1
Exhibit 1.2
Class B Note Underwriting Agreement
dated July 14, 1999
2
CLASS B NOTE UNDERWRITING AGREEMENT
Caterpillar Financial Asset Trust 1999-A
Class B 6.55% Asset Backed Notes
July 14, 1999
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Introductory. Caterpillar Financial Funding Corporation, a Nevada
corporation (the "Seller"), proposes to cause Caterpillar Financial Asset Trust
1999-A (the "Trust") to issue and sell $23,656,000 aggregate principal amount of
6.55% Class B Asset Backed Notes (the "Class B Notes") to ▇▇▇▇▇▇▇, Sachs & Co.
(the "Underwriter"). The assets of the Trust will include, among other things, a
pool of fixed-rate retail installment sale contracts and finance leases (the
"Receivables") secured by new and used machinery manufactured primarily by
Caterpillar Inc. ("Caterpillar"), including rights to receive certain payments
with respect to such Receivables, and security interests in the machinery
financed by the Receivables (the "Financed Equipment"), and the proceeds
thereof. The Receivables will be sold to the Trust by the Seller. The
Receivables will be serviced for the Trust by Caterpillar Financial Services
Corporation, a Delaware corporation (the "Servicer" or "CFSC"). The Notes will
be issued pursuant to the Indenture to be dated as of July 1, 1999 (as amended
and supplemented from time to time, the "Indenture"), between the Trust and The
First National Bank of Chicago, a national banking association (the "Indenture
Trustee").
Simultaneously with the issuance and sale of the Class B Notes as
contemplated herein, the Trust will issue $155,000,000 aggregate principal
amount of Class A-1 5.365% Asset Backed Notes (the "Class A-1 Notes"),
$125,000,000 aggregate principal amount of Class A-2 5.90% Asset Backed Notes
(the "Class A-2 Notes") and $270,000,000 aggregate principal amount of Class A-3
6.20% Asset Backed Notes (the "Class A-3 Notes," together with the Class A-1
Notes and the Class A-2 Notes, the "Class A Notes," and together with the Class
B Notes, the "Notes") and $17,764,812 aggregate principal amount of Asset Backed
Certificates (the "Certificates," together with the Notes sometimes referred to
collectively herein as the "Securities"), each such certificate representing a
fractional undivided interest in the Trust. The Class A Notes will be sold
pursuant to an underwriting agreement (the "Class A Note Underwriting
Agreement," together with this Underwriting Agreement, the "Underwriting
Agreements") among the Seller, CFSC and the underwriters named in Schedule I
thereto.
3
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Sale and Servicing Agreement to be dated as
of July 1, 1999 (as amended and supplemented from time to time, the "Sale and
Servicing Agreement"), among the Trust, the Seller and the Servicer or, if not
defined therein, in the Indenture or the Trust Agreement to be dated as of July
1, 1999 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Seller and Chase Manhattan Bank Delaware, a Delaware banking
corporation as owner trustee under the Trust Agreement (the "Owner Trustee").
2. Representations and Warranties of the Seller and CFSC. Each of
the Seller and CFSC, with respect to itself only, and not with respect to the
other, represents and warrants to and agrees with the Underwriter that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
(Registration No. 333-53721) on such Form S-3, including a prospectus and a form
of prospectus supplement, for registration under the Act of the offering and
sale of the Notes. The Seller may have filed one or more amendments thereto,
each of which amendments has previously been furnished to the Underwriter. The
Seller will also file with the Commission a prospectus supplement in accordance
with Rule 424(b) under the Act. The Seller has included in the Registration
Statement, as amended at the Effective Date (as hereinafter defined), all
information required by the Act and the rules thereunder to be included in the
Prospectus (as hereinafter defined) with respect to the Notes and the offering
thereof. As filed, the registration statement as amended, the form of prospectus
supplement, and any prospectuses or prospectus supplements filed pursuant to
Rule 424(b) under the Act relating to the Notes shall, except to the extent that
the Underwriter shall agree in writing to a modification, be in all substantive
respects in the form furnished to the Underwriter prior to the Execution Time
(as hereinafter defined) or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest preliminary prospectus supplement which has
previously been furnished to the Underwriter) as the Seller has advised the
Underwriter, prior to the Execution Time, will be included or made therein.
For purposes of this Agreement, "Effective Time" means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time,
and including the exhibits thereto and any material incorporated by reference
therein (including any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets (as defined in Section 13 of this Agreement)
filed on Form 8-K), is hereinafter referred to as the "Registration Statement,"
and any prospectus supplement (the "Prospectus Supplement") relating to the
Notes, as filed with the Commission pursuant to and in accordance with Rule
424(b) under the Act is, together with the prospectus filed as part of the
Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "Basic
Prospectus"), hereinafter referred to as the "Prospectus". "Preliminary
Prospectus" means any preliminary
-2-
4
prospectus to the Prospectus which describes the Notes and the offering thereof
and which is used prior to the filing of the Prospectus. "Rule 424" refers to
such rule under the Act. Any reference herein to the Registration Statement, the
Prospectus or any Prospectus Supplement shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration Statement
or the issue date of the Prospectus or any Prospectus Supplement, as the case
may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Prospectus or any
Prospectus Supplement shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement, or the issue date of the Prospectus or any Prospectus Supplement, as
the case may be, deemed to be incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus was first filed and
on the Closing Date (as defined below), the Prospectus and any Prospectus
Supplement did or will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the respective rules and regulations
of the Commission thereunder (the "Rules and Regulations") and of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). On the Effective
Date, the Registration Statement did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus, together with any Prospectus
Supplement, did not or will not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Seller makes no representation or
warranty as to the information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with information
furnished in writing to the Seller by the Underwriter specifically for use in
connection with preparation of the Registration Statement or the Prospectus.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, management,
financial condition, stockholders' equity, results of operations, regulatory
status or business prospects of the Seller or CFSC, and (ii) neither the Seller
nor CFSC has entered into any transaction or agreement (whether or not in the
ordinary course of business) material to it that, in either case, would
reasonably be expected to materially adversely affect the interests of the
holders of the Notes, other than as set forth or contemplated in the Prospectus.
(d) The computer tape of the Receivables created as of July 1, 1999,
and made available to the Underwriter by the Servicer, was complete and accurate
as of the date thereof and includes a description of the Receivables that are
described in Schedule A to the Sale and Servicing Agreement.
-3-
5
(e) Each of the Seller and CFSC is duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and is qualified to transact business in and is in good standing
under the laws of each state in which its activities require such qualification,
and has full power, authority and legal right to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted.
(f) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CFSC.
(g) On the date of this Agreement and on the Closing Date, the
representations and warranties of CFSC and the Seller in each of the Basic
Documents to which they are a party will be true and correct.
(h) CFSC's sale, transfer, assignment, set over and conveyance of
the Receivables to the Seller as of the Closing Date will vest in the Seller all
of CFSC's right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(i) The Seller's sale, transfer, assignment, set over and conveyance
of the Receivables to the Trust as of the Closing Date will vest in the Trust
all of the Seller's right, title and interest therein, subject to no prior lien,
mortgage, security interest, pledge, adverse claim, charge or other encumbrance.
(j) The Trust's grant of a security interest in the Receivables to
the Indenture Trustee pursuant to the Indenture will vest in the Indenture
Trustee, for the benefit of the Noteholders, a first priority perfected security
interest therein, subject to no prior lien, mortgage, security interest, pledge,
adverse claim, charge or other encumbrance.
3. Purchase, Sale, and Delivery of the Class B Notes. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Seller agrees to cause the
Trust to sell to the Underwriter, and the Underwriter agrees to purchase from
the Trust, at a purchase price of 99.523580% of the principal amount thereof,
$23,656,000 in principal amount of Class B Notes. Delivery of and payment for
the Class B Notes shall be made at the office of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on July 21, 1999 (the "Closing
Date"). Delivery of the Class B Notes shall be made against payment of the
purchase price in immediately available funds drawn to the order of the Seller.
The Class B Notes to be so delivered will be initially represented by one or
more Class B Notes registered in the name of "Cede & Co.," the nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Class B Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Class B Notes will be available only
under limited circumstances set forth in the Indenture.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Class B Notes for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
-4-
6
5. Covenants of the Seller. The Seller covenants and agrees with the
Underwriter that:
(a) Immediately following the execution of this Agreement, the
Seller will prepare a Prospectus Supplement setting forth the amount of Notes
covered thereby and the terms thereof not otherwise specified in the Basic
Prospectus, the price at which such Notes are to be purchased by the
Underwriter, the initial public offering price, the selling concessions and
allowances, and such other information as the Seller deems appropriate and shall
furnish a copy to the Underwriter in accordance with Section 5(b) of this
Agreement. The Seller will transmit the Prospectus including such Prospectus
Supplement to the Commission pursuant to Rule 424(b) by a means reasonably
calculated to result in filing that complies with all applicable provisions of
Rule 424(b). The Seller will advise the Underwriter promptly of any such filing
pursuant to Rule 424(b).
(b) Prior to the termination of the offering of the Notes, the
Seller will not file any amendment of the Registration Statement or supplement
to the Prospectus unless the Seller has furnished the Underwriter with a copy
for its review prior to filing and will not file any such proposed amendment or
supplement to which the Underwriter reasonably objects. Subject to the foregoing
sentence, if filing of the Prospectus is otherwise required under Rule 424(b),
the Seller will file the Prospectus, properly completed, and any supplement
thereto, with the Commission pursuant to and in accordance with the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Underwriter of such timely filing.
(c) The Seller will advise the Underwriter promptly of any proposal
to amend or supplement the Registration Statement as filed or the Prospectus,
and will not effect such amendment or supplement without the Underwriter's
consent, which consent will not unreasonably be withheld. The Seller will also
advise the Underwriter promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information and the Seller will also advise the Underwriter
promptly of any amendment or supplement to the Registration Statement or the
Prospectus and of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose, and the Seller will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
the lifting of any issued stop order.
(d) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective Rules and Regulations thereunder, the Seller
promptly will notify the Underwriter and will prepare and file, or cause to be
prepared and filed, with the Commission, subject to the first sentence of
paragraph (b) of this Section 5, an amendment or supplement that will correct
such statement or omission, or effect such compliance. Any such filing shall not
operate as a waiver or limitation on any right of the Underwriter hereunder.
-5-
7
(e) As soon as practicable, but not later than fourteen months after
the original effective date of the Registration Statement, the Seller will cause
the Trust to make generally available to Noteholders an earnings statement of
the Trust covering a period of at least twelve months beginning after the
Effective Date of the Registration Statement that will satisfy the provisions of
Section 11(a) of the Act.
(f) The Seller will furnish to the Underwriter copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus or prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each case as
soon as available and in such quantities as the Underwriter requests.
(g) The Seller will assist the Underwriter in arranging for the
qualification of the Notes for sale and determination of their eligibility for
investment under the laws of such jurisdictions in the United States, or as
necessary to qualify for the Euroclear System or Cedelbank, societe anonyme, as
the Underwriter designates and will continue to assist the Underwriter in
maintaining such qualifications in effect so long as required for the
distribution; provided, however, that neither the Seller nor CFSC shall be
required to qualify to do business in any jurisdiction where it is now not
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is now not subject to service
of process.
(h) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as the Underwriter shall cease to
maintain a secondary market in the Notes, whichever occurs first, the Seller
will deliver to the Underwriter the annual statements of compliance and the
annual independent certified public accountants' reports furnished to the Owner
Trustee or the Indenture Trustee pursuant to the Sale and Servicing Agreement,
as soon as such statements and reports are furnished to the Owner Trustee or the
Indenture Trustee.
(i) So long as any of the Notes are outstanding, the Seller will
furnish to the Underwriter (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to Noteholders or filed
with the Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning the
Seller filed with any government or regulatory authority which is otherwise
publicly available, as the Underwriter may reasonably request.
(j) On or before the Closing Date, the Seller shall cause the
computer records of the Seller and the Servicer relating to the Receivables to
be marked to show the Trust's absolute ownership of the Receivables, and from
and after the Closing Date neither the Seller nor the Servicer shall take any
action inconsistent with the Trust's ownership of such Receivables, other than
as permitted by the Sale and Servicing Agreement.
(k) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents
-6-
8
or the taking of any other actions by the Seller, the Seller shall furnish such
documents and take any such other actions.
(l) For the period beginning on the date of this Agreement and
ending seven days after the Closing Date, unless waived by the Underwriter, none
of the Seller, CFSC or any trust originated, directly or indirectly, by the
Seller or CFSC will offer to sell or sell notes (other than the Notes)
collateralized by, or certificates (other than the Certificates) evidencing an
ownership interest in, receivables generated pursuant to fixed-rate retail
installment sale contracts and finance leases and secured by equipment similar
to the Financed Equipment.
(m) The Seller and CFSC each will deliver to the Underwriter, all
opinions, certificates and other documents or information delivered to the Owner
Trustee and the Indenture Trustee at the time such opinions, certificates and
other documents or information are delivered to the Owner Trustee or the
Indenture Trustee pursuant to the Sale and Servicing Agreement and the Purchase
Agreement with respect to perfection and priority of CFSC's interest in the
Receivables.
6. Payment of Expenses. The Seller will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation, issuance and delivery of the Notes
to the Underwriter, (iii) the fees and disbursements of the Seller's counsel and
accountants, (iv) the qualification of the Notes under securities laws in
accordance with the provisions of Section 5(g), including filing fees and the
fees and disbursements of counsel in connection therewith and in connection with
the preparation of any blue sky or legal investment survey, (v) the printing and
delivery to the Underwriter of copies of the Registration Statement as
originally filed and of each amendment thereto, of the Preliminary Prospectus
and of each amendment or supplement thereto, (vi) the printing and delivery to
the Underwriter of copies of any blue sky or legal investment survey prepared in
connection with the Notes, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) the fees and expenses, if any, incurred with respect
to any filing with the National Association of Securities Dealers, Inc. and (ix)
the fees and expenses of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP in its role as
counsel to the Trust incurred as a result of providing the opinions required by
Section 7(f) hereof.
7. Conditions of the Obligations of the Underwriter. The obligations
of the Underwriter to purchase and pay for the Class B Notes will be subject to
the accuracy of the representations and warranties on the part of the Seller
herein, to the accuracy of the statements of officers of the Seller made
pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) The Registration Statement shall have become effective prior to
the Execution Time, and prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Underwriter, shall be contemplated by the Commission or by any
authority administering any state securities or blue sky law.
(b) The Prospectus and any supplements thereto shall have been filed
(if required)
-7-
9
with the Commission in accordance with the Rules and Regulations and Section
5(a) hereof.
(c) On or prior to the date of this Agreement and on or prior to the
Closing Date, the Underwriter shall have received a letter or letters, dated as
of the date of this Agreement and as of the Closing Date, respectively, of
PricewaterhouseCoopers LLP, independent public accountants, substantially in the
form of the drafts to which the Underwriter has previously agreed and otherwise
in form and substance satisfactory to the Underwriter and its counsel.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Seller or the Servicer which, in the judgment of the Underwriter,
materially impairs the investment quality of the Notes or makes it impractical
or inadvisable to market the Notes; (ii) any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange; (iii) any suspension of trading of
any securities of Caterpillar or CFSC on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal, Delaware or New York
authorities; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress, or any other
substantial national or international calamity or emergency if, in the judgment
of the Underwriter, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Notes.
(e) The Underwriter shall have received opinions of ▇▇▇▇ ▇. ▇▇▇▇▇,
General Counsel of CFSC, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP and Tuke, ▇▇▇▇ &
▇▇▇▇▇▇▇, PLC, counsel to CFSC, the Seller and the Trust and such other counsel
acceptable to the Underwriter, addressed to the Underwriter, the Owner Trustee
and the Indenture Trustee, dated the Closing Date and satisfactory in form and
substance to the Underwriter and its counsel, substantially to the effect that:
(i) CFSC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Underwriting Agreements, the
Administration Agreement, the Purchase Agreement, the Sale and Servicing
Agreement and the Custodial Agreement and had at all times, and now has,
the power, authority and legal right to acquire, own and sell the
Receivables.
(ii) The Seller has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Nevada
with full corporate power and authority to own its properties and conduct
its business, as presently owned and conducted by it, and to enter into
and perform its obligations under the Underwriting Agreements, the
Purchase Agreement, the Trust Agreement, the Sale and Servicing Agreement
and the Custodial Agreement and had at all times, and now has, the power,
authority and legal right to acquire, own and sell the Receivables.
(iii) CFSC is duly qualified to do business and is in good standing,
and has obtained
-8-
10
all necessary licenses and approvals in each jurisdiction in which failure
to qualify or to obtain such license or approval would render any
Receivable unenforceable by the Seller, the Owner Trustee or the Indenture
Trustee.
(iv) The Seller is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would have a material adverse effect on the Receivables as a
whole.
(v) The direction by the Seller to the Owner Trustee to authenticate
the Certificates has been duly authorized by the Seller and, when the
Certificates have been duly executed, authenticated and delivered by the
Owner Trustee in accordance with the Trust Agreement and delivered to and
paid for by the Seller, will be legally issued, fully paid and
nonassessable obligations of the Trust.
(vi) The direction by CFSC to the Indenture Trustee to authenticate
the Notes has been duly authorized by CFSC, and, when the Notes have been
duly executed and delivered by the Owner Trustee, authenticated by the
Indenture Trustee in accordance with the Indenture and delivered and paid
for pursuant to the Underwriting Agreements, the Notes will be duly issued
and entitled to the benefits and security afforded by the Indenture,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(vii) Each of the Purchase Agreement, the Trust Agreement, the Sale
and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by the Seller, and is a legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(viii) The Underwriting Agreements have been duly authorized,
executed and delivered by each of the Seller and CFSC.
(ix) Each of the Administration Agreement, the Purchase Agreement,
the Sale and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by CFSC and is a legal, valid and
binding obligation of CFSC enforceable against CFSC in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the
-9-
11
discretion of the court before which any proceeding therefor may be
brought.
(x) Neither the sale, transfer, assignment, set over and conveyance
of the Receivables from CFSC to the Seller, nor the sale, transfer,
assignment, set over and conveyance of the Receivables from the Seller to
the Trust, nor the grant of security interest in the Trust Estate by the
Trust to the Indenture Trustee, nor the assignment by the Seller of its
right, title and interest in the Purchase Agreement to the Trust, nor the
grant of the security interest in the Collateral to the Indenture Trustee
pursuant to the Indenture, nor the execution and delivery of the
Underwriting Agreements, the Purchase Agreement, the Trust Agreement, the
Sale and Servicing Agreement or the Custodial Agreement by the Seller, nor
the execution of the Underwriting Agreements, the Administration
Agreement, the Purchase Agreement, the Sale and Servicing Agreement or the
Custodial Agreement by CFSC, nor the consummation of any transactions
contemplated in the Underwriting Agreements, the Purchase Agreement, the
Trust Agreement, the Indenture, the Administration Agreement, the Sale and
Servicing Agreement or the Custodial Agreement (such agreements, excluding
the Underwriting Agreements, being for purposes of this clause (e) and
elsewhere herein, as applicable, collectively, the "Basic Documents"), nor
the fulfillment of the terms thereof by CFSC, the Seller or the Trust, as
the case may be, will (x) conflict with, or result in a breach, violation
or acceleration of, or constitute a default under, any term or provision
of the certificate of incorporation or bylaws of CFSC or the Seller or, to
the best of such counsel's knowledge after due inquiry, of any indenture
or other agreement or instrument to which CFSC or the Seller is a party or
by which either of them is bound, or (y) result in a violation of or
contravene the terms of any statute, order or regulation applicable to
CFSC or the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over either of them.
(xi) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge, threatened before any court,
administrative agency, or other tribunal (1) asserting the invalidity of
the Trust or any of the Basic Documents, (2) seeking to prevent the
consummation of any of the transactions contemplated by any of the Basic
Documents or the execution and delivery thereof, or (3) that could
reasonably be expected to materially and adversely affect the performance
(A) by CFSC of its obligations under, or the validity or enforceability
of, the Underwriting Agreements, the Administration Agreement, the
Purchase Agreement, the Sale and Servicing Agreement or the Custodial
Agreement, (B) by the Seller of its obligations under, or the validity or
enforceability of, the Underwriting Agreements, the Purchase Agreement,
the Trust Agreement, the Sale and Servicing Agreement or the Custodial
Agreement, or (C) by the Servicer of its obligations under, or the
validity or enforceability of, the Sale and Servicing Agreement.
(xii) To the best knowledge of such counsel, no default exists and
no event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which CFSC or the Seller is a
party or by which either of them is bound, which default is or would have
a material adverse effect on the financial condition, earnings, business
or properties of CFSC and its subsidiaries, taken as a whole.
-10-
12
(xiii) The Assignment (as defined in the Purchase Agreement) dated
as of the Closing Date from CFSC to the Seller has been duly authorized,
executed and delivered by CFSC.
(xiv) Should CFSC become the debtor in a case under the Bankruptcy
Code, if the matter were properly briefed and presented to a court, the
court should hold that (1) the transfer of the Receivables by CFSC to the
Seller in the manner set forth in the Purchase Agreement would constitute
an absolute sale of the Receivables, rather than a borrowing by CFSC
secured by the Receivables, and thus (2) the Seller's rights to the
Receivables would not be impaired by the operation of Section 362(a) of
the Bankruptcy Code.
(xv) Should CFSC become the debtor in a case under the Bankruptcy
Code, and the Seller would not otherwise properly be a debtor in a case
under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, the court,
exercising reasonable judgment after full consideration of all relevant
factors, should not order, over the objection of the Certificateholders or
the Noteholders, the substantive consolidation of the assets and
liabilities of the Seller with those of CFSC based on any legal theories
currently subscribed to by federal courts exercising bankruptcy
jurisdiction.
(xvi) Such counsel is familiar with the Servicer's standard
operating procedures relating to the Servicer's acquisition of a perfected
first priority security interest in the equipment financed by the Servicer
pursuant to equipment installment sale contracts in the ordinary course of
the Servicer's business. Assuming that the Servicer's standard procedures
have been followed with respect to the perfection of security interests in
the Financed Equipment (and such counsel has no reason to believe that
such procedures have not been followed), the Servicer has acquired or will
acquire a perfected first priority security interest in the Financed
Equipment.
(xvii) The Purchase Agreement grants to the Seller a valid security
interest in CFSC's rights in the Receivables and the proceeds thereof. The
Sale and Servicing Agreement grants to the Trust a valid security interest
in the Seller's rights in the Receivables and the proceeds thereof. The
Indenture grants to the Indenture Trustee a valid security interest in the
Trust's rights in the Receivables and the proceeds thereof.
(xviii) The Receivables are chattel paper as defined in the UCC.
(xix) Immediately prior to the sale of the Receivables and the
proceeds thereof to the Seller, CFSC had a first priority perfected
security interest in the Receivables and the proceeds thereof. Immediately
prior to the transfer of the Receivables and the proceeds thereof to the
Trust, the Seller had a first priority perfected security interest in the
Receiv ▇▇▇▇▇ and the proceeds thereof. Immediately prior to the transfer
of the Receivables and the proceeds thereof to the Indenture Trustee, the
Trust had a first priority perfected security interest in the Receivables
and the proceeds thereof. The Indenture Trustee has a first priori ty
perfected security interest in the Receivables and the proceeds thereof.
The opinion
-11-
13
covered by this paragraph (xix) shall be subject to customary UCC
exceptions and qualifications.
(xx) The Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Administration Agreement and the Purchase Agreement conform
in all material respects with the description thereof contained in the
Prospectus and any supplement thereto.
(xxi) The statements in the Prospectus under the headings "Risk
Factors -- Perfection of Interests in Receivables and in Financed
Equipment" and "Certain Legal Aspects of the Receivables" to the extent
they constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects.
(xxii) The statements contained in the Prospectus and any supplement
thereto under the headings "Description of the Notes," "Description of the
Certificates" and "Description of the Transfer and Servicing Agreements,"
insofar as such statements constitute a summary of the Notes, the
Certificates, the Indenture, the Administration Agreement, the Sale and
Servicing Agreement, the Purchase Agreement and the Trust Agreement, are a
fair and accurate summary of the matters referred to therein.
(xxiii) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Basic Documents,
except for such filings with respect to the transfer of the Receivables to
the Seller pursuant to the Purchase Agreement and the transfer of the
Receivables to the Trust pursuant to the Sale and Servicing Agreement and
as may be required under state securities or Blue Sky laws of various
jurisdictions.
(xxiv) All actions required to be taken and all filings required to
be made under the Act prior to the sale of the Notes have been duly taken
or made.
(xxv) The Trust Agreement is not required to be qualified under the
Trust Indenture Act and the Trust is not required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(xxvi) The Indenture has been duly qualified under the Trust
Indenture Act.
(xxvii) The Seller is not, and will not as a result of the offer and
sale of the Notes as contemplated in the Prospectus and the Underwriting
Agreements become, an "investment company" as defined in the Investment
Company Act or a company "controlled by" an "investment company" within
the meaning of the Investment Company Act.
(xxviii) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed
therein.
(xxix) The Registration Statement has become effective under the
Act, any required
-12-
14
filing of any Preliminary Prospectus and the Prospectus and any
supplements thereto pursuant to Rule 424(b) has been or will be made in
the manner and within the time period required by Rule 424(b), and, 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 are pending or contemplated under the Act,
and the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of the
Act, the Exchange Act, the Trust Indenture Act and the Rules and
Regulations.
(xxx) Nothing has come to such counsel's attention that would lead
such counsel to believe that the Registration Statement or the Prospectus
or any amendment or supplement thereto as of the respective dates thereof
(other than the financial statements and other financial and statistical
information contained therein, as to which such counsel need not express
any view) contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein
not misleading.
(xxxi) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver and
perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Notes and the Certificates.
(xxxii) The Indenture, the Sale and Servicing Agreement, the
Custodial Agreement and the Administration Agreement have been duly
authorized and, when duly executed and delivered by the Owner Trustee on
behalf of the Trust, will constitute the legal, valid and binding
obligations of the Trust, enforceable against the Trust in accordance with
their terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(xxxiii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Sale and Servicing Agreement, and had at
all relevant times, and now has, the power, authority and legal right to
acquire, own, sell and service the Receivables.
(xxxiv) The Servicer is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render any Receivable unenforceable by the Seller, the
Owner Trustee or the Indenture Trustee.
(xxxv) The Sale and Servicing Agreement has been duly authorized,
executed and
-13-
15
delivered by the Servicer, and is the legal, valid and binding obligation
of the Servicer enforceable against the Servicer in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(xxxvi) Neither the execution and delivery of the Sale and Servicing
Agreement by the Servicer, nor the consummation of any transactions
contemplated in the Underwriting Agreements or the Basic Documents, nor
the fulfillment of the terms thereof by the Servicer will conflict with,
or result in a breach, violation or acceleration of, or constitute a
default under, any term or provision of the certificate of incorporation
or bylaws of the Servicer or of any indenture or other agreement or
instrument to which the Servicer is a party or by which it is bound, or
result in a violation of or contravene the terms of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it.
(xxxvii) To the best knowledge of such counsel, no default exists
and no event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which the Servicer is a party or
by which it is bound, which default is or would have a material adverse
effect on the financial condition, earnings, business or properties of the
Servicer and its subsidiaries, taken as a whole.
Such counsel shall also opine as to such other matters as the
Underwriter may reasonably request. The opinions set forth in clauses (xiv),
(xv) and (xix) of this Section 7(e) shall be given by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP or such other outside counsel to CFSC, the Seller and the Trust as
may be acceptable to the Underwriter.
(f) The Underwriter shall have received an opinion addressed to it
of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP in its capacity as Special Tax Counsel for
the Trust, substantially to the effect that the statements in the Prospectus
under the headings "Summary of Terms--Tax Status" (to the extent relating to
Federal income tax consequences) and "Federal Income Tax Consequences"
accurately describe the material Federal income tax consequences to holders of
the Notes, and the statements in the Prospectus under the heading "ERISA
Considerations," to the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared or reviewed by
such counsel and accurately describe the material consequences to holders of the
Notes under ERISA. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, in its capacity as
Special Counsel to the Trust, shall have delivered an opinion with respect to
the characterization of the transfer of the Receivables.
(g) The Underwriter shall have received an opinion addressed to it
of Tuke, ▇▇▇▇ & ▇▇▇▇▇▇▇, PLC in its capacity as Special Tennessee Tax Counsel
for the Trust, substantially to the effect that the statements in the Prospectus
under the heading "Summary of Terms--Tax Status" (to
-14-
16
the extent relating to Tennessee income tax consequences) and in the Prospectus
under the heading "Certain State Income Tax Considerations" accurately describe
the material income tax consequences in the State of Tennessee to holders of the
Notes.
(h) The Underwriter shall have received an opinion addressed to it
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ in its capacity as Special Nevada Tax Counsel for the
Trust, substantially to the effect that the Trust would not be subject to
taxation in Nevada.
(i) The Underwriter shall have received an opinion addressed to it
of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in its capacity as Special Counsel
to the Underwriter, dated the Closing Date, with respect to the validity of the
Securities and such other related matters as the Underwriter shall require and
the Seller shall have furnished or caused to be furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(j) The Underwriter shall have received an opinion addressed to it,
the Seller and the Servicer of The Law Department of the Indenture Trustee, and
such other counsel acceptable to the Underwriter and its counsel, dated the
Closing Date and satisfactory in form and substance to the Underwriter and its
counsel, substantially to the effect that:
(i) The Indenture Trustee is a national banking association duly
organized and validly existing under the Federal law of the United States
of America.
(ii) The Indenture Trustee has the full corporate trust power to
accept the office of trustee under the Indenture and to enter into and
perform its obligations under the Indenture, the Sale and Servicing
Agreement, the Custodial Agreement and the Administration Agreement.
(iii) The execution and delivery of the Indenture, the Custodial
Agreement and the Administration Agreement and the acknowledgment and
acceptance of the Sale and Servicing Agreement and the performance by the
Indenture Trustee of its obligations under the Indenture, the Custodial
Agreement, the Sale and Servicing Agreement and the Administration
Agreement have been duly authorized by all necessary corporate action of
the Indenture Trustee and each has been duly executed and delivered by the
Indenture Trustee.
(iv) The Indenture, the Sale and Servicing Agreement, the Custodial
Agreement and the Administration Agreement constitute valid and binding
obligations of the Indenture Trustee enforceable against the Indenture
Trustee in accordance with their terms under the laws of the State of New
York and the Federal law of the United States of America.
(v) The execution and delivery by the Indenture Trustee of the
Indenture, the Custodial Agreement and the Administration Agreement and
the acknowledgment and acceptance of the Sale and Servicing Agreement do
not require any consent, approval or authorization of, or any registration
or filing with, any New York or United States Federal
-15-
17
governmental authority, other than the filing of Form T-1 under the Trust
Indenture Act.
(vi) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vii) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement or the Administration Agreement, nor
the fulfillment of the terms thereof by the Indenture Trustee, will
conflict with, result in a breach or violation of, or constitute a default
under any law or the charter, bylaws or other organizational documents of
the Indenture Trustee or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Indenture Trustee is a
party or is bound or any judgment, order or decree known to such counsel
to be applicable to the Indenture Trustee of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Indenture Trustee.
(viii) To the best of such counsel's knowledge and belief, there is
no action, suit or proceeding pending or threatened against the Indenture
Trustee (as trustee under the Indenture or in its individual capacity)
before or by any governmental authority that if adversely decided, would
materially adversely affect the ability of the Indenture Trustee to
perform its obligations under the Indenture, the Custodial Agreement, the
Sale and Servicing Agreement or the Administration Agreement.
(ix) The execution, delivery and performance by the Indenture
Trustee of the Sale and Servicing Agreement, the Indenture, the Custodial
Agreement and the Administration Agreement will not subject any of the
property or assets of the Trust or any portion thereof, to any liens that
are unrelated to the transactions contemplated in such agreements.
(k) The Underwriter shall have received an opinion addressed to it,
the Seller and the Servicer of Pryor, Cashman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the
Owner Trustee, and such other counsel acceptable to the Underwriter and its
counsel, dated the Closing Date and satisfactory in form and substance to the
Underwriter and its counsel, when taken together, substantially to the effect
that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware.
(ii) The Owner Trustee has full corporate trust power and authority
to enter into and perform its obligations under the Trust Agreement and,
on behalf of the Trust, under the Indenture, the Custodial Agreement, the
Sale and Servicing Agreement and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, of the Indenture, the Custodial Agreement, the Sale
and Servicing Agreement, the Administration Agreement, the Certificates
and the Notes and the performance by the Owner Trustee of its obligations
under the Trust Agreement, the Indenture, the Custodial
-16-
18
Agreement, the Sale and Servicing Agreement and the Administration
Agreement have been duly authorized by all necessary corporate action of
the Owner Trustee and each has been duly executed and delivered by the
Owner Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement and the Administration Agreement
constitute valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms under the laws of
the State of New York and the State of Delaware and the Federal law of the
United States of America.
(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Sale and
Servicing Agreement, the Custodial Agreement and the Administration
Agreement do not require any consent, approval or authorization of, or any
registration or filing with, any Delaware or United States Federal
governmental authority having jurisdiction over the trust power of the
Owner Trustee, other than those consents, approvals or authorizations as
have been obtained and the filing of the Certificate of Trust with the
Secretary of State of the State of Delaware.
(vi) The Owner Trustee has duly executed, authenticated and
delivered the Certificates, and has duly executed and delivered the Notes,
issued on the Closing Date on behalf of the Trust.
(vii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, the Sale and Servicing Agreement,
the Indenture, the Custodial Agreement and the Administration Agreement
and the performance by the Owner Trustee of its obligations thereunder, do
not conflict with, result in a breach or violation of or constitute a
default under, the articles of association or bylaws of the Owner Trustee.
(l) The Underwriter shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, the
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer, the principal financial officer or the principal accounting officer
of each of the Seller and CFSC, in its individual capacity and as Servicer, in
which such officers shall state that, to the best of their knowledge after
reasonable investigation, (i) the representations and warranties of the Seller,
CFSC and/or the Servicer, as the case may be, contained in the Trust Agreement,
Purchase Agreement and the Sale and Servicing Agreement, as applicable, are true
and correct, that the Seller, CFSC and/or the Servicer, as the case may be, has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied under such agreements at or prior to the Closing Date,
that no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and (ii) no material adverse change in or
affecting particularly the business or properties of the Trust, the Seller, CFSC
and/or the Servicer, as the case may be, has occurred.
(m) The Underwriter shall have received evidence satisfactory to it
that, on or before the Closing Date, the Custodian, on behalf of the Seller, the
Trust and the Indenture Trustee
-17-
19
has taken possession of the applicable Receivables reflecting the transfer of
the interest of CFSC in such Receivables and the proceeds thereof to the Seller,
and the transfer of the interest of the Seller in such Receivables and the
proceeds thereof to the Trust and the grant of the security interest by the
Trust in such Receivables and the proceeds thereof to the Indenture Trustee.
(n) The Class B Notes shall have been rated at least "A" by Standard
& Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and at
least "A2" by ▇▇▇▇▇'▇ Investors Service, Inc.
(o) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued by the Seller or any of its affiliates or
by any trust established by the Seller or any of its affiliates.
(p) On the Closing Date, $155,000,000 aggregate principal amount of
Class A-1 5.365% Asset Backed Notes, $125,000,000 aggregate principal amount of
Class A-2 5.90% Asset Backed Notes and $270,000,000 aggregate principal amount
of Class A-3 6.20% Asset Backed Notes shall have been issued and sold and
$17,764,812 aggregate principal amount of the Certificates shall have been
issued and purchased by the Seller.
The Seller will provide or cause to be provided to the Underwriter
such conformed copies of such opinions, certificates, letters and documents as
it reasonably requests.
8. Indemnification and Contribution. (a) The Seller and CFSC will
jointly and severally, indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the Act against any losses, claims, damages, expenses or liabilities, joint or
several, to which the Underwriter or person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Underwriter for any legal or other expenses reasonably incurred by
the Underwriter in connection with investigating or defending any such loss,
claim, damage, expense liability or action; provided, however, that the Seller
and CFSC will not be liable in any such case to the extent that any such loss,
claim, damage, expense or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Seller by the Underwriter specifically for use
therein; and provided further, that the Seller and CFSC shall not be liable to
the Underwriter or any person controlling the Underwriter under the indemnity
agreement in this subsection (a) with respect to any of such documents to the
extent that any such loss, claim, damage, expense or liability of the
Underwriter or such controlling person results from the fact that the
Underwriter sold Notes to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or of
the Prospectus as then amended or supplemented (excluding documents
-18-
20
incorporated by reference), whichever is most recent, if the Seller has
previously furnished copies thereof to the Underwriter.
The indemnity agreement in this subsection (a) shall be in addition
to any liability which the Seller or CFSC may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act.
(b) The Underwriter will indemnify and hold harmless the
Seller and CFSC against any losses, claims, damages, expenses or liabilities to
which the Seller and CFSC may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, expenses or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Seller or CFSC by the
Underwriter specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Seller or CFSC in connection with
investigating or defending any such action or claim.
The indemnity agreement in this subsection (b) shall be in addition
to any liability which the Underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls the Seller
or CFSC within the meaning of the Act.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) of written 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 subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof, and in the event that such indemnified party
shall not so notify the indemnifying party within 30 days following receipt of
any such notice by such indemnified party, the indemnifying party shall have no
further liability under such subsection to such indemnified party unless the
indemnifying party shall have received other notice addressed and delivered in
the manner provided in Section 11 hereof of the commencement of such action; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection. 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
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party in its
reasonable judgment, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable or
-19-
21
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, expenses or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, expenses or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Seller and CFSC on the one hand and the Underwriter on
the other from the offering of the Notes. 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 Seller and CFSC on the one
hand and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, expenses or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative benefits received by the Seller and CFSC
on the one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Seller and CFSC bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
in the table on the cover page of the Prospectus, as amended or supplemented,
with respect to the Notes. 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 information supplied by the Seller and CFSC on the one hand or by the
Underwriter on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission, including, with respect to the Underwriter, the extent to which such
losses, claims, damages, expenses or liabilities (or actions in respect thereof)
result from the fact that the Underwriter sold such Notes to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus or the Prospectus as then supplemented or amended
(excluding documents incorporated by reference), whichever is more recent, if
the Seller has previously furnished copies thereof to the Underwriter. The
Seller, CFSC and the Underwriter agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim. Notwithstanding the provisions of this
subsection (d), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Notes underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which the Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
9. No Bankruptcy Petition. The Underwriter and CFSC each covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for which
the Seller was the depositor which securities were rated by any nationally
recognized statistical rating organization, it will not institute against, or
join any
-20-
22
other person in instituting against, the Seller any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings under
any Federal or state bankruptcy or similar law.
10. Survival of Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or CFSC or any of their officers and the Underwriter set forth in or made
pursuant to this Agreement or contained in certificates of officers of the
Seller submitted pursuant hereto shall remain operative and in full force and
effect, regardless of (i) any termination of this Agreement, (ii) any
investigation or statement as to the results thereof made by or on behalf of the
Underwriter or of the Seller or any of their respective representatives,
officers or directors or any controlling person, and (iii) delivery of and
payment for the Class B Notes. If for any reason the purchase of the Class B
Notes by the Underwriter is not consummated, the Seller shall remain responsible
for the expenses to be paid or reimbursed by the Seller pursuant to Section 6
and the respective obligations of the Seller and the Underwriter pursuant to
Section 8 shall remain in effect. If for any reason the purchase of the Class B
Notes by the Underwriter is not consummated (other than because of a failure to
satisfy the conditions set forth in items (ii), (iv) or (v) of Section 7(d)),
the Seller will reimburse the Underwriter, upon demand, for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Class B Notes. Nothing
contained in this Section 10 shall limit the recourse of the Seller against the
Underwriter.
11. Notices. All communications hereunder will be in writing and if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to the Underwriter at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇
▇▇▇▇▇▇▇▇▇; if sent to the Seller, will be mailed, delivered or telegraphed, and
confirmed to it at Caterpillar Financial Funding Corporation, Greenview Plaza,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Secretary; if sent to CFSC, will be mailed, delivered or telegraphed, and
confirmed to it at Caterpillar Financial Services Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇- 1071, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8 will be mailed,
delivered or telegraphed and confirmed to the Underwriter. Any such notice will
take effect at the time of receipt.
12. Computational Materials; Term Sheets. The Underwriter represents
and warrants to the Seller that (a) it has not and will not use any information
that constitutes "Computational Materials" as defined in the no-action letter,
dated May 20, 1994, issued by the Commission to ▇▇▇▇▇▇, Peabody Acceptance
Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇ Structured Asset
Corporation (as made generally applicable to other issuers and underwriters by
the Commission in the response to the request of the Public Securities
Association, dated May 24, 1994), in connection with the offering of the Class B
Notes and (b) it has not and will not use any information that constitutes "ABS
Term Sheets," "Structural Term Sheets" or "Collateral Term Sheets," each as
defined in the no-action letter, dated February 13, 1995, addressed by the
Commission to the Public Securities Association, in connection with the offering
of the Class B Notes, in each case without the prior written consent of the
Seller and CFSC to such usage.
-21-
23
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligations hereunder. No purchaser of Class B
Notes from the Underwriter shall be deemed to be a successor of the Underwriter
merely because of such purchase.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. Applicable Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
-22-
24
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller, CFSC and the Underwriter in
accordance with the terms of this Class B Note Underwriting Agreement.
Very truly yours,
CATERPILLAR FINANCIAL FUNDING
CORPORATION
By:
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
CATERPILLAR FINANCIAL SERVICES
CORPORATION
By:
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
The foregoing Class B Underwriting
Agreement is hereby confirmed and
accepted as of the date first written above.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,
By:
------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
