<PAGE>
As filed with the Securities and Exchange Commission on July 24, 1996
Registration No.333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
-----------------------------------
DELAWARE 6799
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
13-3778761
(I.R.S. Employer Identification No.)
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]
-------------------------
CALCULATION OF REGISTRATION FEE
===============================================================================
Amount to be
Title of each class of securities to be registered registered
- -------------------------------------------------------------------------------
___% Trade Trust Certificates, Series 1996-A...... $106,678,418
===============================================================================
===============================================================================
Propsed Proposed
maximum offering maximum
price per unit(1) aggregate offering Amount of
price(1) registration fee
- -------------------------------------------------------------------------------
100% $106,678,418 $36,786
===============================================================================
(1) Estimated solely for purposes of determining the registration fee.
-------------------------
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 Registration S-K Showing Location
in Prospectus of Information Required by Items of Form S-1
Form S-1 Location in Prospectus
Item Number and Heading ----------------------
-----------------------
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
<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 or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION JULY 24, 1996
PROSPECTUS
_____% TRADE TRUST CERTIFICATES, SERIES 1996-A
EVIDENCING INTERESTS IN LOAN NOTES GUARANTEED BY THE
EXPORT-IMPORT BANK OF THE UNITED STATES
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 _________, 1996,
incorporating therein the Standard Terms and Conditions of Trust Agreement dated
as of _________, 1996 (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 to be issued, is expected to
be $106,678,418. 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 ________, 1996 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 __________,
1996 and will be payable semi-annually on each _______ and __________ (unless
such day is not a Business Day as defined herein), commencing on _______, 199__
and ending on __________, ____. Principal will be payable in 24 equal 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.
_________________________________
<TABLE>
<CAPTION>
===============================================================================
Initial
Public Proceeds
Principal Offering Underwriting to the
Amount Price Commission Trust(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
___% Trade Trust
Certificates, Series
1996-A.................. $106,678,418 100% .___% $_______
===============================================================================
</TABLE>
(1) The underwriting commissions and certain other expenses estimated to be
$________ 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 ___________, 1996.
_________________________________
___________, 1996
ABN AMRO SECURITIES (USA) INC.
-2-
<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 half 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 Holders." 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................. Trade Trust Certificates, Series
1996-A (the "Certificates").
The Trust............................. 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............... AMRO Bank N.V.
The Certificates...................... Certificates will be issued in an
aggregate amount of approximately
$106,678,418, will entitle the holder
to interest at a rate of _____% per
annum, and will have a final
distribution date of ______________,
__________.
-2-
<PAGE>
Principal on the Certificates will be
payable in 24 equal semi-annual
installments, on each ________ and
__________ (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 _________, 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
$500,000. 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 _______ and __________
(or, if not a Business Day, on the
immediately succeeding Business Day
except that if the final maturity date
of _________, ____ is not a Business
Day, such payment shall be made on the
immediately preceding Business Day) in
each year, commencing on
______________, interest at a fixed
rate and principal in 24 equal semi-
annual installments as set forth under
"The
-5-
<PAGE>
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 Holders on
the related Payment Date.
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 Holders 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."
-6-
<PAGE>
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."
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.
-7-
<PAGE>
Trustee's Fees and Expenses of The Trustee's fees and expenses will be
the Trust......................... 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."
The Eximbank Guarantee............... Eximbank will endorse 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
-8-
<PAGE>
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. 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.. $106,678,418 representing the aggregate
principal balance on the Loan Notes
as of __________________ (the "Cutoff
Date").
-9-
<PAGE>
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 Holders
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 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 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 Eximbank.
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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 Tranche A Loan Agreement
dated as of ____________, 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.
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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.
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
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, 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.
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If Eximbank accelerates the Loan Notes pursuant to the Loan Agreement due to a
non-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 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 Holders 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 Notes in the aggregate principal amount of $106,678,418. 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 equal 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 ________ and
______, commencing ______, 199__, and ending on _____________; 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 _____________ 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 and Chicago, Illinois.
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 __________, 1996 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 _____________ (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 Ratings Group, a
division of the McGraw-Hill Companies, 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,
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the Trustee is to release any proceeds of the demand on the original Liquidity
Facility to the Liquidity Provider.
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 _________,
1996 incorporating therein the Standard Terms and Conditions of Trust Agreement
dated as of ______, 1996 (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 Holders. 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
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Servicer of the Loan Notes held in the Trust. The Seller and the Servicer are
affiliates of the Underwriter and the Trustee.
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 Holders
of the Certificates 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 _______ and ________ (or the next succeeding Business Day if such date is
not a Business Day unless such non-Business Day is _____________ whereupon such
payment shall be made on the immediately preceding Business Day), commencing on
___________ and ending on _____________, 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 equal semi-
annual installments, on each Payment Date, commencing ___________ to the persons
in whose names the Certificates are registered on the preceding Record Date,
each such installment being in the aggregate amount of $____________ (except
that the last payment of principal is scheduled to be $___________).
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.
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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 distribution of any amounts due to the Holders 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 Holders on a pro rata basis. If payments in respect of any
Certificates are not made when due for any reason, Holders 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 Holders, 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 Holders 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.
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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 Holders 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 Holders refer to
distributions, notices, reports and statements to Cede & Co., as the registered
holder of the global Certificate for distribution to Holders in accordance with
DTC procedures. Accordingly, each 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 Holders
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 Holders.
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
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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.
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).
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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.
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 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
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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, 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 Holders.
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
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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 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 Holders, 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 Holders
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
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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 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 Holders 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 Holders 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 Holders; 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
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lein 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 Holders, 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 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 Holders; or (6) to evidence the succession of the Trustee; or (7) to add to
any events of default (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 Holders 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 Holders,
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 Holders of which is required
for any such supplemental trust agreement, or the consent of the Holders 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 Holders 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
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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
termination and the sale of the Trust Estate.
Promptly after the execution by the Company and the Trustee of any
supplemental trust agreement, the Company shall mail to the Holders of the
outstanding Certificates, 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
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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."
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
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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.
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
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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.
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
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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.
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
-32-
<PAGE>
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.
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.
-33-
<PAGE>
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.
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 Holders
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
-34-
<PAGE>
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, 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
-35-
<PAGE>
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.
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 Holders, 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.
-36-
<PAGE>
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 purchase from the Company, and the Company has agreed
to sell to the Underwriter, Certificates in an aggregate principal amount equal
to $106,678,418.
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 Loeb and Loeb, New York, New York and
(d) for the Company and the Trust by Chapman and Cutler, Chicago, Illinois.
Chapman and Cutler, as special United
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<PAGE>
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.
-38-
<PAGE>
Annex A
-------
SCHEDULE OF DISTRIBUTIONS
ON THE
____% TRADE TRUST CERTIFICATES, SERIES 1996-A
AGGREGATE AGGREGATE AGGREGATE
PRINCIPAL INTEREST PRINCIPAL AND
PAYMENT DATE PAYMENT PAYMENT INTEREST PAYMENT
<PAGE>
Annex B
-------
<TABLE>
<CAPTION>
INDEX OF DEFINED TERMS
<S> <C>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Servicer Remittance Date 25
Servicer Remittance Report 24
Trust 1 and 2 and 18
Trust Agreement 1 and 18
Trustee 1 and 2 and 18
Underwriting Agreement 37
</TABLE>
<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>
<CAPTION>
TABLE OF CONTENTS
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..................................................18
The Company..................................................................19
Description of the Certificates..............................................19
Certain Federal Income Tax Consequences......................................31
ERISA Considerations.........................................................35
Underwriting.................................................................37
Legal Matters................................................................37
</TABLE>
------------------------------------
Until _______, 1996 (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.
$106,678,418
U.S. TRADE TRUST, SERIES 1996-A
____% TRADE TRUST CERTIFICATES
SERIES 1996-A
_________________________________
PROSPECTUS
__________, 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>
<CAPTION>
<S> <C>
SEC Registration Fee....................................... $36,786
Legal Fees and Expenses....................................
Blue Sky Fees and Expenses.................................
Rating Agency Fees.........................................
Trustee's Fees and Expenses................................
Printing...................................................
Miscellaneous..............................................
-------
Total................................................. $
=======
</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.
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
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 --Form of Opinion of Chapman and Cutler with respect to
legality.
8.1 --Form of 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).
</TABLE>
- ---------------------
* To be filed by Amendment
(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
II-2
<PAGE>
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 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 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on this day 23 of July, 1996.
U.S. Trade Funding Corp.
By /s/ Andrew L. Stidd
-----------------------------
Andrew L. Stidd
President
Power of Attorney
Know all Men by These Presents, that the undersigned, a director or officer
of U.S. Trade Funding Corp., a Delaware corporation, hereby constitutes and
appoints Ronald E. Rokosz, Paul Gipson, Steven L. Clark, and David A. Ebroon and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
or post-effective amendments to this registration statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission or any state securities commission,
granting unto each such attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each such attorney-in-fact and agent, or his
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Andrew L. Stidd Director, Principal Executive 7/23/96
- ------------------------ Officer, Principal Financial ------------------
Andrew L. Stidd Officer and Principal
Accounting Officer
/s/ Kevin P. Burns Director 7/23/96
- ------------------------ ------------------
Kevin P. Burns
/s/ Paul E. Gipson Director 7/23/96
- ------------------------ ------------------
Paul E. Gipson
/s/ Margaret A. Gipson Director 7/23/96
- ------------------------ ------------------
Margaret A. Gipson
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
Exhibit Description
<C> <S>
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 Form of Opinion of Chapman and Cutler with respect to legality.
8.1 Form of 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.
10.5 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 page forming a part of
this Registration Statement).
</TABLE>
- -------------------
*To be filed by Amendment
II-5
<PAGE>
$106,678,418
______% TRADE TRUST CERTIFICATES, SERIES 1996-A
U.S. TRADE TRUST SERIES 1996-A
ISSUED BY
U.S. TRADE FUNDING CORP.
(THE COMPANY)
UNDERWRITING AGREEMENT
__________, 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 "_____% 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 __________, 1996 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 $106,678,418 issued by the Borrower. The Loan Notes will
bear interest at ______% per annum and will mature on _______________, _____.
Each Loan Note was issued under the Tranche A Loan Agreement (the "Loan
Agreement") dated as of ____________, 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
<PAGE>
hereinafter referred to) 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 ___________, 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-_______________) 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 $__________ 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 $106,678,418, 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 ____________, 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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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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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 Loeb and Loeb, 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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(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
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<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, National Association (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
Bank N.V. (in its individual capacity, "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
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<PAGE>
AMRO, or, to the best of the signer's knowledge, 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: Jeff Sirota, 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>
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 ______ day of __________, 1996.
Christopher Aidun, Sole Incorporator
------------------------------------
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<PAGE>
BY-LAWS
OF
U.S. TRADE FUNDING CORP.
ARTICLE I.
OFFICES
Section 1.1. The registered office of the Corporation shall be in the City
of Dover, County of Kent, State of Delaware. The Corporation may also have
offices at such other places both within and without the State of Delaware as
the Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II.
STOCKHOLDERS
Section 2.1. Time and Place of Meetings. All meetings of the
stockholders for the election of directors or for any other purpose shall be
held at such time and place, within or outside the State of Delaware, as shall
be designated by the Board of Directors. In the absence of any such designation
by the Board of Directors, each such meeting shall be held at the principal
office of the Corporation.
Section 2.2. Annual Meetings. An annual meeting of stockholders shall be
held for the purpose of electing Directors and transacting such other business
as may properly be brought before the meeting. The date of the annual meeting
shall be determined by the Board of Directors.
Section 2.3. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by law, may be called by
the President and shall be called by the Secretary at the direction of a
majority of the Board of Directors, or at the request in writing of stockholders
owning a majority in amount of the entire capital stock of the corporation
issued and outstanding and entitled to vote.
Section 2.4. Notice of Meeting. Written notice of each meeting of the
stockholders stating the place, date and time of the meeting shall be given not
less than ten (10) nor more than sixty (60) days before the date of the meeting,
to each stockholder entitled to vote at such meeting. The notice of any special
meeting of stockholders shall state the purpose or purposes for which the
meeting is called.
Section 2.5. Quorum. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by law. If a quorum is
not present or represented, the holders of the stock, present in person or
represented by proxy, at the meeting and entitled to vote thereat
<PAGE>
shall have power, by the affirmative vote of the holders of a majority of such
stock, to adjourn the meeting to another time and/or place, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting, at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the original meeting. If the adjournment is for more than thirty (30) days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 2.6. Voting. At all meetings of the stockholders, each
stockholder shall be entitled to vote, in person or by proxy, the shares of
voting stock owned by such stockholder of record on the record date for the
meeting. When a quorum is present or represented at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which, by express provision of law or of the
Certificate of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Section 2.7. Informal Action By Stockholders. Any action required to be
taken at a meeting of the stockholders, or any other action which may be taken
at a meeting of the stockholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
stockholders entitled to vote with respect to the subject matter thereof.
ARTICLE III.
DIRECTORS
Section 3.1. General Powers. The business and affairs of the Corporation
shall be managed and controlled by or under the direction of a Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Certificate of Incorporation
or by these By-Laws directed or required to be exercised or done by the
stockholders.
Section 3.2. Number, Qualification and Tenure. The number of directors
which shall constitute the whole Board of Directors shall be no less than three
(3) and no more than five (5) and shall be set from time to time by resolution
of the Board of Directors. The initial Board of Directors shall consist of four
(4) Directors. The Directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3.3 hereof, and each Director
elected shall hold office until his successor is elected and qualified or until
his earlier resignation or removal.
Section 3.3. Vacancies. Vacancies and newly created directorships
resulting from any increase in the number of directors may be filled by a
majority of the Directors then in office though less than a quorum, and each
Director so chosen shall hold office until his successor is elected and
qualified or until his earlier resignation or removal. If there are no
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<PAGE>
Directors in office, then an election of Directors may be held in the manner
provided by law.
Section 3.4. Place of Meetings. The Board of Directors may hold meetings,
both regular and special, either within or outside the State of Delaware.
Section 3.5. Regular Meetings. The Board of Directors shall hold a
regular meeting, to be known as the annual meeting, immediately following each
annual meeting of the stockholders. Other regular meetings of the Board of
Directors shall be held at such time and at such place as shall from time to
time be determined by the Board of Directors. No notice of regular meetings need
be given.
Section 3.6. Special Meetings. Special meetings of the Board of
Directors may be called by the President. Special meetings shall be called by
the Secretary on the written request of any Director. Written or verbal notice
to each Director of each special meeting stating the place, date, time and
purposes of such meeting shall be given not less than two (2) hours nor more
then ten (10) days before the time of the meeting.
Section 3.7. Quorum. At all meetings of the Board of Directors a
majority of the total number of Directors shall constitute a quorum for the
transaction of business and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by law, the
Certificate of Incorporation or these By-Laws. If a quorum shall not be present
at any meeting of the Board of Directors, the Directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 3.8. Organization. The Chairman of the Board, if elected, shall
act as chairman at all meetings of the Board of Directors. If a Chairman of the
Board is not elected or, if elected, is not present, the President or, in the
absence of the President, a Vice Chairman (who is also a member of the Board of
Directors and, if more than one (1), in the order designated by the Board of
Directors or, in the absence of such designation, in the order of their
election), if any, or if no such Vice Chairman is present, a Director chosen by
a majority of the Directors present, shall act as chairman at meetings of the
Board of Directors.
Section 3.9. Executive Committee. The Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate one (1) or
more Directors to constitute an Executive Committee, to serve as such, unless
the resolution designating the Executive Committee is sooner amended or
rescinded by the Board of Directors, until the next annual meeting of the Board
of Directors or until their respective successors are designated. The Board of
Directors, by resolution adopted by a majority of the whole Board of Directors,
may also designate additional Directors as alternate members of the Executive
Committee to serve as members of the Executive Committee in the place and stead
of any regular member or members thereof who may be unable to attend a meeting
or otherwise unavailable to act as a member of the Executive Committee. In the
absence or
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disqualification of a member and all alternate members who may serve in the
place and stead of such member, the member or members thereof present at any
meeting and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another Director to act at the
meeting in the place of any such absent or disqualified member.
Except as expressly limited by the General Corporation Law of the State of
Delaware or the Certificate of Incorporation, the Executive Committee shall have
and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation between the meetings
of the Board of Directors. The Executive Committee shall keep a record of its
acts and proceedings, which shall form a part of the records of the Corporation
in the custody of the Secretary, and all actions of the Executive Committee
shall be reported to the Board of Directors at the next meeting of the Board of
Directors.
Meetings of the Executive Committee may be called at any time by the
Chairman of the Board, the President or any two (2) of its members. No notice
of meetings need be given. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business and, except as
expressly limited by this Section 3.9, the act of a majority of the members
present at any meeting at which there is a quorum shall be the act of the
Executive Committee. Except as expressly provided in this Section 3.9, the
Executive Committee shall fix its own rules of procedure.
Section 3.10. Other Committees. The Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate one (1) or
more other committees, each such committee to consist of one (1) or more
Directors. Except as expressly limited by the General Corporation Law of the
State of Delaware or the Certificate of Incorporation, any such committee shall
have and may exercise such powers as the Board of Directors may determine and
specify in the resolution designating such committee. The Board of Directors, by
resolution adopted by a majority of the whole Board of Directors, also may
designate one (1) or more additional Directors as alternate members of any such
committee to replace any absent or disqualified member at any meeting of the
committee, and at any time may change the membership of any committee or amend
or rescind the resolution designating the committee. In the absence or
disqualification of a member or alternate member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another Director to act at the meeting in the place of any such absent or
disqualified member, provided that the Director so appointed meets any
qualifications stated in the resolution designating the committee. Each
committee shall keep a record of proceedings and report the same to the Board of
Directors to such extent and in such form as the Board of Directors may require.
Unless otherwise provided in the resolution designating the committee, a
majority of all of the members of any such committee may select its chairman,
fix its rules of procedure, fix the time and place of its meetings and specify
what notice of meetings, if any, shall be given.
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Section 3.11. Action without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 3.12. Attendance by Telephone. Members of the Board of Directors,
or of any committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors, or any committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
Section 3.13. Compensation. The Board of Directors shall have the
authority to fix the compensation of Directors, which may include their
expenses, if any, of attendance at each meeting of the Board of Directors or of
a committee.
Section 3.14. Interested Directors and Officers.
(a) No contract or transaction between the Corporation and one (1) or
more of its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one (1) or
more of the Corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the Board of Directors or committee thereof which authorizes the
contract or transactions, or solely because his or their votes are counted for
such purpose, if:
(i) The material facts as to his or their relationship or interest
and as to the contract or transaction are disclosed or known to the Board
of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative votes
of a majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum; or
(ii) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(iii) The contract or transaction is fair as to the Corporation as
of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders.
(b) Common or interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
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ARTICLE IV.
OFFICERS
Section 4.1. Enumeration. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary and a
Treasurer. The Board of Directors may also elect a Chairman of the Board, one
(1) or more Vice Chairmen, one (1) or more Vice Presidents, one (1) or more
Assistant Secretaries and Assistant Treasurers and such other officers and
agents as it shall deem appropriate. Any number of offices may be held by the
same person.
Section 4.2. Term of Office. The officers of the Corporation shall be
elected at the annual meeting of the Board of Directors and shall hold office
until their successors are elected and qualified. Any officer elected or
appointed by the Board of Directors may be removed at any time by the Board of
Directors. Any vacancy occurring in any office of the Corporation required by
this Article shall be filled by the Board of Directors, and any vacancy in any
other office may be filled by the Board of Directors. Each such successor shall
hold office for the unexpired term, until his successor is elected and qualified
or until he sooner dies, resigns, is removed or becomes disqualified.
Section 4.3. Chairman of the Board. The Chairman of the Board, when
elected, shall be the Chief Executive Officer of the Corporation and, as such,
shall have general supervision, direction and control of the business and
affairs of the Corporation, subject to the control of the Board of Directors,
shall preside at meetings of stockholders and shall have such other functions,
authority and duties as customarily appertain to the office of the chief
executive of a business corporation or as may be prescribed by the Board of
Directors.
Section 4.4. President. During any period when there shall be an office
of Chairman of the Board, the President shall be the Chief Operating Officer of
the Corporation and shall have such functions, authority and duties as may be
prescribed by the Board of Directors or the Chairman of the Board. During any
period when there shall not be an office of Chairman of the Board, the President
shall be the Chief Executive Officer of the Corporation and, as such, shall have
the functions, authority and duties provided for the Chairman of the Board when
there is an office of Chairman of the Board.
Section 4.5. Vice President. The Vice President shall perform such duties
and have such other powers as may from time to time be prescribed by the Board
of Directors, the Chairman of the Board or the President.
Section 4.6. Secretary. The Secretary shall keep a record of all
proceedings of the stockholders of the Corporation and of the Board of
Directors, and shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice, if any, of all
meetings of the stockholders and shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board or the
President. The Secretary shall have custody of the corporate seal of the
Corporation and the Secretary, or in the absence of the Secretary any Assistant
Secretary, shall have authority to affix the same to any instrument requiring
it, and when so affixed it may be attested by the
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signature of the Secretary or an Assistant Secretary. The Board of Directors may
give general authority to any other officer to affix the seal of the Corporation
and to attest such affixing of the seal.
Section 4.7. Assistant Secretary. The Assistant Secretary, or if there be
more than one (1), the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Secretary or in the event of the
Secretary's inability or refusal to act, perform the duties and exercise the
powers of the Secretary and shall perform such other duties as may from time to
time be prescribed by the Board of Directors, the Chairman of the Board, the
President or the Secretary.
Section 4.8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board, the President and
the Board of Directors, at its regular meetings or when the Board of Directors
so requires, an account of all transactions as Treasurer and of the financial
condition of the Corporation. The Treasurer shall perform such other duties as
may from time to time be prescribed by the Board of Directors, the Chairman of
the Board or the President.
Section 4.9. Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one (1), the Assistant Treasurers in the order determined by
the Board of Directors (or if there be no such determination, then in the order
of their election), shall, in the absence of the Treasurer or in the event of
the Treasurer's inability or refusal to act, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as may from time to time be prescribed by the Board of Directors, the
Chairman of the Board, the President or the Treasurer.
Section 4.10. Other Officers. Any officer who is elected or appointed from
time to time by the Board of Directors and whose duties are not specified in
these By-Laws shall perform such duties and have such powers as may be
prescribed from time to time by the Board of Directors, the Chairman of the
Board or the President.
ARTICLE V.
RESIGNATIONS AND REMOVALS
Section 5.1. Resignation. Any Director or officer may resign at any time
by delivering his resignation in writing to the Chairman of the Board, if any,
the President, or the Secretary or to a meeting of the Board of Directors. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time, and without in either case the necessity of its being accepted
unless the resignation shall so state.
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Section 5.2. Removals. A Director (including, without limitation, persons
elected by Directors to fill vacancies in the Board of Directors ) may be
removed from office with or without cause by the vote of the holders of a
majority of the shares issued and outstanding and entitled to vote in the
election of Directors. The Board of Directors may at any time remove any
officer either with or without cause. The Board of Directors may at any time
terminate or modify the authority of any agent.
Section 5.3. No Compensation. Except where a right to receive compensation
under such circumstances shall be expressly provided in a duly authorized
written agreement with the Corporation, no Director or officer resigning and no
Director or officer removed shall have any right to any compensation as such
Director or officer for any period following his resignation or removal, or any
right to damages on account of such removal, whether his compensation be by the
month or by the year or otherwise; unless in the case of a resignation, a
majority of the remaining Directors, or, in the case of removal, the body acting
on the removal pursuant to Section 5.2 hereof, shall in their or its discretion
provide for compensation from the Corporation.
ARTICLE VI.
CERTIFICATES OF STOCK
Section 6.1. Form. The shares of the Corporation shall be represented by
certificates; provided, however, that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
the Corporation's stock shall be uncertificated shares. Certificates of stock
in the Corporation, if any, shall be signed by or in the name of the Corporation
by the Chairman of the Board or the President or a Vice President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Corporation. Where a certificate is countersigned by a transfer agent,
other than the Corporation or an employee of the Corporation, or by a registrar,
the signatures of the Chairman of the Board, the President or a Vice President
and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary may be facsimiles. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, the certificate may be issued by the Corporation with the
same effect as if such officer, transfer agent or registrar were such officer,
transfer agent or registrar at the date of its issue.
Section 6.2. Transfer. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate of
stock or uncertificated shares in place of any certificate therefor issued by
the Corporation to the person entitled thereto, cancel the old certificate and
record the transaction on its books.
Section 6.3. Replacement. In case of the loss, destruction or theft of a
certificate for any stock of the Corporation, a new certificate of stock or
uncertificated shares in place of any certificate therefor issued by the
Corporation may be issued upon satisfactory proof of
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such loss, destruction or theft and upon such terms as the Board of Directors
may prescribe. The Board of Directors may in its discretion require the owner of
the lost, destroyed or stolen certificate, or his legal representative, to give
the Corporation a bond, in such sum and in such form and with such surety or
sureties as it may direct, to indemnify the Corporation against any claim that
may be made against it with respect to a certificate alleged to have been lost,
destroyed or stolen.
ARTICLE VII.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Section 7.1. Indemnification. (a) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or 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, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation or such other person, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation or such other person, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the Corporation, or 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, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation or such other person and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
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Section 7.2. Expenses. To the extent that a director, officer, employee or
agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 7.1 hereof, or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
Section 7.3. Determination of Indemnification. Any indemnification under
Section 7.1 or 7.2 hereof (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 7.1 or 7.2 hereof. Such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Section 7.4. Advance Payments. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors, the legal counsel or the stockholders in the manner provided
in Section 7.3 hereof upon receipt of an undertaking by or on behalf of the
Director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation under this Article.
Section 7.5. ERISA and Tax Indemnification. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, (i) arising under the Employee
Retirement Income Security Act of 1974 or regulations promulgated thereunder, or
under any other law or regulation of the United States or any agency or
instrumentality thereof or law or regulation of any state or political
subdivision or any agency or instrumentality of either, or under the common or
civil law of any of the foregoing, against expenses (including attorneys' fees),
judgments, fines, penalties, taxes and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding by
reason of the fact that he is or was a fiduciary, disqualified person or party
in interest with respect to an employee benefit plan covering employees of the
Corporation or of a subsidiary of the Corporation, or is or was serving in any
other capacity with respect to such plan, or has or had any obligations or
duties with respect to such plan by reason of such laws or regulations, provided
that such person was or is a director, officer, employee or agent of the
Corporation, or (ii) in connection with any matter arising under federal, state
or local revenue or taxation laws or regulations, against expenses (including
attorneys' fees), judgments, fines, penalties, taxes, amounts paid in settlement
and amounts paid as penalties or fines necessary to contest the imposition of
such penalties or fines, actually and reasonably incurred by him in connection
with such action, suit or proceeding by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership,
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joint venture, trust or other enterprise and had responsibility for or
participated in activities relating to compliance with such revenue or taxation
laws and regulations; provided, however, that such person did not act
dishonestly or in willful or reckless violation of the provisions of the law or
regulation under which such suit or proceeding arises. Unless the Board of
Directors determines that under the circumstances then existing, it is probable
that such director, officer, employee or agent will not be entitled to be
indemnified by the Corporation under this Section 7.5, expenses incurred in
defending such suit or proceeding, including the amount of any penalties or
fines necessary to be paid to contest the imposition of such penalties or fines,
shall be paid by the Corporation in advance of the final disposition of such
suit or proceeding upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Corporation under
this Section 7.5.
Section 7.6. Nonexclusive Right. The indemnification provided by this
Article VII shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-law, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be such a director, officer, employee
or agent and shall inure to the benefit of the successors, assigns, heirs,
executors and administrators of such a person.
Section 7.7. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or 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 against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not he would be entitled to indemnity against such liability
under the provisions of this article.
ARTICLE VIII.
GENERAL PROVISIONS
Section 8.1. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 8.2. Corporate Seal. The corporate seal shall be in such form as
may be approved from time to time by the Board of Directors. The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or in any
other manner reproduced.
Section 8.3. Waiver of Notice. Whenever any notice is required to be given
under law or the provisions of the Certificate of Incorporation or these By-
Laws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.
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ARTICLE IX.
AMENDMENTS
These By-Laws may be altered, amended or repealed or new By-Laws may be
adopted by the Board of Directors. The fact that the power to amend, alter,
repeal or adopt the By-Laws has been conferred upon the Board of Directors shall
not divest the stockholders of the same powers.
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===============================================================================
U.S. TRADE FUNDING CORP.
Standard Terms and Conditions of Trust Agreement
Dated as of _________________, 1996
_______________________
Loan-Backed Securities
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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>
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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 PrincipL 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.........................................42
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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These Standard Terms and Conditions of Trust Agreement dated as of
_______________, 1996 (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-throughSecurities
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 306.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 SECURITEES
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 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 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 adjudge 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 Determining 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 Trustee 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
rescission 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.
Section 7.04. 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; or
(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.
Section 8.05. 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.
Section 8.06. 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
within one year after such resignation, removal or incapability or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Determining Party (50.1%) delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders 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.
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(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.
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
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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
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
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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;
(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
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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.
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:
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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, 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. Servicer's 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
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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 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
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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:
(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
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(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.
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.
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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.
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.
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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 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.
Section12.02. 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
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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 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
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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, 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.
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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;
(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
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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
(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
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(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.
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
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(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.
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.
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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.
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.
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(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 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:
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(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;
(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
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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.
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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U.S. TRADE FUNDING CORP.
SUPPLEMENTAL TRUST AGREEMENT
This SUPPLEMENTAL TRUST AGREEMENT, dated as of __________, 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 ________________, 1996 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 $_____________ and $____________ 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
_____________, 1996 between the Company and the Seller. The principal amount of
each of the Loan Notes is payable in 24 equal installments of principal, such
installments to be paid on ____________ and ____________ of each year,
commencing _________, 199___ and having a final maturity of ___________, _____.
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.
<PAGE>
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 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
Agreement, 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 D 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
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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.
"Credit Enhancement": shall mean the Guarantee Agreement.
"Cut-Off Date": shall mean the last day of any Collection Period.
"Delivery Date": shall mean _______________, 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 E 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 E 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
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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.
"Guarantee Agreement": shall mean the Guarantee Agreement dated as of
______________, 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 Tranche A Loan Agreement dated
as of ______________, 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 _____% Trade Trust Series
1996-A Certificates.
"Liquidity Facility": shall mean that certain Irrevocable Revolving Credit
Agreement dated as of _____________, 1996, 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.
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"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 ___________ and ___________ 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 _____________, _____
shall not be a Business Day, such Note Payment Date shall be the next preceding
Business Day.
"Payment Date": shall mean the dates upon which Distributions are required
to be made on the Securities, which shall be _________ and _________ of each
year, commencing with _________________, 1996 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 _______________, ______ 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),
Annex C to the Guarantee Agreement (in the case of the Industrial and Commercial
Bank of China) and Exhibit D 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
_________, 1996 among the Company, the Servicer and the Trustee.
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"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.
"Stated Maturity": shall mean ____________, _____.
"Transfer Agreement": means the Transfer Agreement dated ______________,
1996 among the Borrower, ABN AMRO Bank N.V., as Facility Agent and Lender, and
the Trustee, in substantially the form attached as Appendix 5 to the Loan
Agreement.
"Underwriting Agreement": shall mean that certain Underwriting Agreement,
dated ___________, 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: _______________.
(b) One (1) Level 1 Interest Account is established as a sub-account
of the Distribution Account with LaSalle National Bank, Account Number:
_______________.
(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: _______________.
(e) No Level 2 or lower priority Principal Account is established.
(f) The Revenue Account is established with LaSalle National Bank,
Account Number: _______________.
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
acquisition thereto, and satisfaction of all the conditions set forth therein to
the 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), Annex C to the
Guarantee Agreement (in respect of the Industrial and Commercial Bank of China),
and Exhibit D hereto (in the case of Eximbank); and
(i) the legend evidencing the Guarantee shall have been endorsed on all
Loan Notes to be assigned by 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
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Certificate, if any, any Transfer Agreement, any other property contained in the
Trust 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 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(c) 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(c) have been met, the
Trustee shall, in accordance with such Section 7(c), 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(c) 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(c).
(e) In accordance with Section 7(d) 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(d).
(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(b) 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(b) 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(b) 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)(i) 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 11(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 Agreement, the Trustee shall have no responsibility or liability
for or with respect to the enforcement of any such Loan Note, Loan Agreement,
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 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 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 $106,678,418 which will be in definitive
form 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
of the Trust Agreement, the Trustee (with the consent of the
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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.
-14-
<PAGE>
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>
EXHIBIT A
TO SUPPLEMENT
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.: __________ PRINCIPAL AMOUNT: $106,678,418
Stated Maturity: ____________________ Delivery Date: ___________________
CUSIP NO.: ------------- PERCENTAGE INTEREST: ---------%
______% 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
____________, 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 ___________, 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 ______________, 1996 (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 __________________,
1996 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
-2-
<PAGE>
Guarantee Agreement dated as of ___________, 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 ___________, 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
-3-
<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: _____________, 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 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 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
-6-
<PAGE>
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 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 _____________________, in
which case the Payment Date shall be the next 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
-7-
<PAGE>
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 $500,000 and integral multiples thereof, except
that one Certificate may be in an amount less than $500,000. 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.
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
-8-
<PAGE>
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
IMPUTED IMPUTED REMAINING
CERTIFICATE PAYMENT PRINCIPAL INTEREST PRINCIPAL BALANCE
DATE/1/ PAYMENT PAYMENT AFTER SCHEDULED
PAYMENT
- ---------------------------
/1/ If not a Business Day, the next following Business Day except in the case
of ______________, in which event the next preceding Business Day.
-10-
<PAGE>
ASSIGNMENT
For value received the undersigned, 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 ____________, 1996 in principal amount
of $_______ ("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 _____________, 1996 in principal amount
of $_______ ("Note B")
1. Interest allocable to current Collection Period $
----------
2. Principal allocable to current Collection Period $
----------
3. Total for current Collection Period (IIB1 + IIB2) $
----------
-12-
<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
-13-
<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)
$
----------
-14-
<PAGE>
EXHIBIT C
Borrower and Lessee Payment Demand
_________, 19__
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 __________, 19__. 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.
-15-
<PAGE>
Very truly yours,
LaSalle National Bank, as Trustee
By:_______________________________
Title:
-16-
<PAGE>
Exhibit D
Eximbank Payment Demand
for Each Promissory Note
____________, 19__
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. __________
Attention: Vice President - Contract Administration
Gentlemen:
Pursuant to Section 7 of the Guarantee Agreement dated as of ___________,
1996 (the "Guarantee Agreement") between you and ABN AMRO Bank N.V. ("ABN
AMRO"), the undersigned (as a successor Agent pursuant to Section 11(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 Depositor).
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
__________, 19__, $__________ 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 Section
7(b)(i) of 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 Section
7(b)(i) of 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
-17-
<PAGE>
Agreement. The Installment Payment Method is applicable in accordance with the
provisions of the Guarantee Agreement.
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 D 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.
-18-
<PAGE>
Very truly yours,
LaSalle National Bank,
as Successor Facility Agent
By: _______________________________
Title: ____________________________
-19-
<PAGE>
Exhibit E
Form of DTC Letter
[To Come]
-20-
<PAGE>
EXHIBIT 4.08
FORM OF INVESTMENT DIRECTION
[TO COME]
-21-
<PAGE>
Schedule I to Supplement
Loan
Aggregate Principal Amount: $106,678,418
Lender: ABN AMRO Bank N.V.
Borrower: YA96A Limited
Loan Notes
Note issued by Borrower to Lender ____________, 1996 in principal amount of
$____________________
#1
Note issued by Borrower to Lender ____________, 1996 in principal amount of
$____________________
#2
Loan Documents
Tranche A Loan Agreement, dated ____________, 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 ____________, 1996 between Export Import Bank
of the United States and ABN AMRO Bank N.V.
Loan Notes (described above)
Liquidity Facility dated as of ____________, 1996 by and among the
Company, the Liquidity Provider, the Servicer and the Trustee.
-22-
<PAGE>
____________, 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 ____% Trade Trust Certificates, Series 1996-A (the "Certificates") pursuant
to a proposed Supplemental Trust Agreement dated as of ____________, 1996,
incorporating therein the Standard Terms and Conditions of Trust Agreement dated
as of ____________, 1996 (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 ____________, 1996 (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
_______________, 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
_______________, 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>
_______________, 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 ____% Trade
Trust Certificates, Series 1996-A (the "Certificates"). The Certificates are to
be issued pursuant to that certain Supplemental Trust Agreement incorporating
the proposed Standard Terms and Conditions of Trust Agreement, each dated as of
_____________, 1996, (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 ______________, 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
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<PAGE>
===============================================================================
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 _____________, 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......................................................................5
Section 4.1. Servicer Remittance Report...............................................................5
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..................................................7
Section 6.1. Representations and Warranties of the Servicer...........................................7
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..........................................10
Section 7.1 ........................................................................................10
Article VIII Termination Events; Servicing Termination.................................................11
Section 8.1. Termination Events......................................................................11
Section 8.2. Remedies................................................................................11
Section 8.3. Trustee to Act; Appointment of Successor................................................12
Section 8.4. Servicer Transfer to Successor Servicer, etc............................................12
Article IX Liabilities; Indemnification..............................................................13
Section 9.1. Liabilities; Indemnification of the Company and the Trustee.............................13
</TABLE>
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<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.............................................................................14
Section 10.1. Notices, etc............................................................................14
Section 10.2. Choice of Law and Venue.................................................................15
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..............................................................16
Section 10.9. Good Faith and Reasonableness...........................................................16
Section 10.10. Counterparts............................................................................16
Section 10.11. Amendment...............................................................................16
Section 10.12. No Insolvency Proceeding Against the Company............................................16
Section 10.13. Exercise of Rights......................................................................17
Section 10.14. No Recourse.............................................................................17
Section 10.15. Payment on Non-Business Days............................................................17
Signature Page...............................................................................................18
</TABLE>
Exhibits
Schedule 1
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<PAGE>
SERVICING AGREEMENT
This SERVICING AGREEMENT (this "Agreement"), dated as of ____________,
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 of the Company (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
Section 2.1. 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.
Section 2.2. 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(c) or 7(d) 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 Annex C to the Eximbank Guarantee Agreement (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, 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 D 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 thereon in connection with a
-4-
<PAGE>
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.
Section 3.2. 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 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.
-5-
<PAGE>
ARTICLE IV
REPORTING OBLIGATIONS
Section 4.1. 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.
Section 4.2. 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:
(i) the aggregate Imputed Principal Amounts and Imputed Interest
Amounts distributed to the respective Holders as of such Payment Date;
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<PAGE>
(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.
Section 4.4. Trustee's 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 Servicer hereunder. The Servicer shall not otherwise be entitled
to payment of any additional fee or reimbursement for its out-of-pocket
expenses.
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<PAGE>
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.1. 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 equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
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<PAGE>
(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.
(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.
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<PAGE>
(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.
(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.
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<PAGE>
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;
(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
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<PAGE>
(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 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.
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<PAGE>
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 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
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<PAGE>
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.
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
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<PAGE>
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
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
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<PAGE>
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 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
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<PAGE>
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 Involuntary Insolvency Proceeding. 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.
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:_________________________________
Title:___________________________
By:_________________________________
Title:___________________________
U.S. Trade Funding Corp.
By:_________________________________
Title:___________________________
LaSalle National Bank, as Trustee
By:_________________________________
Title:___________________________
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SCHEDULE I
TO SERVICING AGREEMENT
<TABLE>
<CAPTION>
<S> <C>
DATE OF TRUST AGREEMENT: As of _____________, 1996
LOAN:
Borrower: YA96A Limited
Lender: ABN AMRO Bank N.V.
Date of Loan Agreement: ____________, 1996
Amount of each Loan: $____________
and
$____________
Aggregate Amount of Loans: $106,678,418
SECURITIES: ____% Trade Trust Certificates,
Series 1996-A issued by U.S. Trade
Trust, Series 1996-A
</TABLE>
<PAGE>
===============================================================================
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 1996-A
dated as of ____________, 1996
===============================================================================
<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..........................7
Section 2.10. Procedures for Repayment..................................7
Section 2.11. Obligations Absolute......................................7
Section 2.12. Expiry Date...............................................7
Section 2.13. Liquidity Account.........................................8
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....................................................10
Section 4.01. Affirmative Covenants....................................10
Section 4.02. Negative Covenants.......................................10
Article V REPRESENTATIONS AND WARRANTIES...............................12
Section 5.01. Representations and Warranties...........................12
Article VI MISCELLANEOUS................................................14
Section 6.01. Computations.............................................14
Section 6.02. Exercise of Rights.......................................14
Section 6.03. Successors and Assigns...................................14
Section 6.04. Headings.................................................14
Section 6.05. Notices; Requests; Demands...............................14
Section 6.06. Survival of Representations and Warranties...............16
Section 6.07. Governing Law............................................16
Section 6.08. Counterparts.............................................16
Section 6.09. Further Assurances.......................................16
Section 6.10. Bankruptcy Petition Against the Company..................16
Section 6.11. Recourse.................................................17
</TABLE>
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<TABLE>
<C> <S>
Section 6.12. Effective Date...........................................17
Section 6.13. Amendment................................................18
Section 6.14. Jurisdiction; Immunities.................................18
Section 6.15. Severability.............................................18
Section 6.16. Prior Agreements Superseded..............................18
Section 6.17. Certain Information......................................18
</TABLE>
Attachment ................Program Schedule
-ii-
<PAGE>
IRREVOCABLE REVOLVING CREDIT AGREEMENT
Irrevocable Revolving Credit Agreement dated as of ____________, 1996 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").
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 Tranche A Loan Agreement among the Borrower, Wilmington Trust
Company (as Security Trustee thereunder) and the Bank (as Lender and Facility
Agent thereunder) dated ____________, 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 (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 ____________, 1996 (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 ____________, 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;
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 have the meaning provided in the first Whereas clause of
this 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, the
Mortgage, 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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"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 ____________, 199__ 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.
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"Liquidity Account" shall have the meaning specified in Section 2.13
hereof.
"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.
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"Underwriting Agreement" shall mean the Underwriting Agreement dated as of
____________, 1996 between the Company and the Underwriter, as the same may at
any time be amended or modified.
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
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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.
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 thereon.
(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
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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.
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 _____________, 199__.
(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
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shall have received such notice from the Company, or if such day is not a
Business Day, the next succeeding Business Day.
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 Ratings 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.
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(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.
(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
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(b) no event shall have occurred and be continuing that constitutes a
Payment Default.
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.
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(c) Limit on Other Debt. Create, incur, assume or suffer to exist any
indebtedness, whether current or funded, or any other liability, except:
(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
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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.
(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).
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(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 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.
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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 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. Headings. 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.
-16-
<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
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<PAGE>
Schedule to this 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.
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>
================================================================================
Purchase Agreement
ABN AMRO Bank N.V.
and
U.S. Trade Funding Corp.
dated as of _____________, 1996
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<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.............4
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................................................8
Section 6.05. Governing Law; Jurisdiction...............................8
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........................................9
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 ____________, 1996 (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 ___________, 1996 (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, any security therefor, 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.
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<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.
-3-
<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
-4-
<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:
-5-
<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:
-6-
<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.
-7-
<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
-8-
<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.
-9-
<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>
EXHIBIT A
SALE AND ASSIGNMENT AGREEMENT
SALE AND ASSIGNMENT NO. 1 OF TRANSFERRED PROPERTY, (this "Assignment")
dated as of __________, 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 ____________, 1996 (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
----------------------------------
Name
------------------------------
Title
-----------------------------
By
----------------------------------
Name
------------------------------
Title
-----------------------------
A-2
<PAGE>
Annex I to Assignment
Description of Transferred Property and Purchase Price
Loan
Aggregate Principal Amount: $106,678,418
Lender: ABN AMRO Bank N.V.
Borrower: YA96A Limited
Loan Notes
Note issued by Borrower to Lender ____________, 1996 in principal amount of
$____________
#1
Note issued by Borrower to Lender ____________, 1996 in principal amount of
$____________
Loan Documents
Tranche A Loan Agreement, dated ____________, 1996 by and among YA96A
Limited, as Borrower, ABN AMRO Bank N.V., as Facility Agent and the Lender
named therein.
Guarantee Agreement, dated ____________, 1996 between Export Import Bank of
the United States and ABN AMRO Bank N.V.
Loan Notes (described above)
Liquidity Facility
Mortgage Agreement, dated _____________, 1996 between the Borrower and
Wilmington Trust Company, as security trustee.
Purchase Price
$106,678,418
A-3
