule 10 of the
Lease evidencing the insurance required to be maintained pursuant to
Clause 15 and Schedule 4 of the Lease.
2. An executed copy of the related Purchase Agreement Assignment.
3. An executed copy of the related Security Documents.
4. An executed copy of the related Lease.
5. An undertaking from the General Administration of Civil Aviation of China
to issue a certificate of registration within thirty (30) days of the
Borrowing Date noting the interests of the Lessee as operator of the
Aircraft and the Borrower as lessor and owner and the Security Trustee as
mortgagee.
6. A notice of assignment of insurances in the form set forth in Schedule 2
to the Security Assignment executed by the Borrower and the Lessee.
7. The following legal opinions each addressed to EXIM, the Security
Trustee and the Facility Agent:
(i) an opinion of Zheng, Liu, Yuan & Zhou Law Office, Chinese counsel
to the Lessee,
(ii) an opinion of Maples and Calder, Cayman Islands counsel to the
Borrower; and
(iii) an opinion of Baker & McKenzie, English counsel to the Borrower.
8. Certified true copies of the Bills of Sale relating to the transfer of
title to such Aircraft to the Borrower.
9. Evidence satisfactory to the Facility Agent and EXIM that all of the
conditions precedent under the related Lease to the Lessee's obligation
to lease the Aircraft shall have been satisfied or waived.
- 2-2 -
<PAGE>
10. Evidence that the security constituted by the Bridge Financing Documents,
if any, has been discharged or will be discharged contemporaneously with
the relevant Disbursement hereunder.
B. With respect to each Disbursement
---------------------------------
1. An executed Note with the EXIM guarantee endorsed thereon.
- 2-3 -
<PAGE>
PART III
--------
Conditions to Conversion
- ------------------------
1. Executed copy of the Securitization Documents duly executed and delivered
by each of the parties thereto in form and substance acceptable to the
Facility Agent, EXIM and the Trustee and their respective legal counsel.
2. Evidence of payment by Borrower of amounts required to be paid on the
Conversion Date.
3. Executed copy of the Fixed Rate Notes with the EXIM guarantee legend,
endorsed by EXIM.
4. Such other documents, legal opinions and certificates as may be required
pursuant to the Securitization Documents including, without limitation,
an opinion of the General Counsel of EXIM addressed to the Trustee, in
form and substance acceptable to the Trustee.
5. The certificates to be issued under the Trust shall have been rated "AAA"
by Standard & Poor's Rating Group.
6. The registration statement relating to the certificates to be issued
under the Trust shall have become effective and remain effective as to
such issuance.
7. The Trust shall have been duly created and validly existing.
- 2-4 -
<PAGE>
APPENDIX 3
PART 1
------
FORM OF FLOATING RATE INSTALLMENT NOTE
--------------------------------------
YA96A LIMITED
PROMISSORY NOTE DUE _______________
IN RESPECT OF ONE BOEING 767-300 AIRCRAFT, MSN [ ]
IN THE AGGREGATE PRINCIPAL AMOUNT OF
US$[______________________]
FOR VALUE RECEIVED, YA96A LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at Ugland House, South Church
Street, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies (the
"Borrower"), hereby irrevocably and unconditionally promises to pay to ABN AMRO
Bank N.V., as Facility Agent for the Lenders, the principal sum of
[US$___________________], in twenty-four (24) equal (or as nearly equal as
practicable) consecutive principal installments, each such principal installment
to be due and payable on the date and in the amount set forth in Annex A hereto,
together with interest on the unpaid principal amount hereof from time to time
outstanding at the rate determined in accordance with Clause 5.02 of the
Guaranteed Loan Agreement (defined below), from and including the date hereof
until such principal amount is paid in full; provided, however, that the final
-------- -------
principal payment hereon shall in any and all events equal the then outstanding
principal balance hereof. Interest shall accrue from day to day, and shall be
calculated on the basis of a 360-day year and actual days elapsed. Accrued
interest hereon shall be payable on the last day of each Interest Period (or, in
the case of an Interest Period with a duration of less than one month, such
later date as the Facility Agent may agree) and on the date this Note is paid in
full.
This promissory note is one of the Floating Rate Notes referred to in the
Guaranteed Loan Agreement dated as of 27 August 1996 (the "Guaranteed Loan
Agreement") made by and among the Borrower, the banks and other financial
institutions named therein as Lenders, ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent, Wilmington Trust Company, as Security Trustee, and Export-Import
Bank of the United States, the provisions of which are incorporated herein by
reference. All terms and expressions defined in the Guaranteed Loan Agreement
(whether defined therein or incorporated by reference to another document) shall
have the same meanings when used in this Note.
Principal and interest due hereunder or under the Guaranteed Loan
Agreement shall be payable in Dollars in immediately available funds for receipt
on or prior to 11:00 a.m. New York time on the due date thereof as specified in
Clause 10 of the Guaranteed Loan Agreement. The holder hereof, by its
acceptance of this Note, agrees that each payment of principal and interest
received by it hereunder shall be applied in the order specified in Clause 10.03
of the Guaranteed Loan Agreement.
- 3-1 -
<PAGE>
In the event that any amount of the principal hereof or accrued interest
on this Note is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay to the Lender, on demand
interest on such unpaid amount (to the extent permitted by applicable law) for
the period from the date such amount was due until such amount shall have been
paid in full at an interest rate per annum determined in accordance with Section
14 of the Guaranteed Loan Agreement.
Notwithstanding the preceding paragraph hereof, beginning on the date on
which EXIM shall have made a claim payment to the Lender under the EXIM
Guarantee, in the event any amount of principal of or accrued interest on this
Note owing to EXIM is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay, without duplication of
default interest otherwise payable under the Guaranteed Loan Agreement, to EXIM
on demand interest on such unpaid amount (to the extent permitted by applicable
law) for the period from the date such amount was due until such amount shall
have been paid in full at an interest rate per annum equal to the per annum rate
of interest fixed for new EXIM borrowings (in U.S. Dollars) occurring at any
time within the six (6) month period preceding the date of such default plus
1.75% (as determined by EXIM), which rate once so determined for an amount in
default shall remain in effect until such default is cured.
This Note is subject to prepayment only as permitted by the terms of the
Guaranteed Loan Agreement. Following any such prepayment Annex A hereto shall
be deemed to be amended to conform to the substitute Schedule 2 to the
Guaranteed Loan Agreement as agreed between the Borrower, EXIM and the Lender
pursuant to Clause 6.02A or 7.04 of the Guaranteed Loan Agreement, and
thereafter all payments of principal and interest thereon to be made hereunder
shall be made in accordance with Annex A, as so amended.
The Borrower hereby waives any demand, diligence, presentation, protest
and notice of any kind and warrants to the holder hereof that all action and
approval required for execution and delivery hereof as a legal, valid and
binding obligation of the Borrower, enforceable in accordance with the terms
hereof, has been duly obtained and is in full force and effect.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed, as
of the date hereof.
YA96A LIMITED
By __________________________________________
Title:
- 3-2 -
<PAGE>
GUARANTEE
---------
This note is guaranteed by the Export-Import Bank of the United States ("EXIM")
as provided in the Guarantee Agreement dated as of ____________, 1996, between
ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and EXIM, and said
guarantee is expressly made subject to all of said provisions therein as if all
of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF THE
UNITED STATES
By:__________________________________________
Name:________________________________________
Title:_______________________________________
EXIM Guarantee No. AP070425 - People's Republic of China (China Yunnan Airlines)
- 3-3 -
<PAGE>
APPENDIX 3
PART 2
------
FORM OF FIXED RATE INSTALLMENT NOTE [Issuance Date]
-----------------------------------
IN RESPECT OF
ONE BOEING 767-300 AIRCRAFT, MSN [ ]
YA96A LIMITED
PROMISSORY NOTE DUE _______________
IN THE AGGREGATE PRINCIPAL AMOUNT OF
US$[_________________]
FOR VALUE RECEIVED, YA96A LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at Ugland House, South Church
Street, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies (the
"Borrower"), hereby irrevocably and unconditionally promises to pay to the order
of LaSalle National Bank, as trustee, the principal sum of
[US$_________________], together with interest on the unpaid principal amount
hereof from time to time outstanding at the [Fixed Rate] from and including the
date hereof until such principal amount is paid in full; provided, however, that
-------- -------
the final principal payment hereon shall in any and all events equal the then
outstanding principal balance hereof. Such principal and interest shall be due
and payable on the dates set forth in Annex A hereto in [ ]/1/ equal
(or as nearly equal as practicable) consecutive installments of combined
principal and interest in the amounts set forth in Annex A hereto. Interest
shall accrue from day to day, and shall be calculated on the basis of a 360-day
year of twelve 30-day months. Accrued interest hereon shall be payable on each
Fixed Rate Payment Date and on the date this Note is paid in full.
This promissory note is one of the Fixed Rate Notes referred to in the
Guaranteed Loan Agreement dated as of 27 August 1996 (the "Guaranteed Loan
Agreement") made by and among the Borrower, the banks and other financial
institutions named therein as Lenders, ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent, Wilmington Trust Company, as Security Trustee, and Export-Import
Bank of the United States, the provisions of which are incorporated herein by
reference. All terms and expressions defined in the Guaranteed
_________________________
/1/ Insert number equal to (1) twenty-four (24) minus (2) the sum of (A)
the number of Floating Rate Payment Dates occurring prior to the
Conversion and (B) if the Conversion Date is a Floating Rate Payment
Date, one (1).
- 3-4 -
<PAGE>
Loan Agreement (whether defined therein or incorporated by reference to another
document) shall have the same meanings when used in this Note.
Principal and interest due hereunder or under the Guaranteed Loan
Agreement shall be payable in Dollars in immediately available funds for receipt
on or prior to 11:00 a.m. New York time on the due date thereof as specified in
Clause 10 of the Guaranteed Loan Agreement. The holder hereof, by its
acceptance of this Note, agrees that each payment of principal and interest
received by it hereunder shall be applied in the order specified in Clause 10.03
of the Guaranteed Loan Agreement.
In the event that any amount of the principal hereof or accrued interest
on this Note is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay to the Lender, on demand
interest on such unpaid amount (to the extent permitted by applicable law) for
the period from the date such amount was due until such amount shall have been
paid in full at an interest rate per annum determined in accordance with Section
14 of the Guaranteed Loan Agreement.
Notwithstanding the preceding paragraph hereof, beginning on the date on
which EXIM shall have made a claim payment to the Lender under the EXIM
Guarantee, in the event any amount of principal of or accrued interest on this
Note owing to EXIM is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay, without duplication of
default interest otherwise payable under the Guaranteed Loan Agreement, to EXIM
on demand interest on such unpaid amount (to the extent permitted by applicable
law) for the period from the date such amount was due until such amount shall
have been paid in full at an interest rate per annum equal to the per annum rate
of interest fixed for new EXIM borrowings (in U.S. Dollars) occurring at any
time within the six (6) month period preceding the date of such default plus
1.75% (as determined by EXIM), which rate once so determined for an amount in
default shall remain in effect until such default is cured.
This Note is subject to prepayment only as permitted by the terms of the
Guaranteed Loan Agreement.
The Borrower hereby waives any demand, diligence, presentation, protest
and notice of any kind and warrants to the holder hereof that all action and
approval required for execution and delivery hereof as a legal, valid and
binding obligation of the Borrower, enforceable in accordance with the terms
hereof, has been duly obtained and is in full force and effect.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
- 3-5 -
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed, as
of the date hereof.
YA96A LIMITED
By___________________________________________
Title:
GUARANTEE
---------
This note is guaranteed by the Export-Import Bank of the United States ("EXIM")
as provided in the Guarantee Agreement dated as of [____________, 1996], between
ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and EXIM, and said
guarantee is expressly made subject to all of said provisions therein as if all
of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF THE
UNITED STATES
By:__________________________________________
Name:________________________________________
Title:_______________________________________
EXIM Guarantee No. AP070425 - People's Republic of China (China Yunnan Airlines)
- 3-6 -
<PAGE>
APPENDIX 4
FORM OF TRANSFER AGREEMENT
--------------------------
THIS TRANSFER AGREEMENT is made and entered into as of the ____ day of
____________, 1996 among (1) YA96A Limited (the "Borrower"); (2) ABN AMRO Bank
N.V., Chicago branch, as facility agent, (the "Facility Agent") and (3)
______________________ as lender (the "Lender"), [(4) U.S. Trade Funding
Corporation], and (5) LaSalle National Bank, (the "Assignee"), as trustee of the
[__________Trust __________] formed pursuant to the Trust Agreement.
RECITALS
WHEREAS, on the date hereof, the Lender has an outstanding loan to the
Borrower in the principal amount of $[_______] (such loan, to the extent
outstanding on the Effective Date, being referred to as the "Loan"), subject to
the terms of the Loan Agreement (as hereinafter defined);
WHEREAS, the Lender and the Facility Agent propose to sell, assign and
transfer to the Assignee, and the Assignee proposes to accept and assume from
the Lender and the Facility Agent all of the rights, benefits and obligations of
the Lender and the Facility Agent under the Loan Agreement, the Floating Rate
Notes and the Eximbank Guarantee then outstanding in respect thereof including
all rights, benefits and obligations under the Security Documents, all on the
terms and subject to the conditions of this Transfer Agreement (such rights,
benefits and obligations being herein referred to as the "Assigned Property");
WHEREAS, this Transfer Agreement is being entered into pursuant to Clause 4
of the Loan Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions.
-----------
1.1 "Loan Agreement" means the Guaranteed Loan Agreement dated as of 27
--------------
August, 1996 (as amended, supplemented and otherwise modified and in effect from
time to time) and made between YA96A Limited, as Borrower, ABN AMRO Bank N.V.,
Chicago branch, as facility agent, the financial institutions party thereto,
Export-Import Bank of the United States and Wilmington Trust Company, as
Security Trustee;
-4-1-
<PAGE>
1.2 Defined terms used and not defined herein shall have the respective
meanings given to such terms in the Loan Agreement.
SECTION 2. Assignment.
----------
2.1 On the terms set forth herein and subject to the satisfaction of the
conditions to effectiveness set forth in Section 4 hereof and the EXIM
Guarantee, effective as of [the Conversion Date to be included] (the "Effective
Date"): (a) the Lender and the Facility Agent hereby sell, assign and transfer
to the Assignee all of the right, title and interest of the Lender and the
Facility Agent in and to the Assigned Property arising from and after the
Effective Date, and (b) the Assignee hereby accepts such sale, assignment and
transfer and hereby assumes all of the obligations of the Lender and the
Facility Agent from and after the Effective Date under the Loan Agreement in
respect of such Floating Rate Notes outstanding thereunder and the Eximbank
Guarantee.
2.2 Each of the parties hereto hereby confirm that in consideration of
such sale, transfer and assignment and with effect from the Effective Date, the
Lender and the Facility Agent are hereby released from all obligations under the
Loan Agreement (but only to the extent assigned hereby), under the Floating Rate
Notes and under the EXIM Guarantee.
2.3 Such sale, assignment and transfer shall be without recourse,
representation or warranty except as expressly provided herein.
2.4 The Assignee hereby expressly assumes, effective as of the Effective
Date, for the benefit of the Borrower and EXIM, all of the Facility Agent's and
the Lender's obligations under the EXIM Guarantee.
2.5 The Assignee further agrees for the benefit of the Borrower and EXIM
(i) to perform its obligations under the Trust Agreement to the same extent as
if the terms thereof (which are hereby incorporated by reference) were set out
herein in full, (ii) not to amend, modify or waive any provision of the
Liquidity Agreement without the prior written consent of EXIM and (iii) not to
amend or modify the interest rate set forth in the Liquidity Agreement without
the prior written consent of the Borrower and EXIM, provided that any amendment,
modification or waiver of the Liquidity Agreement which does not comply with the
provisions of this Clause 2.5 shall be null and void for all purposes of the
Operative Documents and the EXIM Guarantee
SECTION 3. Payments.
--------
3.1 As consideration for the sale, assignment and transfer contemplated by
Section 2 hereof, the Assignee shall by not later than 1:00 p.m. New York time
on the Effective Date, pay to the Lender an amount equal to $_________________.
3.2 The Lender and the Assignee agree that any principal, interest and
other payments with respect to the Assigned Property (i) accrued prior to but
excluding the
-4-2-
<PAGE>
Effective Date or owed pursuant to Clause 5.02 of the Loan Agreement shall be
payable to, and for the account of, such Lender, and (ii) accruing from and
after the Effective Date shall be payable to, and for the account of, the
Assignee. Each party further agrees that it will hold for the other party any
principal, interest or other amounts that it may receive to which the other
party shall be entitled pursuant to the preceding sentence and pay, in like
money and funds, any such amounts that it may receive to the other party
promptly upon receipt.
3.3 All payments hereunder shall be made in Dollars and in immediately
available funds, without setoff, deduction or counterclaim to the Lender by
payment to its account no. [_____] with ____________________).
SECTION 4. Conditions to Effectiveness.
---------------------------
The effectiveness of the sale, assignment and transfer contemplated
hereby is subject to the satisfaction of each of the following conditions:
4.1 the due execution and delivery of this Transfer Agreement by the
Lender, the Assignee, the Facility Agent, [U.S. Trade Funding Corporation] and
the Borrower;
4.2 the receipt by the Lender of the payment required to be made by the
Assignee under Section 3.1 hereof;
4.3 receipt by the Facility Agent (for the account of the Persons entitled
thereto) of all sums due and payable by the Borrower under the Loan Agreement
and/or the Floating Rate Notes on or before the Effective Date;
4.4 receipt by the Assignee of the Fixed Rate Notes referred to in Clause
4.02 of the Loan Agreement; and
4.5 receipt by the Assignee of the EXIM guarantee legend on the Fixed Rate
Notes issued by the Borrower in favor of the Assignee.
SECTION 5. Representations and Warranties of the Lender, the Facility
----------------------------------------------------------
Agent and the Assignee.
----------------------
Each of the Lender and the Facility Agent represents and warrants to the
Assignee, the Borrower and EXIM and the Assignee represents (in respect of
subclauses (a) and (b)) to EXIM, the Facility Agent and the Lender that (a) it
has full power and authority, and has taken all action necessary to execute and
deliver this Transfer Agreement and any and all other documents required to be
executed or delivered by it in connection with this Transfer Agreement and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Transfer Agreement, and no governmental authorization or other
authorizations are required to be obtained by it in connection therewith, (b)
immediately prior to the Conversion contemplated hereby, it owns all right,
title and interest in and to the Floating Rate Notes and, pursuant to this
Transfer Agreement, has transferred all such right,
-4-3-
<PAGE>
title and interest free and clear of all Liens, and (c) this Transfer Agreement
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms.
SECTION 6. Further Assurances.
------------------
The Lender, the Facility Agent and the Assignee hereby agree to execute and
deliver such other instruments, and take such other actions, as either party may
reasonably request in connection with the transactions contemplated by this
Transfer Agreement.
SECTION 7. Governing Law; Jurisdiction; Service of Process; Venue; Waiver
--------------------------------------------------------------
of Jury Trial; Etc.
-------------------
This Transfer Agreement shall be governed by and construed in accordance
with the law of the State of New York. Any legal action or proceeding arising
out of or relating to this transfer agreement or the transactions contemplated
hereby, and any action or proceeding to execute or otherwise enforce any
judgment obtained in connection therewith, may be instituted in the Supreme
Court of the State of New York, County of New York or in the U.S. District Court
for the Southern District of New York, and by execution and delivery of this
transfer agreement each of the parties hereby irrevocably and unconditionally
submits generally (but non-exclusively) to the jurisdiction of each such court.
Each of the parties hereby irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to such party at its address specified in Section 9 hereof or to such
other Person as may be appointed pursuant to Clause 22 of the Loan Agreement.
Each of the parties hereby agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. The Assignee
irrevocably waives, to the fullest extent permitted by law, any objection which
the Assignee may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each of the
parties hereby irrevocably waives, to the fullest extent permitted by law, any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
SECTION 8. Notices.
-------
All communications between the parties hereto (including, without
limitation, any modifications of, or any waivers or consents under, this
Transfer Agreement) and notices in connection with this Transfer Agreement shall
be in writing, hand-delivered or sent by ordinary mail, telex or facsimile
transmitter, addressed as follows: (a) if to the Assignee at its address set
forth beneath its signature hereto, and (b) if to the Borrower, the Facility
Agent or EXIM, at its address set forth beneath its signature to the Loan
Agreement or, in the case of a Lender, at its Lending Office. All such
communications and notices shall be effective upon receipt.
-4-4-
<PAGE>
SECTION 9. Binding Effect; Amendments.
--------------------------
This Transfer Agreement shall be binding upon and inure to the benefit of
the parties hereby and their respective successors and assigns. No party hereto
(other than the Assignee) may assign or transfer any of its rights or
obligations under this Transfer Agreement without the prior consent of the other
parties hereto, and any purported assignment, absent such consent, shall be
void. No provisions of this Transfer Agreement may be amended, waived or
otherwise modified except by an instrument in writing signed by each party
hereto.
SECTION 10. Interpretation.
--------------
The headings of the various sections hereof are for convenience of
reference only and shall not affect the meaning or construction of any provision
hereof.
SECTION 11. Counterparts.
------------
This Transfer Agreement may be executed in any number of counterparts, each
of which shall be identical and all of which, when taken together, will
constitute one and the same instrument, and each party may execute this Transfer
Agreement by signing any such counterpart.
-4-5-
<PAGE>
IN WITNESS WHEREOF each of the parties hereto has caused this Transfer
Agreement to be duly executed and delivered as of the day and year first before
written.
____________________________________
as Lender
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
LASALLE NATIONAL BANK
By: ________________________________
Name:
Title:
U.S. TRADE FUNDING CORPORATION
By: ________________________________
Name:
Title:
Address:
Telephone No.:
Telex No.:
Facsimile No.:
Attention:
<PAGE>
YA96A LIMITED
By: ________________________________
Name:
Title:
ABN AMRO BANK N.V., Chicago Branch
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By: __________________________________
Name:
Title
By: ___________________________________
Name:
Title:
Acknowledged and Agreed:
EXPORT-IMPORT BANK
OF THE UNITED STATES
By: ________________________________
Name:
Title:
<PAGE>
APPENDIX 5
FORM OF NOTICE OF CONVERSION
----------------------------
To: ABN AMRO Bank N.V., Chicago Branch
as Facility Agent
135 South LaSalle Street
Suite 760
Chicago, Illinois 60674-9135
U.S.A.
Attention: ______________________
______________________
and
The Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Dated: _____________, 1996
Re: Guaranteed Loan Agreement dated as of 27 August 1996
----------------------------------------------------
Ladies and Gentlemen:
1. We refer to the Guaranteed Loan Agreement (as from time to time amended,
varied, novated or supplemented, the "Loan Agreement") entered into among
YA96A Limited as Borrower, the financial institutions party thereto as
Lenders, Wilmington Trust Company, as Security Trustee, ABN AMRO Bank N.V.,
Chicago branch, as Facility Agent, the financial institutions party thereto
as Lenders and Export-Import Bank of the United States. Terms defined as
the Loan Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Loan Agreement and on [date
of proposed Conversion] (the "Conversion Date"), we wish to convert
interest payable on the Loan to the Fixed Rate from the Floating Rate upon
the terms and subject to the conditions contained therein.
-4-1-
<PAGE>
3. The Fixed Rate applicable to the Loan from and after the date of Conversion
shall be _____ % per annum.
We have caused this Notice of Conversion to be executed by our authorized
representative as of the date hereof.
Yours faithfully
_________________________________
for and on behalf of
YA96A Limited
<PAGE>
APPENDIX 6
FIXED RATE PRICING PROCEDURE
For purposes of conversion to the Fixed Rate pursuant to Clause 4 of the
Guaranteed Loan Agreement, the Facility Agent shall, no later than 5.00 p.m.,
Chicago time, on the Chicago business day prior to the date, which date shall be
a Chicago business day, on which the Underwriter proposes to set the Fixed Rate
(the "Rate Set Date"), deliver to the Borrower and the Lessee a notice, for
acceptance or rejection by the Borrower, which sets forth the rate (the
"Proposed Maximum Fixed Rate") and reasonable detail of the calculation thereof,
which the Fixed Rate will not exceed if the Underwriter and the Borrower were to
set the Fixed Rate on the Rate Set Date. The Borrower shall, prior to 8.00
a.m., Chicago time, on the Rate Set Date notify the Facility Agent by telecopy
of its acceptance or rejection of the Proposed Maximum Fixed Rate. If the
Borrower does not so notify the Facility Agent, the Borrower shall be deemed to
have rejected the Proposed Maximum Fixed Rate.
Notwithstanding any acceptance of the Proposed Maximum Fixed Rate by the
Borrower in accordance with the prior paragraph, the Borrower may telephone the
Facility Agent no later than 8.00 a.m., Chicago time, on the Rate Set Date to
determine whether the Facility Agent wishes to confirm the Proposed Maximum
Fixed Rate or to quote a newer and lower rate to be the maximum Fixed Rate (the
"New Maximum Rate"). During such telephone conversation, which the Borrower
authorizes to be tape-recorded, the Borrower shall have the right to reject the
Proposed Maximum Fixed Rate, to accept the New Maximum Rate or to reject both
rates.
If the Borrower shall have accepted the Proposed Maximum Fixed Rate or the
New Maximum Rate, the Underwriter shall, while using its best efforts to
minimize the rate, set the Fixed Rate on the Rate Set Date. Provided that the
Fixed Rate so set by the Underwriter equals or is less than the rate accepted by
the Borrower in accordance with these procedures, such rate shall be the Fixed
Rate for all purposes of Clause 4 of the Guaranteed Loan Agreement.
<PAGE>
EXHIBIT 10.3
================================================================================
SERVICING AGREEMENT
among
U.S. TRADE FUNDING CORP.
and
ABN AMRO Bank N.V.,
as Servicer
and
LASALLE NATIONAL BANK,
as Trustee
Dated as of October 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Heading Page
<S> <C> <C>
Article I DEFINITIONS ......................................................................... 1
Section 1.1. Definitions......................................................................... 1
Article II SERVICER AS AGENT..................................................................... 3
Section 2.1. Appointment of the Servicer; Servicing.............................................. 3
Section 2.2. Collection Procedures............................................................... 3
Article III EXIMBANK GUARANTEE AGREEMENT.......................................................... 4
Section 3.1. Claims Under Eximbank Guarantee..................................................... 4
Section 3.2. Borrowing Under the Revolving Credit Agreement;
Disbursement on Special Payment Date................................................ 5
Article IV REPORTING OBLIGATIONS................................................................. 6
Section 4.1. Servicer Remittance Report.......................................................... 6
Section 4.2. Other Reports....................................................................... 6
Section 4.3. Reports to Certificateholders....................................................... 6
Section 4.4. Trustee's Obligations............................................................... 7
Article V COMPENSATION.......................................................................... 7
Article VI REPRESENTATIONS, WARRANTIES AND COVENANTS............................................. 8
Section 6.1. Representations and Warranties of the Servicer...................................... 8
Section 6.2. Covenants of the Servicer........................................................... 9
Section 6.3. Covenants of the Company and the Trustee............................................ 10
Article VII MERGER OR CONSOLIDATION OF SERVICER; RESIGNATION...................................... 11
Section 7.1. 11
Article VIII TERMINATION EVENTS; SERVICING TERMINATION............................................. 11
Section 8.1. Termination Events.................................................................. 11
Section 8.2. Remedies............................................................................ 12
Section 8.3. Trustee to Act; Appointment of Successor............................................ 12
Section 8.4. Servicer Transfer to Successor Servicer, etc 13
Article IX LIABILITIES; INDEMNIFICATION.......................................................... 13
Section 9.1. Liabilities; Indemnification of the Company and the
Trustee ............................................................................ 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 9.2. Indemnification of the Servicer.................................................. 14
Section 9.3. Special Indemnification of the Trustee........................................... 14
Article X MISCELLANEOUS....................................................................... 15
Section 10.1. Notices, etc..................................................................... 15
Section 10.2. Choice of Law and Venue.......................................................... 16
Section 10.3. Effectiveness of the Agreement................................................... 16
Section 10.4. Successors and Assigns........................................................... 16
Section 10.5. Headings......................................................................... 16
Section 10.6. Interpretation of Agreement...................................................... 16
Section 10.7. Severability of Provisions....................................................... 16
Section 10.8. Merger of Prior Agreements....................................................... 17
Section 10.9. Good Faith and Reasonableness.................................................... 17
Section 10.10. Counterparts..................................................................... 17
Section 10.11. Amendment........................................................................ 17
Section 10.12. No Insolvency Proceeding Against the Company.....................................
Section 10.13. Exercise of Rights............................................................... 17
Section 10.14. No Recourse...................................................................... 18
Section 10.15. Payment on Non-Business Days..................................................... 18
Signature Page......................................................................................... 19
</TABLE>
Exhibits
Schedule 1
-ii-
<PAGE>
SERVICING AGREEMENT
This SERVICING AGREEMENT (this "Agreement"), dated as of October 1, 1996,
is entered into by and among U.S. TRADE FUNDING CORP., a Delaware corporation
(together with its successors and assigns, the "Company"), ABN AMRO Bank N.V., a
bank organized under the laws of The Netherlands and acting through its Chicago
Branch (together with its successors and assigns, the "Servicer") and LASALLE
NATIONAL BANK, a national banking association as Trustee (together with its
successors and assigns, the "Trustee") for the Trust identified on Schedule 1
hereto (the "Trust").
WITNESSETH:
WHEREAS, the Company is a corporation organized to purchase Loan Notes and
related Eximbank Guarantees using proceeds of the issuance and sale of certain
Securities secured by, or representing fractional undivided interests in trusts
comprised of, such Loan Notes and related Eximbank Guarantees;
WHEREAS, the Securities identified on Schedule 1 hereto are being issued
pursuant to a Supplemental Trust Agreement (the "Supplement") among the Company,
the Servicer and the Trustee, which incorporates by reference the Standard Terms
and Conditions of Trust Agreement (such Supplement as incorporating such terms
and conditions being also referred to below as the "Trust Agreement"); and
WHEREAS, the Company has requested, and the Servicer has agreed, to provide
certain collection and servicing responsibilities for the benefit of the Trust
on behalf of the Holders of the Securities in respect of the Loans evidenced by
the Loan Notes.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings specified
in the Trust Agreement, and, to the extent not defined in the Trust Agreement,
shall have the following meanings:
"Advances" shall have the meaning specified in the Liquidity Facility.
"Books and Records" shall mean all of the relevant Person's books and
records including, but not limited to: minute books; ledgers; records
indicating, summarizing or evidencing such Person's assets, liabilities and
accounts; all information relating to such Person's business operations or
financial condition; and all computer programs, disc or tape
<PAGE>
files, printouts, runs and other computer prepared information and the equipment
containing such information.
"Borrower" shall mean, with respect to a Loan, the obligor who has executed
the Loan Note evidencing such Loan.
"Eximbank Guarantee" shall mean, with respect to a Loan, the guarantee
provided on the related Loan Note pursuant to the related Eximbank Guarantee
Agreement and shall include any related Payment Certificate issued by Eximbank
under the Eximbank Guarantee Agreement.
"Eximbank Guarantee Agreement" shall mean the agreement pursuant to which
Eximbank provides the Eximbank Guarantee related to a particular Loan Note or
Notes, as identified on Schedule 1 hereto.
"Lien" means a mortgage, pledge, lien, claim, equity interest,
participation interest, security interest or other charge or encumbrance of any
kind.
"Loan" shall mean the one or more loans, receivables or other evidences of
indebtedness in which the Securities represent fractional undivided ownership
interests, as such Loans are specifically identified on Schedule 1 hereto.
"Loan Documents" shall mean, with respect to any Loan, the documents and
instruments evidencing the Loan, including, without limitation, any loan
agreement, note, security agreement, insurance policy or guarantee.
"Loan Notes" shall mean the promissory notes of Borrowers evidencing the
Loans.
"Loan Program Documents" shall mean the documents pursuant to which the
Company purchases the Loans and related Loan Notes, issues or causes the
issuance and sale or placement of the related Securities and provides for the
servicing of the Loans, and shall include, but not be limited to, the Purchase
Agreement between ABN AMRO Bank N.V. and the Company, this Agreement, any
related Underwriting Agreement, any related Liquidity Agreement and the Trust
Agreement.
"Other Indemnified Parties" shall mean and include such party's directors,
officers, agents and employees.
"Securities" shall mean the certificates of beneficial interest issued by
the Trust at the direction of the Company pursuant to the Trust Agreement, as
specifically identified on Schedule 1 hereto.
"Servicing Fee" shall have the meaning given such term in Article V below.
"Trust Agreement" shall mean the Supplemental Trust Agreement among the
Company, the Servicer and the Trustee, dated the date indicated on Schedule 1
hereto,
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<PAGE>
incorporating by reference the Standard Terms and Conditions of Trust Agreement,
and pursuant to which the Securities are issued.
ARTICLE II
SERVICER AS AGENT
Section2.1. Appointment of the Servicer; Servicing. (a) The Trustee (for
the benefit of the Trust) hereby appoints the Servicer as its special agent to
service the Loans, subject to, and in accordance with, the terms of this
Agreement and the related Eximbank Guarantee Agreement, on behalf of the Holders
of the Securities, and agrees otherwise to perform and carry out the duties,
responsibilities and obligations that are to be performed and carried out by the
Servicer pursuant to this Agreement. The Servicer hereby accepts such
appointment, in consideration of the Servicing Fee and other valuable
consideration.
(b) In the servicing of the Loans and the collection of amounts due
thereunder, the Servicer shall exercise the same degree of care that it
exercises in handling similar matters for its own account.
Section2.2. Collection Procedures. (a) The Servicer (i) shall, not less
than fifteen (15) nor more than twenty (20) days prior to each Note Payment Date
for a Loan Note, deliver to the Borrower a notice specifying the date of the
Note Payment Date and the amounts of principal and interest due on such Loan
Note on such Note Payment Date; provided, however, the failure of the Servicer
to give such notice shall not constitute a waiver of the Trust's or any other
party's right to receive any payment from the Borrower in respect of such Loan
Note; (ii) shall receive and collect on behalf of the Trustee all Collections on
the Loans, including without limitation payments received from Eximbank pursuant
to related Eximbank Guarantee Agreements with respect to the Loans as provided
in Section 3.1(b) below, and any Advances received by the Servicer from the
related Liquidity Provider as provided in Section 3.2 below and (iii) shall, on
the Servicer Remittance Date, transfer such Collections to the Revenue Account.
(b) The Servicer shall notify the Trustee upon receipt of each payment due
under the Loan Notes immediately upon receipt thereof.
(c) The Servicer shall enforce, on behalf of the Trust, the Eximbank
Guarantee and any Payment Certificates in accordance with their respective
terms, will take all necessary steps to claim, in the name and on behalf of the
Trustee (for the benefit of the Trust), under the Eximbank Guarantee or the
Payment Certificates, as the case may be, and will provide Eximbank with any
information reasonably available to the Trustee or the Servicer and requested by
Eximbank to facilitate payment by Eximbank pursuant to the Eximbank Guarantee or
the Payment Certificates. Except as otherwise provided in the Eximbank Guarantee
Agreement, failure by the Trustee or the Servicer to take any action to enforce
any right under the Eximbank Guarantee or the Payment Certificates, as the case
may be, shall not constitute a waiver of such right.
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<PAGE>
(d) Contemporaneously with the execution of this Agreement, the Servicer
shall have established and shall thereafter maintain a system of collecting and
processing payments of principal, interest and any other amounts due and owing
with respect to the Loans and the Loan Documents, which shall be consistent with
the terms and conditions of the related Eximbank Guarantee Agreement and the
Trust Agreement.
ARTICLE III
EXIMBANK GUARANTEE AGREEMENT
Section 3.1. Claims Under Eximbank Guarantee. (a) In the event that, prior
to an Eximbank Payment Event and prior to an assignment to Eximbank pursuant to
Section 7(b) or 7(c) of the Eximbank Guarantee Agreement with respect to a Loan
Note, the Borrower under such Loan Note has failed to pay an installment of
principal of or interest on such Loan Note on the relevant Note Payment Date
then (i) the Servicer will promptly give Eximbank written notice of such
default, and (ii) the Servicer shall, within 10 calendar days after becoming
aware of such failure, send, on behalf of Eximbank, a written demand for payment
to the Borrower, the Lessee and to the Industrial and Commercial Bank of China,
substantially in the forms attached as Exhibit C to the Supplement (as to the
Borrower and the Lessee) and Exhibit D to the Supplement (as to the Industrial
and Commercial Bank of China), respectively, by telegram, telex, telecopier or
hand delivery in respect of such Loan Note, in each case promptly upon the
opening of business on the Business Day following the relevant Note Payment
Date. If (i) such failure continues unremedied for a period of 30 calendar days
from the date any installment of principal of or interest on such Loan Note was
due or any Advance made under the Liquidity Facility together with interest
thereon shall not have been repaid in full within 30 days of the making of such
Advance, and (ii) a period of 15 calendar days has elapsed since written demand
for payment was made on the Borrower, the Lessee and the Industrial and
Commercial Bank of China in respect of such Loan Note as provided above, then
the Servicer is hereby authorized and shall promptly make demand for payment on
Eximbank in the name and on behalf of the Trustee (for the benefit of the Trust)
by delivering to Eximbank a Payment Demand in the appropriate form attached as
Exhibit E to the Supplement (accompanied by copies of the prior demands on the
Borrower, the Lessee and the Industrial and Commercial Bank of China described
above), which Payment Demand shall have been executed previously on behalf of
the Trustee (for the benefit of the Trust), and the Servicer (as provided in
Section 4.02(f) of the Trust Agreement) will instruct the Trustee in writing
that the Trustee assign to Eximbank the relevant Loan Note as provided in
Section 6 of the Eximbank Guarantee Agreement and Section 4.02(f) of the
Supplement. In making a demand for payment on Eximbank in accordance with this
Section 3.1(a), the Servicer shall select the Installment Payment Method (as
such term is defined in the applicable Eximbank Guarantee Agreement). Upon the
Servicer's receipt of a Payment Certificate (as defined in the Eximbank
Guarantee Agreement) from Eximbank with respect to a written demand for payment,
the Servicer will immediately deliver such Payment Certificate to the Trustee,
as trustee under the Trust Agreement for the benefit of the Holders. The
Servicer also agrees to make and submit such claims as may be necessary under
the Eximbank Guarantee in order to realize amounts
-4-
<PAGE>
thereon in connection with a rescission or disgorgement of a Borrower payment
pursuant to, and under the circumstances described in, Section 3(c) of the
Eximbank Guarantee Agreement.
(b) All payments received by the Servicer on behalf of the Trustee (for
the benefit of the Trust) from Eximbank pursuant to a demand under an Eximbank
Guarantee Agreement as provided above shall be deposited by the Servicer on or
before the Servicer Remittance Date in the Revenue Account in accordance with
Section 2.2(a) above.
(c) The Servicer shall deliver a copy of each notice or demand required
pursuant to subsection (a) of this Section 3.1 to be delivered to the Borrower,
the Lessee, the Industrial and Commercial Bank of China, or Eximbank to the
Trustee simultaneously with delivery of such notice or demand to the Borrower,
the Lessee, the Industrial and Commercial Bank of China, or Eximbank, as the
case may be. In the event the Trustee has not received a copy of any notice or
demand required to be delivered pursuant to this Section 2.1 within the time
period prescribed therefor, the Trustee shall send such notice or demand to the
appropriate party within the applicable time period.
(d) The Servicer will not, without Eximbank's prior written consent, agree
to any material amendment of any Loan Note, or any material deviation from the
provisions thereof, including, without limitation, a change in the interest
rate, payment terms or place of payment of any Loan Note or acceleration of the
maturity of any Loan Note.
(e) The Servicer shall maintain a register in respect of any Loan Note
assigned to the Trust on behalf of the Company in accordance with Section 10 of
the related Eximbank Guarantee Agreement and shall record in such register all
information required to be so recorded under such provision. The Servicer will
not, without the Company's prior written consent, agree to any modification of
the payment instructions set forth in any Eximbank Guarantee Agreement, except
if necessary in connection with the appointment of a successor Trustee under the
Trust Agreement.
Section3.2. Borrowing Under the Revolving Credit Agreement; Disbursement
on Special Payment Date. (a) If by 1:00 P.M. (New York City time) on any
Servicer Remittance Date the Servicer has not received (x) payment from the
applicable Borrower in respect of the principal of, and interest on, any Loan
Note, or (y) payment from Eximbank in respect of such Loan Note pursuant to the
terms of the applicable Eximbank Guarantee, in each case in an amount sufficient
to pay all of the interest and principal then due on the Securities, then the
Servicer, on behalf of the Trustee (for the benefit of the Trust), shall, by not
later than 2:00 P.M. (New York City time) on the related Payment Date, request
an Advance by giving a Notice of Borrowing under the Liquidity Facility (with a
copy to the Trustee, in respect of a drawing on the Liquidity Account if a
funding of the Liquidity Account has occurred as described in Section 2.13 of
the Liquidity Facility) in an amount equal to the amount of such deficiency. The
Servicer shall also make the borrowing described in Section 2.13 of the
Liquidity Facility at the times and in the manner described therein, with such
amounts to be deposited in the Liquidity Account. The Servicer shall
-5-
<PAGE>
deposit all amounts paid to it in respect of each Advance, or drawing on the
Liquidity Account as the case may be, in the Revenue Account in accordance with
Section 2.2 above.
ARTICLE IV
REPORTING OBLIGATIONS
Section4.1. Servicer Remittance Report. On or before each Servicer
Remittance Date with respect to a Collection Period, in accordance with Section
13.01 of the Trust Agreement, the Servicer shall deliver to the Trustee a
Servicer Remittance Report for such Collection Period, substantially in the form
attached as Exhibit B to the related Supplement, which Servicer Remittance
Report shall provide the Trustee with information sufficient for the Trustee to
make the required disbursements and Distributions with respect to the
Securities. The Servicer has, concurrently with the execution and delivery of
this Agreement, delivered a pre-executed version of the Servicer Remittance
Report which shall apply to each scheduled Servicer Remittance Date and on which
the Trustee may rely, unless and to the extent that events relating to the
payments on the Loan Notes and/or Liquidity Facility Warrant a modification of
such Servicer Remittance Report, in which case the Servicer shall deliver to the
Trustee a modified Servicer Remittance Report in lieu of the pre-executed
version reflecting as necessary such events.
Section4.2. Other Reports. (a) The Servicer shall provide, on an annual
basis, to the Trustee, the Lender and the Board of Directors, a report prepared
by the Servicer with respect to such information as the Trustee, the Lender or
the Board of Directors may reasonably request and as may be required by the
Trust Agreement regarding performance by the Servicer of its duties hereunder,
including without limitation, with respect to compliance by the Borrowers with
the requirements of the Loan Documents.
(b) The Servicer will deliver to the Company and the Trustee on or before
the date ninety (90) days after the beginning of each calendar year, a
certificate signed by an authorized officer of the Servicer and stating that (i)
a review of the activities of the Servicer relating to the servicing of the
Loans and Loan Documents during the preceding calendar year (or since the
Closing Date in the case of the first such certificate which is required to be
delivered) and of performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled substantially all of its obligations
under this Agreement throughout the period covered by such review, or, if there
has been a material default in the fulfillment of any such obligations,
specifying each such default known to such officer and the nature and status
thereof and the actions, if any, being taken to cure such default.
Section 4.3. Reports to Certificateholders. (a) On or before the fifth
Business Day following each relevant Payment Date, the Servicer, on behalf of
the Trust, shall (at no cost to the Trust or Trustee) supply to each Holder a
report (referred to a "Semiannual Report") which shall include the following
information, as of the immediately preceding relevant Payment Date, with respect
to the distribution by such Trust:
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(i) the aggregate Imputed Principal Amounts and Imputed Interest Amounts
distributed to the respective Holders as of such Payment Date;
(ii) the aggregate Imputed Principal Amount of the Securities outstanding
after giving effect to the Distribution as of such Payment Date;
(iii) if the amounts referred to in (i) above are less than the amounts of
principal and interest paid on the Loan Notes or the Eximbank Payment
Certificate with respect to the immediately preceding Note Payment Date,
the amount of any such difference; and
(iv) any additional information that the Servicer elects to include or
that is required to be included in the Semiannual Report in order to
satisfy the requirements, if any, under the Exchange Act, as then in
effect, with respect to the mailing of periodic reports to
Certificateholders.
The Semiannual Report shall also state that no delinquency in payment under
any Loan Note, the related Eximbank Guarantee or any Eximbank Payment
Certificate has occurred and is continuing or, if any delinquency has occurred
and is continuing, shall specify the amount, if any, paid or payable under the
Eximbank Guarantee and the date or expected date of the relevant Eximbank
Payment Event. Each Semiannual Report shall include a certification from a
Responsible Officer of the Servicer to the effect that the Servicer continues to
be eligible to act as such under the Servicing Agreement and, to the best of
such Responsible Officer's knowledge and belief, the Semiannual Report complies
with the requirements of the Trust Agreement and is accurate.
(b) The fiscal year of each Trust shall be the calendar year. Within the
prescribed period of time for tax reporting purposes after the end of each
calendar year during the term of this Servicing Agreement, the Servicer shall
prepare and mail (at no additional cost to the Borrower) to each Holder a report
setting forth the amounts distributed to such Holder during such calendar year.
The report required by this subsection (b) may be combined with one of the
Semiannual Reports sent by the Servicer to Holders each year pursuant to
subsection (a) of this Section 4.3.
Section4.4. Trustees Obligations. The Servicer agrees to prepare, provide
and/or file the reports and other information required to be prepared, provided
and/or filed by the Trustee pursuant to Section 4.02(c) of the Supplement.
ARTICLE V
COMPENSATION
The Servicer hereby acknowledges that it has received payment in full of a
servicing fee (the "Servicing Fee") as full compensation for the services to be
provided by the
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Servicer hereunder. The Servicer shall not otherwise be entitled to payment of
any additional fee or reimbursement for its out-of-pocket expenses.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section6.1. Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants to the Company and the Trustee as follows:
(a) Organization and Good Standing. The Servicer is a bank, duly
organized, validly existing and in good standing under the laws of The
Netherlands, with full corporate power and authority to own its properties
and assets and to conduct its business as currently conducted and to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
(b) Due Authorization and No Conflict. The execution, delivery and
performance of this Agreement by the Servicer have been duly authorized by
all requisite corporate action and will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any Lien upon any of its
property or assets pursuant to the terms of, any indenture, mortgage, deed
of trust, loan agreement, lease, or other agreement or instrument to which
it is bound or to which any of its property or assets is subject, nor will
such action result in any violation of the organizational documents of the
Servicer, or of any law, rule or regulation of any governmental
jurisdiction, applicable to the Servicer.
(c) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit, of or with any
Person, including without limitation, any court or governmental agency or
body of any governmental jurisdiction, any state or any political
subdivision of either having jurisdiction over the Servicer or any of its
properties or assets, is required to be obtained by or with respect to the
Servicer in connection with the execution, delivery and performance by the
Servicer of this Agreement and the consummation of the transactions
contemplated hereby, other than such as have been obtained or with respect
to which the failure to obtain will not have a material adverse effect on
the business, operations or financial condition of the Servicer, or its
ability to perform its obligations under this Agreement.
(d) Binding Obligation. This Agreement has been duly and validly
executed and delivered by the Servicer and constitutes the valid and
legally binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms except as enforceability may be
limited by applicable bankruptcy, reorganization, receivership, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights and remedies against national banking associations and by general
principles of
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equity (regardless of whether enforcement is sought in a proceeding equity
or at law).
(e) No Proceeding. As at the date of this Agreement, there are no
actions, proceedings or investigations pending or, to the knowledge of the
Servicer, threatened, against the Servicer before any court, administrative
agency or other tribunal:
(i) which, if determined adversely to the Servicer, could
materially and adversely affect the validity or enforceability of this
Agreement;
(ii) which question the consummation by the Servicer of any of
the transactions contemplated by this Agreement; or
(iii) which, if determined adversely to the Servicer, could
materially and adversely affect the ability of the Servicer to perform
its obligations under, or the validity or enforceability of, this
Agreement.
(f) No Financing Statement. There is no effective financing
statement (or similar statement, mortgage or instrument of registration
under the law of any jurisdiction) now on file or registered in any public
office filed or purporting to be filed by the Servicer covering any
interest of any kind in the Loan or the Loan Documents or intended so to
be.
Section 6.2. Covenants of the Servicer. The Servicer covenants to the
Company and the Trustee that so long as this Agreement shall remain in effect:
(a) Organization and Good Standing. The Servicer will preserve and
maintain its existence as a bank under the laws of The Netherlands, and
remain qualified to perform its duties and obligations hereunder under the
laws of each jurisdiction where the failure to preserve and maintain such
existence would adversely affect the ability of the Servicer to perform its
obligations under this Agreement.
(b) Books and Records. The Servicer will maintain and implement
administrative operating procedures and keep and maintain all Books and
Records reasonably necessary or advisable for the timely collection of
Loans, the making of claims under the Eximbank Guarantee Agreement and the
requesting of Advances under the Liquidity Facility.
(c) Inspection. The Servicer will permit the Company and its
representatives and the Trustee and any officer or employee of, or agent
designated by the foregoing to have access during normal business hours to
the Books and Records of the Servicer in order to examine such Books and
Records with respect to the transactions contemplated hereby.
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(d) Compliance with Laws. The Servicer will comply, in all material
respects, with all laws, rules, regulations, orders, decrees and directions
of any governmental authority applicable to its obligations under this
Agreement, or to its obligations with respect to the Loans, the Loan
Documents or any part thereof.
(e) No Liens. The Servicer will not, by any act or omission to act,
create, permit or suffer to exist, and shall take such actions as are
necessary to remove, any Lien, claim or right in, to or on the interest of
the Company and the Trustee in the Loans or the Loan Documents, (other than
the Lien of the Trust Agreement) and will defend the right, title and
interest of the Company and the Trustee in and to the Loans or the Loan
Documents against the claims and demands of all Persons arising from any
act or omission to act of the Servicer in respect of any Lien (other than
the Lien created by the Trust Agreement).
(f) Notice of Liens. The Servicer will advise the Company and the
Trustee in reasonable detail, promptly after the Servicer has obtained
actual knowledge (i) of any Lien asserted or claim made against any of the
Loans or the Loan Documents, (other than the Lien created by the Trust
Agreement), and (ii) of the occurrence of any breach by the Servicer of any
of its representations, warranties and covenants contained herein.
(g) Continuing Compliance. The Servicer shall take all reasonable
actions reasonably requested in writing by the Company or the Trustee at
any time and shall take the actions at the times so that each of the Loans
and the Loan Documents will continue to comply with all laws, rules and
regulations applicable thereto, including, without limitation, the laws,
rules and regulations of the various states of the United States of
America.
(h) Information. All information furnished by the Servicer to the
Company or to the Trustee from time to time hereunder shall be true and
correct in all material respects as of the date thereof.
Section 6.3. Covenants of the Company and the Trustee. Each of the Company
and the Trustee (solely with respect to clause (a)(ii) below) covenants and
agrees that, so long as this Agreement shall remain in effect:
(a) Amendments. (i) The Company agrees to furnish the Servicer with
copies of all waivers or amendments to the Loan Program Documents and (ii)
neither the Company nor the Trustee shall agree to any material amendment
to the Loan Program Documents if such amendment would adversely affect the
rights and obligations of the Servicer without first receiving the express
written consent of the Servicer.
(b) No Other Business. The Company will not engage in any business
or enterprise or enter into any material transaction other than as
contemplated by the Loan Program Documents.
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(c) No Liens. The Company will not sell, pledge, assign or transfer
to any Person other than the Trustee, for the benefit of the Holders, or
grant, create, incur, assume or suffer to exist any Lien on any Loan and
the Loan Documents, other than the Lien created by the Trust Agreement.
ARTICLE VII
MERGER OR CONSOLIDATION OF
SERVICER; RESIGNATION
Section 7.1. (a) Any Person into which the Servicer may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer, shall be deemed to have
assumed and be the successor to all of the Servicer's duties and obligations
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; provided that such Person shall execute such agreements,
documents and instruments as may be requested by the Company or the Trustee to
evidence such Person's assumption of the obligations of the Servicer hereunder.
(b) The Servicer may resign its duties and obligations hereunder at
any time (i) upon thirty (30) days' prior written notice to the Company and the
Trustee and the Rating Agency and (ii) upon appointment by the Company and the
Trustee of a Successor Servicer (as defined in Section 8.3(a) below); provided
that in the event that the Company and the Trustee cannot agree upon a Successor
Servicer within such thirty (30) day period, the Trustee without further action
shall automatically be appointed the Successor Servicer. The Successor Servicer
must have the qualifications set forth in Section 8.3 and must be approved by
Eximbank to be accepted as the Successor Servicer. Upon such resignation, the
Servicer shall deliver all Books and Records and correspondence relating to the
Loans and the Loan Documents in its possession to the successor Servicer, or as
otherwise instructed by the Trustee.
ARTICLE VIII
TERMINATION EVENTS; SERVICING TERMINATION
Section 8.1. Termination Events. The occurrence of any one of the
following events shall be a "Termination Event" under this Agreement:
(a) failure on the part of the Servicer to disburse when due any
amounts provided for herein and the continuation of such failure for a
period of five (5) Business Days after receipt by the Servicer of written
notice thereof from the Company or the Trustee;
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(b) failure on the part of the Servicer to observe or perform any
other term, covenant, condition or agreement provided for herein, and the
continuation of such failure for a period of ten (10) days following
receipt by the Servicer of written notice thereof from the Company or the
Trustee; or
(c) an Insolvency Proceeding commenced by or against the Servicer, or
any receivership or conservatorship proceeding instituted by any authorized
governmental authority against the Servicer.
Section 8.2. Remedies. The remedies provided below are cumulative and not
exclusive of any rights and remedies which the Company or the Trustee would
otherwise have pursuant to law or equity.
(a) If a Termination Event specified in Section 8.1 shall have occurred,
the Company and the Trustee may, by written notice (a "Servicer Termination
Notice") to the Servicer, elect to terminate all of the rights and obligations
of the Servicer as servicer under this Agreement, subject to Section 8.3 hereof.
(b) If a Termination Event specified in Section 8.1 shall have occurred,
then, in addition to any other remedies that may be available to the Company or
the Trustee, the Company may request the Servicer to, and upon such request the
Servicer shall transfer to the Trustee all of its rights, powers and trusts in
and to all instruments, Books and Records, moneys and other documents or
property.
Section 8.3. Trustee to Act; Appointment of Successor. (a) On and after
the receipt by the Servicer of a Servicer Termination Notice pursuant to Section
8.2(a), the Servicer shall continue to perform all servicing functions under
this Agreement until such time as a successor has been appointed as Servicer in
accordance with this Section 8.3. The Company and the Trustee shall, as promptly
as possible after the giving of a Servicer Termination Notice, appoint a
successor servicer (the "Successor Servicer") and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Company and the Trustee. The Company and/or the Trustee may obtain bids from any
potential Successor Servicer. Any successor to the Servicer appointed under the
provisions of this Section shall have a combined capital and surplus of at least
$150,000,000 and shall have the capacity to perform the obligations hereunder.
In the event that a Successor Servicer has not been appointed and has not
accepted its appointment at the time the Servicer ceases to act as the Servicer,
the Trustee without further action shall automatically be appointed the
Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having a combined capital and surplus of
not less than $150,000,000 and whose regular business includes the servicing of
commercial loans as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer under this Agreement and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement to the Servicer shall be deemed to refer to the
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Successor Servicer, except for the references in Section 9.1 which shall
continue to refer to the Servicer; provided, that the Servicer shall not
indemnify the Company or the Trustee if the acts, omissions or alleged acts or
omissions upon which a claim for indemnification arises pursuant to Section 9.1
were the acts, omissions or alleged acts or omissions of a Successor Servicer.
Section 8.4. Servicer Transfer to Successor Servicer, etc. (a) After
receipt by the Servicer of a Servicer Termination Notice and the appointment of
a Successor Servicer in accordance with the provisions of Section 8.3 hereof,
all authority and power of the Servicer as loan solicitor, processor and
servicer under this Agreement shall pass to and be vested in the Successor
Servicer; and the Trustee is hereby authorized and empowered (upon the failure
of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer
as attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights.
(b) The Servicer agrees to cooperate with the Company, the Trustee and the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which shall thereafter be received with respect to the Loans and
Loan Documents and shall cooperate in giving notice to the Borrowers of the
Successor Servicer and directing payments with respect to the Loans to the
address designated by the Successor Servicer.
(c) The Servicer shall promptly transfer its Books and Records relating to
the Loans to the Successor Servicer in such form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other Books and Records and correspondence of the Servicer necessary for the
continued servicing of the Loans in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this Section 8.4 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer deems to be confidential,
the Successor Servicer shall be required to enter into such customary
confidentiality agreements as the Servicer shall reasonably deem necessary to
protect its interest in such information.
ARTICLE IX
LIABILITIES; INDEMNIFICATION
Section 9.1. Liabilities; Indemnification of the Company and the Trustee.
The Servicer agrees to indemnify and hold harmless each of the Company, the
Trustee and each of their Other Indemnified Parties from and against any and all
such losses, liabilities (including liabilities for penalties), claims, demands,
actions, suits, judgments, out-of-pocket costs and expenses (including, without
limitation, interest, reasonable attorneys' fees and expenses and expenses)
arising out of or based on any negligence, willful misconduct or bad
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faith of the Servicer in connection with the performance of its obligations
hereunder. Notwithstanding the above, the Servicer shall not be liable to the
Company, the Trustee or such Other Indemnified Parties for any error in judgment
other than that specifically listed above except for the negligence, willful
misconduct or bad faith of the Servicer or its directors, officers, agents or
employees; provided, however, that the Servicer agrees in all events to
indemnify and hold the Trustee harmless (i) with respect to any obligations
assumed by the Trustee pursuant to the Transfer Agreement, and (ii) to the same
extent as the Company is so obligated under Section 8.07(b) of the Standard
Terms and Conditions of Trust Agreement (as incorporated into the Trust
Agreement); and provided, further, that nothing contained in this Section 9.1 is
intended as or shall be construed (i) as a warranty or representation, express
or implied, as to the solvency or financial net worth of any Borrower, the
Lessee or as to the collectability of any Loan under this Agreement or (ii) as
an agreement to indemnify, reimburse or otherwise be responsible to the Company,
the Trustee or any of their Other Indemnified Parties, for losses resulting from
the failure of any Borrower or the Lessee to pay any Loan, except to the extent
caused by the negligence, willful misconduct or bad faith of the Servicer. This
indemnity agreement will be in addition to any liability which the Servicer may
otherwise have and shall survive the termination of this Agreement.
Section 9.2. Indemnification of the Servicer. The Company hereby agrees
to indemnify the Servicer, and its Other Indemnified Parties, and hold each of
them harmless, from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, damages, costs
and expenses (including without limitation interest and reasonable attorneys'
fees and expenses) arising out of or resulting from any act or omission to act
by the Servicer pursuant to and in accordance with this Agreement or pursuant to
any instruction of the Company or the Trustee, as the case may be (other than
any such action or omission to act by the Servicer or its directors, officers,
agents or employees which constitutes negligence, willful misconduct or bad
faith in connection with the performance of its obligations hereunder to the
extent the Servicer has granted an indemnity with respect thereto under Section
9.1 hereof).
Section 9.3. Special Indemnification of the Trustee. In addition to its
obligations under Section 9.1 above, the Servicer agrees to indemnify and hold
harmless the Trustee for any failure on the part of the Servicer to deliver the
notices and demands required to be delivered by the Servicer pursuant to Section
3.1 hereof, if and to the extent that the Trustee shall incur any loss,
liability, cost or expense as a consequence of such failure. The Servicer's
obligation to indemnify the Trustee pursuant to this Section 9.3 shall be
absolute, irrespective of whether the Servicer's conduct constituted negligence,
wilful misconduct or bad faith.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Notices, etc. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
Person pursuant hereto shall be in writing and shall be personally delivered or
sent by registered, certified or express mail, postage prepaid, return receipt
requested, or by telex or facsimile transmission, and shall be deemed to be
given for purposes of this Agreement, in the case of a notice sent by
registered, certified or express mail, on the date that such writing is actually
delivered to the intended recipient thereof in accordance with the provisions of
this Section 10.1, or in the case of telex, when sent, answerback received, or
in the case of facsimile transmission, when received and telephonically
confirmed; provided that, notices, demands, instructions or other communications
required to be given under this Agreement, if permitted hereunder to be made
telephonically, shall be confirmed in writing promptly thereafter in accordance
with the foregoing provisions, and shall be deemed given for purposes of this
Agreement on the day when given by telephone to a Person who is the recipient
for notice hereunder (if confirmed promptly thereafter in writing in accordance
with this Section 10.1). Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 10.1,
notices, demands, instructions and other communications in writing shall be
given to or made upon the following parties at their respective addresses (or to
their respective telex or facsimile transmission numbers) indicated below, and,
in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party below or at such other address or
number as any party may notify to the other parties in accordance with the
provisions of this Section 10.1:
If to the Company:
U.S. Trade Funding Corp.
Two Wall Street
New York, New York 10005
Attention: Andrew L. Stidd
Telephone: (212) 346-9000
Facsimile No.: (212) 346-9012
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If to the Trustee:
LaSalle National Bank
135 South LaSalle Street - Suite 200
Chicago, IL 60603
Attention: Asset-Backed Securities Trust Services
Telephone: (312) 904-7326
Facsimile No.: (312) 904-2084
If to the Servicer:
ABN AMRO Bank N.V.
Chicago Branch
135 South LaSalle Street, Suite 611
Chicago, Illinois 60603
Attention: Structured Trade Finance
Telephone: (312) 904-7347
Facsimile No.: (312) 904-7399
Section 10.2. Choice of Law and Venue. The validity of this Agreement,
its construction, interpretation and enforcement, and the rights of the parties
hereunder, shall be determined under, governed by and construed in accordance
with the laws of the State of Illinois. To the extent permitted by applicable
law, the parties agree that all actions or proceedings arising in connection
with this Agreement shall be tried and litigated only in the state and federal
courts located in the State of Illinois. Each of the Trustee, the Company and
the Servicer waives any right it may have to assert the doctrine of Forum Non
Conveniens or to object to such venue.
Section 10.3. Effectiveness of the Agreement. This Agreement shall be
binding and deemed effective when executed, delivered and accepted by the
parties hereto.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
of the parties; provided that the Servicer shall not assign this Agreement or
any rights hereunder except pursuant to Section 7.1 hereof, without the prior
written consent of the Company or the Trustee. Any prohibited assignment shall
be absolutely void.
Section 10.5. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
Section 10.6. Interpretation of Agreement. This Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
Section 10.7. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
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provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 10.8. Merger of Prior Agreements. This Agreement cannot be
changed or terminated orally. All prior agreements, understandings,
representations, warranties and negotiations, if any, are merged into this
Agreement.
Section 10.9. Good Faith and Reasonableness. The parties intend and agree
that their respective rights, duties, powers, liabilities, obligations and
directions shall be performed, carried out, discharged and exercised reasonably
and in good faith.
Section 10.10. Counterparts. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on the same or separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original instrument and all of which counterparts, taken
together, shall constitute one and the same Agreement.
Section 10.11. Amendment. Any provision of this Agreement may be amended,
waived, supplemented, restated, discharged or terminated (i) to cure any
ambiguity, (ii) to correct any defective provisions or to correct or supplement
any provisions therein which may be inconsistent with any other provisions
therein, or (iii) to add any other provisions with respect to matters or
questions arising thereunder, which provisions shall not be inconsistent with
any other provisions thereof, in writing duly executed by the Company, the
Trustee and the Servicer (with not less than thirty (30) days prior written
notice to the Rating Agency). No amendment to this Agreement shall in any event
be effective without the prior written consent of Eximbank.
Section 10.12. No Insolvency Proceeding Against the Company. The Servicer
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all Securities and any other securities issued
by or at the direction of the Company pursuant to the Loan Program Documents, it
will not institute against or join with any other Person in instituting against
the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States. This Section shall survive the
termination of the Agreement.
Section 10.13. Exercise of Rights. No failure or delay on the part of the
Company or the Trustee to exercise any right, power or privilege under this
Agreement and no course of dealing between the Company or the Trustee, as the
case may be, and the Servicer shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and except to the extent limited under this
Agreement, not exclusive of any rights or remedies which the Company or the
Trustee would otherwise have pursuant to law or equity. No notice to or demand
on any party in any case shall entitle such party to any other or further notice
or demand in similar or other circumstances, or constitute waiver of the right
of the other party to any other or further action in any circumstance without
notice or demand.
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Section 10.14. No Recourse. The Servicer, whether by virtue of its rights
and obligations under this Agreement or otherwise, shall not be deemed liable to
the Company or any other Person for the liabilities of the Company. In no event
shall the Servicer be liable to the Company or any other Person for indirect,
special, punitive, incidental or consequential loss or damage of any kind
whatsoever, including without limitation, lost profits, whether or not the
likelihood of such loss or damage was known to the Servicer. The obligations of
each of the Company, the Trustee and the Servicer under this Agreement are
solely the corporate obligations of the Company, the Trustee and the Servicer,
respectively. No recourse shall be had for the payment of any amount owing
hereunder or for the payment of any fee hereunder or any other obligation or
claim arising out of or based upon this Agreement against any stockholder,
member, employee, affiliate, officer, director or incorporator of any of the
Company, the Trustee or the Servicer.
Section 10.15. Payment on Non-Business Days. In any case where the date
for payment of funds hereunder, by check, wire transfer or otherwise, or the
date on which any other act required under this Agreement is to be performed
shall not be a Business Day, then such payment or such performance need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of such payment or the date for
such performance, and no interest shall accrue for the period from and after
such date, provided, however, that if such due date is the final maturity date
of a Loan Note, then such payment or performance relating thereto shall be made
on the next preceding Business Day.
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<PAGE>
In Witness Whereof, the parties hereto have caused this Agreement to be
executed and delivered as of the date first hereinabove set forth.
ABN AMRO Bank N.V., as Servicer
By: ABN AMRO North America, Inc.,
its agent
By:_____________________________________
Title:________________________________
By:_____________________________________
Title:________________________________
U.S. Trade Funding Corp.
By:_____________________________________
Title:________________________________
LaSalle National Bank, as Trustee
By:_____________________________________
Title:________________________________
-19-
<PAGE>
SCHEDULE I
TO SERVICING AGREEMENT
DATE OF TRUST AGREEMENT: As of October 1, 1996
LOAN:
Borrower: YA96A Limited
Lender: ABN AMRO Bank N.V.
Date of Loan Agreement: August 27, 1996
Amount of each Loan: $ 50,952,326.31
and
$50,719,872.97
Aggregate Amount of Loans: $101,672,199.28
SECURITIES: 6.75% Trade Trust Certificates, Series
1996-A issued by U.S. Trade Trust, Series
1996-A
<PAGE>
EXHIBIT 10.4
================================================================================
IRREVOCABLE REVOLVING CREDIT AGREEMENT
AMONG
U.S. TRADE FUNDING CORP.
and
ABN AMRO BANK N.V., as Lender and Servicer
and
LASALLE NATIONAL BANK, as Trustee
for the
U. S. Trade Trust Series 1995-A
dated as of January 1, 1995
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I Definitions............................................... 2
Section 1.01. Definitions............................................. 2
ARTICLE II The Advances.............................................. 5
Section 2.01. Advances................................................ 5
Section 2.02. Notice of Borrowing..................................... 5
Section 2.03. Disbursement of Funds................................... 5
Section 2.04. Evidence of Indebtedness................................ 6
Section 2.05. Interest Payments....................................... 6
Section 2.06. Commitment Fees......................................... 6
Section 2.07. Principal Payments...................................... 6
Section 2.08. Termination of Any Borrower Commitment.................. 6
Section 2.09. Method and Place of Payment, etc........................ 6
Section 2.10. Procedures for Repayment................................ 7
Section 2.11. Obligations Absolute.................................... 7
Section 2.12. Expiry Date............................................. 7
Section 2.13. Liquidity Account....................................... 7
ARTICLE III Conditions Precedent..................................... 8
Section 3.01. Conditions Precedent to Effectiveness................... 8
Section 3.02. Conditions Precedent to Each Advance.................... 9
ARTICLE IV Covenants................................................. 9
Section 4.01. Affirmative Covenants................................... 9
Section 4.02. Negative Covenants...................................... 10
ARTICLE V Representations and Warranties............................ 12
Section 5.01. Representations and Warranties.......................... 12
ARTICLE VI Miscellaneous............................................. 13
Section 6.01. Computations............................................ 13
Section 6.02. Exercise of Rights...................................... 13
Section 6.03. Successors and Assigns.................................. 13
Section 6.04. Headings................................................ 14
Section 6.05. Notices; Requests; Demands.............................. 14
Section 6.06. Survival of Representations and Warranties.............. 15
Section 6.07. Governing Law........................................... 15
Section 6.08. Counterparts............................................ 15
Section 6.09. Further Assurances...................................... 15
Section 6.10. Bankruptcy Petition Against the Company................. 16
Section 6.11. Recourse................................................ 16
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
Section 6.12. Effective Date.......................................... 17
Section 6.13. Amendment............................................... 17
Section 6.14. Jurisdiction; Immunities................................ 17
Section 6.15. Severability............................................ 17
Section 6.16. Prior Agreements Superseded............................. 17
Section 6.17. Certain Information..................................... 17
Attachment ................Program Schedule
</TABLE>
-ii-
<PAGE>
IRREVOCABLE REVOLVING CREDIT AGREEMENT
IRREVOCABLE REVOLVING CREDIT AGREEMENT dated as of January 1, 1995 among
U.S. TRADE FUNDING CORP., a Delaware corporation (the "Company"), ABN AMRO Bank
N.V., a bank organized under the laws of The Netherlands, acting through its
Chicago Branch in its capacity as Servicer (the "Servicer") and acting through
its Seattle Branch in its capacity as Lender, the ("Lender") and LASALLE
NATIONAL BANK, as Trustee (the "Trustee") for the U. S. Trade Trust Series 1995-
A (the "Trust").
WITNESSETH:
WHEREAS, ABN AMRO BANK N.V., acting through its Chicago branch (together
with its successors and assigns, the "Bank") has made loans to the Borrower
pursuant to a Tranche A Loan Agreement among the Borrower, Wilmington Trust
Company (as Security Trustee thereunder) and the Bank (as Lender and Facility
Agent thereunder) dated January 13, 1995 (the "Loan Agreement") and such Loans
are evidenced by certain promissory notes in the form set forth in Appendix 3,
Part 2 to the Loan Agreement (the "Loan Notes");
WHEREAS, the Loan Notes are entitled to the benefits of the related
Guarantee Agreement (the "Eximbank Guarantee Agreement"), between the Bank (as
Facility Agent) and the Export-Import Bank of the United States ("Eximbank");
WHEREAS, the Company and the Trustee have entered into a Supplemental Trust
Agreement, incorporating therein the Standard Terms and Conditions of Trust
Agreement dated as of January 1, 1995 (such Supplemental Trust Agreement being
referred to herein as the "Trust Agreement") pursuant to which the Trust is
entitled to issue, or cause the issuance, of certain securities (the
"Securities");
WHEREAS, pursuant to a Purchase Agreement dated as of January 1, 1995 (the
"Purchase Agreement"), the Company has agreed to purchase from the Bank, and the
Bank has agreed to sell to the Company, the Loan Notes and all of the Bank's
right, title and interest thereunder, including, without limitation, all of its
right, title and interest under the Eximbank Guarantee Agreement related to the
Loan Notes;
WHEREAS, the Company will finance its payment of the purchase price of the
Loan Notes through the issuance by the Trust of Securities pursuant to the Trust
Agreement and the obligations in respect of the Securities will be secured by an
assignment, inter alia, of all of the Company's right, title and interest with
respect to the Loan Notes, the related Eximbank Guarantee Agreement, the
Purchase Agreement, the Servicing Agreement and this Agreement, to the Trustee
pursuant to such Trust Agreement;
WHEREAS, the Company desires that the payment of amounts due on the
Securities be supported by an irrevocable revolving credit facility; and
<PAGE>
WHEREAS, subject to the terms and conditions set forth herein, the Lender
is willing to provide, at the request of the Company, an irrevocable revolving
credit facility as provided herein;
NOW THEREFORE, the parties hereto agree as follows::
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this Agreement,
capitalized terms not otherwise defined herein shall have the meanings specified
in the Trust Agreement.
(b) As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both singular and
plural forms of the terms defined):
"ABN Account" shall have the meaning provided in Section 2.09 herein.
"Advances" shall have the meaning provided in Section 2.01 herein.
"Agreement" shall mean this Irrevocable Revolving Credit Agreement among
the Company, the Lender, the Servicer and the Trustee as it may from time to
time be amended, supplemented or otherwise modified in accordance with the terms
hereof.
"Bank" shall have the meaning provided in the first Whereas clause of this
Agreement.
"Borrower" shall mean the "Borrower" under the Loan Agreement.
"Borrower Advance" shall mean an Advance, the proceeds of which are used to
make interest or principal payments on the Securities relating to the Borrower,
and Loan Notes or Securities identified in the Notice of Borrowing relating to
such Borrower Advance.
"Borrower Commitment" with respect to a Loan Note, shall mean the amount
set forth opposite "Borrower Commitment" on the Program Schedule delivered with
respect to such Loan Note and attached hereto, which amount is available for
borrowing hereunder, with such amount in all events to be not less than the
largest principal payment due on the related Loan Note of the Borrower on any
upcoming Due Date, plus interest payable thereon through the related upcoming
Due Date.
"Borrower Documents" with respect to the Borrower, shall mean the Loan
Agreement to which such Borrower is a party, the related Loan Notes and the
Eximbank Guarantee Agreement relating to such Loan Notes.
"Borrower Effective Date" shall have the meaning provided in Section 6.12
hereto.
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<PAGE>
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which banks are not required or authorized by law to close in Chicago,
Illinois and New York, New York.
"Commitment" shall mean as of any date, the sum of all Borrower
Commitments, which amount is available for borrowing hereunder.
"Company" shall have the meaning provided in the first paragraph of this
Agreement.
"Company Documents" shall mean, as of any date of determination,
collectively, this Agreement, the Purchase Agreement, the Securities, the
Underwriting Agreement, the Trust Agreement and the Servicing Agreement.
"Effective Date" shall have the meaning provided in Section 6.12 hereto.
Event of Default" shall have the meaning provided in the Trust Agreement."
Eximbank" shall have the meaning provided in the second Whereas clause of this
Agreement.
"Expiry Date" shall mean December 31, 1995 initially and each date to which
such date has been extended in accordance with Section 2.12.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one one-hundredths of one per cent
(0.01%)), equal to the average rate quoted to the Lender on such day for the
purchase by the Lender of federal funds.
"Interest Rate" shall mean with respect to each day on which an Advance is
outstanding under this Agreement, a per annum interest rate (calculated on the
basis of the actual number of days elapsed and a 360-day year) expressed as a
percentage equal to the higher of (x) the rate of interest then in effect as to
the Loan Note just prior to default and (y) the aggregate of one percent (1%)
plus twenty one-hundredths of one percent (.20%) plus the Federal Funds Rate.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"Lender's Office" shall mean the office of the Lender at ABN AMRO Bank
N.V., Seattle Branch, 600 University Street, One Union Square, Seattle,
Washington 98101, Attention: Operations Department, (206) 587-2330 and (206)
682-5641 (telecopy no.) or such other office as the Lender may designate in
writing to the Company, the Servicer, the Trustee and the Underwriter.
"Lien" shall mean a mortgage, pledge, lien, claim, equity interest,
participation interest, security interest or other charge or encumbrance of any
kind, including the retained security title of a conditional vendor or lessor.
"Liquidity Account" shall have the meaning specified in Section 2.13
hereof.
-3-
<PAGE>
"Loan Agreement" shall have the meaning provided in the first Whereas
clause of this Agreement.
"Loan Collateral" shall mean the "Loan Collateral" under and as defined in
the Trust Agreement.
"Loan Note" shall have the meaning provided in the first Whereas clause of
this Agreement.
"Management Agreement" shall have the meaning provided in Section
4.02(c)(viii) hereof.
"Notice of Borrowing" shall have the meaning provided in Section 2.02
herein.
"Payment Default" shall mean the failure of the Lender to be repaid in full
for the principal of and interest on an Advance within 150 days of the date such
Advance is made; provided that a Payment Default shall not occur if, no later
than such 150th day, Eximbank has paid in full the amount required to be paid
under the applicable Eximbank Guarantee Agreement in respect of the related
payments under the applicable Loan Note.
"Program Schedule", with respect to the Loan Notes and the Securities,
shall mean the schedule identifying the Loan Notes, the Borrower and the related
Borrower Commitment as attached hereto.
"Purchase Agreement" shall have the meaning provided in the fourth Whereas
clause of this Agreement."
"Replacement Facility" shall have the meaning specified in Section 2.13
hereof.
"Servicer" shall mean ABN AMRO Bank N.V., acting through its Chicago Branch
as servicer under the Servicing Agreement, including its successors and assigns.
"Servicing Agreement" shall mean the Servicing Agreement entered into
between the Company, the Trustee and the Servicer, at the time of the issuance
of the Securities as the same may at any time be amended or modified.
"Trust Agreement" shall have the meaning in the third Whereas clause of
this Agreement.
"Trustee" shall mean LaSalle National Bank, as trustee under the Trust
Agreement, and any successor trustee thereunder.
"Underwriter" shall mean ABN AMRO Securities (USA) Inc. as underwriter
under the Underwriting Agreement, including its successor and assigns."
"Underwriting Agreement" shall mean the Underwriting Agreement dated as of
January 27, 1995 between the Company and the Underwriter, as the same may at any
time be amended or modified.
-4-
<PAGE>
ARTICLE II
THE ADVANCES
Section 2.01. Advances. The Lender hereby irrevocably agrees, on the terms
and conditions hereinafter set forth, to make advances (the "Advances") in the
manner, and subject to the terms and conditions provided herein from time to
time on any Business Day during the period from the Effective Date until the
Expiry Date in an aggregate amount at any time outstanding not to exceed the
Commitment. No Advance shall be made with respect to a Loan Note as identified
in the related Notice of Borrowing, if after giving effect to such Advance, the
aggregate outstanding Advances with respect to such Loan Note exceed the
applicable Borrower Commitment specified on the Program Schedule relating to
such Loan Note. The Company may from time to time borrow, repay and prepay
Advances pursuant to Sections 2.07 or 2.10 and reborrow under this Article II.
Repayment of the amount of the Advance together with all accrued interest
thereon shall have the effect of reinstating the amount of the Borrower
Commitment by the amount of such repaid Advance which corresponds to the
Borrower's Loan Note with respect to which such Advance was made, making such
amount available for reborrowing hereunder.
Section 2.02. Notice of Borrowing. Whenever a borrowing is intended to be
made hereunder, the Servicer, on behalf of the Trustee (for the benefit of the
Trust), shall give the Lender at the Lender's Office written notice or
telephonic notice (to be promptly confirmed in writing thereafter) of such
intended borrowing by no later than 2:00 P.M. (New York City time) on the
proposed borrowing date. Each such written notice (each, a "Notice of
Borrowing") shall specify (i) the principal amount that the Trustee (for the
benefit of the Trust) desires to borrow hereunder, (ii) the date of borrowing
(which shall be a Business Day), (iii) the Loan Note on which payment has not
been received (and the Borrower thereunder), and (iv) the Eximbank Guarantee
Agreement relating to such Loan Note. The Company and the Trustee (for the
benefit of the Trust), each hereby appoints the Servicer to act as its agent to
prepare and deliver a Notice of Borrowing hereunder on behalf of the Company or
the Trustee, and the Servicer acknowledges that, as set forth in the Servicing
Agreement, it will prepare and deliver or cause to be prepared and delivered a
Notice of Borrowing as required by this Section. The Lender acknowledges the
appointment by the Company and the Trustee (for the benefit of the Trust) of the
Servicer as the agent of the Company and the Trustee to prepare and deliver any
Notice of Borrowing hereunder. The Lender further acknowledges the right of the
Trustee to effect borrowings hereunder by submitting Notices of Borrowing
directly in accordance with the foregoing procedures.
Section 2.03. Disbursement of Funds. Subject to the satisfaction of the
applicable conditions set forth in Article III, by no later than 3:00 P.M. (New
York City time) on the date of borrowing specified in a Notice of Borrowing, the
Lender shall make available to the Servicer in freely transferable U.S. dollars
and in immediately available funds the Advance requested to be made on such date
by transferring such amount to the Servicer for deposit pursuant to the
Servicing Agreement or, in the case of Notices of Borrowing submitted directly
by the Trustee, by transferring such amount to the Trustee for deposit pursuant
to the Trust Agreement. Each such Advance shall consist of the Lender's general
funds and shall not be commingled with any assets of the Company.
-5-
<PAGE>
Section 2.04. Evidence of Indebtedness. For each Loan Note identified in a
Notice of Borrowing relating to an Advance, the Lender shall maintain an account
or accounts evidencing the indebtedness of the Company resulting from such
Advance (and relating to such Loan Note) owing to the Lender from time to time
including the amounts of principal and interest payable and paid to the Lender
from time to time hereunder. The entries made in such account or accounts shall
be conclusive and binding for all purposes, absent manifest error.
Section 2.05. Interest Payments. (a) The Company agrees to pay interest on
the unpaid principal amount of each Advance from and including the date of such
Advance to but excluding the date of payment in full at the Interest Rate in
effect for each day during such period.
(b) Accrued interest in respect of each Advance shall be payable, in
arrears, on the payment date therefor as provided in Section 2.07 and
thereafter, on demand.
Section 2.06. Commitment Fees. (a) On the Effective Date, there shall be
paid to the Lender such fee as shall be mutually agreeable to the Lender and the
Company with regard to this facility.
(b) On any Special Payment Date (as defined in the Trust Agreement), there
shall be paid to the Lender a supplemental fee, payable from the Revenue Account
(but only to the extent available) of such amounts as may remain in the Revenue
Account following all other required distributions from such account on the
Special Payment Date.
Section 2.07. Principal Payments. (a) Each Advance shall be repaid in full on
the 150th day following the date of such Advance.
(b) The Company may prepay, without premium or penalty, the outstanding
principal amount of an Advance together with unpaid accrued interest there on.
(c) Upon repayment of any portion of the outstanding principal amount of
an Advance, the amount of the Commitment available to be borrowed hereunder
shall be reinstated by the amount of such repayment.
Section 2.08. Termination of Any Borrower Commitment.
The Company, without premium or penalty, shall have the right at any time
and from time to time to terminate any Borrower Commitment upon at least 30
Business Days' prior written notice to the Lender and the Trustee, specifying
the date (which shall be a Business Day) of such termination. The termination of
any Borrower Commitment shall be effective on the date specified in the
Company's notice, provided that no such termination of such Borrower Commitment
shall be effective if, on the date specified, an Advance with respect to the
Loan Note issued by such Borrower would remain outstanding after such date or if
such termination would adversely affect the rating on the related Securities.
-6-
<PAGE>
Section 2.09. Method and Place of Payment, etc. (a) All payments to the
Lender under this Agreement shall be made to the account of ABN AMRO Bank,
Seattle Branch at ABN AMRO Bank N.V., New York, New York, Account Number
651001085541 ABA Routing Number 026-009-580; Swift Number: ABNAUS6S (the "ABN
Account") on the date when due and shall be made in freely transferable U.S.
dollars and in immediately available funds.
(b) Whenever any payment to be made hereunder shall be stated to be due on
a day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and interest shall be payable at the applicable
rate during such extension.
Section 2.10. Procedures for Repayment. (a) The Company hereby irrevocably
authorizes the Servicer and the Trustee to satisfy the Company's obligations
under this Agreement in respect of repayment of Advances from amounts available
therefor from the Trust Estate, as provided in the Servicing Agreement and in
the Trust Agreement, as applicable.
(b) The Company irrevocably authorizes the Servicer and the Lender to make
the transfers and application of funds described in Sections 2.03, 2.06(b) and
2.10 hereof.
Section 2.11. Obligations Absolute. Except as otherwise provided in Article
III hereof, the obligations of the Lender to make Advances under this Agreement
shall be unconditional and irrevocable and such Advances shall be made in
accordance with the terms hereof, irrespective of, without limitation, the
existence of any claim, set-off, defense (including, without limitation, fraud)
or other right that the Lender may have at any time against the Company (or any
persons or entities for whom the Company may be acting), or the Borrower under
the Loan Agreement, whether in connection with this Agreement, the transactions
contemplated hereby or by the Company Documents or any Borrower Documents or any
unrelated transaction.
Section 2.12. Expiry Date.
(a) Subject to subparagraph (b) of this Section 2.12 and other provisions
of this Agreement permitting early termination, this Agreement shall terminate
on December 31, 1995.
(b) On a Business Day which is at least thirty (30) days but not more than
sixty (60) days before the then-current Expiry Date, the Company (or the
Servicer on behalf of the Company) may notify the Lender in writing of the
Company's desire to extend the Expiry Date to the date that is 364 days after
the Lender issues its written notice granting such extension (provided that if
such date is not a Business Day, then the new Expiry Date shall be the Business
Day immediately preceding the date which is 364 days after the issuance of such
notice). The Lender shall notify the Company, the Servicer and the Trustee of
its decision regarding such extension no later than fifteen (15) days after the
date on which the Lender shall have received such notice from the Company, or if
such day is not a Business Day, the next succeeding Business Day.
-7-
<PAGE>
Section 2.13. Liquidity Account. In the event that (i) on or prior to the
fifth Business Day prior to the Expiry Date, or (ii) within fifteen (15) days of
any downgrade or withdrawal of the short-term unsecured debt rating of the
Lender, the Lender does not provide to the Company a replacement irrevocable
liquidity facility (a "Replacement Facility") substantially identical to this
Agreement and issued by the Lender or another institution with a short-term
unsecured debt rating of A-1+ by Standard & Poor's Rating Group, and with
respect to which Replacement Facility the Rating Agency has given written notice
that such replacement does not result in a withdrawal or downgrade in the rating
on the Securities (and in all events with not less than thirty (30) days prior
written notice to such Rating Agency), the Servicer or the Trustee may deliver
to the Lender a Notice of Borrowing for the full amount of any undrawn
Commitment, and, in the case of the Servicer, shall simultaneously notify the
Trustee of the occurrence of such event. The proceeds of any such Advance shall
be deposited in a separate trust account (the "Liquidity Account") with the
Trustee. Pursuant to the Trust Agreement, the Trustee shall invest such amounts
only in Eligible Investments. The funds in the Liquidity Account may be
withdrawn by the Servicer or the Trustee under the same circumstances as the
Servicer or the Trustee were permitted to make borrowings hereunder. In such
case, the Lender shall be entitled to reimbursement hereunder in respect of such
withdrawals in the same manner as with respect to Advances made under Section
2.01 hereof (other than reimbursement from amounts paid into the Liquidity
Account as described above). In the event that (i) the Lender subsequently
delivers a Replacement Facility or (ii) the Lender obtains confirmation from
Standard & Poor's Ratings Group that amounts in the Liquidity Account are no
longer necessary to maintain the then-rating of the related Securities, the
Company, the Servicer and the Trustee shall release or shall cause the Trustee
to release any proceeds remaining in the Liquidity Account to the Lender.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Effectiveness. This Agreement shall
become effective upon the occurrence of the following conditions precedent:
(a) Trust Agreement. The Standard Terms of Trust Agreement shall have been
duly adopted by the Company and the Trustee, the Lender shall have received a
true and correct copy thereof, and the Standard Terms of Trust Agreement shall
be in form and substance satisfactory to the Lender.
(b) No Default. After giving effect to this Agreement, there shall exist
no Event of Default and the Company shall not be in default of any of its
obligations under this Agreement or the other Company Documents.
(c) Representations and Warranties. All representations and warranties of
the Company contained in this Agreement and in the other Company Documents shall
be true and correct and with the same force and effect as though such
representations and warranties had been made as of the Effective Date.
-8-
<PAGE>
(d) Opinions of Counsel. The Lender shall have received from (i) counsel
to the Company and (ii) Chapman and Cutler, special counsel to the Lender and
(iii) counsel to Eximbank, favorable opinions, each dated the Effective Date in
form and substance satisfactory to the Lender.
(e) Documentation and Proceedings. The Lender shall have received
certified copies of the certificate of incorporation and by-laws of the Company,
Board of Directors' resolutions in respect of the Company Documents and
incumbency certificates, all satisfactory in form and substance to the Lender.
(f) Officer's Certificates. The Lender shall have received a certificate
or certificates executed by authorized officers of the Company certifying that
the conditions applicable to it set forth in Sections 3.01(b) and (c) have been
satisfied.
(g) Basic Documents. Each of the following documents shall have been
executed and delivered by the parties thereto and be in full force and effect,
the Lender shall have received duly executed counterparts thereof, and each such
document shall be in form and substance satisfactory to the Lender:
(i) the Trust Agreement pursuant to which the related Securities are
issued;
(ii) the related Loan Agreement entered into by the applicable
Borrower, together with copies of all closing documents delivered to the
Bank thereunder; and
(iii) the Eximbank Guarantee Agreement relating to the Loan Notes to be
issued pursuant to the Loan Agreement.
(h) Receipt of Fee. The Lender shall have received from the Company the
fees described in Section 2.06 hereof.
(i) Program Schedule. The Lender shall have received a copy of the Program
Schedule with respect to the applicable Loan Note or Notes, which Program
Schedule shall be attached hereto.
Section 3.02. Conditions Precedent to Each Advance. The obligation of the
Lender to make each Advance, including the initial Advance, shall be subject to
the further conditions precedent that:
(a) the Lender shall have received a Notice of Borrowing; and
(b) no event shall have occurred and be continuing that constitutes a
Payment Default.
-9-
<PAGE>
ARTICLE IV
COVENANTS
Section 4.01. Affirmative Covenants. So long as any Advance shall remain
unpaid or the Lender shall have any Commitment hereunder, the Company shall:
(a) Maintenance of Corporate Existence. Preserve and maintain in all
material respects its corporate existence.
(b) Financial Information; Inspection of Records. Promptly provide the
Lender with any financial and operational information with respect to the
Company Documents or the Company as the Lender may reasonably request and
permit the Lender and its agents to inspect any of the Company's assets
(including its books and records) at any time that the Lender reasonably so
requests.
(c) Payment of Taxes. Take all actions necessary to ensure that all
taxes and other governmental claims in respect of the Company's operations
and assets are promptly paid.
(d) Delivery of Documents upon Issuance of Securities. Promptly
provide the Lender with copies of all agreements, certificates and other
documents delivered by the Company or the Borrower in connection with the
issuance of Securities together with, in the case of legal opinions,
letters permitting the Lender to rely thereon.
(e) Use of Proceeds. Use the proceeds of the Securities only to
purchase Loan Notes from the Bank pursuant to the Purchase Agreement and to
pay any fees or expenses of the Underwriter pursuant to the Underwriting
Agreement.
(f) Proceeds of Advances. Use the proceeds of the Advances solely to
make payments in respect of the Securities related to the Loan Note or
Notes with respect to which such Advance was made.
Section 4.02. Negative Covenants. So long as any Advance shall remain unpaid
or the Lender shall have any Commitment hereunder, the Company shall not:
(a) Dividend Limitation. Declare or pay any dividend in respect of, or
make any distribution in respect of or in redemption of, any shares of its
capital stock.
(b) Liens. Contract for, create, incur, assume or suffer to exist any
Lien of any nature upon any of its property or assets, whether now owned or
hereafter acquired, except as permitted in the Trust Agreement.
(c) Limit on Other Debt. Create, incur, assume or suffer to exist any
indebtedness, whether current or funded, or any other liability, except:
-10-
<PAGE>
(i) indebtedness evidenced by the Securities;
(ii) the Advances;
(iii) indebtedness of the Company representing fees, expenses and
indemnities payable to the Trustee pursuant to the Trust Agreement;
(iv) other indebtedness of the Company to the Trustee or the
Lender arising hereunder or under the Trust Agreement;
(v) indebtedness of the Company or other amounts payable to the
Bank under the Purchase Agreement;
(vi) indebtedness of the Company representing fees, expenses and
indemnities payable to the Underwriter under the Underwriting
Agreement;
(vii) such indebtedness as is permitted under the Trust Agreement;
and
(viii) indebtedness for services supplied or furnished to the
Company (including, without limitation, reasonable accountants' and
attorneys' fees and amounts payable under the Servicing Agreement and
the Management Agreement between the Company and Lord Securities
Corporation dated as of July 22, 1994 (the "Management Agreement"));
it being understood that any such other indebtedness does not constitute a claim
on the Trust Estate (or shall only constitute a claim thereon subordinate to the
indebtedness described in clauses (c)(i) and (ii) as and to the extent provided
in the Trust Agreement).
(e) Consolidation, Merger and Sale of Assets. Enter into any merger,
consolidation, joint venture, syndicate or other form of combination with
any Person or sell, lease or transfer or otherwise dispose of all or
substantially all of its assets.
(f) Other Agreements. Enter into or be a party to any agreement or
instrument other than the Company Documents, the Management Agreement and
the Referral Agreement dated as of July 22, 1994 between the Company and
ABN AMRO Bank, N.V., or amend, modify or waive any provision of, or give
any approval or consent or permission provided for in, any Company Document
(other than the Underwriting Agreement, the Servicing Agreement, the
Management Agreement and other than the Trust Agreement to the extent
permitted thereby), or any Loan Note, without in any such case the prior
written consent of the Lender if any of the rights or obligations of the
Lender would be adversely affected thereby. The Company shall give the
Lender 10 Business Days notice of the Company's entering into any of the
additional agreements or instruments referred to in the preceding sentence
or any amendment of any Company Document or Loan Note that might require
such consent.
-11-
<PAGE>
(g) Capital Expenditures. Make any expenditure (by long-term or
operating lease or otherwise) for capital assets (both realty and
personality).
(h) Other Business. Engage in any business, enterprise or activity or
enter into any material transaction other than as contemplated by this
Agreement and the other Company Documents.
(i) Amendment of Certificate of Incorporation or By-Laws. Amend its
certificate of incorporation or by-laws without the prior written consent
of the Lender, which consent shall not be unreasonably withheld.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties. The Company hereby represents
and warrants as follows:
(a) Corporate Existence. The Company is duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has the corporate power to own its assets and to transact the business in
which it is now engaged. The Company has no subsidiaries.
(b) Corporate Power; Authorization; Enforceable Obligation. The
Company has the corporate power, authority and legal right to execute,
deliver and perform the Company Documents and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the
terms and conditions hereof, the execution, delivery and performance by the
Company of the Company Documents (other than the Securities). No consent,
license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required for the execution, delivery or performance by the
Company of the Company Documents which has not been obtained, made, given
or accomplished. The Company Documents (other than the Securities) have
been executed and delivered by a duly authorized officer of the Company,
and each of the Company Documents constitutes as to the Company and, in the
case of the Securities, as to the Trust, when executed and issued in
accordance with the provisions of the Trust Agreement, will constitute, a
legal, valid and binding obligation enforceable in accordance with their
respective terms, except that the enforceability thereof may be subject to
the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
(c) No Legal Bar. The execution, delivery and performance by the
Company of the Company Documents will not violate any provision of, or
result in any default
-12-
<PAGE>
under, any existing law or regulation applicable to the Company, any order,
judgment, award or decree of any court, arbitrator or governmental
authority applicable to the Company, the certificate of incorporation or
by-laws of the Company, or any mortgage, indenture, lease, contract or
other agreement, instrument or undertaking to which the Company is a party
or by which the Company or any of its assets may be bound, and will not,
except as otherwise provided herein or under any of the other Company
Documents, result in, or require, the creation or imposition of any Lien on
any of its property, assets or revenues.
(d) No Litigation. No litigation, investigation or administrative
proceeding of or before any court, arbitrator or governmental authority is
pending or, to the Company's knowledge, threatened against the Company or
any of its assets.
(e) Securities; Investment Company Act etc. The Securities are being
registered pursuant to the registration requirements of the Securities Act
of 1933, as amended. The qualification of the Trust Agreement with respect
to the Securities under the Trust Indenture Act of 1939, as amended, will
not be required in connection with the offer, issuance, sale or delivery of
the Securities. The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(f) Parent of the Company. Securitization Holding Company, L.L.C., a
Delaware limited liability company, is the registered owner of all of the
issued and outstanding capital stock of the Company, all of which capital
stock has been validly issued, is fully paid and nonassessable and is and
will remain free and clear of all Liens, warrants, options and rights to
purchase. The Company owns no capital stock of, or other interest in, any
person or entity.
(g) Accuracy of Representations and Warranties. The representations
and warranties of the Company contained in each other document delivered in
connection with this Agreement and the other Company Documents are, or when
such document was delivered were, true and correct when made.
(h) No Default. The Company is not in default of any of its
obligations under any of the Company Documents.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Computations. All computations of interest and fees
hereunder shall be made on the basis of a year of 360 days and the actual number
of days elapsed.
Section 6.02. Exercise of Rights. No failure or delay on the part of the
Lender to exercise any right, power or privilege under this Agreement and no
course of dealing between
-13-
<PAGE>
the Company and the Lender shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. Except as otherwise provided in Section 6.11(b) with
respect to the Company, the rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Lender would
otherwise have pursuant to law or equity. No notice to or demand on any party in
any case shall entitle such party to any other or further notice or demand in
similar or other circumstances, or constitute a waiver of the right of the other
party to any other or further action in any circumstances without notice or
demand.
Section 6.03. Successors and Assigns. This Agreement shall bind, and the
benefits hereof shall inure to, the parties hereto and their respective
successors and assigns, provided that no party hereto may transfer or assign any
or all of its rights and obligations hereunder without the prior written consent
of the other parties hereto, other than with respect to the succession of any
successor Servicer or Trustee to rights and obligations hereunder pursuant to
the succession provisions the Servicing Agreement or Trust Agreement as
applicable. Nothing in this Agreement is intended or shall be construed to give
any person other than the persons mentioned in the preceding sentence any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
Section 6.04. The descriptive headings of the various provisions of this
Agreement are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.
Section 6.05. Notices; Requests; Demands. Except where telephonic
instructions or notices are authorized herein to be given, all notices, demands,
instructions and other communications required or permitted to be given to or
made upon any party hereto shall be in writing and shall be personally delivered
or sent by registered, certified or express mail, postage prepaid, return
receipt requested, or by telecopier or prepaid telegram (with messenger delivery
specified in the case of a telegram) and shall be deemed to be given for
purposes of this Agreement on the day that such writing is delivered or sent to
the intended recipient thereof in accordance with the provisions of this
Section. Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section, notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their respective
telecopier or telephone numbers) and in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
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<PAGE>
If to the Company:
U. S. Trade Funding Corp.
Two Wall Street
New York, New York 10005
Attention: Andrew C. Stidd, President
Telecopy: (212) 346-9012
Telephone: (212) 346-9008
with a copy to the Underwriter and the Trustee.
If to the Bank:
ABN AMRO Bank N.V.
Chicago Branch
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Structured Trade Finance
Telecopy: (312) 904-7399
Telephone: (312) 904-7343
If to the Lender:
ABN AMRO Bank N.V.
Seattle Branch
600 University Street
One Union Square, Suite 2323
Seattle, Washington 98101
Attention: Operations Department
Telecopy: (206) 682-5641
Telephone: (206) 587-2330
-15-
<PAGE>
with a copy to the Trustee.
If to the Trustee:
LaSalle National Bank
135 South LaSalle Street - Suite 200
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Services
Telecopy No.: (312) 904-2084
Telephone No.: (312) 904-7326
If to the Underwriter:
ABN AMRO Securities (USA) Inc.
181 West Madison Street, Suite 3201
Chicago, Illinois 60602
Attention: Jeff Sirota
Telecopy No.: (312) 781-8167
Telephone No.: (312) 781-7100
Section 6.06. Survival of Representations and Warranties. All
representations and warranties contained in Article V shall survive the
execution and delivery of this Agreement and any Advance and shall continue only
so long as and until such time as all indebtedness hereunder shall have been
paid in full or the Lender has any Commitment outstanding hereunder.
Section 6.07. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 6.08. Counterparts. This Agreement may be executed in any number
of copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
Section 6.09. Further Assurances. The Company agrees to do such further
acts and things and to execute and deliver to the Lender such additional
assignments, agreements, powers and instruments, as the Lender may require or
deem advisable to carry into effect the purposes of this Agreement or to better
assure and confirm unto the Lender its rights, powers and remedies hereunder.
Section 6.10. Bankruptcy Petition Against the Company. The Lender hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all Securities, it will not institute against, or join
any other person in instituting against, the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
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<PAGE>
Section 6.11. Recourse. (a) The obligations of the Company under this
Agreement and all other Company Documents are solely the corporate obligations
of the Company. No recourse shall be had for the payment of any amount owing in
respect of Advances or for the payment of any fee hereunder or any other
obligation or claim arising out of or based upon this Agreement or any other
Company Document against any stockholder, employee, affiliate officer, director
or incorporator of the Company. Nothing in this Section 6.11 shall limit any
rights that the Lender may have against persons other than the Company.
(b) Except as otherwise provided in the second following sentence, the
Company's obligations hereunder, including without limitation its obligation to
repay the Lender for unpaid Advances, shall be satisfied solely from
distributions or collections in respect of the Trust Estate as contemplated in
Sections 2.10(a) and (b) hereof and in the Borrower Documents and no recourse
shall be had for any such obligation against any other asset of the Company. In
no event shall the Lender have the right to sell or direct the sale of any Trust
Estate. In the event the amount received by the Lender in repayment of an unpaid
Advance or payment of interest thereon is less than the amount of such unpaid
Advance or interest thereon, the Lender shall have no recourse against the
Company or its assets for such unpaid portion of such unpaid Advance or interest
thereon but may proceed (if so entitled thereunder) against the Borrower under
the applicable Borrower Documents and any other persons (other than the Company)
who may have liability therefor.
(c) The Lender hereby agrees that, notwithstanding any provision of this
Agreement, at any time any Security is outstanding and no Insolvency Event (as
defined below) has occurred and is continuing, (i) the Company shall not make
any payment to the Lender, (ii) the Company shall have no duty, liability or
obligation to make any payment to the Lender, (iii) no payment shall be due from
the Company and (iv) the Lender shall have no right to enforce any claim against
the Company in respect of any payment, in each case unless and to the extent (x)
that the making of such payment by the Company would not render the Company
insolvent and (y) the Company has funds available to make such payment. The term
"Insolvency Event" shall mean the entry against the Company of a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days, or the consent by the Company to the appointment of a
trustee, conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Company or the filing by the Company of a petition to take
advantage of any applicable insolvency or reorganization statute.
Section 6.12. Effective Date. This Agreement shall become effective on the
date (the "Borrower Effective Date") on which the Company, the Lender, the
Servicer and the Trustee shall have executed and delivered a counterpart of this
Agreement and all of the conditions set forth in Section 3.01 hereof have been
satisfied or waived by the Lender. The execution of a Program Schedule by the
Lender and the attachment of such Program Schedule to this
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<PAGE>
Agreement shall constitute confirmation by the Lender that the conditions set
forth in Section 3.01 hereof have been satisfied or waived by the Lender.
Section 6.13. Amendment. No amendment or waiver of any provision of this
Agreement, nor consent to any departure therefrom, shall be effective unless (i)
the same shall be in writing and signed by the Lender, the Company, the Servicer
and the Trustee, and (ii) the prior written consent of Eximbank, as well as the
prior written notification from the Rating Agency that a withdrawal or downgrade
of the rating on the Securities shall not as a result occur, shall have been
obtained, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 6.14. Jurisdiction; Immunities. (a) Each party hereto hereby
irrevocably submits to the jurisdiction of Illinois state or United States
federal court sitting in Illinois over any action or proceeding arising out of
or relating to this Agreement or any Advance and each such party hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Illinois state or federal court. Each party
hereto irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to such party at
its address specified herein. Each party hereto further waives, to the extent
permitted by law, any objection to venue in such state and any objection to an
action or proceeding in such state on the basis of forum non conveniens. Each
party hereto further agrees that any action or proceeding brought against such
party shall be brought only in an Illinois state or United States federal court
sitting in Illinois.
(b) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, such party
hereby irrevocably waives, to the extent permitted by law, such immunity in
respect of its obligations under this Agreement.
Section 6.15. Severability. To the extent permitted by law, any provision
of this Agreement which is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
Section 6.16. Prior Agreements Superseded. This Agreement shall completely
and fully supersede all prior understandings or agreements, both written and
oral, between the Company and the Lender relating to the making of Advances,
including those contained in any commitment letter or other correspondence
between the Lender and the Company executed in anticipation of the making of
Advances.
Section 6.17. Certain Information. At the request of the Company or its
designee, the Lender agrees to update, no more often than on a quarterly basis,
the summary financial information concerning the Lender contained in the
offering material relating to the Securities issued by or at the direction of
the Company.
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<PAGE>
In Witness Whereof, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written. U.S. Trade Funding Corp.
U.S. TRADE FUNDING CORP.
By:__________________________________________
Name:
Title: President
ABN AMRO BANK N.V., as Lender
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
ABN AMRO BANK N.V., as Servicer
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
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<PAGE>
The undersigned acknowledges and
consents to the terms hereof and
agrees to perform its obligations
hereunder.
__________________________________
LaSalle National Bank, as
Trustee
By:_______________________________
Name:
Title:
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<PAGE>
PROGRAM SCHEDULE
Reference is made to that certain IRREVOCABLE REVOLVING CREDIT AGREEMENT
dated as of January 1, 1995 among U.S. TRADE FUNDING CORP., a Delaware
corporation (the "Company"), ABN AMRO Bank N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch in its capacity as
Servicer (the "Servicer") and acting through its Seattle Branch in its capacity
as Lender, the ("Lender") and LASALLE NATIONAL BANK, as Trustee (the "Trustee")
for the U. S. Trade Trust Series 1996-A (the "Trust") (the "Liquidity
Agreement").
WITNESSETH:
WHEREAS, ABN AMRO BANK N.V., acting through its Chicago branch (together
with its successors and assigns, the "Bank") has made loans to YA96A Limited, a
company incorporated under the laws of the Cayman Islands (the "Borrower")
pursuant to a Guaranteed Loan Agreement among the Borrower, Wilmington Trust
Company (as Security Trustee thereunder), Export Import Bank of the United
States and the Bank (as Lender and Facility Agent thereunder) dated as of August
27, 1996 (the "Loan Agreement") and such Loans are evidenced by certain
promissory notes in the form set forth in Appendix 3, Part 2 to the Loan
Agreement (each a "Loan Note" and collectively, the "Loan Notes");
WHEREAS, the Loan Notes are entitled to the benefits of the related
Guarantee Agreement (the "Eximbank Guarantee Agreement"), between the Bank (as
Facility Agent) and the Export-Import Bank of the United States ("Eximbank");
WHEREAS, the Company and the Trustee have entered into a Supplemental Trust
Agreement dated as of October 1, 1996, incorporating therein the Standard Terms
and Conditions of Trust Agreement dated as of January 1, 1995 (such Supplemental
Trust Agreement being referred to herein as the "Trust Agreement") pursuant to
which the Trust is entitled to issue, or cause the issuance, of certain
securities (the "Securities");
WHEREAS, pursuant to a Sale and Assignment Agreement No. 2 dated as of
October 1, 1996 (the "Purchase Agreement"), the Company has agreed to purchase
from the Bank, and the Bank has agreed to sell to the Company, the Loan Notes
and all of the Bank's right, title and interest thereunder, including, without
limitation, all of its right, title and interest under the Eximbank Guarantee
Agreement related to the Loan Notes;
WHEREAS, the Company will finance its payment of the purchase price of the
Loan Notes through the issuance by the Trust of Securities pursuant to the Trust
Agreement and the obligations in respect of the Securities will be secured by an
assignment, inter alia, of all of the Company's right, title and interest with
respect to the Loan Notes, the related Eximbank Guarantee Agreement, the
Purchase Agreement, the Servicing Agreement and this Agreement, to the Trustee
pursuant to such Trust Agreement;
<PAGE>
WHEREAS, the Company desires that the payment of amounts due on the
Securities be supported by an irrevocable revolving credit facility; and
WHEREAS, subject to the terms and conditions set forth herein and in the
Liquidity Agreement, the Lender is willing to provide, at the request of the
Company, an irrevocable revolving credit facility with respect to the Loan
Notes, which amount is available for borrowing under the Liquidity Agreement;
NOW, THEREFORE, the parties hereto agree that this Program Schedule shall
constitute a "Program Schedule" as defined in the Liquidity Agreement and shall
be attached to the Liqudity Agreement as provided in Section 6.12 of the
Liquidity Agreement:
<TABLE>
<CAPTION>
DATE OF LIQUIDITY FACILITY: As of January 1, 1995
<S> <C>
LOAN(S):
Borrower: YA96A Limited
Lender: ABN AMRO Bank N.V.
Date of Loan Agreement: August 27, 1996
Amount of each Loan Note: $ 50,952,326.31 ("Note A");
$ 50,719,872.97 ("Note B");
Borrower Commitment: $ 3,131,432.23 (Note A)
$ 3,117,146.11 (Note B)
Aggregate Amount of Loans: $ 101,672,199.28
Aggregate Commitment: $ 6,248,578.34
SECURITIES: 6.75% Trade Trust Certificates, Series
1996-A issued by U.S. Trade Trust, Series
1996-A
EXIMBANK GUARANTEE: Eximbank Guarantee No. AP070425 - People's
Republic of China (China Yunnan Airlines)
</TABLE>
<PAGE>
In Witness Whereof, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of October 1, 1996.
U.S. TRADE FUNDING CORP.
By:_____________________________________
Name:
Title: President
ABN AMRO BANK N.V., as Lender
By: ABN AMRO NORTH AMERICA, INC., its
agent
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
ABN AMRO BANK N.V., as Servicer
By: ABN AMRO NORTH AMERICA, INC., its
agent
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
<PAGE>
The undersigned acknowledges and
consents to the terms hereof and
agrees to perform its obligations
hereunder.
LaSalle National Bank, as
Trustee
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT 10.5
================================================================================
Purchase Agreement
ABN Amro Bank N.V.
and
U.S. Trade Funding Corp.
dated as of January 1, 1995
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Article I Definitions.............................................................. 1
Section 1.01. Definitions.............................................................. 1
Article II Purchase and Conveyance of Loan Notes.................................... 2
Article III Representations and Warranties........................................... 3
Section 3.01. Representations and Warranties of the Bank............................... 3
Section 3.02. Representations and Warranties of the Company............................ 3
Article IV Other Matters Relating to the Bank....................................... 4
Section 4.01. Liability of the Bank.................................................... 4
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations of, the Bank 4
Section 4.03. Limitation on Liability of the Bank...................................... 5
Section 4.04. Notice to Borrowers...................................................... 5
Article V Conditions Precedent..................................................... 5
Section 5.01. Conditions to the Obligations of the Company............................. 5
Article VI Miscellaneous............................................................ 6
Section 6.01. Notices, etc............................................................. 6
Section 6.02. Successors and Assigns................................................... 7
Section 6.03. Severability Clause...................................................... 7
Section 6.04. Amendments............................................................... 7
Section 6.05. Governing Law; Jurisdiction.............................................. 7
Section 6.06. Counterparts............................................................. 8
Section 6.07. Bankruptcy Petition Against the Company.................................. 8
Section 6.08. No Recourse.............................................................. 8
Section 6.09. Effect of Headings....................................................... 8
Section 6.10. No Waiver................................................................ 9
</TABLE>
Exhibit A to the Purchase Agreement Sale and Assignment Agreement
Annex I to Assignment Description of transferred property and purchase price
<PAGE>
Purchase Agreement dated as of January 1, 1995 (the "Agreement") between
ABN Amro Bank N.V., acting through its Chicago branch (together with its
successors and assigns, the "Bank") and U.S. Trade Funding Corp. (the
"Company").
WITNESSETH
Whereas, the Bank will, from time to time, loan amounts to the Borrowers
pursuant to Loan Agreements between each of the Borrowers and the Bank and such
Loans are to be evidenced by certain promissory notes in the forms set forth in
the related Loan Agreement (the "Loan Notes");
Whereas, the Loan Notes are entitled to the benefits of the related
Guarantee Agreements, (the "Eximbank Guarantee Agreements") between the Bank and
the Export-Import Bank of the United States ("Eximbank");
Whereas, the Company and LaSalle National Bank, as trustee (together with
any successors thereto in such capacity, the "Trustee"), are or will be parties
to Supplemental Trust Agreements incorporating therein the Standard Terms and
Conditions of Trust Agreement dated as of January 1, 1995 (as the same may be
amended from time to time, "Trust Agreements") pursuant to which the Company is
entitled to issue, or cause the issuance, from time to time of certain
securities (the "Securities");
Whereas, the Company desires to purchase from time to time from the Bank,
and the Bank desires to sell from time to time to the Company, the Loan Notes
and all of the Bank's right, title and interest thereunder, including, without
limitation, all of its right, title and interest under the Eximbank Guarantee
Agreements to the extent related to the Loan Notes; and
Whereas, the Company will finance its payment of the purchase price of the
Loan Notes through the issuance from time to time of the Company's Securities
(or Securities representing interests in a Trust formed by the Company) pursuant
to the related Trust Agreement and will secure the Securities by assigning,
inter alia, all of its right, title and interest with respect to the Loan Notes,
the related Loan Agreement and the Eximbank Guarantee Agreements to the Trustee
pursuant to the Trust Agreement.
Now, Therefore, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions (a) For all purposes of this Agreement,
capitalized terms not otherwise defined herein shall have the meanings specified
in the Trust Agreement.
<PAGE>
(b) The following terms (except as otherwise expressly provided or unless
the context otherwise requires) for all purposes of this Agreement shall have
the respective meanings hereinafter specified:"
Assignment" shall have the meaning set forth in Section 5.01(c) hereof."
Borrower" shall mean each Borrower party to a Loan Agreement."
Documents" shall have the meaning specified in Section 4.03(b) hereof."
Payment Certificate" with respect to any Loan Notes, shall mean a payment
certificate issued by Eximbank with respect to such Loan Notes."
Purchase Date" shall mean each date (which shall be a Business Day) on
which the Bank sells and the Company purchases Transferred Property pursuant to
this Agreement."
Purchase Price" shall have the meaning set forth in Section 2.01(a)
hereof."
Transferred Property" shall have the meaning set forth in Section 2.01(a)
hereof.
The words "herein," "hereof," "hereby," "hereto," "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
article, section, paragraph or other subdivision of this Agreement. Defined
terms shall include the plural and the singular as the context shall require.
ARTICLE II
PURCHASE AND CONVEYANCE OF LOAN NOTES
Section 2.01. Purchase of Transferred Property;. (a) Subject to and
upon the terms and conditions hereinafter set forth, from time to time, the Bank
will sell, transfer, convey and assign to, or at the direction of, the Company,
without recourse, except as provided in this Agreement, and the Company will
purchase (but only as the Company shall agree as evidenced by its execution of a
related Assignment), all of the Bank's right, title and interest in and under
(i) one or more Loan Notes specified by the Bank, (ii) all monies due or to
become due with respect to such Loan Note or Loan Notes, and (iii) to the extent
related to such Loan Note or Loan Notes, the rights under the related Loan
Agreement or Loan Agreements and one or more Eximbank Guarantee Agreements
(collectively, the "Transferred Property") for a purchase price (the "Purchase
Price") equal to the purchase price of such Loan Note or Loan Notes as set forth
in the related Assignment. The Company acknowledges that transfers of the
Transferred Property made by the Bank directly to the Trustee for the benefit of
a Trust pursuant to a Transfer Agreement (as defined in Section 5.01(d) hereof)
are authorized by the Company consistent with the Company's rights in the
Transferred Property acquired hereunder.
-2-
<PAGE>
(b) The Purchase Price shall be satisfied by the payment of the same in
U.S. Dollars and in immediately available funds to such office of the Bank as
the Bank may designate from time to time.
(c) The Bank will cause each such Loan Note to be transferred to the
Trustee, as trustee under the related Trust Agreement for the benefit of the
Holders, on behalf of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Bank. The Bank
represents and warrants to the Company that:
(a) The Bank has been duly organized and is validly existing and in
good standing as a bank under the laws of its jurisdiction of organization,
with full power and authority to own its properties and to transact the
business in which it now engages.
(b) The performance of its obligations under this Agreement and the
consummation of the transactions herein contemplated have been duly
authorized by all requisite corporate action and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of its property or assets or upon that of any of
its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Bank or
any of its subsidiaries is a party or by which the Bank or any of its
subsidiaries is bound or to which any of their property or assets is
subject, nor will such action result in any violation of the provisions of
the Bank's organizational documents.
(c) This Agreement has been, and on each Purchase Date, each
Assignment will be, duly executed and delivered by the Bank and each
constitutes (or will constitute on the relevant Purchase Date) a valid and
legally binding obligation of the Bank, enforceable against the Bank in
accordance with its terms, except as the enforceability thereof may be
subject to (i) the effects of any applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship or other laws, regulations
and administrative orders affecting the rights of creditors generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or law).
(d) On each Purchase Date the Bank will be the owner of all right,
title and interest in and to the Transferred Property to be conveyed to the
Company on such Purchase Date and upon delivery of the corresponding
Assignment and the relevant Loan Notes such ownership interest will be
vested in the Company free and clear of all claims other than claims
created by or arising through the Company.
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<PAGE>
Section 3.02. Representations and Warranties of the Company. The Company
represents and warrants to the Bank that:
(a) The Company has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of Delaware,
with full corporate power and authority to own its properties and to
transact the business in which it now engages or in which it proposes to
engage.
(b) The purchases to be made by the Company of the Transferred
Property pursuant to this Agreement and the consummation of the
transactions herein contemplated will not conflict with, or result in a
breach of, any of the terms or provisions of, or constitute a default under
or, except as contemplated hereby or by the Trust Agreement, result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of the Company pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which it is bound or to which any of the
property or assets of the Company is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
the By-Laws of the Company or of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its properties or assets; and no consent,
approval, authorization, order, registration or qualification of or with
any court or any such regulatory authority or other governmental agency or
body is required for the purchases from time to time by the Company of the
Transferred Property hereunder.
(c) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the valid and legally binding obligation of
the Company enforceable against the Company in accordance with its terms,
except that the enforceability hereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws nor or
hereafter in effect relating to creditor's rights and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or law).
ARTICLE IV
OTHER MATTERS RELATING TO THE BANK
Section 4.01. Liability of the Bank. The Bank shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Bank in such capacity herein.
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Bank. (a) Any corporation or other entity into which the Bank may be
merged or consolidated, or any corporation or other entity resulting from any
merger, conversion or consolidation to which the Bank shall be a party, or any
Person succeeding to the business of the Bank shall be the successor of the Bank
hereunder (without relieving the Bank of its responsibilities hereunder if it
survives such merger, conversion or consolidation), without
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<PAGE>
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that, upon the request of the Company, the
successor to the Bank shall execute an assumption agreement providing for the
assumption by the successor to the Bank of the rights and obligations of the
Bank hereunder in a form reasonably satisfactory to the Company.
(b) The obligations of the Bank hereunder shall not be assignable nor
shall any Person succeed to the obligations of the Bank hereunder except in each
case in accordance with the provisions of Section 4.02(a) hereof.
Section 4.03. Limitation on Liability of the Bank. (a) Neither the Bank
nor any of the directors or officers or employees or agents of the Bank in its
capacity hereunder shall be under any liability to the Company, the Trustee, the
Holders or any other Person for any action taken or for refraining from the
taking of any action in its capacity as Bank pursuant to this Agreement whether
arising from express or implied duties under this Agreement, provided that this
provision shall not protect the Bank or any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Bank and any director or officer or
employee or agent of the Bank 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.
(b) The Bank shall not be responsible to the Company, the Trustee, the
Liquidity Provider, any Holder or any other Person for the execution (by any
party other than the Bank), effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of any Loan Note, any Loan
Agreement, any Eximbank Guarantee Agreement or any of the agreements, documents
or instruments referred to therein (collectively, the "Documents") or for any
representation, warranty, recital or statement made (by any party other than the
Bank) therein or in any written or oral statement or in any financial or other
statement, instrument, report, certificate or any other document made or
furnished or made available by the Bank to the Company, the Trustee, the
Liquidity Provider, any Holder or any other Person or by or on behalf of the
Borrower, Eximbank or any other Person obligated under the Documents to the
Bank, the Company, the Trustee, the Liquidity Provider, any Holder or any other
Person in connection with the Documents and the transactions contemplated
thereby.
Section 4.04. Notice to Borrowers. On or prior to each Purchase Date, the
Bank shall give written notice of the transfer of the Transferred Property to
each Borrower who has issued any Loan Note included in the Transferred Property.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01. Conditions to the Obligations of the Company. The
obligations of the Company to purchase Transferred Property hereunder on any
Purchase Date shall be subject to the satisfaction of the following conditions:
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<PAGE>
(a) All representations and warranties of the Bank contained in
Section 3.01 hereof shall be true and correct on the relevant Purchase Date
and the Bank shall be in compliance in all material respects with all of
its obligations hereunder.
(b) The Company shall have issued or caused to be issued Securities
on such Purchase Date in an aggregate principal amount satisfactory to the
Company in order to effect the purchase of the Transferred Property.
(c) The Bank shall have executed and delivered to the Company the
Sale and Assignment Agreement with respect to the Transferred Property in
substantially the form of Exhibit A hereto (each an "Assignment") together
with the original Loan Notes duly endorsed to the Trustee, as trustee under
the Trust Agreement for the benefit of the Holders.
(d) The Bank shall have executed and delivered (and the Company
hereby directs such execution and delivery) to the Trustee, a Transfer
Agreement in the form attached to the related Loan Agreement (a "Transfer
Agreement") in order to effect the transfer of the Transferred Property to
the related Trust.
(e) Written notice of the transfer of the Transferred Property shall
have been given to each applicable Borrower by the Bank in accordance with
Section 4.04 hereof.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Notices, etc. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto shall be in writing and shall be personally delivered or sent by
registered, certified or express mail, postage prepaid, return receipt
requested, or by telecopier or prepaid telegram (with messenger delivery
specified in the case of a telegram) and shall be deemed to be given for
purposes of this Agreement on the day that such writing is delivered or sent to
the intended recipient thereof in accordance with the provisions of this Section
6.01. Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section, notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or at such other
address as may be designated from time to time by a party listed below to the
others as its address for such purpose), or to their respective telecopier
numbers indicated below, and in the case of telephonic instructions or notices,
by calling the telephone number or numbers indicated for such party below:
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<PAGE>
If to the Bank:
ABN AMRO Bank N.V.
Chicago Branch
135 S. LaSalle St., Chicago, IL 60603
Attention: Structured Trade Finance
Telecopy No.: 312-904-7399
Telephone No.: 312-904-7347
If to the Company:
U.S. Trade Funding Corp.
Two Wall Street
New York, New York 10005
Attention: Andrew L. Stidd, President
Telecopy No.: (212) 346-9012
Telephone No.: (212) 346-9000
with a copy to the Servicer.
Section 6.02. Successors and Assigns. This Agreement shall be binding
upon the Bank and the Company and their respective successors and assigns and
shall inure to the benefit of the Bank and the Company and their respective
successors and assigns; provided, however, that the Company shall not transfer
or assign any or all of its rights and obligations hereunder without the prior
written consent of the Bank. Notwithstanding the foregoing, as is provided
above, the Bank acknowledges that the Company shall assign all of its rights
with respect to the Loan Notes and related Loan Agreements purchased from time
to time by the Company pursuant to this Agreement (including, without
limitation, its right under the Eximbank Guarantee Agreement with respect
thereto) to the Trustee pursuant to the Trust Agreement as security for the
payment of the Securities and the Company's obligations under the Trust
Agreement with respect to the Securities, and Bank hereby consents to such
assignment. Nothing in this Agreement is intended or shall be construed to give
any Person other than the Persons mentioned in the first two sentences of this
Section 6.02, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein, except Section 4.03 of this
Agreement shall inure to the benefit of the directors, officers, employees and
agents of the Bank and its successors and assigns.
Section 6.03. Severability Clause. To the extent permitted by applicable
law, any provisions of this Agreement which are prohibited 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 such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
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<PAGE>
Section 6.04. Amendments. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally but only by an instrument in
writing signed by the Bank, the Company and the Trustee.
Section 6.05. Governing Law; Jurisdiction. (a) This Agreement and the
Assignment shall be construed in accordance with and governed by the laws of the
State of Illinois without giving effect to the conflict of laws principles
thereof.
(b) The Company and the Bank each hereby irrevocably agrees that any legal
suit, action or proceeding arising out of or relating to this Agreement or any
of the transactions contemplated thereby, may be instituted by the other party
hereto in the Courts of the State of Illinois or the Federal Courts sitting in
the Northern District of Illinois. The Company and the Bank each hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have now or hereafter to the laying of the venue or any objection based
on forum non conveniens, or based on the grounds of jurisdiction with respect to
any such legal suit, action or proceeding and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding.
Section 6.06. Counterparts. This Agreement may be executed in any number
of copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
Section 6.07. Bankruptcy Petition Against the Company. The Bank covenants
that prior to the date which is one year and one day after the payment in full
of all Securities issued by the Company under the Trust Agreement, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any Federal or State bankruptcy or
similar law.
Section 6.08. No Recourse. (a) The obligations of the Company under this
Agreement are solely the corporate obligations of the Company. No recourse shall
be had for the payment of any amount owing hereunder or under any agreement
related hereto against any stockholder, employee, affiliate, officer, director
or incorporator of the Company. It is understood and agreed that the Bank shall
not be liable for any losses suffered by the Company or the purchasers of the
Securities in respect of the Transferred Property.
(b) The Bank hereby agrees that, notwithstanding any provision of this
Agreement, at any time any Security is outstanding and no Insolvency Event, as
defined below, has occurred and is continuing, (i) the Company shall not make
any payment to the Bank, (ii) the Company shall have no duty, liability or
obligation to make any payment to the Bank, (iii) no payment shall be due from
the Company and (iv) the Bank shall have no right to enforce any claim against
the Company in respect of any payment, in each case unless and to the extent (x)
that the making of such payment by the Company would not render the Company
insolvent and (y) the Company has funds available to make such payment. The term
"Insolvency Event" shall mean the entry against the Company of a decree or order
by a
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<PAGE>
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for period of
60 consecutive days, or the consent by the Company to the appointment of a
trustee, conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Company or the filing by the Company of a petition to take
advantage of any applicable insolvency or reorganization statute.
Section 6.09. Effect of Headings. The Article and Section Headings herein
are for convenience only and shall not affect construction hereof.
Section 6.10. No Waiver. No failure or delay on the part of the Bank to
exercise any right, power or privilege under this Agreement and no course of
dealing between the Company and the Bank shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
right, power or privilege. No notice to or demand on any party in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances, or constitute a waiver of the right of the other party to any
other or further action in any circumstances without notice or demand.
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<PAGE>
In Witness Whereof, each of the parties hereto have caused this Purchase
Agreement to be duly executed and delivered as of the date first above written.
ABN Amro Bank N.V., acting through its
Chicago branch
By______________________________________
Name____________________________________
Title___________________________________
By______________________________________
Name____________________________________
Title___________________________________
U.S. Trade Funding Corp.
By______________________________________
Name____________________________________
Title___________________________________
Acknowledged:
LaSalle National Bank, as Trustee
By_________________________
Name_______________________
Title________________________
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<PAGE>
SALE AND ASSIGNMENT AGREEMENT
Sale and Assignment No. 2 of Transferred Property, (this "Assignment")
dated as of October 1, 1996, between U.S. Trade Funding Corp. (the "Company")
and ABN AMRO Bank N.V., acting through its Chicago branch (the "Bank"), pursuant
to Section 5.01(c) of the Purchase Agreement referred to below.
WITNESSETH:
Whereas, the Company and the Bank are parties to the Purchase Agreement,
dated as of January 1, 1995 (hereinafter as such agreement may from time to time
be amended, supplemented or otherwise modified, the "Purchase Agreement");
Whereas, pursuant to the Purchase Agreement, the Bank may agree from time
to time to sell, transfer, convey and assign to the Company, without recourse,
all of the Bank's right, title and interest in and under (i) one or more Loan
Notes (as defined in the Purchase Agreement) specified by the Bank herein, (ii)
all monies due or to become due with respect to such Loan Note or Loan Notes,
and (iii) to the extent related to such Loan Note or Loan Notes, the rights
under the related Loan Agreement or Loan Agreements and one or more Eximbank
Guarantee Agreements (as defined in the Purchase Agreement, the "Transferred
Property"); and
Whereas, the Company agrees to purchase the Transferred Property specified
herein, subject to the terms and conditions specified in the Purchase Agreement;
Now, Therefore, the Company and the Bank hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement, unless otherwise defined
herein.
2. Conveyance of Transferred Property. The Bank hereby sells, transfers,
assigns, sets over and otherwise conveys to, or upon the order of, the Company,
without recourse, all of its right, title and interest in, to and under the
Transferred Property identified in Annex I hereto at the Purchase Price set
forth in Annex I hereto. The Company acknowledges that such transfer is being
made by the Bank directly to the Trustee for the benefit of the U.S. Trade
Trust, Series 1996-A pursuant to the Transfer Agreement, dated as of even date
herewith and is authorized by the Company as contemplated in Section 2.01 of the
Purchase Agreement.
3. Acceptance by Company. Subject to the satisfaction of the condition
set forth in Section 4 of this Assignment, the Company hereby acknowledges the
transfer of the Transferred Property by the Bank directly to the Trust upon the
order of the Company pursuant to Section 2 of this Assignment and acknowledges
receipt of the Certificates authenticated by the Trustee in consideration
thereof.
<PAGE>
4. Representations and Warranties of the Bank. The Bank hereby confirms
that the representations and warranties made by the Bank in Section 3.01 of the
Purchase Agreement shall be true and correct as of the date of this Assignment.
5. Counterparts. This Assignment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument.
In Witness Whereof, the undersigned have caused this Assignment to be duly
executed and delivered by their respective duly authorized officers on the day
and the year first above written.
U.S. Trade Funding Corp.
By______________________________________
Name__________________________________
Title_________________________________
ABN AMRO Bank N.V., acting through its
Chicago Branch
By: ABN AMRO North America, Inc., its
agent
By______________________________________
Name__________________________________
Title_________________________________
By______________________________________
Name__________________________________
Title_________________________________
2
<PAGE>
ANNEX I TO ASSIGNMENT
Description of Transferred Property and Purchase Price
------------------------------------------------------
Loan
Aggregate Principal Amount: $101,672,199.28
Lender: ABN AMRO Bank N.V.
Borrower: YA96A Limited
Loan Notes
Note issued by Borrower to Lender October 25, 1996 in principal amount of
$50,952,326.31
Note issued by Borrower to Lender October 25, 1996 in principal amount of
$50,719,872.97
Loan Documents
Guaranteed Loan Agreement, dated August 27, 1996 by and among YA96A
Limited, as Borrower, the banks and other financial institutions named
therein, as Lenders, ABN AMRO Bank N.V., Chicago Branch as Facility Agent
and Wilmington Trust Company, as Security Trustee.
Guarantee Agreement, dated September 11, 1996 between Export Import Bank of
the United States and ABN AMRO Bank N.V., Chicago Branch, as Facility
Agent.
Loan Notes (described above)
Liquidity Facility
Each Deed of Mortgage, relating to the Loan Notes between the Borrower and
Wilmington Trust Company, as Security Trustee.
Purchase Price
$101,672,199.28
3
