SALE AND SERVICING AGREEMENT among CATERPILLAR FINANCIAL ASSET TRUST 2006-A Issuing Entity CATERPILLAR FINANCIAL FUNDING CORPORATION Depositor and CATERPILLAR FINANCIAL SERVICES CORPORATION Servicer Dated as of June 1, 2006
EXHIBIT
4.3
among
Issuing
Entity
CATERPILLAR
FINANCIAL FUNDING CORPORATION
Depositor
and
CATERPILLAR
FINANCIAL SERVICES CORPORATION
Servicer
Dated
as
of June 1, 2006
TABLE
OF
CONTENTS
SECTION
1.01. Definitions.....................................................................................................................................................1
SECTION
1.02. Other
Definitional
Provisions....................................................................................................................17
ARTICLE
II
CONVEYANCE
OF
RECEIVABLES.....................................................................................................................18
SECTION
2.01. Conveyance
of
Receivables......................................................................................................................18
SECTION
2.02. Closing..........................................................................................................................................................19
SECTION
2.03. Books
and
Records.....................................................................................................................................19
ARTICLE
III
THE
RECEIVABLES..............................................................................................................................................19
SECTION
3.01. Representations
and Warranties of
Depositor........................................................................................19
SECTION
3.02. Repurchase
by Depositor or CFSC Upon
Breach....................................................................................21
SECTION
3.03. Custody
of Receivable
Files.......................................................................................................................22
SECTION
3.04. Duties
of
Servicer........................................................................................................................................22
SECTION
3.05. Acceptance
by Issuing Entity and the Indenture Trustee of the Receivables;
Certification by the Indenture
Trustee......................................................................................................22
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF
RECEIVABLES...........................................................................24
SECTION
4.01. Duties
of
Servicer.........................................................................................................................................24
SECTION
4.02. Collection
of Receivable
Payments...........................................................................................................24
SECTION
4.03. Realization
upon
Receivables.....................................................................................................................25
SECTION
4.04. Physical
Damage
Insurance........................................................................................................................25
SECTION
4.05. Maintenance
of Security Interests in Financed
Equipment...................................................................25
SECTION
4.06. Covenants
of
Servicer..................................................................................................................................26
SECTION
4.07. Purchase
by Servicer of Receivables upon
Breach.................................................................................26
SECTION
4.08. Servicing
Fee.................................................................................................................................................26
SECTION
4.09. Servicer
Report.............................................................................................................................................27
SECTION
4.10. Annual
Statement as to Compliance; Notice of
Default........................................................................27
SECTION
4.11. Annual
Independent Certified Public Accountants'
Attestation.........................................................28
SECTION
4.12. Servicer
Expenses........................................................................................................................................28
SECTION
4.13. Reports
to the
Commission........................................................................................................................28
-i-
TABLE
OF CONTENTS
(continued)
ARTICLE
V
DISTRIBUTIONS;
RESERVE ACCOUNT;
CERTIFICATEHOLDER AND NOTEHOLDER
INFORMATION....................................................................29
SECTION
5.01. Establishment
of Trust
Accounts.............................................................................................................29
SECTION
5.02. Collections....................................................................................................................................................31
SECTION
5.03. Additional
Deposits....................................................................................................................................31
SECTION
5.04. Distributions.................................................................................................................................................31
SECTION
5.05. Reserve
Account.........................................................................................................................................34
.
SECTION
5.06. Certificateholder
and Noteholder
Information........................................................................................34
SECTION
5.07. Net
Deposits.................................................................................................................................................36
SECTION
5.08. Tax
Monitoring............................................................................................................................................36
.
ARTICLE
VI
THE
DEPOSITOR...................................................................................................................................................36
SECTION
6.01. Representations
of
Depositor....................................................................................................................36
SECTION
6.02. Liability
of Depositor;
Indemnities............................................................................................................37
SECTION
6.03. Merger
or
Consolidation of, or Assumption of the Obligations of,
Depositor...................................38
SECTION
6.04. Limitation
on Liability of Depositor and
Others........................................................................................39
SECTION
6.05. Depositor
May Own the Certificate or
Notes............................................................................................39
ARTICLE
VII
THE
SERVICER.......................................................................................................................................................39
SECTION
7.01. Representations
of
Servicer.........................................................................................................................39
SECTION
7.02. Indemnities
of
Servicer.................................................................................................................................40
SECTION
7.03. Merger
or
Consolidation of, or Assumption of the Obligations of,
Servicer.......................................42
SECTION
7.04. Limitation
on Liability of Servicer and
Others...........................................................................................42
SECTION
7.05. CFSC
Not
To Resign as
Servicer..................................................................................................................43
ARTICLE
VIII
DEFAULT...............................................................................................................................................................43
SECTION
8.01. Servicer
Default..............................................................................................................................................43
SECTION
8.02. Appointment
of Successor
Servicer............................................................................................................44
SECTION
8.03. Notification
to Noteholders and
Certificateholder....................................................................................45
SECTION
8.04. Waiver
of
Past
Defaults................................................................................................................................45
SECTION
8.05. Appointment
of
Custodians.........................................................................................................................46
ARTICLE
IX
TERMINATION.......................................................................................................................................................46
SECTION
9.01. Optional
Purchase of All Receivables; Trust
Termination......................................................................46
-ii-
TABLE
OF CONTENTS
(continued)
ARTICLE
X
MISCELLANEOUS
PROVISIONS..........................................................................................................................47
SECTION
10.01. Amendment...................................................................................................................................................47
SECTION
10.02. Protection
of Title to
Trust.........................................................................................................................47
SECTION
10.03. Notices...........................................................................................................................................................49
SECTION
10.04. Assignment...................................................................................................................................................50
SECTION
10.05. Limitations
on Rights of
Others.................................................................................................................50
SECTION
10.06. Severability....................................................................................................................................................50
SECTION
10.07. Separate
Counterparts.................................................................................................................................50
SECTION
10.08. Headings........................................................................................................................................................50
SECTION
10.09. Governing
Law..............................................................................................................................................50
SECTION
10.10. Assignment
to Indenture
Trustee..............................................................................................................51
SECTION
10.11. Nonpetition
Covenants................................................................................................................................51
SECTION
10.12. Limitation
of Liability of Owner Trustee and Indenture
Trustee............................................................51
SCHEDULE
A - Schedule
of
Receivables............................................................................................................................................A-1
SCHEDULE
B - Location
of Receivable
Files......................................................................................................................................B-1
SCHEDULE
C - Receivable
Files
Certification.....................................................................................................................................C-1
SCHEDULE
D - Servicer
Report.............................................................................................................................................................D-1
SCHEDULE
E - Trustee
Instructions.....................................................................................................................................................E-1
-iii-
SALE
AND
SERVICING AGREEMENT dated as of June 1, 2006, among CATERPILLAR FINANCIAL ASSET
TRUST 2006-A, a Delaware statutory trust, CATERPILLAR FINANCIAL FUNDING
CORPORATION, a Nevada corporation, and CATERPILLAR FINANCIAL SERVICES
CORPORATION, a Delaware corporation.
WHEREAS
the Issuing Entity (as defined below) desires to purchase a portfolio of
receivables arising in connection with (i) retail installment sale
contracts for the purchase of machinery or equipment and (ii) equipment finance
lease contracts for the lease of machinery or equipment, in each case acquired
or originated by CFSC (as defined below) in the ordinary course of its
business;
WHEREAS
the Depositor (as defined below) has purchased such portfolio of receivables
from CFSC and desires to sell such portfolio of receivables to the Issuing
Entity; and
WHEREAS
CFSC desires to service such receivables.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
"Additional
Servicing Compensation"
means,
with respect to any Receivable, any late fees, extension fees and other
administrative fees or similar charges allowed by applicable law with respect
to
such Receivable.
"Administration
Agreement"
means
the Administration Agreement, dated as of June 1, 2006, among the Trust, the
Depositor, CFSC, as administrator, and U.S. Bank National Association, as
indenture trustee, as the same may be amended, modified or supplemented from
time to time.
"Administration
Fee"
means
the fee payable to the Administrator pursuant to Section 3 of the
Administration Agreement.
"Administrator"
means
the administrator under the Administration Agreement.
"Affiliate"
has the
meaning specified in the Indenture.
"Agreement"
means
this Sale and Servicing Agreement, as the same may be amended, modified or
supplemented from time to time.
"Amount
Financed"
means
with respect to a Receivable related to a Lease, the original Net Investment
with respect to such Lease, and with respect to a Receivable related to an
Installment Sales Contract, the sum of the amount advanced under the Receivable
toward the purchase price of the related Financed Equipment, plus any related
costs.
"APR"
or
"Annual
Percentage Rate"
with
respect to any Receivable related to an Installment Sales Contract means the
annual percentage rate of interest of such Receivable as set forth on the
Schedule of Receivables for such Receivable and with respect to any Receivable
related to a Lease, the Implicit Interest Rate.
"Basic
Documents"
has the
meaning specified in the Indenture.
"Business
Day"
means
any day other than a Saturday, a Sunday or a day on which banking institutions
or trust companies in New York, New York, Nashville, Tennessee, Las Vegas,
Nevada or Wilmington, Delaware are authorized or obligated by law, regulation
or
executive order to remain closed.
"Caterpillar"
means
Caterpillar Inc., a Delaware corporation, and its successors.
"Certificate"
has the
meaning specified in the Trust Agreement.
"Certificate
Balance"
means,
on the Closing Date, $4,835,819 and, thereafter, $4,835,819 reduced by all
amounts allocable to principal previously distributed to the Certificateholder
pursuant to Section 5.02(a) of the Trust Agreement.
"Certificate
Distribution Account"
has the
meaning specified in the Trust Agreement.
"Certificate
Pool Factor"
means
1.0000000 as of the Closing Date, and as of the close of business on any
Distribution Date thereafter a seven-digit decimal figure equal to the
Certificate Balance as of such date (after giving effect to reductions of the
Certificate Balance on such date) divided by the Certificate Balance at the
Closing Date.
"Certificateholder"
has the
meaning specified in the Trust Agreement.
"CFSC"
means
Caterpillar Financial Services Corporation, a Delaware corporation, and its
successors.
"Class"
means
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes or the Class B Notes, as applicable.
"Class A
Noteholders"
has the
meaning specified in the Indenture.
"Class A
Noteholders' Interest Carryover Shortfall"
means,
with respect to any Distribution Date, the sum of (i) the excess, if any,
of (A) the sum of (1) the Class A Noteholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and (2) any
outstanding Class A Noteholders' Interest Carryover Shortfall on such
preceding Distribution Date, over (B) the amount in respect of interest
that is actually distributed to the Class A Noteholders on such preceding
Distribution Date, and (ii) interest on the amount of interest due but not
paid to Class A Noteholders on the preceding Distribution Date, to the
extent permitted by law, at the Class A-1 Note Interest Rate, the
Class A-2 Note Interest Rate, the Class A-3 Note Interest Rate and the
Class A-4 Note Interest Rate, as applicable, from and including such
preceding Distribution Date to, but excluding, the current Distribution
Date.
2
"Class A
Noteholders' Interest Distributable Amount"
means,
with respect to any Distribution Date, the sum of (i) the Class A
Noteholders' Monthly Interest Distributable Amount for such Distribution Date
and (ii) the Class A Noteholders' Interest Carryover Shortfall for such
Distribution Date.
"Class A
Noteholders' Monthly Interest Distributable Amount"
means,
with respect to any Distribution Date, an amount equal to the aggregate amount
of interest accrued on the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes at the Class A-1 Note
Interest Rate, the Class A-2 Note Interest Rate, the Class A-3 Note
Interest Rate and the Class A-4 Note Interest Rate, respectively, with
respect to the Class A-1 Notes, from and including the preceding
Distribution Date (or, in the case of the initial Distribution Date, from and
including the Closing Date), to but excluding such Distribution Date (based
on a
360-day year and the actual number of days elapsed), and, with respect to the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
from and including the 25th
day of
the month preceding such Distribution Date (or, in the case of the initial
Distribution Date, from and including the Closing Date), to but excluding the
25th
day of
the month of such Distribution Date (in each case based on a 360-day year of
twelve 30-day months).
"Class A
Notes"
means
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes, collectively.
"Class A-1
Note Final Scheduled Distribution Date"
means
the Distribution Date occurring in June 2007.
"Class A-1
Note Interest Rate"
has the
meaning specified in the Indenture.
"Class A-1
Note Pool Factor"
means
1.0000000 as of the Closing Date, and as of the close of business on any
Distribution Date thereafter means a seven digit decimal figure equal to the
Outstanding Principal Amount of the Class A-1 Notes as of such date (after
giving effect to payments in reduction of the principal amount of the
Class A-1 Notes on such date) divided by the original Outstanding Principal
Amount of the Class A-1 Notes.
"Class A-2
Note Final Scheduled Distribution Date"
means
the Distribution Date occurring in February 2009.
"Class A-2
Note Interest Rate"
has the
meaning specified in the Indenture.
"Class A-2
Note Pool Factor"
means
1.0000000 as of the Closing Date and as of the close of business on any
Distribution Date thereafter means a seven digit decimal figure equal to the
Outstanding Principal Amount of the Class A-2 Notes as of such date (after
giving effect to payments in reduction of the principal amount of the
Class A-2 Notes on such date) divided by the original Outstanding Principal
Amount of the Class A-2 Notes.
"Class A-3
Note Final Scheduled Distribution Date"
means
the Distribution Date occurring in May 2010.
3
"Class A-3
Note Interest Rate"
has the
meaning specified in the Indenture.
"Class A-3
Note Pool Factor"
means
1.0000000 as of the Closing Date and, as of the close of business on any
Distribution Date thereafter means a seven digit decimal figure equal to the
Outstanding Principal Amount of the Class A-3 Notes as of such date (after
giving effect to payments in reduction of the principal amount of the
Class A-3 Notes on such date) divided by the original Outstanding Principal
Amount of the Class A-3 Notes.
"Class A-4
Note Final Scheduled Distribution Date"
means
the Distribution Date occurring in August 2011.
"Class A-4
Note Interest Rate"
has the
meaning specified in the Indenture.
"Class A-4
Note Pool Factor"
means
1.0000000 as of the Closing Date and, as of the close of business on any
Distribution Date thereafter means a seven digit decimal figure equal to the
Outstanding Principal Amount of the Class A-4 Notes as of such date (after
giving effect to payments in reduction of the principal amount of the
Class A-4 Notes on such date) divided by the original Outstanding Principal
Amount of the Class A-4 Notes.
"Class
B Note Final Scheduled Distribution Date"
means
the Distribution Date occurring in June 2012.
"Class
B Noteholders"
has the
meaning specified in the Indenture.
"Class
B Noteholders' Interest Carryover Shortfall"
means,
with respect to any Distribution Date, the sum of (i) the excess, if any, of
(A)
the sum of (1) the Class B Noteholders' Monthly Interest Distributable Amount
for the preceding Distribution Date and (2) any outstanding Class B Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over (B)
the
amount in respect of interest that is actually distributed to the Class B
Noteholders on such preceding Distribution Date, and (ii) interest on the amount
of interest due but not paid to Class B Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class B Note Interest
Rate from and including the 25th
day of
the month preceding such Distribution Date, to but excluding the 25th
day of
the month containing such Distribution Date (based on a 360-day year of twelve
30-day months).
"Class
B Noteholders' Interest Distributable Amount"
means,
with respect to any Distribution Date, the sum of (i) the Class B Noteholders'
Monthly Interest Distributable Amount for such Distribution Date and (ii) the
Class B Noteholders' Interest Carryover Shortfall for such Distribution
Date.
"Class
B Noteholders' Monthly Interest Distributable Amount"
means,
with respect to any Distribution Date, an amount equal to the aggregate interest
accrued on the Class B Notes at the Class B Note Interest Rate from and
including the 25th
day of
the month preceding such Distribution Date (or, in the case of the initial
Distribution Date, from and including the Closing Date), to but excluding the
25th
day of
the month containing such Distribution Date (based on a 360-day year of twelve
30-day months).
"Class
B Note Interest Rate"
has the
meaning specified in the Indenture.
4
"Class
B Note Pool Factor"
means
1.0000000 as of the Closing Date and, as of the close of business on any
Distribution Date thereafter means a seven digit decimal figure equal to the
Outstanding Principal Amount of the Class B Notes as of such date (after giving
effect to payments in reduction of the principal amount of the Class B Notes
on
such date) divided by the original Outstanding Principal Amount of the Class
B
Notes.
"Class
of Notes"
means
all Notes included in Class A-1 Notes, all Notes included in Class A-2
Notes, all Notes included in Class A-3 Notes, all Notes included in
Class A-4 Notes or all Notes included in Class B Notes, whichever is
appropriate.
"Closing
Date"
means
June 28, 2006.
"Collection
Account"
means
the account designated as such, established and maintained pursuant to Section
5.01 (a)(i).
"Collection
Period"
means,
with respect to the first Distribution Date, the calendar month of June 2006
and, with respect to each subsequent Distribution Date, the immediately
preceding calendar month. Any amount stated "as of the close of business on
the
last day of a Collection Period" shall give effect to the following calculations
as determined as of the end of the day on such last day: (i) all applications
of
collections and (ii) all distributions to be made on the following Distribution
Date.
"Collateral"
has the
meaning specified in the Granting Clause of the Indenture.
"Commission"
means
the Securities and Exchange Commission, and its successors.
"Contract"
means
an Installment Sales Contract or a Lease, as applicable, and shall include
all
documents relating to an amendment or modification of such
Contract.
"Contract
Balance"
of a
Receivable, as of the close of business on the last day of a Collection Period
or as of the Cut-off Date, as applicable, means the Amount Financed minus the
sum of (i) that portion of all Scheduled Payments paid on or prior to such
day
allocable to principal using the actuarial method, (ii) any payment of the
Purchase Amount with respect to such Receivable purchased by the Servicer or
repurchased by CFSC or the Depositor and allocable to principal and (iii) any
prepayment in full or any partial prepayments (including any Liquidation
Proceeds) applied to reduce the Contract Balance of such Receivable, in each
case plus accrued and unpaid interest. With respect to each Lease, the Servicer
shall allocate all Scheduled Payments thereon between "principal" and "interest"
based upon each such Lease's Implicit Interest Rate.
"Corporate
Trust Office"
means
the office of the Indenture Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of
the
execution of this Agreement is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Caterpillar Financial Asset Trust 2006-A,
except that for purposes of Section 3.02 of the Indenture, such term shall
mean
the office or agency of the Indenture Trustee in the Borough of Manhattan in
the
City of New York which office at the date hereof is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or at such other address as the Indenture
Trustee may designate from time to time by notice to the Noteholders, the
Servicer, the Owner Trustee and the Depositor, or the principal corporate trust
office of any successor Indenture Trustee (the address of which the successor
Indenture Trustee will notify the Noteholders, the Servicer, the Owner Trustee
and the Depositor); provided that for purposes of Section 3.02 of the Indenture,
the address of any such office shall be in the Borough of Manhattan in the
City
of New York.
5
"Cross-Collateralized
Equipment"
means,
with respect to any Contract, an item of machinery or equipment, other than
the
related Financed Equipment, which also secures an Obligor's indebtedness or
obligations under the respective Receivable in addition to the related Financed
Equipment.
"Cumulative
Realized Losses"
means,
with respect to any Collection Period, the percentage equivalent of a fraction
equal to all Realized Losses during the period since the Cut-off Date through
the end of such Collection Period divided by the Initial Pool
Balance.
"Custodian"
means
U.S. Bank National Association, in its capacity as custodian of the Receivable
Files, and its successors and assigns in such capacity, pursuant to the
Custodial Agreement.
"Custodial
Agreement"
means
the Custodial Agreement, dated as of June 1, 2006, among CFSC, the Depositor,
the Issuing Entity and the Custodian, as the same may be amended, modified
or
supplemented from time to time.
"Cut-off
Date"
means
June 1, 2006.
"Dealer"
means
each Caterpillar dealer who sold an item of Financed Equipment relating to
a
Receivable.
"Dealer
Receivable"
means a
Receivable originated by a Dealer and acquired by CFSC from such
Dealer.
"Delivery
Date"
means
the date on which the Receivable Files are delivered to the
Custodian.
"Depositor"
means
Caterpillar Financial Funding Corporation, a Nevada corporation, and its
successors in interest to the extent permitted hereunder.
"Determination
Date"
means,
with respect to any Distribution Date, the fifth Business Day prior to such
Distribution Date.
"Discount
Factor"
means
7.90% per annum.
"Distribution
Date"
means
the 25th day of each calendar month or, if such day is not a Business Day,
the
immediately following Business Day, commencing on July 25,
2006.
"Eligible
Institution"
means
(a) the corporate trust department of the Indenture Trustee, the Owner Trustee,
JPMorgan Chase Bank, N.A., as long as it is paying agent under the Trust
Agreement or U.S. Bank National Association, so long as it is a paying agent
under the Indenture, or (b) a depository institution organized under the laws
of
the United States of America or any one of the states thereof or the District
of
Columbia (or any domestic branch of a foreign bank) (i)(A) which has either
(1)
a long-term unsecured debt rating of AAA or better by Standard & Poor's and
Aaa or better by ▇▇▇▇▇'▇ or (2) a short-term unsecured debt rating or a
certificate of deposit rating of "A-1+" by Standard & Poor's and "Prime-1"
or better by ▇▇▇▇▇'▇, or any other long-term, short-term or certificate of
deposit rating acceptable to the Rating Agencies and (B) whose deposits-are
insured by the FDIC or (ii)(A) the parent of which has a long-term or short-term
unsecured debt rating acceptable to the Rating Agencies and (B) whose deposits
are insured by the FDIC. If so qualified, the Indenture Trustee, the Owner
Trustee, JPMorgan Chase Bank, N.A. or U.S. Bank National Association may be
considered an Eligible Institution for the purposes of clause (b) of this
definition.
6
"Eligible
Investments"
mean
the following (other than any issued by CFSC, the holder of the Certificates
or
any of their respective Affiliates):
(a) direct
obligations of, and obligations fully guaranteed as to timely payment by, the
United States of America;
(b) demand deposits, time deposits or certificates of deposit of any depository
institution incorporated under the laws of the United States of America or
any
state thereof (or any domestic branch of a foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of
the investment or contractual commitment to invest therein, the commercial
paper
or other short-term unsecured debt obligations (other than such obligations
the
rating of which is based on the credit of a Person other than such depository
institution) thereof shall have a credit rating from each Rating Agency in
the
highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each Rating Agency in the highest
investment category granted thereby;
(d) investments in money market funds having a rating from each Rating Agency
in
the highest investment category granted thereby (including any such funds for
which the Indenture Trustee or the Owner Trustee or any of their respective
Affiliates is investment manager or advisor);
(e) investments in common trust funds having a rating from each Rating Agency
in
the highest investment category granted thereby maintained and operated by
Eligible Institutions (including the Indenture Trustee or the Owner
Trustee);
(f) bankers' acceptances issued by any depository institution or trust company
referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (i) a depository institution (acting as principal) described in clause
(b) or (ii) a depository institution the deposits of which are insured by FDIC;
or
7
(h) any other investment that is permitted by each of the Rating
Agencies.
"Eligible
Securities Account"
means
either (a) a segregated account with an Eligible Institution or (b) a segregated
trust account with the corporate trust department of a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as such depository institution shall have a senior
unsecured rating of at least investment grade from each Rating Agency in one
of
its generic rating categories.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"FDIC"
means
the Federal Deposit Insurance Corporation, and its successors.
"Final
Scheduled Distribution Date"
means
any of the Class A-1 Note Final Scheduled Distribution Date, the
Class A-2 Note Final Scheduled Distribution Date, the Class A-3 Note
Final Scheduled Distribution Date, the Class A-4 Note Final Scheduled
Distribution Date or the Class B Note Final Scheduled Distribution
Date.
"Financed
Equipment"
means
an item of machinery or equipment, together with all accessions thereto, which
was purchased or refinanced, in the case of an Installment Sales Contract or
leased, in the case of a Lease, by an Obligor pursuant to the terms of the
related Contract, and in either case which secures such related Obligor's
indebtedness or obligations under the respective Receivable.
"First
Priority Principal Distribution Amount"
means,
with respect to any Distribution Date, an amount, not less than zero, equal
to
the excess, if any, of (i) the Outstanding Principal Amount of all Class A
Notes as of the preceding Distribution Date (after giving effect to any
principal payments made on the Class A Notes on such preceding Distribution
Date) over (ii) the Note Value at the end of the Collection Period preceding
such Distribution Date; provided,
however,
that
the First Priority Principal Distribution Amount shall not be less than the
aggregate of (i) on and after the Class A-1 Note Final Scheduled
Distribution Date, the amount that is necessary to reduce the Outstanding
Principal Amount of the Class A-1 Notes to zero, (ii) on and after the
Class A-2 Note Final Scheduled Distribution Date, the amount that is
necessary to reduce the Outstanding Principal Amount of the Class A-2 Notes
to zero, (iii) on and after the Class A-3 Note Final Scheduled Distribution
Date, the amount that is necessary to reduce the Outstanding Principal Amount
of
the Class A-3 Notes to zero and (iv) on and after the Class A-4 Note
Final Scheduled Distribution Date, the amount that is necessary to reduce the
Outstanding Principal Amount of the Class A-4 Notes to zero.
"Governmental
Authority"
means
the United States of America, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Holder"
or
"Noteholder"
has the
meaning specified in the Indenture.
8
"Implicit
Interest Rate"
means
with respect to any Receivable related to a Lease, the rate set forth with
respect to such Receivable on the Schedule of Receivables.
"Indenture"
means
the Indenture, dated as of June 1, 2006, between the Issuing Entity and the
Indenture Trustee, as the same may be amended, modified or supplemented from
time to time.
"Indenture
Trustee"
means
U.S. Bank National Association, a national banking association, in its capacity
as indenture trustee under the Indenture, its successors in interest and any
successor indenture trustee under the Indenture.
"Initial
Note Value"
means
the Note Value as of the Cut-off Date, which is $965,955,819.
"Initial
Pool Balance"
means
the Pool Balance as of the Cut-off Date, which is $979,999,737.
"Insolvency
Event"
means,
with respect to a specified Person, (i) the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or (ii) the commencement by such Person of a
voluntary case under any applicable federal or state bankruptcy, insolvency
or
other similar law now or hereafter in effect, or the consent by such Person
to
the entry of an order for relief in an involuntary case under any such law,
or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors,
or
the failure by such Person generally to pay its debts as such debts become
due,
or the taking of action by such Person in furtherance of any of the
foregoing.
"Installment
Sales Contract"
means,
with respect to any applicable Receivable, the related fixed rate retail
installment sale contract for the purchase of machinery or
equipment.
"Investment
Earnings"
means,
with respect to any Distribution Date, the investment earnings (net of losses
and investment expenses) on amounts on deposit in the Trust
Accounts.
"Issuing
Entity"
means
Caterpillar Financial Asset Trust 2006-A, a Delaware statutory trust, and its
successors.
"Lease"
means,
with respect to any applicable Receivable, the related equipment finance lease
contract.
"Lien"
means a
security interest, lien, charge, pledge, equity or encumbrance of any kind
with
respect to any Receivable other than mechanics' liens and any liens which attach
to such Receivable by operation of law as a result of any act or omission by
the
related Obligor.
9
"Liquidated
Receivable"
means
any Receivable which has been liquidated by the Servicer through the sale or
other disposition of the related Financed Equipment.
"Liquidation
Proceeds"
means,
with respect to any Liquidated Receivable, the monies collected in respect
thereof, from whatever source (including the proceeds of insurance policies
with
respect to the related Financed Equipment or Obligor on a Liquidated
Receivable), net of the sum of any amounts expended by the Servicer in
connection with such liquidation and any amounts required by law or the
applicable Contract to be remitted to the Obligor on such Liquidated Receivable,
excluding (i) Recoveries and (ii) monies collected in respect of any Liquidated
Receivable in excess of the Contract Balance therefor.
"Moody's"
means
▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Net
APR"
means,
with respect to any Receivable, the APR therefor less the Servicing Fee Rate.
"Net
Excess Spread"
means,
with respect to any Distribution Date on or prior to the Distribution Date
on
which the amount on deposit in the Reserve Account equals the Specified Reserve
Account Balance, the Total Available Amount reduced by (i) the Servicing Fee
and
all unpaid Servicing Fees from prior Collection Periods, (ii) the Administration
Fee and all unpaid Administration Fees from prior Collection Periods, (iii)
the
Class A Noteholders' Interest Distributable Amount, (iv) the Class B
Noteholders' Interest Distributable Amount and (v) the difference between (A)
the Note Value at the end of the second preceding Collection Period, or in
the
case of the initial Distribution Date, the Initial Note Value, and (B) the
Note
Value at the end of the preceding Collection Period.
"Net
Investment"
with
respect to a Lease, means the present value of the sum of (i) Scheduled
Payments due thereunder and (ii) the residual payment amount at the end of
the
Lease term, discounted at the Implicit Interest Rate for such
Lease.
"Note
Register"
and
"Note
Registrar"
have
the meanings specified in the Indenture.
"Note
Value"
means,
at any time, the present value of the unpaid Scheduled Payments on the
Receivables (including all lease residual payments on the Leases), discounted
on
a monthly basis at the Discount Factor. For purposes of calculating Note Value
for any (i) delinquent Receivable that has not had the Financed Equipment
by which it is secured repossessed and which is not a Liquidated Receivable
or a
180-Day Receivable, the amount of any delinquent payments will be assumed to
be
received in the next Collection Period and all other payments which have not
yet
become due will be assumed to be received as originally scheduled,
(ii) Receivable that has had the Financed Equipment by which it is secured
repossessed but which has not yet become a Liquidated Receivable or a 180-Day
Receivable, the outstanding Contract Balance of that Receivable will be assumed
to be received in the next Collection Period and it will be assumed that no
other payments will be received on that Receivable, (iii) Liquidated
Receivable, it will be assumed that no payments will be received on that
Receivable and (iv) 180-Day Receivable, the aggregate amount of unpaid
Scheduled Payments of such 180-Day Receivable will be reduced by the Write
Down
Amount, if any, calculated during the preceding Collection Period and all
remaining Scheduled Payments will be assumed to be received as originally
scheduled.
10
"Noteholders'
Interest Distributable Amount"
means,
with respect to any Distribution Date, the sum of (i) the Class A
Noteholders' Interest Distributable Amount and (ii) the Class B Noteholders'
Interest Distributable Amount for such Distribution Date.
"Notes"
means
the Class A Notes and the Class B Notes, collectively.
"Obligor"
on a
Receivable means (i) the purchaser, co-purchasers or lessees of the Financed
Equipment and (ii) any other Person, including the related Dealer, who owes
payments under the Receivable.
"Officers'
Certificate"
means a
certificate signed by (i) the chairman of the board, the president, the vice
chairman of the board, the executive vice president, any vice president, a
treasurer or any assistant treasurer and (ii) the controller (or chief
accounting officer) or a secretary or assistant secretary, in each case of
the
Depositor or the Servicer, as appropriate.
"180-Day
Receivable"
means,
as of the last day of any Collection Period, any Receivable as to which (i)
a
Scheduled Payment is more than 180 days past its due date, as specified in
the
related Contract, and (ii) the Servicer has determined its estimated value
in
accordance with its servicing standards.
"Opinion
of Counsel"
means
one or more written opinions of counsel who may be an employee of or counsel
to
the Depositor, CFSC or the Servicer, which counsel shall be acceptable to the
Indenture Trustee, the Owner Trustee or the Rating Agencies, as
applicable.
"Original
Contract"
means
with respect to each Receivable, a related Contract that satisfies the following
conditions:
(a)
(i) Such
Contract states as part of its terms:
"Although
multiple counterparts of this document may be signed, only the counterpart
accepted, acknowledged and certified by CFSC on the signature page thereof
as
the original will constitute original chattel paper."; and
(ii) CFSC
has
accepted, acknowledged and certified one originally executed copy or version
of
such Contract (and no other) by stamping on the signature page thereon the
following legend and executing the same where indicated (which execution will
be
effected in red by use of a stamp containing a replica of an authorized
signatory of CFSC):
11
ACCEPTED,
ACKNOWLEDGED AND CERTIFIED BY CATERPILLAR FINANCIAL SERVICES CORPORATION AS
THE
ORIGINAL.
By:________________________________________
Title:_______________________________________;
or
|
(b)
|
Such
Contract is in "snap-set" or other form for which only one original
may be
produced.
|
|
(c)
|
The
Contract is a Dealer Receivable and the Dealer has represented and
warranted to CFSC that such Contract is the original and only contract
executed in connection with the related Financed
Equipment.
|
"Outstanding"
has the
meaning specified in the Indenture.
"Outstanding
Principal Amount"
means
the aggregate principal amount of all Notes, or a Class of Notes, as applicable,
Outstanding at the date of determination.
"Over
60-day Delinquency Percentage"
means,
for any Distribution Date, the percentage equivalent of a fraction equal to
the
aggregate Contract Balance of all Receivables for which a Scheduled Payment
was
more than 60 days past its related due date (as specified in the related
Contract) as of the end of the preceding Collection Period, divided by the
Pool
Balance on such Distribution Date.
"Owner
Trust Estate"
has the
meaning specified in the Trust Agreement.
"Owner
Trustee"
means
Chase Bank USA, National Association in its capacity as owner trustee under
the
Trust Agreement, its successors in interest and any successor Owner Trustee
under the Trust Agreement.
"Pool
Balance"
means,
at any time, the aggregate of the Contract Balances of the Receivables at the
end of the preceding Collection Period, after giving effect to (i) all payments
received from Obligors and Purchase Amounts remitted by CFSC, the Depositor
or
the Servicer, as the case may be, for such Collection Period, (ii) Liquidation
Proceeds received with respect to any Liquidated Receivables received during
such Collection Period and (iii) all Realized Losses on Liquidated Receivables
and 180 Day Receivables for that Collection Period.
"Pool
Factor"
means
1.0000000 as of the Cut-off Date and, as of the close of business on the last
day of a Collection Period thereafter means a seven digit decimal figure equal
to the Pool Balance as of such date divided by the Initial Pool
Balance.
"Principal
Distribution Account"
means
the administrative subaccount within the Collection Account established by
the
Indenture Trustee pursuant to Section
5.01(a)(i).
"Principal
Distribution Amount"
means,
with respect to any Distribution Date, the sum of the First Priority Principal
Distribution Amount, the Second Priority Principal Distribution Amount and
the
Regular Principal Distribution Amount for such Distribution Date.
12
"Purchase
Agreement"
means
the Purchase Agreement, dated as of June 1, 2006, between the Depositor and
CFSC, as the same may be amended, modified or supplemented from time to
time.
"Purchase
Amount"
means,
with respect to an Installment Sales Contract or a Lease, the Contract Balance
calculated as of the close of business on the last day of a Collection Period,
required to prepay in full the respective Receivable under the terms thereof,
in
each case plus interest at the related APR to the end of the month during which
the Installment Sales Contract or Lease became a Purchased
Receivable.
"Purchased
Receivable"
means a
Receivable (i) purchased as of the close of business on the last day of a
Collection Period by the Servicer pursuant to Section
4.07,
(ii)
repurchased as of the last day of a Collection Period by the Depositor or CSFC
pursuant to Section
3.02,
or
(iii) purchased by the Servicer pursuant to Section
9.01.
"Rating
Agencies"
means
Moody's and Standard & Poor's. If no such organization or successor is in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Depositor, notice
of
which designation shall be given to the Indenture Trustee, the Owner Trustee
and
the Servicer.
"Rating
Agency Condition"
means,
with respect to any action, that each Rating Agency shall have been given 10
days' (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each Rating Agency shall have notified the Depositor,
the Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then current rating
of any Class of Notes.
"Realized
Loss"
means,
for any Distribution Date, the sum of (i) with respect to any Receivable that
became a Liquidated Receivable during the related Collection Period, the excess,
if any, of (a) the Contract Balance of such Liquidated Receivable minus the
Write Down Amount for such Receivable, if any, over (b) the Liquidation Proceeds
for that Liquidated Receivable for that Collection Period to the extent
allocable to principal and (ii) the Write Down Amount, if any, calculated during
the related Collection Period, with respect to each 180-Day
Receivable.
"Receivable"
means
any Contract listed on the Schedule of Receivables.
"Receivable
File"
means
(a) with respect to each Receivable (other than a Dealer Receivable), the
Original Contract related to such Receivable and (b) with respect to each Dealer
Receivable, the Original Contract related to such Receivable and any documents
used to assign such Dealer Receivable and the related Dealer's security interest
in the related Transaction Equipment to CFSC.
"Recoveries"
means,
with respect to any Liquidated Receivable, (a) monies collected in respect
thereof, from whatever source, but after (i) such Receivable became a Liquidated
Receivable and (ii) the proceeds from the sale or other disposition of the
related Financed Equipment have been received by the Servicer for deposit in
the
Collection Account, net of (b) the sum of any amounts expended by the Servicer
for the account of the Obligor and any amounts required by law or the applicable
Contract to be remitted to the Obligor.
13
"Regular
Principal Distribution Amount"
means,
with respect to any Distribution Date, an amount, not less than zero, equal
to
(i) the excess of (A) the sum of the Outstanding Principal Amount of all Notes
and the Certificate Balance as of the preceding Distribution Date (in each
case,
after giving effect to any principal payments made on the Notes and Certificates
on such preceding Distribution Date) over (B) the Note Value at the end of
the
Collection Period preceding such Distribution Date, minus (ii) the sum of (A)
the First Priority Principal Distribution Amount and (B) the Second Priority
Principal Distribution Amount for such Distribution Date.
"Regulation
AB"
means
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
"Reserve
Account"
means
the account designated as such, established and maintained pursuant to
Section
5.01(a)(ii).
"Reserve
Account Initial Deposit"
means
the initial deposit to the Reserve Account by the Issuing Entity on the Closing
Date of $12,074,448.
"Schedule
of Receivables"
means
the schedule of Receivables (which schedule may be in the form of microfiche)
attached as Schedule A.
"Scheduled
Payment"
on a
Receivable means the scheduled periodic payment required to be made by the
Obligor.
"Securities"
means,
collectively, the Notes and the Certificate.
"Securities
Act"
means
the Securities Act of 1933, as amended.
"Second
Priority Principal Distribution Amount"
means,
with respect to any Distribution Date, an amount, not less than zero, equal
to
(i) the excess, if any, of (A) the Outstanding Principal Amount of all Notes
as
of the preceding Distribution Date (after giving effect to any principal
payments made on the Notes on such preceding Distribution Date) over (B) the
Note Value at the end of the Collection Period preceding such Distribution
Date
minus (ii) the First Priority Principal Distribution Amount for such
Distribution Date; provided,
however,
that on
and after the Class B Note Final Scheduled Distribution Date, the Second
Priority Principal Distribution Amount shall be not less than an amount that
is
necessary to reduce the Outstanding Principal Amount of the Class B Notes to
zero.
"Securities
Intermediary"
has the
meaning specified in Section 5.01(c)(ii)(B) and initially means U.S. Bank
National Association.
"Servicer"
means
CFSC, as the servicer of the Receivables, and each successor to CFSC (in the
same capacity) pursuant to Section
7.03
or
8.02.
14
"Servicer
Default"
means
an event specified in Section
8.01.
"Servicer
Report"
means
an Officers' Certificate of the Servicer delivered pursuant to Section
4.09,
substantially in the form of Schedule
D
or in
such other form that is acceptable to the Indenture Trustee, the Owner Trustee
and the Servicer.
"Servicing
Fee"
means
the fee payable to the Servicer for services rendered during the respective
Collection Period, determined pursuant to Section
4.08.
"Servicing
Fee Rate"
means
1.0% per annum.
"Specified
Reserve Account Balance"
means,
with respect to any Distribution Date, an amount equal to the lesser of (i)
the
Outstanding Principal Amount of the Notes and (ii) 1.50% of the Initial
Note Value; provided,
however,
that
the percentage specified in clause (ii) of this definition of Specified Reserve
Account Balance may be reduced as follows:
| · |
if
on the Distribution Date in December 2007, (i) Cumulative Realized
Losses for the related Collection Period are less than 0.65% and
(ii) the Three Month Rolling Over 60-Day Delinquency Percentage
for
such Distribution Date
is
less than 5.00%, the percentage specified in clause (ii) of this
definition of Specified Reserve Account Balance will be 1.25% for
the
December 2007 Distribution Date and each subsequent Distribution
Date,
subject to any further reduction in accordance with the terms of
this
definition;
|
| · |
if
on the Distribution Date in June 2008, (i) the percentage then specified
in clause (ii) of this definition of Specified Reserve Account Balance
is
1.50%, (ii) Cumulative Realized Losses for the related Collection
Period
are less than 1.00% and (iii) the Three Month Rolling Over 60-Day
Delinquency Percentage for such Distribution Date is less than 6.00%,
the
percentage then specified in clause (ii) of this definition of Specified
Reserve Account Balance will be reduced by 0.50% for the June 2008
Distribution Date and each subsequent Distribution
Date;
|
| · |
if
on the Distribution Date in June 2008, (i) the percentage then specified
in clause (ii) of this definition of Specified Reserve Account Balance
is
1.25%, (ii) Cumulative Realized Losses for the related Collection
Period
are less than 1.00% and (iii) the Three Month Rolling Over 60-Day
Delinquency Percentage for such Distribution Date is less than 6.00%,
the
percentage then specified in clause (ii) of this definition of Specified
Reserve Account Balance will be reduced by 0.25% for the June 2008
Distribution Date and each subsequent Distribution Date;
and
|
| · |
if
on the Distribution Date in December 2008, (i) the percentage then
specified in clause (ii) of this definition of Specified Reserve
Account
Balance is 1.25% or greater, (ii) Cumulative Realized Losses for
the
related Collection Period are less than 1.20% and (iii) the Three
Month
Rolling Over 60-Day Delinquency Percentage for such Distribution
Date is
less than 7.00%, the percentage then specified in clause (ii) of
this
definition of Specified Reserve Account Balance will be reduced by
0.25%
for the December 2008 Distribution Date and each subsequent Distribution
Date.
|
15
provided,
further,
that on
and after the date on which the Depositor eliminates the Reserve Account in
accordance with the provisions of Section 5.05(e), the Specified Reserve Account
Balance shall be zero.
"Standard
& Poor's"
means
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or its successors.
"Three
Month Rolling Over 60-Day Delinquency Percentage"
means,
for any Distribution Date, the average of the Over 60-day Delinquency
Percentages for that Distribution Date and the two immediately preceding
Distribution Dates.
"Total
Available Amount"
means,
for each Distribution Date, the sum of the aggregate collections in respect
of
Receivables (including any Liquidation Proceeds, any Purchase Amounts paid
by
the Depositor, CFSC or the Servicer and any amounts received from Dealers with
respect to Receivables) received during the related Collection Period and
Investment Earnings on the Trust Accounts during such Collection Period, but
shall not include any payments or proceeds (including any Liquidation Proceeds
and any amounts received from Dealers with respect to Receivables) of (i) any
Receivables the Purchase Amount of which has been included in the Total
Available Amount in a prior Collection Period, (ii) any Liquidated Receivable
after and to the extent of the reassignment of such Liquidated Receivable by
the
Trust to the Depositor in accordance with Section 4.02 and (iii) any Additional
Servicing Compensation.
"Total
Distribution Amount"
means,
with respect to any Distribution Date, the sum of (i) the Total Available
Amount for such Distribution Date and (ii) the amount, if any withdrawn from
the
Reserve Account and deposited into the Collection Account on such Distribution
Date pursuant to Section 5.05(b) on such Distribution Date.
"Total
Required Payment"
means,
for each Distribution Date, the amounts payable pursuant to Section 5.04(b)(i)
through 5.04(b)(vi).
"Transaction
Equipment"
means,
collectively, the Financed Equipment and, if applicable, the
Cross-Collateralized Equipment.
"Transfer
Date"
means,
with respect to any Distribution Date, the Business Day preceding such
Distribution Date.
"Trust"
means
the Issuing Entity.
"Trust
Account Property"
means
the Trust Accounts, all investment property, instruments, money and other
property credited to or on deposit in any Trust Account from time to time,
including the Reserve Account Initial Deposit, and all proceeds of the
foregoing.
"Trust
Accounts"
has the
meaning specified in Section
5.01(b).
"Trust
Agreement"
means
the Amended and Restated Trust Agreement, dated as of June 28, 2006,
between the Depositor and the Owner Trustee, as the same may be amended,
modified or supplemented from time to time.
16
"Trust
Officer"
means,
in the case of (a) the Indenture Trustee, any officer within the Corporate
Trust
Office of the Indenture Trustee, including any Vice President, Assistant Vice
President, Trust Officer, Secretary, Assistant Secretary or any other officer
of
the Indenture Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to
a
particular matter, any other officer to whom such matter is referred because
of
such officer’s knowledge of and familiarity with the particular subject, and (b)
the Owner Trustee, any officer in the Corporate Trustee Administration
Department of the Owner Trustee with direct responsibility for the
administration of the Trust Agreement and the Basic Documents on behalf of
the
Owner Trustee.
"Write
Down Amount"
means,
for any 180-Day Receivable, the excess of (i) the Contract Balance of such
180-Day Receivable as of the last day of the Collection Period during which
a
Scheduled Payment on such Receivable became more than 180 days past its due
date, as specified in the related Contract, over (ii) the estimated value of
the
Receivable, as determined by the Servicer in accordance with its servicing
standards, to the extent allocable to principal in the same manner as a payment
in such amount would be.
SECTION
1.02. Other
Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture.
(b) All terms defined in this Agreement shall have the meanings contained
herein when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any document made or delivered
pursuant hereto, accounting terms not defined in this Agreement or in any such
other document, and accounting terms partly defined in this Agreement or in
any
such other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement
or
in any such other document shall control.
(d) The words "hereof," "herein," "hereunder," and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules
and
Exhibits in or to this Agreement unless otherwise specified; the term
"including" shall mean "including without limitation"; and the term "or" is
not
exclusive. Terms used herein that are defined in the New York UCC and not
otherwise defined herein shall have the meanings set forth in the New York
UCC,
unless the contract requires otherwise.
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well
as to the feminine and neuter genders of such terms.
17
ARTICLE
II
CONVEYANCE
OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables.
In
consideration of the Issuing Entity's delivery to or upon the order of the
Depositor of (i) Class A-1 Notes with an aggregate Outstanding Principal
Amount of $246,100,000, (ii) Class A-2 Notes with an aggregate Outstanding
Principal Amount of $250,000,000, (iii) Class A-3 Notes with an aggregate
Outstanding Principal Amount of $302,000,000, (iv) Class A-4 Notes
with an aggregate Outstanding Principal Amount of $136,460,000, (v) Class B
Notes with an aggregate Outstanding Principal Amount of $26,560,000 and (vi)
the
Certificate with a Certificate Balance of $4,835,819 the Depositor does hereby
sell, transfer, assign, set over and otherwise convey to the Issuing Entity,
without recourse (subject to the obligations herein), all right, title and
interest, whether now owned or hereafter acquired, of the Depositor in and
to
the following:
(a) the Receivables, and all monies (including accrued interest) due
thereunder on or after the Cut-off Date;
(b) the
Trust
Account Property;
(c) the security interests in the Transaction Equipment granted by
Obligors pursuant to the Receivables, the Transaction Equipment, and all
Liquidation Proceeds;
(d) all
proceeds of repossessed or returned Transaction Equipment;
(e) all
proceeds with respect to the Receivables from claims on any physical damage,
credit life, liability or disability insurance policies covering Financed
Equipment or Obligors, as the case may be;
(f) the
Purchase Agreement, including the right of the Depositor to cause CFSC to
repurchase Receivables from the Depositor as provided therein;
(g) all
proceeds from recourse to, or other payments by, Dealers on
Receivables;
(h) cash
in
the amount of the Reserve Account Initial Deposit; and
(i) the
proceeds of any and all of the foregoing.
It
is the
express intent of the parties hereto that the conveyance of the Receivables
and
the other property described above by the Depositor to the Issuing Entity as
provided in this Agreement be, and be construed as, a sale of the Receivables
and the other property described above by the Depositor to the Issuing Entity.
It is, further, not the intention of the parties that such conveyance be deemed
the grant of a security interest in the Receivables or the other property
described above by the Depositor to the Issuing Entity to secure a debt or
other
obligation of the Depositor. However, in the event, notwithstanding the intent
of the parties, the Receivables or the other property described above are held
to be property of the Depositor, or if for any reason this Agreement is held
or
deemed to create a security interest in the Receivables or the other property
described above then, (a) this Agreement shall be a security agreement
within the meaning of Article 9 of the New York UCC and (b) the Depositor
hereby grants to the Issuing Entity a security interest in all of the
Depositor's right, title, and interest, whether now owned or hereafter acquired,
in and to the property described in clauses (a) through (i) above, as security
for the obligations of the Depositor hereunder. In connection herewith, the
Issuing Entity (or its assignee) shall have all of the rights and remedies
of a
secured party under the UCC.
18
Any
assignment of the interest of the Issuing Entity pursuant to this Section
2.01
shall
also be an assignment of the security interest created hereby. Each of the
Depositor and the Issuing Entity shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement creates a security interest in the Receivables, such security interest
would be a perfected security interest of first priority under applicable law
and will be maintained as such throughout the term of the
Agreement.
SECTION 2.02. Closing.
The
conveyance of the Receivables and the other property described in Section 2.01
shall take place on the Closing Date, simultaneously with the closing of the
transactions contemplated by the Purchase Agreement, the underwriting agreements
relating to the Notes and the other Basic Documents. Upon the delivery to or
upon the order of the Depositor of the Notes and the Certificate, the ownership
of each Receivable and the contents of the related Receivable File is vested
in
the Issuing Entity, subject only to the lien of the Indenture.
SECTION 2.03. Books and Records.
The
transfer of each Receivable shall be reflected on the Depositor's balance sheets
and other financial statements prepared in accordance with generally accepted
accounting principles as a transfer of assets by the Depositor to the Issuing
Entity. The Depositor shall be responsible for maintaining, and shall maintain,
a complete and accurate set of books and records and computer files for each
Receivable which shall be clearly marked to reflect the ownership of each
Receivable by the Issuing Entity.
ARTICLE
III
THE
RECEIVABLES
SECTION 3.01. Representations and Warranties of Depositor.
The
Depositor hereby makes the following representations and warranties as to the
Receivables on which the Issuing Entity is deemed to have relied in acquiring
the Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement, but shall survive the sale, transfer and
assignment of the Receivables to the Issuing Entity and the grant of a security
interest therein to the Indenture Trustee pursuant to the
Indenture.
(a) Title.
It is
the intention of the Depositor that the transfer and assignment herein
contemplated constitute a sale of the Receivables from the Depositor to the
Issuing Entity and that the beneficial interest in and title to such Receivables
not be part of the debtor's estate in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy law. No Receivable
has
been sold, transferred, assigned or pledged by the Depositor to any Person
other
than the Issuing Entity. Immediately prior to the transfer and assignment herein
contemplated, the Depositor owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person
and,
immediately upon the transfer thereof, the Issuing Entity shall have good and
marketable title to each such Receivable, free and clear of all Liens and rights
of others; and the transfer has been perfected under the UCC.
19
(b) Priority.
Other
than the security interest granted to the Issuing Entity pursuant to this
Agreement, the Depositor has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Depositor
has not
authorized the filing of and is not aware of any financing statement against
the
Depositor that includes a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted
to
the Issuing Entity hereunder or that has been terminated. The Depositor is
not
aware of any judgment or tax lien filings against the Depositor. None of
the
Contracts that constitute or evidence the Receivables has any ▇▇▇▇ or notation
indicating that it has been pledged, assigned or otherwise conveyed by the
Depositor to any Person other than the Issuing Entity or the Indenture
Trustee.
(c) Security
Interest.
This
Agreement creates a valid and continuing security interest (as defined in
the
UCC) in the Receivables and the proceeds thereof in favor of the Issuing
Entity,
which security interest is prior to all other Liens, and is enforceable as
such
against creditors of and purchasers from the Depositor.
(d)
Characterization of Receivables.
The
Receivables constitute "tangible chattel paper" within the meaning of the
UCC.
(e) All Actions Taken.
On the
Delivery Date all original executed copies of each Contract that constitute
or
evidence the Receivables will be delivered to the Custodian. The Depositor
will
cause the Custodian to deliver a written acknowledgment that the Custodian
is
holding the Receivable Files solely on behalf and for the benefit of the Issuing
Entity. The Depositor has caused or will have caused, within 10 days of the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdiction under applicable law in order
to
perfect the security interest in the Receivables granted to the Issuing Entity
hereunder. All actions necessary in any jurisdiction to be taken to give (i)
the
Issuing Entity a first priority perfected ownership or security interest in
the
Receivables (exclusive of Receivables for which a governmental entity is the
Obligor) and (ii) the Indenture Trustee a first priority perfected security
interest therein (including UCC filings with the Nevada Secretaries of State)
have been taken or will be taken within 10 days of the Closing
Date.
(f) Possession of Receivable Files.
All of
the Receivable Files have been or will be delivered to the Custodian within
30
days of the Closing Date, subject to Section
3.05(b).
(g) Perfection
of Security Interest in Financed Equipment.
The
Depositor has taken all steps necessary to perfect its security interest against
the Obligors in the property securing the Contracts.
20
(h) No Consents Required.
All
approvals, authorizations, consents, orders or other actions of any Person
or of
any Governmental Authority required in connection with the execution and
delivery by the Depositor of this Agreement or any other Basic Document,
the
performance by the Depositor of the transactions contemplated by this Agreement
or any other Basic Document and the fulfillment by the Depositor of the terms
hereof or thereof, have been obtained or have been completed and are in full
force and effect (other than approvals, authorizations, consents, orders
or
other actions which if not obtained or completed or in full force and effect
would not have a material adverse effect on the Depositor or the Issuing
Entity
or upon the collectability of any Receivable or upon the ability of the
Depositor to perform its obligations under this Agreement).
SECTION 3.02. Repurchase by Depositor or CFSC Upon
Breach.
(a) The Depositor, the Servicer or the Owner Trustee, as the case may be,
shall inform the other parties to this Agreement, CFSC and the Indenture Trustee
promptly, in writing, upon the discovery of any breach of the Depositor's
representations and warranties made pursuant to Section
3.01
or any
breach of CFSC's representations and warranties made pursuant to Section 3.02(b)
of the Purchase Agreement. Unless any such breach shall have been cured by
the
last day of the second month following the month of the discovery thereof by
the
Depositor or receipt by the Depositor of written notice from the Owner Trustee
or the Servicer of such breach, the Depositor shall be obligated, and, if
necessary, the Depositor or the Owner Trustee shall enforce the obligation
of
CFSC, if any, under Section 6.02(a)(i) of the Purchase Agreement, to repurchase
any Receivable materially and adversely affected by any such breach as of such
last day (or, at the Depositor's option, as of the last day of the first month
following the month of the discovery).
(b)
In consideration of the repurchase of the Receivable, the Depositor shall remit
the Purchase Amount with respect to such Receivable in the manner specified
in
Section
5.03;
provided,
however,
that
the obligation of the Depositor to repurchase any Receivable arising solely
as a
result of a breach of CFSC's representations and warranties pursuant to Section
3.02(b) of the Purchase Agreement is subject to the receipt by the Depositor
of
the Purchase Amount from CFSC. Subject to the provisions of Section
6.02,
the
sole remedy of the Issuing Entity, the Owner Trustee, the Indenture Trustee,
the
Noteholders or the Certificateholder with respect to a breach of representations
and warranties pursuant to Section
3.01,
Section
3.02(b) of the Purchase Agreement and the agreement contained in this Section
shall be to require the Depositor to repurchase Receivables pursuant to this
Section, subject to the conditions contained herein, or to enforce CFSC's
obligation, if any, to the Depositor to repurchase such Receivables pursuant
to
the Purchase Agreement. The Owner Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section.
21
SECTION 3.03. Custody of Receivable Files.
The
Depositor, the Issuing Entity and the Indenture Trustee have appointed the
Custodian pursuant to the Custodial Agreement, and the Custodian has thereby
accepted such appointment, to act as custodian of the documents described
in the
definition of Receivable File.
SECTION 3.04. Duties of Servicer.
(a) Receivable Files.
The
Servicer shall maintain such accurate and complete accounts, records and
computer systems pertaining to each Receivable File as shall enable itself
and
the Issuing Entity to comply with this Agreement. In performing its duties,
the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable receivables that the Servicer services for itself
or
others. The Servicer shall conduct, or cause to be conducted, periodic audits
of
the related accounts, records and computer systems, in such a manner as shall
enable the Issuing Entity or the Indenture Trustee to verify the accuracy of
the
Servicer's record keeping. The Servicer shall promptly report to the Issuing
Entity and the Indenture Trustee any failure on its part to maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed
to
require an initial review or any periodic review by the Issuing Entity, the
Owner Trustee or the Indenture Trustee.
(b) Access to Records.
The
Servicer shall notify the Owner Trustee and the Indenture Trustee of any change
in the location of its principal place of business in writing not later than
90
days after any such change. The Servicer shall make available to the Owner
Trustee and the Indenture Trustee, or their respective duly authorized
representatives, attorneys or auditors, a list of locations of the related
accounts, records and computer systems maintained by the Servicer at such times
as the Owner Trustee or the Indenture Trustee shall instruct. The Indenture
Trustee shall have access to such accounts, records and computer
systems.
(c) Safekeeping.
The
Servicer shall hold, or cause to be held, on behalf of the Issuing Entity (i)
all file stamped copies of UCC financing statements evidencing the security
interest of the Issuing Entity in Transaction Equipment and (ii) any and all
documents, other than the Receivable Files, that CFSC or the Depositor shall
keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor or Transaction Equipment, and shall maintain such
accurate and complete records pertaining to each Receivable as shall enable
the
Issuing Entity to comply with this Agreement. Upon instruction from the
Indenture Trustee, the Servicer shall release any such UCC filing or other
document to the Indenture Trustee, the Indenture Trustee's agent, or the
Indenture Trustee's designee, as the case may be, at such place or places as
the
Indenture Trustee may designate, as soon as practicable.
SECTION 3.05. Acceptance by Issuing Entity and the Indenture
Trustee of the Receivables; Certification by the Indenture
Trustee.
(a) The Issuing Entity hereby acknowledges and declares that on the
Delivery Date the Custodian will hold the Receivable Files for the benefit
of
the Indenture Trustee, subject to the terms and conditions of the Indenture
and
this Agreement. By its acknowledgment of this Agreement, the Custodian agrees
that it will execute and deliver the Custodian Certifications (as defined in
the
Custodial Agreement) described in Sections
3.1
and
4.1
of the
Custodial Agreement. Prior to delivering the Receivable Files to the Custodian,
the Servicer agrees to review (or cause to be reviewed) each Receivable File.
The Indenture Trustee shall be under no duty or obligation to inspect, review
or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they are other than what they purport to be on their face.
On
the Delivery Date the Servicer shall deliver to the Depositor, the Issuing
Entity, the Indenture Trustee, the Owner Trustee and each Rating Agency, a
certification in the form attached as Schedule
C
to the
effect that, as to each Receivable (other than any Receivable paid in full
or
any Receivable specifically identified in such certification as not covered
by
such certification): (i) all documents required to be delivered to the Custodian
pursuant to this Agreement (including each of the items in the definition of
Receivable File) have been delivered to the Custodian, (ii) such documents
have
been reviewed by it and have not been mutilated, damaged, torn or otherwise
physically altered (handwritten additions, changes or corrections shall not
constitute physical alteration if initialed by the Obligor) and relate to such
Receivable, and (iii) based on its examination, and only as to the foregoing
documents, the information set forth on the Schedule of Receivables accurately
reflects the information set forth in the Receivable Files.
22
(b) The Depositor agrees to use reasonable efforts to (i) in connection
with the delivery of the Receivable Files on the Delivery Date, cause to
be
delivered to the Custodian, any Receivable File that the Custodian determines
is
missing pursuant to Section
4.1
of the
Custodial Agreement and (ii) cause to be remedied a material defect in a
document constituting part of a Receivable File. If, however, the Depositor
has
not caused (A) such missing Receivable File to be delivered or (B) to be
remedied any defect by the last day of the second month following the month
of
the Delivery Date, and such defect materially and adversely affects the
interests of the Noteholders or the Certificateholder in the related Receivable,
the Depositor shall remit the Purchase Amount in the manner specified in
Section 5.03.
The
obligation of the Depositor to repurchase any Receivable is subject to the
receipt by the Depositor of the Purchase Amount from CFSC in accordance with
the
terms of the Purchase Agreement. Subject to the provisions of Section
5.03,
the
sole remedy of the Issuing Entity, the Owner Trustee, the Indenture Trustee,
the
Noteholders or the Certificateholder with respect to such missing Receivable
File or such a defect and the agreement contained in this Section shall be
to
require the Depositor to repurchase Receivables pursuant to this Section,
subject to the conditions contained herein, or to enforce CFSC's obligation
to
the Depositor, if any, to repurchase such Receivables pursuant to the Purchase
Agreement. The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of
any Receivable pursuant to this Section.
(c) Upon receipt by the Indenture Trustee of a certification of the
Servicer of a repurchase of a Receivable described in Section
3.05(b)
and
receipt of the Purchase Amount, the Indenture Trustee is required to release
to
CFSC the related Receivable File and shall execute, without recourse, and
deliver such instruments of transfer as may be necessary to transfer such
Receivable to CFSC.
23
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer.
The
Issuing Entity hereby engages the Servicer and the Servicer hereby agrees to
manage, service, administer and make collections on the Receivables (other
than
Purchased Receivables) with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable receivables
that it services for itself or others. The Servicer's duties shall include
calculating, billing, collection and posting of all payments, responding to
inquiries of Obligors on such Receivables, investigating delinquencies,
reporting tax information to Obligors (to the extent required under the related
Contracts), accounting for collections, and furnishing servicer reports to
the
Owner Trustee and the Indenture Trustee with respect to distributions. Subject
to the provisions of Section
4.02,
the
Servicer shall follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered to execute and deliver,
on
behalf of itself, the Issuing Entity, the Owner Trustee, the Indenture Trustee,
the Certificateholder and the Noteholders or any of them, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Transaction Equipment securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuing
Entity (in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose
of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal
proceeding it shall be held that the Servicer may not enforce a Receivable
on
the ground that it shall not be a real party in interest or a holder entitled
to
enforce such Receivable, the Owner Trustee shall, at the Servicer's expense
and
direction, take steps to enforce such Receivable, including bringing suit in
its
name or the name of the Issuing Entity, the Indenture Trustee, the
Certificateholder or the Noteholders. The Owner Trustee shall, upon the written
request of the Servicer, furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer
to
carry out its servicing and administrative duties hereunder. The Servicer shall
prepare, execute or cause to be executed and deliver all certificates or other
documents required to be delivered by the Issuing Entity pursuant to the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 or the rules and regulations promulgated thereunder.
The Servicer shall determine the estimated value of any Receivable as to which
a
Scheduled Payment is more than 180 days past its due date as of the last day
of
a Collection Period during or prior to the immediately following Collection
Period.
SECTION 4.02. Collection of Receivable Payments.
(a)
The Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable machinery receivables that it services for itself
or
others. The Servicer shall not reduce the principal balance of, reduce the
APR
of, reduce the aggregate amount of Scheduled Payments or the amount of any
Scheduled Payment due under any Receivable, release or modify the security
interest in the Financed Equipment securing such Receivable, or otherwise amend
or modify a Receivable in a manner that would have a material adverse effect
on
the interests of the Noteholders. Notwithstanding the foregoing, the Servicer
may grant extensions on a Receivable; provided,
however,
that if
the Servicer extends the due date of any Scheduled Payment to a date beyond
the
Class B Note Final Scheduled Distribution Date, it shall promptly purchase
the
Receivable from the Issuing Entity in accordance with the terms of Section
4.07.
To the
extent not otherwise required by applicable law or the applicable Contract,
the
Servicer shall allocate payments made by or on behalf of the Obligor with
respect to the Receivables first to any overdue Scheduled Payment (including
taxes and miscellaneous billables), second to the current Scheduled Payment
(including taxes and miscellaneous billables) and third to late fees. The
Servicer may in its discretion waive any other amounts of Additional Servicing
Compensation that may be collected in the ordinary course of servicing a
Receivable. Notwithstanding anything in this Agreement to the contrary, in
the
event that a Receivable becomes a Liquidated Receivable, any Recoveries relating
thereto shall be paid to the Depositor and such Liquidated Receivable shall
be
assigned by the Issuing Entity to the Depositor.
24
(b) Notwithstanding anything in this Agreement to the contrary (but
subject to the immediately succeeding sentence), the Servicer may refinance
any
Receivable only if (i) the related Obligor executes a new installment sales
contract or lease and (ii) the proceeds of such refinancing are used to pre-pay
all obligations in full of such Obligor under such Receivable (which amount
shall be applied in accordance with Section
5.02).
The
new receivable created by the refinancing shall not be property of the Issuing
Entity. The parties hereto intend that the Servicer will not refinance a
Receivable pursuant to this Section
4.02(b)
in order
to provide direct or indirect assurance to the Depositor, the Indenture Trustee,
the Owner Trustee, the Noteholders, or the Certificateholder, as applicable,
against loss by reason of the bankruptcy or insolvency (or other credit
condition) of, or default by, the Obligor on, or the uncollectability of,
any
Receivable.
SECTION 4.03. Realization upon Receivables.
On
behalf of the Issuing Entity, the Servicer shall use its best efforts,
consistent with its customary servicing procedures, to repossess or otherwise
realize upon the Transaction Equipment securing any Receivable as to which
the
Servicer shall have determined eventual payment in full is unlikely or, with
respect to Financed Equipment relating to any Lease, as to which the related
Obligor has returned the Financed Equipment. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of comparable receivables, which may include selling
the Transaction Equipment at public or private sale. The foregoing shall be
subject to the provision that, in any case in which any item of Transaction
Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with the repair or the repossession of such Transaction Equipment
unless it shall determine in its discretion that such repair or repossession
will increase the Liquidation Proceeds by an amount greater than the amount
of
such expenses.
SECTION 4.04. Physical Damage Insurance.
The
Servicer shall, in accordance with its customary servicing procedures, require
that each Obligor shall have obtained physical damage insurance covering the
Transaction Equipment as of the execution of the Receivable.
SECTION
4.05. Maintenance of Security Interests in Financed
Equipment.
The
Servicer shall, in accordance with its customary servicing procedures, take
such
steps as are necessary to maintain perfection of the security interest created
by each Receivable (including each Receivable on which a governmental entity
is
the Obligor) in the related Financed Equipment. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest or to maintain such perfected security interest on behalf of the
Issuing Entity and the Indenture Trustee in the event of the relocation of
the
Obligor, or for any other reason.
25
SECTION
4.07. Purchase by Servicer of Receivables upon Breach.
The
Servicer or the Owner Trustee shall inform the other party and the Indenture
Trustee, the Depositor and CFSC promptly, in writing, upon the discovery of
any
breach pursuant to Section
4.02,
4.05
or
4.06.
Unless
the breach shall have been cured by the last day of the second month following
such discovery (or, at the Servicer's election, the last day of the first
following month) (except for the failure to return a released Receivable File,
for which there is no grace period beyond the specified five Business Days),
the
Servicer shall purchase any Receivable materially and adversely affected by
such
breach. If the Servicer takes any action pursuant to Section
4.02
that
impairs the rights of the Issuing Entity, the Indenture Trustee, the
Certificateholder or the Noteholders in any Receivable or as otherwise provided
in Section
4.02,
the
Servicer shall purchase such Receivable. In consideration of the purchase of
any
such Receivable pursuant to either of the two preceding sentences, the Servicer
shall remit the Purchase Amount in the manner specified in Section
5.03.
Subject
to Section
7.02,
the
sole remedy of the Issuing Entity, the Owner Trustee, the Indenture Trustee,
the
Certificateholder or the Noteholders with respect to a breach pursuant to
Section
4.02,
4.05
or
4.06
shall be
to require the Servicer to purchase Receivables pursuant to this Section. The
Owner Trustee shall have no duty to conduct any affirmative investigation as
to
the occurrence of any condition requiring the purchase of any Receivable
pursuant to this Section. The parties hereto intend that the Servicer will
not
intentionally breach or cause a breach pursuant to Section
4.02,
4.05
or
4.06
in order
to provide direct or indirect assurance to the Depositor, the Indenture Trustee,
the Owner Trustee, the Noteholders, or the Certificateholder, as applicable,
against loss by reason of the bankruptcy or insolvency (or other credit
condition) of, or default by, the Obligor on, or the uncollectability of, any
Receivable.
SECTION 4.08. Servicing Fee.
On each
Distribution Date, the Servicer shall be entitled to receive the Servicing
Fee
in respect of the immediately preceding Collection Period equal to the product
of (a) one-twelfth of the Servicing Fee Rate and (b) the Note Value as of the
first day of such preceding Collection Period. The Servicer shall also be
entitled to any Additional Servicing Compensation with respect to Receivables,
collected (from whatever source) on the Receivables, which Additional Servicing
Compensation shall be paid to the Servicer pursuant to Section
5.07.
26
SECTION 4.09. Servicer Report.
On each
Determination Date, the Servicer shall deliver to the Administrator, the
Owner
Trustee, the Paying Agent as defined in the Trust Agreement, the Indenture
Trustee and the Depositor, with a copy to the Rating Agencies, a Servicer
Report
containing all information necessary to make the distributions pursuant to
Sections
5.04,
5.05
and
5.06
for the
Collection Period preceding the date of such Servicer Report. The Servicer
Report shall be substantially in the form of Schedule D (or such other form
as is acceptable to the Indenture Trustee, the Owner Trustee and the Servicer).
Neither the Owner Trustee nor the Indenture Trustee shall be required to
determine, confirm or recalculate the information contained in the Servicer
Report. Receivables to be purchased by the Servicer or to be repurchased
by the
Depositor or CSFC shall be identified by the Servicer by account number with
respect to such Receivable as specified in Schedule
A.
SECTION 4.10. Annual Statement as to Compliance; Notice of
Default.
(a) The Servicer shall deliver to each of the Owner Trustee, the Indenture
Trustee and the Rating Agencies, on or before the earlier of (1) April 30 of
each year or (2) with respect to any calendar year during which the Issuing
Entity's Annual Report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, the date
on
which the Annual Report on Form 10-K is required to be filed in accordance
with
the Exchange Act and the rules and regulations of the Commission, a servicer
compliance statement, signed by an authorized officer of the Servicer, as
described in Item 1123 of Regulation AB, to the effect that:
(i)
A review of the Servicer's activities during the preceding 12-month period
ended
December 31 (or in the case
of
the initial statement, the period from the Closing Date to December 31) and
of
its 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 all of its obligations under this Agreement in all material respects
throughout the reporting period or, if there has been a failure to fulfill
any
such obligation in any material respect, specifying each such failure known
to
such officer and the nature and status thereof.
(b) The Servicer shall use commercially reasonable efforts to obtain from
all other parties participating in the servicing function any additional
certifications required under Item 1123 of Regulation AB to the extent required
to be included in the Issuing Entity’s Annual Report on Form 10-K; provided,
however, that a failure to obtain such certifications shall not be a breach
of
the Servicer's duties hereunder if any such party fails to deliver such a
certification.
(c) The Indenture Trustee shall send a copy of such certificate and the
accountants' attestation referred to in Section
4.11
to the
Rating Agencies. A copy of such certificate and the accountants' attestation
referred to in Section
4.11
may be
obtained by any Certificateholder by a request in writing to the Owner Trustee
at its address in Section
10.03.
(d) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof,
but
in no event later than five Business Days thereafter, written notice in an
Officers' Certificate of any event which with the giving of notice or lapse
of
time, or both, would become a Servicer Default under Section
8.01(a)
or
(b).
27
SECTION 4.11. Annual Independent Certified Public Accountants'
Attestation.
In
order to confirm that the servicing of the Receivables has been conducted
in
compliance with the terms of this Agreement and to comply with the applicable
provisions of Regulation AB, the Servicer shall deliver or shall cause a
firm of
independent certified public accountants, which may also render other services
to the Servicer, the Depositor or CFSC, to deliver to the Owner Trustee and
the
Indenture Trustee on or before the earlier of (a) April 30 of each year or
(b)
with respect to any calendar year during which the Issuing Entity's Annual
Report on Form 10-K is required to be filed in accordance with the Exchange
Act
and the rules and regulations of the Commission, the date on which the Annual
Report on Form 10-K is required to be filed in accordance with the Exchange
Act
and the rules and regulations of the Commission, the attestation required
under
Item 1122(b) of Regulation AB.
SECTION 4.12. Servicer Expenses.
The
Servicer shall be required to pay all expenses incurred by it in connection
with
its activities hereunder, including fees and disbursements of independent
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to the Owner Trustee, the Indenture Trustee,
the
Certificateholder and the Noteholders.
SECTION 4.13. Reports to the Commission.
(a) The Servicer shall cause to be filed with the Commission any periodic
reports required to be filed by the Issuing Entity under the provisions of
the
Exchange Act, and the rules and regulations of the Commission thereunder
including, without limitation, reports on Form 10-K, Form 10-D and Form 8-K.
The
Depositor shall, at its expense, cooperate in any reasonable request made by
the
Servicer in connection with such filings.
(b) Any Form 10-K filed with the Commission in connection with this
Section 4.13 shall include, with respect to the Notes:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Servicer, in the form required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rules 13a-14
and
15d-14 under the Exchange Act and any additional directives of the
Commission.
(ii) A report regarding its assessment of compliance during the preceding
calendar year with all applicable servicing criteria set forth in
Item 1122(d) of Regulation AB with respect to transactions involving the
Servicer that are backed by the same types of assets as those backing the Notes,
as well as similar reports on assessment of compliance received from other
parties participating in the servicing function as required by Item 1122(a)
of
Regulation AB.
(iii) With respect to each assessment report described immediately above,
a report by a registered public accounting firm that attests to, and reports
on,
the assessment made by the asserting party, as set forth in relevant Commission
regulations, as described in Regulation 1122(b) of Regulation AB and Section
4.11.
28
(iv) The servicer compliance statement required to be delivered pursuant
Section 4.10.
(c) The Servicer shall use commercially reasonable efforts to obtain from
all other parties participating in the servicing function any required
assessment report and related accountants' attestation to the extent required
to
be included in the Issuing Entity’s Annual Report on Form 10-K; provided,
however, that a failure to obtain such certifications shall not be a breach
of
the Servicer's duties hereunder if any such party fails to deliver such a report
or attestation.
ARTICLE
V
DISTRIBUTIONS;
RESERVE ACCOUNT;
CERTIFICATEHOLDER
AND NOTEHOLDER INFORMATION
SECTION 5.01. Establishment of Trust Accounts.
(a) (i) The Servicer,
for the
benefit of the Noteholders and the Certificateholder, shall establish and
maintain in the name of the Indenture Trustee an Eligible Securities Account
(the "Collection Account"), which is U.S. Bank National Association Account
#103403001 as of the Closing Date. The Indenture Trustee shall establish and
maintain an administrative subaccount within the Collection Account for the
benefit of the Noteholders and the Certificateholder (the "Principal
Distribution Account"), which is U.S. Bank National Association Account
#103403002 as of the Closing Date.
(ii) The Servicer, for the benefit of the Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Securities Account (the "Reserve Account"), which is U.S. Bank National
Association Account #103403003 as of the Closing Date.
(b) Funds on deposit in the Collection Account (including the Principal
Distribution Account) and the Reserve Account (collectively, the "Trust
Accounts") shall be invested by the Indenture Trustee in Eligible Investments
selected by the Servicer; provided,
however,
it is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from such investment in Eligible Investments (other than losses
from nonpayment of investments in obligations of the institution acting as
Indenture Trustee). All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the applicable Noteholders and, if applicable, the
Certificateholder. Other than as permitted by the Rating Agencies, funds
credited to or on deposit in the Trust Accounts shall be invested in Eligible
Investments that will mature so that such funds will be available at the close
of business on the Transfer Date preceding the immediately following
Distribution Date; provided,
however,
that
funds credited to or on deposit in Trust Accounts may be invested in Eligible
Investments of the Indenture Trustee which may mature so that such funds will
be
available on the Distribution Date. Funds credited to or deposited in a Trust
Account on a Transfer Date which immediately precedes a Distribution Date upon
the maturity of any Eligible Investments are not required to be invested
overnight, but if so invested, such investments must meet the conditions of
the
immediately preceding sentence.
29
(c) (i)The
Trust
Accounts shall be under the control of the Indenture Trustee. If, at any
time,
any of the Trust Accounts ceases to be an Eligible Securities Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business
Days
(or such longer period, not to exceed 30 calendar days, as to which each
Rating
Agency may consent) establish a new Trust Account as an Eligible Securities
Account and shall transfer any cash or any investments to such new Trust
Account. So long as U.S. Bank National Association is an Eligible Institution,
any Trust Account may be maintained with it as an Eligible Securities
Account.
(ii) With
respect to the Trust Account Property, the Indenture Trustee and U.S. Bank
National Association, as Securities Intermediary, agree, and each subsequent
Securities Intermediary shall agree, by its acceptance hereof,
that:
(A)
any
Trust Account Property held in securities accounts shall be held solely in
the
Eligible Securities Accounts; and each such Eligible Securities Account shall
be
subject to the control of the Indenture Trustee, and the Indenture Trustee
shall
have sole signature authority with respect thereto;
(B)
all
Trust Account Property shall be delivered to the Indenture Trustee by causing
the financial institution then maintaining the related Trust Account (each
such
institution being referred to herein as a "Securities Intermediary") to indicate
by book-entry that the financial asset related to such Trust Account Property
has been credited to such Trust Account. Each Trust Account shall only be
established at a financial institution which agrees (i) to comply with
entitlement orders with respect to such Trust Account issued by the Indenture
Trustee without further consent of the Depositor, the Servicer or the Issuing
Entity and (ii) that each item of property credited to such Trust Account shall
be treated as a financial asset, and the Securities Intermediary does hereby
agree to the foregoing; and
(C)
Upon
release of the lien of the Indenture Trustee under the Indenture in accordance
with the terms thereof, each of the Trust Accounts shall be put in the name
of
the Issuing Entity and the Issuing Entity shall have all rights granted to
the
Indenture Trustee pursuant to this Agreement.
(iii) The
Servicer shall have the power, revocable by the Indenture Trustee or by the
Owner Trustee with the consent of the Indenture Trustee, to instruct the
Indenture Trustee to make withdrawals and payments from the Trust Accounts
for
the purpose of permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to carry out
its
duties under the Indenture.
30
(iv) The
Indenture Trustee is hereby authorized to execute purchase and sales directed
by
the Servicer through the facilities of its own trading or capital markets
operations. The Indenture Trustee shall send statements to the Servicer and
the
Issuing Entity monthly reflecting activity for each account created hereunder
for the preceding month. Although the Issuing Entity recognizes that it may
obtain a broker confirmation at no additional cost, the Issuing Entity hereby
agrees that confirmations of investments are not required to be issued by the
Indenture Trustee for each month in which a monthly statement is rendered.
No
statement need be rendered pursuant to the provision hereof if no activity
occurred in the account for such month.
SECTION 5.02. Collections.
Subject
to Section
5.03,
the
Servicer shall remit to the Collection Account (i) all payments by or on behalf
of the Obligors with respect to the Receivables (other than Purchased
Receivables) and (ii) all Liquidation Proceeds, in each case as collected during
each Collection Period within two Business Days of receipt and identification
thereof. Notwithstanding the foregoing, if (i) CFSC is the Servicer, (ii) a
Servicer Default shall not have occurred and be continuing and (iii) CFSC
maintains a short-term rating of at least "A-1" by Standard & Poor's and
"Prime-1" by Moody's, the Servicer may remit such collections with respect
to
each Collection Period to the Collection Account on or before the second
Business Day prior to the following Distribution Date. For purposes of this
Article V, the phrase "payments by or on behalf of Obligors" shall mean payments
made with respect to the Receivables by Persons other than the Servicer or
CFSC.
SECTION 5.03. Additional Deposits.
(a) The Servicer and the Depositor shall deposit or cause to be deposited
in the Collection Account the Purchase Amounts with respect to Purchased
Receivables as set forth in the immediately following sentence, and the Servicer
shall deposit in the Collection Account all amounts to be paid under
Section
9.01
as set
forth therein. The Servicer and the Depositor will deposit the Purchase Amount
with respect to each Purchased Receivable when such obligations are due, unless,
with respect to Purchase Amounts to be remitted by the Servicer, the Servicer
shall be permitted to make deposits monthly prior to each Distribution Date
pursuant to Section
5.02,
in
which case such deposits shall be made in accordance with such Section. The
Servicer shall account for Purchase Amounts paid by itself, CFSC, or the
Depositor separately.
(b) By its acknowledgement of this Agreement, the Indenture Trustee agrees
that on each Distribution Date it will withdraw all Investment Earnings credited
to the Reserve Account since the preceding Distribution Date (or in the case
of
the initial Distribution Date, the Indenture Trustee will withdraw all
Investment Earnings credited to Reserve Account since the Closing Date) and
deposit such Investment Earnings in the Collection Account in accordance with
Section
8.03(a)
of the
Indenture.
SECTION 5.04. Distributions.
(a) On each Determination Date, the Servicer shall calculate all amounts
required to determine the amounts to be remitted to the Class A
Noteholders, the Class B Noteholders and the Certificateholder.
31
(b) On the second Business Day prior to each Distribution Date, the
Servicer shall instruct the Indenture Trustee, which instruction shall be
in the
form of Schedule
E
(or such
other form that is acceptable to the Indenture Trustee and the Servicer),
to
make the following deposits and distributions for receipt by the Servicer,
the
Noteholders, or for deposit in the applicable Trust Account or Certificate
Distribution Account by 11:00 A.M. (New York time) on such following
Distribution Date to the extent of the Total Distribution Amount on deposit
in
the Collection Account, in the following order of priority:
(i)
to the Servicer, the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
(ii) to the Administrator under the Administration Agreement, the
Administration Fee and all unpaid Administration Fees from prior Collection
Periods;
(iii) to the Class A Noteholders pro rata based upon the amount of
interest accrued on each such Class of Class A Notes, the Class A
Noteholders' Interest Distributable Amount;
(iv) to the Principal Distribution Account, the First Priority Principal
Distribution Amount, if any;
(v) to the Class B Noteholders, the Class B Noteholders' Interest
Distributable Amount;
(vi) to the Principal Distribution Account, the Second Priority Principal
Distribution Amount, if any;
(vii) to the Reserve Account, an amount equal to the excess of the
Specified Reserve Account Balance over the amount on deposit in the Reserve
Account on such Distribution Date; provided,
that,
on or
prior to the Distribution Date on which the amount on deposit in the Reserve
Account equals the Specified Reserve Account Balance, the amount deposited
in
the Reserve Account pursuant to this clause (vii) shall not exceed the Net
Excess Spread for the applicable Distribution Date;
(viii) if any Class of Notes is Outstanding prior to giving effect to
distributions on such Distribution Date, to the Principal Distribution Account,
the Regular Principal Distribution Amount;
(ix) pro rata, to the Indenture Trustee under the Indenture, all unpaid
Indenture Trustee's fees and expenses, to the Custodian under the Custodial
Agreement, all unpaid Custodian's fees and expenses; and to the Issuing Entity,
the amount of any state taxes payable by the Issuing Entity; and
(x) to the Certificate Distribution Account, the remaining Total
Distribution Amount.
(c) On the second Business Day prior to each Distribution Date, the
Servicer shall instruct the Indenture Trustee, which instruction shall be in
the
form of Schedule
E
(or such
other form that is acceptable to the Indenture Trustee and the Servicer), to
make the following distributions from the Principal Distribution Account by
11:00 A.M. (New York time) on such following Distribution Date in the following
order of priority:
32
(i) to the Class A-1 Noteholders in reduction of the Outstanding
Principal Amount of the Class A-1 Notes until the Outstanding Principal
Amount thereof has been reduced to zero;
(ii)
to the Class A-2 Noteholders in reduction of the Outstanding Principal
Amount of the Class A-2 Notes until the Outstanding Principal Amount
thereof has been reduced to zero;
(iii) to the Class A-3 Noteholders in reduction of the Outstanding
Principal Amount of the Class A-3 Notes until the Outstanding Principal
Amount thereof has been reduced to zero;
(iv) to the Class A-4 Noteholders in reduction of the Outstanding
Principal Amount of the Class A-4 Notes until the Outstanding Principal
Amount thereof has been reduced to zero;
(v) to the Class B Noteholders in reduction of the Outstanding Principal
Amount of the Class B Notes until the Outstanding Principal Amount thereof
has
been reduced to zero; and
(vi) to the Certificate Distribution Account, any funds remaining on
deposit in the Principal Distribution Account.
(d)
Notwithstanding anything in this Section
5.04
to the
contrary, if an Event of Default under the Indenture occurs and the maturities
of the Notes are accelerated pursuant to Section
5.02
of the
Indenture, all amounts on deposit in the Collection Account shall be applied
in
accordance with Section
5.04(b)
or
5.04(c)
of the
Indenture.
(e) In the event that any withholding tax is imposed on the Issuing
Entity’s payment (or allocations of income) to the Class B Noteholders, such tax
shall reduce the amount otherwise distributable to the Class B Noteholders
in
accordance with this Section. The Indenture Trustee is hereby authorized to
retain from amounts otherwise distributable to the Class B Noteholders
sufficient funds for the payment of any tax that is legally owed or required
to
be withheld by the Issuing Entity (but such authorization shall not prevent
the
Issuing Entity or the Indenture Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted
by
law, pending the outcome of such proceedings). The amount of any withholding
tax
imposed with respect to the Class B Noteholders shall be treated as cash
distributed to the Class B Noteholders at the time it is withheld by the Issuing
Entity and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution,
the
Indenture Trustee may in its sole discretion withhold such amounts in accordance
with this clause (e). In the event that the Class B Noteholders wish to apply
for a refund of any such withholding tax, the Indenture Trustee shall reasonably
cooperate with the Class B Noteholders in making such claim so long as the
Class
B Noteholders agrees to reimburse the Indenture Trustee for any out-of-pocket
expenses incurred.
33
SECTION 5.05. Reserve Account.
(a) On the Closing Date, the Issuing Entity shall deposit the Reserve
Account Initial Deposit into the Reserve Account using the cash supplied to
it
pursuant to Section 2.01(h). The Servicer shall determine the Specified
Reserve Account Balance for each Distribution Date.
(b)
On each Determination Date, the Servicer shall determine if the Total Required
Payment exceeds the Total Available Amount for the related Distribution Date,
and if such an excess exists the Servicer shall instruct the Indenture Trustee
to withdraw from the Reserve Account on the related Distribution Date, to the
extent of funds available therein after any withdrawal from the Reserve Account
pursuant to Section
5.03(b),
an
amount equal to such excess and deposit such funds into the Collection Account
for inclusion as part of the Total Distribution Amount for distribution on
such
Distribution Date in accordance with the priorities set forth in Section
5.04(b).
(c) On each Determination Date, the Servicer shall determine if the amount
on deposit in the Reserve Account (after taking into account any deposits
thereto pursuant to Sections
5.04(b)
and any
withdrawals therefrom pursuant to Sections
5.03(b)
or
5.05(b))
is
greater than the Specified Reserve Account Balance for such Distribution Date
(which shall be calculated to give effect to the reduction in the Outstanding
Principal Amount of the Notes to result from payments to Noteholders pursuant
to
Section
5.04(c)
on such
Distribution Date) and the Servicer shall instruct the Indenture Trustee to
deposit such amounts in the Certificate Distribution Account.
(d) Notwithstanding anything in this Section
5.05
to the
contrary, if an Event of Default under the Indenture occurs and the maturities
of the Notes are accelerated pursuant to Section
5.02
of the
Indenture, amounts on deposit in the Reserve Account shall be applied by the
Indenture Trustee in accordance with Section
5.04(b)
or
5.04(c)
of the
Indenture.
(e)
Upon satisfaction of the Rating Agency Condition, the Depositor may eliminate
the Reserve Account and replace it with an alternative arrangement.
SECTION 5.06. Certificateholder and Noteholder
Information.
On the
second Business Day prior to each Distribution Date, the Indenture Trustee
shall
forward or make available to each Noteholder of record and the Administrator
shall forward to each Certificateholder of record pursuant to the Trust
Agreement the Servicer Report delivered by the Servicer pursuant to
Section 4.09. Such Servicer Report shall set forth at least the following
information as to the Notes (separately stating such information as to the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes) and the Certificate, to the extent
applicable:
(i) the amount to be deposited to the Principal Distribution Account and
the amounts to be paid to the Noteholders and the Certificateholder
therefrom;
34
(ii) the Class A Noteholders' Interest Distributable Amount, the
Class B Noteholders' Interest Distributable Amount and the amounts paid to
such
Noteholders in respect thereof;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period;
(iv) the Note Value as of the close of business on the last day of the
preceding Collection Period;
(v) the Outstanding Principal Amount of each class of the Notes, the
Class A-1 Note Pool Factor, the Class A-2 Note Pool Factor, the
Class A-3 Note Pool Factor, the Class A-4 Note Pool Factor, the Class
B Note Pool Factor and the Certificate Balance, in each case as of the close
of
business on the last day of the preceding Collection Period, after giving effect
to payments allocated to principal reported under (i) above;
(vi)
the amount of the Servicing Fee paid to the Servicer with respect to the related
Collection Period;
(vii) the amount of the Administration Fee paid to the Administrator with
respect to the preceding Collection Period;
(viii) the aggregate amount of the Purchase Amounts for Purchased
Receivables with respect to the related Collection Period paid by each of CFSC,
the Depositor, and the Servicer (accounted for separately);
(ix) the amount of Realized Losses, if any, for the related Collection
Period;
(x)
the amount of Cumulative Realized Losses with respect to the related Collection
Period;
(xi) the balance of the Reserve Account on such Distribution Date, after
giving effect to withdrawals made on such Distribution Date;
(xii) the Specified Reserve Account Balance for such Distribution
Date;
(xiii) the amount, if any, to be withdrawn from the Reserve Account and
deposited into the Collection Account on such Distribution Date pursuant to
Section 5.05(b);
(xiv)
the amount, if any, to be withdrawn from the Reserve Account and deposited
to
the Certificate Distribution Account pursuant to Section
5.05(c);
(xv) the Certificate Balance for such Distribution Date and the aggregate
amount to be deposited to the Certificate Distribution Account pursuant to
Section 5.04(c);
35
(xvi) the amount, if any, to be distributed to the Certificateholder
pursuant to Section 5.02(a)(i)
of the
Trust Agreement; and
(xvii) the amount, if any, to be distributed to the Depositor pursuant to
Section 5.02(a)(ii)
of the
Trust Agreement.
Each
amount set forth pursuant to paragraph (i), (ii) or (iv) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.
The
Indenture Trustee shall only be required to provide to the Noteholders the
information furnished to it by the Servicer. The Indenture Trustee shall not
be
required to determine, confirm or recompute any such information.
SECTION 5.07. Net Deposits.
As an
administrative convenience, so long as CFSC is the Servicer and the
Administrator, if the Servicer is permitted to remit collections monthly rather
than within two Business Days of their receipt and identification pursuant
to
Section
5.02,
the
Servicer will be permitted to make the deposit of collections on the Receivables
and Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to the Servicer or the Administrator with respect
to
such Collection Period (including any Additional Servicing Compensation and
the
Servicing Fee to the extent of amounts available for payment thereof), and
the
Servicer shall pay amounts owing to the Administrator directly; provided, that
if the Servicer is required to remit collections within two Business Days,
the
Servicer shall be paid the Additional Servicing Compensation by means of the
Servicer making the deposit of such collections net of the Additional Servicing
Compensation and deposits of such amounts may not be made net of the Servicing
Fee. The Servicer, however, will account to the Owner Trustee, the Indenture
Trustee, the Noteholders and the Certificateholder as if the Servicing Fee
and
Administration Fee were paid individually.
SECTION
5.08. Tax Monitoring.
The
Servicer shall monitor whether any state taxes are payable by the Issuing Entity
and shall notify the Indenture Trustee of the amount and due date of such taxes
in a timely manner.
ARTICLE
VI
THE
DEPOSITOR
SECTION
6.01. Representations of Depositor.
The
Depositor makes the following representations on which the Issuing Entity is
deemed to have relied in acquiring the Receivables. The representations speak
as
of the execution and delivery of this Agreement and shall survive the sale
of
the Receivables to the Issuing Entity and the grant of a security interest
therein to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing.
The
Depositor is duly organized and validly existing as a corporation in good
standing under the laws of the State of Nevada with the power and authority
to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and has, the power, authority and legal right to acquire and own the
Receivables.
36
(b) Due Qualification.
The
Depositor is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the failure to so qualify or to obtain any such license
or approval would render any Receivable unenforceable that would otherwise
be
enforceable by the Depositor or the Issuing Entity.
(c) Power and Authority.
The
Depositor has the power and authority to execute and deliver this Agreement
and
to carry out its terms; the Depositor has full power and authority to sell
and
assign the Receivables and other property to be sold and assigned to and
deposited with the Issuing Entity and has duly authorized such sale and
assignment to the Issuing Entity by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly authorized
by the Depositor by all necessary corporate action.
(d) Binding Obligation.
This
Agreement constitutes a legal, valid and binding obligation of the Depositor
enforceable in accordance with its terms, except to the extent that such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally, and the remedy of specific performance and injunctive relief may
be
subject to certain equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(e) No Violation.
The
consummation by the Depositor of the transactions contemplated by this Agreement
and the fulfillment by the Depositor of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default under,
the
articles of incorporation or by-laws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which
it
is bound; (ii) result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or (iii) violate
any law or, to the best of the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(f) No Proceedings.
There
are no proceedings or investigations pending, or to the Depositor's best
knowledge, threatened, before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor
or
its properties: (i) asserting the invalidity of this Agreement, the
Indenture, the Notes, the Certificate or any of the other Basic Documents,
(ii) seeking to prevent the issuance of the Notes or the Certificate or the
consummation of any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents; (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, the Notes, the Certificate
or
any other of the Basic Documents or (iv) which might adversely affect the
federal or state income tax attributes of the Notes or the
Certificate.
SECTION 6.02. Liability of Depositor; Indemnities.
The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Depositor under this
Agreement.
37
(a) The Depositor shall indemnify, defend and hold harmless the Issuing
Entity, the Owner Trustee, the Custodian and the Indenture Trustee and their
officers, directors and agents from and against any taxes that may at any
time
be asserted against the Issuing Entity, the Owner Trustee, the Custodian
or the
Indenture Trustee or their respective officers, directors, and agents with
respect to the sale of the Receivables to the Issuing Entity or the issuance
and
original sale of the Certificate and the Notes, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuing Entity, not including any taxes asserted
with respect to ownership of the Receivables or federal or other income taxes
arising out of the transactions contemplated by this Agreement) and costs
and
expenses in defending against the same.
(b) The Depositor shall indemnify, defend and hold harmless the Issuing
Entity, the Owner Trustee, the Custodian and the Indenture Trustee and their
officers, directors, and agents from and against any loss, liability or expense
incurred by reason of (i) the Depositor's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement and
(ii) the Depositor's or the Issuing Entity's violation or alleged violation
of
federal or state securities laws in connection with the offering and sale of
the
Notes and the Certificate.
Indemnification
under this Section shall survive the resignation or removal of the Owner
Trustee, the Custodian or the Indenture Trustee and the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Depositor shall have made any indemnity payments pursuant
to this Section
6.02
and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Depositor, without interest.
SECTION
6.03. Merger or Consolidation of, or Assumption of the Obligations of,
Depositor.
Any
Person (a) into which the Depositor may be merged or consolidated, (b) which
may
result from any merger or consolidation to which the Depositor shall be a party
or (c) which may succeed to the properties and assets of the Depositor
substantially as a whole, which Person in any of the foregoing cases executes
an
agreement of assumption to perform every obligation of the Depositor under
this
Agreement, shall be the successor to the Depositor hereunder without the
execution or filing of any document or any further act by any of the parties
to
this Agreement; provided,
however,
that
(i) immediately after giving effect to such transaction, no representation
or
warranty made pursuant to Section
3.01
shall
have been breached and no Servicer Default, and no event that, after notice
or
lapse of time, or both, would become a Servicer Default shall have occurred
and
be continuing, (ii) the Depositor shall have delivered to the Owner Trustee
and
the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Rating Agency Condition shall have been satisfied with respect
to such transaction and (iv) the Depositor shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating
that,
in the opinion of such counsel, all actions necessary to perfect the interests
of the Issuing Entity and the Indenture Trustee have been taken, including
that
all financing statements and continuation statements and amendments thereto
have
been authorized and filed that are necessary fully to preserve and protect
the
interest of the Issuing Entity and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that,
in
the opinion of such counsel, no such action shall be necessary to preserve
and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii) and (iv) above shall be conditions to the consummation of
the
transactions referred to in clause (a), (b) or (c) above.
38
SECTION 6.04. Limitation on Liability of Depositor and
Others.
The
Depositor and any director or officer or employee or agent of the Depositor
may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters
arising hereunder. The Depositor shall not be under any obligation to appear
in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it
in any
expense or liability.
SECTION 6.05. Depositor May Own the Certificate or
Notes.
The
Depositor and any Affiliate (other than CFSC) thereof may in its individual
or
any other capacity become the owner or pledgee of the Certificate or Notes
with
the same rights as it would have if it were not the Depositor or an Affiliate
thereof, except as expressly provided herein (including the definition of
"Outstanding" contained in each of the Indenture and the Trust Agreement) or
in
any Basic Document.
ARTICLE
VII
THE
SERVICER
SECTION
7.01. Representations of Servicer.
The
Servicer makes the following representations on which the Issuing Entity is
deemed to have relied in acquiring the Receivables. The representations speak
as
of the execution and delivery of the Agreement (or as of the date a Person
(other than the Indenture Trustee) becomes Servicer pursuant to Sections
7.03
and
8.02,
in the
case of a successor to the Servicer) and shall survive the sale of the
Receivables to the Issuing Entity and the grant of a security interest therein
to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing.
The
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, and has the corporate
power and authority to own its properties and to conduct the business in which
it is currently engaged, and had at all relevant times, and has, the power,
authority and legal right to service the Receivables.
(b) Power and Authority.
The
Servicer has the power and authority to execute and deliver this Agreement
and
to carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary corporate
action.
(c) Binding Obligation.
This
Agreement constitutes a legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except that such enforcement may
be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally, and
the
remedy of specific performance and injunctive relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
39
(d) No Violation.
The
consummation by the Servicer of the transactions contemplated by this
Agreement
and the fulfillment by the Servicer of the terms hereof do not conflict
with,
result in any breach of any of the terms and provisions of, nor constitute
(with
or without notice or lapse of time) a default under, the articles of
incorporation or by-laws of the Servicer, or any indenture, agreement
or other
instrument to which the Servicer is a party or by which it is bound;
nor result
in the creation or imposition of any Lien upon any of its properties
pursuant to
the terms of any such indenture, agreement or other instrument (other
than as
contemplated by the Basic Documents); nor violate any law or, to the
best of the
Servicer's knowledge, any order, rule or regulation applicable to the
Servicer
of any court or of any federal or state regulatory body, administrative
agency
or other governmental instrumentality having jurisdiction over the Servicer
or
its properties.
(e) No Proceedings.
To the
Servicer's best knowledge, there are no proceedings or investigations pending,
or threatened, before any court, regulatory body, administrative agency or
other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement, the Indenture,
the
Notes, the Certificate or any of the other Basic Documents; (ii) seeking to
prevent the issuance of the Notes or the Certificate or the consummation of
any
of the transactions contemplated by this Agreement, the Indenture or any of
the
other Basic Documents; (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement, the
Indenture, the Notes, the Certificate or any of the other Basic Documents;
or
(iv) relating to the Servicer and which might adversely affect the federal
or
state income tax attributes of the Notes or the Certificate.
(f) No Consents Required.
All
approvals, authorizations, consents, orders or other actions of any Person
or of
any Governmental Authority required in connection with the execution and
delivery by the Servicer of this Agreement or any other Basic Document, the
performance by the Servicer of the transactions contemplated by this Agreement
or any other Basic Document and the fulfillment by the Servicer of the terms
hereof or thereof, have been obtained or have been completed and are in full
force and effect (other than approvals, authorizations, consents, orders or
other actions which if not obtained or completed or in full force and effect
would not have a material adverse effect on the Servicer or the Issuing Entity
or upon the collectability of any Receivable or upon the ability of the Servicer
to perform its obligations under this Agreement).
SECTION 7.02. Indemnities of Servicer.
The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer under this
Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the Issuing
Entity, the Owner Trustee, the Indenture Trustee, the Custodian, the
Noteholders, the Certificateholder and the Depositor and any of the officers,
directors and agents of the Issuing Entity, the Owner Trustee, the Indenture
Trustee, the Custodian and the Depositor from and against any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or resulting
from the use, ownership or operation by the Servicer or any Affiliate (other
than the Depositor or the Issuing Entity) thereof of any Transaction
Equipment.
40
(b) The Servicer shall indemnify, defend and hold harmless the Issuing
Entity, the Owner Trustee, the Indenture Trustee, the Custodian and the
Depositor and their respective officers, directors and agents from and against
(i) any taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuing Entity or the Depositor, not including
any taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuing Entity or the issuance and original sale of the
Certificate and the Notes, or asserted with respect to ownership of the
Receivables, or Federal or other income taxes arising out of distributions
on
the Certificate or the Notes) and (ii) costs and expenses in defending against
the same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuing
Entity, the Owner Trustee, the Indenture Trustee, the Depositor, the Custodian,
the Certificateholder and the Noteholders and any of the officers, directors
and
agents of the Issuing Entity, the Owner Trustee, the Indenture Trustee and
the
Depositor from and against any and all costs, expenses, losses, claims, damages
and liabilities to the extent that any such cost, expense, loss, claim, damage
or liability arose out of, or was imposed upon any such Person through, the
negligence, willful misfeasance or bad faith of the Servicer in the performance
of its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement or on account of the failure of
the
Servicer to be qualified to do business as a foreign corporation or to have
obtained a license or approval in any jurisdiction.
(d)
The Servicer shall indemnify, defend and hold harmless the Owner Trustee, the
Custodian and the Indenture Trustee and their respective officers, directors
and
agents from and against all costs, expenses, losses, claims, damages and
liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein, and in the case of the Owner
Trustee, in the Trust Agreement, in the case of the Custodian, the Custodial
Agreement and in the case of the Indenture Trustee, the Indenture, except to
the
extent that any such cost, expense, loss, claim, damage or liability: (i) shall
be due to the willful misfeasance, bad faith or negligence (except for errors
in
judgment) of the Owner Trustee, the Custodian or the Indenture Trustee, as
applicable; or (ii) shall arise from the breach by the Owner Trustee of any
of
its representations or warranties set forth in Section
7.03
of the
Trust Agreement.
(e) The Servicer shall pay any and all taxes levied or assessed upon all
or any part of the Owner Trust Estate, other than any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the Issuing
Entity or the issuance and original sale of the Certificate and the Notes,
or
Federal or other income taxes imposed on the Issuing Entity because of its
classification or reclassification for tax purposes, or Federal or other income
taxes arising out of distributions on the Certificate or the Notes.
For
purposes of this Section, in the event of the termination of the rights and
obligations of CFSC (or any successor thereto pursuant to Section
7.03)
as
Servicer pursuant to Section
8.01,
or a
resignation by such Servicer pursuant to this Agreement, such Servicer shall
be
deemed to be the Servicer pending appointment of a successor Servicer (other
than the Indenture Trustee) pursuant to Section
8.02.
41
Indemnification
under this Section shall survive the resignation or removal of the Owner Trustee
or the Indenture Trustee or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and
the
Person to or on behalf of whom such payments are made thereafter collects any
of
such amounts from others, such Person shall promptly repay such amounts to
the
Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer.
Any
Person (a) (i) into which the Servicer may be merged or consolidated, (ii)
which
may result from any merger or consolidation to which the Servicer shall be
a
party, (iii) which may succeed to the properties and assets of the Servicer
substantially as a whole, or (iv) which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Caterpillar, and
(b)
in the case of any of (i), (ii), (iii) or (iv), which has executed an agreement
of assumption to perform every obligation of the Servicer hereunder, shall
be
the successor to the Servicer under this Agreement without further act on the
part of any of the parties to this Agreement; provided,
however,
that
(w) immediately after giving effect to such transaction, no Servicer Default,
and no event which, after notice or lapse of time, or both, would become a
Servicer Default shall have occurred and be continuing, (x) the Servicer shall
have delivered to the Owner Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent provided for in this Agreement relating to
such transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (z) the Servicer shall
have delivered to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been
authorized and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings or (B) stating that, in
the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(w), (x), (y) and (z) above shall be conditions to the consummation of the
transactions referred to in clause (a) or (b) above.
SECTION 7.04. Limitation on Liability of Servicer and
Others.
Neither
the Servicer nor any of the directors or officers or employees or agents of
the
Servicer shall be under any liability to the Issuing Entity, the Noteholders
or
the Certificateholder, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided,
however,
that
this provision shall not protect the Servicer or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance,
bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Servicer and
any
director or officer or employee or agent of the Servicer as the case may be,
may
rely in good faith on any document of any kind prima facie properly executed
and
submitted by any person respecting any matters arising under this
Agreement.
42
Except
as
provided in this Agreement, the Servicer shall not be under any obligation
to
appear in, prosecute or defend any legal action that shall not be incidental
to
its duties to service the Receivables in accordance with this Agreement, and
that in its opinion may involve it in any expense or liability; provided,
however,
that
the Servicer may undertake any reasonable action that it may deem necessary
or
desirable in respect of this Agreement and the other Basic Documents and the
rights and duties of the parties to this Agreement and the other Basic Documents
and the interests of the Certificateholder under this Agreement and the
Noteholders under the Indenture.
SECTION 7.05. CFSC Not To Resign as Servicer.
Subject
to the provisions of Section
7.03,
CFSC
shall not resign from the obligations and duties hereby imposed on it as
Servicer under this Agreement except upon determination that the performance
of
its duties under this Agreement shall no longer be permissible under applicable
law (if it is also determined that such determination may not be reversed).
Notice of any such determination permitting the resignation of CFSC shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Owner Trustee and the Indenture Trustee concurrently with
or
promptly after such notice. No such resignation shall become effective until
the
Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of CFSC in accordance with Section
8.02.
ARTICLE
VIII
DEFAULT
SECTION 8.01. Servicer Default.
If any
one of the following events (each, a "Servicer
Default")
shall
occur and be continuing:
(a) any failure by the Servicer (i) to deliver to the Indenture Trustee
for deposit in any of the Trust Accounts or the Certificate Distribution Account
any required payment or (ii) to direct the Indenture Trustee to make any
required distribution therefrom that shall continue unremedied for a period
of
three Business Days after written notice of such failure is received by the
Servicer from the Owner Trustee or the Indenture Trustee or after discovery
of
such failure by an officer of the Servicer;
(b) failure on the part of the Servicer to duly observe or to perform in
any material respect any other covenants or agreements of the Servicer set
forth
in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of the Certificateholder or
Noteholders and (ii) continues unremedied for a period of 60 days after the
date
on which written notice of such failure, requiring the same to be remedied,
shall have been given (A) to the Servicer by the Owner Trustee or the Indenture
Trustee or (B) to the Servicer and to the Owner Trustee and the Indenture
Trustee by the Holders of Notes evidencing not less than 25% of the Outstanding
Principal Amount of the Notes or the Certificateholder; or
43
(c) an Insolvency Event occurs with respect to the
Servicer;
then,
and
in each and every case, so long as the Servicer Default shall not have been
remedied, either the Indenture Trustee, or the Holders of Class A Notes
evidencing not less than 25% of the Outstanding Principal Amount of such Notes,
or if no Class A Notes are Outstanding, the Holders of Class B Notes
evidencing not less than 25% of the Outstanding Principal Amount of such Notes,
or if no Notes are Outstanding, either the Owner Trustee or the
Certificateholder, by notice then given in writing to the Servicer (and to
the
Indenture Trustee and the Owner Trustee if given by the Noteholders) may
terminate all the rights and obligations (other than the obligations set forth
in Section
7.02
hereof
that accrued prior to such termination) of the Servicer under this Agreement.
On
or after the receipt by the Servicer of such written notice, all authority
and
power of the Servicer under this Agreement, whether with respect to the Notes,
the Certificate or the Receivables or otherwise, shall, without further action,
pass to and be vested in the Indenture Trustee or such successor Servicer as
may
be appointed under Section
8.02;
and,
without limitation, the Indenture Trustee and the Owner Trustee are hereby
authorized and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer
under
this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the
predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection (x) with transferring the computer
or
other records to the successor Servicer in the form requested and (y) amending
this Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Owner Trustee shall give notice thereof
to
the Rating Agencies.
SECTION 8.02. Appointment of Successor Servicer.
(a)
Upon the Servicer's receipt of notice of termination, pursuant to Section
8.01
or the
Servicer's resignation in accordance with the terms of this Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until
the earlier of (x) the date 45 days from the delivery to the Owner Trustee
and
the Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and
(y) the date upon which the predecessor Servicer shall become unable to act
as
Servicer, as specified in the notice of resignation and accompanying Opinion
of
Counsel. In the event of the Servicer's termination hereunder, the Indenture
Trustee shall appoint a successor Servicer, and the successor Servicer shall
accept its appointment by a written assumption in form acceptable to the Owner
Trustee and the Indenture Trustee. In the event that a successor Servicer has
not been appointed at the time when the predecessor Servicer has ceased to
act
as Servicer in accordance with this Section, pending the appointment of and
acceptance by a successor Servicer, the Indenture Trustee without further action
shall automatically be appointed and serve as the successor Servicer and the
Indenture Trustee shall be entitled to the Servicing Fee and the Additional
Servicing Compensation. Notwithstanding the above, the Indenture Trustee shall,
if it shall be legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established institution who has
demonstrated its capability to service the Receivables to the satisfaction
of
the Indenture Trustee, as the successor to the Servicer under this Agreement,
having a net worth of not less than $50,000,000 and whose regular business
shall
include the servicing of receivables comparable with the Receivables, as the
successor to the Servicer under this Agreement.
44
The
Indenture Trustee, acting in its capacity as successor Servicer, and any
successor Servicer appointed by it, shall have no responsibility or obligation
(i) for any breach by any predecessor Servicer of any of its representations
and
warranties, or (ii) any acts or omissions of CFSC or any other Servicer prior
to
its termination.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor servicer) shall be the successor in all respects
to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and the
Additional Servicing Compensation and all the rights granted to the predecessor
Servicer by the terms and provisions of this Agreement.
(c) Subject to the Indenture Trustee's right to appoint a successor
Servicer pursuant to Section
8.02(a)
after
the Indenture Trustee has become the Servicer pending the appointment of and
acceptance by a successor Servicer, the Servicer may not resign unless it is
prohibited from serving as such by law.
(d)
Notwithstanding any other provision of this Agreement, neither the Indenture
Trustee nor any successor Servicer shall be deemed in default, breach or
violation of this Agreement as a result of the failure of CFSC or any Servicer
(i) to cooperate with the Indenture Trustee or any successor Servicer pursuant
to Section
8.01,
(ii) to
deliver funds required to be deposited to any Trust Account or (iii) to deliver
files or records relative to the Receivables as may be requested by the
Indenture Trustee or successor Servicer.
SECTION 8.03. Notification to Noteholders and
Certificateholder.
Upon
any termination of, or appointment of a successor to, the Servicer pursuant
to
this Article VIII, the Owner Trustee shall give prompt written notice thereof
to
the Certificateholder and the Indenture Trustee shall give prompt written notice
thereof to Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults.
The
Holders of Class A Notes evidencing more than a 50% of the Outstanding
Principal Amount of such Notes or, if no Class A Notes are Outstanding, the
Holders of Class B Notes evidencing more than 50% of the Outstanding Principal
Amount of such Notes or, if no Notes are Outstanding, the Certificateholder,
may, on behalf of all Noteholders and the Certificateholder, waive in writing
any default by the Servicer in the performance of its obligations hereunder
and
its consequences, except a default in making any required deposits to or
payments from any of the Trust Accounts in accordance with this Agreement.
Upon
any such waiver of a past default, such default shall cease to exist, and any
Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
45
SECTION 8.05. Appointment of Custodians.
CFSC,
the Depositor, the Issuing Entity and the Indenture Trustee may, with the
consent of the Servicer and notice to the Rating Agencies, appoint U.S. Bank
National Association, as Custodian to hold all or a portion of the Receivable
Files as agent for such Person during such time as such Person owns or has
an
interest in the Receivables, in accordance with the Custodial Agreement.
U.S.
Bank National Association is appointed Custodian and, for so long as it shall
be
the Custodian thereunder, agrees to comply with the terms of the Custodial
Agreement applicable to it. The Indenture Trustee agrees to comply with the
terms of the Custodial Agreement and to enforce the terms and provisions
thereof
against the Custodian.
ARTICLE
IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables; Trust
Termination.
(a)
If on the last day of any Collection Period the Note Value is 10% or less of
the
Initial Note Value the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts, which purchase shall be effective
as of such last day by depositing in the Collection Account on or prior to
the
second Business Day prior to the next succeeding Distribution Date an amount
equal to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables but not including Liquidated Receivables) pursuant to Section 5.03;
provided,
however,
that
the aggregate Purchase Amount for the Receivables, after payment of all amounts
due pursuant to Section
5.04(b)(i)
on such
next succeeding Distribution Date, is an amount at least equal to the aggregate
Redemption Price for the Class A-4 Notes and the Class B Notes; and
provided further that the Servicer shall not purchase the Owner Trust Estate
if
the aggregate Purchase Amount exceeds the fair market value of the Owner Trust
Estate as determined by the Servicer in good faith.
(b) Notice
of
any termination of the Issuing Entity shall be given by the Servicer to the
Owner Trustee and the Indenture Trustee as soon as practicable after the
Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholder will succeed to the rights of the Noteholders hereunder (other
than the right to receive payments under Section 5.05(b)),
and
the Owner Trustee will succeed to the rights of, and assume the obligations
of,
the Indenture Trustee pursuant to this Agreement.
46
ARTICLE
X
MISCELLANEOUS
PROVISIONS
SECTION 10.01. Amendment.
The
Agreement may be amended by the Depositor, the Servicer and the Issuing Entity,
with the consent of the Indenture Trustee, but without the consent of any of
the
Noteholders or the Certificateholder, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in
this Agreement or of modifying in any manner the rights of the Noteholders
or
the Certificateholder; provided,
however,
that
such amendment shall not, as evidenced by an Opinion of Counsel delivered to
the
Owner Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholders or the Certificateholder or the federal
tax characterization of the Notes.
This
Agreement may also be amended from time to time by the Depositor, the Servicer
and the Issuing Entity, with the consent of the Indenture Trustee, the consent
of the Holders of Notes evidencing at least a majority of the Outstanding
Principal Amount of the Notes and the consent of the "Holder" (as defined in
the
Trust Agreement) of the Certificate, for the purpose of adding any provisions
to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholder; provided,
however,
that no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or (b) reduce the aforesaid percentage of the Outstanding Principal
Amount of the Notes, the holders of which are required to consent to any such
amendment, without the consent of the Holders of all the Outstanding
Notes.
Prior
to
the execution of any such amendment or consent, the Servicer shall furnish
written notification of the substance of such amendment or consent to each
of
the Rating Agencies. Promptly after the execution of any such amendment or
consent without the consent of the Certificateholder, the Owner Trustee shall
furnish written notification of the substance of such amendment or consent
to
the Certificateholder.
It
shall
not be necessary for the consent of the Certificateholder or the Noteholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.
Prior
to
the execution of any amendment to this Agreement, the Owner Trustee and the
Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel referred to in Section
10.02(i)(1).
The
Owner Trustee and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Owner Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 10.02. Protection of Title to Trust.
47
(a) The Depositor shall take all actions necessary to perfect, and
maintain perfection of, the interests of the Issuing Entity and the Indenture
Trustee in the Receivables. In the event it is determined that the Indenture
Trustee's or the Issuing Entity's interests are no longer perfected, such
actions shall include but shall not be limited to the enforcement of the
terms
of the Custodial Agreement and of Section
6.02
of the
Purchase Agreement. In addition, without limiting the rights of the Indenture
Trustee or the Issuing Entity specified in the immediately preceding sentence,
the Depositor shall authorize and file such financing statements and cause
to be
authorized and filed such continuation statements, all in such manner and
in
such places as may be required by law fully to present, maintain, and protect
the interest of the Issuing Entity and the interest of the Indenture Trustee
in
the Receivables and in the proceeds thereof. The Depositor shall deliver
(or
cause to be delivered) to the Owner Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name or type
or jurisdiction of organization unless it shall have given the Owner Trustee
and
the Indenture Trustee at least 30 days' prior written notice thereof and, if
applicable, shall have timely filed appropriate amendments to any and all
previously filed financing statements or continuation statements (so that the
security interest of the Issuing Entity or the Indenture Trustee in the
Receivables is not adversely affected).
(c) The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know
at
any time the status of such Receivable, including payments and Recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or Recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the Servicer's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of the Issuing Entity (which
interest has been acquired from the Depositor) and the Indenture Trustee in
such
Receivable and that such Receivable is owned by the Issuing Entity and a
security interest therein has been granted to the Indenture Trustee. Indication
of the Issuing Entity's interest (which interest has been acquired from the
Depositor) and the Indenture Trustee's interest in a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in receivables
comparable with the Receivables, to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to
any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuing Entity and a security interest therein has been granted
to
the Indenture Trustee.
48
(g) The Servicer shall permit the Indenture Trustee and its agents at any
time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any
Receivable.
(h)
Upon request, the Servicer shall furnish to the Owner Trustee or to the
Indenture Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Collateral,
together with a reconciliation of such list to the Schedule of Receivables
and
to each of the Servicer Reports furnished before such request indicating removal
of Receivables from the Collateral.
(i) The Depositor shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement and of
each amendment thereto, an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all actions have been taken that are necessary fully
to
perfect the interests of the Issuing Entity and the Indenture Trustee in the
Receivables, and reciting the details of such action or referring to prior
Opinions of Counsel in which such details are given, or (B) stating that, in
the
opinion of such counsel, no such action shall be necessary to perfect such
interest; and
(2) within 120 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the Cut-off
Date, an Opinion of Counsel, dated as of a date during such 120-day period,
either (A) stating that, in the opinion of such counsel, all actions have been
taken, and, if applicable, all financing statements and continuation statements
have been authorized and filed, that are necessary fully to perfect the
interests of the Issuing Entity and the Indenture Trustee in the Receivables
and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to perfect such
interest.
Each
Opinion of Counsel referred to in clause (1) or (2) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to perfect such interest.
(j) The Depositor shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 10.03. Notices.
All
demands, notices and communications upon or to the Depositor, the Servicer,
the
Issuing Entity, the Owner Trustee, the Indenture Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, and shall be deemed to have been
duly
given upon receipt (a) in the case of the Depositor, to Caterpillar Financial
Funding Corporation, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
(702-735-2514), (b) in the case of the Servicer, to Caterpillar Financial
Services Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(615-341-1000), (c) in the case of the Issuing Entity or the Owner Trustee,
at
the "Corporate Trust Office" (as defined in the Trust Agreement), with a copy
to
the Administrator, to ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(615-341-1000), (d) in the case of the Indenture Trustee, at the Corporate
Trust
Office, (e) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (f) in
the
case of Standard & Poor's, to Standard & Poor's Ratings Services, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed Surveillance Department
or,
as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
49
SECTION
10.04. Assignment.
Notwithstanding anything to the contrary contained herein, except as provided
in
Sections
6.03
and
7.03
and as
provided in the provisions of this Agreement concerning the resignation of
the
Servicer, this Agreement may not be assigned by the Depositor or the
Servicer.
SECTION
10.05. Limitations on Rights of Others.
The
provisions of this Agreement are solely for the benefit of the Depositor, the
Servicer, the Issuing Entity, the Owner Trustee, the Certificateholder, the
Indenture Trustee and the Noteholders, and nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person any legal
or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 10.06. Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
SECTION 10.07. Separate Counterparts.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
SECTION 10.08. Headings.
The
headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION
10.09. Governing Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND
THE OBLIGATIONS, RIGHTS, REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
50
SECTION 10.10. Assignment to Indenture Trustee.
The
Depositor hereby acknowledges and consents to any mortgage, pledge, assignment
and grant of a security interest by the Issuing Entity to the Indenture Trustee
pursuant to the Indenture for the benefit of the Noteholders of all right,
title
and interest of the Issuing Entity in, to and under the Receivables and the
other property constituting the Owner Trust Estate or the assignment of any
or
all of the Issuing Entity's rights and obligations hereunder to the Indenture
Trustee.
SECTION 10.11. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the Servicer,
the Depositor, the Owner Trustee, the Custodian, the Securities Intermediary,
and the Indenture Trustee shall not, prior to the date which is one year and
one
day after the payment in full of the Notes, acquiesce, petition or otherwise
invoke or cause the Issuing Entity to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuing Entity under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuing Entity or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Issuing Entity.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Issuing Entity, the Owner Trustee, the Custodian, the Securities
Intermediary, and the Indenture Trustee shall not, prior to the date which
is
one year and one day after the payment in full of the Notes, acquiesce, petition
or otherwise invoke or cause the Depositor to invoke the process of any court
or
government authority for the purpose of commencing or sustaining a case against
the Depositor under any Federal or state bankruptcy, insolvency or similar
law
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Depositor.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Bank USA, National Association not
in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuing Entity, and in no event shall Chase Bank USA, National Association
in
its individual capacity or, except as expressly provided in the Trust Agreement,
as owner trustee of the Issuing Entity, have any liability for the
representations, warranties, covenants, agreements or other obligations of
the
Issuing Entity hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to
the assets of the Issuing Entity. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of
any
duties or obligations of the Issuing Entity hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by U.S. Bank National Association
not in its individual capacity but solely as Indenture Trustee, Securities
Intermediary, and Custodian and in no event shall U.S. Bank National Association
have any liability for the representations, warranties, covenants, agreements
or
other obligations of the Issuing Entity hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuing Entity.
51
[Signature
Page Follows]
52
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the date first above
written.
By:
CHASE
BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner
Trustee on behalf of the Issuing Entity,
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇.
▇▇▇▇▇▇
Title: Assistant
Vice President
CATERPILLAR
FINANCIAL FUNDING
CORPORATION,
as Depositor,
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Title: Treasurer
CATERPILLAR
FINANCIAL SERVICES
CORPORATION,
as Servicer
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Title: Treasurer
Acknowledged
and Accepted:
U.S.
BANK
NATIONAL ASSOCIATION,
not
in
its individual capacity but only as
Indenture
Trustee, Custodian and
Securities
Intermediary
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Title: Vice
President
Acknowledged
and Accepted:
CHASE
BANK USA, NATIONAL ASSOCIATION,
not
in
its individual capacity but solely
as
Owner
Trustee of the Issuing Entity,
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇.
▇▇▇▇▇▇
Title: Assistant
Vice President
SCHEDULE
A
SCHEDULE
OF RECEIVABLES
A-1
SCHEDULE
B
LOCATION
OF RECEIVABLE FILES
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
B-1
SCHEDULE
C
FORM
OF RECEIVABLE FILES CERTIFICATION
[DATE]
[Issuing
Entity]
[Rating
Agencies]
[Depositor]
|
Re:
|
Sale
and Servicing Agreement (the "Sale and Servicing Agreement"), dated as of June 1, 2006 among Caterpillar
Financial Services
Corporation, as Servicer, Caterpillar Financial Funding Corporation
and
Caterpillar Financial Asset Trust
2006-A
|
Ladies
and Gentlemen:
In
accordance with the provisions of Section 3.05 of the above-referenced Sale
and
Servicing Agreement, the undersigned hereby certifies that as to each Receivable
listed on the Schedule of Receivables (other than any Receivable paid in full
or
any Receivable listed on the exception report attached hereto), it has reviewed
the Receivable Files and has determined that (i) all documents required to
be
delivered to the Custodian pursuant to the Sale and Servicing Agreement
(including each of the items in the definition of Receivable File) have been
delivered to the Custodian, (ii) such documents have been reviewed by it and
have not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections shall not constitute physical
alteration if initialed by the Obligor) and relate to such Receivable, and
(iii)
based on its examination, and only as to the foregoing documents, the
information set forth on the Schedule of Receivables accurately reflects the
information set forth in the Receivable Files.
The
undersigned has not made any independent examination of such documents beyond
the review specifically required in the above-referenced Sale and Servicing
Agreement. The undersigned makes no representations as to: (i) the validity,
legality, enforceability or genuineness of any documents contained in the
Receivable Files, or (ii) the collectability, insurability, effectiveness or
suitability of any Receivable identified on the Schedule of
Receivables.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-referenced Sale and Servicing Agreement.
[Signature
Page Follows]
C-1
CATERPILLAR
FINANCIAL SERVICES CORPORATION,
as
Servicer
By:_______________________________________
Name:
Title:
C-2
SCHEDULE
D
SERVICER
REPORT
The
undersigned hereby certify that (i) they are, respectively, a duly elected
[title] and [title] of Caterpillar Financial Services Corporation and (ii)
this
Servicer Report complies with the requirements of, and is being delivered
pursuant to, Section 4.09 and Section 5.06 of the Sale and Servicing Agreement
(the "Sale and Servicing Agreement") dated as of June 1, 2006 between
Caterpillar Financial Asset Trust 2006-A, Caterpillar Financial Funding
Corporation and Caterpillar Financial Services Corporation.
Dated:
________________________________ ________________________________________
Name:
Title:
_______________________________________
Name:
Title:
D-1
|
SERVICER
REPORT
|
|
|
Record
Date
|
|
|
Distribution
Date
|
|
|
Transaction
Month
|
1
|
|
Collection
Period Month Begin
|
June
1, 2006
|
|
Collection
Period Month End
|
June
30, 2006
|
|
Previous
Payment Date (or Closing Date)
|
June
28, 2006
|
|
Actual
Days in Accrual Period
|
|
|
ORIGINAL
DEAL PARAMETERS
|
|
|
Initial
Note Value
|
|
|
Initial
Aggregate Contract Balance
|
|
|
Number
of Contracts
|
|
|
Weighted
Average Annual Percentage Rate
|
|
|
Weighted
Average Remaining Term
|
|
|
Annual
Servicing Fee Rate
|
|
|
Reserve
Account Initial Deposit
|
|
|
Specified
Reserve Account Balance
|
|
|
Class
A-1 Note Original Principal Balance
|
|
|
Class
A-1 Note Rate
|
|
|
Class
A-1 Note Final Scheduled Distribution Date
|
|
|
Class
A-1 CUSIP Number
|
|
|
Class
A-2 Note Original Principal Balance
|
|
|
Class
A-2 Note Rate
|
|
|
Class
A-2 Note Final Scheduled Distribution Date
|
|
|
Class
A-2 CUSIP Number
|
|
|
Class
A-3 Note Original Principal Balance
|
|
|
Class
A-3 Note Rate
|
|
|
Class
A-3 Note Final Scheduled Distribution Date
|
|
|
Class
A-3 CUSIP Number
|
|
|
Class
A-4 Note Original Principal Balance
|
|
|
Class
A-4 Note Rate
|
|
|
Class
A-4 Note Final Scheduled Distribution Date
|
|
|
Class
A-4 CUSIP Number
|
|
|
Class
B Note Original Principal Balance
|
|
|
Class
B Note Rate
|
|
|
Class
B Note Final Scheduled Distribution Date
|
|
|
Class
B CUSIP Number
|
|
|
Certificate
Balance
|
|
|
INPUTS
FROM PREVIOUS PERIOD SERVICER REPORT
|
|
|
Note
Value
|
|
|
Aggregate
Contract Balance
|
|
|
Number
of Contracts
|
|
|
Weighted
Average Annual Percentage Rate
|
|
|
Weighted
Average Remaining Term
|
|
|
Reserve
Account Balance
|
|
|
Class
A-1 Note Outstanding Principal Balance
|
|
|
Class
A-1 Note Interest Shortfall
|
|
|
Class
A-2 Note Outstanding Principal Balance
|
|
|
Class
A-2 Note Interest Shortfall
|
|
|
Class
A-3 Note Outstanding Principal Balance
|
|
|
Class
A-3 Note Interest Shortfall
|
|
|
Class
A-4 Note Outstanding Principal Balance
|
|
|
Class
A-4 Note Interest Shortfall
|
|
|
Class
B Note Outstanding Principal Balance
|
|
|
Class
B Note Interest Shortfall
|
|
|
Servicing
Fee Shortfall
|
|
|
CURRENT
COLLECTION PERIOD ACTIVITY
|
|
|
Total
Interest Collections
|
|
|
Total
Principal Collections
|
|
|
Residual
Collections
|
|
|
Warranty
Repurchases Contracts
|
|
|
Administrative
Repurchases
|
|
|
Liquidation
Proceeds
|
|
|
Reserve
Account Reinvestment Income
|
|
|
Total
Available Amount
|
|
|
Beginning
Note Value
|
|
|
Ending
Note Value
|
|
|
Beginning
Aggregate Contract Balance
|
|
|
Ending
Aggregate Contract Balance
|
|
|
Number
of Contracts at Beginning of Period
|
|
|
Number
of Contracts at End of Period
|
|
|
Weighted
Average Annual Percentage Rate
|
|
|
Weighted
Average Remaining Term
|
|
|
Cumulative
Prepayment Rate
|
|
|
Aggregate
Scheduled Amounts 31-60 days past due
|
|
|
Aggregate
Scheduled Amounts 61-90 days past due
|
|
|
Aggregate
Scheduled Amounts 91-120 days past due
|
|
|
Aggregate
Scheduled Amounts 121 days or more past due
|
|
|
Net
Losses on Liquidated Receivables this Period
|
|
|
Repossessed
Equipment not Sold or Reassigned (Beginning)
|
|
|
Repossessed
Equipment not Sold or Reassigned (End)
|
|
|
CALCULATION
OF DISTRIBUTABLE AMOUNTS
|
|
|
Servicing
Fee Due
|
|
|
Is
CFSC or Affiliate Servicer (Yes / No)?
|
|
|
Has
Reserve Account Reached the Specified Reserve Account Balance (Yes
/
No)?
|
|
|
Administration
Fee
|
|
|
Class
A-1 Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
A-1 Noteholders' Interest Carryover Shortfall
|
|
|
Class
A-1 Noteholders' Interest Distributable Amount
|
|
|
Class
A-2 Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
A-2 Noteholders' Interest Carryover Shortfall
|
|
|
Class
A-2 Noteholders' Interest Distributable Amount
|
|
|
Class
A-3 Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
A-3 Noteholders' Interest Carryover Shortfall
|
|
|
Class
A-3 Noteholders' Interest Distributable Amount
|
|
|
Class
A-4 Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
A-4 Noteholders' Interest Carryover Shortfall
|
|
|
Class
A-4 Noteholders' Interest Distributable Amount
|
|
|
Class
A Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
A Noteholders' Interest Carryover Shortfall
|
|
|
Class
A Noteholders' Interest Distributable Amount
|
|
|
First
Priority Principal Distribution Amount
|
|
|
Class
B Noteholders' Monthly Interest Distributable Amount
|
|
|
Class
B Noteholders' Interest Carryover Shortfall
|
|
|
Class
B Noteholders' Interest Distributable Amount
|
|
|
Second
Priority Principal Distribution Amount
|
|
|
Net
Excess Spread Amount
|
|
|
Regular
Principal Distribution Amount
|
|
|
Total
Required Payment
|
|
|
Draw
from Reserve Account
|
|
|
Total
Distribution Amount
|
|
|
Excess
Cash flow deposited to Certificate Distribution Account
|
|
|
DISTRIBUTIONS
FROM COLLECTION ACCOUNT
|
|
|
1.
Servicing Fee
|
|
|
2.
Administration Fee
|
|
|
3.
Class A Noteholders' Interest Distributable Amount to Class A
Noteholders
|
|
|
4.
First Priority Principal Distribution Amount to Principal Distribution
Account
|
|
|
5.
Class B Noteholders' Interest Distributable Amount to Class B
Noteholders
|
|
|
6.
Second Priority Principal Distribution Amount to Principal Distribution
Account
|
|
|
7.
Deposit to Reserve Account
|
|
|
8.
Regular Principal Distribution Amount to Principal Distribution
Account
|
|
|
9.
Indenture Trustee Fees
|
|
|
10.
Custodian Fees
|
|
|
11.
Deposit to Certificate Distribution Account
|
|
|
DISTRIBUTIONS
FROM PRINCIPAL DISTRIBUTION ACCOUNT
|
|
|
1.
Principal to Class A-1 Noteholders
|
|
|
2.
Principal to Class A-2 Noteholders
|
|
|
3.
Principal to Class A-3 Noteholders
|
|
|
4.
Principal to Class A-4 Noteholders
|
|
|
5.
Principal to Class B Noteholders
|
|
|
6.
Deposit to Certificate Distribution Account
|
|
|
RECONCILIATION
OF RESERVE ACCOUNT
|
|
|
Beginning
Reserve Account Balance
|
|
|
Draw
from Reserve Account to cover shortfalls
|
|
|
Interim
Specified Reserve Account Balance
|
|
|
Deposit
to Reserve Account Needed
|
|
|
Deposit
to Reserve Account from Collection Account
|
|
|
Specified
Reserve Account Balance
|
|
|
Reserve
Account Release deposited into Certificate Distribution
Account
|
|
|
Ending
Reserve Account Balance
|
|
|
SUMMARY
OF DISTRIBUTIONS
|
|
|
Servicing
Fee Paid to Servicer
|
|
|
Servicing
Fee Shortfall
|
|
|
Class
A-1 Interest Paid
|
|
|
Class
A-1 Interest Shortfall
|
|
|
Class
A-1 Principal Paid
|
|
|
Ending
Class A-1 Principal Balance
|
|
|
Class
A-2 Interest Paid
|
|
|
Class
A-2 Interest Shortfall
|
|
|
Class
A-2 Principal Paid
|
|
|
Ending
Class A-2 Principal Balance
|
|
|
Class
A-3 Interest Paid
|
|
|
Class
A-3 Interest Shortfall
|
|
|
Class
A-3 Principal Paid
|
|
|
Ending
Class A-3 Principal Balance
|
|
|
Class
A-4 Interest Paid
|
|
|
Class
A-4 Interest Shortfall
|
|
|
Class
A-4 Principal Paid
|
|
|
Ending
Class A-4 Principal Balance
|
|
|
Class
B Interest Paid
|
|
|
Class
B Interest Shortfall
|
|
|
Class
B Principal Paid
|
|
|
Ending
Class B Principal Balance
|
|
|
Deposit
to Certificate Distribution Account
|
|
|
CERTIFICATEHOLDER
INFORMATION
|
|
|
ORIGINAL
DEAL PARAMETERS
|
|
|
Certificate
Balance
|
|
|
INPUTS
FROM PREVIOUS PERIOD STATEMENT TO
CERTIFICATEHOLDER
|
|
|
Certificate
Balance
|
|
|
Certificate
Pool Factor
|
|
|
CALCULATION
OF DISTRIBUTABLE AMOUNTS
|
|
|
Deposit
to Certificate Distribution Account from Collection Account
plus
|
|
|
Deposit
to Certificate Distribution Account from Principal Distribution
Account
|
|
|
Deposit
to Certificate Distribution Account from Reserve Account
|
|
|
Total
Deposit to Certificate Distribution Account
|
|
|
DISTRIBUTIONS
FROM CERTIFICATE DISTRIBUTION ACCOUNT
|
|
|
1.
Principal to Fixed Rate Certificateholders
|
|
|
2.
Any remaining amounts to the Depositor
|
|
|
3.
Amount of Principal being paid on Certificate
|
|
|
per
$1,000 original principal balance
|
|
|
SUMMARY
OF DISTRIBUTIONS
|
|
|
Certificates
Principal Paid
|
|
|
Ending
Certificates Principal Balance
|
|
|
Certificate
Pool Factor
|
|
|
Remaining
amounts to the Depositor
|
|
|
NOTEHOLDER
INFORMATION
|
|
|
(i)
Amount of principal being paid on Notes
|
|
|
(a)
Class A-1 Notes (CUSIP No. [____])
|
|
|
per
$1,000 original principal balance
|
|
|
(b)
Class A-2 Notes (CUSIP No. [____])
|
|
|
per
$1,000 original principal balance
|
|
|
(c)
Class A-3 Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(d)
Class A-4 Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(e)
Class B Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(f)
Total
|
|
|
(ii) Amount
of interest being paid on Notes
|
|
|
(a)
Class A-1 Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(b)
Class A-2 Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(c)
Class A-3 Notes (CUSIP No. [_____])
|
|
|
per
$1,000 original principal balance
|
|
|
(d)
Class A-4 Notes (CUSIP No. [____])
|
|
|
per
$1,000 original principal balance
|
|
|
(e)
Class B Notes (CUSIP No. [____])
|
|
|
per
$1,000 original principal balance
|
|
|
(f)
Total
|
|
|
(iii)
(a) Aggregate Contract Balance at beginning of related collection
period
|
|
|
(b)
Aggregate Contract Balance at end of related collection
period
|
|
|
(c)
Note Value at beginning of related collection period
|
|
|
(d)
Note Value at end of related collection period
|
|
|
(iv)
Before and after giving effect to distributions on this Distribution
Date
|
|
|
(a)
(1) outstanding principal amount of Class A-1 Notes
|
|
|
(2)
outstanding principal amount of Class A-1 Notes
|
|
|
(3)
Class A-1 Note Pool Factor
|
|
|
(4)
Class A-1 Note Pool Factor
|
|
|
(b)
(1) outstanding principal amount of Class A-2 Notes
|
|
|
(2)
outstanding principal amount of Class A-2 Notes
|
|
|
(3)
Class A-2 Note Pool Factor
|
|
|
(4)
Class A-2 Note Pool Factor
|
|
|
(c)
(1) outstanding principal amount of Class A-3 Notes
|
|
|
(2)
outstanding principal amount of Class A-3 Notes
|
|
|
(3)
Class A-3 Note Pool Factor
|
|
|
(4)
Class A-3 Note Pool Factor
|
|
|
(d)
(1) outstanding principal amount of Class A-4 Notes
|
|
|
(2)
outstanding principal amount of Class A-4 Notes
|
|
|
(3)
Class A-4 Note Pool Factor
|
|
|
(4)
Class A-4 Note Pool Factor
|
|
|
(e)
(1) outstanding principal amount of Class B Notes
|
|
|
(2)
outstanding principal amount of Class B Notes
|
|
|
(3)
Class B Note Pool Factor
|
|
|
(4)
Class B Note Pool Factor
|
|
|
(v)
Amount of Servicing Fee paid
|
|
|
(vi)
Amount of Administration fee being paid
|
|
|
(vii)
Other expenses being paid
|
|
|
(viii)
Cumulative Prepayment Rate for the related Collection
Period
|
|
|
(ix)
Three-Month Rolling Over 60-Day Delinquency Percentage
|
|
|
(x)
Aggregate Amount of Realized Losses for the related Collection
Period
|
|
|
(xi)
Aggregate amount of Cumulative Realized Losses through the related
|
|
|
Collection
period
|
|
|
(xii)
Aggregate Purchase Amounts for the related Collection
Period
|
|
|
(xiii)
(a) Balance of Reserve Account at beginning of related Collection
Period
|
|
|
(b)
Balance of Reserve Account at end of related Collection
Period
|
|
|
(xiv)
Specified Reserve Account Balance at end of related Collection
Period
|
|
D-3
SCHEDULE
E
TRUSTEE
INSTRUCTIONS
The
undersigned hereby certify that (i) they are, respectively, a duly elected
[title] and [title] of Caterpillar Financial Services Corporation and (ii)
Exhibit
A
hereto
complies with the requirements of, and is being delivered pursuant to,
Section
5.04(b)
of the
Sale and Servicing Agreement (the "Sale and Servicing Agreement") dated as
of
June 1, 2006 between Caterpillar Financial Asset Trust 2006-A, Caterpillar
Financial Funding Corporation and Caterpillar Financial Services
Corporation.
Dated:_________________________________________
________________________________________
Name:
Title:
________________________________________
Name:
Title:
E-1
EXHIBIT
A
TO
SCHEDULE E
|
TRUSTEE
INSTRUCTIONS
|
|
|
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
|
|
|
U.S.
Bank National Association
|
|
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Re:
Caterpillar Financial Asset Trust 2006-A, Account
#[______]
|
|
|
Please
make the following distributions from the above referenced
account:
|
|
|
(i
) Payment of Servicing Fee (including any previously unpaid Servicing
Fees) to Servicer pursuant to Section 5.04 (b)(i ):
|
|
|
|
|
|
(ii)
to the Administrator under the Administration Agreement, the
|
|
|
Administration
Fee (including any previously unpaid Admin Fees)
|
|
|
(iii)
Class A Noteholders' Interest Distributable Amount to be remitted
to the
Class A Noteholders:
|
|
|
|
|
|
(iv)
Amount of First Priority Principal Distribution Amount to be deposited
to
the Principal Distribution Account pursuant to Section 5.04 (b) (iv)
:
|
|
|
|
|
|
(v)
Class B Noteholders' Interest Distributable Amount to be remitted
to the
Class B Noteholders:
|
|
|
|
|
|
(vi)
Amount of Second Priority Principal Distribution Amount to be deposited
to
the Principal Distribution Account pursuant to Section 5.04 (b) (vi)
:
|
|
|
|
|
|
(vii)
Deposit to Reserve Account pursuant to Section 5.04
(b)(vii):
|
|
|
(viii)
Amount to be deposited to the Principal Distribution Account
|
|
|
for
the Regular Principal Distribution pursuant to Section
5.04(b)(viii):
|
|
|
(ix)
The amount to be deposited to the Certificate Distribution Account
pursuant to Section 5.04 (b) (x) for distribution to the holder of
the
Certificate:
|
|
|
|
|
|
(x)
Amount to be distributed from the Principal Distribution Account
to each
Class of Noteholders, and to the holders of the
Certificate:
|
|
|
|
|
|
(xi)
Amount to be withdrawn from the Reserve Account and deposited to
the
Collection Account pursuant to Section 5.05(b); and
|
|
|
|
|
|
(xii)
Amount to be withdrawn from the Reserve Account and deposited to
the
Certificate Distribution Account pursuant to Section
5.05(c)
|
|
|
Wire
instructions for Certificate Distribution Account:
|
|
|
JPMORGAN
CHASE
|
|
|
New
York, NY
|
|
|
ABA#
021 000 021
|
|
|
FOR
FURTHER CREDIT TO:
|
|
|
Account
# [__________]
|
|
|
Reference:
Cat Financial 2006-A Certificate Distribution Account
|
|
|
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Wire
instructions when remitting Excess Reserve and amounts
|
|
|
due
Depositor (when not sent to Certificate Distribution
Account):
|
|
|
JPMorganChase
Bank
|
|
|
ABA#
▇▇▇▇▇▇▇▇▇
|
|
|
FOR
FURTHER CREDIT TO:
|
|
|
Caterpillar
Financial Funding Corporation
|
|
|
Account
# [__________]
|
|
|
Reference:
CAT FIN 2006-A
|
|
|
Servicer
Contact: ▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Caterpillar
Financial Services Corporation
|
|
E-2