EXHIBIT 10.3
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SERVICING AGREEMENT
among
U.S. TRADE FUNDING CORP.
and
ABN AMRO Bank N.V.,
as Servicer
and
LASALLE NATIONAL BANK,
as Trustee
Dated as of October 1, 1996
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TABLE OF CONTENTS
Section Heading Page
Article I DEFINITIONS ......................................................................... 1
Section 1.1. Definitions......................................................................... 1
Article II SERVICER AS AGENT..................................................................... 3
Section 2.1. Appointment of the Servicer; Servicing.............................................. 3
Section 2.2. Collection Procedures............................................................... 3
Article III EXIMBANK GUARANTEE AGREEMENT.......................................................... 4
Section 3.1. Claims Under Eximbank Guarantee..................................................... 4
Section 3.2. Borrowing Under the Revolving Credit Agreement;
Disbursement on Special Payment Date................................................ 5
Article IV REPORTING OBLIGATIONS................................................................. 6
Section 4.1. Servicer Remittance Report.......................................................... 6
Section 4.2. Other Reports....................................................................... 6
Section 4.3. Reports to Certificateholders....................................................... 6
Section 4.4. Trustee's Obligations............................................................... 7
Article V COMPENSATION.......................................................................... 7
Article VI REPRESENTATIONS, WARRANTIES AND COVENANTS............................................. 8
Section 6.1. Representations and Warranties of the Servicer...................................... 8
Section 6.2. Covenants of the Servicer........................................................... 9
Section 6.3. Covenants of the Company and the Trustee............................................ 10
Article VII MERGER OR CONSOLIDATION OF SERVICER; RESIGNATION...................................... 11
Section 7.1. 11
Article VIII TERMINATION EVENTS; SERVICING TERMINATION............................................. 11
Section 8.1. Termination Events.................................................................. 11
Section 8.2. Remedies............................................................................ 12
Section 8.3. Trustee to Act; Appointment of Successor............................................ 12
Section 8.4. Servicer Transfer to Successor Servicer, etc 13
Article IX LIABILITIES; INDEMNIFICATION.......................................................... 13
Section 9.1. Liabilities; Indemnification of the Company and the
Trustee ............................................................................ 13
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Section 9.2. Indemnification of the Servicer.................................................. 14
Section 9.3. Special Indemnification of the Trustee........................................... 14
Article X MISCELLANEOUS....................................................................... 15
Section 10.1. Notices, etc..................................................................... 15
Section 10.2. Choice of Law and Venue.......................................................... 16
Section 10.3. Effectiveness of the Agreement................................................... 16
Section 10.4. Successors and Assigns........................................................... 16
Section 10.5. Headings......................................................................... 16
Section 10.6. Interpretation of Agreement...................................................... 16
Section 10.7. Severability of Provisions....................................................... 16
Section 10.8. Merger of Prior Agreements....................................................... 17
Section 10.9. Good Faith and Reasonableness.................................................... 17
Section 10.10. Counterparts..................................................................... 17
Section 10.11. Amendment........................................................................ 17
Section 10.12. No Insolvency Proceeding Against the Company.....................................
Section 10.13. Exercise of Rights............................................................... 17
Section 10.14. No Recourse...................................................................... 18
Section 10.15. Payment on Non-Business Days..................................................... 18
Signature Page......................................................................................... 19
Exhibits
Schedule 1
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SERVICING AGREEMENT
This SERVICING AGREEMENT (this "Agreement"), dated as of October 1, 1996,
is entered into by and among U.S. TRADE FUNDING CORP., a Delaware corporation
(together with its successors and assigns, the "Company"), ABN AMRO Bank N.V., a
bank organized under the laws of The Netherlands and acting through its Chicago
Branch (together with its successors and assigns, the "Servicer") and LASALLE
NATIONAL BANK, a national banking association as Trustee (together with its
successors and assigns, the "Trustee") for the Trust identified on Schedule 1
hereto (the "Trust").
WITNESSETH:
WHEREAS, the Company is a corporation organized to purchase Loan Notes and
related Eximbank Guarantees using proceeds of the issuance and sale of certain
Securities secured by, or representing fractional undivided interests in trusts
comprised of, such Loan Notes and related Eximbank Guarantees;
WHEREAS, the Securities identified on Schedule 1 hereto are being issued
pursuant to a Supplemental Trust Agreement (the "Supplement") among the Company,
the Servicer and the Trustee, which incorporates by reference the Standard Terms
and Conditions of Trust Agreement (such Supplement as incorporating such terms
and conditions being also referred to below as the "Trust Agreement"); and
WHEREAS, the Company has requested, and the Servicer has agreed, to provide
certain collection and servicing responsibilities for the benefit of the Trust
on behalf of the Holders of the Securities in respect of the Loans evidenced by
the Loan Notes.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings specified
in the Trust Agreement, and, to the extent not defined in the Trust Agreement,
shall have the following meanings:
"Advances" shall have the meaning specified in the Liquidity Facility.
"Books and Records" shall mean all of the relevant Person's books and
records including, but not limited to: minute books; ledgers; records
indicating, summarizing or evidencing such Person's assets, liabilities and
accounts; all information relating to such Person's business operations or
financial condition; and all computer programs, disc or tape
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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incorporating by reference the Standard Terms and Conditions of Trust Agreement,
and pursuant to which the Securities are issued.
ARTICLE II
SERVICER AS AGENT
Section2.1. Appointment of the Servicer; Servicing. (a) The Trustee (for
the benefit of the Trust) hereby appoints the Servicer as its special agent to
service the Loans, subject to, and in accordance with, the terms of this
Agreement and the related Eximbank Guarantee Agreement, on behalf of the Holders
of the Securities, and agrees otherwise to perform and carry out the duties,
responsibilities and obligations that are to be performed and carried out by the
Servicer pursuant to this Agreement. The Servicer hereby accepts such
appointment, in consideration of the Servicing Fee and other valuable
consideration.
(b) In the servicing of the Loans and the collection of amounts due
thereunder, the Servicer shall exercise the same degree of care that it
exercises in handling similar matters for its own account.
Section2.2. Collection Procedures. (a) The Servicer (i) shall, not less
than fifteen (15) nor more than twenty (20) days prior to each Note Payment Date
for a Loan Note, deliver to the Borrower a notice specifying the date of the
Note Payment Date and the amounts of principal and interest due on such Loan
Note on such Note Payment Date; provided, however, the failure of the Servicer
to give such notice shall not constitute a waiver of the Trust's or any other
party's right to receive any payment from the Borrower in respect of such Loan
Note; (ii) shall receive and collect on behalf of the Trustee all Collections on
the Loans, including without limitation payments received from Eximbank pursuant
to related Eximbank Guarantee Agreements with respect to the Loans as provided
in Section 3.1(b) below, and any Advances received by the Servicer from the
related Liquidity Provider as provided in Section 3.2 below and (iii) shall, on
the Servicer Remittance Date, transfer such Collections to the Revenue Account.
(b) The Servicer shall notify the Trustee upon receipt of each payment due
under the Loan Notes immediately upon receipt thereof.
(c) The Servicer shall enforce, on behalf of the Trust, the Eximbank
Guarantee and any Payment Certificates in accordance with their respective
terms, will take all necessary steps to claim, in the name and on behalf of the
Trustee (for the benefit of the Trust), under the Eximbank Guarantee or the
Payment Certificates, as the case may be, and will provide Eximbank with any
information reasonably available to the Trustee or the Servicer and requested by
Eximbank to facilitate payment by Eximbank pursuant to the Eximbank Guarantee or
the Payment Certificates. Except as otherwise provided in the Eximbank Guarantee
Agreement, failure by the Trustee or the Servicer to take any action to enforce
any right under the Eximbank Guarantee or the Payment Certificates, as the case
may be, shall not constitute a waiver of such right.
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(d) Contemporaneously with the execution of this Agreement, the Servicer
shall have established and shall thereafter maintain a system of collecting and
processing payments of principal, interest and any other amounts due and owing
with respect to the Loans and the Loan Documents, which shall be consistent with
the terms and conditions of the related Eximbank Guarantee Agreement and the
Trust Agreement.
ARTICLE III
EXIMBANK GUARANTEE AGREEMENT
Section 3.1. Claims Under Eximbank Guarantee. (a) In the event that, prior
to an Eximbank Payment Event and prior to an assignment to Eximbank pursuant to
Section 7(b) or 7(c) of the Eximbank Guarantee Agreement with respect to a Loan
Note, the Borrower under such Loan Note has failed to pay an installment of
principal of or interest on such Loan Note on the relevant Note Payment Date
then (i) the Servicer will promptly give Eximbank written notice of such
default, and (ii) the Servicer shall, within 10 calendar days after becoming
aware of such failure, send, on behalf of Eximbank, a written demand for payment
to the Borrower, the Lessee and to the Industrial and Commercial Bank of China,
substantially in the forms attached as Exhibit C to the Supplement (as to the
Borrower and the Lessee) and Exhibit D to the Supplement (as to the Industrial
and Commercial Bank of China), respectively, by telegram, telex, telecopier or
hand delivery in respect of such Loan Note, in each case promptly upon the
opening of business on the Business Day following the relevant Note Payment
Date. If (i) such failure continues unremedied for a period of 30 calendar days
from the date any installment of principal of or interest on such Loan Note was
due or any Advance made under the Liquidity Facility together with interest
thereon shall not have been repaid in full within 30 days of the making of such
Advance, and (ii) a period of 15 calendar days has elapsed since written demand
for payment was made on the Borrower, the Lessee and the Industrial and
Commercial Bank of China in respect of such Loan Note as provided above, then
the Servicer is hereby authorized and shall promptly make demand for payment on
Eximbank in the name and on behalf of the Trustee (for the benefit of the Trust)
by delivering to Eximbank a Payment Demand in the appropriate form attached as
Exhibit E to the Supplement (accompanied by copies of the prior demands on the
Borrower, the Lessee and the Industrial and Commercial Bank of China described
above), which Payment Demand shall have been executed previously on behalf of
the Trustee (for the benefit of the Trust), and the Servicer (as provided in
Section 4.02(f) of the Trust Agreement) will instruct the Trustee in writing
that the Trustee assign to Eximbank the relevant Loan Note as provided in
Section 6 of the Eximbank Guarantee Agreement and Section 4.02(f) of the
Supplement. In making a demand for payment on Eximbank in accordance with this
Section 3.1(a), the Servicer shall select the Installment Payment Method (as
such term is defined in the applicable Eximbank Guarantee Agreement). Upon the
Servicer's receipt of a Payment Certificate (as defined in the Eximbank
Guarantee Agreement) from Eximbank with respect to a written demand for payment,
the Servicer will immediately deliver such Payment Certificate to the Trustee,
as trustee under the Trust Agreement for the benefit of the Holders. The
Servicer also agrees to make and submit such claims as may be necessary under
the Eximbank Guarantee in order to realize amounts
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thereon in connection with a rescission or disgorgement of a Borrower payment
pursuant to, and under the circumstances described in, Section 3(c) of the
Eximbank Guarantee Agreement.
(b) All payments received by the Servicer on behalf of the Trustee (for
the benefit of the Trust) from Eximbank pursuant to a demand under an Eximbank
Guarantee Agreement as provided above shall be deposited by the Servicer on or
before the Servicer Remittance Date in the Revenue Account in accordance with
Section 2.2(a) above.
(c) The Servicer shall deliver a copy of each notice or demand required
pursuant to subsection (a) of this Section 3.1 to be delivered to the Borrower,
the Lessee, the Industrial and Commercial Bank of China, or Eximbank to the
Trustee simultaneously with delivery of such notice or demand to the Borrower,
the Lessee, the Industrial and Commercial Bank of China, or Eximbank, as the
case may be. In the event the Trustee has not received a copy of any notice or
demand required to be delivered pursuant to this Section 2.1 within the time
period prescribed therefor, the Trustee shall send such notice or demand to the
appropriate party within the applicable time period.
(d) The Servicer will not, without Eximbank's prior written consent, agree
to any material amendment of any Loan Note, or any material deviation from the
provisions thereof, including, without limitation, a change in the interest
rate, payment terms or place of payment of any Loan Note or acceleration of the
maturity of any Loan Note.
(e) The Servicer shall maintain a register in respect of any Loan Note
assigned to the Trust on behalf of the Company in accordance with Section 10 of
the related Eximbank Guarantee Agreement and shall record in such register all
information required to be so recorded under such provision. The Servicer will
not, without the Company's prior written consent, agree to any modification of
the payment instructions set forth in any Eximbank Guarantee Agreement, except
if necessary in connection with the appointment of a successor Trustee under the
Trust Agreement.
Section3.2. Borrowing Under the Revolving Credit Agreement; Disbursement
on Special Payment Date. (a) If by 1:00 P.M. (New York City time) on any
Servicer Remittance Date the Servicer has not received (x) payment from the
applicable Borrower in respect of the principal of, and interest on, any Loan
Note, or (y) payment from Eximbank in respect of such Loan Note pursuant to the
terms of the applicable Eximbank Guarantee, in each case in an amount sufficient
to pay all of the interest and principal then due on the Securities, then the
Servicer, on behalf of the Trustee (for the benefit of the Trust), shall, by not
later than 2:00 P.M. (New York City time) on the related Payment Date, request
an Advance by giving a Notice of Borrowing under the Liquidity Facility (with a
copy to the Trustee, in respect of a drawing on the Liquidity Account if a
funding of the Liquidity Account has occurred as described in Section 2.13 of
the Liquidity Facility) in an amount equal to the amount of such deficiency. The
Servicer shall also make the borrowing described in Section 2.13 of the
Liquidity Facility at the times and in the manner described therein, with such
amounts to be deposited in the Liquidity Account. The Servicer shall
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deposit all amounts paid to it in respect of each Advance, or drawing on the
Liquidity Account as the case may be, in the Revenue Account in accordance with
Section 2.2 above.
ARTICLE IV
REPORTING OBLIGATIONS
Section4.1. Servicer Remittance Report. On or before each Servicer
Remittance Date with respect to a Collection Period, in accordance with Section
13.01 of the Trust Agreement, the Servicer shall deliver to the Trustee a
Servicer Remittance Report for such Collection Period, substantially in the form
attached as Exhibit B to the related Supplement, which Servicer Remittance
Report shall provide the Trustee with information sufficient for the Trustee to
make the required disbursements and Distributions with respect to the
Securities. The Servicer has, concurrently with the execution and delivery of
this Agreement, delivered a pre-executed version of the Servicer Remittance
Report which shall apply to each scheduled Servicer Remittance Date and on which
the Trustee may rely, unless and to the extent that events relating to the
payments on the Loan Notes and/or Liquidity Facility Warrant a modification of
such Servicer Remittance Report, in which case the Servicer shall deliver to the
Trustee a modified Servicer Remittance Report in lieu of the pre-executed
version reflecting as necessary such events.
Section4.2. Other Reports. (a) The Servicer shall provide, on an annual
basis, to the Trustee, the Lender and the Board of Directors, a report prepared
by the Servicer with respect to such information as the Trustee, the Lender or
the Board of Directors may reasonably request and as may be required by the
Trust Agreement regarding performance by the Servicer of its duties hereunder,
including without limitation, with respect to compliance by the Borrowers with
the requirements of the Loan Documents.
(b) The Servicer will deliver to the Company and the Trustee on or before
the date ninety (90) days after the beginning of each calendar year, a
certificate signed by an authorized officer of the Servicer and stating that (i)
a review of the activities of the Servicer relating to the servicing of the
Loans and Loan Documents during the preceding calendar year (or since the
Closing Date in the case of the first such certificate which is required to be
delivered) and of performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled substantially all of its obligations
under this Agreement throughout the period covered by such review, or, if there
has been a material default in the fulfillment of any such obligations,
specifying each such default known to such officer and the nature and status
thereof and the actions, if any, being taken to cure such default.
Section 4.3. Reports to Certificateholders. (a) On or before the fifth
Business Day following each relevant Payment Date, the Servicer, on behalf of
the Trust, shall (at no cost to the Trust or Trustee) supply to each Holder a
report (referred to a "Semiannual Report") which shall include the following
information, as of the immediately preceding relevant Payment Date, with respect
to the distribution by such Trust:
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(i) the aggregate Imputed Principal Amounts and Imputed Interest Amounts
distributed to the respective Holders as of such Payment Date;
(ii) the aggregate Imputed Principal Amount of the Securities outstanding
after giving effect to the Distribution as of such Payment Date;
(iii) if the amounts referred to in (i) above are less than the amounts of
principal and interest paid on the Loan Notes or the Eximbank Payment
Certificate with respect to the immediately preceding Note Payment Date,
the amount of any such difference; and
(iv) any additional information that the Servicer elects to include or
that is required to be included in the Semiannual Report in order to
satisfy the requirements, if any, under the Exchange Act, as then in
effect, with respect to the mailing of periodic reports to
Certificateholders.
The Semiannual Report shall also state that no delinquency in payment under
any Loan Note, the related Eximbank Guarantee or any Eximbank Payment
Certificate has occurred and is continuing or, if any delinquency has occurred
and is continuing, shall specify the amount, if any, paid or payable under the
Eximbank Guarantee and the date or expected date of the relevant Eximbank
Payment Event. Each Semiannual Report shall include a certification from a
Responsible Officer of the Servicer to the effect that the Servicer continues to
be eligible to act as such under the Servicing Agreement and, to the best of
such Responsible Officer's knowledge and belief, the Semiannual Report complies
with the requirements of the Trust Agreement and is accurate.
(b) The fiscal year of each Trust shall be the calendar year. Within the
prescribed period of time for tax reporting purposes after the end of each
calendar year during the term of this Servicing Agreement, the Servicer shall
prepare and mail (at no additional cost to the Borrower) to each Holder a report
setting forth the amounts distributed to such Holder during such calendar year.
The report required by this subsection (b) may be combined with one of the
Semiannual Reports sent by the Servicer to Holders each year pursuant to
subsection (a) of this Section 4.3.
Section4.4. Trustees Obligations. The Servicer agrees to prepare, provide
and/or file the reports and other information required to be prepared, provided
and/or filed by the Trustee pursuant to Section 4.02(c) of the Supplement.
ARTICLE V
COMPENSATION
The Servicer hereby acknowledges that it has received payment in full of a
servicing fee (the "Servicing Fee") as full compensation for the services to be
provided by the
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Servicer hereunder. The Servicer shall not otherwise be entitled to payment of
any additional fee or reimbursement for its out-of-pocket expenses.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section6.1. Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants to the Company and the Trustee as follows:
(a) Organization and Good Standing. The Servicer is a bank, duly
organized, validly existing and in good standing under the laws of The
Netherlands, with full corporate power and authority to own its properties
and assets and to conduct its business as currently conducted and to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
(b) Due Authorization and No Conflict. The execution, delivery and
performance of this Agreement by the Servicer have been duly authorized by
all requisite corporate action and will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any Lien upon any of its
property or assets pursuant to the terms of, any indenture, mortgage, deed
of trust, loan agreement, lease, or other agreement or instrument to which
it is bound or to which any of its property or assets is subject, nor will
such action result in any violation of the organizational documents of the
Servicer, or of any law, rule or regulation of any governmental
jurisdiction, applicable to the Servicer.
(c) No Consent. No consent, approval, authorization, order,
registration, filing, qualification, license or permit, of or with any
Person, including without limitation, any court or governmental agency or
body of any governmental jurisdiction, any state or any political
subdivision of either having jurisdiction over the Servicer or any of its
properties or assets, is required to be obtained by or with respect to the
Servicer in connection with the execution, delivery and performance by the
Servicer of this Agreement and the consummation of the transactions
contemplated hereby, other than such as have been obtained or with respect
to which the failure to obtain will not have a material adverse effect on
the business, operations or financial condition of the Servicer, or its
ability to perform its obligations under this Agreement.
(d) Binding Obligation. This Agreement has been duly and validly
executed and delivered by the Servicer and constitutes the valid and
legally binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms except as enforceability may be
limited by applicable bankruptcy, reorganization, receivership, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights and remedies against national banking associations and by general
principles of
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equity (regardless of whether enforcement is sought in a proceeding equity
or at law).
(e) No Proceeding. As at the date of this Agreement, there are no
actions, proceedings or investigations pending or, to the knowledge of the
Servicer, threatened, against the Servicer before any court, administrative
agency or other tribunal:
(i) which, if determined adversely to the Servicer, could
materially and adversely affect the validity or enforceability of this
Agreement;
(ii) which question the consummation by the Servicer of any of
the transactions contemplated by this Agreement; or
(iii) which, if determined adversely to the Servicer, could
materially and adversely affect the ability of the Servicer to perform
its obligations under, or the validity or enforceability of, this
Agreement.
(f) No Financing Statement. There is no effective financing
statement (or similar statement, mortgage or instrument of registration
under the law of any jurisdiction) now on file or registered in any public
office filed or purporting to be filed by the Servicer covering any
interest of any kind in the Loan or the Loan Documents or intended so to
be.
Section 6.2. Covenants of the Servicer. The Servicer covenants to the
Company and the Trustee that so long as this Agreement shall remain in effect:
(a) Organization and Good Standing. The Servicer will preserve and
maintain its existence as a bank under the laws of The Netherlands, and
remain qualified to perform its duties and obligations hereunder under the
laws of each jurisdiction where the failure to preserve and maintain such
existence would adversely affect the ability of the Servicer to perform its
obligations under this Agreement.
(b) Books and Records. The Servicer will maintain and implement
administrative operating procedures and keep and maintain all Books and
Records reasonably necessary or advisable for the timely collection of
Loans, the making of claims under the Eximbank Guarantee Agreement and the
requesting of Advances under the Liquidity Facility.
(c) Inspection. The Servicer will permit the Company and its
representatives and the Trustee and any officer or employee of, or agent
designated by the foregoing to have access during normal business hours to
the Books and Records of the Servicer in order to examine such Books and
Records with respect to the transactions contemplated hereby.
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(d) Compliance with Laws. The Servicer will comply, in all material
respects, with all laws, rules, regulations, orders, decrees and directions
of any governmental authority applicable to its obligations under this
Agreement, or to its obligations with respect to the Loans, the Loan
Documents or any part thereof.
(e) No Liens. The Servicer will not, by any act or omission to act,
create, permit or suffer to exist, and shall take such actions as are
necessary to remove, any Lien, claim or right in, to or on the interest of
the Company and the Trustee in the Loans or the Loan Documents, (other than
the Lien of the Trust Agreement) and will defend the right, title and
interest of the Company and the Trustee in and to the Loans or the Loan
Documents against the claims and demands of all Persons arising from any
act or omission to act of the Servicer in respect of any Lien (other than
the Lien created by the Trust Agreement).
(f) Notice of Liens. The Servicer will advise the Company and the
Trustee in reasonable detail, promptly after the Servicer has obtained
actual knowledge (i) of any Lien asserted or claim made against any of the
Loans or the Loan Documents, (other than the Lien created by the Trust
Agreement), and (ii) of the occurrence of any breach by the Servicer of any
of its representations, warranties and covenants contained herein.
(g) Continuing Compliance. The Servicer shall take all reasonable
actions reasonably requested in writing by the Company or the Trustee at
any time and shall take the actions at the times so that each of the Loans
and the Loan Documents will continue to comply with all laws, rules and
regulations applicable thereto, including, without limitation, the laws,
rules and regulations of the various states of the United States of
America.
(h) Information. All information furnished by the Servicer to the
Company or to the Trustee from time to time hereunder shall be true and
correct in all material respects as of the date thereof.
Section 6.3. Covenants of the Company and the Trustee. Each of the Company
and the Trustee (solely with respect to clause (a)(ii) below) covenants and
agrees that, so long as this Agreement shall remain in effect:
(a) Amendments. (i) The Company agrees to furnish the Servicer with
copies of all waivers or amendments to the Loan Program Documents and (ii)
neither the Company nor the Trustee shall agree to any material amendment
to the Loan Program Documents if such amendment would adversely affect the
rights and obligations of the Servicer without first receiving the express
written consent of the Servicer.
(b) No Other Business. The Company will not engage in any business
or enterprise or enter into any material transaction other than as
contemplated by the Loan Program Documents.
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(c) No Liens. The Company will not sell, pledge, assign or transfer
to any Person other than the Trustee, for the benefit of the Holders, or
grant, create, incur, assume or suffer to exist any Lien on any Loan and
the Loan Documents, other than the Lien created by the Trust Agreement.
ARTICLE VII
MERGER OR CONSOLIDATION OF
SERVICER; RESIGNATION
Section 7.1. (a) Any Person into which the Servicer may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer, shall be deemed to have
assumed and be the successor to all of the Servicer's duties and obligations
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided that such Person shall execute such agreements,
documents and instruments as may be requested by the Company or the Trustee to
evidence such Person's assumption of the obligations of the Servicer hereunder.
(b) The Servicer may resign its duties and obligations hereunder at
any time (i) upon thirty (30) days' prior written notice to the Company and the
Trustee and the Rating Agency and (ii) upon appointment by the Company and the
Trustee of a Successor Servicer (as defined in Section 8.3(a) below); provided
that in the event that the Company and the Trustee cannot agree upon a Successor
Servicer within such thirty (30) day period, the Trustee without further action
shall automatically be appointed the Successor Servicer. The Successor Servicer
must have the qualifications set forth in Section 8.3 and must be approved by
Eximbank to be accepted as the Successor Servicer. Upon such resignation, the
Servicer shall deliver all Books and Records and correspondence relating to the
Loans and the Loan Documents in its possession to the successor Servicer, or as
otherwise instructed by the Trustee.
ARTICLE VIII
TERMINATION EVENTS; SERVICING TERMINATION
Section 8.1. Termination Events. The occurrence of any one of the
following events shall be a "Termination Event" under this Agreement:
(a) failure on the part of the Servicer to disburse when due any
amounts provided for herein and the continuation of such failure for a
period of five (5) Business Days after receipt by the Servicer of written
notice thereof from the Company or the Trustee;
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(b) failure on the part of the Servicer to observe or perform any
other term, covenant, condition or agreement provided for herein, and the
continuation of such failure for a period of ten (10) days following
receipt by the Servicer of written notice thereof from the Company or the
Trustee; or
(c) an Insolvency Proceeding commenced by or against the Servicer, or
any receivership or conservatorship proceeding instituted by any authorized
governmental authority against the Servicer.
Section 8.2. Remedies. The remedies provided below are cumulative and not
exclusive of any rights and remedies which the Company or the Trustee would
otherwise have pursuant to law or equity.
(a) If a Termination Event specified in Section 8.1 shall have occurred,
the Company and the Trustee may, by written notice (a "Servicer Termination
Notice") to the Servicer, elect to terminate all of the rights and obligations
of the Servicer as servicer under this Agreement, subject to Section 8.3 hereof.
(b) If a Termination Event specified in Section 8.1 shall have occurred,
then, in addition to any other remedies that may be available to the Company or
the Trustee, the Company may request the Servicer to, and upon such request the
Servicer shall transfer to the Trustee all of its rights, powers and trusts in
and to all instruments, Books and Records, moneys and other documents or
property.
Section 8.3. Trustee to Act; Appointment of Successor. (a) On and after
the receipt by the Servicer of a Servicer Termination Notice pursuant to Section
8.2(a), the Servicer shall continue to perform all servicing functions under
this Agreement until such time as a successor has been appointed as Servicer in
accordance with this Section 8.3. The Company and the Trustee shall, as promptly
as possible after the giving of a Servicer Termination Notice, appoint a
successor servicer (the "Successor Servicer") and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Company and the Trustee. The Company and/or the Trustee may obtain bids from any
potential Successor Servicer. Any successor to the Servicer appointed under the
provisions of this Section shall have a combined capital and surplus of at least
$150,000,000 and shall have the capacity to perform the obligations hereunder.
In the event that a Successor Servicer has not been appointed and has not
accepted its appointment at the time the Servicer ceases to act as the Servicer,
the Trustee without further action shall automatically be appointed the
Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having a combined capital and surplus of
not less than $150,000,000 and whose regular business includes the servicing of
commercial loans as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer under this Agreement and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement to the Servicer shall be deemed to refer to the
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Successor Servicer, except for the references in Section 9.1 which shall
continue to refer to the Servicer; provided, that the Servicer shall not
indemnify the Company or the Trustee if the acts, omissions or alleged acts or
omissions upon which a claim for indemnification arises pursuant to Section 9.1
were the acts, omissions or alleged acts or omissions of a Successor Servicer.
Section 8.4. Servicer Transfer to Successor Servicer, etc. (a) After
receipt by the Servicer of a Servicer Termination Notice and the appointment of
a Successor Servicer in accordance with the provisions of Section 8.3 hereof,
all authority and power of the Servicer as loan solicitor, processor and
servicer under this Agreement shall pass to and be vested in the Successor
Servicer; and the Trustee is hereby authorized and empowered (upon the failure
of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer
as attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights.
(b) The Servicer agrees to cooperate with the Company, the Trustee and the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which shall thereafter be received with respect to the Loans and
Loan Documents and shall cooperate in giving notice to the Borrowers of the
Successor Servicer and directing payments with respect to the Loans to the
address designated by the Successor Servicer.
(c) The Servicer shall promptly transfer its Books and Records relating to
the Loans to the Successor Servicer in such form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other Books and Records and correspondence of the Servicer necessary for the
continued servicing of the Loans in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this Section 8.4 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer deems to be confidential,
the Successor Servicer shall be required to enter into such customary
confidentiality agreements as the Servicer shall reasonably deem necessary to
protect its interest in such information.
ARTICLE IX
LIABILITIES; INDEMNIFICATION
Section 9.1. Liabilities; Indemnification of the Company and the Trustee.
The Servicer agrees to indemnify and hold harmless each of the Company, the
Trustee and each of their Other Indemnified Parties from and against any and all
such losses, liabilities (including liabilities for penalties), claims, demands,
actions, suits, judgments, out-of-pocket costs and expenses (including, without
limitation, interest, reasonable attorneys' fees and expenses and expenses)
arising out of or based on any negligence, willful misconduct or bad
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faith of the Servicer in connection with the performance of its obligations
hereunder. Notwithstanding the above, the Servicer shall not be liable to the
Company, the Trustee or such Other Indemnified Parties for any error in judgment
other than that specifically listed above except for the negligence, willful
misconduct or bad faith of the Servicer or its directors, officers, agents or
employees; provided, however, that the Servicer agrees in all events to
indemnify and hold the Trustee harmless (i) with respect to any obligations
assumed by the Trustee pursuant to the Transfer Agreement, and (ii) to the same
extent as the Company is so obligated under Section 8.07(b) of the Standard
Terms and Conditions of Trust Agreement (as incorporated into the Trust
Agreement); and provided, further, that nothing contained in this Section 9.1 is
intended as or shall be construed (i) as a warranty or representation, express
or implied, as to the solvency or financial net worth of any Borrower, the
Lessee or as to the collectability of any Loan under this Agreement or (ii) as
an agreement to indemnify, reimburse or otherwise be responsible to the Company,
the Trustee or any of their Other Indemnified Parties, for losses resulting from
the failure of any Borrower or the Lessee to pay any Loan, except to the extent
caused by the negligence, willful misconduct or bad faith of the Servicer. This
indemnity agreement will be in addition to any liability which the Servicer may
otherwise have and shall survive the termination of this Agreement.
Section 9.2. Indemnification of the Servicer. The Company hereby agrees
to indemnify the Servicer, and its Other Indemnified Parties, and hold each of
them harmless, from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, damages, costs
and expenses (including without limitation interest and reasonable attorneys'
fees and expenses) arising out of or resulting from any act or omission to act
by the Servicer pursuant to and in accordance with this Agreement or pursuant to
any instruction of the Company or the Trustee, as the case may be (other than
any such action or omission to act by the Servicer or its directors, officers,
agents or employees which constitutes negligence, willful misconduct or bad
faith in connection with the performance of its obligations hereunder to the
extent the Servicer has granted an indemnity with respect thereto under Section
9.1 hereof).
Section 9.3. Special Indemnification of the Trustee. In addition to its
obligations under Section 9.1 above, the Servicer agrees to indemnify and hold
harmless the Trustee for any failure on the part of the Servicer to deliver the
notices and demands required to be delivered by the Servicer pursuant to Section
3.1 hereof, if and to the extent that the Trustee shall incur any loss,
liability, cost or expense as a consequence of such failure. The Servicer's
obligation to indemnify the Trustee pursuant to this Section 9.3 shall be
absolute, irrespective of whether the Servicer's conduct constituted negligence,
wilful misconduct or bad faith.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Notices, etc. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
Person pursuant hereto shall be in writing and shall be personally delivered or
sent by registered, certified or express mail, postage prepaid, return receipt
requested, or by telex or facsimile transmission, and shall be deemed to be
given for purposes of this Agreement, in the case of a notice sent by
registered, certified or express mail, on the date that such writing is actually
delivered to the intended recipient thereof in accordance with the provisions of
this Section 10.1, or in the case of telex, when sent, answerback received, or
in the case of facsimile transmission, when received and telephonically
confirmed; provided that, notices, demands, instructions or other communications
required to be given under this Agreement, if permitted hereunder to be made
telephonically, shall be confirmed in writing promptly thereafter in accordance
with the foregoing provisions, and shall be deemed given for purposes of this
Agreement on the day when given by telephone to a Person who is the recipient
for notice hereunder (if confirmed promptly thereafter in writing in accordance
with this Section 10.1). Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 10.1,
notices, demands, instructions and other communications in writing shall be
given to or made upon the following parties at their respective addresses (or to
their respective telex or facsimile transmission numbers) indicated below, and,
in the case of telephonic instructions or notices, by calling the telephone
number or numbers indicated for such party below or at such other address or
number as any party may notify to the other parties in accordance with the
provisions of this Section 10.1:
If to the Company:
U.S. Trade Funding Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Trustee:
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Asset-Backed Securities Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Servicer:
ABN AMRO Bank N.V.
Chicago Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Trade Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.2. Choice of Law and Venue. The validity of this Agreement,
its construction, interpretation and enforcement, and the rights of the parties
hereunder, shall be determined under, governed by and construed in accordance
with the laws of the State of Illinois. To the extent permitted by applicable
law, the parties agree that all actions or proceedings arising in connection
with this Agreement shall be tried and litigated only in the state and federal
courts located in the State of Illinois. Each of the Trustee, the Company and
the Servicer waives any right it may have to assert the doctrine of Forum Non
Conveniens or to object to such venue.
Section 10.3. Effectiveness of the Agreement. This Agreement shall be
binding and deemed effective when executed, delivered and accepted by the
parties hereto.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
of the parties; provided that the Servicer shall not assign this Agreement or
any rights hereunder except pursuant to Section 7.1 hereof, without the prior
written consent of the Company or the Trustee. Any prohibited assignment shall
be absolutely void.
Section 10.5. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
Section 10.6. Interpretation of Agreement. This Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
Section 10.7. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
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provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
Section 10.8. Merger of Prior Agreements. This Agreement cannot be
changed or terminated orally. All prior agreements, understandings,
representations, warranties and negotiations, if any, are merged into this
Agreement.
Section 10.9. Good Faith and Reasonableness. The parties intend and agree
that their respective rights, duties, powers, liabilities, obligations and
directions shall be performed, carried out, discharged and exercised reasonably
and in good faith.
Section 10.10. Counterparts. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on the same or separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original instrument and all of which counterparts, taken
together, shall constitute one and the same Agreement.
Section 10.11. Amendment. Any provision of this Agreement may be amended,
waived, supplemented, restated, discharged or terminated (i) to cure any
ambiguity, (ii) to correct any defective provisions or to correct or supplement
any provisions therein which may be inconsistent with any other provisions
therein, or (iii) to add any other provisions with respect to matters or
questions arising thereunder, which provisions shall not be inconsistent with
any other provisions thereof, in writing duly executed by the Company, the
Trustee and the Servicer (with not less than thirty (30) days prior written
notice to the Rating Agency). No amendment to this Agreement shall in any event
be effective without the prior written consent of Eximbank.
Section 10.12. No Insolvency Proceeding Against the Company. The Servicer
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all Securities and any other securities issued
by or at the direction of the Company pursuant to the Loan Program Documents, it
will not institute against or join with any other Person in instituting against
the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States. This Section shall survive the
termination of the Agreement.
Section 10.13. Exercise of Rights. No failure or delay on the part of the
Company or the Trustee to exercise any right, power or privilege under this
Agreement and no course of dealing between the Company or the Trustee, as the
case may be, and the Servicer shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and except to the extent limited under this
Agreement, not exclusive of any rights or remedies which the Company or the
Trustee would otherwise have pursuant to law or equity. No notice to or demand
on any party in any case shall entitle such party to any other or further notice
or demand in similar or other circumstances, or constitute waiver of the right
of the other party to any other or further action in any circumstance without
notice or demand.
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Section 10.14. No Recourse. The Servicer, whether by virtue of its rights
and obligations under this Agreement or otherwise, shall not be deemed liable to
the Company or any other Person for the liabilities of the Company. In no event
shall the Servicer be liable to the Company or any other Person for indirect,
special, punitive, incidental or consequential loss or damage of any kind
whatsoever, including without limitation, lost profits, whether or not the
likelihood of such loss or damage was known to the Servicer. The obligations of
each of the Company, the Trustee and the Servicer under this Agreement are
solely the corporate obligations of the Company, the Trustee and the Servicer,
respectively. No recourse shall be had for the payment of any amount owing
hereunder or for the payment of any fee hereunder or any other obligation or
claim arising out of or based upon this Agreement against any stockholder,
member, employee, affiliate, officer, director or incorporator of any of the
Company, the Trustee or the Servicer.
Section 10.15. Payment on Non-Business Days. In any case where the date
for payment of funds hereunder, by check, wire transfer or otherwise, or the
date on which any other act required under this Agreement is to be performed
shall not be a Business Day, then such payment or such performance need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of such payment or the date for
such performance, and no interest shall accrue for the period from and after
such date, provided, however, that if such due date is the final maturity date
of a Loan Note, then such payment or performance relating thereto shall be made
on the next preceding Business Day.
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In Witness Whereof, the parties hereto have caused this Agreement to be
executed and delivered as of the date first hereinabove set forth.
ABN AMRO Bank N.V., as Servicer
By: ABN AMRO North America, Inc.,
its agent
By:_____________________________________
Title:________________________________
By:_____________________________________
Title:________________________________
U.S. Trade Funding Corp.
By:_____________________________________
Title:________________________________
LaSalle National Bank, as Trustee
By:_____________________________________
Title:________________________________
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SCHEDULE I
TO SERVICING AGREEMENT
DATE OF TRUST AGREEMENT: As of October 1, 1996
LOAN:
Borrower: YA96A Limited
Lender: ABN AMRO Bank N.V.
Date of Loan Agreement: August 27, 1996
Amount of each Loan: $ 50,952,326.31
and
$50,719,872.97
Aggregate Amount of Loans: $101,672,199.28
SECURITIES: 6.75% Trade Trust Certificates, Series
1996-A issued by U.S. Trade Trust, Series
1996-A