EXHIBIT 4.3B
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SALE AND SERVICING AGREEMENT
among
CATERPILLAR FINANCIAL ASSET TRUST [____]-[_]
Issuer
CATERPILLAR FINANCIAL FUNDING CORPORATION
Seller
and
CATERPILLAR FINANCIAL SERVICES CORPORATION
Servicer
Dated as of [______________]
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitional Provisions............................ 20
SECTION 1.03. Calculations............................................. 21
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables................................ 21
SECTION 2.02. Closing.................................................. 22
SECTION 2.03. Books and Records........................................ 22
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Seller................. 22
SECTION 3.02. Repurchase by Seller or CFSC Upon Breach................. 23
SECTION 3.03. Custody of Receivable Files.............................. 24
SECTION 3.04. Duties of Servicer....................................... 24
SECTION 3.05. Acceptance by Issuer and the Indenture Trustee of the
Receivables; Certification by the Indenture Trustee...... 25
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer....................................... 27
SECTION 4.02. Collection of Receivable Payments........................ 27
SECTION 4.03. Realization upon Receivables............................. 28
SECTION 4.04. Physical Damage Insurance................................ 28
SECTION 4.05. Maintenance of Security Interests in Financed Equipment.. 28
SECTION 4.06. Covenants of Servicer.................................... 28
SECTION 4.07. Purchase by Servicer of Receivables upon Breach.......... 29
SECTION 4.08. Servicing Fee............................................ 29
SECTION 4.09. Servicer's Certificate................................... 29
SECTION 4.10. Annual Statement as to Compliance; Notice of Default..... 29
SECTION 4.11. Annual Independent Certified Public Accountants' Report.. 30
SECTION 4.12. Servicer Expenses........................................ 30
ARTICLE V
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DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.......................... 31
SECTION 5.02. Collections.............................................. 33
SECTION 5.03. Additional Deposits...................................... 33
SECTION 5.04. Distributions............................................ 33
SECTION 5.05. Reserve Account.......................................... 34
SECTION 5.06. Statements to Certificateholders and Noteholders......... 36
SECTION 5.07. Net Deposits............................................. 39
ARTICLE VI
THE SELLER
SECTION 6.01. Representations of Seller................................ 39
SECTION 6.02. [Reserved]............................................... 41
SECTION 6.03. Liability of Seller; Indemnities......................... 41
SECTION 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Seller................................... 41
SECTION 6.05. Limitation on Liability of Seller and Others............. 42
SECTION 6.06. Seller May Own Certificates or Notes..................... 42
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer.............................. 42
SECTION 7.02. Indemnities of Servicer.................................. 44
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer................................. 45
SECTION 7.04. Limitation on Liability of Servicer and Others........... 46
SECTION 7.05. CFSC Not To Resign as Servicer........................... 46
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default......................................... 47
SECTION 8.02. Appointment of Successor................................. 48
SECTION 8.03. Notification to Noteholders and Certificateholders....... 49
SECTION 8.04. Waiver of Past Defaults.................................. 49
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables; Trust Termination.. 50
ARTICLE X
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MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment................................................ 50
SECTION 10.02. Protection of Title to Trust............................. 51
SECTION 10.03. Notices.................................................. 53
SECTION 10.04. Assignment............................................... 54
SECTION 10.05. Limitations on Rights of Others.......................... 54
SECTION 10.06. Severability............................................. 54
SECTION 10.07. Separate Counterparts.................................... 54
SECTION 10.08. Headings................................................. 54
SECTION 10.09. Governing Law............................................ 54
SECTION 10.10. Assignment to Indenture Trustee.......................... 54
SECTION 10.11. Nonpetition Covenants.................................... 55
SECTION 10.12. Limitation of Liability of Owner Trustee and
Indenture Trustee........................................ 55
SCHEDULE A - Schedule of Receivables................................. A-1
SCHEDULE B - Location of Receivables Files........................... ▇-▇
▇▇▇▇▇▇▇▇ ▇-▇ - ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ Trustee's Initial Certification..... C-1-1
SCHEDULE C-2 - Form of Indenture Trustee's Final Certification....... C-2-1
SCHEDULE D - Servicer's Certificate.................................. D-1
SCHEDULE E - Officers' Certificate................................... E-1
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SALE AND SERVICING AGREEMENT dated as of [____________], among CATERPILLAR
FINANCIAL ASSET TRUST [____]-[_], a Delaware business trust (the "Issuer"),
CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation (the "Seller"),
and CATERPILLAR FINANCIAL SERVICES CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to purchase a portfolio of receivables arising
in connection with retail installment sale contracts for the purchase of
machinery acquired or originated by Caterpillar Financial Services Corporation
in the ordinary course of its business;
WHEREAS the Seller has purchased such portfolio of receivables from
Caterpillar Financial Services Corporation and desires to sell such portfolio of
receivables to the Issuer; and
WHEREAS Caterpillar Financial Services Corporation 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:
"Administration Agreement" means the Administration Agreement dated as of
[____________] among the Trust, the Seller, CFSC, as Administrator, and
[_______________________________], as indenture trustee, as the same may be
amended and 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 assigned thereto in Section 1.01 of the
Indenture.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Amount Financed" with respect to a Receivable means the sum of (i) the
amount advanced under the Receivable toward the purchase price of the related
Financed Equipment, plus (ii) with respect to an Over-Rate Receivable, the
related purchase premium paid by CFSC to the related Dealer, and (iii) any
related costs.
"APR" or "Annual Percentage Rate" of a Receivable means the annual
percentage rate of interest of such Receivable set forth on the Schedule of
Receivables.
"Basic Documents" has the meaning assigned to such term 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, [_______________] and 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 Balance" equals, on the Closing Date, $[________] and,
thereafter, equals $[________], reduced by all amounts allocable to principal
previously distributed to Certificateholders and as further reduced pursuant to
Section 5.05(e), and as increased pursuant to Section 5.05(e).
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Final Scheduled Distribution Date" means the [________]
Distribution Date.
"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.
"Certificateholders" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of (a) the Certificateholders' Principal
Distributable Amount and (b) the Certificateholders' Interest Distributable
Amount.
"Certificateholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the sum of (a) the excess, if any, of (i) the sum of (A)
the Monthly Certificate Interest for the preceding Distribution Date and (B) any
outstanding Certificateholders' Interest Carryover Shortfall on such preceding
Distribution Date, over (ii) the amount in respect of interest that is actually
deposited in the Certificate Distribution Account on the preceding Distribution
Date, and (b) interest on such excess, to the extent permitted by law, at the
Pass-Through Rate from such preceding Distribution Date through the current
Distribution Date.
"Certificateholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of (a) the Monthly Certificate Interest for such
Distribution Date and the (b) Certificateholders' Interest Carryover Shortfall
for such Distribution Date.
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, (a) prior to the Distribution Date on which
the principal amount of the Class
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A Notes and the Class B Notes have been reduced to zero, zero, (b) on or after
the Distribution Date on which the principal amount of the Class A Notes and the
Class B Notes are reduced to zero, the Principal Distribution Amount for such
Distribution Date (less the portion thereof required on such first Distribution
Date to reduce the outstanding principal amount of the Notes to zero).
"Certificateholders' Principal Carryover Shortfall" means, as of the close
of any Distribution Date, the sum of (a) the excess, if any, of (i) the sum of
(A) the Certificateholders' Monthly Principal Distributable Amount for such
Distribution Date and (B) any outstanding Certificateholders' Principal
Carryover Shortfall from the preceding Distribution Date, over (ii) the amount
in respect of principal that is actually deposited in the Certificate
Distribution Account on such current Distribution Date and (b) without
duplication of clause (a), the unreimbursed portion of the amount by which the
Certificate Balance has been reduced pursuant to Section 5.05(e).
"Certificateholders' Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Certificateholders' Monthly
Principal Distributable Amount for such Distribution Date and (b) the
Certificateholders' Principal Carryover Shortfall as of the close of business on
the preceding Distribution Date; provided, however, that the sum of (a) and (b)
shall not exceed the Certificate Balance, and on the Certificate Final Scheduled
Distribution Date, the Certificateholders' Principal Distributable Amount will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Certificate Distribution Account on such Distribution Date and
allocable to principal) to reduce the Certificate Balance to zero.
"Certificates" has the meaning assigned to such term 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 or the Class B Notes, as applicable.
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, and the
Class A-3 Notes, collectively.
"Class A Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Class A Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of (a) the Class A Noteholders' Principal
Distributable Amount and (b) the Class A Noteholders' Interest Distributable
Amount.
"Class A Noteholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the sum of (a) the excess, if any, of (i) the sum of (A)
the Class A Noteholders' Monthly Interest Distributable Amount for the preceding
Distribution Date and (B) any outstanding Class A Noteholders' Interest
Carryover Shortfall on such preceding Distribution Date, over (ii) the amount in
respect of interest that is actually deposited in the Class A Note
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Distribution Account on such preceding Distribution Date, and (b) 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, Class A-2 Note Interest Rate and/or and Class A-3 Note Interest
Rate, as applicable, borne by such Class A Notes from and including such
preceding Distribution Date to but excluding the current Distribution Date.
"Class A Noteholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Class A Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and (b) 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 sum of the Monthly A-1
Note Interest, the Monthly A-2 Note Interest and the Monthly A-3 Note Interest
for such Distribution Date.
"Class A Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Class A-1 Noteholders' Principal
Distributable Amount, (b) the Class A-2 Noteholders' Principal Distributable
Amount and (c) the Class A-3 Noteholders' Principal Distributable Amount.
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes and the
Class A-3 Notes, collectively.
"Class A-1 Note Final Scheduled Distribution Date" means the [_________]
Distribution Date.
"Class A Noteholders" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Class A-1 Noteholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, the lesser of (a) the Principal
Distribution Amount and (b) the outstanding principal balance of the Class A-1
Notes.
"Class A-1 Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess, if any, of (a) the sum of (i) the
Class A-1 Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (ii) any outstanding Class A-1 Noteholders' Principal
Carryover Shortfall as of the preceding Distribution Date over (b) the amount in
respect of principal that is actually deposited in the Class A Note Distribution
Account and allocated to the Class A-1 Notes for such Distribution Date.
"Class A-1 Noteholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (a) the Class A-1 Noteholders'
Monthly Principal Distributable Amount for such Distribution Date and (b) the
Class A-1 Noteholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the sum of (a) and (b)
shall not exceed the outstanding principal amount of the Class A-1 Notes, and on
the Class A-1 Final Scheduled Distribution Date, the Class A-1 Noteholders'
Principal Distributable Amount will include the amount necessary (after giving
effect to the other amounts to be
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deposited in the Class A Note Distribution Account on such Distribution Date and
allocable to principal) to reduce the outstanding principal amount of the Class
A-1 Notes to zero.
"Class A-1 Note Interest Rate" has the meaning assigned to such term 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 Final Scheduled Distribution Date" means the [_________]
Distribution Date.
"Class A-2 Noteholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, (a) if such Distribution Date is prior to
the Distribution Date on which the principal amount of the Class A-1 Notes is
reduced to zero, zero; (b) if such Distribution Date is the Distribution Date on
which the principal amount of the Class A-1 Notes is reduced to zero, the
amount, if any, by which the Principal Distribution Amount exceeds the
outstanding principal amount of the Class A-1 Notes immediately prior to such
Distribution Date; and (c) if such Distribution Date is after the Distribution
Date on which the principal amount of the Class A-1 Notes has been reduced to
zero, the Principal Distribution Amount.
"Class A-2 Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess, if any, of (a) the sum of (i) the
Class A-2 Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (ii) any outstanding Class A-2 Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date over (b)
the amount in respect of principal that is actually deposited in the Class A
Note Distribution Account and allocated to the Class A-2 Notes.
"Class A-2 Noteholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (a) the Class A-2 Noteholders'
Monthly Principal Distributable Amount for such Distribution Date and (b) the
Class A-2 Noteholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the sum of (a) and (b)
shall not exceed the outstanding principal amount of the Class A-2 Notes, and on
the Class A-2 Final Scheduled Distribution Date, the Class A-2 Noteholders'
Principal Distributable Amount will include the amount necessary (after giving
effect to the other amounts to be deposited in the Class A Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
outstanding principal amount of the Class A-2 Notes to zero.
"Class A-2 Note Interest Rate" has the meaning assigned to such term 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 balance 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.
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"Class A-3 Final Scheduled Distribution Date" means the [____ ____]
Distribution Date.
"Class A-3 Noteholders' Monthly Principal Distributable Amount" means,
with respect to any Distribution Date, (a) if such Distribution Date is prior to
the Distribution Date on which the principal amount of the Class A-1 Notes and
Class A-2 Notes is reduced to zero, zero; (b) if such Distribution Date is the
Distribution Date on which the principal amount of the Class A-1 Notes and Class
A-2 Notes is reduced to zero, the amount, if any, by which the Principal
Distribution Amount exceeds the outstanding principal amount of the Class A-1
Notes and Class A-2 Notes immediately prior to such Distribution Date; and (c)
if such Distribution Date is after the Distribution Date on which the principal
amount of the Class A-1 Notes and Class A-2 Notes has been reduced to zero, the
Principal Distribution Amount.
"Class A-3 Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess, if any, of (a) the sum of (i) the
Class A-3 Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (ii) any outstanding Class A-3 Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date over (b)
the amount in respect of principal that is actually deposited in the Class A
Note Distribution Account and allocated to the Class A-3 Notes.
"Class A-3 Noteholders' Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of (a) the Class A-3 Noteholders'
Monthly Principal Distributable Amount for such Distribution Date and (b) the
Class A-3 Noteholders' Principal Carryover Shortfall as of the close of the
preceding Distribution Date; provided, however, that the sum of (a) and (b)
shall not exceed the outstanding principal amount of the Class A-3 Notes, and on
the Class A-3 Final Scheduled Distribution Date, the Class A-3 Noteholders'
Distributable Principal Amount will include the amount necessary (after giving
effect to the other amounts to be deposited in the Class A Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
outstanding principal amount of the Class A-3 Notes to zero.
"Class A-3 Note Interest Rate" has the meaning assigned to such term 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 B Final Scheduled Distribution Date" means the [________________]
Distribution Date.
"Class B Noteholders" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Class B Noteholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of (a) the Class B Noteholders' Principal
Distributable Amount and (b) the Class B Noteholders' Interest Distributable
Amount.
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"Class B Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, (a) if such Distribution Date is prior to the
Distribution Date on which the principal amount of the Class A Notes is reduced
to zero, zero; (b) if such Distribution Date is the Distribution Date on which
the principal amount of the Class A Notes is reduced to zero, the amount, if
any, by which the Principal Distribution Amount exceeds the outstanding
principal amount of the Class A Notes immediately prior to such Distribution
Date; and (c) if such Distribution Date is after the Distribution Date on which
the principal amount of the Class A Notes has been reduced to zero, the
Principal Distribution Amount.
"Class B Noteholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date, the excess, if any, of (a) the sum of (i) the
Class B Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and (ii) any outstanding Class B Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date over (b)
the amount in respect of principal that is actually deposited in the Class B
Note Distribution Account and allocated to the Class B Notes.
"Class B Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Class B Noteholders' Monthly
Principal Distributable Amount for such Distribution Date and (b) the Class B
Noteholders' Principal Carryover Shortfall as of the close of the preceding
Distribution Date; provided, however, that the sum of (a) and (b) shall not
exceed the outstanding principal amount of the Class B Notes, and on the Class B
Final Scheduled Distribution Date, the Class B Noteholders' Distributable
Principal Amount will include the amount necessary (after giving effect to the
other amounts to be deposited in the Class B Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the outstanding
principal amount of the Class B Notes to zero.
"Class B Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"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.
"Closing Date" means [_______________].
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.01.
"Collection Period" means, with respect to the first Distribution Date,
the one calendar month period ending on and including [______________] and, with
respect to each subsequent Distribution Date, the immediately preceding one
calendar month period. 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: (1) all applications of
collections and (2) all distributions to be made on the following Distribution
Date.
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"Commission" means the Securities and Exchange Commission.
"Contract" means, with respect to any Receivable, a retail installment
sale contract for the purchase of machinery or equipment and shall include all
documents relating to an amendment or modification of such Contract.
"Corporate Trust Office" means the principal 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:
[___________________], except that for purposes of Section 3.02 of the
Indenture, such term shall mean the office or agency of the Indenture Trustee in
[____________], [____________] 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 Owner
Trustee and the Seller, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders, the Owner Trustee and the Seller); provided that for
purposes of Section 3.02 of the Indenture, the address of any such office shall
be in [________________________].
"Cross-Collateralized Equipment" means, with respect to any Contract, an
item of machinery, other than the related Financed Equipment, which is owned by
the related Obligor and which also secures an Obligor's indebtedness under the
respective Receivable in addition to the related Financed Equipment.
"Custodian" means [______________________________], as custodian of the
Receivable Files, and each successor thereto pursuant to the Custodial
Agreement.
"Custodial Agreement" means the Custodial Agreement, dated as of
[_____________], among CFSC, as originator and Servicer, the Seller, as
depositor, the Issuer, and [___________________________], as Indenture Trustee
and Custodian, as the same may be amended and supplemented from time to time.
"Cut-off Date" means [______________].
"Dealer" means the dealer who sold an item of Financed Equipment securing
a Receivable.
"Dealer Receivable" means a Receivable originated by a Dealer and acquired
by CFSC from such Dealer.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the New York
UCC and are susceptible to physical delivery, transfer thereof to the
Indenture Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and,
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with respect to a certificated security (as defined in Section 8-102 of
the New York New York UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the
Indenture Trustee or its nominee or custodian or endorsed in blank to a
financial intermediary (as defined in Section 8-313 of the New York UCC)
and the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian and the sending by such
financial intermediary of a confirmation of the purchase of such
certificated security by the Indenture Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the New York UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the amount
of such certificated security, the identification by the clearing
corporation of the certificated securities for the sole and exclusive
account of the financial intermediary, the maintenance of such
certificated securities by such clearing corporation or a "custodian bank"
(as defined in Section 8-102(4) of the New York UCC) or the nominee of
either subject to the clearing corporation's exclusive control, the
sending of a confirmation by the financial intermediary of the purchase by
the Indenture Trustee or its nominee or custodian of such securities and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian (all of the foregoing,
"Physical Property"), and, in any event, any such Physical Property in
registered form shall be in the name of the Indenture Trustee or its
nominee or custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership
of any such Trust Account Property (as defined herein) to the Indenture
Trustee or its nominee or custodian, consistent with changes in applicable
law or regulations or the interpretation thereof;
(b) with respect to any United States Securities Entitlement, the
following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the New York UCC:
book-entry registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its
books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Indenture Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account Property solely as
agent for the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation
thereof; and
9
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the New York UCC and that is
not governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the sending
of a confirmation by the financial intermediary of the purchase by the
Indenture Trustee or its nominee or custodian of such uncertificated
security, and the making by such financial intermediary of entries on its
books and records identifying such uncertificated securities as belonging
to the Indenture Trustee or its nominee or custodian and such additional
or alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to the
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof.
"Determination Date" means, with respect to any Distribution Date, the
[__] Business Day prior to such Distribution Date.
"Distribution Date" means the [__] day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing on
[_____________].
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee, [____________] as long as it is paying
agent under the Trust Agreement or [__________________________], 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 Moody's or (2) a short-term unsecured
debt rating or a certificate of deposit rating of A-1+ by Standard & Poor's and
P-1 or better by Moody's, 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, [_________] or [______________________________] may be considered an
Eligible Institution for the purposes of clause (b) of this definition.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities (uncertificated or certificated) (other than any such instrument
or security issued by CFSC or any of its Affiliates) represented by instruments
in bearer or registered form which evidence:
(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 or trust company 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
10
depository institution or trust company) 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 funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(e) [Reserved];
(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 or trust
company (acting as principal) described in clause (b) or (ii) a depository
institution or trust company the deposits of which are insured by FDIC; or
(h) any other investment 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 any
of the securities of such depository institution shall have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade.
"Farm Credit Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. ss. 615.5450.
"Final Maturity Date" means __________________________.
"Financed Equipment" means an item of machinery, together with all
accessions thereto, which was financed pursuant to the terms of the related
Contract and secures an Obligor's indebtedness under the respective Receivable.
"FHLBank Entitlement": means a "Security Entitlement" as defined in 12
C.F.R. ss. 912.1.
"Fitch" means Fitch Investors Service, L.P., or its successor.
11
"Funding Corporation Entitlement" means a "Security Entitlement" as
defined in 12 C.F.R. ss. 1511.1.
"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 assigned to such term in Section
1.01 of the Indenture.
"HUD Entitlement" means a "Security Entitlement" as defined in 24 C.F.R.
ss. 81.2.
"Indenture" means the Indenture dated as of [_____________], between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means [______________________________], in its
capacity as trustee under the Indenture, its successors in interest and any
successor trustee under the Indenture.
"Initial Pool Balance" means the Pool Balance as of the Cut-off Date,
which is $[________________].
"Insolvency Event" means, with respect to a specified Person, (a) the
filing 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 (b)
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.
"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 to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means Caterpillar Financial Asset Trust [____]-[_].
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"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.
"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 moneys 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) during the Collection Period in which such
Receivable became 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 to be remitted to the Obligor on such Liquidated Receivable.
"Monthly A-1 Note Interest" means, with respect to any Distribution Date,
an amount equal to one-twelfth of the product of (a) the Class A-1 Note Interest
Rate and (b) the outstanding principal balance of the Class A-1 Notes as of the
close of business on the preceding Distribution Date after giving effect to all
payments of principal made to the Class A-1 Noteholders on such preceding
Distribution Date; provided, however, that with respect to the first
Distribution Date, interest on the outstanding principal balance of the Class
A-1 Notes will accrue from and including the Closing Date to but excluding the
[__________] Distribution Date and will be calculated on the basis of a 360-day
year of twelve 30-day months.
"Monthly A-2 Note Interest" means, with respect to any Distribution Date,
an amount equal to one-twelfth of the product of (a) the Class A-2 Note Interest
Rate and (b) the outstanding principal balance of the Class A-2 Notes as of the
close of business on the preceding Distribution Date after giving effect to all
payments of principal made to the Class A-2 Noteholders on such preceding
Distribution Date; provided, however, that with respect to the first
Distribution Date, interest on the outstanding principal balance of the Class
A-2 Notes will accrue from and including the Closing Date to but excluding the
[__________] Distribution Date and will be calculated on the basis of a 360-day
year of twelve 30-day months.
"Monthly A-3 Note Interest" means, with respect to any Distribution Date,
an amount equal to one-twelfth of the product of (a) the Class A-3 Note Interest
Rate and (b) the outstanding principal balance of the Class A-3 Notes as of the
close of business on the preceding Distribution Date after giving effect to all
payments of principal made to the Class A-3 Noteholders on such preceding
Distribution Date; provided, however, that with respect to the first
Distribution Date, interest on the outstanding principal balance of the Class
A-3 Notes will accrue from and including the Closing Date to but excluding the
[__________] Distribution Date and will be calculated on the basis of a 360-day
year of twelve 30-day months.
"Monthly B Note Interest" means, with respect to any Distribution Date, an
amount equal to one-twelfth of the product of (a) the Class B Note Interest Rate
and (b) the outstanding principal balance of the Class B Notes as of the close
of business on the preceding Distribution Date after giving effect to all
payments of principal made to the Class B Noteholders on such preceding
Distribution Date; provided, however, that with respect to the first
Distribution Date, interest on the outstanding principal balance of the Class B
Notes will accrue from and including
13
the Closing Date to but excluding the [__________] Distribution Date and will be
calculated on the basis of a 360-day year of twelve 30-day months.
"Monthly Certificate Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Pass-Through Rate
and (b) the Certificate Balance as of the close of business on the preceding
Distribution Date after giving effect to all distributions in respect of
principal made to the Certificateholders on such preceding Distribution Date;
provided, however, that with respect to the first Distribution Date, interest on
the outstanding Certificate Balance will accrue from and including the Closing
Date to but excluding the [__________] Distribution Date and will be calculated
on the basis of a 360-day year of twelve 30-day months.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Net APR" has the meaning assigned to such term in the Indenture.
"New York UCC" has the means the New York Commercial Code in effect in the
State of New York.
"Note Register" or "Note Registrar" have the meanings specified in Section
2.04 of the Indenture.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Notes of a Class" or "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, or all Notes included in Class B Notes, whichever is appropriate.
"Obligor" on a Receivable means (a) the purchaser or co-purchasers of the
Financed Equipment and (b) any other Person, including the related Dealer, who
owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by (a) 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 (b) a
secretary or assistant secretary, in each case of the Seller or the Servicer, as
appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who may
be an employee of or counsel to the Seller or the Servicer, which counsel shall
be acceptable to the Indenture Trustee, the Owner Trustee and/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:
14
"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):
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.
"Outstanding" has the meaning assigned to such term in Section 1.01 of the
Indenture.
"Outstanding Amount" means the aggregate principal amount of all Notes, or
a Class of Notes, as applicable, Outstanding at the date of determination.
"Over-Rate Receivable" means a Receivable which has been purchased by CFSC
from a Dealer for a price greater than the principal amount thereof stated in
the related Contract.
"Owner" means the Holder of a Certificate.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means [__________________] in its capacity as Owner
Trustee under the Trust Agreement, its successors in interest and any successor
owner trustee under the Trust Agreement.
"Pass-Through Rate" means, with respect to the Certificates on a
Distribution Date, a rate per annum equal to [____]%.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate of the Principal 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 the Seller or the Servicer, as the case
15
may be, for such Collection Period, and (ii) all Realized Losses on Liquidated
Receivables during such 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 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
based on the related APR, (ii) any payment of the Purchase Amount with respect
to the Receivable purchased by the Servicer or repurchased by the Seller and
allocable to principal and (iii) any prepayment in full or any partial
prepayments (including any Liquidation Proceeds) applied to reduce the Principal
Balance of the Receivable.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to the
preceding Collection Period: (i) that portion of all collections on the
Receivables (including any Liquidation Proceeds and any amounts received from
Dealers with respect to Receivables) allocable to principal; (ii) the amount of
Realized Losses for the related Collection Period (except to the extent included
in (iii) below) and (iii) the Principal Balance of each Receivable that the
Servicer became obligated to purchase or that the Seller became obligated to
repurchase during the related Collection Period (except to the extent included
in (i) above).
"Purchase Agreement" means the Purchase Agreement dated as of
[__________], between the Seller and CFSC, as the same may be amended and
supplemented from time to time.
"Purchase Amount" means the amount, 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 (including interest at the related APR to the
end of the month of purchase).
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or repurchased as of such time by the Seller pursuant to Section
3.02.
"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 Seller, 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 Seller, 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 or the Certificates.
16
"Realized Loss" means, with respect to any Collection Period, for any
Liquidated Receivable the excess of (a) the Principal Balance of such Liquidated
Receivable over the Liquidation Proceeds with respect to such Receivable for
such Collection Period to the extent allocable to principal and (b) amounts
payable by any Dealer with respect to Over-Rate Receivables which are deemed
uncollectible by the Servicer.
"Receivable" means any Contract listed on Schedule A hereto (which
Schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Sections 3.03(a) and
(b).
"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 to be remitted to the Obligor.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a).
"Reserve Account Initial Deposit" means the initial deposit by the Seller
on the Closing Date of $[_________].
"▇▇▇▇▇▇ Mae Entitlement" means a "Security Entitlement" as defined in 31
C.F.R. ss. 354.1.
"Schedule of Receivables" means the schedule of Receivables attached
hereto as Schedule A.
"Scheduled Payment" on a Receivable means the scheduled periodic payment
of principal and interest required to be made by the Obligor.
"Securities" means, collectively, the Notes and the Certificates.
"Seller" means Caterpillar Financial Funding Corporation, a Nevada
corporation, and its successors in interest to the extent permitted hereunder.
"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.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" 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.
17
"Servicer's Yield" 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.
"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" with respect to any Distribution Date
means the greater of (i) [____]% of the Pool Balance as of the close of business
on the last day of the preceding Collection Period and (ii) $[_______];
provided, however, that the amount in clause (i) with respect to a Distribution
Date (referred to herein as the "Current Distribution Date") shall be equal to
the amount calculated for such clause (i) for the Distribution Date immediately
preceding such Current Distribution Date if any of the following events occur:
(a) the aggregate of the Realized Losses realized from the
Cut-off Date through the end of the Collection Period preceding such
Current Distribution Date exceeds the amount equal to [____]% of the
Initial Pool Balance;
(b) the sum of (i) 12 times the aggregate of the Realized
Losses realized during the Collection Period immediately preceding
such current Distribution Date plus (ii) the aggregate Principal
Balance of all Receivables since the Cut-off Date as of the last day
of the Collection Period immediately preceding such Current
Distribution Date as to which the related Financed Equipment has
been repossessed but which has not become a Liquidated Receivable
exceeds the amount equal to [____]% of the Pool Balance at the
beginning of such Collection Period; or
(c) the aggregate amount of Scheduled Payments that are
delinquent by more than 60 days as of the end of the Collection
Period immediately preceding such Current Distribution Date exceeds
an amount equal to [____]% of the Pool Balance as of the end of such
Collection Period;
provided, further, that (x) the Specified Reserve Account Balance shall not
exceed the sum of the outstanding principal amount of the Notes and (y) upon
payment of all principal and interest due on the Notes, 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 successor.
"Tennesse Valley Entitlement" means a Security Entitlement as defined in
18 C.F.R. ss. 1314.2.
"Total Distribution 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 Seller and/or the Servicer and any
amounts received from Dealers with respect to
18
Receivables) received during the related Collection Period and Investment
Earnings on the Trust Accounts during such Collection Period, excluding all
payments and 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 Distribution 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 Seller and
(iii) any Servicer's Yield.
"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.
"Treasury Entitlement" means a "Security Entitlement" as defined in 31
C.F.R. 357.2.
"Trust" means the Issuer.
"Trust Accounts" has the meaning assigned thereto in Section 5.01(b).
"Trust Account Property" means the Trust Accounts, all amounts, investment
property and investments held from time to time in any Trust Account (whether in
the form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), including the Reserve Account Initial
Deposit, and all proceeds of the foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement dated as
of [______________], between the Seller and the Owner Trustee, as the same may
be amended and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including, without limitation,
all property and interests Granted (as defined in the Indenture) to the
Indenture Trustee), including all proceeds thereof.
"Trust Officer" means, (a) in the case of 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 officers' knowledge of and
familiarity with the particular subject, and (b) with respect to 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.
"United States Securities Entitlement" means a Treasury Entitlement, a HUD
Entitlement, a FHLBank Entitlement, a Funding Corporation Entitlement, a Farm
Credit Entitlement, Tennessee Valley Entitlement or a ▇▇▇▇▇▇ ▇▇▇ Entitlement.
19
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 defined meanings
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 certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or 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 certificate or
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 certificate or 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; and the term
"including" shall mean "including without limitation."
(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.
SECTION 1.03. Calculations. For all purposes of this Agreement, interest
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables. In consideration of the Issuer's
delivery to or upon the order of the Seller of (i) $[____________], and (ii) a
Certificate in the principal amount of $[_____], the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations herein) all right, title and interest of the Seller
in and to the following, whether now owned or hereafter acquired:
(a) the Receivables, and all moneys (including accrued interest) due
thereunder on or after the Cut-off Date;
(b) the interest of the Seller in the Trust Account PropertyTrust
Accounts and all amounts credited thereto;
20
(c) the interest of the Seller in the security interests in the
Transaction Equipment granted by Obligors pursuant to the Receivables and
any other interest of the Seller in the Transaction Equipment;
(d) the interest of the Seller in any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Equipment or Obligors;
(e) all right, title and interest of the Seller in and to the
Purchase Agreement, including the right of the Seller to cause CFSC to
repurchase Receivables from the Seller under certain circumstances;
(f) the interest of the Seller in any proceeds from recourse to or
other payments by Dealers; and
(g) the proceeds of any and all of the foregoing.
SECTION 2.02. Closing.
The conveyance of the Receivables shall take place at the offices of
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, on the Closing Date, simultaneously with the closing of the
transactions contemplated by the Purchase Agreement, the underwriting agreements
related to the Notes and the Certificates and the other Basic Documents. Upon
the acceptance by the Seller of the proceeds of the sale of the Notes and the
Certificates, the ownership of each Receivable and the contents of the related
Receivable File is vested in the Issuer, subject only to the lien of the
Indenture.
SECTION 2.03. Books and Records.
The transfer of each Receivable shall be reflected on the Seller's balance
sheets and other financial statements prepared in accordance with generally
accepted accounting principles as a transfer of assets by the Seller to the
Issuer. The Seller 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 Issuer.
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Seller. The Seller makes
the following representations and warranties as to the Receivables on which the
Issuer 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
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the Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Issuer 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 Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to each
Receivable, free and clear of all Liens and rights of others and, immediately
upon the transfer thereof, the Issuer 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.
(b) All Actions Taken. All actions necessary in any jurisdiction to be
taken (i) to give the Issuer a first priority perfected ownership interest in
the Receivables (exclusive of Receivables for which a governmental entity is the
Obligor) (including without limitation delivery of the Receivables Files
pursuant to the Custodial Agreement), and (ii) to give the Indenture Trustee a
first priority perfected security interest therein (including, without
limitation, UCC filings with the Delaware and Nevada Secretaries of State and
precautionary UCC filings with the Tennessee Secretary of State).
(c) Possession of Receivable Files. All of the Receivables Files have been
or will be delivered to the Custodian on or prior to the Closing Date or as
otherwise provided in Section 3.03.
(d) 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 Seller of this Agreement or
any other Basic Document, the performance by the Seller of the transactions
contemplated by this Agreement or any other Basic Document and the fulfillment
by the Seller 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 Seller or the Issuer or upon the collectibility of any Receivable or upon
the ability of the Seller to perform its obligations under this Agreement).
SECTION 3.02. Repurchase by Seller or CFSC Upon Breach. (a) The Seller,
the Servicer, CFSC or the Owner Trustee, as the case may be, shall inform the
other parties to the Agreement, CFSC and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of the Seller'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 Owner Trustee or receipt by
the Owner Trustee of written notice from the Seller or the Servicer of such
breach, the Seller shall be obligated, and, if necessary, the Seller or the
Owner Trustee shall enforce, the obligation of CFSC, if any, under Section
6.02(a)(i) of the Purchase Agreement to repurchase
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any Receivable materially and adversely affected by any such breach as of such
last day (or, at the Seller'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 Seller shall
remit the Purchase Amount in the manner specified in Section 5.03; provided,
however, that the obligation of the Seller 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
Seller of the Purchase Amount from CFSC. Subject to the provisions of Section
6.03, the sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee,
the Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein, or to enforce CFSC's obligation, if any, to the Seller 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.
SECTION 3.03. Custody of Receivable Files. The Seller, the Issuer and the
Indenture Trustee have appointed the Custodian pursuant to the Custodial
Agreement, and the Custodian has thereby accepted such appointment, to act as
the agent of the Seller, the Issuer and the Indenture Trustee as custodian of
the following documents:
(a) the Original Contract related to each Receivable; and
(b) with respect to each Dealer Receivable, any documents used to
assign such Dealer Receivable and the related Dealer's security interest
in the Transaction Equipment to CFSC.
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 Issuer 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 Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer 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
Issuer, 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
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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 on behalf of the Issuer (i) all
file stamped copies of UCC financing statements evidencing the security interest
of CFSC in Transaction Equipment, and (ii) any and all documents, other than the
Receivable Files, that CFSC or the Seller 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 Issuer 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 Issuer and the Indenture Trustee of the
Receivables; Certification by the Indenture Trustee.
(a) The Issuer hereby acknowledges constructive receipt, through the
Custodian, for each Receivable, of a Receivable File in the form delivered to it
by the Seller and declares that it will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets delivered to
it, in trust upon and subject to the conditions set forth in the Trust Agreement
for the benefit of the Certificateholders, subject to the terms and conditions
of the Indenture and this Agreement. By its acknowledgment of this Agreement,
the Indenture Trustee agrees to execute and deliver on the Closing Date an
acknowledgement of receipt by it, or by the Custodian on its behalf, of a
Receivables File for each Receivable in the form attached as Schedule C-1
hereto, and declares that it will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets delivered to it
in trust upon and subject to the conditions of the Indenture for the benefit of
the Noteholders and, to the extent set forth therein and herein, for the benefit
of the Certificateholders. The Indenture Trustee agrees to review (or cause to
be reviewed) each Receivable File within 45 days after the Closing Date and to
deliver to the Seller, the Issuer, the Owner Trustee, each Rating Agency and the
Servicer a final certification in the form attached hereto as Schedule C-2 to
the effect that, as to each Receivable listed on the Schedules of Receivables
(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 it pursuant to this Agreement (including
without limitation each of the items listed in Section 3.03(a) and (b)) are in
its possession, (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 initialled 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 on the
Receivable Files. 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.
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(b) If the Indenture Trustee during the process of reviewing the
Receivable Files finds any document constituting a part of a Receivable File
which is not executed, has not been received, is unrelated to the related
Receivable identified on Schedule A hereto, or does not conform to the
requirements of Section 3.03 or substantively to the description thereof as set
forth on the Schedule of Receivables, the Indenture Trustee shall promptly so
notify the Servicer, the Owner Trustee and the Seller. In performing any such
review, the Indenture Trustee may conclusively rely on the Servicer as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Indenture Trustee's review of the Receivable
Files is limited solely to confirming that the documents listed in Section 3.03
have been executed and received and relate to the Receivable Files identified on
the Schedule of Receivables. The Servicer agrees to use reasonable efforts to
cause to be remedied a material defect in a document constituting part of a
Receivable File of which it is so notified by the Indenture Trustee. If,
however, the Servicer has not caused to be remedied any defect described in such
final certification by the last day of the second month following the month of
receipt by it of the final certification referred to in paragraph (a) of this
Section 3.05, and such defect materially and adversely affects the interests of
the Noteholders or Certificateholders in the related Receivable, the Seller
shall remit the Purchase Amount in the manner specified in Section 5.03;
provided, however, that the obligation of the Seller to repurchase any
Receivable is subject to the receipt by the Seller of the Purchase Amount from
CFSC. Subject to the provisions of Section 5.03, the sole remedy of the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders with respect to such a defect and the agreement contained in
this Section shall be to require the Seller to repurchase Receivables pursuant
to this Section, subject to the conditions contained herein, or to enforce
CFSC's obligation to the Seller 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) above and
receipt of the Purchase Amount, the Indenture Trustee is required to release to
CFSC the related Receivables File and shall execute, without recourse, and
deliver such instruments of transfer as may be necessary to transfer such
Receivable to CFSC.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. The Servicer, as agent for the Issuer
(to the extent provided herein), shall 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 monthly and annual statements to the
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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 Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders 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
Issuer (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 Owner Trustee, the Indenture Trustee, the
Certificateholders 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.
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 stated annual percentage rate of
interest, reduce the aggregate amount of Scheduled Payments or the amount of any
Scheduled Payment due under any Receivable, or otherwise amend or modify a
Receivable in a manner that would have a material adverse effect on the
interests of the Securityholders. Notwithstanding the foregoing, the Servicer
may grant extensions on a Receivable; provided, however, that if the Servicer
reschedules the due date of any Scheduled Payment to a date beyond the Final
Maturity Date, it shall promptly purchase the Receivable from the Issuer in
accordance with the terms of Section 4.07. The Servicer may in its discretion
waive any other amounts of Servicer's Yield that may be collected in the
ordinary course of servicing a Receivable. Notwithstanding anything in this
Agreement to the contrary, any Recoveries shall be paid to the Seller and any
Liquidated Receivables shall be assigned by the Trust to the Seller (to extent
the Principal Balance thereof has been distributed as part of the Principal
Distributable Amount).
(b) Notwithstanding anything in this Agreement to the contrary (but
subject to the immediately succeeding sentence), the Servicer may refinance any
Receivable by accepting a new Contract from the related Obligor and applying the
proceeds of such refinancing to pay all obligations in full of such Obligor
under such Receivable. The receivable created by the refinancing shall not be
property of the Trust. 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 Seller, the Indenture Trustee, the Owner
Trustee, the Noteholders, or the Certificateholders, as applicable, against loss
by reason of the bankruptcy or insolvency (or other credit condition) of, or
default by, the Obligor on, or the uncollectibility of, any Receivable.
26
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer, 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. 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 and/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 Issuer
and the Indenture Trustee in the event of the relocation of Financed Equipment,
or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not: (i) release
the Transaction Equipment securing any Receivable from the security interest
granted by such Receivable in whole or in part or modify such security interest
except (A) in accordance with Section 4.03 above or (B) in the event of payment
in full by the Obligor thereunder; (ii) impair the rights of the Issuer, the
Indenture Trustee, the Certificateholders or the Noteholders in any Receivable;
or (iii) fail to return a Receivable File released to it pursuant to Section 3.3
of the Custodial Agreement within five (5) Business Days of such release.
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 Seller and CFSC promptly, in writing, upon the discovery of any
breach pursuant to Section 4.02(a), 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 Seller'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 (5) 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 Issuer,
the Indenture Trustee, the Certificateholders 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 Issuer, the Owner Trustee, the Indenture Trustee,
the Certificateholders or the Noteholders with respect to a breach pursuant
27
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 Seller, the Indenture Trustee, the Owner Trustee, the
Noteholders, or the Certificateholders, as applicable, against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by, the
Obligor on, or the uncollectibility of, any Receivable.
SECTION 4.08. Servicing Fee. On each Determination 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 Pool Balance as of the first day of such
preceding Collection Period. The Servicer shall also be entitled to any
Servicer's Yield with respect to Receivables, collected (from whatever source)
on the Receivables, which Servicer's Yield shall be paid to the Servicer
pursuant to Section 5.07.
SECTION 4.09. Servicer's Certificate. On each Determination Date, the
Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the
Seller, with a copy to the Rating Agencies, a Servicer's Certificate containing
all information necessary to make the distributions pursuant to Sections 5.04
and 5.05 for the Collection Period preceding the date of such Servicer's
Certificate. Neither the Owner Trustee nor the Indenture Trustee shall be
required to determine, confirm or recalculate the information contained in the
Servicer's Certificate. Receivables to be purchased by the Servicer or to be
repurchased by the Seller 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 the Owner Trustee and the Indenture Trustee and
the Rating Agencies, on or before April 30 of each year, an Officers'
Certificate stating that (i) a review of the activities of the Servicer during
the preceding 12-month period ending on December 31 and of its performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled in all material respects all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment of any
such obligation in any material respect, specifying each such default known to
such officers and the nature and status thereof. The Indenture Trustee shall
send a copy of such certificate and the report referred to in Section 4.11 to
the Rating Agencies. A copy of such certificate and the report 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.
(b) 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 (5) 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).
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SECTION 4.11. Annual Independent Certified Public Accountants' Report. In
order to confirm that the servicing of the Receivables has been conducted in
compliance with the terms of this Agreement, the Servicer shall cause a firm of
independent certified public accountants, which may also render other services
to the Servicer, the Seller or CFSC, to deliver to the Owner Trustee and the
Indenture Trustee on or before April 30 of each year, a report addressed to the
Board of Directors of the Servicer, the Owner Trustee and the Indenture Trustee,
to the effect that such firm has examined the financial statements of CFSC and
issued its report thereon and that such examination (a) was made in accordance
with generally accepted auditing standards and accordingly included such tests
of the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances; (b) included tests relating to
machinery installment sale contracts serviced for others in accordance with
requirements agreed to by the Servicer and the Indenture Trustee, to the extent
the tests are applicable to the servicing obligations set forth in this
Agreement; and (c) discloses the results of such tests during the preceding
12-month period ended December 31 that, in the firm's opinion, such program
requires such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
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, Certificateholders and Noteholders.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.
(a) (i) The Seller, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Securities Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and the Certificateholders.
(ii) (1) The Seller, for the benefit of the Class A Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Securities Account (the "Class A Note Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Class A Noteholders.
(2) The Seller, for the benefit of the Class B Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Securities Account ( the "Class B Note
29
Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Class B Noteholders.
(iii) The Seller, for the benefit of the Noteholders and the
Certificateholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Securities Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders.
(b) Funds on deposit in the Collection Account, the Class A Note
Distribution Account, the Class B Note 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. All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
applicable Noteholders and, if applicable, the Certificateholders; provided,
however, that on each Distribution Date all investment earnings (net of losses
and investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Total
Distribution Amount. Other than as permitted by the Rating Agencies, funds 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 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 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.
(c) (i) The Indenture Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds, investments,
proceeds and income shall be part of the Trust Estate. The Trust Accounts shall
be under the sole dominion and control of the Indenture Trustee for the benefit
of the Noteholders and the Certificateholders or the Noteholders, as applicable.
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 and/or any investments
to such new Trust Account. So long as [______________________________] is an
Eligible Institution, any Trust Account may be maintained with it in an Eligible
Securities Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that if held in deposit accounts
shall be held solely in the Eligible Securities Accounts; and each such
Eligible Securities Account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture Trustee shall have
sole signature authority with respect thereto;
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(B) any Trust Account Property that constitutes Physical Property
shall be delivered to the Indenture Trustee in accordance with paragraph
(a) of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a financial intermediary
(as such term is defined in Section 8-313(4) of the UCC) acting solely for
the Indenture Trustee;
(C) any Trust Account Property that is a United States Security
Entitlement shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued book-entry registration
of such Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (C) above
shall be delivered to the Indenture Trustee in accordance with paragraph
(c) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominee's) ownership of
such security.
(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.
(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 monthly reflecting activity for each amount created hereunder for the
preceding month. Although the Servicer recognizes that it may obtain a broker
confirmation at no additional cost, the Servicer 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 (except to the extent of Recoveries applied in accordance
with Section 4.02), 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 P-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.
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SECTION 5.03. Additional Deposits. The Servicer and the Seller 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 Seller
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 and the Seller separately.
SECTION 5.04. Distributions. (a) On each Determination Date, the Servicer
shall calculate all amounts required to determine the amounts to be deposited in
the Class A Note Distribution Account, Class B Note Distribution Account and the
Certificate Distribution Account.
(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 Exhibit C to 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 or 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 funds deposited into the
Collection Account, in the following order of priority:
(i) to the Servicer (if CFSC or an Affiliate is not 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 Note Distribution Account, the Class A
Noteholders' Interest Distributable Amount;
(iv) to the Class B Note Distribution Account, the Class B
Noteholders Interest Distributable Amount;
(v) to the Class A Note Distribution Account, the Class A-1
Noteholders' Principal Distributable Amount;
(vi) to the Class A Note Distribution Account, the Class A-2
Noteholders' Principal Distributable Amount;
(vii) to the Class A Note Distribution Account, the Class A-3
Noteholders' Principal Distributable Amount;
(viii) to the Class B Note Distribution Account, the Class B
Noteholders' Principal Distribution Amount;
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(ix) to the Certificate Distribution Account, the
Certificateholders' Interest Distributable Amount;
(x) to the Certificate Distribution Account, the Certificateholders'
Principal Distributable Amount;
(xi) to the Servicer (if CFSC or an Affiliate is the Servicer), the
Servicing Fee and all unpaid Servicing Fees from prior Collection Periods;
and
(xii) to the Reserve Account, the remaining Total Distribution
Amount.
(c) 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, the amounts set fourth in
clauses (v), (vii) and (viii) above will be deposited into the Class A Note
Distribution Account prior to depositing the amount set forth in clause (iv)
above in the Class B Note Distribution Account.
SECTION 5.05. Reserve Account. (a) On the Closing Date, the Seller shall
deposit the Reserve Account Initial Deposit into the Reserve Account. The
Servicer shall determine the Specified Reserve Account Balance for each
Distribution Date.
(b) (i) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits or withdrawals therefrom
on such Distribution Date), prior to the [__________] Distribution Date is
greater than the Specified Reserve Account Balance for such Distribution Date,
the Servicer shall instruct the Indenture Trustee to distribute the amount of
such excess to the Seller; provided that if, after giving effect to all payments
made on the Notes and Certificates on such Distribution Date, the Pool Balance
as of the end of the preceding Collection Period is less than the sum of the
outstanding principal amount of the Notes, such excess amount shall not be
distributed to the Seller and shall be retained in the Reserve Account available
for application in accordance with Sections 5.05(c) and (d). Amounts properly
distributed to the Seller pursuant to this Section 5.05(b)(i) shall be deemed
released from the Trust and the security interest therein granted to the
Indenture Trustee, and the Seller shall in no event thereafter be required to
refund any such distributed amounts.
(ii) On each Distribution Date, commencing with the [__________]
Distribution Date, if the amount on deposit in the Reserve Account (after taking
into account any deposits thereto pursuant to Section 5.04(b)(xii) and any
withdrawals therefrom pursuant to Section 5.05(c) and (d)) 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 balance
of the Notes to result from the deposits made in the Class A Note Distribution
Account pursuant to Sections 5.04(b)(v), (vi) or (vii) or 5.05(c) and the Class
B Note Distribution Account pursuant to Sections 5.04(b)(viii) or 5.05(d) on
such Distribution Date), then the Servicer shall instruct the Indenture Trustee
(A) to deposit the entire amount of such excess to the Class A Note Distribution
Account (x) for distribution to Class A-2 Noteholders as principal (until the
Class A-2 Notes have been paid in full) and then (y) for distribution to the
Class A-3 Noteholders as principal (until the Class A-3 Notes have been paid in
full) and then (B) deposit the amount of such excess not distributed to the
Class A-3 Noteholders following their payment
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in full to the Class B Note Distribution Account for distribution to Class B
Noteholders as principal (until the Class B Notes are paid in full). The amount
of such excess not distributed to the Class B Noteholders following their
payment in full pursuant to the immediately preceding sentence shall be
distributed to the Seller.
(c) In the event that the Class A Noteholders' Distributable Amount for a
Distribution Date exceeds the amount deposited into the Class A Note
Distribution Account pursuant to Section 5.04(b)(iii), (v), (vi) and (vii) on
such Distribution Date, the Indenture Trustee shall withdraw from the Reserve
Account on such Distribution Date, upon receipt of the instruction from the
Servicer pursuant to Section 5.04(b), to the extent of funds available therein,
an amount equal to such excess, and the Indenture Trustee shall deposit such
amount into the Class A Note Distribution Account pursuant to the terms of the
Indenture.
(d) In the event that the Class B Distributable Amount for a Distribution
Date exceeds the amount deposited in the Class B Distribution Account pursuant
to Section 5.04(b)(iv) and (viii) on such Distribution Date, the Indenture
Trustee shall withdraw on such Distribution Date from the Reserve Account, upon
receipt of the instruction of the Servicer pursuant to Section 5.04(b), to the
extent of funds available therein after giving effect to paragraph (c) above, an
amount equal to such excess, and the Indenture Trustee shall deposit such amount
into the Class B Distribution Account pursuant to the terms of the Indenture.
(e) The Certificate Balance shall be reduced on any Distribution Date by
the excess, if any, of (i) the sum of (A) the Certificate Balance (after giving
effect to the reduction in the Certificate Balance to result from the deposits
made in the Certificate Distribution Account pursuant to Sections 5.04(b)(x) on
such Distribution Date (and the resulting distributions pursuant to the Trust
Agreement)) and (B) the aggregate outstanding principal balance of the Notes
(after giving effect to the reduction in the aggregate outstanding principal
balance of the Notes to result from the deposits made in the Class A Note
Distribution Account and the Class B Note Distribution Account on such
Distribution Date and on prior Distribution Dates) over (ii) the sum of (A) the
Pool Balance as of the close of business on the last day of the preceding
Collection Period and (B) the amount on deposit in the Reserve Account after
giving effect to any distributions therefrom on such Distribution Date.
Thereafter, the Certificate Balance shall be increased to the extent that any
portion of the Total Distribution Amount is available to pay the existing
Certificateholders' Principal Carryover Shortfall before making any deposits to
the Reserve Account pursuant to Section 5.04(b)(xii), but not by more than the
aggregate reductions in the Certificate Balance pursuant to this paragraph.
(f) Notwithstanding anything in Sections 5.05(d) and (e) to the contrary,
if on any Distribution Date on which any Notes are outstanding the amount on
deposit in the Reserve Account is less than the amount equal to [____]% of the
Pool Balance as of the end of the immediately preceding Collection Period, then
amounts will be withdrawn from the Reserve Account on such Distribution Date
only to the extent needed to pay any Class A Noteholders' Interest Distributable
Amount, and Class B Noteholders' Interest Distributable Amount otherwise unpaid
on such date, and no funds may be withdrawn from the Reserve Account on such
Distribution Date to pay any portion of the Class A Noteholders' Principal
Distributable Amount or Class B Noteholders' Interest Distributable Amount, in
each case otherwise unpaid on such date.
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(g) 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(a) of the Indenture.
SECTION 5.06. Statements to Certificateholders and Noteholders. (a) On the
second Business Day prior to each Distribution Date, the Servicer shall provide
to the Indenture Trustee (with a copy to the Rating Agencies) and to the Owner
Trustee (for the Owner Trustee to forward to each Certificateholder of record
pursuant to the Trust Agreement) a statement substantially in the form of
Exhibit A to Schedule E (or such other form that is acceptable to the Indenture
Trustee, the Owner Trustee and the Servicer) setting 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 and the Class B
Notes) and the Certificates, to the extent applicable:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period;
(iv) the outstanding principal balance 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 B Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor, 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;
(v) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(vi) the amount of the Administration Fee paid to the Administrator
with respect to such Collection Period;
(vii) the aggregate amount of the Purchase Amounts for Purchased
Receivables with respect to the related Collection Period paid by each of
the Seller and the Servicer (accounted for separately);
(viii) the amount of Realized Losses, if any, for such Collection
Period;
(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to withdrawals made on such Distribution Date;
(x) the Specified Reserve Account Balance for such Distribution
Date;
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(xi) the Class A Noteholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account
and deposited into the Class A Note Distribution Account pursuant to
Section 5.05(c);
(xii) the Class B Noteholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account
and deposited into the Class B Note Distribution Account pursuant to
Section 5.05(d); and
(xiii) the Certificateholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account.
Each amount set forth pursuant to paragraph (i), (ii) or (v) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Note.
(b) On the second Business Day prior to each Distribution Date, the
Servicer shall provide to the Indenture Trustee (with a copy to the Rating
Agencies) for the Indenture Trustee to forward to each Noteholder of record, a
statement substantially in the form of Exhibit B to Schedule E (or such other
form that is acceptable to the Indenture Trustee and the Servicer) setting forth
at least the following information as to the Notes (to the extent applicable,
separately stating such information for the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class B Notes) to the extent applicable with
respect to such Distribution Date for the preceding Collection Period;
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period;
(iv) the outstanding principal balance 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 B Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor 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;
(v) the amount of the Servicing Fee paid to the Servicer with
respect to such Collection Period;
(vi) the amount of the Administration Fee paid to the Administrator
with respect to such Collection Period;
(vii) the aggregate amount of the Purchase Amounts for Purchased
Receivables with respect to such Collection Period;
(viii) the amount of Realized Losses, if any, for such Collection
Period; and
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(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to withdrawals made on such Distribution Date;
(x) the Specified Reserve Account Balance for such Distribution
Date;
(xi) the Class A Noteholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account
and deposited into the Class A Note Distribution Account pursuant to
Section 5.05(c);
(xii) the Class B Noteholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account
and deposited into the Class B Note Distribution Account pursuant to
Section 5.05(d); and
(xiii) the Certificateholders' Distributable Amount, the components
thereof, and the amount, if any, to be withdrawn from the Reserve Account.
Each amount set forth pursuant to subclause (i), (ii) or (v) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Note.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Indenture, the Indenture
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Noteholder and received any payment thereon, a statement
containing the amounts described in (i) and (ii) above and any other information
required by applicable tax laws, for the purposes of such Noteholder's
preparation of Federal income tax returns.
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 and the Administrator with respect to such Collection Period (and the
Servicer shall pay amounts owing to the Administrator directly); provided, that
regardless of the required frequency of remittances, the Servicer shall be paid
the Servicer's Yield by means of the Servicer making the deposit of such
collections net of the Servicer's Yield. The Servicer, however, will account to
the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if the Servicing Fee and Administration Fee was paid
individually.
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ARTICLE VI
THE SELLER
SECTION 6.01.Representations of Seller. The Seller makes the following
representations on which the Issuer 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 Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller 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.
(b) Due Qualification. The Seller 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 Seller or the Owner Trustee.
(c) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full power and authority to sell and assign the
Receivables and other property to be sold and assigned to and deposited
with the Issuer and the Seller and has duly authorized such sale and
assignment to the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller 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 of the transactions
contemplated by this Agreement and the fulfillment 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 Seller, or
any indenture, agreement or other instrument to which the Seller is a
party or by which it shall be 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) or violate any law or, to the best
38
of the Seller's knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement, the Indenture, the Notes, the
Certificates or any of the other Basic Documents, (ii) seeking to prevent
the issuance of the Notes or the Certificates 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 Seller
of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, the Notes, the Certificates 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 Certificates.
SECTION 6.02. [Reserved].
SECTION 6.03. Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer, 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 Issuer, 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 Issuer or the issuance and original sale of the Certificates
and the Notes, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of the
Issuer, 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 Seller shall indemnify, defend and hold harmless the Issuer, 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 Seller'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
Seller's or the Issuer's violation or alleged violation of Federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates.
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 Seller shall have made any indemnity
payments pursuant to this Section 6.03 and the Person to or on behalf
39
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Seller, without
interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller 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 Seller 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 Seller 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 Owner Trustee and the Indenture Trustee have been taken, including that
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee 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.
SECTION 6.05. Limitation on Liability of Seller and Others. The Seller and
any director or officer or employee or agent of the Seller 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 Seller 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 6.06. Seller May Own Certificates or Notes. The Seller and any
Affiliate (other than CFSC) thereof may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights as it
would have if it were not the Seller or an Affiliate thereof, except as
expressly provided herein (including, without limitation, the definition of
"Outstanding" contained in each of the Indenture and the Trust Agreement) or in
any Basic Document.
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ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer 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
Issuer and the pledge thereof 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 acquire, own, sell and 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.
(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall 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 shall be 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 this Agreement); 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, administra- tive agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes,
41
the Certificates or any of the other Basic Documents; (ii) seeking to
prevent the issuance of the Notes or the Certificates 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 Certificates 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 Certificates.
(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
Issuer or upon the collectibility 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
Issuer, the Owner Trustee, the Indenture Trustee, the Custodian, the
Noteholders, the Certificateholders and the Seller and any of the
officers, directors and agents of the Issuer, the Owner Trustee, the
Indenture Trustee, the Custodian and the Seller 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 Seller) thereof of any Transaction
Equipment.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Custodian and the
Seller 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 Issuer, not including
any taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the
Certificates and the Notes, or asserted with respect to ownership of the
Receivables, or Federal or other income taxes arising out of distributions
on the Certificates or the Notes) and (ii) costs and expenses in defending
against the same.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
Custodian, the Certificateholders and the Noteholders and any of the
officers, directors and agents of the Issuer, the Owner Trustee, the
Indenture Trustee and the Seller from and against any and all costs,
42
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 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
Issuer or the issuance and original sale of the Certificates and the
Notes, or Federal or other income taxes imposed on the Issuer because of
its classification or reclassification for tax purposes, or Federal or
other income taxes arising out of distributions on the Certificates 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.
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
43
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 executed 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), (b), (c), or (d) 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 Issuer, the Noteholders or the
Certificateholders, 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.
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 Certificateholders 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,
44
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 (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; or
(b) failure on the part of the Servicer or the Seller, as the case
may be, duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may be)
set forth in this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of Certificateholders
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 or the Seller (as the
case may be) by the Owner Trustee or the Indenture Trustee or (B) to the
Servicer or the Seller (as the case may be), and to the Owner Trustee and
the Indenture Trustee by the Holders of Notes evidencing not less than 25%
of the Outstanding Amount of the Notes (including the Class B Notes) or
"Holders" (as defined in the Trust Agreement) of Certificates evidencing
not less than 25% of the outstanding Certificate Balance; or
(c) an Insolvency Event occurs with respect to the Seller or 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 Notes evidencing
not less than 25% of the Outstanding Amount of the Notes, 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) 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 Certificates 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
45
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. (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 Servicer's Yield. 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.
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
46
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 Servicer's Yield 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 Certificateholders. 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
Certificateholders 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 Notes evidencing not
less than a majority of the Outstanding Amount of the Notes (or, if no Notes are
Outstanding, the "Holders" (as defined in the Trust Agreement) of Certificates
evidencing not less than a majority of the outstanding Certificate Balance) may,
on behalf of all Noteholders and Certificateholders, 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.
SECTION 8.05. Appointment of Custodians. CFSC, the Seller, the Issuer and
the Indenture Trustee may, with the consent of the Servicer and notice to the
Rating Agencies, appoint [______________________________], 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. [______________________________] 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 for the benefit
of the Noteholders and the Certificateholders.
47
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables; Trust Termination. (a)
If on the last day of any Collection Period the Pool Balance is less than 10% of
the Initial Pool Balance, 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; provided, however, that the Servicer may not
effect any such purchase so long as the rating on CFSC's long-term debt
obligations is less than Baa3 by Moody's, unless the Owner Trustee and the
Indenture Trustee shall have received an Opinion of Counsel to the effect that
such purchase would not constitute a fraudulent conveyance. To exercise such
option, the Servicer shall deposit 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
and shall succeed to all interests in and to the Trust.
(b) [Reserved]
(c) Notice of any termination of the Trust 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.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder
(other than rights 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.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. The Agreement may be amended by the Seller, the
Servicer and the Trust, with the consent of the Indenture Trustee, but without
the consent of any of the Noteholders or the Certificateholders, 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 Certificateholders; provided, however, that such action
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 Noteholder or Certificateholder or the tax characterization
of the Notes or the Certificates.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Trust, with the consent of the Indenture Trustee, the consent
of the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes (including the Class
48
B Notes) and the consent of the "Holders" (as defined in the Trust Agreement) of
Certificates evidencing not less than a majority of the Certificate Balance, 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 Certificateholders; 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 the Certificateholders or (b) reduce the aforesaid portion of the
Outstanding Amount of the Notes and the aforesaid portion of Certificate
Balance, the Holders and "Holders" of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the "Holders" (as defined in the Trust Agreement) of all the outstanding
Certificates.
Prior to the execution of any such amendment or consent, the Owner Trustee
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, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Certificateholder and the
Indenture Trustee.
It shall not be necessary for the consent of Certificateholders or
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. (a) The Seller shall take all
actions necessary to perfect, and maintain perfection of, the interests of the
Owner Trustee and the Indenture Trustee in the Receivables. In the event it is
determined that the Indenture Trustee's or the Issuer's interests are no longer
perfected, such actions shall include but shall not be limited to 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 Issuer specified in the immediately preceding sentence, the Seller shall
execute and file such financing statements and cause to be executed 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
Issuer and the interest of the Indenture Trustee in the Receivables and in the
proceeds thereof. The Seller 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 Seller nor the Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
or otherwise seriously misleading within
49
the meaning of ss. 9-402(7) of the UCC (regardless of whether such a filing was
ever made), unless it shall have given the Owner Trustee and the Indenture
Trustee at least five 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 Lien of the Issuer
or the Indenture Trustee is not adversely affected).
(c) Each of the Seller and the Servicer shall have an obligation to give
the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement (regardless of whether such a filing was ever
made) and shall promptly, if applicable, file any such amendment. 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 Issuer (which interest has
been acquired from the Seller) and the Indenture Trustee in such Receivable and
that such Receivable is owned by the Issuer and has been pledged to the
Indenture Trustee. Indication of the Issuer's interest (which interest has been
acquired from the Seller) 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 Seller 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 Issuer and has been pledged to the Indenture Trustee.
(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 Trust, together
with a reconciliation of such list to the Schedule
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of Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer 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 Owner Trustee 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 90 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 90-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 executed and filed, that
are necessary fully to perfect the interests of the Owner Trustee 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 Seller shall, to the extent required by applicable law, cause the
Certificates and 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 Seller, the Servicer, the Issuer, 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 Seller, to
Caterpillar Financial Funding Corporation, Greenview Plaza, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, (702-735-2514), (b) in the case of
the Servicer, to Caterpillar Financial Services Corporation, ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇- 1071 (615-386-5800), (c) the case of the Issuer or
the Owner Trustee, at the "Corporate Trust Office" (as defined in the Trust
Agreement), (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.
51
SECTION 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.04 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 Seller or the Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, 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 CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS, REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and the other property constituting
the Owner Trust Estate and/or the assignment of any or all of the Issuer'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 Seller, the Owner Trustee and
the Indenture Trustee shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar
52
official of the Issuer or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Issuer, the Owner Trustee and the Indenture Trustee shall not, prior to the
date which is one year and one day after the termination of this Agreement with
respect to the Seller, acquiesce, petition or otherwise invoke or cause the
Seller to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller 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 Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.
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 [_____________] not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer, and in no
event shall [_______________] in its individual capacity or, except as expressly
provided in the Trust Agreement, as beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer 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 Issuer. 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 Issuer 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 [_________________________] not
in its individual capacity but solely as Indenture Trustee, and in no event
shall [_________________________] have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer 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 Issuer.
53
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
CATERPILLAR FINANCIAL ASSET TRUST
[____]_[_]
By: [__________________],
not in its individual capacity but solely as
Owner Trustee on behalf of the Trust,
By:
---------------------------------------------
Name:
Title:
CATERPILLAR FINANCIAL FUNDING
CORPORATION,
Seller,
By:
---------------------------------------------
Name:
Title:
CATERPILLAR FINANCIAL SERVICES
CORPORATION,
Servicer,
By:
---------------------------------------------
Name:
Title:
Acknowledged and Accepted:
[_________________________],
not in its individual capacity
but solely as Indenture Trustee and as Custodian
By:
---------------------------------------
Name:
Title:
54
SCHEDULE A
Schedule of Receivables
A-1
SCHEDULE B
Location of Receivable Files
[_________________________]
[_________________________]
B-1
SCHEDULE C-1
FORM OF INDENTURE TRUSTEE INITIAL CERTIFICATION
________________, [____]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of [_____________] among Caterpillar
Financial Services Corporation as Servicer, Caterpillar
Financial Funding Corporation and Caterpillar Financial Asset
Trust [______]
Gentlemen:
In accordance with Section 3.05 of the Sale and Servicing Agreement, the
undersigned, as Indenture Trustee under the Indenture, hereby certifies that it
or the Custodian on its behalf has received a Receivable File with respect to
each Receivable listed in the Schedule of Receivables and the documents
contained therein appear to bear original signatures.
Neither the Indenture Trustee nor the Custodian on its behalf has made any
independent examination of any such documents beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any such documents contained in the Receivables
Files, or (ii) collectibility, 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.
[_________________________],
as Indenture Trustee
By:
----------------------------------------
C-1-1
SCHEDULE C-2
FORM OF INDENTURE TRUSTEE FINAL CERTIFICATION
___________, [____]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of [____________] among Caterpillar
Financial Services Corporation, as Servicer, Caterpillar
Financial Funding Corporation and Caterpillar Financial Asset
Trust [____]-[_]
Gentlemen:
In accordance with the provisions of Section 3.05 of the above-referenced
Sale and Servicing Agreement, the undersigned, as Indenture Trustee under the
Indenture, 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 or the Custodian on its behalf has
reviewed the Receivables Files delivered to it or the Custodian on its behalf
pursuant to Section 3.03 of the Sale and Servicing Agreement and has determined
that (i) all such documents are in its possession or in the possession of the
Custodian on its behalf, (ii) all documents to be included in the Receivables
Files pursuant to the Sale and Servicing Agreement including, without
limitation, the Original Contract have been reviewed by it or the Custodian on
its behalf and have not been mutilated, damaged, torn or otherwise physically
altered and relate to such Receivable and (iii) based on its examination, or the
examination of the Custodian on its behalf, and only as to the foregoing
documents, the information set forth on the Schedule of Receivables respecting
such Receivables accurately reflects the information set forth in the
Receivables .
Neither the Indenture Trustee nor the Custodian on its behalf has made any
independent examination of such documents beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any documents contained in the Receivable
Files, or (ii) the collectibility, insurability, effectiveness or suitability of
any Receivable identified on the Schedule of Receivables.
C-2-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Sale and Servicing Agreement.
[___________________________________],
as Indenture Trustee
By:___________________________
Name:
Title:
C-2-2
SCHEDULE D
Servicer's Certificate
The undersigned hereby certify that (i) they are, respectively, a duly
elected [title] and [title] of Caterpillar Financial Services Corporation and
(ii) this Servicing Certificate complies with the requirements of, and is being
delivered pursuant to, Section 4.09 of the Sale and Servicing Agreement (the
"Sale and Servicing Agreement") dated as of [_______ __], [____] between
Caterpillar Financial Asset Trust [____]-[_], Caterpillar Financial Funding
Corporation and Caterpillar Financial Services Corporation.
Dated:_________________ ------------------------------
Name:
Title:
------------------------------
Name:
Title:
D-1
Distribution Date: ______________
(i) Servicing Fee;
(ii) Administration Fee;
(iii) Total Distribution Amount;
(iv) the weighted average Net APR for the related Collection
Period;
(v) clause (i) of Class A Noteholders' Monthly Interest
Distributable Amount;
(vi) Class A Noteholders' Interest Carryover Shortfall;
(vii) clause (ii) of Class A Noteholders' Monthly Interest
Distributable Amount;
(viii) Class A Noteholders' Monthly Interest Distributable
Amount;
(ix) Class A Noteholders' Principal Distributable Amount;
(x) Class A-1 Noteholders' Monthly Distribution Amount;
(xi) Class A-1 Noteholders' Principal Carryover Shortfall;
(xii) Class A-1 Noteholders' Principal Distributable Amount;
(xiii) [Intentionally Omitted];
(xiv) Class A-2 Noteholders' Monthly Principal Distribution
Amount;
(xv) Class A-2 Noteholders' Principal Carryover Shortfall;
(xvi) Class A-2 Noteholders' Principal Monthly Distributable
Amount;
(xvii) Class A-3 Noteholders' Monthly Principal Distribution
Amount;
(xviii) Class A-3 Noteholders' Principal Carryover Shortfall;
(xix) Class A-3 Noteholders' Monthly Distributable Amount;
D-2
(xx) Class B Noteholders' Monthly Principal Distribution
Amount;
(xxi) Class B Noteholders' Principal Carryover Shortfall;
(xxii) Class B Noteholders' Monthly Distributable Amount;
(xxiiii) Class B Noteholders' Principal Distributable Amount;
(xxiv) the amount of principal to be distributed to the Class A-2
Noteholders, Class A-3 Noteholders and/or Class B
Noteholders pursuant to Section 5.05(b)(ii);
(xxv) Monthly Certificate Interest;
(xxvi) Certificateholders' Interest Carryover Shortfall;
(xxvii) Certificateholders' Interest Distributable Amount;
(xxviii) Certificateholders' Monthly Principal Distributable
Amount;
(xxix) Certificateholders' Principal Carryover Shortfall;
(xxx) Certificateholders' Principal Distributable Amount;
(xxxi) Certificateholders' Distributable Amount;
(xxxii) the amount to be deposited into the Reserve Account
pursuant to Section 5.04(b);
(xxxiii) the Specified Reserve Account Balance;
(xxxiv) the excess, if any, of the amount in the Reserve Account
(after giving effect to Section 5.04(b)) over the
Specified Reserve Account Balance;
(xxxv) the amount to be distributed from the Reserve Account to
the Seller pursuant to Section 5.05(b)(i) or (ii), as
applicable;
(xxxvi) the amount to be withdrawn from the Reserve Account and
deposited into the Class A Note Distribution Account
pursuant to Section 5.05(c) (separately stating interest
and principal);
D-3
(xxxvii) the amount to be withdrawn from the Reserve Account and
deposited into the Class B Note Distribution Account
pursuant to Section 5.05(d) (separately stating interest
and principal);
(xxxviii) the Pool Balance as of the close of business on the last
day of the related Collection Period;
(xxxix) the outstanding principal amount of the Class A-1 Notes,
the Class A-1 Note Pool Factor, the outstanding principal
amount of the Class A-2 Notes, the Class A-2 Note Pool
Factor, the outstanding principal amount of the Class A-3
Notes, the Class A-3 Note Pool Factor, the outstanding
principal amount of the Class B Notes, the Class B Note
Pool Factor, the Certificate Balance and the Certificate
Pool Factor as of the close of business on the last day of
the related Collection Period, after giving effect to
payments of principal on such Distribution Date;
(xi) the aggregate amount of the Purchase Amounts for Purchased
Receivables with respect to the related Collection Period;
(xii) the amount of Realized Losses, if any, for the related
Collection Period; and
(xiii) the balance of the Reserve Account on such Distribution
Date, after giving effect to distributions made on such
Distribution Date.
(xiii) the Specified Reserve Account Balance for such
Distribution Date and the following:
(a)(i) the aggregate of the Realized Losses realized from
the Cut-off Date through the end of the Collection
Period preceding such Distribution Date and (ii) the
amount equal to [____]% of the Initial Pool Balance;
(b)(i) the sum of (x) 12 times the Realized Losses realized
during the Collection Period immediately preceding
such Distribution Date and (y) the aggregate
Principal Balance of all Receivables as to which the
related Financed Equipment has been repossessed but
which has not become a Liquidated Receivable and
(ii) the amount equal to [____]% of the Pool Balance
at the beginning of such Collection Period; or
(c)(i) the aggregate amount of Scheduled Payments that are
delinquent by more than 60 days as of the end of the
Collection Period
D-4
immediately preceding such Distribution Date and
(ii) the amount equal to [____]% of the Pool Balance
as of the end of such Collection Period.
D-5
SCHEDULE E
Officers' Certificate
The undersigned hereby certify that (i) they are, respectively, a duly
elected [title] and [title] of Caterpillar Financial Services Corporation, (ii)
Exhibit A hereto complies with the requirements of, and is being delivered
pursuant to, Section 5.08(a) of the Sale and Servicing Agreement (the "Sale and
Servicing Agreement") dated as of [____________] between Caterpillar Financial
Asset Trust [____]-[_], Caterpillar Financial Funding Corporation and
Caterpillar Financial Services Corporation, (iii) Exhibit B hereto complies with
the requirements of, and is delivered pursuant to, Section 5.07(b) of the Sale
and Servicing Agreement, and (iv) Exhibit C hereto complies with the
requirements of, and is being delivered pursuant to, Section 5.04(b) of the Sale
and Servicing Agreement.
Dated:________________________
------------------------------
Name:
Title:
------------------------------
Name:
Title:
E-1
EXHIBIT A
TO SCHEDULE E
Statement for Certificateholders
pursuant to Section 5.08(a)
Distribution Date:___________________
(i) Amount of principal being paid or distributed:
(a) Class A-1 Notes:_______________ ($____ per $[___]
original principal
amount)
(b) Class A-2 Notes:_______________ ($____ per $[___]
original principal
amount)
(c) Class A-3 Notes:_______________ ($____ per $[___]
original principal
amount)
(d) Class B Notes:_______________ ($____ per $[___]
original principal
amount)
(e) Certificates:__________________ ($ per $[___]
original principal
amount)
(f) Total:_______________
(ii) (a) Amount of interest being paid or distributed:
(a) Class A-1 Notes:_____________ ($____ per $[___]
original principal
amount)
(b) Class A-2 Notes:_____________ ($____ per $[___]
original principal
amount)
(c) Class A-3 Notes:_____________ ($____ per $[___]
original principal
amount)
(d) Class B Notes:_____________ ($____ per $[___]
original principal
amount)
A-1
(e) Certificates:________________ ($____ per $[___]
original principal
amount)
(f) Total:_______________
(iii) Pool Balance at end of related Collection Period:________.
(iv) after giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class
A-1 Notes:_____________
(2) Class A-1 Note Pool Factor:______________
(b) (1) outstanding principal amount of Class
A-2 Notes:_____________
(2) Class A-2 Note Pool Factor:____________
(c) (1) outstanding principal amount of Class
A-3 Notes:_____________
(2) Class A-3 Note Pool Factor:____________
(d) (1) outstanding principal amount of Class B Notes:__________
(2) Class B Note Pool Factor:____________
(e) (1) Certificate Balance:_____________
(2) Certificate Pool Factor:____________
(v) Amount of Servicing Fee being paid :____________.
(vi) Amount of Administration Fee being paid:____________.
(vii) Aggregate Purchase Amounts for Collection Period:____________.
(viii) Aggregate amount of Realized Losses for the Collection
Period:__________.
(ix) Amount in Reserve Account:_______________.
A-2
EXHIBIT B
TO SCHEDULE E
Statement for Noteholders
pursuant to Section 5.08(a)
Distribution Date:___________________
(i) Amount of principal being paid on Notes:
(a) Class A-1 Notes:_______________ ($____ per $[___]
original principal
amount)
(b) Class A-2 Notes:_______________ ($____ per $[___]
original principal
amount)
(c) Class A-3 Notes:_______________ ($____ per $[___]
original principal
amount)
(d) Class B Notes:_______________ ($____ per $[___]
original principal
amount)
(e) Total:_______________
(ii) Amount of interest being paid or distributed:
(a) Class A-1 Notes:_____________ ($____ per $[___]
original principal
amount)
(b) Class A-2 Notes:_____________ ($____ per $[___]
original principal
amount)
(c) Class A-3 Notes:_____________ ($____ per $[___]
original principal
amount)
(d) Class B Notes:_____________ ($____ per $[___]
original principal
amount)
(e) Total:_______________
(iii) Pool Balance at end of related Collection Period:_________.
(iv) after giving effect to distributions on this Distribution Date:
B-1
(a) (1) outstanding principal amount of Class A-1 Notes:________
(2) Class A-1 Note Pool Factor:______________
(b) (1) outstanding principal amount of Class
A-2 Notes:_____________
(2) Class A-2 Note Pool Factor:__________
(c) (1) outstanding principal amount of Class
A-3 Notes:_____________
(2) Class A-3 Note Pool Factor:__________
(d) (1) outstanding principal amount of Class B Notes:__________
(2) Class B Note Pool Factor:__________
(e) (1) Certificate Balance:__________
(v) Amount of Servicing Fee being paid:____________.
(vi) Amount of Administration Fee being paid:____________.
(vii) Aggregate Purchase Amounts for Collection Period:____________.
(viii) Aggregate amount of Realized Losses for the Collection
Period:__________.
(ix) Amount in Reserve Account:___________________.
B-2
EXHIBIT C
TO SCHEDULE E
Instructions to the Indenture Trustee for payments and deposits pursuant to
Section 5.04(b) of the Sale and Servicing Agreement:
Date:________
(i) Payment of Servicing Fee (including any previously unpaid Servicing
Fees) to Servicer: __________.
(ii) Payment of Administration Fee to Administrator: ______________.
(iii) Class A Noteholders' Interest Distributable Amount to be deposited
into Class A Noteholders' Distribution Account: __________.
(iv) Class B Noteholders' Interest Distributable Amount to be deposited
into Class B Noteholders' Distribution Account: __________.
(v) Class A Noteholders' Principal Distributable Amount to be deposited
into Class A Noteholders' Distribution Account: __________.
(vi) Class B Noteholders' Principal Distributable Amount to be deposited
into Class B Noteholders' Distribution Account: __________.
(vii) Certificateholders' Interest Distributable Amount to be deposited
into Certificateholders' Distribution Account: __________.
(viii) Certificateholders' Principal Distributable Amount to be deposited
into Certificateholders' Distribution Account: __________.
(ix) Deposit to Reserve Account: __________.
(x) (A) Distribute Excess Reserve Account Amount to Seller: ________.
(B) Pay Excess Reserve Account Amount to Noteholders.
C-1