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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 1997
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CATERPILLAR FINANCIAL FUNDING CORPORATION
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(Exact name of registrant as specified in governing instruments)
Nevada 333-24373 88-0342613
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
organization)
Greenview Plaza, 2950 East Flamingo Road, Suite C-3B, Las Vegas, NV 89121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 735-2514
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Not Applicable
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(Former name or former address if changed since last report)
Exhibit Index located at Page 2
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Items 1 through 6 and Item 8 are not included because they are not applicable.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits (executed copies) - The following execution copies of
Exhibits to the Form S-3 Registration Statement of the Registrant are
hereby filed:
Sequentially
Exhibit Numbered
Number Exhibit Page
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1.1 Class A Note Underwriting Agreement __
dated November 19, 1997 among Caterpillar
Financial Funding Corporation, Caterpillar
Financial Services Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Chase
Securities Inc. and Citicorp Securities, Inc.
1.2 Class B Note Underwriting Agreement dated __
November 19, 1997 among Caterpillar Financial
Funding Corporation, Caterpillar Financial
Services Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
4.1 Indenture dated as of November 1, 1997 between __
Caterpillar Financial Asset Trust 1997-B and The
First National Bank of Chicago, as Indenture
Trustee.
4.2 Amended and Restated Trust Agreement dated as __
of November 1, 1997 between Caterpillar
Financial Funding Corporation and Chase
Manhattan Bank Delaware, as Owner Trustee.
4.3 Sale and Servicing Agreement dated as __
of November 1, 1997 among Caterpillar
Financial Asset Trust 1997-B, Caterpillar
Financial Funding Corporation, as Seller and
Caterpillar Financial Services Corporation, as
Servicer.
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Sequentially
Exhibit Numbered
Number Exhibit Page
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10.1 Purchase Agreement dated as of November 1, 1997 __
between Caterpillar Financial Funding
Corporation Inc., as Purchaser and Caterpillar
Financial Services Corporation, as Seller.
10.2 Administration Agreement dated as of __
November 1, 1997 among Caterpillar Financial
Asset Trust 1997-B, Caterpillar Financial
Services Corporation, as Administrator and
Servicer, Caterpillar Financial Funding
Corporation, and The First National Bank of
Chicago, as Indenture Trustee.
10.3 Custodial Agreement dated as of November 1, __
1997, among Caterpillar Financial Services
Corporation, Caterpillar Financial Funding
Corporation, Caterpillar Financial Asset Trust
1997-B and the First National Bank of Chicago,
as Indenture Trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CATERPILLAR FINANCIAL FUNDING CORPORATION
(Registrant)
December 10, 1997 By:/s/ EDWARD J. SCOTT
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Name: Edward J. Scott
Title: Treasurer
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Exhibit 1.1
Class A Note Underwriting Agreement
dated November 19, 1997
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CATERPILLAR FINANCIAL ASSET TRUST 1997-B
CLASS A-1 5.805% ASSET BACKED NOTES
CLASS A-2 6.018% ASSET BACKED NOTES
CLASS A-3 6.16% ASSET BACKED NOTES
CATERPILLAR FINANCIAL FUNDING CORPORATION
CLASS A NOTE UNDERWRITING AGREEMENT
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November 19, 1997
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representative of the
Several Underwriters
250 Vesey Street, 15th Floor
New York, New York 10281
Ladies and Gentlemen:
1. INTRODUCTORY. Caterpillar Financial Funding Corporation, a Nevada
corporation (the "SELLER"), proposes to cause Caterpillar Financial Asset Trust
1997-B (the "TRUST") to issue and sell $81,000,000 aggregate principal amount of
Class A-1 5.805% Asset Backed Notes (the "CLASS A-1 NOTES"), $110,900,000
aggregate principal amount of Class A-2 6.018% Asset Backed Notes (the "CLASS A-
2 NOTES") and $102,091,000 aggregate principal amount of Class A-3 6.16% Asset
Backed Notes (the "CLASS A-3 NOTES", and together with the Class A-2 Notes and
the Class A-3 Notes, the "CLASS A NOTES") to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS"), for whom you are acting as
representative (the "REPRESENTATIVE"). The assets of the Trust will include,
among other things, a pool of fixed rate retail installment sale contracts (the
"RECEIVABLES") secured by new and used machinery manufactured primarily by
Caterpillar Inc. ("CATERPILLAR"), including rights to receive certain payments
with respect to such Receivables, and security interests in the machinery
financed by the Receivables (the "FINANCED EQUIPMENT"), and the proceeds
thereof. The Receivables will be sold to the Trust by the Seller. The
Receivables will be serviced for the Trust by Caterpillar Financial Services
Corporation, a Delaware corporation (the "SERVICER" or "CFSC"). The Notes will
be issued pursuant to the Indenture to be dated as of November 1, 1997 (as
amended and supplemented from time to time, the "INDENTURE"), between the Trust
and The First National Bank of Chicago, a national banking association (the
"INDENTURE TRUSTEE").
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Simultaneously with the issuance and sale of the Class A Notes as
contemplated herein, the Trust will issue $12,577,000 aggregate principal amount
of 6.35% Class B Asset Backed Notes (the "CLASS B NOTES"; together with the
Class A Notes, the "NOTES") and $7,861,558 aggregate principal amount of 6.35%
Asset Backed Certificates (the "CERTIFICATES"; together with the Notes sometimes
referred to collectively herein as the "SECURITIES"), each representing a
fractional undivided interest in the Trust. The Class B Notes will be sold
pursuant to an underwriting agreement (the "CLASS B NOTE UNDERWRITING
AGREEMENT"; together with this Underwriting Agreement, the "UNDERWRITING
AGREEMENTS") among the Seller, CFSC and the underwriters named in Schedule I
thereto.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement to be dated as of
November 1, 1997 (as amended and supplemented from time to time, the "SALE AND
SERVICING AGREEMENT"), among the Trust, the Seller and the Servicer or, if not
defined therein, in the Indenture or the Trust Agreement to be dated as of
November 1, 1997 (as amended and supplemented from time to time, the "TRUST
AGREEMENT"), between the Seller and Chase Manhattan Bank Delaware, a Delaware
banking corporation as owner trustee under the Trust Agreement (the "OWNER
TRUSTEE").
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to and agrees with each Underwriter that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "ACT"), and has filed with the
Securities and Exchange Commission (the "COMMISSION") a registration statement
(Registration No. 333-24373) on such Form, including a prospectus and a form of
prospectus supplement, for registration under the Act of the offering and sale
of the Notes. The Seller may have filed one or more amendments thereto, each of
which amendments has previously been furnished to the Representative. The
Seller will also file with the Commission a prospectus supplement in accordance
with Rule 424(b) under the Act. The Seller has included in the Registration
Statement, as amended at the Effective Date (as hereinafter defined), all
information required by the Act and the rules thereunder to be included in the
Prospectus (as hereinafter defined) with respect to the Notes and the offering
thereof. As filed, the registration statement as amended, the form of
prospectus supplement, and any prospectuses or prospectus supplements filed
pursuant to Rule 424(b) under the Act relating to the Notes shall, except to the
extent that the Representative shall agree in writing to a modification, be in
all substantive respects in the form furnished to the Representative prior to
the Execution Time (as hereinafter defined) or, to the extent not completed at
the Execution Time, shall contain only such specific
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additional information and other changes (beyond that contained in the latest
preliminary prospectus supplement which has previously been furnished to the
Representative) as the Seller has advised the Representative, prior to the
Execution Time, will be included or made therein.
For purposes of this Agreement, "EFFECTIVE TIME" means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"EFFECTIVE DATE" means the date of the Effective Time. "EXECUTION TIME" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time,
and including the exhibits thereto and any material incorporated by reference
therein (including any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets (as defined in Section 13 of this Agreement)
filed on Form 8-K), is hereinafter referred to as the "REGISTRATION STATEMENT,"
and any prospectus supplement (the "PROSPECTUS SUPPLEMENT") relating to the
Notes, as filed with the Commission pursuant to and in accordance with Rule
424(b) under the Act is, together with the prospectus filed as part of the
Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "BASIC
PROSPECTUS"), hereinafter referred to as the "PROSPECTUS". "PRELIMINARY
PROSPECTUS" means any preliminary prospectus to the Prospectus which describes
the Notes and the offering thereof and which is used prior to the filing of the
Prospectus. "RULE 424" refers to such rule under the Act. Any reference herein
to the Registration Statement, the Prospectus or any Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), on or before the
Effective Date of the Registration Statement or the issue date of the Prospectus
or any Prospectus Supplement, as the case may be; and any reference herein to
the terms "AMEND", "AMENDMENT" or "SUPPLEMENT" with respect to the Registration
Statement, the Prospectus or any Prospectus Supplement shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of the
Prospectus or any Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus was first filed and
on the Closing Date (as defined below), the Prospectus and any Prospectus
Supplement did or will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939,
as amended (the "TRUST INDENTURE ACT"), and the respective rules
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and regulations of the Commission thereunder (the "RULES AND REGULATIONS") and
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
On the Effective Date, the Registration Statement did not and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus, together with
any Prospectus Supplement, did not or will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Seller makes no representation
or warranty as to the information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with information
furnished in writing to the Seller by any Underwriter through the Representative
specifically for use in connection with preparation of the Registration
Statement or the Prospectus.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, management,
financial condition, stockholders' equity, results of operations, regulatory
status or business prospects of the Seller or CFSC, and (ii) neither the Seller
nor CFSC has entered into any transaction or agreement (whether or not in the
ordinary course of business) material to it that, in either case, would
reasonably be expected to materially adversely affect the interests of the
holders of the Notes, other than as set forth or contemplated in the Prospectus.
(d) The computer tape of the Receivables created as of November 1,
1997, and made available to the Representative by the Servicer, was complete and
accurate as of the date thereof and includes a description of the Receivables
that are described in Schedule A to the Sale and Servicing Agreement.
(e) Each of the Seller and CFSC is duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and is qualified to transact business in and is in good standing
under the laws of each state in which its activities require such qualification,
and has full power, authority and legal right to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted.
(f) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CFSC.
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(g) On the date of this Agreement and on the Closing Date, the
representations and warranties of CFSC and the Seller in each of the Basic
Documents to which they are a party will be true and correct.
(h) CFSC's assignment and delivery of the Receivables to the Seller
as of the Closing Date will vest in the Seller all of CFSC's right, title and
interest therein, subject to no prior lien, mortgage, security interest, pledge,
adverse claim, charge or other encumbrance.
(i) The Seller's assignment and delivery of the Receivables to the
Trust as of the Closing Date will vest in the Trust all of the Seller's right,
title and interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(j) The Trust's assignment of the Receivables to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
3. PURCHASE, SALE, AND DELIVERY OF THE CLASS A NOTES. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Seller agrees to cause the
Trust to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, (a) at a purchase price of 99.85% of
the principal amount thereof, the respective principal amount of the Class A-1
Notes set forth opposite the name of such Underwriter in Schedule I hereto, (b)
at a purchase price of 99.82% of the principal amount thereof, the respective
principal amount of the Class A-2 Notes set forth opposite the name of such
Underwriter in Schedule I hereto and (c) at a purchase price of 99.7513597% of
the principal amount thereof, the respective principal amount of the Class A-3
Notes set forth opposite the name of such Underwriter in Schedule I hereto.
Delivery of and payment for the Class A Notes shall be made at the office of
Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, New York 10103
on November 25, 1997 (the "CLOSING DATE"). Delivery of the Class A Notes shall
be made against payment of the purchase price in immediately available funds
drawn to the order of the Seller. The Class A Notes to be so delivered will be
initially represented by one or more Class A Notes registered in the name of
Cede & Co., the nominee of The Depository Trust Company ("DTC"). The interests
of beneficial owners of the Class A Notes will be represented by book entries on
the records of DTC and participating members thereof. Definitive Class A Notes
will be available only under limited circumstances set forth in the Indenture.
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4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Class A Notes for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
5. COVENANTS OF THE SELLER. The Seller covenants and agrees with
each of the Underwriters that:
(a) Immediately following the execution of this Agreement, the Seller
will prepare a Prospectus Supplement setting forth the amount of Notes covered
thereby and the terms thereof not otherwise specified in the Basic Prospectus,
the price at which such Notes are to be purchased by the Underwriters, the
initial public offering price, the selling concessions and allowances, and such
other information as the Seller deems appropriate and shall furnish a copy to
the Representative in accordance with Section 5(b) of this Agreement. The
Seller will transmit the Prospectus including such Prospectus Supplement to the
Commission pursuant to Rule 424(b) by a means reasonably calculated to result in
filing that complies with all applicable provisions of Rule 424(b). The Seller
will advise the Representative promptly of any such filing pursuant to Rule
424(b).
(b) Prior to the termination of the offering of the Notes, the Seller
will not file any amendment of the Registration Statement or supplement to the
Prospectus unless the Seller has furnished the Representative with a copy for
its review prior to filing and will not file any such proposed amendment or
supplement to which the Representative reasonably objects. Subject to the
foregoing sentence, if filing of the Prospectus is otherwise required under Rule
424(b), the Seller will file the Prospectus, properly completed, and any
supplement thereto, with the Commission pursuant to and in accordance with the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such timely filing.
(c) The Seller will advise the Representative promptly of any
proposal to amend or supplement the Registration Statement as filed or the
Prospectus, and will not effect such amendment or supplement without the
Representative's consent, which consent will not unreasonably be withheld. The
Seller will also advise the Representative promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information and the Seller will also advise
the Representative promptly of any amendment or supplement to the Registration
Statement or the Prospectus and of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threat of any proceeding for that purpose, and the Seller will
use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting of any issued
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stop order.
(d) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective Rules and Regulations thereunder, the Seller
promptly will notify the Representative and will prepare and file, or cause to
be prepared and filed, with the Commission, subject to the first sentence of
paragraph (b) of this Section 5, an amendment or supplement that will correct
such statement or omission, or effect such compliance. Any such filing shall
not operate as a waiver or limitation on any right of any Underwriter hereunder.
(e) As soon as practicable, but not later than fourteen months after
the original effective date of the Registration Statement, the Seller will cause
the Trust to make generally available to Noteholders an earnings statement of
the Trust covering a period of at least twelve months beginning after the
Effective Date of the Registration Statement that will satisfy the provisions of
Section 11(a) of the Act.
(f) The Seller will furnish to the Underwriters copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus or prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each case as
soon as available and in such quantities as the Underwriters request.
(g) The Seller will assist the Representative in arranging for the
qualification of the Notes for sale and determination of their eligibility for
investment under the laws of such jurisdictions in the United States, or as
necessary to qualify for the Euroclear System or Cedel Bank, societe anonyme, as
the Representative designates and will continue to assist the Representative in
maintaining such qualifications in effect so long as required for the
distribution; provided, however, that neither the Seller nor CFSC shall be
required to qualify to do business in any jurisdiction where it is now not
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is now not subject to service
of process.
(h) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as the Underwriters shall cease to maintain a
secondary market in the Notes, whichever occurs first, the Seller will deliver
to the Representative the annual statements of compliance and the annual
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independent certified public accountants' reports furnished to the Owner Trustee
or the Indenture Trustee pursuant to the Sale and Servicing Agreement, as soon
as such statements and reports are furnished to the Owner Trustee or the
Indenture Trustee.
(i) So long as any of the Notes are outstanding, the Seller will
furnish to the Representative (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to Noteholders or filed
with the Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning the
Seller filed with any government or regulatory authority which is otherwise
publicly available, as the Representative may reasonably request.
(j) On or before the Closing Date, the Seller shall cause the
computer records of the Seller and the Servicer relating to the Receivables to
be marked to show the Trust's absolute ownership of the Receivables, and from
and after the Closing Date neither the Seller nor the Servicer shall take any
action inconsistent with the Trust's ownership of such Receivables, other than
as permitted by the Sale and Servicing Agreement.
(k) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other actions
by the Seller, the Seller shall furnish such documents and take any such other
actions.
(l) For the period beginning on the date of this Agreement and ending
seven days after the Closing Date, unless waived by the Underwriters, none of
the Seller, CFSC or any trust originated, directly or indirectly, by the Seller
or CFSC will offer to sell or sell notes (other than the Notes) collateralized
by, or certificates (other than the Certificates) evidencing an ownership
interest in, receivables generated pursuant to fixed rate retail installment
sale contracts secured by equipment similar to the Financed Equipment.
(m) The Seller and CFSC each will deliver to the Representative, all
opinions, certificates and other documents or information delivered to the Owner
Trustee and the Indenture Trustee at the time such opinions, certificates and
other documents or information are delivered to the Owner Trustee or the
Indenture Trustee pursuant to the Sale and Servicing Agreement and the Purchase
Agreement with respect to perfection and priority of CFSC's interest in the
Receivables.
6. PAYMENT OF EXPENSES. The Seller will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the
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Registration Statement as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the Notes to the Underwriters, (iii)
the fees and disbursements of the Seller's counsel and accountants, (iv) the
qualification of the Notes under securities laws in accordance with the
provisions of Section 5(g), including filing fees and the fees and disbursements
of counsel in connection therewith and in connection with the preparation of any
blue sky or legal investment survey, (v) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, of the Preliminary Prospectus and of each amendment or
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of any blue sky or legal investment survey prepared in connection with the
Notes, (vii) any fees charged by rating agencies for the rating of the Notes,
(viii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc. and (ix) the fees and
expenses of Orrick, Herrington & Sutcliffe LLP in its role as counsel to the
Trust incurred as a result of providing the opinions required by Section 7(f)
hereof. The Underwriters have agreed to reimburse the Seller for expenses not
to exceed $65,000 incurred by the Seller in connection with the issuance and
distribution of the Class A Notes.
7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase and pay for the Class A Notes will
be subject to the accuracy of the representations and warranties on the part of
the Seller herein, to the accuracy of the statements of officers of the Seller
made pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) The Registration Statement shall have become effective prior to
the Execution Time, and prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Representative, shall be contemplated by the Commission or by
any authority administering any state securities or blue sky law.
(b) The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof.
(c) On or prior to the date of this Agreement and on or prior to the
Closing Date, the Representative shall have received a letter or letters, dated
as of the date of this Agreement and as of the Closing Date, respectively, of
Price Waterhouse, independent public accountants, substantially in the form of
the drafts to which the Representative has previously
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agreed and otherwise in form and substance satisfactory to the Representative
and its counsel.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Seller or the Servicer which, in the judgment of the
Underwriters, materially impairs the investment quality of the Notes or makes it
impractical or inadvisable to market the Notes; (ii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange; (iii) any suspension
of trading of any securities of Caterpillar or CFSC on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by Federal,
Delaware or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress, or any other substantial national or international calamity or
emergency if, in the judgment of the Underwriters, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the Notes.
(e) The Representative shall have received opinions of Paul J. Gaeto,
General Counsel of CFSC, Orrick, Herrington & Sutcliffe LLP and Tuke, Yopp &
Sweeney, counsel to CFSC, the Seller and the Trust and such other counsel
acceptable to the Underwriters addressed to the Representative, the Owner
Trustee and the Indenture Trustee, dated the Closing Date and satisfactory in
form and substance to the Representative and its counsel, substantially to the
effect that:
(i) CFSC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Underwriting Agreements, the
Administration Agreement, the Purchase Agreement, the Sale and Servicing
Agreement and the Custodial Agreement and had at all times, and now has,
the power, authority and legal right to acquire, own and sell the
Receivables.
(ii) The Seller has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Nevada with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Underwriting Agreements, the Purchase
Agreement, the Trust Agreement, the Sale and Servicing Agreement and the
Custodial Agreement and had at all times, and now has, the power, authority
and legal right
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to acquire, own and sell the Receivables.
(iii) CFSC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render any Receivable unenforceable by the Seller, the Owner Trustee or the
Indenture Trustee, except as may be required under state securities or Blue
Sky laws of various jurisdictions.
(iv) The Seller is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would have a material adverse effect on the Receivables as a
whole, except as may be required under state securities or Blue Sky laws of
various jurisdictions.
(v) The direction by the Seller to the Owner Trustee to
authenticate the Certificates has been duly authorized by the Seller and,
when the Certificates have been duly executed, authenticated and delivered
by the Owner Trustee in accordance with the Trust Agreement and delivered
to and paid for by the Seller, will be legally issued, fully paid and
nonassessable obligations of the Trust.
(vi) The direction by CFSC to the Indenture Trustee to authenticate
the Notes has been duly authorized by CFSC, and, when the Notes have been
duly executed and delivered by the Owner Trustee, authenticated by the
Indenture Trustee in accordance with the Indenture and delivered and paid
for pursuant to the Note Underwriting Agreement, the Notes will be duly
issued and entitled to the benefits and security afforded by the Indenture,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(vii) Each of the Purchase Agreement, the Trust Agreement, the Sale
and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by the Seller, and is a legal, valid and
binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable
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defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(viii) The Underwriting Agreements have been duly authorized,
executed and delivered by each of the Seller and CFSC.
(ix) Each of the Administration Agreement, the Purchase Agreement,
the Sale and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by CFSC and is a legal, valid and
binding obligation of CFSC enforceable against CFSC in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(x) Neither the transfer of the Receivables from CFSC to the Seller,
nor the transfer of the Receivables from the Seller to the Trust, nor the
assignment of the Trust Estate to the Trust, nor the assignment by the
Seller of its right, title and interest in the Purchase Agreement to the
Trust, nor the grant of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, nor the execution and delivery
of the Underwriting Agreements, the Purchase Agreement, the Trust
Agreement, the Sale and Servicing Agreement or the Custodial Agreement by
the Seller, nor the execution of the Underwriting Agreements, the
Administration Agreement, the Purchase Agreement, the Sale and Servicing
Agreement or the Custodial Agreement by CFSC, nor the consummation of any
transactions contemplated in the Underwriting Agreements, the Purchase
Agreement, the Trust Agreement, the Indenture, the Administration
Agreement, the Sale and Servicing Agreement or the Custodial Agreement
(such agreements, excluding the Underwriting Agreements, being for purposes
of this clause (e), collectively, the "BASIC DOCUMENTS"), nor the
fulfillment of the terms thereof by CFSC, the Seller or the Trust, as the
case may be, will (x) conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of CFSC or the Seller or, to
the best of such counsel's knowledge after due inquiry, of any indenture or
other agreement or instrument to which CFSC or the Seller is a party or by
which either of them is bound, or (y) result in a violation of or
contravene the terms of any statute, order or regulation applicable to CFSC
or the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over either of them.
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(xi) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge, threatened before any court,
administrative agency, or other tribunal (1) asserting the invalidity of
the Trust or any of the Basic Documents, (2) seeking to prevent the
consummation of any of the transactions contemplated by any of the Basic
Documents or the execution and delivery thereof, or (3) that could
reasonably be expected to materially and adversely affect the performance
(A) by CFSC of its obligations under, or the validity or enforceability of,
the Underwriting Agreements, the Administration Agreement, the Purchase
Agreement, the Sale and Servicing Agreement or the Custodial Agreement, (B)
by the Seller of its obligations under, or the validity or enforceability
of, the Underwriting Agreements, the Purchase Agreement, the Trust
Agreement, the Sale and Servicing Agreement or the Custodial Agreement, or
(C) by the Servicer of its obligations under, or the validity or
enforceability of, the Sale and Servicing Agreement.
(xii) To the best knowledge of such counsel, no default exists and no
event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which CFSC or the Seller is a
party or by which either of them is bound, which default is or would have a
material adverse effect on the financial condition, earnings, business or
properties of CFSC and its subsidiaries, taken as a whole.
(xiii) The Assignment dated as of the Closing Date from CFSC to the
Seller has been duly authorized, executed and delivered by CFSC.
(xiv) Should CFSC become the debtor in a case under the Bankruptcy
Code, if the matter were properly briefed and presented to a court, the
court should hold that (1) the transfer of the Receivables by CFSC to the
Seller in the manner set forth in the Purchase Agreement would constitute
an absolute sale of the Receivables, rather than a borrowing by CFSC
secured by the Receivables, and thus (2) the Seller's rights to the
Receivables would not be impaired by the operation of Section 362(a) of the
Bankruptcy Code.
(xv) Should CFSC become the debtor in a case under the Bankruptcy
Code, and the Seller would not otherwise properly be a debtor in a case
under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, the court,
exercising reasonable judgment after full consideration of all relevant
factors, should not order, over the objection of the Certificateholders or
the Noteholders, the substantive consolidation of the assets and
liabilities of the Seller
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with those of CFSC based on any legal theories currently subscribed to by
federal courts exercising bankruptcy jurisdiction.
(xvi) Such counsel is familiar with the Servicer's standard operating
procedures relating to the Servicer's acquisition of a perfected first
priority security interest in the equipment financed by the Servicer
pursuant to equipment installment sale contracts in the ordinary course of
the Servicer's business. Assuming that the Servicer's standard procedures
have been followed with respect to the perfection of security interests in
the Financed Equipment (and such counsel has no reason to believe that such
procedures have not been followed), the Servicer has acquired or will
acquire a perfected first priority security interest in the Financed
Equipment.
(xvii) The Purchase Agreement grants to the Seller a valid security
interest in CFSC's rights in the Receivables and the proceeds thereof. The
Sale and Servicing Agreement grants to the Trust a valid security interest
in the Seller's rights in the Receivables and the proceeds thereof. The
Indenture grants to the Indenture Trustee a valid security interest in the
Trust's rights in the Receivables and the proceeds thereof.
(xviii) The Receivables are chattel paper as defined in the UCC.
(xix) Immediately prior to the sale of the Receivables and the
proceeds thereof to the Seller, CFSC had a first priority perfected
security interest in the Receivables and the proceeds thereof. Immediately
prior to the transfer of the Receivables and the proceeds thereof to the
Trust, the Seller had a first priority perfected security interest in the
Receivables and the proceeds thereof. Immediately prior to the transfer of
the Receivables and the proceeds thereof to the Indenture Trustee, the
Trust had a first priority perfected security interest in the Receivables
and the proceeds thereof. The Indenture Trustee has a first priority
perfected security interest in the Receivables and the proceeds thereof.
The opinion covered by this paragraph (xix) shall be subject to customary
UCC exceptions and qualifications.
(xx) The Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Administration Agreement and the Purchase Agreement conform
in all material respects with the description thereof contained in the
Prospectus and any supplement thereto.
(xxi) The statements in the Prospectus under the headings "Risk
Factors -- Perfection of Interests in
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Receivables and in Financed Equipment" and "Certain Legal Aspects of the
Receivables" to the extent they constitute matters of law or legal
conclusions with respect thereto, are correct in all material respects.
(xxii) The statements contained in the Prospectus and any supplement
thereto under the headings "Description of the Notes", "Description of the
Certificates" and "Description of the Transfer and Servicing Agreements",
insofar as such statements constitute a summary of the Notes, the
Certificates, the Indenture, the Administration Agreement, the Sale and
Servicing Agreement and the Trust Agreement, are a fair and accurate
summary of the matters referred to therein.
(xxiii) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
consummation of the transactions contemplated in the Basic Documents,
except such filings with respect to the transfer of the Receivables to the
Seller pursuant to the Purchase Agreement, the transfer of the Receivables
to the Trust pursuant to the Sale and Servicing Agreement, and such as may
be required under state securities or Blue Sky laws of various
jurisdictions.
(xxiv) All actions required to be taken and all filings required to
be made under the Act prior to the sale of the Notes have been duly taken
or made.
(xxv) The Trust Agreement is not required to be qualified under the
Trust Indenture Act and the Trust is not required to be registered under
the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT").
(xxvi) The Indenture has been duly qualified under the Trust
Indenture Act.
(xxvii) The Seller is not, and will not as a result of the offer and
sale of the Notes as contemplated in the Prospectus and the Note
Underwriting Agreement become, an "investment company" as defined in the
Investment Company Act or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act.
(xxviii) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed
therein.
(xxix) The Registration Statement has become effective under the Act,
any required filing of any Preliminary Prospectus and the Prospectus and
any supplements thereto pursuant to Rule 424(b) has been or will be made in
the
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manner and within the time period required by Rule 424(b), and, to the best
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act,
and the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of the
Act, the Exchange Act, the Trust Indenture Act and the Rules and
Regulations.
(xxx) Nothing has come to such counsel's attention that would lead
such counsel to believe that the Registration Statement or the Prospectus
or any amendment or supplement thereto as of the respective dates thereof
(other than the financial statements and other financial and statistical
information contained therein, as to which such counsel need not express
any view) contains an untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein not
misleading.
(xxxi) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver and
perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Notes and the Certificates.
(xxxii) The Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized and, when duly executed
and delivered by the Owner Trustee on behalf of the Trust, will constitute
the legal, valid and binding obligations of the Trust, enforceable against
the Trust in accordance with their terms, except (x) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (y) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought.
(xxxiii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Sale and Servicing Agreement, and had at
all relevant times, and now has, the power, authority and legal right to
acquire, own, sell and
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service the Receivables.
(xxxiv) The Servicer is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render any Receivable unenforceable by the Seller, the Owner
Trustee or the Indenture Trustee.
(xxxv) The Sale and Servicing Agreement has been duly authorized,
executed and delivered by the Servicer, and is the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(xxxvi) Neither the execution and delivery of the Sale and Servicing
Agreement by the Servicer, nor the consummation of any transactions
contemplated in the Underwriting Agreements or the Basic Documents, nor the
fulfillment of the terms thereof by the Servicer will conflict with, or
result in a breach, violation or acceleration of, or constitute a default
under, any term or provision of the certificate of incorporation or by-laws
of the Servicer or of any indenture or other agreement or instrument to
which the Servicer is a party or by which it is bound, or result in a
violation of or contravene the terms of any statute, order or regulation
applicable to the Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it.
(xxxvii) To the best knowledge of such counsel, no default exists
and no event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which the Servicer is a party or
by which it is bound, which default is or would have a material adverse
effect on the financial condition, earnings, business or properties of the
Servicer and its subsidiaries, taken as a whole.
Such counsel shall also opine as to such other matters as the
Underwriters may reasonably request. The opinions set forth in clauses (xiv),
(xv) and (xix) of this Section 7(e) shall be given by Orrick, Herrington &
Sutcliffe LLP or such other outside counsel to CFSC, the Seller and the Trust as
may be acceptable to the Underwriters.
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(f) The Representative shall have received an opinion addressed to it
of Orrick, Herrington & Sutcliffe LLP in its capacity as Special Tax Counsel for
the Trust, substantially to the effect that the statements in the Prospectus
under the headings "Summary of Terms--Tax Status" (to the extent relating to
Federal income tax consequences) and "Certain Federal Income Tax Considerations"
accurately describe the material Federal income tax consequences to holders of
the Securities, and the statements in the Prospectus under the heading "ERISA
Considerations", to the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared or reviewed by
such counsel and accurately describe the material consequences to holders of the
Securities under ERISA. Orrick, Herrington & Sutcliffe LLP, in its capacity as
Special Counsel to the Trust, shall have delivered an opinion with respect to
the characterization of the transfer of the Receivables.
(g) The Representative shall have received an opinion addressed to it
of Tuke, Yopp & Sweeney in its capacity as Special Tennessee Tax Counsel for the
Trust, substantially to the effect that the statements in the Prospectus under
the heading "Summary of Terms--Tax Status" (to the extent relating to Tennessee
income tax consequences) and in the Prospectus under the heading "Certain State
Income Tax Considerations" accurately describe the material income tax
consequences in the State of Tennessee to holders of the Notes.
(h) The Representative shall have received an opinion addressed to it
of Lionel Sawyer & Collins in its capacity as Special Nevada Tax Counsel for the
Trust, substantially to the effect that the Trust would not be subject to
taxation in Nevada.
(i) The Representative shall have received an opinion addressed to
it of Skadden, Arps, Slate, Meagher & Flom LLP in its capacity as Special
Counsel to the Underwriters, dated the Closing Date, with respect to the
validity of the Securities and such other related matters as the Representative
shall require and the Seller shall have furnished or caused to be furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(j) The Representative shall have received an opinion addressed to
it, the Seller and the Servicer of The Law Department of the Indenture Trustee,
and such other counsel acceptable to the Representative and its counsel, dated
the Closing Date and satisfactory in form and substance to the Representative
and its counsel, substantially to the effect that:
(i) The Indenture Trustee is a national banking association duly
organized and validly existing under the Federal law of the United States
of America.
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(ii) The Indenture Trustee has the full corporate trust power to
accept the office of trustee under the Indenture and to enter into and
perform its obligations under the Indenture, the Sale and Servicing
Agreement, the Custodial Agreement and the Administration Agreement.
(iii) The execution and delivery of the Indenture, the Custodial
Agreement and the Administration Agreement and the acceptance of the Sale
and Servicing Agreement and the performance by the Indenture Trustee of its
obligations under the Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized by all necessary
corporate action of the Indenture Trustee and each has been duly executed
and delivered by the Indenture Trustee.
(iv) The Indenture, the Sale and Servicing Agreement, the Custodial
Agreement and the Administration Agreement constitute valid and binding
obligations of the Indenture Trustee enforceable against the Indenture
Trustee in accordance with their terms under the laws of the State of New
York and the Federal law of the United States of America.
(v) The execution and delivery by the Indenture Trustee of the
Indenture, the Custodial Agreement and the Administration Agreement and the
acceptance of the Sale and Servicing Agreement do not require any consent,
approval or authorization of, or any registration or filing with, any New
York or United States Federal governmental authority, other than the filing
of Form T-1 under the Trust Indenture Act.
(vi) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vii) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement or the Administration Agreement, nor the
fulfillment of the terms thereof by the Indenture Trustee, will conflict
with, result in a breach or violation of, or constitute a default under any
law or the charter, by-laws or other organizational documents of the
Indenture Trustee or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Indenture Trustee is a
party or is bound or any judgment, order or decree known to such counsel to
be applicable to the Indenture Trustee of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Indenture Trustee.
(viii) To the best of such counsel's knowledge and
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belief, there is no action, suit or proceeding pending or threatened
against the Indenture Trustee (as trustee under the Indenture or in its
individual capacity) before or by any governmental authority that if
adversely decided, would materially adversely affect the ability of the
Indenture Trustee to perform its obligations under the Indenture, the Sale
and Servicing Agreement or the Administration Agreement.
(ix) The execution, delivery and performance by the Indenture Trustee
of the Sale and Servicing Agreement, the Indenture, the Custodial Agreement
and the Administration Agreement will not subject any of the property or
assets of the Trust or any portion thereof, to any liens that are unrelated
to the transactions contemplated in such Agreements.
(k) The Representative shall have received an opinion addressed to
it, the Seller and the Servicer of Pryor, Cashman, Sherman & Flynn, counsel to
the Owner Trustee, and such other counsel acceptable to the Representative and
its counsel, dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, when taken together, substantially to the
effect that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware.
(ii) The Owner Trustee has full corporate trust power and authority
to enter into and perform its obligations under the Trust Agreement and, on
behalf of the Trust, under the Indenture, the Sale and Servicing Agreement
and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, of the Indenture, the Custodial Agreement, the Sale
and Servicing Agreement, the Administration Agreement, the Certificates and
the Notes and the performance by the Owner Trustee of its obligations under
the Trust Agreement, the Indenture, the Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all necessary
corporate action of the Owner Trustee and each has been duly executed and
delivered by the Owner Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement and the Administration Agreement
constitute valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms under the laws of
the State of New York and the State of Delaware and the Federal law of the
United States of America.
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(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Sale and
Servicing Agreement, the Custodial Agreement and the Administration
Agreement do not require any consent, approval or authorization of, or any
registration or filing with, any Delaware or United States Federal
governmental authority having jurisdiction over the trust power of the
Owner Trustee, other than those consents, approvals or authorizations as
have been obtained and the filing of the Certificate of Trust with the
Secretary of State of the State of Delaware.
(vi) The Owner Trustee has duly executed, authenticated and delivered
the Certificates, and has duly executed and delivered the Notes, issued on
the Closing Date on behalf of the Trust.
(vii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, the Sale and Servicing Agreement,
the Indenture, the Custodial Agreement and the Administration Agreement and
the performance by the Owner Trustee of its obligations thereunder, do not
conflict with, result in a breach or violation of or constitute a default
under, the Articles of Association or By-laws of the Owner Trustee.
(l) The Representative shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, the
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer, the principal financial officer or the principal accounting officer
of each of the Seller and the Servicer in which such officers shall state that,
to the best of their knowledge after reasonable investigation, (i) the
representations and warranties of the Seller or the Servicer, as the case may
be, contained in the Trust Agreement, Purchase Agreement and the Sale and
Servicing Agreement, as applicable, are true and correct, that the Seller or the
Servicer, as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under such agreements at or
prior to the Closing Date, that no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission and (ii) no material
adverse change in or affecting particularly the business or properties of the
Trust, the Seller, or the Servicer has occurred.
(m) The Representative shall have received evidence satisfactory to
it that, on or before the Closing Date, the Custodian, on behalf of the Seller,
the Trust and the Indenture Trustee has taken possession of the applicable
Receivables reflecting the transfer of the interest of CFSC in such Receivables
and the proceeds thereof to the Seller, and the
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transfer of the interest of the Seller in such Receivables and the proceeds
thereof to the Trust and the grant of the security interest by the Trust in such
Receivables and the proceeds thereof to the Indenture Trustee.
(n) The Class A-1 Notes shall have been rated "A-1+" by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and "P-1"
by Moody's Investors Service, Inc., the Class A-2 Notes shall have been rated
"AAA" by Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. and "Aaa" by Moody's Investors Service, Inc. and the Class A-3
Notes shall have been rated "AAA" by Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. and "Aaa" by Moody's Investors
Service, Inc.
(o) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued by the Seller or any of its affiliates or
by any trust established by the Seller or any of its affiliates.
(p) On the Closing Date, $12,577,000 aggregate principal amount of
Class B Notes shall have been issued and sold and $7,861,558 aggregate principal
amount of the Certificates shall have been issued and purchased by the Seller.
The Seller will provide or cause to be provided to the Representative
such conformed copies of such opinions, certificates, letters and documents as
it reasonably requests.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Seller and CFSC will
jointly and severally, indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act as follows: against any losses, claims, damages, liabilities or
expenses, joint or several, to which any such Underwriter or person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and against any and
all loss, liability, claim, damage and expense whatsoever to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any
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governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the written consent
of the Seller or CFSC; and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending any such action or claim; PROVIDED, HOWEVER, that the Seller and CFSC
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Notes or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Seller by the Representative on behalf of the
Underwriters expressly for use in the Prospectus as amended or supplemented
relating to such Notes; and provided, further, that the Seller and CFSC shall
not be liable to any Underwriter under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus or Prospectus
Supplement to the extent that any such loss, claim, damage, liability or expense
results from the fact that such Underwriter sold Notes to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus or Prospectus Supplement (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Seller has previously
furnished copies thereof to such Underwriter.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Seller and CFSC against any losses, claims, damages, liabilities or expenses
to which the Seller and CFSC may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Prospectus as amended or supplemented and any other prospectus relating to the
Notes, or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Prospectus as amended or supplemented and any other
prospectus relating to the Notes, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Seller
or CFSC by such Underwriter expressly for use therein, and will reimburse the
Seller and CFSC for any legal or other expenses reasonably incurred by the
Seller and CFSC in connection with investigating or defending any such action or
claim.
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(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation and as set forth in the immediately
succeeding sentence. In any such action, any indemnified party shall have the
right to retain its own counsel, but the legal and other expenses of such
counsel shall be at the expense of such indemnified party unless the
indemnifying party and the indemnified party shall have mutually agreed to the
contrary or the named parties in any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them in which case the legal and
other expense of such counsel shall be at the expense of the indemnifying party.
The indemnifying party shall not, in connection with any action or related
proceeding in the same jurisdiction, be liable for the legal and other expenses
of more than one separate firm for all indemnified parties.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Seller and CFSC on the one hand
and the Underwriters on the other from the offering of the Notes to which such
loss, claim, damage, liability or expense (or action in respect thereof)
relates. If, however, the indemnification
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<PAGE>
provided for in this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party under subsection (b) above in respect of any
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to therein or if the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Seller and CFSC on the one hand and the contributing
Underwriter on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Seller and CFSC on the one hand and the
contributing Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of the Notes (before
deducting expenses) received by the Seller and CFSC bear to the total
commissions or discounts received by the contributing Underwriter in respect
thereof. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
relates to information supplied by the Seller and CFSC on the one hand or by the
contributing Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Seller and CFSC and the contributing Underwriter
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes purchased by or through such Underwriter were
sold exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Seller and CFSC under this Section 8 shall
be in addition to any liability which the Seller
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<PAGE>
and CFSC may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and each Underwriter's obligations under this Section 8
shall be in addition to any liability which such Underwriter may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Seller and CFSC and to each person, if any, who controls the
Seller or CFSC within the meaning of the Act.
9. DEFAULTS OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligations to purchase the Class A Notes hereunder on the
Closing Date and the aggregate principal amount of the Class A Notes that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of the Class A Notes, the
Representative may make arrangements satisfactory to the Representative and the
Seller for the purchase of such Class A Notes by other persons, including any of
the Underwriters, but if no such arrangements are made by the Closing Date, the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Class A Notes that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If an
Underwriter or Underwriters so default and the aggregate principal amount of the
Class A Notes with respect to such default or defaults exceeds 10% of the total
principal amount of the Class A Notes and arrangements satisfactory to the
Representative and the Seller for the purchase of such Class A Notes by other
persons are not made within 24 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the
Seller, except as provided in Section 11. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
10. NO BANKRUPTCY PETITION. Each Underwriter and CFSC covenants and
agrees that, prior to the date which is one year and one day after the payment
in full of all securities issued by the Seller or by a trust for which the
Seller was the depositor which securities were rated by any nationally
recognized statistical rating organization, it will not institute against, or
join any other person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
11. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or CFSC or any of their officers and each of the Underwriters set forth
in or made pursuant to this Agreement or contained in certificates of officers
of the Seller submitted pursuant hereto shall remain
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<PAGE>
operative and in full force and effect, regardless of (i) any termination of
this Agreement, (ii) any investigation or statement as to the results thereof
made by or on behalf of any Underwriter or of the Seller or any of their
respective representatives, officers or directors or any controlling person, and
(iii) delivery of and payment for the Class A Notes. If for any reason the
purchase of the Class A Notes by the Underwriters is not consummated, the Seller
shall remain responsible for the expenses to be paid or reimbursed by the Seller
pursuant to Section 6 and the respective obligations of the Seller and the
Underwriters pursuant to Section 8 shall remain in effect. If for any reason
the purchase of the Class A Notes by the Underwriters is not consummated (other
than because of a failure to satisfy the conditions set forth in items (ii),
(iv) or (v) of Section 7(d)), the Seller will reimburse any Underwriter, upon
demand, for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by it in connection with the
offering of the Class A Notes. Nothing contained in this Section 11 shall limit
the recourse of the Seller against the Underwriters.
12. NOTICES. All communications hereunder will be in writing and if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at World Financial Center, North Tower, 250 Vesey Street,
New York, New York 10281, Attention: Theodore F. Breck; if sent to the Seller,
will be mailed, delivered or telegraphed, and confirmed to it at Caterpillar
Financial Funding Corporation, Greenview Plaza, 2950 East Flamingo Road, Suite
C-3B, Las Vegas, Nevada 89121, Attention: Secretary; if sent to CFSC, will be
mailed, delivered or telegraphed, and confirmed to it at Caterpillar Financial
Services Corporation, 3322 West End Avenue, Nashville, Tennessee 37203-1071,
Attention: Secretary; PROVIDED, HOWEVER, that any notice to an Underwriter
pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to
such Underwriter. Any such notice will take effect at the time of receipt.
13. COMPUTATIONAL MATERIALS; TERM SHEETS. Each Underwriter
represents and warrants to the Seller that (a) it has not and will not use any
information that constitutes "COMPUTATIONAL MATERIALS" as defined in the no-
action letter, dated May 20, 1994, issued by the Commission to Kidder, Peabody
Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and Kidder
Structured Asset Corporation (as made generally applicable to other issuers and
underwriters by the Commission in the response to the request of the Public
Securities Association, dated May 24, 1994), in connection with the offering of
the Class A Notes and (b) it has not and will not use any information that
constitutes "ABS TERM SHEETS", "STRUCTURAL TERM SHEETS" or "COLLATERAL TERM
SHEETS", each as defined in the no-action letter, dated February 13, 1995,
addressed by the Commission to the Public Securities Association, in connection
with the
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<PAGE>
offering of the Class A Notes, in each case without the prior written consent of
the Seller and CFSC to such usage.
14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligations hereunder. No purchaser of Class A
Notes from any Underwriter shall be deemed to be a successor of such Underwriter
merely because of such purchase.
15. REPRESENTATION. The Representative will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representative will be binding
upon all of the Underwriters.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
17. APPLICABLE LAW. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller, CFSC and the several
Underwriters in accordance with its terms.
Very truly yours,
CATERPILLAR FINANCIAL
FUNDING CORPORATION
By:/s/Edward J. Scott
----------------------
Name: Edward J. Scott
Title: Treasurer
CATERPILLAR FINANCIAL
SERVICES CORPORATION
By:/s/Ali M. Bahaj
----------------------
Name: Ali M. Bahaj
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
on behalf of itself and as
Representative of the several
Underwriters
By:/s/Theodore F. Breck
------------------------
Name: Theodore F. Breck
Title: Director
<PAGE>
SCHEDULE I
Principal Principal Principal
Amount of Amount of Amount of
Underwriter Class A-1 Notes Class A-2 Notes Class A-3 Notes
- ----------- --------------- --------------- ---------------
Merrill Lynch, Pierce . . . $27,000,000 $ 37,000,000 $ 34,091,000
Fenner & Smith
Incorporated
Chase Securities Inc. . . . $27,000,000 $ 36,950,000 $ 34,000,000
Citicorp Securities, Inc. . $27,000,000 $ 36,950,000 $ 34,000,000
---------- ----------- -----------
Total $81,000,000 $110,900,000 $102,091,000
----------- ------------ ------------
----------- ------------ ------------
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Exhibit 1.2
Class B Note Underwriting Agreement
dated November 19, 1997
<PAGE>
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
CLASS B 6.35% ASSET BACKED NOTES
CATERPILLAR FINANCIAL FUNDING CORPORATION
CLASS B NOTE UNDERWRITING AGREEMENT
-----------------------------------
November 19, 1997
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
250 Vesey Street, 15th Floor
New York, New York 10281
Ladies and Gentlemen:
1. INTRODUCTORY. Caterpillar Financial Funding Corporation, a Nevada
corporation (the "SELLER"), proposes to cause Caterpillar Financial Asset Trust
1997-B (the "TRUST") to issue and sell $12,577,000 aggregate principal amount of
6.35% Class B Asset Backed Notes (the "CLASS B NOTES") to Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "UNDERWRITER"). The assets of the Trust will
include, among other things, a pool of fixed rate retail installment sale
contracts (the "RECEIVABLES") secured by new and used machinery manufactured
primarily by Caterpillar Inc. ("CATERPILLAR"), including rights to receive
certain payments with respect to such Receivables, and security interests in the
machinery financed by the Receivables (the "FINANCED EQUIPMENT"), and the
proceeds thereof. The Receivables will be sold to the Trust by the Seller. The
Receivables will be serviced for the Trust by Caterpillar Financial Services
Corporation, a Delaware corporation (the "SERVICER" or "CFSC"). The Notes will
be issued pursuant to the Indenture to be dated as of November 1, 1997 (as
amended and supplemented from time to time, the "INDENTURE"), between the Trust
and The First National Bank of Chicago, a national banking association (the
"INDENTURE TRUSTEE").
Simultaneously with the issuance and sale of the Class B Notes as
contemplated herein, the Trust will issue $81,000,000 aggregate principal amount
of Class A-1 5.805% Asset Backed Notes (the "CLASS A-1 NOTES"), $110,900,000
aggregate principal amount of Class A-2 6.018% Asset Backed Notes (the "CLASS A-
2 NOTES") and $102,091,000 aggregate principal amount of Class A-3 6.16% Asset
Backed Notes (the "CLASS A-3 NOTES", together with the Class A-2 Notes and the
Class A-3 Notes, the "CLASS A NOTES", and together with the Class B Notes, the
"NOTES") and $12,577,000
<PAGE>
aggregate principal amount of 6.35% Asset Backed Certificates (the
"CERTIFICATES"; together with the Notes sometimes referred to collectively
herein as the "SECURITIES"), each representing a fractional undivided interest
in the Trust. The Class A Notes will be sold pursuant to an underwriting
agreement (the "CLASS A NOTE UNDERWRITING AGREEMENT"; together with this
Underwriting Agreement, the "UNDERWRITING AGREEMENTS") among the Seller, CFSC
and the underwriters named in Schedule I thereto.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement to be dated as of
November 1, 1997 (as amended and supplemented from time to time, the "SALE AND
SERVICING AGREEMENT"), among the Trust, the Seller and the Servicer or, if not
defined therein, in the Indenture or the Trust Agreement to be dated as of
November 1, 1997 (as amended and supplemented from time to time, the "TRUST
AGREEMENT"), between the Seller and Chase Manhattan Bank Delaware, a Delaware
banking corporation as owner trustee under the Trust Agreement (the "OWNER
TRUSTEE").
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to and agrees with the Underwriter that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "ACT"), and has filed with the
Securities and Exchange Commission (the "COMMISSION") a registration statement
(Registration No. 333-24373) on such Form, including a prospectus and a form of
prospectus supplement, for registration under the Act of the offering and sale
of the Notes. The Seller may have filed one or more amendments thereto, each of
which amendments has previously been furnished to the Underwriter. The Seller
will also file with the Commission a prospectus supplement in accordance with
Rule 424(b) under the Act. The Seller has included in the Registration
Statement, as amended at the Effective Date (as hereinafter defined), all
information required by the Act and the rules thereunder to be included in the
Prospectus (as hereinafter defined) with respect to the Notes and the offering
thereof. As filed, the registration statement as amended, the form of
prospectus supplement, and any prospectuses or prospectus supplements filed
pursuant to Rule 424(b) under the Act relating to the Notes shall, except to the
extent that the Underwriter shall agree in writing to a modification, be in all
substantive respects in the form furnished to the Underwriter prior to the
Execution Time (as hereinafter defined) or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest preliminary prospectus
supplement which has previously been furnished to the Underwriter) as the Seller
has advised the Underwriter, prior to the Execution Time, will be included or
made therein.
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<PAGE>
For purposes of this Agreement, "EFFECTIVE TIME" means the date and
time as of which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"EFFECTIVE DATE" means the date of the Effective Time. "EXECUTION TIME" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. Such registration statement, as amended at the Effective Time,
and including the exhibits thereto and any material incorporated by reference
therein (including any Computational Materials, ABS Term Sheets, Structural Term
Sheets and Collateral Term Sheets (as defined in Section 13 of this Agreement)
filed on Form 8-K), is hereinafter referred to as the "REGISTRATION STATEMENT,"
and any prospectus supplement (the "PROSPECTUS SUPPLEMENT") relating to the
Notes, as filed with the Commission pursuant to and in accordance with Rule
424(b) under the Act is, together with the prospectus filed as part of the
Registration Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b) being hereinafter referred to as the "BASIC
PROSPECTUS"), hereinafter referred to as the "PROSPECTUS". "PRELIMINARY
PROSPECTUS" means any preliminary prospectus to the Prospectus which describes
the Notes and the offering thereof and which is used prior to the filing of the
Prospectus. "RULE 424" refers to such rule under the Act. Any reference herein
to the Registration Statement, the Prospectus or any Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), on or before the
Effective Date of the Registration Statement or the issue date of the Prospectus
or any Prospectus Supplement, as the case may be; and any reference herein to
the terms "AMEND", "AMENDMENT" or "SUPPLEMENT" with respect to the Registration
Statement, the Prospectus or any Prospectus Supplement shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of the
Prospectus or any Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement did or will, and, when the Prospectus was first filed and
on the Closing Date (as defined below), the Prospectus and any Prospectus
Supplement did or will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939,
as amended (the "TRUST INDENTURE ACT"), and the respective rules and regulations
of the Commission thereunder (the "RULES AND REGULATIONS") and of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). On the Effective
Date, the Registration Statement did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the
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<PAGE>
statements therein not misleading; and, on the Effective Date, the Prospectus,
if not filed pursuant to Rule 424(b), did not or will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus,
together with any Prospectus Supplement, did not or will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that the Seller makes no
representation or warranty as to the information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon and in conformity
with information furnished in writing to the Seller by the Underwriter
specifically for use in connection with preparation of the Registration
Statement or the Prospectus.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, management,
financial condition, stockholders' equity, results of operations, regulatory
status or business prospects of the Seller or CFSC, and (ii) neither the Seller
nor CFSC has entered into any transaction or agreement (whether or not in the
ordinary course of business) material to it that, in either case, would
reasonably be expected to materially adversely affect the interests of the
holders of the Notes, other than as set forth or contemplated in the Prospectus.
(d) The computer tape of the Receivables created as of November 1,
1997, and made available to the Underwriter by the Servicer, was complete and
accurate as of the date thereof and includes a description of the Receivables
that are described in Schedule A to the Sale and Servicing Agreement.
(e) Each of the Seller and CFSC is duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and is qualified to transact business in and is in good standing
under the laws of each state in which its activities require such qualification,
and has full power, authority and legal right to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted.
(f) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CFSC.
(g) On the date of this Agreement and on the Closing Date, the
representations and warranties of CFSC and the Seller in each of the Basic
Documents to which they are a party will be true and correct.
(h) CFSC's assignment and delivery of the Receivables
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<PAGE>
to the Seller as of the Closing Date will vest in the Seller all of CFSC's
right, title and interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(i) The Seller's assignment and delivery of the Receivables to the
Trust as of the Closing Date will vest in the Trust all of the Seller's right,
title and interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(j) The Trust's assignment of the Receivables to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
3. PURCHASE, SALE, AND DELIVERY OF THE CLASS B NOTES. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Seller agrees to cause the
Trust to sell to the Underwriter, and the Underwriter agrees to purchase from
the Trust, at a purchase price of 99.6338777% of the principal amount thereof,
$12,577,000 in principal amount of Class B Notes. Delivery of and payment for
the Class B Notes shall be made at the office of Orrick, Herrington & Sutcliffe
LLP, 666 Fifth Avenue, New York, New York 10103 on November 25, 1997 (the
"CLOSING DATE"). Delivery of the Class B Notes shall be made against payment of
the purchase price in immediately available funds drawn to the order of the
Seller. The Class B Notes to be so delivered will be initially represented by
one or more Class B Notes registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC"). The interests of beneficial owners of the
Class B Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Class B Notes will be available only
under limited circumstances set forth in the Indenture.
4. OFFERING BY UNDERWRITER. It is understood that the Underwriter
proposes to offer the Class B Notes for sale to the public (which may include
selected dealers) as set forth in the Prospectus.
5. COVENANTS OF THE SELLER. The Seller covenants and agrees with
the Underwriter that:
(a) Immediately following the execution of this Agreement, the Seller
will prepare a Prospectus Supplement setting forth the amount of Notes covered
thereby and the terms thereof not otherwise specified in the Basic Prospectus,
the price at which such Notes are to be purchased by the Underwriter, the
initial public offering price, the selling concessions and
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<PAGE>
allowances, and such other information as the Seller deems appropriate and shall
furnish a copy to the Underwriter in accordance with Section 5(b) of this
Agreement. The Seller will transmit the Prospectus including such Prospectus
Supplement to the Commission pursuant to Rule 424(b) by a means reasonably
calculated to result in filing that complies with all applicable provisions of
Rule 424(b). The Seller will advise the Underwriter promptly of any such filing
pursuant to Rule 424(b).
(b) Prior to the termination of the offering of the Notes, the Seller
will not file any amendment of the Registration Statement or supplement to the
Prospectus unless the Seller has furnished the Underwriter with a copy for its
review prior to filing and will not file any such proposed amendment or
supplement to which the Underwriter reasonably objects. Subject to the
foregoing sentence, if filing of the Prospectus is otherwise required under Rule
424(b), the Seller will file the Prospectus, properly completed, and any
supplement thereto, with the Commission pursuant to and in accordance with the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Underwriter of such timely filing.
(c) The Seller will advise the Underwriter promptly of any proposal
to amend or supplement the Registration Statement as filed or the Prospectus,
and will not effect such amendment or supplement without the Underwriter's
consent, which consent will not unreasonably be withheld. The Seller will also
advise the Underwriter promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information and the Seller will also advise the Underwriter
promptly of any amendment or supplement to the Registration Statement or the
Prospectus and of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose, and the Seller will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
the lifting of any issued stop order.
(d) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act or the respective Rules and Regulations thereunder, the Seller
promptly will notify the Underwriter and will prepare and file, or cause to be
prepared and filed, with the Commission, subject to the first sentence of
paragraph (b) of this Section 5, an amendment or
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<PAGE>
supplement that will correct such statement or omission, or effect such
compliance. Any such filing shall not operate as a waiver or limitation on any
right of the Underwriter hereunder.
(e) As soon as practicable, but not later than fourteen months after
the original effective date of the Registration Statement, the Seller will cause
the Trust to make generally available to Noteholders an earnings statement of
the Trust covering a period of at least twelve months beginning after the
Effective Date of the Registration Statement that will satisfy the provisions of
Section 11(a) of the Act.
(f) The Seller will furnish to the Underwriter copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus or prospectus supplement, the
Prospectus and all amendments and supplements to such documents, in each case as
soon as available and in such quantities as the Underwriter requests.
(g) The Seller will assist the Underwriter in arranging for the
qualification of the Notes for sale and determination of their eligibility for
investment under the laws of such jurisdictions in the United States, or as
necessary to qualify for the Euroclear System or Cedel Bank, societe anonyme, as
the Underwriter designates and will continue to assist the Underwriter in
maintaining such qualifications in effect so long as required for the
distribution; provided, however, that neither the Seller nor CFSC shall be
required to qualify to do business in any jurisdiction where it is now not
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is now not subject to service
of process.
(h) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as the Underwriter shall cease to maintain a
secondary market in the Notes, whichever occurs first, the Seller will deliver
to the Underwriter the annual statements of compliance and the annual
independent certified public accountants' reports furnished to the Owner Trustee
or the Indenture Trustee pursuant to the Sale and Servicing Agreement, as soon
as such statements and reports are furnished to the Owner Trustee or the
Indenture Trustee.
(i) So long as any of the Notes are outstanding, the Seller will
furnish to the Underwriter (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to Noteholders or filed
with the Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning the
Seller filed with any government or regulatory authority which is otherwise
publicly available, as the Underwriter may reasonably request.
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(j) On or before the Closing Date, the Seller shall cause the
computer records of the Seller and the Servicer relating to the Receivables to
be marked to show the Trust's absolute ownership of the Receivables, and from
and after the Closing Date neither the Seller nor the Servicer shall take any
action inconsistent with the Trust's ownership of such Receivables, other than
as permitted by the Sale and Servicing Agreement.
(k) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other actions
by the Seller, the Seller shall furnish such documents and take any such other
actions.
(l) For the period beginning on the date of this Agreement and ending
seven days after the Closing Date, unless waived by the Underwriter, none of the
Seller, CFSC or any trust originated, directly or indirectly, by the Seller or
CFSC will offer to sell or sell notes (other than the Notes) collateralized by,
or certificates (other than the Certificates) evidencing an ownership interest
in, receivables generated pursuant to fixed rate retail installment sale
contracts secured by equipment similar to the Financed Equipment.
(m) The Seller and CFSC each will deliver to the Underwriter, all
opinions, certificates and other documents or information delivered to the Owner
Trustee and the Indenture Trustee at the time such opinions, certificates and
other documents or information are delivered to the Owner Trustee or the
Indenture Trustee pursuant to the Sale and Servicing Agreement and the Purchase
Agreement with respect to perfection and priority of CFSC's interest in the
Receivables.
6. PAYMENT OF EXPENSES. The Seller will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation, issuance and delivery of the Notes
to the Underwriter, (iii) the fees and disbursements of the Seller's counsel and
accountants, (iv) the qualification of the Notes under securities laws in
accordance with the provisions of Section 5(g), including filing fees and the
fees and disbursements of counsel in connection therewith and in connection with
the preparation of any blue sky or legal investment survey, (v) the printing and
delivery to the Underwriter of copies of the Registration Statement as
originally filed and of each amendment thereto, of the Preliminary Prospectus
and of each amendment or supplement thereto, (vi) the printing and delivery to
the Underwriter of copies of any blue sky or legal investment survey prepared in
connection with the Notes, (vii) any fees charged by rating agencies for the
rating
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of the Notes, (viii) the fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc. and (ix) the
fees and expenses of Orrick, Herrington & Sutcliffe LLP in its role as counsel
to the Trust incurred as a result of providing the opinions required by Section
7(f) hereof.
7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITER. The
obligations of the Underwriter to purchase and pay for the Class B Notes will be
subject to the accuracy of the representations and warranties on the part of the
Seller herein, to the accuracy of the statements of officers of the Seller made
pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) The Registration Statement shall have become effective prior to
the Execution Time, and prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Underwriter, shall be contemplated by the Commission or by any
authority administering any state securities or blue sky law.
(b) The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof.
(c) On or prior to the date of this Agreement and on or prior to the
Closing Date, the Underwriter shall have received a letter or letters, dated as
of the date of this Agreement and as of the Closing Date, respectively, of Price
Waterhouse, independent public accountants, substantially in the form of the
drafts to which the Underwriter has previously agreed and otherwise in form and
substance satisfactory to the Underwriter and its counsel.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Seller or the Servicer which, in the judgment of the Underwriter,
materially impairs the investment quality of the Notes or makes it impractical
or inadvisable to market the Notes; (ii) any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange; (iii) any suspension of trading of
any securities of Caterpillar or CFSC on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal, Delaware or New York
authorities; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress, or any other
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substantial national or international calamity or emergency if, in the judgment
of the Underwriter, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Notes.
(e) The Underwriter shall have received opinions of Paul J. Gaeto,
General Counsel of CFSC, Orrick, Herrington & Sutcliffe LLP and Tuke, Yopp &
Sweeney, counsel to CFSC, the Seller and the Trust and such other counsel
acceptable to the Underwriter, addressed to the Underwriter, the Owner Trustee
and the Indenture Trustee, dated the Closing Date and satisfactory in form and
substance to the Underwriter and its counsel, substantially to the effect that:
(i) CFSC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Underwriting Agreements, the
Administration Agreement, the Purchase Agreement, the Sale and Servicing
Agreement and the Custodial Agreement and had at all times, and now has,
the power, authority and legal right to acquire, own and sell the
Receivables.
(ii) The Seller has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Nevada with
full corporate power and authority to own its properties and conduct its
business, as presently owned and conducted by it, and to enter into and
perform its obligations under the Underwriting Agreements, the Purchase
Agreement, the Trust Agreement, the Sale and Servicing Agreement and the
Custodial Agreement and had at all times, and now has, the power, authority
and legal right to acquire, own and sell the Receivables.
(iii) CFSC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render any Receivable unenforceable by the Seller, the Owner Trustee or the
Indenture Trustee, except as may be required under state securities or Blue
Sky laws of various jurisdictions.
(iv) The Seller is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would have a material adverse effect on the Receivables as a
whole, except as may be required under state securities or Blue Sky laws of
various jurisdictions.
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(v) The direction by the Seller to the Owner Trustee to authenticate
the Certificates has been duly authorized by the Seller and, when the
Certificates have been duly executed, authenticated and delivered by the
Owner Trustee in accordance with the Trust Agreement and delivered to and
paid for by the Seller, will be legally issued, fully paid and
nonassessable obligations of the Trust.
(vi) The direction by CFSC to the Indenture Trustee to authenticate
the Notes has been duly authorized by CFSC, and, when the Notes have been
duly executed and delivered by the Owner Trustee, authenticated by the
Indenture Trustee in accordance with the Indenture and delivered and paid
for pursuant to the Note Underwriting Agreement, the Notes will be duly
issued and entitled to the benefits and security afforded by the Indenture,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(vii) Each of the Purchase Agreement, the Trust Agreement, the Sale
and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by the Seller, and is a legal, valid and
binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(viii) The Underwriting Agreements have been duly authorized,
executed and delivered by each of the Seller and CFSC.
(ix) Each of the Administration Agreement, the Purchase Agreement,
the Sale and Servicing Agreement and the Custodial Agreement has been duly
authorized, executed and delivered by CFSC and is a legal, valid and
binding obligation of CFSC enforceable against CFSC in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the
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discretion of the court before which any proceeding therefor may be
brought.
(x) Neither the transfer of the Receivables from CFSC to the Seller,
nor the transfer of the Receivables from the Seller to the Trust, nor the
assignment of the Trust Estate to the Trust, nor the assignment by the
Seller of its right, title and interest in the Purchase Agreement to the
Trust, nor the grant of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, nor the execution and delivery
of the Underwriting Agreements, the Purchase Agreement, the Trust
Agreement, the Sale and Servicing Agreement or the Custodial Agreement by
the Seller, nor the execution of the Underwriting Agreements, the
Administration Agreement, the Purchase Agreement, the Sale and Servicing
Agreement or the Custodial Agreement by CFSC, nor the consummation of any
transactions contemplated in the Underwriting Agreements, the Purchase
Agreement, the Trust Agreement, the Indenture, the Administration
Agreement, the Sale and Servicing Agreement or the Custodial Agreement
(such agreements, excluding the Underwriting Agreements, being for purposes
of this clause (e), collectively, the "BASIC DOCUMENTS"), nor the
fulfillment of the terms thereof by CFSC, the Seller or the Trust, as the
case may be, will (x) conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of CFSC or the Seller or, to
the best of such counsel's knowledge after due inquiry, of any indenture or
other agreement or instrument to which CFSC or the Seller is a party or by
which either of them is bound, or (y) result in a violation of or
contravene the terms of any statute, order or regulation applicable to CFSC
or the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over either of them.
(xi) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge, threatened before any court,
administrative agency, or other tribunal (1) asserting the invalidity of
the Trust or any of the Basic Documents, (2) seeking to prevent the
consummation of any of the transactions contemplated by any of the Basic
Documents or the execution and delivery thereof, or (3) that could
reasonably be expected to materially and adversely affect the performance
(A) by CFSC of its obligations under, or the validity or enforceability of,
the Underwriting Agreements, the Administration Agreement, the Purchase
Agreement, the Sale and Servicing Agreement or the Custodial Agreement, (B)
by the Seller of its obligations under, or the validity or enforceability
of, the Underwriting Agreements, the Purchase Agreement, the Trust
Agreement, the Sale and Servicing Agreement or the Custodial Agreement, or
(C) by the Servicer
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of its obligations under, or the validity or enforceability of, the Sale
and Servicing Agreement.
(xii) To the best knowledge of such counsel, no default exists and no
event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which CFSC or the Seller is a
party or by which either of them is bound, which default is or would have a
material adverse effect on the financial condition, earnings, business or
properties of CFSC and its subsidiaries, taken as a whole.
(xiii) The Assignment dated as of the Closing Date from CFSC to the
Seller has been duly authorized, executed and delivered by CFSC.
(xiv) Should CFSC become the debtor in a case under the Bankruptcy
Code, if the matter were properly briefed and presented to a court, the
court should hold that (1) the transfer of the Receivables by CFSC to the
Seller in the manner set forth in the Purchase Agreement would constitute
an absolute sale of the Receivables, rather than a borrowing by CFSC
secured by the Receivables, and thus (2) the Seller's rights to the
Receivables would not be impaired by the operation of Section 362(a) of the
Bankruptcy Code.
(xv) Should CFSC become the debtor in a case under the Bankruptcy
Code, and the Seller would not otherwise properly be a debtor in a case
under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, the court,
exercising reasonable judgment after full consideration of all relevant
factors, should not order, over the objection of the Certificateholders or
the Noteholders, the substantive consolidation of the assets and
liabilities of the Seller with those of CFSC based on any legal theories
currently subscribed to by federal courts exercising bankruptcy
jurisdiction.
(xvi) Such counsel is familiar with the Servicer's standard operating
procedures relating to the Servicer's acquisition of a perfected first
priority security interest in the equipment financed by the Servicer
pursuant to equipment installment sale contracts in the ordinary course of
the Servicer's business. Assuming that the Servicer's standard procedures
have been followed with respect to the perfection of security interests in
the Financed Equipment (and such counsel has no reason to believe that such
procedures have not been followed), the Servicer has acquired or will
acquire a perfected first priority security interest in the Financed
Equipment.
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(xvii) The Purchase Agreement grants to the Seller a valid security
interest in CFSC's rights in the Receivables and the proceeds thereof. The
Sale and Servicing Agreement grants to the Trust a valid security interest
in the Seller's rights in the Receivables and the proceeds thereof. The
Indenture grants to the Indenture Trustee a valid security interest in the
Trust's rights in the Receivables and the proceeds thereof.
(xviii) The Receivables are chattel paper as defined in the UCC.
(xix) Immediately prior to the sale of the Receivables and the
proceeds thereof to the Seller, CFSC had a first priority perfected
security interest in the Receivables and the proceeds thereof. Immediately
prior to the transfer of the Receivables and the proceeds thereof to the
Trust, the Seller had a first priority perfected security interest in the
Receivables and the proceeds thereof. Immediately prior to the transfer of
the Receivables and the proceeds thereof to the Indenture Trustee, the
Trust had a first priority perfected security interest in the Receivables
and the proceeds thereof. The Indenture Trustee has a first priority
perfected security interest in the Receivables and the proceeds thereof.
The opinion covered by this paragraph (xix) shall be subject to customary
UCC exceptions and qualifications.
(xx) The Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Administration Agreement and the Purchase Agreement conform
in all material respects with the description thereof contained in the
Prospectus and any supplement thereto.
(xxi) The statements in the Prospectus under the headings "Risk
Factors -- Perfection of Interests in Receivables and in Financed
Equipment" and "Certain Legal Aspects of the Receivables" to the extent
they constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects.
(xxii) The statements contained in the Prospectus and any supplement
thereto under the headings "Description of the Notes", "Description of the
Certificates" and "Description of the Transfer and Servicing Agreements",
insofar as such statements constitute a summary of the Notes, the
Certificates, the Indenture, the Administration Agreement, the Sale and
Servicing Agreement and the Trust Agreement, are a fair and accurate
summary of the matters referred to therein.
(xxiii) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body
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is required for the consummation of the transactions contemplated in the
Basic Documents, except such filings with respect to the transfer of the
Receivables to the Seller pursuant to the Purchase Agreement, the transfer
of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, and such as may be required under state securities or Blue Sky
laws of various jurisdictions.
(xxiv) All actions required to be taken and all filings required to
be made under the Act prior to the sale of the Notes have been duly taken
or made.
(xxv) The Trust Agreement is not required to be qualified under the
Trust Indenture Act and the Trust is not required to be registered under
the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT").
(xxvi) The Indenture has been duly qualified under the Trust
Indenture Act.
(xxvii) The Seller is not, and will not as a result of the offer and
sale of the Notes as contemplated in the Prospectus and the Note
Underwriting Agreement become, an "investment company" as defined in the
Investment Company Act or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act.
(xxviii) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed
therein.
(xxix) The Registration Statement has become effective under the Act,
any required filing of any Preliminary Prospectus and the Prospectus and
any supplements thereto pursuant to Rule 424(b) has been or will be made in
the manner and within the time period required by Rule 424(b), and, to the
best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act,
and the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of the
Act, the Exchange Act, the Trust Indenture Act and the Rules and
Regulations.
(xxx) Nothing has come to such counsel's attention that would lead
such counsel to believe that the Registration Statement or the Prospectus
or any amendment or supplement thereto as of the respective dates thereof
(other than the financial statements and other financial and
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statistical information contained therein, as to which such counsel need
not express any view) contains an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein not misleading.
(xxxi) The Trust has been duly formed and is validly existing as a
statutory business trust and is in good standing under the laws of the
State of Delaware, with full power and authority to execute, deliver and
perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Notes and the Certificates.
(xxxii) The Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized and, when duly executed
and delivered by the Owner Trustee on behalf of the Trust, will constitute
the legal, valid and binding obligations of the Trust, enforceable against
the Trust in accordance with their terms, except (x) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (y) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought.
(xxxiii) The Servicer has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Sale and Servicing Agreement, and had at
all relevant times, and now has, the power, authority and legal right to
acquire, own, sell and service the Receivables.
(xxxiv) The Servicer is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render any Receivable unenforceable by the Seller, the Owner
Trustee or the Indenture Trustee.
(xxxv) The Sale and Servicing Agreement has been duly authorized,
executed and delivered by the Servicer, and is the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance
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and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(xxxvi) Neither the execution and delivery of the Sale and Servicing
Agreement by the Servicer, nor the consummation of any transactions
contemplated in the Underwriting Agreements or the Basic Documents, nor the
fulfillment of the terms thereof by the Servicer will conflict with, or
result in a breach, violation or acceleration of, or constitute a default
under, any term or provision of the certificate of incorporation or by-laws
of the Servicer or of any indenture or other agreement or instrument to
which the Servicer is a party or by which it is bound, or result in a
violation of or contravene the terms of any statute, order or regulation
applicable to the Servicer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it.
(xxxvii) To the best knowledge of such counsel, no default exists
and no event has occurred which, with notice, lapse of time or both, would
constitute a default in the due performance and observance of any term,
covenant or condition of any agreement to which the Servicer is a party or
by which it is bound, which default is or would have a material adverse
effect on the financial condition, earnings, business or properties of the
Servicer and its subsidiaries, taken as a whole.
Such counsel shall also opine as to such other matters as the
Underwriter may reasonably request. The opinions set forth in clauses (xiv),
(xv) and (xix) of this Section 7(e) shall be given by Orrick, Herrington &
Sutcliffe LLP or such other outside counsel to CFSC, the Seller and the Trust as
may be acceptable to the Underwriter.
(f) The Underwriter shall have received an opinion addressed to it of
Orrick, Herrington & Sutcliffe LLP in its capacity as Special Tax Counsel for
the Trust, substantially to the effect that the statements in the Prospectus
under the headings "Summary of Terms--Tax Status" (to the extent relating to
Federal income tax consequences) and "Certain Federal Income Tax Considerations"
accurately describe the material Federal income tax consequences to holders of
the Securities, and the statements in the Prospectus under the heading "ERISA
Considerations", to the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared or reviewed by
such counsel and accurately describe the material consequences to holders of the
Securities under ERISA. Orrick, Herrington & Sutcliffe LLP, in its capacity as
Special Counsel to the Trust, shall have delivered an opinion with respect to
the characterization of the transfer of the Receivables.
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(g) The Underwriter shall have received an opinion addressed to it of
Tuke, Yopp & Sweeney in its capacity as Special Tennessee Tax Counsel for the
Trust, substantially to the effect that the statements in the Prospectus under
the heading "Summary of Terms--Tax Status" (to the extent relating to Tennessee
income tax consequences) and in the Prospectus under the heading "Certain State
Income Tax Considerations" accurately describe the material income tax
consequences in the State of Tennessee to holders of the Notes.
(h) The Underwriter shall have received an opinion addressed to it of
Lionel Sawyer & Collins in its capacity as Special Nevada Tax Counsel for the
Trust, substantially to the effect that the Trust would not be subject to
taxation in Nevada.
(i) The Underwriter shall have received an opinion addressed to it
of Skadden, Arps, Slate, Meagher & Flom LLP in its capacity as Special Counsel
to the Underwriter, dated the Closing Date, with respect to the validity of the
Securities and such other related matters as the Underwriter shall require and
the Seller shall have furnished or caused to be furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(j) The Underwriter shall have received an opinion addressed to it,
the Seller and the Servicer of The Law Department of the Indenture Trustee, and
such other counsel acceptable to the Underwriter and its counsel, dated the
Closing Date and satisfactory in form and substance to the Underwriter and its
counsel, substantially to the effect that:
(i) The Indenture Trustee is a national banking association duly
organized and validly existing under the Federal law of the United States
of America.
(ii) The Indenture Trustee has the full corporate trust power to
accept the office of trustee under the Indenture and to enter into and
perform its obligations under the Indenture, the Sale and Servicing
Agreement, the Custodial Agreement and the Administration Agreement.
(iii) The execution and delivery of the Indenture, the Custodial
Agreement and the Administration Agreement and the acceptance of the Sale
and Servicing Agreement and the performance by the Indenture Trustee of its
obligations under the Indenture, the Sale and Servicing Agreement and the
Administration Agreement have been duly authorized by all necessary
corporate action of the Indenture Trustee and each has been duly executed
and delivered by the Indenture Trustee.
(iv) The Indenture, the Sale and Servicing Agreement, the Custodial
Agreement and the Administration Agreement
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constitute valid and binding obligations of the Indenture Trustee
enforceable against the Indenture Trustee in accordance with their terms
under the laws of the State of New York and the Federal law of the United
States of America.
(v) The execution and delivery by the Indenture Trustee of the
Indenture, the Custodial Agreement and the Administration Agreement and the
acceptance of the Sale and Servicing Agreement do not require any consent,
approval or authorization of, or any registration or filing with, any New
York or United States Federal governmental authority, other than the filing
of Form T-1 under the Trust Indenture Act.
(vi) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vii) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement or the Administration Agreement, nor the
fulfillment of the terms thereof by the Indenture Trustee, will conflict
with, result in a breach or violation of, or constitute a default under any
law or the charter, by-laws or other organizational documents of the
Indenture Trustee or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Indenture Trustee is a
party or is bound or any judgment, order or decree known to such counsel to
be applicable to the Indenture Trustee of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Indenture Trustee.
(viii) To the best of such counsel's knowledge and belief, there is
no action, suit or proceeding pending or threatened against the Indenture
Trustee (as trustee under the Indenture or in its individual capacity)
before or by any governmental authority that if adversely decided, would
materially adversely affect the ability of the Indenture Trustee to perform
its obligations under the Indenture, the Sale and Servicing Agreement or
the Administration Agreement.
(ix) The execution, delivery and performance by the Indenture Trustee
of the Sale and Servicing Agreement, the Indenture, the Custodial Agreement
and the Administration Agreement will not subject any of the property or
assets of the Trust or any portion thereof, to any liens that are unrelated
to the transactions contemplated in such Agreements.
(k) The Underwriter shall have received an opinion
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addressed to it, the Seller and the Servicer of Pryor, Cashman, Sherman & Flynn,
counsel to the Owner Trustee, and such other counsel acceptable to the
Underwriter and its counsel, dated the Closing Date and satisfactory in form and
substance to the Underwriter and its counsel, when taken together, substantially
to the effect that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware.
(ii) The Owner Trustee has full corporate trust power and authority
to enter into and perform its obligations under the Trust Agreement and, on
behalf of the Trust, under the Indenture, the Sale and Servicing Agreement
and the Administration Agreement.
(iii) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, of the Indenture, the Custodial Agreement, the Sale
and Servicing Agreement, the Administration Agreement, the Certificates and
the Notes and the performance by the Owner Trustee of its obligations under
the Trust Agreement, the Indenture, the Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all necessary
corporate action of the Owner Trustee and each has been duly executed and
delivered by the Owner Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Custodial Agreement and the Administration Agreement
constitute valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms under the laws of
the State of New York and the State of Delaware and the Federal law of the
United States of America.
(v) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture, the Sale and
Servicing Agreement, the Custodial Agreement and the Administration
Agreement do not require any consent, approval or authorization of, or any
registration or filing with, any Delaware or United States Federal
governmental authority having jurisdiction over the trust power of the
Owner Trustee, other than those consents, approvals or authorizations as
have been obtained and the filing of the Certificate of Trust with the
Secretary of State of the State of Delaware.
(vi) The Owner Trustee has duly executed, authenticated and delivered
the Certificates, and has duly executed and delivered the Notes, issued on
the Closing Date on behalf of the Trust.
-20-
<PAGE>
(vii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, the Sale and Servicing Agreement,
the Indenture, the Custodial Agreement and the Administration Agreement and
the performance by the Owner Trustee of its obligations thereunder, do not
conflict with, result in a breach or violation of or constitute a default
under, the Articles of Association or By-laws of the Owner Trustee.
(l) The Underwriter shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, the
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer, the principal financial officer or the principal accounting officer
of each of the Seller and the Servicer in which such officers shall state that,
to the best of their knowledge after reasonable investigation, (i) the
representations and warranties of the Seller or the Servicer, as the case may
be, contained in the Trust Agreement, Purchase Agreement and the Sale and
Servicing Agreement, as applicable, are true and correct, that the Seller or the
Servicer, as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under such agreements at or
prior to the Closing Date, that no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission and (ii) no material
adverse change in or affecting particularly the business or properties of the
Trust, the Seller, or the Servicer has occurred.
(m) The Underwriter shall have received evidence satisfactory to it
that, on or before the Closing Date, the Custodian, on behalf of the Seller, the
Trust and the Indenture Trustee has taken possession of the applicable
Receivables reflecting the transfer of the interest of CFSC in such Receivables
and the proceeds thereof to the Seller, and the transfer of the interest of the
Seller in such Receivables and the proceeds thereof to the Trust and the grant
of the security interest by the Trust in such Receivables and the proceeds
thereof to the Indenture Trustee.
(n) The Class B Notes shall have been rated at least "A" by Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and at
least "A2" by Moody's Investors Service, Inc.
(o) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued by the Seller or any of its affiliates or
by any trust established by the Seller or any of its affiliates.
(p) On the Closing Date, $81,000,000 aggregate
-21-
<PAGE>
principal amount of Class A-1 5.805% Asset Backed Notes, $110,900,000 aggregate
principal amount of Class A-2 6.018% Asset Backed Notes and $102,091,000
aggregate principal amount of Class A-3 6.16% Asset Backed Notes shall have been
issued and sold and $7,861,558 aggregate principal amount of the Certificates
shall have been issued and purchased by the Seller.
The Seller will provide or cause to be provided to the Underwriter
such conformed copies of such opinions, certificates, letters and documents as
it reasonably requests.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Seller and CFSC will
jointly and severally, indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the Act as follows: against any losses, claims, damages, liabilities or
expenses, joint or several, to which the Underwriter or person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and against any and
all loss, liability, claim, damage and expense whatsoever to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is effected with
the written consent of the Seller or CFSC; and will reimburse the Underwriter
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim; PROVIDED, HOWEVER, that the
Seller and CFSC shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the Notes or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Seller by the Underwriter expressly for use in the
Prospectus as amended or supplemented relating to such Notes; and provided,
further, that the Seller and CFSC shall not be liable to the Underwriter under
the indemnity agreement in this
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<PAGE>
subsection (a) with respect to any Preliminary Prospectus or Prospectus
Supplement to the extent that any such loss, claim, damage, liability or expense
results from the fact that the Underwriter sold Notes to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus or Prospectus Supplement (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Seller has previously
furnished copies thereof to the Underwriter.
(b) The Underwriter agrees to indemnify and hold harmless the Seller
and CFSC against any losses, claims, damages, liabilities or expenses to which
the Seller and CFSC may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Prospectus as amended or supplemented and any other prospectus relating to the
Notes, or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Prospectus as amended or supplemented and any other
prospectus relating to the Notes, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Seller
or CFSC by the Underwriter expressly for use therein, and will reimburse the
Seller and CFSC for any legal or other expenses reasonably incurred by the
Seller and CFSC in connection with investigating or defending any such action or
claim.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the
-23-
<PAGE>
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation and as set forth in the immediately
succeeding sentence. In any such action, any indemnified party shall have
the right to retain its own counsel, but the legal and other expenses of such
counsel shall be at the expense of such indemnified party unless the
indemnifying party and the indemnified party shall have mutually agreed to
the contrary or the named parties in any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them in
which case the legal and other expense of such counsel shall be at the
expense of the indemnifying party. The indemnifying party shall not, in
connection with any action or related proceeding in the same jurisdiction, be
liable for the legal and other expenses of more than one separate firm for
all indemnified parties.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Seller and CFSC on the one hand
and the Underwriter on the other from the offering of the Notes to which such
loss, claim, damage, liability or expense (or action in respect thereof)
relates. If, however, the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (b) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to therein or if the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Seller and CFSC on the one hand and the Underwriter on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Seller
and CFSC on the one hand and the Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the sale of the Notes
(before deducting expenses) received by the Seller and CFSC bear to the total
commissions or
-24-
<PAGE>
discounts received by the Underwriter in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading relates to information supplied by
the Seller and CFSC on the one hand or by the Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Seller and CFSC and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes purchased by or
through the Underwriter were sold exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Seller and CFSC under this Section 8 shall
be in addition to any liability which the Seller and CFSC may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act; and the Underwriter's
obligations under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Seller and CFSC and to each
person, if any, who controls the Seller or CFSC within the meaning of the Act.
9. NO BANKRUPTCY PETITION. The Underwriter and CFSC each covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust for which
the Seller was the depositor which securities were rated by any nationally
recognized statistical rating organization, it will not institute against, or
join any other person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
-25-
<PAGE>
10. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or CFSC or any of their officers and the Underwriter set forth in or made
pursuant to this Agreement or contained in certificates of officers of the
Seller submitted pursuant hereto shall remain operative and in full force and
effect, regardless of (i) any termination of this Agreement, (ii) any
investigation or statement as to the results thereof made by or on behalf of the
Underwriter or of the Seller or any of their respective representatives,
officers or directors or any controlling person, and (iii) delivery of and
payment for the Class B Notes. If for any reason the purchase of the Class B
Notes by the Underwriter is not consummated, the Seller shall remain responsible
for the expenses to be paid or reimbursed by the Seller pursuant to Section 6
and the respective obligations of the Seller and the Underwriter pursuant to
Section 8 shall remain in effect. If for any reason the purchase of the Class B
Notes by the Underwriter is not consummated (other than because of a failure to
satisfy the conditions set forth in items (ii), (iv) or (v) of Section 7(d)),
the Seller will reimburse the Underwriter, upon demand, for all reasonable out-
of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Class B Notes. Nothing
contained in this Section 10 shall limit the recourse of the Seller against the
Underwriter.
11. NOTICES. All communications hereunder will be in writing and if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to the Underwriter at World Financial Center, North Tower, 250 Vesey Street, New
York, New York 10281, Attention: Theodore F. Breck; if sent to the Seller, will
be mailed, delivered or telegraphed, and confirmed to it at Caterpillar
Financial Funding Corporation, Greenview Plaza, 2950 East Flamingo Road, Suite
C-3B, Las Vegas, Nevada 89121, Attention: Secretary; if sent to CFSC, will be
mailed, delivered or telegraphed, and confirmed to it at Caterpillar Financial
Services Corporation, 3322 West End Avenue, Nashville, Tennessee 37203-1071,
Attention: Secretary; PROVIDED, HOWEVER, that any notice to an Underwriter
pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to
the Underwriter. Any such notice will take effect at the time of receipt.
12. COMPUTATIONAL MATERIALS; TERM SHEETS. The Underwriter represents
and warrants to the Seller that (a) it has not and will not use any information
that constitutes "COMPUTATIONAL MATERIALS" as defined in the no-action letter,
dated May 20, 1994, issued by the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset
Corporation (as made generally applicable to other issuers and underwriters by
the Commission in the response to the request of the Public Securities
Association, dated May 24, 1994), in connection with the offering of the Class
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<PAGE>
B Notes and (b) it has not and will not use any information that constitutes
"ABS TERM SHEETS", "STRUCTURAL TERM SHEETS" or "COLLATERAL TERM SHEETS", each as
defined in the no-action letter, dated February 13, 1995, addressed by the
Commission to the Public Securities Association, in connection with the offering
of the Class B Notes, in each case without the prior written consent of the
Seller and CFSC to such usage.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligations hereunder. No purchaser of Class B
Notes from the Underwriter shall be deemed to be a successor of the Underwriter
merely because of such purchase.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller, CFSC and the Underwriter in
accordance with its terms.
Very truly yours,
CATERPILLAR FINANCIAL
FUNDING CORPORATION
By:/s/Edward J. Scott
----------------------
Name: Edward J. Scott
Title: Treasurer
CATERPILLAR FINANCIAL
SERVICES CORPORATION
By:/s/ Ali M. Bahaj
----------------------
Name: Ali M. Bahaj
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Theodore F. Breck
------------------------
Name: Theodore F. Breck
Title: Director
<PAGE>
Exhibit 4.1
Indenture dated as of November 1, 1997
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------------
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
Class A-1 5.805% Asset Backed Notes and
Class A-2 6.018% Asset Backed Notes
Class A-3 6.16% Asset Backed Notes
Class B 6.35% Asset Backed Notes
INDENTURE
Dated as of November 1, 1997
----------------
THE FIRST NATIONAL BANK OF CHICAGO
Indenture Trustee
- --------------------------------------------------------------------------------
<PAGE>
------------------------------
<TABLE>
<CAPTION>
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
--------- -----------------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . 6.11
(a)(2) . . . . . . . . . . . . . . . . . . . 6.11
(a)(3) . . . . . . . . . . . . . . . . . . . 6.10
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . 6.08(a)(1)
(c). . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a). . . . . . . . . . . . . . . . . . . . . 6.12
(b). . . . . . . . . . . . . . . . . . . . . 6.12
312(a). . . . . . . . . . . . . . . . . . . . . 7.01(a)
(b). . . . . . . . . . . . . . . . . . . . . 7.02(b)
(c). . . . . . . . . . . . . . . . . . . . . 7.02(c)
313(a). . . . . . . . . . . . . . . . . . . . . 7.04
(b). . . . . . . . . . . . . . . . . . . . . 7.04
(c). . . . . . . . . . . . . . . . . . . . . 7.04
(d). . . . . . . . . . . . . . . . . . . . . 7.04
314(a). . . . . . . . . . . . . . . . . . . . . 3.09, 7.03(a)
(b). . . . . . . . . . . . . . . . . . . . . 3.06
(c)(1) . . . . . . . . . . . . . . . . . . . 2.09, 8.04(b)
(c)(2) . . . . . . . . . . . . . . . . . . . 2.09, 8.04(b), 11.01(a)
(c)(3) . . . . . . . . . . . . . . . . . . . 2.09, 8.04(b), 11.01(a)
(d)(1) . . . . . . . . . . . . . . . . . . . 2.09, 8.04(b), 11.01(a)
(d)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(d)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . 11.01(a)
315(a). . . . . . . . . . . . . . . . . . . . . 6.01(b)
(b). . . . . . . . . . . . . . . . . . . . . 6.05
(c). . . . . . . . . . . . . . . . . . . . . 6.01(b)
(d). . . . . . . . . . . . . . . . . . . . . 6.01(b)
(d)(1) . . . . . . . . . . . . . . . . . . . 6.01(b)
(d)(2) . . . . . . . . . . . . . . . . . . . 6.01(c)
(d)(3) . . . . . . . . . . . . . . . . . . . 6.01(c)
(e). . . . . . . . . . . . . . . . . . . . . 5.13
316(a)(1)(A). . . . . . . . . . . . . . . . . . 5.11
316(a)(1)(B). . . . . . . . . . . . . . . . . . 5.12
316(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
316(b). . . . . . . . . . . . . . . . . . . . . 5.07
317(a)(1) . . . . . . . . . . . . . . . . . . . 5.03
317(a)(2) . . . . . . . . . . . . . . . . . . . 5.03
317(b). . . . . . . . . . . . . . . . . . . . . 5.03
318(a). . . . . . . . . . . . . . . . . . . . . 11.07
</TABLE>
- ----------------------
*This reconciliation and tie shall not, for any purpose, be deemed to be part
of the within indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
----
GRANTING CLAUSE
............................................................................. 1
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. (a) Definitions.............................................. 2
(b) Other Definitional Provisions............................ 10
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............. 10
SECTION 1.03. [Reserved].................................................... 11
SECTION 1.04. Calculations of Interest...................................... 11
ARTICLE II
THE NOTES
SECTION 2.01. Form.......................................................... 11
SECTION 2.02. Execution, Authentication and Delivery........................ 11
SECTION 2.03. Temporary Notes............................................... 12
SECTION 2.04. Registration; Registration of Transfer and Exchange........... 12
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes.................... 14
SECTION 2.06. Persons Deemed Owner.......................................... 14
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest......... 15
SECTION 2.08. Cancellation.................................................. 16
SECTION 2.09. Release of Collateral......................................... 16
SECTION 2.10. Book-Entry Notes.............................................. 16
SECTION 2.11. Notices to Clearing Agency.................................... 17
SECTION 2.12. Definitive Notes.............................................. 17
SECTION 2.13. Representations by Noteholders and Note Owners................ 17
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest............................. 18
SECTION 3.02. Maintenance of Office or Agency............................... 18
SECTION 3.03. Money for Payments To Be Held in Trust........................ 18
SECTION 3.04. Existence..................................................... 20
SECTION 3.05. Protection of Trust Estate.................................... 20
<PAGE>
SECTION 3.06. Opinions as to Trust Estate................................... 21
SECTION 3.07. Performance of Obligations; Servicing of Receivables.......... 21
SECTION 3.08. Negative Covenants............................................ 23
SECTION 3.09. Statements as to Compliance................................... 24
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms........... 24
SECTION 3.11. Successor or Transferee....................................... 26
SECTION 3.12. No Other Business............................................. 26
SECTION 3.13. No Borrowing.................................................. 26
SECTION 3.14. Servicer's Obligations........................................ 26
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............. 26
SECTION 3.16. Capital Expenditures.......................................... 27
SECTION 3.17. Removal of Administrator...................................... 27
SECTION 3.18. Restricted Payments........................................... 27
SECTION 3.19. Notice of Events of Default................................... 27
SECTION 3.20. Further Instruments and Acts.................................. 27
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture....................... 27
SECTION 4.02. Application of Trust Money.................................... 29
SECTION 4.03. Repayment of Moneys Held by Paying Agent...................... 29
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default............................................. 29
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment............ 30
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee............................................. 31
SECTION 5.04. Remedies; Priorities.......................................... 33
SECTION 5.05. Optional Preservation of the Receivables...................... 34
SECTION 5.06. Limitation of Suits........................................... 35
SECTION 5.07. Unconditional Rights of Noteholders to Receive Principal and
Interest...................................................... 36
SECTION 5.08. Restoration of Rights and Remedies............................ 36
SECTION 5.09. Rights and Remedies Cumulative................................ 36
SECTION 5.10. Delay or Omission Not a Waiver................................ 36
SECTION 5.11. Control by Noteholders........................................ 36
SECTION 5.12. Waiver of Past Defaults....................................... 37
(ii)
<PAGE>
SECTION 5.13. Undertaking for Costs......................................... 37
SECTION 5.14. Waiver of Stay or Extension Laws.............................. 38
SECTION 5.15. Action on Notes............................................... 38
SECTION 5.16. Performance and Enforcement of Certain Obligations............ 38
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee................................... 39
SECTION 6.02. Rights of Indenture Trustee................................... 40
SECTION 6.03. Individual Rights of Indenture Trustee........................ 41
SECTION 6.04. Indenture Trustee's Disclaimer................................ 41
SECTION 6.05. Notice of Defaults............................................ 41
SECTION 6.06. Reports by Indenture Trustee to Holders....................... 41
SECTION 6.07. Compensation and Indemnity.................................... 41
SECTION 6.08. Replacement of Indenture Trustee.............................. 42
SECTION 6.09. Successor Indenture Trustee by Merger......................... 43
SECTION 6.10. Appointment of Co-Trustee or Separate Indenture Trustee....... 43
SECTION 6.11. Eligibility; Disqualification................................. 45
SECTION 6.12. Preferential Collection of Claims Against Issuer.............. 45
SECTION 6.13. Appointment of Custodians..................................... 46
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders................................................... 46
SECTION 7.02. Preservation of Information; Communications to Noteholders.... 46
SECTION 7.03. Reports by Issuer............................................. 46
SECTION 7.04. Reports by Indenture Trustee.................................. 47
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money........................................... 47
SECTION 8.02. Trust Accounts................................................ 48
SECTION 8.03. General Provisions Regarding Accounts......................... 49
SECTION 8.04. Release of Trust Estate....................................... 49
SECTION 8.05. Opinion of Counsel............................................ 50
(iii)
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders........ 50
SECTION 9.02. Supplemental Indentures with Consent of Noteholders........... 51
SECTION 9.03. Execution of Supplemental Indentures.......................... 53
SECTION 9.04. Effect of Supplemental Indenture.............................. 53
SECTION 9.05. Conformity With Trust Indenture Act........................... 53
SECTION 9.06. Reference in Notes to Supplemental Indentures................. 53
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption.................................................... 54
SECTION 10.02. Form of Redemption Notice..................................... 54
SECTION 10.03. Notes Payable on Redemption Date.............................. 55
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions etc...................... 55
SECTION 11.02. Form of Documents Delivered to Indenture Trustee.............. 57
SECTION 11.03. Acts of Noteholders........................................... 57
SECTION 11.04. Notices, etc. to Indenture Trustee, Issuer and Rating
Agencies...................................................... 58
SECTION 11.05. Notices to Noteholders; Waiver................................ 59
SECTION 11.06. Alternate Payment and Notice Provisions....................... 59
SECTION 11.07. Conflict with Trust Indenture Act............................. 59
SECTION 11.08. Effect of Headings and Table of Contents...................... 60
SECTION 11.09. Successors and Assigns........................................ 60
SECTION 11.10. Separability.................................................. 60
SECTION 11.11. Benefits of Indenture......................................... 60
SECTION 11.12. Legal Holidays................................................ 60
SECTION 11.13. GOVERNING LAW................................................. 60
SECTION 11.14. Counterparts.................................................. 60
SECTION 11.15. Recording of Indenture........................................ 60
SECTION 11.16. Trust Obligation.............................................. 60
SECTION 11.17. No Petition................................................... 61
SECTION 11.18. Inspection.................................................... 61
(iv)
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EXHIBITS
EXHIBIT A - Schedule of Receivables.....................................A-1
EXHIBIT B - Reserved....................................................B-1
EXHIBIT C - Form of Depository Agreement................................C-1
EXHIBIT D - Form of Class A Note........................................D-1
EXHIBIT E - Form of Class B Note........................................E-1
(v)
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This INDENTURE dated as of November 1, 1997, is hereby executed by and
between CATERPILLAR FINANCIAL ASSET TRUST 1997-B, a Delaware business trust (the
"Issuer" or the "Trust"), and THE FIRST NATIONAL BANK OF CHICAGO, as trustee and
not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
benefit of the Holders of the Issuer's Class A-1 5.805% Asset Backed Notes,
Class A-2 6.018% Asset Backed Notes, Class A-3 6.16% Asset Backed Notes
(collectively, the "Class A Notes") and the Class B 6.35% Asset Backed Notes
(the "Class B Notes", and together with the Class A Notes, the "Notes") as
provided in this Indenture:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest, whether now owned or hereafter acquired, in,
to and under (a) the Receivables and all obligations of the Obligors thereunder,
including all moneys (including accrued interest) due thereon on or after the
Cut-off Date; (b) the security interests in the Transaction Equipment granted by
Obligors pursuant to the Receivables and any other interest of the Issuer in the
Transaction Equipment; (c) any proceeds with respect to the Receivables from
claims on any physical damage, credit life and/or disability insurance policies
covering Financed Equipment or Obligors; (d) the Purchase Agreement, including
the right assigned to the Issuer to cause CFSC to repurchase Receivables from
the Seller under certain circumstances described therein; (e) the Trust Account
Property, including all money on deposit from time to time in the Trust
Accounts, including the Reserve Account Initial Deposit and the Yield Supplement
Deposit Amount, and in all investments and all income from the investment of
funds therein (including any accrued discount realized on liquidation of any
investment purchased at a discount); (f) the Sale and Servicing Agreement
(including all rights of the Seller under the Purchase Agreement assigned to the
Issuer pursuant to the Sale and Servicing Agreement); (g) the rights of the
Seller in any proceeds from recourse to Dealers on Receivables or any other
amounts owing by Dealers on Receivables; and (h) all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds,
products, rents, receipts or profits of the conversion, voluntary or
involuntary, into cash or other property, all cash and non-cash proceeds,
accounts, accounts receivable, notes, drafts, contract rights, general
intangibles, documents, money, certificates of deposit, letters of credit,
advances of credit, goods, uncertificated securities, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property consisting of, arising from or relating to all or
any part of any of the foregoing or any proceeds thereof (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, ratably
without prejudice, priority
<PAGE>
or distinction, and to secure compliance with the provisions of this Indenture,
all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the
Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties as required in this Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. (a) DEFINITIONS. Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"ACT" has the meaning specified in SECTION 11.03(a).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of
November 1, 1997, among the Administrator, the Issuer and the Trustee.
"ADMINISTRATOR" means CFSC or any successor Administrator under the
Administration Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AUTHORIZED OFFICER" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers,
containing the specimen signature of each such Person, delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Vice President or more senior officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers (containing the specimen signatures of such officers) delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter); PROVIDED, HOWEVER, that
for purposes of SECTION 3.09 such officer of the Administrator must be any of
the chief executive officer, chief financial officer or chief accounting
officer.
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"BASIC DOCUMENTS" means the Certificate of Trust, the Trust Agreement, the
Purchase Agreement, the Sale and Servicing Agreement, the Administration
Agreement, the Depository Agreement, the Custodial Agreement, the Underwriting
Agreements and other documents and certificates delivered in connection
therewith.
"BOOK-ENTRY CLASS A NOTES" means a beneficial interest in the Class A
Notes, ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in SECTION 2.10.
"BOOK-ENTRY CLASS B NOTES" means a beneficial interest in the Class B
Notes, ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in SECTION 2.10.
"BOOK-ENTRY NOTES" means the Book-Entry Class A Notes and the Book-Entry
Class B Notes.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in the City of New York, Chicago,
Illinois and Nashville, Tennessee or in such other location as the Corporate
Trust Office may be located are authorized or obligated by law, regulation or
executive order to remain closed.
"CERTIFICATE" has the meaning assigned to it in the Trust Agreement.
"CERTIFICATE OF TRUST" means the certificate of trust of the Issuer
substantially in the form of EXHIBIT B to the Trust Agreement.
"CFSC" means Caterpillar Financial Services Corporation, a Delaware
corporation, and its successors.
"CLASS A NOTE OWNER" means, with respect to a Book-Entry Class A Note, the
Person who is the owner of such Book-Entry Class A Note, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"CLASS A NOTES" means, collectively, the Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes.
"CLASS A-1 NOTE" means any Note, substantially in the form of EXHIBIT D,
designated therein as a Class A-1 5.805% Asset Backed Note.
"CLASS A-2 NOTE" means any Note, substantially in the form of EXHIBIT D,
designated therein as a Class A-2 6.018% Asset Backed Note.
3
<PAGE>
"CLASS A-3 NOTE" means any Note, substantially in the form of EXHIBIT D,
designated therein as a Class A-3 6.16% Asset Backed Note.
"CLASS A-1 NOTE INTEREST RATE" means, for any Distribution Date, 5.805% per
annum.
"CLASS A-2 NOTE INTEREST RATE" means, for any Distribution Date, 6.018% per
annum.
"CLASS A-3 NOTE INTEREST RATE" means, for any Distribution Date, 6.16% per
annum.
"CLASS B NOTE OWNER" means, with respect to a Book-Entry Class B Note, the
Person who is the owner of such Book-Entry Class B Note, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"CLASS B NOTES" means any Note, substantially in the form of EXHIBIT E,
designated therein as a Class B 6.35% Asset Backed Note.
"CLASS B NOTE RATE" means, for any Distribution Date, 6.35% per annum.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"CLOSING DATE" means November 25, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of this
Indenture.
"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 date of the execution of this Agreement is located
at One First National Plaza, Suite 0126, Chicago, Illinois 60670, Attention:
Corporate Trust Division, except that for purposes of SECTION 3.02, such term
shall mean the office or agency of the Indenture Trustee in the Borough of
Manhattan in the City of New York, which office at the date hereof is located at
14 Wall Street, Eighth Floor, New York, New York 10005, or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders 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 and the Seller); PROVIDED, that for the
purposes of Section 3.02, the address of any such office shall be in the Borough
of Manhattan in the City of New York.
4
<PAGE>
"DEFAULT" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in SECTION 2.10.
"DEPOSITORY AGREEMENT" means the agreement among the Issuer, the Indenture
Trustee, the Administrator, and The Depository Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, substantially in the form of
EXHIBIT C.
"DISTRIBUTION DATE" means the 25th day of each calendar month, or, if any
such date is not a Business Day, the next succeeding Business Day, commencing
December 26, 1997.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning specified in SECTION 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Note Register.
"INDENTURE" means this Indenture as amended or supplemented from time to
time.
"INDENTURE TRUSTEE" means The First National Bank of Chicago, a national
banking association, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
5
<PAGE>
"INDEPENDENT" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of SECTION 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"ISSUER" means Caterpillar Financial Asset Trust 1997-B or any successor
thereto and, for purposes of any provision contained herein and required by the
TIA, each other obligor on the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request signed
in the name of the Issuer by any one of its Authorized officers and delivered
to the Indenture Trustee.
"NET APR" means, with respect to a Receivable, its APR less the Servicing
Fee Rate.
"NOTE INTEREST RATE" means the per annum interest rate borne by a Note.
"NOTE OWNER" means a Class A Note Owner and a Class B Note Owner, as
applicable.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in SECTION 2.04.
"NOTES" means, collectively, the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class B Notes.
"OFFICER'S CERTIFICATE" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of SECTION 11.01, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized Officer of the Issuer.
"OPINION OF COUNSEL" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to CFSC and who shall be satisfactory to the Indenture Trustee, and
which opinion or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, shall comply with any applicable requirements of SECTION
11.01, and shall be in form and substance satisfactory to the Indenture Trustee.
6
<PAGE>
"OUTSTANDING" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Notes that the Indenture Trustee knows to be so owned shall be
so disregarded; PROVIDED, FURTHER, that (i) at any time following an Event of
Default, in determining whether the Holders of the requisite Outstanding Amount
of the Notes have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Basic Document, and (ii) at any time
following a Servicer Default, in determining whether the Holders of the
requisite Outstanding Amount may terminate all the rights and obligations of the
Servicer or waive any Servicer Default to the extent set forth in Section 8.01
of the Sale and Servicing Agreement, the Class B Notes shall be disregarded and
deemed not to be Outstanding unless no Class A Notes are Outstanding. Notes
owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Indenture Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not any such person.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes, or
a class of Notes, as applicable, Outstanding at the date of determination.
"OWNER TRUSTEE" means Chase Manhattan Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.
"PAYING AGENT" means the Indenture Trustee or any Person that meets the
eligibility standards for the Indenture Trustee specified in SECTION 6.11 and is
authorized by the Issuer to
7
<PAGE>
make the payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"PERSON" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"PLAN" means any employee benefit plan or other plan or arrangement,
including an individual retirement account or annuity, Keough plan or collective
investment fund or insurance company general or separate account in which such
plans, accounts or arrangements are invested, that are subject to the fiduciary
responsibility and prohibited transaction provisions of ERISA and/or Section
4975 of the Code.
"PLAN ASSETS" mean assets that are treated as "plan assets" of any Plan for
purposes of applying Title I of ERISA and Section 4975 of the Code.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under SECTION 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
"RATING AGENCY" means Moody's and Standard & Poor's. If no such
organization or successor is any longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Issuer, 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 prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer and the
Issuer in writing that such action will not result in a reduction or withdrawal
of the then current rating of any Class of the Notes.
"RECEIVABLE" means any Contract listed on the Schedule of Receivables.
"RECORD DATE" means, with respect to a Distribution Date or Redemption
Date, (i) if the Notes are held in book-entry form, the close of business on the
calendar day immediately preceding such Distribution Date or Redemption Date or
(ii) if the Notes are held in definitive form, the last calendar day of the
month preceding the month in which such Distribution Date or Redemption Date
occurs.
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"REDEMPTION DATE" means the Distribution Date specified by the Servicer or
the Issuer pursuant to SECTION 10.01.
"REDEMPTION PRICE" means in the case of a redemption of the Class A-3 Notes
and the Class B Notes pursuant to SECTION 10.01, an amount equal to the
principal amount of the Class A-3 Notes and the Class B Notes redeemed plus
accrued and unpaid interest thereon at the Class A-3 Note Interest Rate and the
Class B Note Interest Rate, as applicable, to but excluding the Redemption Date.
"REGISTERED HOLDER" means the Person in whose name a Note is registered in
the Note Register on the applicable Record Date.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Trust Officer, Secretary,
Assistant Secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement dated
as of November 1, 1997, among the Issuer, the Seller and the Servicer.
"SCHEDULE OF RECEIVABLES" means the listing of the Receivables set forth in
EXHIBIT A (which Exhibit may be in the form of microfiche).
"STATE" means any one of the 50 states of the United States of America or
the District of Columbia.
"SUCCESSOR SERVICER" has the meaning specified in SECTION 3.07(e).
"TRUST" means Caterpillar Financial Asset Trust 1997-B.
"TRUST AGREEMENT" means the Trust Agreement, as amended and restated as of
November 1, 1997, between the Seller and the Owner Trustee.
"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 this
Indenture for the benefit of the Noteholders (including, without limitation, all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as in
force on the date hereof, unless otherwise specifically provided.
9
<PAGE>
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
(b) OTHER DEFINITIONAL PROVISIONS. (1) Capitalized terms used herein and
not otherwise defined have the meanings assigned to them in the Sale and
Servicing Agreement or, if not defined therein, in the Trust Agreement.
(2) All terms defined in this Indenture shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(3) As used in this Indenture and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Indenture or in any such certificate or other document, and accounting
terms partly defined in this Indenture 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 Indenture 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 Indenture or
in any such certificate or other document shall control.
(4) The words "hereof," "herein," "hereunder," and words of similar import
when used in this Indenture shall refer to this Indenture as a whole and not to
any particular provision of this Indenture; Section and Exhibit references
contained in this Indenture are references to Sections and Exhibits in or to
this Indenture unless otherwise specified; and the term "including" shall mean
"including without limitation."
(5) The definitions contained in this Indenture 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 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
10
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"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. [RESERVED]
SECTION 1.04. CALCULATIONS OF INTEREST. All calculations of interest made
hereunder shall be made, with respect to the Class A-1 Notes, on the basis of a
year of 360 days and the actual number of days elapsed and with respect to the
Class A-2 Notes, the Class A-3 Notes and the Class B Notes, on the basis of a
year of 360 days of twelve 30-day months.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Class A-1, Class A-2 and Class A-3 Notes, in each
case together with the Indenture Trustee's certificate of authentication, shall
be in substantially the forms set forth in EXHIBIT D, and the Class B Notes,
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in EXHIBIT E, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution of the Notes. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Class A Notes set forth in EXHIBIT D and the terms of the Class B Notes set
forth in EXHIBIT E are part of the terms of this Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or
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any of them have ceased to hold such offices prior to the authentication and
delivery of such Notes or did not hold such offices at the date of such Notes.
The Indenture Trustee shall, upon written order of the Seller, authenticate
and deliver Class A-1 Notes for original issue in an aggregate principal amount
of $81,000,000, Class A-2 Notes for an original issue in an aggregate principal
amount of $110,900,000, Class A-3 Notes for an original issue in an aggregate
principal amount of $102,091,000 and Class B Notes for an original issue in an
aggregate principal amount of $12,577,000. The aggregate principal amount of
Class A-1 Notes, Class A-2 Notes , Class A-3 Notes and Class B Notes outstanding
at any time may not exceed such amounts, respectively, except as provided in
SECTION 2.05.
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes in the minimum denomination of $1,000 and in
integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. TEMPORARY NOTES. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at the office or agency of the Issuer to be maintained as
provided in SECTION 3.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute, and
the Indenture Trustee shall authenticate and deliver in exchange therefor, a
like principal amount of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be the initial "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
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If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Note Registrar and of the location, and any change in
the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in SECTION 3.02, if the
applicable requirements of Article 8 of the UCC are met the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of the
same class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the applicable
requirements of Article 8 of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the City of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to SECTION 2.03 or 9.06 not involving any transfer.
The preceding provisions of this section notwithstanding, the Issuer shall
not be required to make, and the Note Registrar need not register, transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
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SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the applicable requirements of Article 8 of the UCC are met,
the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide-purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Except as set forth in the first paragraph of this Section 2.05, every
replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such
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Note be overdue, and neither the Issuer, the Indenture Trustee nor any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED
INTEREST. (a) The Class A Notes shall accrue interest as provided in the form
of the Class A Note set forth in EXHIBIT D and the Class B Notes shall accrue
interest as provided in the form of the Class B Note set forth in EXHIBIT E, and
in each case such interest shall be payable on each Distribution Date as
specified therein, subject to SECTION 3.01. Any installment of interest or
principal, if any, or any other amount, payable on any Note which is punctually
paid or duly provided for by the Issuer on the applicable Distribution Date
shall be paid to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the Record Date, by check mailed first-class, postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, (i) except that, unless Definitive Notes have been issued pursuant
to SECTION 2.12, with respect to Notes registered on the Record Date in the name
of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds to
the account designated by such nominee and (ii) except for (A) the final
installment of principal payable with respect to such Note on a Distribution
Date and (B) the Redemption Price for any Note called for redemption pursuant to
SECTION 10.01(A), in each case which shall be payable as provided below. The
funds represented by any such checks returned undelivered shall be held in
accordance with SECTION 3.03.
(b) The principal of each Class A Note shall be payable in installments on
each Distribution Date as provided in the form of Class A Note set forth in
EXHIBIT D. The principal of the Class B Notes shall be payable in installments
on each Distribution Date as provided in the form of Class B Note set forth in
Exhibit E. Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable, if not previously paid, on the date on which
an Event of Default shall have occurred and be continuing, if the Indenture
Trustee or the Holders of the Notes representing a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in SECTION 5.02. All principal payments on each class of
Notes shall be made pro rata to the Noteholders of such Class entitled thereto.
Upon notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business on
the Record Date preceding the Distribution Date on which the Issuer expects that
the final installment of principal of and interest on such Note will be paid.
Such notice shall be mailed no later than five Business Days prior to such final
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in SECTION 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders on
a subsequent special record date, which date shall be fixed or caused to be
fixed by the Issuer and shall be at least five Business Days prior to the
payment
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date. The Issuer shall fix or cause to be fixed any such payment date, and, at
least 15 days before any such special record date, the Issuer shall mail to each
Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it; PROVIDED that such Issuer Order
is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
SECTION 2.09. RELEASE OF COLLATERAL. Subject to SECTION 3.03 and SECTION
11.01, the Indenture Trustee shall release property from the lien of this
Indenture only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and Independent Certificates in accordance
with TIA Sections 314(c) and 314 (d)(1) or an Opinion of Counsel in lieu of such
Independent Certificates to the effect that the TIA does not require any such
Independent Certificates.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance, will
be issued in the form of a typewritten Note or Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
SECTION 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to SECTION 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of the
Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note
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Owners and the Clearing Agency and/or the Clearing Agency Participants
pursuant to the Depository Agreement. Unless and until Definitive Notes
are issued pursuant to SECTION 2.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to SECTION
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Clearing Agency, and
shall have no obligation to the Note Owners.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Issuer advises the Indenture
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes, and the
Issuer is unable to locate a qualified successor, (ii) the Issuer at its option
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default or a Servicer Default, Note Owners representing beneficial
interests aggregating a majority of the Outstanding Amount of the Notes advise
the Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interests of the Note
Owners, then the Clearing Agency shall notify all Note Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency. None of the
Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
SECTION 2.13. REPRESENTATIONS BY NOTEHOLDERS AND NOTE OWNERS. Each
Noteholder and Note Owner, by acceptance of a Note, or in the case of a Note
Owner, a beneficial interest in a Note, will be deemed to have represented and
warranted for the benefit of the Seller, the Servicer, the Indenture Trustee,
the Owner Trustee and the Issuer that it did not purchase such Note or
beneficial interest in a Note with Plan Assets of any Plan if any of the Seller,
the Servicer, the Indenture Trustee, the Owner Trustee, any Certificateholder or
any of their
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respective affiliates (i) has investment or administrative discretion with
respect to the Plan Assets used to effect such purchase; (ii) has authority or
responsibility to give, or regularly gives, investment advice with respect to
such Plan Assets, for a fee and pursuant to an agreement or understanding that
such advice (a) will serve as a primary basis for investment decisions with
respect to such Plan Assets, and (b) will be based on the particular investment
needs of such Plan; or (iii) unless exemption relief is available under U.S.
Department of Labor Prohibited Transaction Class Exemption 95-60, 91-38 or 90-1,
is an employer maintaining or contributing to such Plan.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly and
punctually pay the principal of and interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the foregoing,
the Issuer will cause to be distributed all amounts on deposit in the Class A
Note Distribution Account and the Class B Note Distribution Account on a
Distribution Date pursuant to SECTION 8.02(c). Amounts properly withheld under
the Code by any Person from a payment to any Noteholder of interest and/or
principal and/or premium shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, in the City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Corporate
Trust Office to serve as its agent for the foregoing purposes. The Issuer will
give prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
SECTION 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection
Account, the Class A Note Distribution Account and the Class B Note Distribution
Account pursuant to SECTION 8.02(c) shall be made on behalf of the Issuer by the
Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from
the Collection Account, the Class A Note Distribution Account and the Class B
Note Distribution Account for payments of Class A Notes and Class B Notes,
respectively, shall be paid over to the Issuer except as provided in this
Section.
At or before 12:00 noon (New York time) on each Distribution Date and the
Redemption Date, the Issuer shall deposit or cause to be deposited (a) in the
Class A Note Distribution
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Account an aggregate sum sufficient to pay the amounts then becoming due under
the Class A Notes, such sum to be held in trust for the benefit of the Persons
entitled thereto, and (b) in the Class B Note Distribution Account, an aggregate
sum sufficient to pay the amounts then becoming due under the Class B Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto.
Unless the Paying Agent is the Indenture Trustee, the Issuer shall promptly
notify the Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent, it hereby so agrees), subject to the provisions of this
Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and
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payable shall be discharged from such trust, and the Indenture Trustee or
such Paying Agent, as the case may be, shall give prompt notice of such
occurrence to the Issuer and shall release such money to the Issuer on Issuer
Request; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to
the extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; PROVIDED, HOWEVER, that the Indenture Trustee or such Paying
Agent, before being required to make any such repayment, shall at the expense
and direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such publication, any unclaimed balance
of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address
of record for each such Holder).
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. PROTECTION OF TRUST ESTATE. The Issuer will from time to
time take all actions necessary, including without limitation preparing,
executing, delivering and filing all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, if applicable, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture:
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all persons and parties.
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The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee pursuant to this Section.
SECTION 3.06. OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken to
perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are so necessary and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
maintain the perfection of such lien and security interest.
(b) On or before April 30 in each calendar year, beginning in 1998, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken to
perfect the lien and security interest of this Indenture, including without
limitation with respect to the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is so necessary and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain the perfection of such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that will, in the opinion of such
counsel, be required to maintain the perfection of the lien and security
interest of this Indenture until April 30 in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF
RECEIVABLES. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Administrator to assist the Issuer in performing its duties
under this Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by it by the terms of this
Indenture
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and the Sale and Servicing Agreement in accordance with and within the time
periods provided for herein and therein. Except as otherwise expressly provided
therein, the Issuer shall not waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof without the consent of the Indenture
Trustee or the Holders of a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee and the Rating Agencies thereof, and shall specify in such
notice the action, if any, the Issuer is taking with respect of such default.
If a Servicer Default shall arise from the failure of the Servicer to perform
any of its duties or obligations under the Sale and Servicing Agreement with
respect to the Receivables, the Issuer shall take all reasonable steps available
to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 8.01 of the
Sale and Servicing Agreement, the Issuer shall appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the Indenture Trustee. In the
event that a Successor Servicer has not been appointed and accepted its
appointment at the time when the Servicer ceases to act as Servicer, the
Indenture Trustee without further action shall automatically be appointed the
Successor Servicer. The Indenture Trustee may resign as the Servicer by giving
written notice of such resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new servicer enters into a servicing agreement with the Issuer
as provided below. Upon delivery of any such notice to the Issuer, the Issuer
shall obtain a new servicer as the Successor Servicer under the Sale and
Servicing Agreement. Any Successor Servicer other than the Indenture Trustee
shall (i) be an established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of equipment
receivables and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of ARTICLE VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one
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of its Affiliates, provided that it shall be fully liable for the actions and
omissions of such Affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee. As soon as a Successor Servicer is appointed, the Issuer shall notify
the Indenture Trustee of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it will not, without the prior written
consent of the Indenture Trustee or the Holders of a majority in Outstanding
Amount of the Notes, amend, modify, waiver, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
permitted pursuant to the terms of the Sale and Servicing Agreement) or the
Basic Documents, or waive timely performance or observance by the Servicer or
the Seller under the Sale and Servicing Agreement or by CFSC under the Purchase
Agreement; PROVIDED, HOWEVER, that no such amendment shall (i) except to the
extent otherwise provided in the Sale and Servicing Agreement, increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to be
made for the benefit of the Noteholders or (ii) reduce the aforesaid percentage
of the Notes which are required to consent to any such amendment, without the
consent of the holders of all the outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Holders, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may reasonably deem necessary or appropriate under the
circumstances.
SECTION 3.08. NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Purchase
Agreement or the Sale and Servicing Agreement, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so by
the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(iii) dissolve or liquidate in whole or in part; or
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(iv) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by operation of law, in
each case on Financed Equipment and arising solely as a result of an action
or omission of the related Obligor) or (C) permit the lien of this
Indenture not to constitute a valid first priority perfected security
interest in the Trust Estate (other than with respect to any such tax,
mechanics' or other lien).
SECTION 3.09. STATEMENTS AS TO COMPLIANCE. (a) The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing within 120 days after the end of the fiscal year 1997),
an Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during the 12-month
period ending at the end of such fiscal year (or in the case of the fiscal
year ending December 31, 1997, the period from the Closing Date to December
31, 1997) and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. (a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
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(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will not have any material adverse tax consequence to
the Issuer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
ARTICLE III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
(b) Other than as set forth in clauses (x) and (y) of SECTION 3.18, the
Issuer shall not convey or transfer any of its properties or assets, including
those included in the Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Holders of
the Notes, (D) unless otherwise provided in such supplemental indenture,
expressly agrees to indemnify, defend and hold harmless the Issuer against
and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agrees by means of such
supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing:
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect
that such transaction will
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not have any material adverse tax consequence to the Issuer, any Noteholder
or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
ARTICLE III and that all conditions precedent herein provided for relating
to such transaction have been complied with (including any filing required
by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with SECTION 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to SECTION 3.10(b), Caterpillar Financial Asset Trust 1997-B
will be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery to the Indenture Trustee of the Officer's
Certificate and Opinion of Counsel specified in SECTION 3.10(b)(vi) stating that
Caterpillar Financial Asset Trust 1997-B is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than the purposes and powers set forth in Section 2.03 of the
Trust Agreement.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the Servicer
to comply with all of its obligations under the Basic Documents, including
without limitation those set forth in Sections 4.09, 4.10, 4.11 and 5.06 of the
Sale and Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
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SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. REMOVAL OF ADMINISTRATOR. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose;
PROVIDED, HOWEVER, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Owner Trustee and the Certificateholder as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement and the Trust Agreement and (y) payments to the
Indenture Trustee and the Administrator pursuant to the Administration
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
SECTION 3.19. NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and, immediately after obtaining knowledge of any of the
following occurrences, written notice of each default on the part of the
Servicer or the Seller of its obligations under the Sale and Servicing Agreement
and each default on the part of CFSC of its obligations under the Purchase
Agreement.
SECTION 3.20. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) SECTIONS 3.03, 3.04, 3.05, 3.08,
3.10, 3.12, 3.13 and 11.17, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
SECTION 6.07 and the obligations of the Indenture Trustee under SECTION 4.02)
and (vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture
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Trustee payable to all or any of them, and the Indenture Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in SECTION 2.05 and (ii) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in SECTION 3.03) have been delivered to the Indenture
Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
(i) have become due and payable;
(ii) will become due and payable at (A) the Class A-1 Final
Scheduled Distribution Date with respect to the Class A-1 Notes, (B)
the Class A-2 Final Scheduled Distribution Date with respect to the
Class A-2 Notes, (C) the Class A-3 Final Scheduled Distribution Date
with respect to the Class A-3 Notes and (D) the Class B Final Scheduled
Distribution Date with respect to the Class B Notes; or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer;
and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture Trustee
cash or direct obligations of or obligations guaranteed by the United
States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered
to the Indenture Trustee for cancellation when due to (x) the Class A-1
Final Scheduled Distribution Date, Class A-2 Final Scheduled Distribution
Date, Class A-3 Final Scheduled Distribution Date or Class B Final
Scheduled Distribution Date, as applicable, or Redemption Date (if Notes
shall have been called for redemption pursuant to SECTION 10.01(a)), as the
case may be;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of SECTION
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11.01(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to SECTION 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; PROVIDED such moneys need not be segregated from other funds except to
the extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to SECTION 3.03, and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a period
of five days; or
(ii) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have
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been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the Outstanding Amount of the Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate 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 the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or
(v) the commencement by the Issuer 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 the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the commencement of the termination of the Trust
pursuant to Section 9.02 of the Trust Agreement, or the taking of action by
the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) or clause (v), its status and what action
the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if declared by Noteholders), and upon any such declaration the
unpaid principal amount of the Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this ARTICLE V provided, the
Holders of Notes representing not less than a majority of the Outstanding Amount
of the Notes, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
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(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in SECTION 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Note Interest Rate borne by the Notes, and in addition thereto
will pay such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in SECTION 5.04, in its discretion, proceed
to protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
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(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
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(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to SECTION 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) in the event that all the Notes have been declared due and
payable pursuant to Section 5.02, sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more public or private
sales called and conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in SECTION 5.01(i), unless (A) the Holders of 100% of the
Outstanding Amount of the Notes consent
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thereto, (B) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to discharge in full all amounts then due and unpaid
upon such Notes for principal and interest or (C) the Indenture Trustee
determines that the Trust Estate will not continue to provide sufficient funds
for the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of Holders of at least 66-2/3% of the Outstanding
Amount of the Notes. In determining such sufficiency or insufficiency with
respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this ARTICLE V following the acceleration of the maturities of the Notes
pursuant to Section 5.02 (so long as such declaration shall not have been
rescinded or annulled), it shall pay out the money or property (other than the
Servicer's Yield, which may be retained by the Servicer in accordance with
Section 5.07 of the Sale and Servicing Agreement) in the following order:
FIRST: to the Indenture Trustee for amounts due under SECTION 6.07;
SECOND: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A Notes for
interest;
THIRD: to Holders of Class A Notes for amounts due and unpaid on the
Class A Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A Notes for
principal;
FOURTH: to Holders of Class B Notes for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
interest;
FIFTH: to Holders of Class B Notes for amounts due and unpaid on the
Class B Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
principal; and
SIXTH: to the Issuer for distribution to the Certificateholder
pursuant to the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Notes have
been declared to be due and payable under SECTION 5.02 following an Event of
Default and such
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declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee may, but need not, elect to maintain possession of the Trust
Estate. It is the desire of the parties hereto and the Noteholders that there
be at all times sufficient funds for the payment of principal of and interest on
the Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.06. LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
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SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this ARTICLE V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. CONTROL BY NOTEHOLDERS. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; PROVIDED that
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of SECTION 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by the
Holders of Notes representing not less than 100% of the Outstanding Amount
of the Notes;
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(iii) if the conditions set forth in SECTION 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount of
the Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to SECTION 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in SECTION 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such waiver,
the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored
to their former positions and rights hereunder, respectively; PROVIDED that no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; PROVIDED that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; PROVIDED that
the provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
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SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with SECTION 5.04(b).
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and
at the Seller's expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by (x) the Seller and the Servicer, as applicable, of each of
their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement or (y) CFSC of its obligations under or in connection
with the Purchase Agreement in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of at least
66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or the
Servicer under or in connection with the Sale and Servicing Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right of the
Issuer to take such action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so and
at the Seller's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by CFSC of each of its obligations to the Seller under or in connection with the
Purchase Agreement in accordance with the terms thereof,
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and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Purchase Agreement to
the extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by CFSC of each of its obligations under the Purchase
Agreement.
(d) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of at least
66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Seller against CFSC under or in
connection with the Purchase Agreement, including the right or power to take any
action to compel or secure performance or observance by CFSC of each of its
obligations to the Seller thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Purchase Agreement, and any
right of the Seller to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; PROVIDED, HOWEVER, the Indenture Trustee
shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.
The Indenture Trustee shall not be required to determine, confirm or
recalculate the information contained in the Servicer's Certificate delivered to
it pursuant to the Sale and Servicing Agreement.
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(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of SUBSECTION
6.01(b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to SECTION 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to SUBSECTIONS 6.01(a), (b) and (c);
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence
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on the part of, or for the supervision of, any such agent, attorney, custodian
or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with SECTIONS 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of the Trust Estate, this Indenture or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns, which
shall include the information required to be distributed pursuant to the second
to last paragraph of SECTION 5.06 of the Sale and Servicing Agreement. The
Indenture Trustee shall only be required to provide to the Noteholders the
information given to it by the Servicer. The Indenture Trustee shall not be
required to determine, confirm or recompute any such information.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee from time to time reasonable compensation for its services.
The Indenture Trustee's
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compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall indemnify the Indenture Trustee against any and all loss,
liability or expense (including the fees of either in-house counsel or outside
counsel, but not both) incurred by it in connection with the administration of
this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer
and the Administrator shall not relieve the Issuer of its obligations hereunder.
The Issuer shall defend the claim and the Indenture Trustee may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel. The
Issuer need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
wilful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in SECTION
5.01(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Notwithstanding anything herein to the contrary, the Indenture Trustee's
right to enforce any of the Issuer's payment obligations pursuant to this
SECTION 6.07 shall be subject to the provisions of SECTION 11.17.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this SECTION 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with SECTION 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein
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as the retiring Indenture Trustee), the Issuer shall promptly appoint a
successor Indenture Trustee, which successor shall be reasonably acceptable to
the Seller.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of not less than a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with SECTION 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under SECTION 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Indenture
Trustee. The Indenture Trustee shall provide the Rating Agencies prior written
notice of any such transaction; PROVIDED that such corporation or banking
association shall be otherwise qualified and eligible under SECTION 6.11.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE INDENTURE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time
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be located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons reasonably acceptable to
the Issuer to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title
to the Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under SECTION 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under SECTION 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this ARTICLE VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
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of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and its long-term
unsecured debt shall be rated at least Baa3 by Moody's and BBB- by Standard &
Poor's. The Indenture Trustee shall comply with TIA Section 310(b), including
the optional provision permitted by the second sentence of TIA Section
310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
of the issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met.
Within 90 days after ascertaining the occurrence of an Event of Default
which shall not have been cured or waived, unless authorized by the Commission,
the Indenture Trustee shall resign with respect to the Class A Notes and/or the
Class B Notes in accordance with Section 6.08 of this Indenture, and the Issuer
shall appoint a successor Indenture Trustee for one or both of such Classes, as
applicable, so that there will be separate Indenture Trustees for the Class A
Notes and the Class B Notes. In the event the Indenture Trustee fails to comply
with the terms of the preceding sentence, the Indenture Trustee shall comply
with clauses (ii) and (iii) of TIA Section 310(b).
In the case of the appointment hereunder of a successor Indenture Trustee
with respect to any Class of Notes pursuant to this Section 6.11, the Issuer,
the retiring Indenture Trustee and the successor Indenture Trustee with respect
to such Class of Notes shall execute and deliver an indenture supplemental
hereto wherein each successor Indenture Trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, the successor Indenture Trustee all
the rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes of the Class to which the appointment of such successor
Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not
retiring with respect to all Classes of Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Indenture Trustee with respect to the Notes of
each Class as to which the retiring Indenture Trustee is not retiring shall
continue to be vested in the Indenture Trustee, and (iii) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Indenture
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Indenture Trustees co-trustees of the same trust
and that each such Indenture Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Indenture Trustee; and upon the removal of the retiring Indenture
Trustee shall become effective to the extent provided therein.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An
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Indenture Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated.
SECTION 6.13. APPOINTMENT OF CUSTODIANS. The Indenture Trustee may, with
the consent of the Servicer and notice to the Rating Agencies, appoint The First
National Bank of Chicago as Custodian to hold the Receivables Files in
accordance with the Custodial Agreement. Subject to this Article VI, the
Indenture Trustee agrees to comply with the terms of each Custodial Agreement
and to enforce the terms and provisions thereof against the Custodian for the
benefit of the Noteholders.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Notes as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in SECTION 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such SECTION 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate, pursuant to TIA Section 312(b), with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe)
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which the Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to CLAUSES (i) and (ii) of this SECTION
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. If required by TIA Section
313(a), within 60 days after each March 31 beginning with March 31, 1998, the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange, if
any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall
be without prejudice to any right to claim a Default or Event of Default under
this Indenture and any right to proceed thereafter as provided in ARTICLE V.
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SECTION 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the Certificateholder
the Trust Accounts as provided in Section 5.01 of the Sale and Servicing
Agreement.
(b) On or before the second Business Day preceding each Distribution Date,
the Total Distribution Amount with respect to the preceding Collection Period
will be deposited in the Collection Account as provided in Section 5.02 of the
Sale and Servicing Agreement. On or before the Business Day preceding each
Distribution Date, the Noteholders' Distributable Amount with respect to the
preceding Collection Period will be transferred from the Collection Account
and/or the Reserve Account, as applicable, to the Class A Note Distribution
Account and the Class B Note Distribution Account as provided in Sections 5.04
and 5.05 of the Sale and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture Trustee
shall distribute all amounts on deposit in the Class A Note Distribution Account
to the Class A Noteholders to the extent of amounts due and unpaid on the Class
A Notes for principal and interest in the following amounts and in the following
order of priority (except as otherwise provided in SECTION 5.04(b)):
(i) accrued and unpaid interest on the Class A Notes; PROVIDED
that if there are not sufficient funds in the Class A Note Distribution
Account to pay the entire amount of accrued and unpaid interest then due on
the Class A Notes, the amount in the Class A Note Distribution Account
shall be applied to the payment of such interest on each class of the Class
A Notes pro rata on the basis of the total such interest due on the Class A
Notes;
(ii) to the Holders of the Class A-l Notes until the Outstanding
Amount of the Class A-l Notes is reduced to zero;
(iii) to the Holders of the Class A-2 Notes until the Outstanding
Amount of the Class A-2 Notes is reduced to zero; and
(iv) to the Holders of the Class A-3 Notes until the Outstanding
Amount of the Class A-3 Notes is reduced to zero.
(d) On each Distribution Date and Redemption Date, the Indenture Trustee
shall distribute all amounts on deposit in the Class B Note Distribution Account
to the Class B Noteholders in respect of the Class B Notes to the extent of
amounts due and unpaid on the Class B Notes for principal and interest in the
following amounts and in the following order of priority (except as otherwise
provided in SECTION 5.04(b)):
(i) accrued and unpaid interest on the Class B Notes; and
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(ii) to the Holders of the Class B Notes until the Outstanding
Amount of the Class B Notes is reduced to zero.
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and (except with respect to the Certificate Distribution Account)
reinvested by the Indenture Trustee upon Issuer Order, subject to the provisions
of Section 5.01(b) of the Sale and Servicing Agreement (which Issuer Order may
be upon direction of the Servicer). All income or other gain from investments
of moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee in the Collection Account, and any loss resulting from such investments
shall be charged to such account. The Issuer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, and, in connection with any direction to the Indenture Trustee to
make any such investment or sale, if requested by the Indenture Trustee, the
Issuer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable
to the Indenture Trustee, to such effect.
(b) Subject to SECTION 6.01(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 12:00
noon New York Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the Notes
shall not have been declared due and payable pursuant to SECTION 5.02, or, if
such Notes shall have been declared due and payable following an Event of
Default, amounts collected or receivable from the Trust Estate are being applied
in accordance with SECTION 5.05 as if there had not been such a declaration;
then the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Trust Accounts in Eligible Investments maturing prior to
the succeeding Distribution Date in accordance with Section 5.01(b) of the Sale
and Servicing Agreement.
SECTION 8.04. RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses pursuant to SECTION 6.07, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this ARTICLE VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
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(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to SECTION 6.07 have
been paid, release any remaining portion of the Trust Estate that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Trust Accounts. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this SECTION 8.04(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of SECTION 11.01.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to SECTION 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; PROVIDED, HOWEVER, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. (a)
Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
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(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; PROVIDED that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of ARTICLE VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Holders of
not less than a majority of the Outstanding Amount of the Notes, by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the
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Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of collections on, or the proceeds of
the sale of, the Trust Estate to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
ARTICLE V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to SECTION 5.04;
(v) modify any provision of this SECTION 9.02 except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Holders of Notes to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
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It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this ARTICLE IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to SECTIONS 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
ARTICLE IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this ARTICLE IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. REDEMPTION. The Class A-3 Notes and the Class B Notes
shall be redeemed in whole, but not in part, on any Distribution Date after the
Class A-1 Notes and the Class A-2 Notes have been paid in full on which the
Servicer exercises the option to purchase the Owner Trust Estate pursuant to
Section 9.01(a) of the Sale and Servicing Agreement; PROVIDED, HOWEVER, that
such purchase is subject to such payment resulting in the Issuer having
available funds sufficient to pay the Redemption Price for the Class A-3 Notes
and the Class B Notes and to reduce the Certificate Balance to zero (together
with payment to the Certificateholder of accrued and unpaid interest on the
Certificate at the Certificate Rate). The Issuer shall furnish the Rating
Agencies notice of such redemption. If the Class A-3 Notes and the Class B
Notes are to be redeemed pursuant to this SECTION 10.01, the Issuer shall
furnish notice of such redemption to the Indenture Trustee not later than 15
days prior to the Redemption Date, and the Issuer shall deposit with the
Indenture Trustee in the (i) Class A Note Distribution Account the Redemption
Price of the Class A-3 Notes to be redeemed and (ii) the Class B Note
Distribution Account the Redemption Price of the Class B Notes to be redeemed,
whereupon all such Class A-3 Notes and Class B Notes shall be due and payable on
the Redemption Date upon the furnishing of a notice complying with SECTION 10.02
to each Holder of the Notes.
SECTION 10.02. FORM OF REDEMPTION NOTICE. (a) Notice of redemption under
SECTION 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the Issuer
to be maintained as provided in SECTION 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
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SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
SECTION 10.02, on the Redemption Date become due and payable at the Redemption
Price and (unless the Issuer shall default in the payment of the Redemption
Price) no interest shall accrue on the Redemption Price for any period after the
date to which accrued interest is calculated for purposes of calculating the
Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
SECTION 11.01(a) or elsewhere in this Indenture, furnish to the
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Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer of the securities to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables or payments pursuant to SECTION 3.03,
whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than Purchased Receivables and
Liquidated Receivables or payments pursuant to SECTION 3.03, or securities
released from the lien of this Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding SECTION 2.09 or any other provision of this
Section, the Issuer may, without complying with clauses (i)-(iv) above, (A)
collect, liquidate, sell or otherwise dispose of Receivables and Financed
Equipment as and to the extent permitted or required by the Basic Documents
and (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents.
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SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, unless such officer or
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in ARTICLE VI.
SECTION 11.03. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
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(subject to SECTION 6.01) conclusive in favor of the Indenture Trustee and the
Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.04. NOTICES, ETC. TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Indenture Trustee and received at its Corporate
Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Caterpillar
Financial Asset Trust 1997-B, in care of Chase Manhattan Bank Delaware, as
Owner Trustee, 1201 Market Street, Ninth Floor, Wilmington, Delaware 19801,
Attention: Corporate Trust Department, with a copy to the Administrator, at
the following address: Caterpillar Financial Services Corporation, 1822
West End Avenue, Nashville, Tennessee 37203-1071 or at any other address
previously furnished in writing to the Indenture Trustee by Issuer or the
Administrator. The Issuer shall promptly transmit any notice received by
it from the Noteholders to the Indenture Trustee.
(c) the Rating Agencies by the Issuer, the Indenture Trustee or the
Owner Trustee shall be sufficient for every purpose hereunder if in
writing, personally delivered or mailed by certified mail, return receipt
requested to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New
York, New York 10007 and (ii) in the case of Standard & Poor's, at the
following address: Standard & Poor's Ratings Services, 26 Broadway (10th
Floor), New York, New York 10004, 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.
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SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Noteholder's address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the sufficiency of such notice
with respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, to the
extent satisfactory to the Indenture Trustee, the Issuer may enter into any
agreement with any Holder of a Note providing for a method of payment, or notice
by the Indenture Trustee or any Paying Agent to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer will furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee will cause payments to be made and notices to be given
in accordance with such agreements.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this indenture by any of the provisions of the TIA, such required
provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
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SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All covenants and agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents of the Indenture Trustee.
SECTION 11.10. SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE 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, AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the
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Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, 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 Article
VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. Notwithstanding any prior termination of this
Indenture, the Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note, hereby covenant and agree that they will not at
any time institute against the Seller or the Trust, or voluntarily join in any
institution against the Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall, and shall cause its representatives, to hold in confidence all
such information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
CATERPILLAR FINANCIAL ASSET
TRUST 1997-B,
By: CHASE MANHATTAN BANK
DELAWARE, not in its individual capacity
but solely as Owner Trustee,
By: /s/ John J. Cashin
--------------------------------------------
Name: John J. Cashin
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but as
Indenture Trustee,
By: /s/ Barbara G. Grosse
--------------------------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared John J. Cashin known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said Vice President and
that she/he executed the same as the corporation for the purpose and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 25th day of November,
1997.
--------------------------
Notary Public
[Seal]
My commission expires:
- ----------------------
63
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STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK,)
BEFORE ME, the undersigned authority, a Notary Public in and for said
County and State, on this day personally appeared Barbara G. Grosse known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
Assistant Vice President and Assistant Secretary and that she/he executed the
same as the corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 25th day of November,
1997.
--------------------------
Notary Public
[Seal]
My commission expires:
- ----------------------
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EXHIBIT A
SCHEDULE OF RECEIVABLES
A-1
<PAGE>
EXHIBIT B
[RESERVED]
B-1
<PAGE>
EXHIBIT C
FORM OF DEPOSITORY AGREEMENT
C-1
<PAGE>
EXHIBIT D
FORM OF CLASS A NOTE
REGISTERED $___________*
No. ____
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.________
UNLESS THIS CLASS A NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS A
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) - ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS A NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A NOTE AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
[THIS CLASS A NOTE WAS ISSUED ON NOVEMBER 25, 1997. IT IS POSSIBLE THAT
APPLICABLE LAW AND PROPOSED TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE
THAT ALL INTEREST PAYMENTS ON THIS CLASS A NOTE ARE TO BE TREATED AS PART OF THE
STATED REDEMPTION PRICE AT MATURITY OF THIS CLASS A NOTE (I.E., PRINCIPAL)
THEREBY CAUSING THIS CLASS A NOTE TO BE TREATED AS HAVING BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. IN SUCH CASE,
THE FOLLOWING INFORMATION WOULD BE APPLICABLE, ASSUMING THAT THIS CLASS A NOTE
PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED
IN PRICING THE CLASS A NOTES: (I) THE AMOUNT
- ---------------------
* Denominations of $1,000 and integral multiples thereof.
D-1
<PAGE>
OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CLASS A NOTE
WOULD BE APPROXIMATELY ____%; AND (II) THE ANNUAL YIELD OF THIS CLASS A NOTE FOR
PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY ___% PER ANNUM. THE ACTUAL
YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED
AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN DETERMINING THE ANNUAL YIELD FOR
FEDERAL INCOME TAX PURPOSES IS ___% OF CPR.]
D-2
<PAGE>
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
[5.805%] [6.018%] [6.16%] [CLASS A-l] [CLASS A-2] [CLASS A-3]
ASSET BACKED NOTES
Caterpillar Financial Asset Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [_________], or
registered assigns, the principal sum of [____________] DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF CLASS A
NOTE] and the denominator of which is [$81,000,000] [for Class A-1 Notes]]
[$110,900,000] [for Class A-2 Notes]] [$102,091,000][for Class A-3 Notes] ] by
(ii) the aggregate amount, if any, payable from the Class A Note Distribution
Account in respect of principal on the [Class A-1] [Class A-2] [Class A-3] Notes
pursuant to SECTION 8.02(c) of the Indenture; PROVIDED, HOWEVER, entire unpaid
principal amount of this Class A Note shall be due and payable on the earlier of
[the November 1998 Distribution Date [for Class A-1]] [the January 2001
Distribution Date [for Class A-2]] [and September 2003 Distribution for the
[Class A-3]] and the Redemption Date, if any, pursuant to SECTION 10.01 of the
Indenture. No payments of principal of the Class A-2 Notes shall be made until
the principal of the Class A-l Notes has been paid in its entirety, and no
payments of principal of the Class A-3 Notes shall be made until the principal
of the Class A-1 Notes and the Class A-2 Notes has been paid in its entirety.
The Issuer will pay interest on this Class A Note at the [Class A-1] [Class A-2]
[Class A-3] Note Interest Rate on each Distribution Date until the principal of
this Class A Note is paid or made available for payment, on the principal amount
of this Class A Note outstanding on the preceding Distribution Date after giving
effect to all payments of principal made on such preceding Distribution Date (or
in the case of the first Distribution Date, on the initial principal amount of
this Class A Note). Interest on this Class A Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, for the
initial Distribution Date from November 25, 1997 to but excluding such
Distribution Date. Interest will be computed, with respect to the Class A-1
Notes, on the basis of a 360-day year and the actual number of days elapsed and,
with respect to the Class A-2 Notes and the Class A-3 Notes, on the basis of a
360-day year of twelve 30 day months. Such principal of and interest on this
Class A Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class A Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Class A Note shall be applied first to interest due and
payable on this Class A Note as provided above and then to the unpaid principal
of this Class A Note.
Reference is made to the further provisions of this Class A Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Class A Note.
D-3
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Class A
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CATERPILLAR FINANCIAL ASSET
TRUST 1997-B
By: Chase Manhattan Bank Delaware, not
in its individual capacity but
solely as Owner Trustee under
the Trust Agreement,
By:
-----------------------------
Name:
Title:
D-4
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Indenture Trustee,
By:
------------------------------------
Name:
Title:
D-5
<PAGE>
[REVERSE OF NOTE]
This Class A Note is one of the [Class A-1] [Class A-2] [Class A-3] Notes
of a duly authorized issue of Class A Notes of the Issuer, designated as its
[5.805%] [6.018%] [6.16%] [Class A-1] [Class A-2] [Class A-3] Asset Backed Notes
(herein called the "Class A Notes"), all issued under an Indenture dated as of
November 1, 1997 (such indenture, as supplemented or amended, is herein called
the "Indenture"), between the Issuer and The First National Bank of Chicago, as
trustee (the "Indenture Trustee", which term includes any successor Indenture
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Class A Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A Notes will be payable on each Distribution Date in
an amount described on the face hereof. "DISTRIBUTION DATE" means the 25th day
of each calendar month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing December 26, 1997.
As described above, the entire unpaid principal amount of this Class A Note
shall be due and payable on the earlier of [the November 1998 Distribution Date
[for Class A-1]] [the January 2001 Distribution Date [for Class A-2] [the
September 2003 Distribution Date [for Class A-3]] and the Redemption Date, if
any, pursuant to SECTION 10.01 of the Indenture. Notwithstanding the foregoing,
the entire unpaid principal amount of the Class A Notes shall be due and payable
on the date on which an Event of Default shall have occurred and be continuing
and the Indenture Trustee or the Holders of the Class A Notes representing a
majority of the Outstanding Amount of the Class A Notes have declared the Class
A Notes to be immediately due and payable in the manner provided in SECTION 5.02
of the Indenture. All principal payments on the Class A Notes of a Class shall
be made pro rata to the Class A Noteholders of such Class entitled thereto.
Payments of interest on this Class A Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Class A Note, shall be made by check mailed
to the Person whose name appears as the Registered Holder of this Class A Note
(or one or more Predecessor Notes) on the Note Register as of the close of
business on each Record Date, except that with respect to Class A Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date
D-6
<PAGE>
without requiring that this Class A Note be submitted for notation of payment.
Any reduction in the principal amount of this Class A Note (or any one or more
Predecessor Notes) effected by any payments made on any Distribution Date shall
be binding upon all future Holders of this Note and of any Class A Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Class A Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed within five days of such Distribution Date
and the amount then due and payable shall be payable only upon presentation and
surrender of this Class A Note at the Indenture Trustee's principal Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the City of New York.
The Issuer shall pay interest on overdue installments of interest at the
[Class A-l] [Class A-2] [Class A-3] Note Interest Rate to the extent lawful.
[As provided in the Indenture, the Class A-3 Notes may be redeemed in
whole, but not in part, by the Issuer, upon the exercise by the Servicer of its
option to repurchase the Receivables on any Distribution Date on or after the
date on which the Pool Balance is ten percent or less of the Initial Pool
Balance.]
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Class A Note may be registered on the Note
Register upon surrender of this Class A Note for registration of transfer at the
office or agency designated by the issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the City of New York or the city in which the
Corporate Trust Office is located, or a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require, and
thereupon one or more new Class A Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Class A Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class A Note or, in the
case of a Note Owner, a beneficial interest in a Class A Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on
the Class A Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director or employee of the Indenture Trustee or the Owner Trustee
in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner
D-7
<PAGE>
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Class A Noteholder or Class A Note Owner, by acceptance of a Class A
Note or, in the case of a Class A Note Owner, a beneficial interest in a Class A
Note, covenants and agrees that by accepting the benefits of the Indenture that
such Noteholder will not at any time institute against the Trust or the Seller,
or join in any institution against the Trust or the Seller of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Class A Notes, the Indenture or the Basic Documents.
It is the intent of the Seller, the Class A Noteholders, the Class B
Noteholders, the Class A Note Owners, the Class B Note Owners, the Issuer, the
Certificateholder and the Certificate Owner that the Class A Notes will be
classified as indebtedness of the Issuer for all United States tax purposes.
The Class A Noteholders, by acceptance of a Class A Note, agree to treat, and to
take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Class A
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Class A Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A Note be overdue, and neither the Issuer, the Indenture Trustee nor
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Class A
Note (or any one of more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Class A Note and of any Class A
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class A Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
D-8
<PAGE>
The term "Issuer" as used in this Class A Note includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Class A Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class A Note and the Indenture 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 and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Class A Note
or of the Indenture shall alter or impair the obligation of the issuer, which is
absolute and unconditional, to pay the principal of and interest on this Class A
Note at the times, place, and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Class A Note or the Indenture, it being
expressly understood that said covenants, obligations and indemnifications have
been made by the Owner Trustee for the sole purposes of binding the interests of
the Owner Trustee in the assets of the Issuer. The Holder of this Class A Note
by the acceptance hereof agrees that, except as expressly provided in the Basic
Documents in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Class A Note.
D-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- ---------------------------------------------
(name and address of assignee)
the within Class A Note and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney, to transfer said Class A Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: *
------------------- ----------------------
Signature Guaranteed:
- --------------------------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
D-10
<PAGE>
EXHIBIT E
FORM OF CLASS B NOTE
REGISTERED $___________*
No. ____
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.________
UNLESS THIS CLASS B NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) - ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS B NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS B NOTE AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
[THIS CLASS B NOTE WAS ISSUED ON NOVEMBER 25, 1997. IT IS POSSIBLE THAT
APPLICABLE LAW AND PROPOSED TREASURY REGULATIONS COULD BE INTERPRETED TO PROVIDE
THAT ALL INTEREST PAYMENTS ON THIS CLASS B NOTE ARE TO BE TREATED AS PART OF THE
STATED REDEMPTION PRICE AT MATURITY OF THIS CLASS B NOTE(I.E., PRINCIPAL)
THEREBY CAUSING THIS CLASS B NOTE TO BE TREATED AS HAVING BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. IN SUCH CASE,
THE FOLLOWING INFORMATION WOULD BE APPLICABLE, ASSUMING THAT THIS CLASS B NOTE
PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS BASED ON CERTAIN ASSUMPTIONS USED
IN PRICING THE CLASS B NOTES: (I) THE AMOUNT
- -------------------------
* Denominations of $1,000 and integral multiples thereof.
E-1
<PAGE>
OF OID AS A PERCENTAGE OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CLASS B NOTES
WOULD BE APPROXIMATELY ____%; AND (II) THE ANNUAL YIELD OF THIS CLASS B NOTES
FOR PURPOSES OF COMPUTING OID WOULD BE APPROXIMATELY ___% PER ANNUM. THE ACTUAL
YIELD TO MATURITY AND OID ON THIS CERTIFICATE MAY DIFFER FROM THE PROJECTED
AMOUNTS. THE PREPAYMENT ASSUMPTION USED IN DETERMINING THE ANNUAL YIELD FOR
FEDERAL INCOME TAX PURPOSES IS ___% OF CPR.]
E-2
<PAGE>
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
CLASS B 6.35% ASSET BACKED NOTES
Caterpillar Financial Asset Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [_________], or
registered assigns, the principal sum of [____________] DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF CLASS B
NOTE] and the denominator of which is [$12,577,000] by (ii) the aggregate
amount, if any, payable from the Class B Note Distribution Account in respect of
principal on the Class B Notes pursuant to SECTION 8.02(c) of the Indenture;
PROVIDED, HOWEVER, entire unpaid principal amount of this Note shall be due and
payable on the earlier of the September 2003 Distribution Date and the
Redemption Date, if any, pursuant to SECTION 10.01 of the Indenture. No
payments of principal of the Class B Notes shall be made until the principal of
the Class A Notes has been paid in its entirety. The Issuer will pay interest
on this Class B Note at the Class B Note Interest Rate on each Distribution Date
until the principal of this Class B Note is paid or made available for payment,
on the principal amount of this Class B Note outstanding on the preceding
Distribution Date after giving effect to all payments of principal made on such
preceding Distribution Date (or in the case of the first Distribution Date, on
the initial principal amount of this Class B Note). Interest on this Class B
Note will accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, for the initial Distribution Date from November 25, 1997
to but excluding such Distribution Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Such principal of and interest on
this Class B Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class B Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Class B Note shall be applied first to interest due and
payable on this Class B Note as provided above and then to the unpaid principal
of this Class B Note.
Reference is made to the further provisions of this Class B Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Class B Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Class B
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
E-3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CATERPILLAR FINANCIAL ASSET
TRUST 1997-B,
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee under
the Trust Agreement,
By:
-----------------------------
Name:
Title:
E-4
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes designated above and referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Indenture Trustee,
By:
------------------------------------
Name:
Title:
E-5
<PAGE>
[REVERSE OF CLASS B NOTE]
This Class B Note is one of the Class B Notes of a duly authorized issue of
Class B Notes of the Issuer, designated as its 6.35% Class B Asset Backed Notes
(herein called the "Class B Notes"), all issued under an Indenture dated as of
November 1, 1997 (such indenture, as supplemented or amended, is herein called
the "Indenture"), between the Issuer and The First National Bank of Chicago, as
trustee (the "Indenture Trustee," which term includes any successor Indenture
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Class B Notes are subject to all terms of the Indenture. All
terms used in this Class B Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Class B Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of the Class B Notes will be payable on each Distribution Date in
an amount described on the face hereof. "DISTRIBUTION DATE" means the 25th day
of each calendar month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing December 26, 1997.
As described above, the entire unpaid principal amount of this Class B Note
shall be due and payable on the earlier of the September 2003 Distribution Date
and the Redemption Date, if any, pursuant to SECTION 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Class B
Notes shall be due and payable on the date on which an Event of Default shall
have occurred and be continuing and the Indenture Trustee or the Holders of the
Class B Notes representing a majority of the Outstanding Amount of the Class B
Notes have declared the Class B Notes to be immediately due and payable in the
manner provided in SECTION 5.02 of the Indenture. All principal payments on the
Class B Notes shall be made pro rata to the Class B Noteholders entitled
thereto.
Payments of interest on this Class B Note due and payable on each
Distribution Date, together with the installment of principal, if any, to the
extent not in full payment of this Class B Note, shall be made by check mailed
to the Person whose name appears as the Registered Holder of this Class B Note
(or one or more Predecessor Notes) on the Note Register as of the close of
business on each Record Date, except that with respect to the Class B Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class B Note be submitted for notation
of payment. Any reduction in the principal amount of this Class B Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future
E-6
<PAGE>
Holders of this Class B Note and of any Class B Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class B Note on a Distribution Date, then the Indenture Trustee, in the
name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Distribution Date
by notice mailed within five days of such Distribution Date and the amount then
due and payable shall be payable only upon presentation and surrender of this
Class B Note at the Indenture Trustee's principal Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class B Note Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-3 Notes and the Class B Notes may
be redeemed in whole, but not in part, by the Issuer, upon the exercise by the
Servicer of its option to repurchase the Receivables on any Distribution Date on
or after the date on which the Pool Balance is ten percent or less of the
Initial Pool Balance.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Class B Note may be registered on the Note
Register upon surrender of this Class B Note for registration of transfer at the
office or agency designated by the issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the City of New York or the city in which the
Corporate Trust Office is located, or a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require, and
thereupon one or more new Class B Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Class B Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B Note or, in the
case of a Note Owner, a beneficial interest in a Class B Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Class B Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent
E-7
<PAGE>
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Noteholder or Note Owner, by acceptance of a Class B Note or, in the
case of a Note Owner, a beneficial interest in a Class B Note, covenants and
agrees that by accepting the benefits of the Indenture that such Noteholder will
not at any time institute against the Trust or the Seller, or join in any
institution against the Trust or the Seller of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Class B Notes, the Indenture or the Basic Documents.
It is the intent of the Seller, the Class A Noteholders, the Class B
Noteholders, the Class A Note Owners, the Class B Note Owners, the Issuer, the
Certificateholders and the Certificate Owners that, the Class B Notes will be
classified as indebtedness of the Issuer for all United States tax purposes.
The Class B Noteholders, by acceptance of a Class B Note, agree to treat, and to
take no action inconsistent with the treatment of, the Class B Notes for such
tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Class B
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Class B Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class B Note be overdue, and neither the Issuer, the Indenture Trustee nor
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, on behalf of the
Holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Class B
Note (or any one of more Predecessor Notes) shall be conclusive and binding upon
such Holder and upon all future Holders of this Class B Note and of any Class B
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class B Note. The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Class B Note includes any successor to
the Issuer under the Indenture.
E-8
<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Class B Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Class B Note and the Indenture 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 and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Class B Note
or of the Indenture shall alter or impair the obligation of the issuer, which is
absolute and unconditional, to pay the principal of and interest on this Class B
Note at the times, place, and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Class B Note or the Indenture, it being
expressly understood that said covenants, obligations and indemnifications have
been made by the Owner Trustee for the sole purposes of binding the interests of
the Owner Trustee in the assets of the Issuer. The Holder of this Class B Note
by the acceptance hereof agrees that, except as expressly provided in the Basic
Documents in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Class B Note.
E-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- ---------------------------------------------
(name and address of assignee)
the within Class B Note and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney, to transfer said Class B Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: *
------------------- ----------------------
Signature Guaranteed:
- -----------------------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face fo the within Note in every
particular, without alteration, enlargement or any change whatsoever.
E-10
<PAGE>
Exhibit 4.2
Amended and Restated Trust Agreement
dated as of November 1, 1997
<PAGE>
[Execution Copy]
- --------------------------------------------------------------------------------
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
AMENDED AND RESTATED TRUST AGREEMENT
between
CATERPILLAR FINANCIAL FUNDING CORPORATION,
as Seller
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of November 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Capitalized Terms........................................ 1
SECTION 1.02. Other Definitional Provisions............................ 3
ARTICLE II
ORGANIZATION
SECTION 2.01. Name..................................................... 3
SECTION 2.02. Office................................................... 4
SECTION 2.03. Purpose and Powers....................................... 4
SECTION 2.04. Appointment of Owner Trustee............................. 5
SECTION 2.05. Initial Capital Contribution of Trust Estate............. 5
SECTION 2.06. Declaration of Trust..................................... 5
SECTION 2.07. Liability of the Owner................................... 5
SECTION 2.08. Title to Trust Property.................................. 5
SECTION 2.09. Situs of Trust........................................... 5
SECTION 2.10. Representations and Warranties of Seller................. 6
SECTION 2.11. Amended and Restated Trust Agreement..................... 7
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. Initial Ownership........................................ 7
SECTION 3.02. Form of Certificate...................................... 7
SECTION 3.03. Authentication of the Certificate........................ 7
SECTION 3.04. Registration of the Certificate.......................... 7
SECTION 3.06. Persons Deemed Owner..................................... 8
SECTION 3.07. [Reserved]............................................... 8
SECTION 3.08. Maintenance of Office or Agency.......................... 8
SECTION 3.09. Appointment of Paying Agents............................. 8
(i)
<PAGE>
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Owner with Respect to Certain Matters.... 9
SECTION 4.02. Action By the Owner with Respect to Certain Matters...... 10
SECTION 4.03. Action By Owner with Respect to Bankruptcy............... 10
SECTION 4.04. Restrictions on Owner's Power............................ 10
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. Establishment of Trust Account........................... 10
SECTION 5.02. Application of Trust Funds............................... 10
SECTION 5.03. Method of Payment........................................ 11
SECTION 5.04. No Segregation of Monies; No Interest.................... 11
SECTION 5.05. Accounting and Report to the Noteholders, the Owner,
the Internal Revenue Service and Others.................. 11
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. General Authority........................................ 12
SECTION 6.02. General Duties........................................... 12
SECTION 6.03. Action Upon Instruction.................................. 12
SECTION 6.04. No Duties Except as Specified in This Agreement or in
Instructions............................................. 13
SECTION 6.05. No Action Except under Specified Documents or
Instructions............................................. 14
SECTION 6.06. Restrictions............................................. 14
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties.......................... 14
SECTION 7.02. Furnishing of Documents.................................. 15
SECTION 7.03. Representations and Warranties........................... 15
SECTION 7.04. Reliance; Advice of Counsel.............................. 16
SECTION 7.05. Not Acting in Individual Capacity........................ 16
SECTION 7.06. Owner Trustee Not Liable for the Certificate, Notes or
Receivables.............................................. 16
SECTION 7.07. Owner Trustee May Own the Certificate and Notes.......... 17
(ii)
<PAGE>
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. Owner Trustee's Fees and Expenses........................ 17
SECTION 8.02. Indemnification.......................................... 17
SECTION 8.03. Payments to the Owner Trustee............................ 18
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. Termination of Trust Agreement........................... 18
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. Eligibility Requirements for Owner Trustee.............. 19
SECTION 10.02. Resignation or Removal of Owner Trustee................. 19
SECTION 10.03. Successor Owner Trustee................................. 20
SECTION 10.04. Merger or Consolidation of Owner Trustee................ 21
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee........... 21
ARTICLE XI
FASIT PROVISIONS
..............................................................................22
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Supplements and Amendments.............................. 24
SECTION 12.02. No Legal Title to Owner Trust Estate in the Owner....... 25
SECTION 12.03. Limitations on Rights of Others......................... 25
SECTION 12.04. Notices................................................. 25
SECTION 12.05. Severability............................................ 25
SECTION 12.06. Separate Counterparts................................... 25
SECTION 12.07. Successors and Assigns.................................. 25
SECTION 12.08. Covenant of the Seller.................................. 26
SECTION 12.09. No Petition............................................. 26
SECTION 12.10. No Recourse............................................. 26
SECTION 12.11. Headings................................................ 27
(iii)
<PAGE>
SECTION 12.12. GOVERNING LAW........................................... 27
SECTION 12.13. [Reserved].............................................. 27
SECTION 12.14. Seller Payment Obligation............................... 27
EXHIBITS
- --------
EXHIBIT A FORM OF CERTIFICATE...........................................A-1
EXHIBIT B FORM OF CERTIFICATE OF TRUST..................................B-1
(iv)
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT dated as of November 1, 1997, between
CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation, as Seller, and
CHASE MANHATTAN BANK DELAWARE, as Owner Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.01. CAPITALIZED TERMS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Administration Agreement" means the Administration Agreement dated as of
November 1, 1997, among the Administrator, the Trust, the Seller and the
Indenture Trustee, as the same may be amended, modified or supplemented from
time to time.
"Administrator" means Caterpillar Financial Services Corporation, a
Delaware corporation, or any successor Administrator under the Administration
Agreement.
"Agreement" shall mean this Trust Agreement, as the same may be amended and
supplemented from time to time.
"Basic Documents" shall mean the Purchase Agreement, the Sale and Servicing
Agreement, the Indenture, the Administration Agreement, the Depository
Agreement, the Custodial Agreement, the Notes, the Certificates and the other
documents and certificates delivered in connection therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ., as the same may be amended from time to
time.
"Certificate" shall mean the certificate evidencing the beneficial interest
of the Owner in the Trust, substantially in the form attached hereto as Exhibit
A.
"Certificate Distribution Account" shall have the meaning assigned to such
term in SECTION 5.01.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B which has been filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to SECTION 3.04.
"Certificateholder" or "Holder" shall mean the Seller as the registered
holder of the Certificate.
<PAGE>
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at 1201 Market
Street, Wilmington, Delaware 19801; or at such other address as the Owner
Trustee may designate by notice to the Owner and the Seller, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Seller).
"Indenture Trustee" shall mean The First National Bank of Chicago, not in
its individual capacity but solely as Indenture Trustee under the Indenture, and
any successor Indenture Trustee under the Indenture.
"Depository Agreement" means the agreement among the Trust, the Indenture
Trustee, the Administrator and The Depository Trust Company, dated as of the
Closing Date, substantially in the form of EXHIBIT C to the Indenture.
"Expenses" shall have the meaning assigned to such term in SECTION 8.02.
"Owner" shall mean the Holder.
"Owner Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and the Certificate Distribution Account and all other
property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement and the
Administration Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent appointed
pursuant to SECTION 3.09 and shall initially be The Chase Manhattan Bank.
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
among the Trust, the Seller, as seller, and Caterpillar Financial Services
Corporation, as servicer, dated as of November 1, 1997, as the same may be
amended, modified or supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" shall mean Caterpillar Financial Funding Corporation in its
capacity as Seller hereunder.
2
<PAGE>
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, 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 and Exhibit references
contained in this Agreement are references to Sections 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.
(f) All calculations of the amount of interest accrued on the Certificates
shall be made on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE II
ORGANIZATION
SECTION 2.01. NAME. The Trust created hereby shall be known as
"Caterpillar Financial Asset Trust 1997-B," in which name the Owner Trustee may
conduct the business of
3
<PAGE>
the Trust, make and execute contracts and other instruments on behalf of the
Trust and sue and be sued.
SECTION 2.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the
Seller.
SECTION 2.03. PURPOSE AND POWERS. (a) The purpose of the Trust is to
engage in the following activities:
(i) to issue the Class A-1 Notes, Class A-2 Notes, the Class A-3
Notes and the Class B Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, and to sell $81,000,000 aggregate principal
amount of the Class A-1 Notes, $110,900,000 aggregate principal amount of
Class A-2 Notes, $102,091,000 aggregate principal amount of the Class A-3
Notes and $12,577,000 aggregate principal amount of Class B Notes to
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Chase
Securities Inc. and Citicorp Securities, Inc. upon the written order of the
Seller and issue the Certificate in the principal amount of $7,861,558 to
the Seller upon the written order of the Seller;
(ii) with the proceeds of the sale of the Notes and the Certificate,
to pay the Seller the amounts owed pursuant to Section 2.01 of the Sale and
Servicing Agreement, by directing Merrill Lynch as representative of the
Seller to wire transfer such proceeds in accordance with instructions
received from the Seller;
(iii) with the proceeds from capital contributions from the Seller
to pay the organizational, start-up and transactional expenses of the
Trust, and with the proceeds from the sale of the Notes and the
Certificate, to fund the Reserve Account and the Yield Supplement Account;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Owner pursuant to the terms of the Sale and Servicing Agreement any
portion of the Trust Estate released from the Lien of, and remitted to the
Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation of
the Owner Trust Estate and the making of distributions to the Owner and the
Noteholders.
4
<PAGE>
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE. The Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account. The Seller shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.06. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owner, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, for income
and franchise tax purposes, the Trust shall be treated as a security device and,
therefore, disregarded as an entity separate from its owner. The parties agree
that, unless otherwise required by appropriate tax authorities, the Trust will
file or cause to be filed annual or other necessary returns, reports and other
forms consistent with the characterization of the Trust as a security device for
such tax purposes. Effective as of the date hereof, the Owner Trustee shall have
all rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.07. LIABILITY OF THE OWNER. The Owner shall not have any
personal liability for any liability or obligation of the Trust.
SECTION 2.08. TITLE TO TRUST PROPERTY. Legal title to all the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.09. SITUS OF TRUST. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any employees in any state other than
Delaware; PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the
Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York, and
payments will be
5
<PAGE>
made by the Trust only from Delaware or New York. The only office of the Trust
will be at the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller hereby
represents and warrants to the Owner Trustee that:
(a) The Seller is duly organized and validly existing as a
corporation in good standing under the laws of the State of Nevada, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted.
(b) 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 such license or approval would render any Receivable unenforceable
that would otherwise be enforceable by the Seller, the Servicer or the
Owner Trustee.
(c) 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 property to be sold and assigned to and
deposited with the Trust and the Seller shall have duly authorized such
sale and assignment and deposit to the Trust 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) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not 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 certificate
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 is bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of the Seller's knowledge, any order, rule or
regulation applicable to the Seller of any court, federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(e) There are no proceedings or investigations pending, or, to the
best of Seller's knowledge, threatened, before any court, federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties which
(i) assert the invalidity of this Agreement or any of the Basic Documents,
(ii) seek to prevent the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, or (iii) seek
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 or any of the Basic Documents.
6
<PAGE>
SECTION 2.11. AMENDED AND RESTATED TRUST AGREEMENT. This Agreement amends
and restates in its entirety the Trust Agreement dated as of November 1, 1997
between the Seller and Owner Trustee.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Seller pursuant to SECTION 2.05, the Seller shall be the
sole beneficiary of the Trust. Notwithstanding any other provision of this
Agreement, the interest of the Seller in the Trust (including its interest by
virtue of being the Holder of the Certificate) shall not be transferable.
SECTION 3.02. FORM OF CERTIFICATE. The Certificate shall be issued in an
original certificate principal balance of $7,861,558. The Certificate shall be
executed on behalf of the Trust by manual or facsimile signature of a Trust
Officer of the Owner Trustee. The Certificate bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall, when duly
authenticated pursuant to SECTION 3.03, be validly issued and entitled to the
benefits of this Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of the Certificate or did not hold such offices at the date of authentication
and delivery of the Certificate.
SECTION 3.03. AUTHENTICATION OF THE CERTIFICATE. Concurrently with the
initial sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificate in a principal amount
equal to the initial Certificate Balance to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Seller, signed
by its Chairman of the Board, its President, any Vice President, its Treasurer,
its Secretary or any Assistant Treasurer, without further corporate action by
the Seller. The Certificate shall not entitle its holder to any benefit under
this Agreement, or be valid for any purpose, unless there shall appear on the
Certificate a certificate of authentication substantially in the form set forth
in EXHIBIT A, executed by the Owner Trustee or the Owner Trustee's
authentication agent, by manual signature; such authentication shall constitute
conclusive evidence that the Certificate shall have been duly authenticated and
delivered hereunder. The Certificate shall be dated the date of its
authentication.
SECTION 3.04. REGISTRATION OF THE CERTIFICATE. The Certificate Registrar
shall keep or cause to be kept, at the office or agency maintained pursuant to
SECTION 3.08, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Owner Trustee shall provide for the
registration of the Certificate. The Chase Manhattan Bank shall be the initial
Certificate Registrar. The Certificate shall not be transferrable.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATE. If (a)
the Certificate is mutilated and shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar
7
<PAGE>
shall receive evidence to its satisfaction of the destruction, loss or theft of
the Certificate and (b) there shall be delivered to the Certificate Registrar
and the Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that the Certificate
shall have been acquired by a bona fide purchaser, the Owner Trustee on behalf
of the Trust shall execute and the Owner Trustee, or the Owner Trustee's
authenticating agent, shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any new
Certificate under this Section, the Owner Trustee or the Certificate Registrar
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNER. The Owner Trustee or the Certificate
Registrar may treat the Seller, as the Person in whose name the Certificate
shall be registered in the Certificate Register, as the owner of the Certificate
for the purpose of receiving distributions pursuant to SECTION 5.02 and for all
other purposes whatsoever, and neither the Owner Trustee nor the Certificate
Registrar shall be bound by any notice to the contrary.
SECTION 3.07. [Reserved]
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in the Borough of Manhattan, in the City of New York, an office or
offices or agency or agencies where notices and demands to or upon the Owner
Trustee in respect of the Certificate and the Basic Documents may be served.
The Owner Trustee initially designates The Chase Manhattan Bank, 55 Water
Street, New York, New York 10041 as its principal corporate trust office for
such purposes. The Owner Trustee shall give prompt written notice to the Seller
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.09. APPOINTMENT OF PAYING AGENTS. The Paying Agent shall make
distributions to the Certificateholder from the Certificate Distribution Account
pursuant to SECTION 5.02 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be The
Chase Manhattan Bank, and any co-paying agent chosen by The Chase Manhattan
Bank, and acceptable to the Owner Trustee. The Chase Manhattan Bank shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. In the event that The Chase Manhattan Bank shall no longer be the
Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The Owner Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Owner
Trustee that as Paying Agent, such successor Paying Agent or additional Paying
8
<PAGE>
Agent will hold all sums, if any, held by it for payment to the
Certificateholder in trust for the benefit of the Certificateholder until
such sums shall be paid to the Certificateholder. The Paying Agent shall
return all unclaimed funds to the Owner Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Owner Trustee. The provisions of SECTIONS 7.01, 7.03, 7.04 and 8.01 shall
apply to the Owner Trustee also in its role as Paying Agent, for so long as
the Owner Trustee shall act as Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Agreement
to the Paying Agent shall include any co-paying agent unless the context
requires otherwise.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. PRIOR NOTICE TO OWNER WITH RESPECT TO CERTAIN MATTERS. With
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholder in writing of the proposed action and the Holder
shall not have notified the Owner Trustee in writing prior to the 30th day after
such notice is given that the Holder has withheld consent or provided
alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (other than
an action to collect on a Receivable) and the compromise of any action,
claim or lawsuit brought by or against the Trust (other than an action to
collect on a Receivable);
(b) the election by the Trust to file an amendment to the Certificate
of Trust;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Owner;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner that would not materially adversely affect the
interests of the Owner; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Trustee or the appointment pursuant to this
Agreement of a successor Certificate Registrar, or the consent to the
assignment by the Note Registrar, Paying Agent or Trustee or Certificate
Registrar of its obligations under the Indenture or this Agreement, as
applicable.
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SECTION 4.02. ACTION BY THE OWNER WITH RESPECT TO CERTAIN MATTERS. The
Owner Trustee shall not have the power, except upon the direction of the Owner,
to (a) remove the Administrator under the Administration Agreement pursuant to
Section 8 thereof, (b) appoint a successor Administrator pursuant to Section 8
of the Administration Agreement, (c) remove the Servicer under the Sale and
Servicing Agreement pursuant to Section 8.01 thereof or (d) except as expressly
provided in the Basic Documents, sell the Receivables after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Owner.
SECTION 4.03. ACTION BY OWNER WITH RESPECT TO BANKRUPTCY. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the prior approval of the Owner and the
delivery to the Owner Trustee by the Owner of a certificate certifying that the
Owner reasonably believes that the Trust is insolvent.
SECTION 4.04. RESTRICTIONS ON OWNER'S POWER. The Owner shall not direct
the Owner Trustee to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Basic Documents or would be contrary to
SECTION 2.03 nor shall the Owner Trustee be obligated to follow any such
direction, if given.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee, for the
benefit of the Certificateholder, shall establish and maintain in the name of
the Trust an Eligible Securities Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholder.
The Owner Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof. Except as otherwise provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee for the benefit of the Certificateholder. If, at any time, the
Certificate Distribution Account ceases to be an Eligible Securities Account,
the Owner Trustee (or the Seller on behalf of the Owner Trustee, if the
Certificate Distribution Account is not then held by the Owner Trustee or an
affiliate thereof) shall within 10 Business Days following notification of such
occurrence (or such longer period, not to exceed 30 calendar days, as to which
each Rating Agency may consent) establish a new Certificate Distribution Account
as an Eligible Securities Account and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
SECTION 5.02. APPLICATION OF TRUST FUNDS. (a) On each Distribution Date,
the Owner Trustee will distribute to the Certificateholder amounts deposited in
the Certificate Distribution
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Account pursuant to Sections 5.04 and 5.05 of the Sale and Servicing Agreement
on or before such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to the
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.07(a) of the Sale and Servicing Agreement on such
Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to the Owner, such tax shall reduce the
amount otherwise distributable to the Owner in accordance with this Section.
The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owner sufficient funds for the payment of any tax
that is legally owed or required to be withheld by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to an Owner shall be treated as cash distributed to the
Owner at the time it is withheld by the Trust and remitted to the appropriate
taxing authority. If there is a possibility that withholding tax is payable with
respect to a distribution, the Owner Trustee may in its sole discretion withhold
such amounts in accordance with this clause (c). In the event that the Owner
wishes to apply for a refund of any such withholding tax, the Owner Trustee
shall reasonably cooperate with the Owner in making such claim so long as the
Owner agrees to reimburse the Owner Trustee for any out-of-pocket expenses
incurred.
SECTION 5.03. METHOD OF PAYMENT. Subject to SECTION 9.01(c),
distributions required to be made to the Certificateholder on any Distribution
Date shall be made to the Certificateholder either by wire transfer, in
immediately available funds, to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if the Certificateholder shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Distribution Date and the Certificate
evidences a denomination of not less than $1,000,000, or, if not, by check
mailed to the Certificateholder at the address of such Holder appearing in the
Certificate Register.
SECTION 5.04. NO SEGREGATION OF MONIES; NO INTEREST. Subject to SECTION
5.01 and 5.02, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
SECTION 5.05. ACCOUNTING AND REPORT TO THE NOTEHOLDERS, THE OWNER,
THE INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall (a) maintain
(or cause to be maintained) the books of the Trust on a fiscal year basis ending
December 31, (or such other period as may be required by applicable law), with
the first year being a short year ending December 31, 1997, and on the accrual
method of accounting or as otherwise may be required by the FASIT Provisions,
(b) deliver to the Owner, as may be required by the Code and applicable Treasury
Regulations, such information as may be required to enable the Owner to prepare
its federal and
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state income tax returns, and make such elections as may from time to time be
required or appropriate under any applicable state or federal statute or rule
or regulation thereunder so as to maintain the Trust's characterization as
disregarded as an entity separate from its owner for federal income tax
purposes and (c) collect or cause to be collected any withholding tax as
described in and in accordance with SECTION 5.02(c) with respect to
distributions from the Trust. As applicable, the Owner Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Receivables or shall offset premium
against interest income or original issue discount accruing with respect to
the Receivables.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to
or contemplated by the Basic Documents to which the Trust is to be a party,
or any amendment thereto or other agreement, in each case, in such form as
the Seller shall approve as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further
authorized from time to time to take such action as the Administrator directs
in writing with respect to the Basic Documents.
SECTION 6.02. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Basic Documents and to administer the Trust
in the interest of the Owner, subject to the Basic Documents and in accordance
with the provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Basic Document, and the Owner
Trustee shall not be liable for the default or failure of the Administrator to
carry out its obligations under the Administration Agreement.
SECTION 6.03. ACTION UPON INSTRUCTION. (a) Subject to ARTICLE IV, the
Owner may, by written instruction, direct the Owner Trustee in the management of
the Trust. Such direction may be exercised at any time by written instruction
of the Owner pursuant to ARTICLE IV.
(b) The Owner Trustee shall not be required to take any action hereunder
or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
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(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Owner requesting
instruction as to the course of action to be adopted, and to the extent the
Owner Trustee acts in good faith in accordance with any written instruction of
the Owner received, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received appropriate
instruction within ten days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interest of the Owner, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Owner requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received, the Owner
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Owner, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to SECTION 6.03; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any liens
on any part of the Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
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SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Owner Trustee pursuant to this Agreement, (ii) in accordance with the
Basic Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to SECTION 6.03.
SECTION 6.06. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in SECTION
2.03 or (b) that, to the actual knowledge of the Owner Trustee, would result in
the Trust being treated as a association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes. The Owner Trustee and
the Seller agree that no election to treat the Trust as an association (or
publicly traded partnership) taxable as a corporation for United States Federal
income tax purposes or any relevant state tax purposes shall be made by or on
behalf of the Trust. The Owner shall not direct the Owner Trustee or the Seller
to take action that would violate the provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder
or under any Basic Document under any circumstances, except (i) for its own
willful misconduct or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in SECTION 7.03 expressly made by the Owner
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Administrator or the Owner;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document, if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
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(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Seller or for the form, character, genuineness, sufficiency,
value or validity of any of the Owner Trust Estate or for or in respect of
the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Certificate, and the Owner Trustee
shall in no event assume or incur any liability, duty, or obligation to any
Noteholder or to the Owner, other than as expressly provided for herein and
in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Indenture Trustee or the Servicer
under any of the Basic Documents or otherwise, and the Owner Trustee shall
have no obligation or liability to perform the obligations of the Trust
under this Agreement or the Basic Documents that are required to be
performed by the Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture or the Servicer under the Sale and
Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of the Owner, unless the Owner has offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby.
The right of the Owner Trustee to perform any discretionary act enumerated
in this Agreement or in any Basic Document shall not be construed as a
duty, and the Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.
SECTION 7.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
(a) to the Owner promptly upon receipt of a written request therefor, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Basic Documents and (b) to the Indenture Trustee promptly upon written request
therefor, copies of the Purchase Agreement, the Sale and Servicing Agreement,
the Administration Agreement and the Trust Agreement.
SECTION 7.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Seller, for the benefit of the Owner, that:
(a) It is a banking corporation duly organized and validly existing
in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
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(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound.
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons.
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created Chase Manhattan Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. OWNER TRUSTEE NOT LIABLE FOR THE CERTIFICATE, NOTES OR
RECEIVABLES. The recitals contained herein and in the Certificate (other than
the signature and counter-signature of the Owner Trustee on the Certificate and
its representations and warranties
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in SECTION 7.03) shall be taken as the statements of the Seller and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Agreement, or of the Certificate (other than the signature and countersignature
of the Owner Trustee on the Certificate) or the Notes or of any other Basic
Document or of any Receivable or related documents. The Owner Trustee shall at
no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable, or the perfection and
priority of any security interest created by any Receivable in any Financed
Equipment or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to the Certificateholder under this Agreement or
the Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Equipment; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Seller or the Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the
Administrator, the Indenture Trustee or the Servicer or any subservicer taken in
the name of the Owner Trustee.
SECTION 7.07. OWNER TRUSTEE MAY OWN THE CERTIFICATE AND NOTES. The Owner
Trustee in its individual or any other capacity may become the Owner or pledgee
of the Certificate or Notes and may deal with the Seller, the Administrator, the
Indenture Trustee and the Servicer in banking transactions with the same rights
as it would have if it were not Owner Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Seller
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
however, that the Owner Trustee's right to enforce such obligation shall be
subject to the provisions of SECTION 11.09.
SECTION 8.02. INDEMNIFICATION. The Seller shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner
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Trustee or any Indemnified Party in any way relating to or arising out of this
Agreement, the Basic Documents, the Owner Trust Estate, the administration of
the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder,
except only that the Seller shall not be liable for or required to indemnify the
Owner Trustee from and against Expenses arising or resulting from any of the
matters described in the third sentence of SECTION 7.01; provided, however, that
the Owner Trustee's right to enforce such obligation shall be subject to the
provisions of SECTION 12.09. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement. In any event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section, the Owner Trustee's choice of
legal counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
SECTION 8.03. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this ARTICLE VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. TERMINATION OF TRUST AGREEMENT. (a) This Agreement (other
than Article VIII) and the Trust shall terminate and be of no further force or
effect, upon the final distribution by the Owner Trustee of all moneys or other
property or proceeds of the Owner Trust Estate in accordance with the terms of
the Indenture, the Sale and Servicing Agreement and ARTICLE V. Any money or
other property held as part of the Owner Trust Estate following such
distribution shall be distributed to the Seller. The bankruptcy, liquidation,
dissolution, death or incapacity of the Owner shall not (x) operate to terminate
this Agreement or the Trust, or (y) entitle the Owner's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Owner Trust
Estate or (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in SECTION 9.01(a), neither the Seller nor the
Owner shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholder shall surrender the Certificate to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to the Certificateholder mailed within five
Business Days of receipt of notice of such termination from the Servicer given
pursuant to SECTION 9.01(c) of the Sale and Servicing Agreement, stating (i) the
Distribution Date upon or with respect to which final payment of the Certificate
shall be made upon presentation and surrender of the Certificate at the office
of the Paying Agent therein designated and (ii) the amount of any such final
payment. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Paying Agent at the
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time such notice is given to Certificateholder. Upon presentation and surrender
of the Certificate, the Paying Agent shall cause to be distributed to
Certificateholder amounts distributable on such Distribution Date pursuant to
SECTION 5.02.
In the event that the Certificateholder shall not surrender the Certificate
for cancellation within six months after the date specified in the above
mentioned written notice, the Owner Trustee shall give a second written notice
to the Certificateholder to surrender the Certificate for cancellation and
receive the final distribution with respect thereto. If within one year after
the second notice the Certificate shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the Certificateholder concerning
surrender of the Certificate, and the cost thereof shall be paid out of the
funds and other assets that shall remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to the Seller.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent which has) a rating of at least Baa3 by Moody's and
at least BBB- by Standard & Poor's. If such corporation shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Owner Trustee
shall resign immediately in the manner and with the effect specified in SECTION
10.02.
SECTION 10.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Seller and the Administrator; PROVIDED,
HOWEVER, that such resignation and discharge shall only be effective upon the
appointment of a successor Owner Trustee. Upon receiving such notice of
resignation, the Seller shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the
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giving of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of SECTION 10.01 and shall fail to resign after written
request therefor by the Seller, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Seller may remove the Owner Trustee. If the Seller shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Seller
shall promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee so removed and one copy to the successor Owner Trustee and Seller shall
pay all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to SECTION 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Seller shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to SECTION 10.02 shall execute, acknowledge and deliver to
the Seller and to its predecessor Owner Trustee, with a copy thereof delivered
to the Administrator, an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties, and obligations of its predecessor under this Agreement, with
like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Seller and the predecessor Owner Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Owner Trustee
all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to SECTION 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Seller shall mail notice of the successor of such Owner
Trustee to the Certificateholder, the Indenture Trustee, the Noteholders and the
Rating Agencies. If the Seller shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Owner Trustee, the successor
Owner Trustee shall cause such notice to be mailed at the expense of the Seller.
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SECTION 10.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder; PROVIDED
such corporation shall be eligible pursuant to SECTION 10.01, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; anything herein to the contrary notwithstanding; PROVIDED,
FURTHER that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.
SECTION 10.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Equipment may at the time be
located, the Seller and the Owner Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title
to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Seller and the Owner Trustee may consider necessary or desirable. If the
Seller shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to SECTION 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to SECTION 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
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Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Seller and the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
FASIT PROVISIONS
(a) The Owner Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860L of the Code) in the FASIT other than the
Notes and the Certificate unless it first receives an Opinion of Counsel at the
expense of the party seeking the creation of such interests to the effect that
such creation will not cause an Adverse FASIT Event.
(b) Subject to any Internal Revenue Service procedures or FASIT Provisions
so requiring, the Owner Trustee shall sign (or, if permitted by the Code, cause
the Administrator to sign) all of the Tax Returns delivered to it by the FASIT
Administrator and return them to the FASIT Administrator for filing in a timely
manner. The Owner Trustee shall promptly provide the FASIT Administrator with
such information in the possession of the Owner Trustee as the FASIT
Administrator may from time to time request for the purpose of enabling the
FASIT Administrator to prepare Tax Returns.
(c) The Owner Trustee shall assist the Servicer and the FASIT
Administrator, to the extent reasonably requested by the Servicer and the FASIT
Administrator to do so, to take such actions and cause the Trust to take such
actions as they deem necessary or desirable to maintain the status of the Trust
as a FASIT under the FASIT Provisions. The Owner Trustee shall not take or fail
to take any action (whether or not authorized hereunder) as to which the
Servicer or the FASIT Administrator, as applicable, has advised it in writing
that it has received an Opinion of Counsel to the effect that an Adverse FASIT
Event could occur with respect to such action. In addition, prior to taking any
action with respect to the Trust or its assets, or causing the Trust to take any
action, which is not expressly permitted under the terms of this Agreement,
unless the Owner Trustee shall have received an Opinion of Counsel that such
action will not
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result in an Adverse FASIT Event, the Owner Trustee will consult with the
Servicer or the FASIT Administrator, as applicable, or its designee, in writing,
with respect to whether such action could cause an Adverse FASIT Event to occur
with respect to the Trust, and the Owner Trustee shall not take any such action
or cause the Trust to take any such action as to which the Servicer or the FASIT
Administrator, as applicable, has advised it in writing that an Adverse FASIT
Event could occur.
(d) Following the Startup Day, the Owner Trustee shall not accept any
contributions of assets to the Trust unless (subject to Section 10.01(f) of the
Sale and Servicing Agreement) the Servicer and the Owner Trustee shall have
received an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in the Trust will
not cause the Trust to fail to qualify as a FASIT at any time that any Notes or
the Certificate are outstanding or subject the Trust to any tax under the FASIT
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(e) The Owner Trustee shall not (subject to Section 10.01(f) of the Sale
and Servicing Agreement) enter into any arrangement by which the Trust will
receive a fee or other compensation for services or will originate any loan nor
permit the Trust to receive any income from assets other than "permitted assets"
as defined in Section 860L(c) of the Code.
(f) The Owner Trustee shall not sell, dispose of or substitute for any of
the Receivables (except in connection with (i) the default, imminent default or
foreclosure of a Receivable, including but not limited to, the acquisition or
sale of Financed Equipment acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of the Trust, (iii) the termination of the Trust pursuant to Article
IX of this Agreement or (iv) a repurchase of Receivables pursuant to Article IX
or Section 3.02 of the Sale and Servicing Agreement) nor acquire any assets for
the Trust, nor sell or dispose of any investments in the Trust Accounts for gain
nor accept any contributions to the Trust after the Closing Date unless it has
received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not affect adversely the status of the Trust as a FASIT.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended
by the Seller and the Owner Trustee, with prior written notice to the Rating
Agencies, without the consent of any of the Noteholders or the
Certificateholder, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholder or for the purpose of enabling the Trust to continue to
qualify as a FASIT and the Notes to continue to qualify as "regular interests"
in the FASIT constituted by the Trust (including, without limitation, compliance
with regulations that have not yet been issued); PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or the Certificateholder or the
tax characterization of the Notes or the Certificate.
This Agreement may also be amended from time to time by the Seller and the
Owner Trustee, with prior written notice to the Rating Agencies, with the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes, 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; PROVIDED, HOWEVER,
that no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or (b) reduce the aforesaid percentage of the Outstanding Amount of
the Notes required to consent to any such amendment, without the consent of the
holders of all the outstanding Notes.
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 the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the Noteholders or the
Indenture Trustee 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. The manner of obtaining such consents shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to this Agreement or any other
Basic Document, the Owner 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 other Basic Documents and that such
amendment will not cause an Adverse FASIT Event. The Owner
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Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 12.02. NO LEGAL TITLE TO OWNER TRUST ESTATE IN THE OWNER. The
Owner shall not have legal title to any part of the Owner Trust Estate. The
Owner shall be entitled to receive distributions with respect to its ownership
interest therein only in accordance with ARTICLES V and IX. No transfer, by
operation of law or otherwise, of any right, title, and interest of the Owner to
and in its ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 12.03. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Seller, the
Owner, the Administrator and, to the extent expressly provided herein, 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 12.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days after
mailing if mailed by certified mail, postage prepaid (except that notice to the
Owner Trustee shall be deemed given only upon actual receipt by the Owner
Trustee), if to the Owner Trustee, addressed to the Corporate Trust Office; if
to the Seller, addressed to Caterpillar Financial Funding Corporation, Greenview
Plaza, 2950 East Flamingo Road, Suite C-3B, Las Vegas, Nevada 89121; or, as to
each party, at such other address as shall be designated by such party in a
written notice to each other party.
(b) Any notice required or permitted to be given to the Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 12.05. 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 12.06. 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 12.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Seller,
the Owner Trustee and its
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successors and the Owner and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by the Owner shall bind the successors and assigns of the Owner.
SECTION 12.08. COVENANT OF THE SELLER. In the event that (a) the
Certificate Balance shall be reduced by Realized Losses and (b) any litigation
with claims in excess of $1,000,000 to which the Seller is a party which shall
be reasonably likely to result in a material judgment against the Seller that
the Seller will not be able to satisfy shall be commenced by the Owner, during
the period beginning nine months following the commencement of such litigation
and continuing until such litigation is dismissed or otherwise terminated (and,
if such litigation has resulted in a final judgment against the Seller, such
judgment has been satisfied) the Seller shall not pay any dividend to
Caterpillar Financial Services Corporation, or make any distribution on or in
respect of its capital stock to Caterpillar Financial Services Corporation, or
repay the principal amount of any indebtedness of the Seller held by Caterpillar
Financial Services Corporation, unless (i) after giving effect to such payment,
distribution or repayment, the Seller's liquid assets shall not be less than the
amount of actual damages claimed in such litigation or (ii) the Rating Agency
Condition shall have been satisfied with respect to any such payment,
distribution or repayment. The Seller further agrees that prior to the
termination of the Trust it shall not revoke, modify or otherwise amend any
agreements with Caterpillar Financial Services Corporation in effect on the
Closing Date in any manner that would adversely affect the rights of the Seller
to receive from Caterpillar Financial Services Corporation contributions of
capital or payments on demand pursuant to such agreements. The Seller further
covenants and agrees that it will not enter into any transaction or take any
action (other than any transaction or action contemplated by this Agreement or
any of the Basic Documents) if, as a result of such transaction or action, any
rating of either the Notes or the Certificates by any of the Rating Agencies
would be downgraded or withdrawn.
SECTION 12.09. NO PETITION. The Owner Trustee, the Certificateholder, by
accepting the Certificate, and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenant and agree that they
will not, prior to the date which is one year and one day after the termination
of the Trust, institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificate, the Notes, this Agreement or any of
the Basic Documents.
SECTION 12.10. NO RECOURSE. The Certificateholder by accepting the
Certificate acknowledges that the Certificate represents a beneficial interest
in the Trust only and does not represent an interest in or obligation of the
Seller, the Servicer, the Administrator, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof, and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, the Certificate or the other Basic Documents.
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SECTION 12.11. 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 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.13. [Reserved]
SECTION 12.14. SELLER PAYMENT OBLIGATION. The Seller shall be responsible
for payment of the Administrator's fees under the Administration Agreement (to
the extent not paid pursuant to Section 5.04 of the Sale and Servicing
Agreement) and shall reimburse the Administrator for all expenses and
liabilities of the Administrator incurred thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee,
By: /s/ John J. Cashin
--------------------------
Name: John J. Cashin
Title: Vice President
CATERPILLAR FINANCIAL
FUNDING CORPORATION,
as Seller,
By: /s/ Edward J. Scott
---------------------------
Name: Edward J. Scott
Title: Treasurer
<PAGE>
EXHIBIT A
NUMBER $7,861,558
R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS NOT TRANSFERABLE IN WHOLE OR IN PART
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS SET FORTH
IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
A-1
<PAGE>
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
6.35% ASSET BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the property of
which includes a pool of retail installment sale contracts secured by new and
used machinery and certain monies due or received thereunder and sold to the
Trust (as defined below) by Caterpillar Financial Funding Corporation.
(This Certificate does not represent an interest in or obligation of Caterpillar
Financial Funding Corporation, Caterpillar Financial Services Corporation,
Caterpillar Inc. or any of their respective affiliates, except to the extent
described below.)
THIS CERTIFIES THAT CATERPILLAR FINANCIAL FUNDING CORPORATION is the
registered Owner of a SEVEN MILLION EIGHT HUNDRED AND SIXTY-ONE THOUSAND FIVE
HUNDRED AND FIFTY-EIGHT DOLLARS ($7,861,558) nonassessable, fully-paid,
undivided interest in Caterpillar Financial Asset Trust 1997-B (the "Trust")
formed by Caterpillar Financial Funding Corporation, a Nevada corporation (the
"Seller").
The Trust was created pursuant to an Amended and Restated Trust Agreement
dated as of November 1, 1997 (the "Trust Agreement"), between the Seller and
Chase Manhattan Bank Delaware, as owner trustee (the "Owner Trustee"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement or the Sale and Servicing
Agreement dated as of November 1, 1997 (the "Sale and Servicing Agreement"),
among the Trust, the Seller and Caterpillar Financial Services Corporation, as
servicer (the "Servicer"), as applicable.
This Certificate is the duly authorized Certificate designated as "6.35%
Asset Backed Certificate" (herein called the "Certificate"). Also issued under
the Indenture dated as of November 1, 1997, between the Trust and The First
National Bank of Chicago, as indenture trustee, are Notes designated as "Class
A-1 5.805% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2 6.018% Asset
Backed Notes" (the "Class A-2 Notes"), "Class A-3 6.16% Asset Backed Notes" (the
"Class A-3 Notes") and "Class B 6.35% Asset Backed Notes" (the "Class B Notes";
together with the A-1 Notes, the A-2 Notes and the Class A-3 Notes, the
"Notes"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The property of the Trust includes a pool of retail
installment sale contracts secured by new and used equipment (the
"Receivables"), all monies received on or after November 1, 1997 from payments
on the Receivables, security interests in the equipment financed thereby and
certain other cross-collateralized equipment, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and certain
other rights under the Trust Agreement and the Sale and Servicing Agreement, all
right, title, and interest of the Seller in and to the Purchase Agreement dated
as of November 1, 1997 between Caterpillar Financial Services Corporation and
the Seller
A-2
<PAGE>
and all proceeds of the foregoing. The Holder of this Certificate
acknowledges and agrees that its rights to receive distributions in respect
of this Certificate are subordinated to the rights of the Noteholders as
described in the Sale and Servicing Agreement and the Indenture.
Under the Trust Agreement, there will be distributed on the 25th day of
each month or, if such day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on December 26, 1997 to the Person in whose
name this Certificate is registered at the close of business on the last
calendar day of the month preceding the month in which such Distribution Date
occurs (the "Record Date") the amount to be distributed to the Certificateholder
on such Distribution Date.
Notwithstanding any prior termination of the Trust Agreement, the
Certificateholder, by its acceptance of this Certificate, covenants and agrees
that it shall not, prior to the date which is one year and one day after the
termination of the Trust, institute against the Seller or the Issuer, or join in
any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to this Certificate, the Notes, the
Trust Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Owner Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office or agency maintained for the
purpose by the Owner Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee, by manual signature, this
Certificate shall not entitle the Holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE.
A-3
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
CATERPILLAR FINANCIAL ASSET
TRUST 1997-B,
By: CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee
Dated: By:
----------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK, or CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee DELAWARE, as Owner Trustee
By THE CHASE MANHATTAN BANK
Authenticating Agent
By: By:
---------------------------- -------------------------
Authorized Signatory Authorized Signatory
A-4
<PAGE>
[REVERSE OF CERTIFICATE]
The Certificate does not represent an obligation of, or an interest in, the
Seller, the Servicer, Caterpillar Inc., the Owner Trustee or any affiliates of
any of them and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated herein or in the Trust
Agreement or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections with respect to the Receivables (and certain
other amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement and the Trust Agreement. The Certificate is limited in
right of payment to certain collections and recoveries respecting the
Receivables, all as more specifically set forth in the Sale and Servicing
Agreement and the Trust Agreement. A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined during normal business hours
at the principal office of the Seller, and at such other places, if any,
designated by the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholder under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the holders of the
Notes and the Certificateholder each voting as a class evidencing a majority of
the outstanding Notes and the Certificate Balance, respectively. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holder of the Certificate.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the Owner hereof for all purposes, and none of the
Owner Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholder of
all amounts required to be paid to it pursuant to the Trust Agreement and the
Sale and Servicing Agreement and the disposition of all property held as part of
the Trust. The Servicer of the Receivables may at its option purchase the corpus
of the Trust at a price specified in the Sale and Servicing Agreement, and such
purchase of the Receivables and other property of the Trust will effect early
retirement of the Certificate; PROVIDED, HOWEVER, such right of purchase is
exercisable only on any Distribution Date on which the Pool Balance is 10% or
less of the Initial Pool Balance.
A-5
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
THIS Certificate of Trust of CATERPILLAR FINANCIAL ASSET TRUST 1997-B (the
"Trust"), dated November 1, 1997, is being duly executed and filed by Chase
Manhattan Bank Delaware, as trustee, to form a business trust under the Delaware
Business Trust Act (12 DEL. CODE, Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is CATERPILLAR
FINANCIAL ASSET TRUST 1997-B.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Chase Manhattan Bank Delaware, 1201 Market
Street, Ninth Floor, Wilmington, Delaware 19801, Attention: Corporate Trustee
Administration Department.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of its
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee,
By:
---------------------------
Name:
Title:
B-1
<PAGE>
Exhibit 4.3
Sale and Servicing Agreement
dated as of November 1, 1997
<PAGE>
[EXECUTION COPY]
SALE AND SERVICING AGREEMENT
among
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
Issuer
CATERPILLAR FINANCIAL FUNDING CORPORATION
Seller
and
CATERPILLAR FINANCIAL SERVICES CORPORATION
Servicer
Dated as of November 1, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . . . . . .19
SECTION 1.03. Calculations. . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . . . . . .19
SECTION 2.02. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.03. Books and Records . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Seller. . . . . . . . . . . .21
SECTION 3.02. Repurchase by Seller or CFSC Upon Breach. . . . . . . . . . . .21
SECTION 3.03. Custody of Receivable Files . . . . . . . . . . . . . . . . . .22
SECTION 3.04. Duties of Servicer. . . . . . . . . . . . . . . . . . . . . . .22
SECTION 3.05. Acceptance by Issuer and the Indenture Trustee of the
Receivables; Certification by the Indenture Trustee . . . . . .23
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. . . . . . . . . . . . . . . . . . . . . . .25
SECTION 4.02. Collection of Receivable Payments . . . . . . . . . . . . . . .25
SECTION 4.03. Realization upon Receivables. . . . . . . . . . . . . . . . . .26
SECTION 4.04. Physical Damage Insurance . . . . . . . . . . . . . . . . . . .26
SECTION 4.05. Maintenance of Security Interests in Financed Equipment . . . .26
SECTION 4.06. Covenants of Servicer . . . . . . . . . . . . . . . . . . . . .26
SECTION 4.07. Purchase by Servicer of Receivables upon Breach . . . . . . . .27
SECTION 4.08. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 4.09. Servicer's Certificate. . . . . . . . . . . . . . . . . . . . .27
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. . . . . .27
SECTION 4.11. Annual Independent Certified Public Accountants' Report . . . .28
SECTION 4.12. Servicer Expenses . . . . . . . . . . . . . . . . . . . . . . .28
<PAGE>
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT; YIELD SUPPLEMENT ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDER AND NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts . . . . . . . . . . . . . . . .29
SECTION 5.02. Collections . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 5.03. Additional Deposits . . . . . . . . . . . . . . . . . . . . . .31
SECTION 5.04. Distributions . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 5.05. Reserve Account . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.06. Yield Supplement Account. . . . . . . . . . . . . . . . . . . .34
SECTION 5.07. Statements to the Certificateholder and Noteholders . . . . . .34
SECTION 5.08. Net Deposits. . . . . . . . . . . . . . . . . . . . . . . . . .37
ARTICLE VI
THE SELLER
SECTION 6.01. Representations of Seller . . . . . . . . . . . . . . . . . . .38
SECTION 6.02. [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 6.03. Liability of Seller; Indemnities. . . . . . . . . . . . . . . .39
SECTION 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. . . . . . . . . . . . . . . . . . . . .40
SECTION 6.05. Limitation on Liability of Seller and Others. . . . . . . . . .40
SECTION 6.06. Seller May Own the Certificate or Notes . . . . . . . . . . . .40
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer . . . . . . . . . . . . . . . . . .41
SECTION 7.02. Indemnities of Servicer . . . . . . . . . . . . . . . . . . . .42
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. . . . . . . . . . . . . . . . . . . .43
SECTION 7.04. Limitation on Liability of Servicer and Others. . . . . . . . .44
SECTION 7.05. CFSC Not To Resign as Servicer. . . . . . . . . . . . . . . . .45
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default. . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 8.02. Appointment of Successor. . . . . . . . . . . . . . . . . . . .46
SECTION 8.03. Notification to Noteholders and Certificateholder . . . . . . .47
SECTION 8.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . .47
(ii)
<PAGE>
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables; Trust Termination . . . .48
ARTICLE X
FASIT PROVISIONS
SECTION 10.01. FASIT Administration. . . . . . . . . . . . . . . . . . . . . .49
SECTION 10.02. Servicer and FASIT Administrator Indemnification. . . . . . . .52
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 11.02. Protection of Title to Trust. . . . . . . . . . . . . . . . . .54
SECTION 11.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 11.04. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 11.05. Limitations on Rights of Others . . . . . . . . . . . . . . . .56
SECTION 11.06. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 11.07. Separate Counterparts . . . . . . . . . . . . . . . . . . . . .56
SECTION 11.08. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 11.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 11.10. Assignment to Indenture Trustee . . . . . . . . . . . . . . . .57
SECTION 11.11. Nonpetition Covenants . . . . . . . . . . . . . . . . . . . . .57
SECTION 11.12. Limitation of Liability of Owner Trustee and Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
SCHEDULE A - Schedule of Receivables. . . . . . . . . . . . . . . . . . . .A-1
SCHEDULE B - Location of Receivables Files. . . . . . . . . . . . . . . . .B-1
SCHEDULE C-1 - Form of Indenture 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
(iii)
<PAGE>
SALE AND SERVICING AGREEMENT dated as of November 1, 1997, among
CATERPILLAR FINANCIAL ASSET TRUST 1997-B, 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
November 1, 1997 among the Trust, the Seller, CFSC, as Administrator, and The
First National Bank of Chicago, 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.
"Adverse FASIT Event" has the meaning assigned thereto in SECTION
10.01(f).
"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 the
amount advanced under the Receivable toward the purchase price of the related
Financed Equipment, plus any related costs.
<PAGE>
"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, Las Vegas, Nevada 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, $7,861,558 and,
thereafter, equals $7,861,558, reduced by all amounts allocable to principal
previously distributed to the Certificateholder 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 September 2003
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.
"Certificate Rate" means, with respect to the Certificate on a
Distribution Date, a rate per annum equal to 6.35%.
"Certificateholder" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholder's Distributable Amount" means, with respect to any
Distribution Date, the sum of (a) the Certificateholder's Principal
Distributable Amount and (b) the Certificateholder's Interest Distributable
Amount.
"Certificateholder's 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 Certificateholder's 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 Certificate Rate from such preceding Distribution
Date through the current Distribution Date.
2
<PAGE>
"Certificateholder's Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Monthly Certificate Interest for
such Distribution Date and (b) the Certificateholder's Interest Carryover
Shortfall for such Distribution Date.
"Certificateholder's 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 A Notes and the Class B Notes have been
reduced to zero, zero, and (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).
"Certificateholder's 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 Certificateholder's Monthly Principal Distributable Amount for
such Distribution Date and (B) any outstanding Certificateholder's 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).
"Certificateholder's Principal Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Certificateholder's Monthly
Principal Distributable Amount for such Distribution Date and (b) the
Certificateholder's 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 Certificateholder's 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.
"Certificate" 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
and established and maintained pursuant to SECTION 5.01.
3
<PAGE>
"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 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 November
1998 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
4
<PAGE>
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 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 January 2001
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
5
<PAGE>
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.
"Class A-3 Final Scheduled Distribution Date" means the September 2003
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
6
<PAGE>
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 September 2003
Distribution Date.
"Class B Note Distribution Account" means the account designated as such
and established and maintained pursuant to Section 5.01.
"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.
"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
7
<PAGE>
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 November 25, 1997.
"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 November 30, 1997 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.
"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 One First National Plaza, Suite 0126, Chicago, Illinois,
Attention: Corporate Trust Services Division, except that for purposes of
Section 3.02 of the Indenture, such term shall mean the office or agency of
the Indenture Trustee in the Borough of Manhattan in the City of New York
which office at the date hereof is located at 14 Wall Street, Eighth Floor,
New York, New York 10005; 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 the Borough of Manhattan in the City of New York.
"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 The First National Bank of Chicago, as custodian of the
Receivable Files, and each successor thereto pursuant to the Custodial
Agreement.
"Custodial Agreement" means the Custodial Agreement, dated as of November
1, 1997, among CFSC, as originator and Servicer, the Seller, as depositor,
the Issuer, and The First
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National Bank of Chicago, as Indenture Trustee and Custodian, as the same may
be amended and supplemented from time to time.
"Cut-off Date" means November 1, 1997.
"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.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day prior to such Distribution Date.
"Discount Receivables" means, with respect to any Distribution Date,
those Receivables that have APR's which are less than the Required Rate.
"Distribution Date" means the 25th day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing
on December 26, 1997.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee, The Chase Manhattan Bank as long as it
is paying agent under the Trust Agreement or The First National Bank of
Chicago, 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, The
Chase Manhattan Bank or The First National Bank of Chicago may be considered
an Eligible Institution for the purposes of clause (b) of this definition.
"Eligible Investments" mean the following investment property,
instruments, money, or other property, book-entry securities, negotiable
instruments or securities (other than any investment property issued by CFSC,
the Holder of the Certificates or any of their respective Affiliates):
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution 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
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and examination by Federal or State banking or depository institution
authorities; PROVIDED, HOWEVER, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
depository institution 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) investments in common trust funds having a rating from each Rating
Agency in the highest investment category granted thereby maintained and
operated by Eligible Institutions (including the Indenture Trustee or the
Owner Trustee);
(f) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with (i) a depository institution 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
such depository institution shall have a senior unsecured rating of at least
investment grade from each Rating Agency in one of its generic rating
categories.
"EO Account" has the meaning assigned thereto in SECTION 10.01(o).
"EO Property" has the meaning assigned thereto in SECTION 10.01(o).
"FASIT" means a "financial asset securitization investment trust" within
the meaning of Section 860L of the Code.
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"FASIT Administrator" means the Servicer, and if the Servicer is found by
a court of competent jurisdiction to no longer be able to fulfill its
obligations as FASIT Administrator under this Agreement, the Servicer shall
appoint a successor FASIT Administrator, subject to assumption of the
obligations of the FASIT Administrator under this Agreement.
"FASIT Provisions" shall mean the provisions of the federal income tax
law relating to financial asset securitization investment trusts, which
appear at Sections 860I through 860L of Subchapter M of Chapter 1 of the
Code, and related provisions, and temporary and final regulations (or, to the
extent not inconsistent with such temporary or final regulations, proposed
regulations) and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time.
"Final Maturity Date" means August 31, 2003.
"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.
"Fitch" means Fitch Investors Service, L.P., or its successor.
"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.
"Indenture" means the Indenture dated as of November 1, 1997, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means The First National Bank of Chicago, 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 $314,429,558.
"Insolvency Event" means, with respect to a specified Person, (a) the
entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or (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
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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 1997-B.
"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.
"Maximum Yield Supplement Amount" has the meaning assigned thereto in
SECTION 5.06.
"Monthly A-1 Note Interest" means, with respect to any Distribution Date,
an amount equal to the product of (a) the Class A-1 Note Interest Rate,
(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 and (c) a fraction the numerator of which is equal to the
actual number of days from and including the preceding Distribution Date to
but excluding such Distribution Date and the denominator of which is equal to
360; PROVIDED, HOWEVER, that with respect to the first Distribution Date,
Monthly A-1 Note Interest shall be equal to the product of (a) the Class A-1
Note Interest Rate, (b) the outstanding principal balance of the Class A-1
Notes as of the close of business on the Closing Date and (c) a fraction the
numerator of which is 31 and the denominator of which is 360.
"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
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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 December 1997 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 December 1997 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 the Closing Date to but
excluding the December 1997 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 Certificate
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 Certificateholder 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 December 1997
Distribution Date and will be calculated on the basis of a 360-day year of
twelve 30-day months.
"Moody's" means Moody's 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 Uniform Commercial Code in effect in the
State of New York.
"Note Rate" means the weighted average of the Class A-1 Note Interest
Rate, the Class A-2 Note Interest Rate, the Class A-3 Note Interest Rate and
the Class B Note Interest Rate.
"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.
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"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:
"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.
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"Outstanding Amount" means the aggregate principal amount of all Notes,
or a Class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means the Holder of the Certificate.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means Chase Manhattan Bank Delaware in its capacity as
Owner Trustee under the Trust Agreement, its successors in interest and any
successor owner trustee under the Trust Agreement.
"Pool Balance" means, at any time, the aggregate of the 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 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 such 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 such 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 November 1,
1997, 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).
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"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.
"Realized Loss" means, with respect to any Collection Period, for any
Liquidated Receivable the excess of 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.
"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.
"Required Rate" means, with respect to any Receivable, the sum of (i) the
Note Rate and (ii) the Servicing Fee Rate.
"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 $7,074,665.
"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.
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"Securities" means, collectively, the Notes and the Certificate.
"Security Entitlement" has the meaning specified in Section 8-102 of the
applicable UCC.
"Securities Intermediary" has the meaning specified in Section 5.01(c)
and initially means The First National Bank of Chicago.
"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.
"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 an amount equal to the lesser of (a) the outstanding principal
balance of the Notes and (b) $7,074,665.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or its successor.
"Tax Returns" shall mean the federal income tax return, on the form to be
specified by the Internal Revenue Service, to be filed on behalf of the Owner
Trust Estate due to its classification as a FASIT under the FASIT Provisions,
together with any and all other information, reports or returns that may be
required to be furnished to the Noteholders or the Certificateholder or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
"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 Receivables)
received during the related Collection Period, the Yield Supplement Deposit
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Amount, if any, for such Distribution Date 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.
"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 and
investments or other investment property held from time to time in any Trust
Account, including the Reserve Account Initial Deposit and the Yield
Supplement Deposit Amount, and all proceeds of the foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement dated as
of November 1, 1997, 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.
"Yield Supplement Account" means the account designated as such,
established and maintained pursuant to SECTION 5.01(a).
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"Yield Supplement Account Deposit" means the initial deposit by the
Seller into the Yield Supplement Account on the Closing Date of $715,911
(which amount is equal to the Maximum Yield Supplement Amount as of the
Cut-off Date).
"Yield Supplement Deposit Amount" means, with respect to any Distribution
Date, the aggregate amount by which one month's interest on the Principal
Balance as of the first day of the related Collection Period of each Discount
Receivable (other than a Discount Receivable that is a Defaulted Receivable)
at a rate equal to the Required Rate, exceeds one month's interest on such
Principal Balance at the APR of each such Receivable.
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.
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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) Notes in the
aggregate principal amount of $306,568,000, and (ii) the Certificate in the
principal amount of $7,861,558, 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 Property;
(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
Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, 18th Floor, New York,
New York 10103, on the Closing Date, simultaneously with the closing of the
transactions contemplated by the Purchase Agreement, the underwriting
agreements relating to the Notes and the Certificate and the other Basic
Documents. Upon the acceptance by the Seller of the proceeds of the sale of
the Notes and the Certificate, 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.
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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 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 applicable
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
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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 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
Certificateholder 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
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.
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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
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 Certificateholder, 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,
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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 Certificateholder. 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.
(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 the Certificateholder 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
Certificateholder 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.
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(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 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 Certificateholder and the
Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Receivables or to the
Transaction Equipment securing such Receivables. If the Servicer shall
commence a legal proceeding to enforce a Receivable, the 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
Certificateholder or the Noteholders. The Owner Trustee shall upon the
written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder.
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 of, 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
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Securityholders. Notwithstanding the foregoing, the Servicer may grant
extensions on a Receivable; PROVIDED, HOWEVER, that if the Servicer extends
the due date of any Scheduled Payment to a date beyond the 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 (which amount shall be applied in
accordance with Section 5.02). 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 Certificateholder, as
applicable, against loss by reason of the bankruptcy or insolvency (or other
credit condition) of, or default by, the Obligor on, or the uncollectibility
of, any Receivable.
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.
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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 or (B) in the
event of payment in full by the Obligor thereunder; (ii) impair the rights
of the Issuer, the Indenture Trustee, the Certificateholder or the
Noteholders in any Receivable; (iii) modify or refinance a Receivable except
in accordance with the terms of SECTION 4.02; or (iv) 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, 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 Certificateholder or the
Noteholders in any Receivable or as otherwise provided in SECTION 4.02, the
Servicer shall purchase such Receivable. In consideration of the purchase of
any such Receivable pursuant to either of the two preceding sentences, the
Servicer shall remit the Purchase Amount in the manner specified in
SECTION 5.03. Subject to SECTION 7.02, the sole remedy of the Issuer, the
Owner Trustee, the Indenture Trustee, the Certificateholder or the Noteholders
with respect to a breach pursuant to SECTION 4.02, 4.05 or 4.06 shall be to
require the Servicer to purchase Receivables pursuant to this Section. The
Owner Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the purchase of any Receivable
pursuant to this Section. The parties hereto intend that the Servicer will
not intentionally breach or cause a breach pursuant to SECTION 4.02, 4.05 or
4.06 in order to provide direct or indirect assurance to the Seller, the
Indenture Trustee, the Owner Trustee, the Noteholders, or the
Certificateholder, as applicable, against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, the Obligor on, or
the 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 5.08.
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
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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 beginning April 30,
1999, an Officers' Certificate stating that (i) a review of the activities of
the Servicer during the preceding 12-month period ending on December 31 (or,
in the case of April 30, 1999, the period from the Closing Date to December
31, 1998) 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 11.03.
(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).
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 beginning April
30, 1999, 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 (or in the case of the report due on or before April 30,
1999, the period from the Closing Date to December 31, 1998) 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.
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SECTION 4.12. SERVICER EXPENSES. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to the Owner Trustee, the Indenture Trustee, the Certificateholder
and the Noteholders.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT; YIELD SUPPLEMENT ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDER AND NOTEHOLDERS
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNTS.
(a) (i) The Seller, for the benefit of the Noteholders and the
Certificateholder, shall establish and maintain in the name "Caterpillar
Financial Asset Trust 1997-B, subject to the security interest of The First
National Bank of Chicago, as Indenture Trustee" an Eligible Securities
Account (the "Collection Account").
(ii) (1) The Seller, for the benefit of the Class A Noteholders, shall
establish and maintain in the name "Caterpillar Financial Asset Trust 1997-B,
subject to the security interest of The First National Bank of Chicago, as
Indenture Trustee" an Eligible Securities Account (the "Class A Note
Distribution Account").
(2) The Seller, for the benefit of the Class B Noteholders, shall
establish and maintain in the name "Caterpillar Financial Asset Trust 1997-B,
subject to the security interest of The First National Bank of Chicago, as
Indenture Trustee" an Eligible Securities Account (the "Class B Note
Distribution Account").
(iii) The Seller, for the benefit of the Noteholders and the
Certificateholder, shall establish and maintain in the name "Caterpillar
Financial Asset Trust 1997-B, subject to the security interest of The First
National Bank of Chicago, as Indenture Trustee" an Eligible Securities
Account (the "Reserve Account").
(iv) The Seller, for the benefit of the Noteholders and the
Certificateholder, shall establish and maintain in the name "Caterpillar
Financial Asset Trust 1997-B, subject to the security interest of The First
National Bank of Chicago, as Indenture Trustee" an Eligible Securities
Account (the "Yield Supplement Account").
(b) Funds on deposit in the Collection Account, the Class A Note
Distribution Account, the Class B Note Distribution Account, the Reserve
Account and the Yield Supplement 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 Certificateholder; PROVIDED, HOWEVER, that
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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 Trust Accounts shall be under the control (within the meaning
of Section 8-106 of the applicable UCC) of the Indenture Trustee for the
benefit of the Noteholders and the Certificateholder 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 The First
National Bank of Chicago 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 and The First National Bank of Chicago, as Securities Intermediary,
agree, and each subsequent Securities Intermediary shall agree, by its
acceptance hereof, that:
(A) any Trust Account Property held in securities accounts shall be
held solely in the Eligible Securities Accounts; and each such Eligible
Securities Account shall be subject to the control (within the meaning of
Section 8-106 of the UCC) of the Indenture Trustee, and the Indenture
Trustee shall have sole signature authority with respect thereto;
(B) all Trust Account Property shall be delivered to the Indenture
Trustee by causing the financial institution then maintaining the related
Trust Account (each such institution being referred to herein as a
"Securities Intermediary") to create a Security Entitlement in such Trust
Account with respect to such Trust Account Property by indicating by
book-entry that such Trust Account Property has been credited to such Trust
Account. Each Trust Account shall only be established at a financial
institution which agrees (i) to comply with entitlement orders with respect
to such Trust Account issued by the Indenture Trustee without further
consent of the Seller, Servicer or Issuer and (ii) that each item of
property credited to such Trust Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.
(C) Upon release of the lien of the Indenture Trustee under the
Indenture in accordance with the terms thereof, each of the Trust Accounts
shall be put in the name
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of the Trust and the Trust shall have all rights granted to the Indenture
Trustee pursuant to this Agreement.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture Trustee, to
instruct the Indenture Trustee to make withdrawals and payments from the
Trust Accounts for the purpose of permitting the Servicer or the Owner
Trustee to carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
(iv) The Indenture Trustee is hereby authorized to execute purchase and
sales directed by the Servicer through the facilities of its own trading or
capital markets operations. The Indenture Trustee shall send statements to
the Servicer and the Issuer monthly reflecting activity for each amount
created hereunder for the preceding month. Although the Issuer recognizes
that it may obtain a broker confirmation at no additional cost, the Issuer
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.
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, the Class B Note
Distribution Account and the Certificate Distribution Account.
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(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;
(ix) to the Servicer (if CFSC or an affiliate is the Servicer), the
Servicing Fee and all unpaid Servicing Fees from prior Collection Periods;
(x) to the Reserve Account, an amount equal to the excess of the
Specified Reserve Account Balance over the amount on deposit in the Reserve
Account on such Distribution Date;
(xi) to the Certificate Distribution Account, the Certificateholder's
Interest Distributable Amount;
(xii) to the Certificate Distribution Account, the Certificateholder's
Principal Distributable Amount; and
(xiv) to the Reserve Account, the remaining Total Distribution Amount.
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(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
forth in clauses (v), (vi) and (vii) 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) [Reserved]
(ii) On each Distribution Date, if the amount on deposit in the
Reserve Account (after taking into account any deposits thereto pursuant to
SECTIONS 5.04(b)(x) and (xiv) 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-1 Noteholders as
principal (until the Class A-1 Notes have been paid in full) and then (y) for
distribution to Class A-2 Noteholders as principal (until the Class A-2 Notes
have been paid in full) and then (z) 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 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 SECTIONS 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.
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(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
SECTION 5.04(b)(xii) 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 Certificateholder's Principal Carryover Shortfall before
making any deposits to the Reserve Account pursuant to SECTION 5.04(b)(xiv),
but not by more than the aggregate reductions in the Certificate Balance
pursuant to this paragraph.
(f) [Reserved]
(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(b) of the Indenture.
SECTION 5.06. YIELD SUPPLEMENT ACCOUNT.
(a) On the Closing Date, the Seller shall deposit into the Yield
Supplement Account from the proceeds of the sale of the Notes an amount equal
to the Yield Supplement Deposit Amount.
(b) On each Distribution Date, the Indenture Trustee shall withdraw from
the Yield Supplement Account and deposit to the Collection Account the Yield
Supplement Deposit Amount for such Payment Date.
(c) On each Determination Date, the Servicer shall calculate the Maximum
Yield Supplement Amount for the related Distribution Date and shall notify the
Indenture Trustee of such amount. On the related Distribution Date, the
Indenture Trustee, after making the withdrawal referred to in paragraph (b)
above, shall withdraw from the Yield Supplement Account the excess, if any, of
the amount then on deposit in the Yield Supplement Account (after giving effect
to the withdrawal of the Yield Supplement Deposit Amount for such Distribution
Date) over the Maximum Yield Supplement Amount as notified to the Indenture
Trustee by the Servicer and shall pay the amount of such excess to the Seller.
The "Maximum Yield Supplement Amount" for any Distribution Date is an amount
equal to the net present value (discounted monthly at a rate of 2.50% per annum)
of the aggregate amount, as of the last day of the related Collection Period, by
which interest on the Principal Balance of each Discount Receivable (other than
any such Receivable that is a Defaulted Receivable) for the remaining term of
such Receivable (assuming no prepayments or delinquencies) at the Required Rate
exceeds interest on such Principal Balance at the APR for each such Receivable.
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SECTION 5.07. STATEMENTS TO THE CERTIFICATEHOLDER 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 Certificate, 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;
(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);
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(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);
(xiii) the Certificateholder's Distributable Amount and the components
thereof;
(xiv) the balance of the Yield Supplement Amount on such
Distribution Date, after giving effect to withdrawals made on such
Distribution Date;
(xv) the Maximum Yield Supplement Amount for such Distribution Date;
and
(xiv) the amount, if any, withdrawn from the Yield Supplement
Account and paid to the Seller pursuant to Section 5.06(c).
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;
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(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
(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);
(xiii) the Certificateholder's Distributable Amount and the components
thereof;
(xiv) the balance of the Yield Supplement Account on such Distribution
Date, after giving effect to withdrawals made on such Distribution Date;
(xv) the Maximum Yield Supplement Amount for such Distribution Date;
and
(xvi) the amount, if any, withdrawn from the Yield Supplement Account
and paid to the Seller pursuant to Section 5.06(c).
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 5.08. 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
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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 Certificateholder as if the Servicing Fee
and Administration Fee was paid individually.
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 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
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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 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 Certificate or any of the other Basic Documents, (ii) seeking to prevent
the issuance of the Notes or the Certificate or the consummation of any of
the transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents; (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, the Notes, the Certificate or any other of the Basic
Documents or (iv) which might adversely affect the Federal or state income
tax attributes of the Notes or the Certificate.
SECTION 6.02. [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 Certificate 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
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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 Certificate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Custodian or the Indenture Trustee and the
termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Seller shall have made any
indemnity payments pursuant to this SECTION 6.03 and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
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.
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SECTION 6.06. SELLER MAY OWN THE CERTIFICATE 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 the Certificate 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.
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
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instrument (other than as contemplated by the Basic Documents); nor
violate any law or, to the best of the Servicer's knowledge, any order,
rule or regulation applicable to the Servicer of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or
its properties.
(e) NO PROCEEDINGS. To the Servicer's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes,
the Certificate or any of the other Basic Documents; (ii) seeking to
prevent the issuance of the Notes or the Certificate or the consummation of
any of the transactions contemplated by this Agreement, the Indenture or
any of the other Basic Documents; (iii) seeking any determination or ruling
that might materially and adversely affect the performance by the Servicer
of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, the Notes, the Certificate or any of the other
Basic Documents ; or (iv) relating to the Servicer and which might
adversely affect the Federal or state income tax attributes of the Notes or
the Certificate.
(f) NO CONSENTS REQUIRED. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Servicer of
this Agreement or any other Basic Document, the performance by the Servicer
of the transactions contemplated by this Agreement or any other Basic
Document and the fulfillment by the Servicer of the terms hereof or
thereof, have been obtained or have been completed and are in full force
and effect (other than approvals, authorizations, consents, orders or other
actions which if not obtained or completed or in full force and effect
would not have a material adverse effect on the Servicer or the 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 Certificateholder 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 or the Issuer) 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
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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 Certificate and the Notes, or asserted with respect to ownership
of the Receivables, or Federal or other income taxes arising out of
distributions on the Certificate or the Notes) and (ii) costs and
expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Seller, the Custodian, the
Certificateholder 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, 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 Certificate 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 Certificate or the Notes.
For purposes of this Section, in the event of the termination of the
rights and obligations of CFSC (or any successor thereto pursuant to
SECTION 7.03) as Servicer pursuant to SECTION 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to SECTION 8.02.
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
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reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter collects
any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer, without interest.
SECTION 7.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. Any Person (a) (i) into which the Servicer may be
merged or consolidated, (ii) which may result from any merger or
consolidation to which the Servicer shall be a party, (iii) which may succeed
to the properties and assets of the Servicer substantially as a whole, or
(iv) which is a corporation 50% or more of the voting stock of which is
owned, directly or indirectly, by Caterpillar, and (b) in the case of any of
(i), (ii), (iii) or (iv), which has executed an agreement of assumption to
perform every obligation of the Servicer hereunder, shall be the successor to
the Servicer under this Agreement without further act on the part of any of
the parties to this Agreement; PROVIDED, HOWEVER, that (w) immediately after
giving effect to such transaction, no Servicer Default, and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (x) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (y) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (z) the Servicer
shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto
have been 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 Certificateholder, except as provided under this Agreement, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director
or officer or employee or agent of the Servicer as the case may be, may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any person respecting any matters arising under this Agreement.
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
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expense or liability; PROVIDED, HOWEVER, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the
parties to this Agreement and the other Basic Documents and the interests of
the Certificateholder under this Agreement and the Noteholders under the
Indenture.
SECTION 7.05. CFSC NOT TO RESIGN AS SERVICER. Subject to the provisions
of SECTION 7.03, CFSC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law (if it is also determined that such
determination may not be reversed). Notice of any such determination
permitting the resignation of CFSC shall be communicated to the Owner Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of CFSC in
accordance with SECTION 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. SERVICER DEFAULT. If any one of the following events (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 the
Certificateholder or Noteholders and (ii) continues unremedied for a period
of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (A) to the
Servicer 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
or the "Holder" (as defined in the Trust Agreement) of the Certificate; or
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(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 Certificate or
the Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under SECTION 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to a
Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection (x) with transferring the computer or
other records to the successor Servicer in the form requested and (y)
amending this Agreement to reflect such succession as Servicer pursuant to
this Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice
of the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
SECTION 8.02. APPOINTMENT OF SUCCESSOR. (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
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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 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 CERTIFICATEHOLDER. Upon
any termination of, or appointment of a successor to, the Servicer pursuant
to this ARTICLE VIII, the Owner Trustee shall give prompt written notice
thereof to the Certificateholder and the Indenture Trustee shall give prompt
written notice thereof to Noteholders and the Rating Agencies.
SECTION 8.04. WAIVER OF PAST DEFAULTS. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes (or, if no
Notes are Outstanding, the "Holder" (as defined in the Trust Agreement) of
the Certificate) may, on behalf of all Noteholders and the Certificateholder,
waive in writing any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in making any
required deposits to or payments from any of the Trust Accounts in accordance
with this Agreement. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
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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 The First National Bank of Chicago, 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. The First National Bank of
Chicago 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
Certificateholder.
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 10% or
less 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 the
Servicer'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. Upon the receipt of such notice,
the Servicer, the Indenture Trustee and the Trust shall take such steps as
are necessary to cause such termination to qualify as a "qualified
liquidation" of the FASIT comprising the Trust under the provisions of
Section 860L(e)(3)(A) and Section 860F(a)(4) of the Code, including, without
limitation, the adoption of a plan of liquidation for the Trust, the
designation of a starting day for the liquidation period, the sale of the
assets of the Trust within the 90 day period commencing on the starting day
of the liquidation period, the distribution of the proceeds of the
liquidation to the holders of the regular and ownership interests in the
Trust (except for amounts held to meet claims against the Trust, the filing
of a final tax return for the Trust and designating thereon the starting day
of the liquidation period and any other action not contrary to the provisions
of this Agreement that is required by an applicable FASIT Provisions.
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(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholder will succeed to the rights of the Noteholders hereunder
(other than 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
FASIT PROVISIONS
SECTION 10.01. FASIT ADMINISTRATION.
(a) The FASIT Administrator shall make an election to treat the Trust as
a FASIT under the Code and, if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for
the taxable year ending on the last day of the calendar year in which the
Notes and the Certificate are issued. For the purposes of the FASIT election
in respect of the Trust, each of the Class A and Class B Notes shall be
designated as the "regular interests" and the Certificate shall be designated
as the sole "ownership interest" in the FASIT. The FASIT Administrator and
the Trust shall not permit the creation of any "interests" (within the
meaning of Section 860L of the Code) in the Trust other than the Notes and
the Certificate unless they first receive an Opinion of Counsel at the
expense of the party seeking the creation of such interests to the effect
that such creation will not cause an Adverse FASIT Event.
(b) The Closing Date is hereby designated as the "startup day" of the
Trust within the meaning of Section 860L(d))(1) of the Code.
(c) The FASIT Administrator shall (i) act on behalf of the Trust in
relation to any tax matter or controversy involving the Trust and (ii)
represent the Trust in any administrative or judicial proceeding relating to
an examination or audit by any governmental taxing authority with respect
thereto. The legal expenses, including without limitation attorneys' or
accountants' fees, and costs of any such proceeding and any liability
resulting therefrom shall be expenses of the FASIT Administrator. If the
FASIT Administrator is no longer the Servicer hereunder, at its option the
FASIT Administrator may continue its duties as FASIT Administrator and shall
be paid reasonable compensation not to exceed $10,000 per year by any
successor Servicer hereunder for so acting as the FASIT Administrator.
(d) The FASIT Administrator shall prepare or cause to be prepared all of
the Tax Returns that it determines are required with respect to the Trust
and, subject to any Internal Revenue Service procedures or FASIT Provisions,
shall deliver such Tax Returns in a timely manner to the Owner Trustee (or to
the Administrator if the Administrator may sign the Tax Returns as
attorney-in-fact of the Owner Trustee under applicable provisions of the
Code) and the Owner Trustee or the Administrator, as the case may be, shall
sign such Tax Returns and return them to the FASIT Administrator for filing
in a timely manner. The expenses of preparing such returns shall be borne by
the FASIT Administrator without any right of
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reimbursement therefor. The FASIT Administrator agrees to indemnify and hold
harmless the Owner Trustee with respect to any tax or liability arising from
the Owner Trustee's signing of Tax Returns that contain errors or omissions.
The Owner Trustee and the Servicer shall promptly provide the FASIT
Administrator with such information in the possession of such Person as the
FASIT Administrator may from time to time request for the purpose of enabling
the FASIT Administrator to prepare Tax Returns.
(e) The FASIT Administrator shall provide (i) to the Owner Trustee and
the Owner Trustee shall forward to the Certificateholder such information or
reports as are required by the Code or the FASIT Provisions including reports
relating to interest, original issue discount and market discount or premium
and (ii) if required by Internal Revenue Service announcement or regulation,
to the Internal Revenue Service the name, title, address and telephone number
of the Person who will serve as the representative of the Trust.
(f) The Servicer and the FASIT Administrator shall take such actions and
shall cause the Trust to take such actions as are reasonably within the
Servicer's or the FASIT Administrator's control and the scope of its duties
more specifically set forth herein as shall be necessary or desirable to
maintain the status of the Trust as a FASIT under the FASIT Provisions (and
the Owner Trustee shall assist the Servicer and the FASIT Administrator, to
the extent reasonably requested by the Servicer and the FASIT Administrator
to do so). The Servicer and the FASIT Administrator shall not knowingly or
intentionally take any action, cause the Trust to take any action or fail to
take (or fail to cause to be taken) any action reasonably within their
respective control that, under the FASIT Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the Trust as a FASIT or
(ii) result in the imposition of a tax upon the Trust (including but not
limited to the tax on prohibited transactions as defined in Section 860L(e)
of the Code) (either such event, in the absence of an Opinion of Counsel or
the indemnification referred to in this sentence, an "Adverse FASIT Event")
unless the Servicer or the FASIT Administrator, as applicable, has received
an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger the
status of the Trust as a FASIT. The Owner Trustee shall not take or fail to
take any action (whether or not authorized hereunder) as to which the
Servicer or the FASIT Administrator, as applicable, has advised it in writing
that it has received an Opinion of Counsel to the effect that an Adverse
FASIT Event could occur with respect to such action or such failure to act.
In addition, prior to taking any action with respect to the Trust or its
assets, or causing the Trust to take any action, which is not expressly
permitted under the terms of the Basic Documents, unless the Owner Trustee
shall have received an Opinion of Counsel that such action will not result in
an Adverse FASIT Event, the Owner Trustee will consult with the Servicer or
the FASIT Administrator, as applicable, or its designee, in writing, with
respect to whether such action could cause an Adverse FASIT Event to occur
with respect to the Trust, and the Owner Trustee shall not take any such
action or cause the Trust to take any such action as to which the Servicer or
the FASIT Administrator, as applicable, has advised it in writing that an
Adverse FASIT Event could occur. The Servicer or the FASIT Administrator, as
applicable, may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
expressly permitted by this Agreement. At all times as may be required by
the Code, the Servicer will to the extent within its control and the scope of
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its duties more specifically set forth herein, maintain substantially all of
the assets of the Trust as "permitted assets" as defined in Section
860L(c)(1) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
the Trust as defined in Section 860L(e) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged to the Servicer, if such tax arises out of or
results from a breach by the Servicer of any of its obligations under this
Agreement, or otherwise against amounts otherwise distributable to the Holder
of the Certificate.
(h) The Owner Trustee and the Servicer shall, for federal income tax
purposes, maintain books and records with respect to the Trust on a calendar
year and on an accrual basis or as otherwise may be required by the FASIT
Provisions.
(i) Following the Startup Day, neither the Servicer nor the Owner
Trustee shall accept any contributions of assets to the Trust unless (subject
to Section 10.01(f)) the Servicer and the Owner Trustee shall have received
an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in the Trust
will not cause the Trust to fail to qualify as a FASIT at any time that any
Notes or the Certificate are outstanding or subject the Trust to any tax
under the FASIT Provisions or other applicable provisions of federal, state
and local law or ordinances.
(j) Neither the Servicer nor the Owner Trustee shall (subject to
Section 10.01(f)) enter into any arrangement by which the Trust will receive
a fee or other compensation for services or will originate any loan nor permit
the Trust to receive any income from assets other than "permitted assets" as
defined in Section 860L(c) of the Code.
(k) Solely for the purposes of Section 860L(b)(1)(A)(iii) of the Code,
the "stated maturity" by which the principal balance of each Class of Notes
representing a regular interest in the FASIT would be reduced to zero is
September 25, 2003.
(l) Within 30 days after the Closing Date, the FASIT Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" or other appropriate form, if required, for
the Trust.
(m) Neither the Owner Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Receivables (except in connection with (i) the
default, imminent default or foreclosure of a Receivable, including but not
limited to, the acquisition or sale of Financed Equipment acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust, (iii) the termination
of the Trust pursuant to Article IX of this Agreement or (iv) a repurchase of
Receivables pursuant to Article IX or Section 3.02 of this Agreement) nor
acquire any assets for the Trust, nor sell or dispose of any investments in
the Trust Accounts for gain nor accept any contributions to the Trust after
the Closing Date unless it has received an Opinion of Counsel that such sale,
disposition, substitution or acquisition will not affect adversely the status
of the Trust as a FASIT.
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(n) The Trust shall not acquire any Financed Equipment except in
connection with a default or imminent default of a Receivable. The Trust
shall not acquire any other property (including personal property) that is
not a "permitted asset" within the meaning of Section 860L(c)(1)(A), (B),
(D), (E), (F) or (G) unless the Servicer obtains an Opinion of Counsel that
such property qualifies as "foreclosure property" within the meaning of
Section 860L(c)(1)(C) of the Code. In the event that any Financed Equipment
is acquired in a repossession (an "EO Property"), the Servicer shall sell any
EO Property within three years (or such shorter term provided in regulations
not yet issued) of its acquisition by the Trust, unless (i) at least 60 days
prior to the expiration of such period, the Servicer applies for an extension
of such period pursuant to Sections 856(e)(3) and 860L(c)(3) of the Code, in
which case the Servicer shall sell such EO Property within the applicable
extension period or (ii) the Servicer seeks, and subsequently receives, an
Opinion of Counsel, addressed to the Owner Trustee and the Servicer, to the
effect that the holding by the Trust of such EO Property subsequent to three
years (or the end of any other applicable period) after its acquisition will
not result in the imposition of taxes on "prohibited transactions" of the
Trust as defined in Section 860L(e) of the Code or cause the Trust to fail to
qualify as a FASIT at any time that any Notes or the Certificate are
outstanding. The Servicer shall manage, conserve, protect and operate each
EO Property solely for the purpose of its prompt disposition and sale in a
manner that does not cause any such EO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860L(c)(3) of the Code
or result in the receipt by the Trust of any "income derived from any asset
that is not a permitted asset" within the meaning of Section 860L(e)(2)(A) of
the Code or any "net income from foreclosure property" which is subject to
taxation under the FASIT Provisions. In connection with its efforts to sell
such EO Property, the Servicer shall either itself or through an agent
selected by the Servicer protect and conserve such EO Property in the same
manner and to such extent as is customary in the locality where such EO
Property is located and may, incident to its conservation and protection of
the interests of the Noteholders and the Certificateholder, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the
Servicer and the Noteholders and the Certificateholder for the period prior
to the sale of such EO Property, subject to the condition that such rental
not be on terms that would cause such EO Property to fail to qualify as
"foreclosure property" within the meaning of Sections 856(e) and 860L(c) of
the Code.
The disposition of EO Property shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
SECTION 10.02. SERVICER AND FASIT ADMINISTRATOR INDEMNIFICATION.
(a) The FASIT Administrator agrees to indemnify the Trust, the Seller,
the Servicer and the Owner Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust, the Seller, the Servicer or the Owner Trustee, as a result of a
breach of the FASIT Administrator's covenants set forth in this Article X and
with respect to compliance with the FASIT Provisions, including without
limitation, any penalties arising from the Owner Trustee's execution of Tax
Returns prepared by the FASIT Administrator that contain errors or omissions;
PROVIDED, HOWEVER, that such liability will not
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be imposed to the extent such breach is a result of an error or omission in
information provided to the FASIT Administrator by the Servicer in which case
SECTION 10.02(B) will apply.
(b) The Servicer agrees to indemnify the Trust, the Seller, the FASIT
Administrator and the Owner Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust, the Seller, the FASIT Administrator or the Owner Trustee, as a
result of a breach of the Servicer's covenants set forth in this Article X or
in Article III with respect to compliance with the FASIT Provisions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. 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 Certificateholder, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholder or for the
purpose of enabling the Trust to continue to qualify as a FASIT and the Notes
to continue to qualify as "regular interests" in the FASIT constituted by the
Trust (including, without limitation, compliance with regulations that have
not yet been issued); 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 Certificate.
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 and the consent of the "Holder" (as defined
in the Trust Agreement) of the Certificate, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholder; PROVIDED, HOWEVER, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholder or (b) reduce the aforesaid portion of the Outstanding
Amount of the Notes, the Holders and "Holder" of which are required to
consent to any such amendment, without the consent of the Holders of all the
outstanding Notes and the "Holder" (as defined in the Trust Agreement) of the
outstanding Certificate.
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 the
Certificateholder and the Indenture Trustee.
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It shall not be necessary for the consent of the Certificateholder or the
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in SECTION 11.02(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 11.02. 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 the meaning of
Section 9-402(7) of the applicable 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 applicable 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
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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 of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Seller 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 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cut-off Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (A) stating that, in the
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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
Certificate 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 11.03. 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,
2950 East Flamingo Road, Suite C-3B, Las Vegas, Nevada 89121, (702-735-2514),
(b) in the case of the Servicer, to Caterpillar Financial Services
Corporation, 3322 West End Avenue, Nashville, TN 37203-1071 (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
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007 and (f) in the case of Standard & Poor's, to
Standard & Poor's Ratings Services, 26 Broadway (15th Floor), New York, New
York 10004, 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.
SECTION 11.04. 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 11.05. 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 Certificateholder, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 11.06. 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
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any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11.07. 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 11.08. 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 11.09. 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 11.10. 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 11.11. 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 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 11.12. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND INDENTURE
TRUSTEE. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank Delaware not in its
individual capacity but solely in its
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capacity as Owner Trustee of the Issuer, and in no event shall Chase
Manhattan Bank Delaware 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 The First National Bank of
Chicago not in its individual capacity but solely as Indenture Trustee, and
in no event shall The First National Bank of Chicago 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.
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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
1997-B
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee on behalf
of the Trust,
By: /s/ JOHN J. CASHIN
------------------------------------
Name: John J. Cashin
Title: Vice President
CATERPILLAR FINANCIAL FUNDING
CORPORATION,
Seller,
By: /s/ EDWARD J. SCOTT
------------------------------------
Name: Edward J. Scott
Title: Treasurer
CATERPILLAR FINANCIAL SERVICES
CORPORATION,
Servicer,
By: /s/ KEVIN E. COLGAN
------------------------------------
Name: Kevin E. Colgan
Title: Vice President
Acknowledged and Accepted:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Indenture Trustee, as Custodian and as Securities Intermediary
By: /s/ BARBARA G. GROSSE
------------------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
A-1
<PAGE>
SCHEDULE B
LOCATION OF RECEIVABLE FILES
Greenview Plaza
2950 East Flamingo Road, Suite C-3C
Las Vegas, Nevada 89121
B-1
<PAGE>
SCHEDULE C-1
FORM OF INDENTURE TRUSTEE INITIAL CERTIFICATION
[DATE]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of November 1, 1997 among Caterpillar
Financial Services Corporation as Servicer, Caterpillar Financial
Funding Corporation and Caterpillar Financial Asset Trust 1997-B
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.
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By:
------------------------------------
C-1-1
<PAGE>
SCHEDULE C-2
FORM OF INDENTURE TRUSTEE FINAL CERTIFICATION
[DATE]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of November 1, 1997 among Caterpillar
Financial Services Corporation, as Servicer, Caterpillar
Financial Funding Corporation and Caterpillar Financial Asset
Trust 1997-B
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
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Sale and Servicing Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By:___________________________
Name:
Title:
C-2-2
<PAGE>
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 November 1, 1997 between
Caterpillar Financial Asset Trust 1997-B, Caterpillar Financial Funding
Corporation and Caterpillar Financial Services Corporation.
Dated:_________________ ______________________________
Name:
Title:
______________________________
Name:
Title:
D-1
<PAGE>
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;
(xx) Class B Noteholders' Monthly Principal Distribution Amount;
(xxi) Class B Noteholders' Principal Carryover Shortfall;
D-2
<PAGE>
(xxii) Class B Noteholders' Monthly Distributable Amount;
(xxiii) 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) Certificateholder's Interest Carryover Shortfall;
(xxvii) Certificateholder's Interest Distributable Amount;
(xxviii) Certificateholder's Monthly Principal Distributable Amount;
(xxix) Certificateholder's Principal Carryover Shortfall;
(xxx) Certificateholder's Principal Distributable Amount;
(xxxi) Certificateholder's 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);
(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
D-3
<PAGE>
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;
(xiii) the balance of the Reserve Account on such Distribution Date,
after giving effect to distributions made on such Distribution
Date;
(xiv) the Specified Reserve Account Balance for such Distribution Date;
(xv) the balance of the Yield Supplement Account on such Distribution Date;
(xvi) the Yield Supplement Deposit Amount for such Distribution Date;
(xvii) the Maximum Yield Supplement Amount on such Distribution Date;
and
(xviii) the amount to be distributed from the Yield Supplement Account to
the Seller pursuant to SECTION 5.06(c).
D-4
<PAGE>
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 November 1, 1997 between
Caterpillar Financial Asset Trust 1997-B, 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
<PAGE>
EXHIBIT A
TO SCHEDULE E
STATEMENT FOR CERTIFICATEHOLDER
PURSUANT TO SECTION 5.07(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 $[___]
original principal
amount)
(e) Certificates:________________ ($____ per $[___]
original principal
amount)
(f) Total:_______________
A-1
<PAGE>
(iii) Pool Balance at end of related Collection Period:________.
(iv) after giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class
A-1 Notes:_____________
(2) Class A-1 Note Pool Factor:______________
(b) (1) outstanding principal amount of Class
A-2 Notes:_____________
(2) Class A-2 Note Pool Factor:____________
(c) (1) outstanding principal amount of Class
A-3 Notes:_____________
(2) Class A-3 Note Pool Factor:____________
(d) (1) outstanding principal amount of Class B Notes:_____________
(2) Class B Note Pool Factor:____________
(e) (1) Certificate Balance:_____________
(2) Certificate Pool Factor:____________
(v) Amount of Servicing Fee being paid :____________.
(vi) Amount of Administration Fee being paid:____________.
(vii) Aggregate Purchase Amounts for Collection Period:____________.
(viii) Aggregate amount of Realized Losses for the Collection
Period:____________.
(ix) Amount in Reserve Account:_______________.
(x) Amount in Yield Supplement Account:______________.
A-2
<PAGE>
EXHIBIT B
TO SCHEDULE E
STATEMENT FOR NOTEHOLDERS
PURSUANT TO SECTION 5.07(a)
Distribution Date:___________________
(i) Amount of principal being paid on Notes:
(a) Class A-1 Notes:_______________ ($____ 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:
(a) (1) outstanding principal amount of Class A-1 Notes:_________
(2) Class A-1 Note Pool Factor:______________
B-1
<PAGE>
(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:___________________.
(x) Specified Reserve Account Balance:______________.
(xi) Amount in Yield Supplement Account:______________.
(xii) Maximum Yield Supplement Amount:______________.
B-2
<PAGE>
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) Payment of Servicing Fee (including any previously unpaid
Servicing Fees) to Servicer: _________.
(viii) Deposit to Reserve Account: __________.
(ix) Certificateholder's Interest Distributable Amount to be deposited into
Certificateholder's Distribution Account: __________.
(x) Certificateholder's Principal Distributable Amount to be deposited
into Certificateholder's Distribution Account: __________.
(xi) Deposit to Reserve Account: __________.
(xii) (A) Distribute Excess Reserve Account Amount to Seller:
____________.
(B) Pay Excess Reserve Account Amount to Noteholders.
C-1
<PAGE>
Exhibit 10.1
Purchase Agreement
dated as of November 1, 1997
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------------
CATERPILLAR FINANCIAL SERVICES CORPORATION
AND
CATERPILLAR FINANCIAL FUNDING CORPORATION
--------------------
PURCHASE AGREEMENT
Dated as of November 1, 1997
--------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . . . 2
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . . . 3
SECTION 2.02. Ownership and Custody of Receivables Files. . . . . . . . 4
SECTION 2.03. Books and Records.. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.04. Custody of Receivable Files . . . . . . . . . . . . . . . 4
SECTION 2.05. Acceptance by Purchaser of the Receivables;
Certification by the Indenture Trustee . . . . . . . . 4
SECTION 2.06. The Closing . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Purchaser . . . . . . . 6
SECTION 3.02. Representations and Warranties of Seller. . . . . . . . . 7
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to the Obligation of the Purchaser . . . . . .12
SECTION 4.02. Conditions to Obligation of Seller. . . . . . . . . . . .12
SECTION 4.03. Junior Liens on Financed Equipment. . . . . . . . . . . .13
ARTICLE V
COVENANTS OF THE SELLER AND THE PURCHASER
SECTION 5.01. Protection of Right, Title and Interest . . . . . . . . .13
SECTION 5.02. Other Liens or Interests. . . . . . . . . . . . . . . . .13
SECTION 5.03. Chief Executive Office. . . . . . . . . . . . . . . . . .13
<PAGE>
SECTION 5.04. Corporate Existence . . . . . . . . . . . . . . . . . . .14
SECTION 5.05. Indemnification . . . . . . . . . . . . . . . . . . . . .16
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Obligations of Seller . . . . . . . . . . . . . . . . . .16
SECTION 6.02. Repurchase Events . . . . . . . . . . . . . . . . . . . .16
SECTION 6.03. Purchaser Assignment of Repurchased Receivables . . . . .17
SECTION 6.04. Trust . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.05. Amendment . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.06. Waivers . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.07. Notices . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 6.08. Costs and Expenses. . . . . . . . . . . . . . . . . . . .18
SECTION 6.09. Representations of Seller and Purchaser . . . . . . . . .18
SECTION 6.10. Confidential Information. . . . . . . . . . . . . . . . .18
SECTION 6.11. Headings and Cross-References . . . . . . . . . . . . . .18
SECTION 6.12. Governing Law . . . . . . . . . . . . . . . . . . . . . .18
SECTION 6.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . .18
EXHIBIT A Form of Assignment
SCHEDULE A Schedule of Receivables
<PAGE>
PURCHASE AGREEMENT dated as of November 1, 1997, between CATERPILLAR
FINANCIAL SERVICES CORPORATION, a Delaware corporation (the "Seller"), and
CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation (the
"Purchaser").
WHEREAS in the regular course of its business, the Seller has originated or
purchased certain fixed-rate retail installment sale contracts secured by new
and used machinery and equipment; and
WHEREAS the Seller and the Purchaser wish to set forth the terms pursuant
to which the Receivables (as hereinafter defined) are to be sold by the Seller
to the Purchaser, which Receivables will be transferred by the Purchaser,
pursuant to the Sale and Servicing Agreement (as hereinafter defined), to
Caterpillar Financial Asset Trust 1997-B (the "Trust"), which Trust will issue a
6.35% Asset Backed Certificate (the "Certificate") representing a fractional
undivided interest in, and Class A-1 5.805% Asset Backed Notes, Class A-2 6.018%
Asset Backed Notes, Class A-3 6.16% Asset Backed Notes and the Class B 6.35%
Asset Backed Notes (collectively, the "Notes") secured by, such Receivables and
the other property of the Trust.
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01. DEFINITIONS. Except as otherwise specified herein or as the
context may otherwise require, the following terms have the respective meanings
set forth below for all purposes of this Agreement.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control", when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, by contract or otherwise; and the terms
"controlled by," "controlling" and "under common control with" have meanings
correlative to the foregoing.
"AGREEMENT" shall mean this Purchase Agreement, as the same may be amended,
modified or supplemented from time to time.
"ASSIGNMENT" shall mean the document of assignment, a form of which is
attached to this Agreement as Exhibit A.
"BASIC DOCUMENTS" shall have the meaning given such term in the Indenture.
<PAGE>
"CERTIFICATE" shall have the meaning given such term in the Trust
Agreement.
"CLOSING DATE" shall mean November 25, 1997.
"INDENTURE" shall mean the Indenture dated as of November 1, 1997 between
the Trust and The First National Bank of Chicago, as indenture trustee, as the
same may be amended, modified or supplemented from time to time.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PROSPECTUS" shall mean the Prospectus (which consists of a base prospectus
dated May 19, 1997 and a prospectus supplement dated November 19, 1997) pursuant
to which the Notes were offered.
"PURCHASER" shall mean Caterpillar Financial Funding Corporation, a Nevada
corporation, its successors and assigns.
"RECEIVABLE" shall mean any Contract listed on the Schedule of Receivables.
"REPURCHASE EVENT" shall have the meaning specified in SECTION 6.02(a).
"SALE AND SERVICING AGREEMENT" shall mean the Sale and Servicing Agreement
dated as of November 1, 1997, among the Trust, the Purchaser (in its capacity as
seller thereunder) and the Seller (in its capacity as Servicer thereunder), as
the same may be amended, modified or supplemented from time to time.
"SCHEDULE OF RECEIVABLES" shall mean the list of Receivables annexed hereto
as Schedule A (which may be in the form of microfiche).
"SELLER" shall mean Caterpillar Financial Services Corporation, a Delaware
corporation, its successors and assigns.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture, or if not
defined therein, in the Trust Agreement.
(b) All terms defined in this Agreement shall have the meanings contained
herein when used in any document made or delivered pursuant hereto unless
otherwise defined therein.
2
<PAGE>
(c) As used in this Agreement and in any document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement or in
any such other document, and accounting terms partly defined in this Agreement
or in any such other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such other document shall control.
(d) The words "hereof," "herein," "hereunder," and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections 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.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. CONVEYANCE OF RECEIVABLES. In consideration of the sale on
the Closing Date of $314,429,558 in Principal Balance of Receivables, the
Purchaser shall (i) deliver to or upon the order of the Seller an amount equal
to $297,643,854 in cash and (ii) accept a capital contribution from the Seller
equal to $16,785,704. The Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Purchaser, without recourse (subject to the
obligations herein), all right, title and interest in and to the following,
whether now owned or hereafter acquired:
(a) all right, title and interest of the Seller, in and to the
Receivables, and all moneys (including accrued interest) due thereunder
on and after the Cut-off Date;
(b) the interests 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 such Transaction Equipment;
(c) the interest and rights 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,
as the case may be;
(d) the interest of the Seller in any proceeds from recourse to or
other payments by Dealers on Receivables; and
3
<PAGE>
(e) the proceeds of any and all of the foregoing.
SECTION 2.02. OWNERSHIP AND CUSTODY OF RECEIVABLES FILES.
(a) Upon the acceptance by the Seller of the amount set forth in
SECTION 2.01, the ownership of each Receivable and the contents
of the related Receivables File shall be vested in the Purchaser.
(b) In connection with the sale of the Receivables, pursuant to
SECTION 2.01, the Seller has delivered or caused to be delivered
each Receivables File to the Custodian on behalf of the
Purchaser.
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 sale of assets by the Seller to the
Purchaser. The Seller shall be responsible for maintaining, and shall maintain,
a complete and accurate set of accounts, records and computer files for each
Receivable which shall be clearly marked to reflect the ownership of each
Receivable by the Purchaser.
SECTION 2.04. CUSTODY OF RECEIVABLE FILES. The Purchaser has appointed the
Custodian pursuant to the Custodial Agreement, and the Custodian thereby
accepted such appointment, to act as agent of the Purchaser as custodian of the
Receivables Files.
SECTION 2.05. ACCEPTANCE BY PURCHASER OF THE RECEIVABLES; CERTIFICATION
BY THE INDENTURE TRUSTEE.
(a) The Purchaser hereby acknowledges constructive receipt of, through
the Custodian, for each Receivable, a Receivables 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 transferred pursuant to the terms hereof. Pursuant to
the Sale and Servicing Agreement, the Custodial Agreement and this
Agreement, the Indenture Trustee will, for the benefit of the Purchaser,
review (or cause to be reviewed) each of the documents in the Receivables
Files within 45 days after the Closing Date and to deliver a final
certification in the form attached to the Sale and Servicing Agreement as
Exhibit C-2 to the effect that, as to each Receivable listed in the
Schedule 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 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
4
<PAGE>
set forth in the Receivables File. Pursuant to the Sale and Servicing
Agreement, the Custodial Agreement and this Agreement, 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.
(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 of the Sale and Servicing Agreement or
substantively to the description thereof as set forth in the Schedule of
Receivables, the Indenture Trustee is required in the Sale and Servicing
Agreement to promptly give notice of same. In performing any such review,
the Indenture Trustee may conclusively rely on the Seller 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 2.04 have been executed and received and relate to the
Receivable Files identified in the Schedule of Receivables. The Seller
agrees to use reasonable efforts to cause to be remedied a material defect
in a document constituting part of a Receivables File of which it is so
notified by the Indenture Trustee. If, however, within 60 days after
receipt by it of notice with respect to such defect the Seller has not
caused to be remedied any defect described in such final certification and
such defect materially and adversely affects the interest of the Purchaser
in the related Receivable, the Seller shall remit the Purchase Amount to
the Purchaser. The sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholder with respect to
a breach shall be to require the Seller to repurchase Receivables pursuant
to this Section, subject to the conditions contained herein. 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 2.06. THE CLOSING.
The conveyance of the Receivables shall take place at the offices of
Orrick, Herrington & Sutcliffe LLP, 666 5th Avenue, 18th Floor, New York, New
York 10103, on the Closing Date, simultaneously with the closing of the
transactions contemplated by the Sale and Servicing Agreement, the underwriting
agreements related to the Notes and the other Basic Documents.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
hereby represents and warrants to the Seller as of the date hereof and as of the
Closing Date:
(a) ORGANIZATION AND GOOD STANDING. The Purchaser is duly organized,
validly existing in good standing under the laws of the State of Nevada,
and has the 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 and own the
Receivables.
(b) DUE QUALIFICATION. The Purchaser 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
ownership or lease of property or the conduct of its business shall require
such qualifications.
(c) POWER AND AUTHORITY. The Purchaser 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 has been duly
authorized by the Purchaser by all necessary corporate action.
(d) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Purchaser, or any indenture,
agreement or other instrument to which the Purchaser is a party or by which
it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than the Sale and Servicing Agreement and the
Indenture); nor violate any law or, to the best of the Purchaser's
knowledge, any order, rule or regulation applicable to the Purchaser of any
court, federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or its
properties.
(e) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Purchaser's best knowledge, threatened, before any
court, federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or its
properties which (i) assert the invalidity of this Agreement, (ii) seek to
prevent the consummation of any of the transactions contemplated by this
Agreement or (iii) seek any determination or ruling that might materially
and adversely affect the performance by the Purchaser of its obligations
under, or the validity or enforceability of, this Agreement.
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SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF SELLER. (a) The Seller
hereby represents and warrants to the Purchaser of the date hereof and as of the
Closing Date:
(i) ORGANIZATION AND GOOD STANDING. The Seller is duly organized,
validly existing in good standing under the laws of the State of Delaware,
and has the 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 and own the
Receivables.
(ii) 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 ownership or
lease of property or the conduct of its business shall require such
qualifications.
(iii) 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 property sold and
assigned to the Purchaser hereby and has duly authorized such sale and
assignment to the Purchaser 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.
(iv) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof neither 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
certificate 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
is bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than this Agreement); nor violate any law or, to
the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court, federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(v) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the best of Seller's knowledge, threatened, before any
court, federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties which (A) assert the invalidity of this Agreement, (B) seek to
prevent the consummation of any of the transactions contemplated by this
Agreement, or (C) seek 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.
(vi) 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
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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 upon the collectibility of any Receivable or upon
the ability of the Seller to perform its obligations under this Agreement).
(b) The Seller makes the following representations and warranties as to
the Receivables on which the Purchaser relied in accepting the Receivables. The
parties hereto acknowledge that the representations and warranties below require
the Seller to monitor conditions that it may not have the ability to monitor.
Accordingly, wherever the Seller makes, or is deemed to make, a representation
that it cannot monitor, such representation shall be made as if prefaced with
the phrase "to the best of the Seller's knowledge"; PROVIDED, HOWEVER, that the
determination as to whether a Repurchase Event has occurred pursuant to SECTION
6.02 of this Agreement shall be made without reliance on whether the Seller
actually had knowledge of the accuracy of any of its representations. Such
representations and warranties speak as of the execution and delivery of this
Agreement but shall survive the sale, transfer and assignment of the Receivables
to the Purchaser and the subsequent assignments and transfers of the Receivables
pursuant to the Sale and Servicing Agreement and the Indenture:
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) was
originated in the United States of America by the Seller in the ordinary
course of business or was originated by a Dealer in the ordinary course of
business, in each case in connection with the retail sale by a Dealer of
Financed Equipment in the ordinary course of such Dealer's business, was
fully and properly executed by the parties thereto, and if originated by
such Dealer, was purchased by the Seller from such Dealer and was validly
assigned by such Dealer to the Seller in accordance with its terms, (B) has
created a valid, subsisting and enforceable (subject to paragraph (iv)
below) first priority security interest in favor of the Seller in the
Financed Equipment, and if applicable, a valid, subsisting and enforceable
(subject to paragraph (iv) below) security interest in favor of the Seller
in the Cross-Collateralized Equipment, which security interests are
assignable by the Seller to the Purchaser, by the Purchaser to the Issuer
and by the Issuer to the Indenture Trustee, (C) contains customary and
enforceable (subject to paragraph (iv) below) provisions such that the
rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, and (D) provides
for fixed payments (except as described below) on a periodic basis, yields
interest at a fixed-rate and is prepayable without premium or penalty at
any time. The fixed payments provided for are sufficient to amortize the
Amount Financed of such Receivable by maturity and yield interest at the
annual percentage rate specified in the related Contract for the relevant
Receivable (which is the APR specified in the Schedule of Receivables for
such Receivable).
(ii) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables to this Agreement is true and correct in all
material respects as of the opening of business on the Cut-off Date and no
selection procedures believed to be
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adverse to the Noteholders or the Certificateholder were utilized in
selecting the Receivables. The computer tape regarding the Receivables
made available to the Purchaser and its assigns is true and correct in all
respects.
(iii) COMPLIANCE WITH LAW. Each Receivable and the sale of the
Financed Equipment complied at the time it was originated or made, and at
the execution of this Agreement complies in all material respects, with all
requirements of applicable federal, state and local laws and regulations
thereunder, including usury laws, the Federal Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and
S, and other equal credit opportunity and disclosure laws.
(iv) BINDING OBLIGATIONS. Each Receivable represents the genuine,
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof (which as of the Closing Date is the
Seller) in accordance with its terms, subject to bankruptcy, insolvency and
other laws relating to the enforcement of creditors' rights generally and
to general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). Such enforceability has
not been and is not adversely affected by whether or not the Seller was or
is qualified to do business in the state in which the Obligor was or is
located.
(v) SECURITY INTEREST IN FINANCED EQUIPMENT. Immediately prior to
the sale, assignment and transfer thereof, each Receivable shall be secured
by a validly perfected first priority security interest in the Financed
Equipment in favor of the Seller as secured party.
(vi) RECEIVABLES IN FORCE. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Equipment been released
from the lien granted by the related Receivable in whole or in part. No
Receivable is rescindable on the basis of whether or not the Seller was or
is qualified to do business in the state in which the Obligor was or is
located.
(vii) PROSPECTUS INFORMATION. As of the Cut-off Date, each
Receivable conforms and all Receivables in the aggregate conform, in all
material respects, to the description set forth in the Prospectus,
including all statistical data or otherwise.
(viii) NO AMENDMENTS. No Receivable has been amended such that the
amount of the Obligor's Scheduled Payments has been increased or decreased,
except for increases or decreases resulting from the inclusion of any
premium for forced-placed physical damage insurance covering the Financed
Equipment.
(ix) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened with respect to any Receivable.
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(x) NO LIENS. No liens or claims have been filed for work, labor or
materials relating to any Financed Equipment that are liens prior to, or
equal or coordinate with, the security interest in the Financed Equipment
granted by the Receivable.
(xi) NO DEFAULT. No Receivable has a payment that is more than 90
days overdue as of the Cut-off Date and, except as permitted in this
paragraph, no default, breach, violation or event permitting acceleration
under the terms of any Receivable has occurred and is continuing; and
(except for payment defaults continuing for a period of not more than 90
days) no continuing condition that with notice or the lapse of time would
constitute a default, breach, violation or event permitting acceleration
under the terms of any Receivable has arisen; and the Seller has not waived
and shall not waive any of the foregoing.
(xii) INSURANCE. The Seller, in accordance with its customary
procedures, has determined that the Obligor has obtained physical damage
insurance covering the Financed Equipment, and under the terms of the
Receivable the Obligor is required to maintain such insurance.
(xiii) 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 Purchaser, and that the beneficial interest in and
title to the 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 Purchaser. Immediately
prior to the transfer and assignment herein contemplated, the Seller has
good and marketable title to each Receivable, free and clear of all Liens,
encumbrances, security interests and rights of others and, immediately upon
the transfer thereof, the Purchaser shall have good and marketable title to
each Receivable, free and clear of all Liens, tax, governmental or similar
liens, encumbrances, security interests and rights of others; and the
transfer of the Receivables to the Purchaser has been perfected under the
UCC.
(xiv) LAWFUL ASSIGNMENT. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer and
assignment of such Receivable or any Receivable under this Agreement, the
Sale and Servicing Agreement or the Indenture is unlawful, void or
voidable.
(xv) ALL ACTIONS TAKEN. All actions necessary to give the Purchaser
a first priority perfected ownership interest in the Receivables pursuant
to the applicable UCC have been taken.
(xvi) [Reserved]
(xvii) MATURITY OF RECEIVABLES. Each Receivable has a final
scheduled payment date due not later than October 2002 as of the Cut-off
Date and the weighted average remaining term of the Receivables is 42
months as of the Cut-off Date.
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(xviii) LOCATION OF RECEIVABLE FILES. The Receivable Files are kept
at the location listed in Schedule B to the Sale and Servicing Agreement.
(xix) OUTSTANDING PRINCIPAL BALANCE. Each Receivable has an
outstanding principal balance of at least $5,107 as of the Cut-off Date.
(xx) NO BANKRUPTCIES. No Obligor on any Receivable as of the Cut-off
Date was noted in the related Receivable File as having filed for
bankruptcy or as being subject to a bankruptcy proceeding and to the
Seller's knowledge no such proceeding is pending or threatened against any
Obligor.
(xxi) NO REPOSSESSIONS. No Financed Equipment securing any
Receivable is in repossession status.
(xxii) CHATTEL PAPER. Each Receivable constitutes "chattel paper"
within the meaning of the UCC of the States of New York and Nevada.
(xxiii) OBLIGORS. None of the Receivables is due from any Person
which does not have a mailing address in the United States of America. No
Receivable is due from the United States of America or any State or from
any agency, department, instrumentality or political subdivision of the
United States of America or any State.
(xxiv) ONE ORIGINAL. There is only one Original Contract related to
each Receivable. With respect to each Receivable, the Seller has a
perfected, first priority ownership or security interest in such
Receivable, free and clear of all Liens, encumbrances, security interests
or rights of others.
(xxv) PAYMENT FREQUENCY. As of the Cut-off Date and as shown on the
books of the Seller, Receivables having an aggregate principal balance
equal to approximately 81.96% of the aggregate principal balance of all
Receivables had monthly scheduled payments; and as of the Cut-off Date and
as shown on the books of the Seller, Receivables having an aggregate
principal balance equal to approximately 18.04% of the aggregate principal
balance of all Receivables had scheduled payments which have monthly
scheduled payments other than certain months specified therein for which
payment is skipped.
(xxvi) INTEREST ACCRUAL. Each Receivable is, as of the Closing Date,
accruing interest.
(xxvii) NOTIFICATION OF OBLIGORS. With respect to each Dealer
Receivable, the related Obligor has been notified with respect to the
assignment of the related Contract to the Seller.
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ARTICLE IV
CONDITIONS
SECTION 4.01. CONDITIONS TO THE OBLIGATION OF THE PURCHASER. The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to
the Closing Date.
(b) COMPUTER FILES MARKED. The Seller shall, at its own expense on
or prior to the Closing Date, (i) indicate in its computer files that
receivables created in connection with the Receivables have been sold to
the Purchaser pursuant to this Agreement and sold by the Purchaser to the
Trust pursuant to the Sale and Servicing Agreement and (ii) deliver to the
Purchaser the Schedule of Receivables certified by the Chairman, the
President, a Vice President, Secretary, the Treasurer or an Assistant
Treasurer of the Seller to be true, correct and complete.
(c) DOCUMENTS TO BE DELIVERED BY SELLER AT CLOSING.
(i) ASSIGNMENT. On the Closing Date, the Seller will execute
and deliver the Assignment. The Assignment shall be substantially in
the form of Exhibit A hereto.
(ii) EVIDENCE OF UCC FILINGS FOR SALE TO PURCHASER. On or prior
to the Closing Date, the Seller shall deliver to the Purchaser, for
its inspection and review, completed UCC requests for information,
dated on or before the Closing Date, listing all effective financing
statements filed with the Tennessee Secretary of State listing the
Seller as debtor.
(iii) EVIDENCE OF POSSESSION BY THE CUSTODIAN. On the Closing
Date, the Seller shall provide the Purchaser with copies of the
executed Transfer Certificate and Trust Receipt referred to in Section
3.1 of the Custodial Agreement.
(iv) OTHER DOCUMENTS. Such other documents as the Purchaser may
reasonably request.
(d) OTHER TRANSACTIONS. The transactions contemplated by the Sale
and Servicing Agreement and the Indenture to be consummated on the Closing
Date shall be consummated on such date.
SECTION 4.02. CONDITIONS TO OBLIGATION OF SELLER. The obligation of the
Seller to sell the Receivables to the Purchaser is subject to the satisfaction
of the following conditions:
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(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Purchaser hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Purchaser shall
have performed all obligations to be performed by it hereunder on or prior
to the Closing Date.
(b) RECEIVABLES PURCHASE PRICE. On the Closing Date, the Purchaser
shall have delivered to the Seller the purchase price specified in SECTION
2.01.
SECTION 4.03. JUNIOR LIENS ON FINANCED EQUIPMENT. The Seller agrees not
to exercise its right to foreclose upon, and will not transfer to third parties
its rights with respect to, any junior liens on any item of Financed Equipment
if such junior liens have not been assigned to the Purchaser pursuant to SECTION
2.01, until (i) the related Receivable has been paid in full or (ii) the related
first priority lien on the Financed Equipment assigned to the Purchaser pursuant
to SECTION 2.01 has been foreclosed upon or released.
ARTICLE V
COVENANTS OF THE SELLER AND THE PURCHASER
The Seller and the Purchaser agree with each other as follows; PROVIDED,
HOWEVER, that to the extent that any provision of this Article conflicts with
any provision of the Sale and Servicing Agreement, the Sale and Servicing
Agreement shall govern:
SECTION 5.01. PROTECTION OF RIGHT, TITLE AND INTEREST. (a) FURTHER
ASSURANCES. The Seller shall take all actions to preserve and protect the
right, title and interest of the Purchaser in and to the Receivables and the
other property included in the Owner Trust Estate. The Purchaser shall
cooperate fully with the Seller in connection with the obligations set forth
above and will execute any and all documents reasonably required to fulfill the
purpose of this paragraph.
(b) NAME CHANGE. Within 15 days after the Seller makes any change in its
name, identity or corporate structure, the Seller shall give the Purchaser
notice of any such change.
SECTION 5.02. OTHER LIENS OR INTERESTS. Except for the conveyances
hereunder and pursuant to the Sale and Servicing Agreement, the Indenture and
the other Basic Documents, the Seller will not sell, pledge, assign or transfer
to any Person, or grant, create, incur, assume or suffer to exist any Lien on,
any interest in, to and under the Receivables, and the Seller shall defend the
right, title and interest of the Purchaser in, to and under the Receivables
against all claims of third parties claiming through or under the Seller or any
Dealer; PROVIDED, HOWEVER, that the Seller's obligations under this Section
shall terminate one year and one day after the termination of the Trust pursuant
to the Trust Agreement.
SECTION 5.03. CHIEF EXECUTIVE OFFICE. During the term of the Receivables,
the Seller will maintain its chief executive office in one of the United States,
except Louisiana or Vermont.
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SECTION 5.04. CORPORATE EXISTENCE. (a) During the term of this Agreement,
the Purchaser will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of Nevada and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement and the Sale and Servicing Agreement and the transactions contemplated
hereby.
(b) The Seller will not take any action or fail to take any action if
such act or omission would cause the Purchaser not to observe the covenants
set forth in SECTION 5.04(c) of this Agreement or to violate the provisions
of the Purchaser's certificate of incorporation.
(c) The Purchaser and the Seller agree that Purchaser's and the Seller's
businesses shall be conducted as follows, and neither Purchaser nor the Seller
shall take any action or fail to take any action if such act or omission would
cause such businesses not to be conducted as follows:
(i) The Purchaser will maintain both an office at which its business
is and will be conducted and a telephone number separate from the Seller or
any of the Seller's Affiliates.
(ii) At least two of the Purchaser's directors are not and will not be
directors, officers or employees of the Seller or any of the Seller's
Affiliates. No employee of the Purchaser shall engage in any servicing
functions with respect to the Receivables and, with respect to the
Purchaser, shall only engage in corporate governance and clerical
functions. So long as the Purchaser maintains an employee at its office,
the Purchaser shall at all times maintain comprehensive liability and
workmen's compensation insurance (as is customary for commercial
enterprises) in an amount, when taking into account any available umbrella
policy, at least equal to $5,000,000.
(iii) The Purchaser will maintain corporate records and books and
accounts separate from those of the Seller or any of the Seller's
Affiliates.
(iv) Except as expressly permitted by the Sale and Servicing Agreement
with respect to collections on the Receivables prior to the transfer of
such collections to the Collection Account, the Purchaser's funds will not
be commingled with those of the Seller or any of the Seller's Affiliates,
and the Purchaser shall maintain bank accounts separate from those of the
Seller or any of the Seller's Affiliates.
(v) The Seller shall maintain records permitting a determination on a
daily basis of the amount and location of any of its funds which are
commingled as permitted under CLAUSE (iv) above.
(vi) The Board of Directors of the Purchaser will take appropriate
corporate action (including without limitation holding meetings or acting
by unanimous consent)
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to authorize all of the Purchaser's corporate actions, and minutes shall be
maintained by the Purchaser separate and apart from those of the Seller or
any of the Seller's Affiliates.
(vii) The Purchaser shall at all times be adequately capitalized to
engage in the transactions contemplated at its formation. Without limiting
the foregoing, the Purchaser shall at all times maintain capital sufficient
to pay its rent, salary of any employee, and any required insurance from
the Closing Date until the Certificate Final Scheduled Distribution Date.
(viii) The Purchaser shall not incur or guarantee any debt other than
under the Sale and Servicing Agreement, nor shall the Purchaser make any
loans, other than as permitted by the Purchaser's Certificate of
Incorporation.
(ix) The Purchaser shall not engage in any transaction with the Seller
or any of the Seller's Affiliates on terms more favorable than in a similar
transaction involving a third party.
(x) The Purchaser shall at all times use its own stationery.
(xi) The Purchaser shall always be described as a separate
corporation, and never as a department, division or otherwise of the Seller
or any of the Seller's Affiliates.
(xii) The Purchaser shall act solely in its own corporate name and
through its own authorized officers and agents. Neither the Purchaser nor
any of Purchaser's Affiliates shall be appointed agent of the Seller,
except as expressly provided for by the Sale and Servicing Agreement and
the Administration Agreement.
(xiii) The data and records (including computer records) used by the
Purchaser or the Seller in the collection and administration of the
Receivables shall reflect the Purchaser's ownership interest therein.
(xiv) Other than organizational expenses, the Purchaser shall be
responsible for the payment of all expenses, indebtedness and other
obligations incurred by it.
(xv) The Purchaser shall at all times hold itself out to the public
under the Purchaser's own name as a legal entity separate and distinct from
the Seller and any of the Seller's Affiliates.
(xvi) None of the Purchaser's funds nor any of the funds held by the
Seller on behalf of the Purchaser or the holders of the Certificate or the
Notes shall be invested in securities issued by the Seller or any of the
Seller's Affiliates.
(d) The Purchaser and the Seller will each furnish to the other on or
before April 30 of each year (commencing April 30, 1999) for so long as any
Certificate or Note remains outstanding an Officer's Certificate to the effect
that all of its obligations under this SECTION 5.04
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have been fulfilled throughout the preceding calendar year (or the period from
the Closing Date until December 31, 1998, as applicable), or, if there has been
any default in the fulfillment of any such obligations, specifying each such
default known to the signer thereof and the nature and status thereof.
(e) The Seller will not transfer or assign any interest in the Purchaser
except pursuant to an instrument under which the transferee or assignee of such
interest expressly assumes the performance of all covenants of the Seller to be
performed or observed under this SECTION 5.04.
(f) The annual audited financial statements of the Purchaser and the
Seller will reflect the results of the issuance of the Notes and Certificates in
accordance with generally accepted accounting principles and also disclose that
the assets of the Seller are not available to pay creditors of the Purchaser or
any other Affiliate of the Seller.
SECTION 5.05. INDEMNIFICATION. (a) The Seller shall indemnify the
Purchaser for any liability as a result of the failure of a Receivable to be
originated in compliance with all requirements of law and for any breach of
any of its representations and warranties contained herein, other than the
representations and warranties made pursuant to SECTION 3.02(b) for which the
sole remedy shall be provided by SECTION 6.02 hereof; PROVIDED, HOWEVER, that
the Seller shall indemnify the Purchaser for any liability arising from a
breach of SECTION 3.02(b)(ii), (iii) and (xxv). These indemnity obligations
shall be in addition to any obligation that the Seller may otherwise have.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. OBLIGATIONS OF SELLER. The obligations of the Seller under
this Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
SECTION 6.02. REPURCHASE EVENTS. (a) The Seller hereby covenants and
agrees with the Purchaser for the benefit of the Purchaser, the Indenture
Trustee, the Noteholders, the Owner Trustee and the Certificateholder that the
occurrence of a breach of any of the Seller's representations and warranties
contained in SECTION 3.02(b) (other than the representation and warranty
contained in Section 3.02(b)(xxv)) in respect of a Receivable shall constitute
an event obligating the Seller to repurchase such Receivable ("Repurchase
Events"), at the Purchase Amount from the Purchaser or from the Trust.
(b) These repurchase obligations of the Seller shall constitute the sole
remedies to the Purchaser, the Indenture Trustee, the Noteholders, the Owner
Trustee or the Certificateholder against the Seller with respect to any
Repurchase Event.
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(c) The terms and conditions of the Purchaser's obligation to enforce its
right of repurchase pursuant to this Section 6.02 shall be governed by Section
3.02 of the Sale and Servicing Agreement.
SECTION 6.03. PURCHASER ASSIGNMENT OF REPURCHASED RECEIVABLES. With
respect to all Receivables repurchased by the Seller pursuant to this Agreement,
the Purchaser shall assign, without recourse, representation or warranty, to the
Seller all the Purchaser's right, title and interest in and to such Receivables,
and all security and documents relating thereto.
SECTION 6.04. TRUST. The Seller acknowledges and agrees that (a) the
Purchaser will, pursuant to the Sale and Servicing Agreement, sell the
Receivables to the Trust and assign its rights under this Agreement to the
Trust, (b) the Trust will, pursuant to the Indenture, assign such Receivables
and such rights to the Indenture Trustee and (c) the representations and
warranties contained in this Agreement and the rights of the Purchaser under
this Agreement, including under SECTION 6.02, are intended to benefit the Trust,
the Certificateholder and the Noteholders (and may be enforced directly by the
Indenture Trustee on behalf of the Noteholders and by the Owner Trustee on
behalf of the Trust or the Certificateholder). The Seller hereby consents to
all such sales and assignments.
SECTION 6.05. AMENDMENT. This Agreement may be amended from time to time,
with prior written notice to the Rating Agencies, by a written amendment duly
executed and delivered by the Seller and the Purchaser, without the consent of
the Noteholders or the Certificateholder, 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
Certificateholder; PROVIDED that such amendment will not, in the Opinion of
Counsel, materially and adversely affect the interest of any Noteholder or the
Certificateholder or the tax characterization of the Notes, the Certificate or
the Trust. This Agreement may also be amended by the Seller and the Purchaser,
with prior written notice to the Rating Agencies, with the consent of the
holders of Notes evidencing a majority in the Outstanding Amount of the Notes
and the holder of the Certificate for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of Noteholders or the Certificateholder;
PROVIDED, HOWEVER, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that are required to be made for the
benefit of Noteholders or the Certificateholder or (ii) reduce the aforesaid
percentage of the Notes and the Certificate which are required to consent to any
such amendment, without the consent of the holders of all the outstanding Notes
and the Certificate.
SECTION 6.06. WAIVERS. No failure or delay on the part of the Purchaser
in exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude and any other or further exercise
thereof or the exercise of any other power, right or remedy.
SECTION 6.07. NOTICES. All demands, notices and communications under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt
17
<PAGE>
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller, to Caterpillar Financial Services Corporation, 3322 West End
Avenue, Nashville, TN 37203-0983, (615) 386-5800; (b) in the case of the
Purchaser, to Caterpillar Financial Funding Corporation, Greenview Plaza, 2950
East Flamingo Road, Suite C-3B, Las Vegas, Nevada 89121 (702) 735-2514; (c) in
the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007; and (d) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, 26 Broadway (10th
Floor), New York, New York 10004, 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.
SECTION 6.08. COSTS AND EXPENSES. The Seller will pay all expenses
incident to the performance of its obligations under this Agreement, and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, excluding fees and expenses of counsel, in connection with the
perfection as against third parties of the Purchaser's right, title and interest
in and to the Receivables and the enforcement of any obligation of the Seller
hereunder.
SECTION 6.09. REPRESENTATIONS OF SELLER AND PURCHASER. The respective
agreements, representations, warranties and other statements by the Seller and
the Purchaser set forth in or made pursuant to this Agreement shall remain in
full force and effect and will survive the closing under SECTION 2.02.
SECTION 6.10. CONFIDENTIAL INFORMATION. The Purchaser agrees that it will
neither use nor disclose to any Person the names and addresses of the Obligors,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Receivables, under the Sale and Servicing Agreement or the Indenture
or any other Basic Document or as required by any of the foregoing or by law.
SECTION 6.11. HEADINGS AND CROSS-REFERENCES. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to Section names or numbers are to such Sections of this Agreement.
SECTION 6.12. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers duly authorized as of the date and year
first above written.
CATERPILLAR FINANCIAL FUNDING
CORPORATION
By: /s/ Edward J. Scott
-------------------------------
Name: Edward J. Scott
Title: Treasurer
CATERPILLAR FINANCIAL SERVICES
CORPORATION
By: /s/ Kevin E. Colgan
-------------------------------
Name: Kevin E. Colgan
Title: Vice President
<PAGE>
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement (the
"Purchase Agreement") dated as of November 1, 1997, between the undersigned and
Caterpillar Financial Funding Corporation (the "Purchaser"), the undersigned
does hereby sell, assign, transfer, set over and otherwise convey unto the
Purchaser, without recourse, (i) all right, title and interest of the Seller, in
and to the Receivables, and all moneys (including accrued interest) due
thereunder on and after Cut-off Date; (ii) the interests of the Seller in the
security interests in the Transaction Equipment granted by the Obligors pursuant
to the Receivables and any other interest of the Seller in such Transaction
Equipment; (iii) the interest and rights of the Seller in any proceeds with
respect to the Receivables from claims on any physical damage, credit life or
disability insurance policies relating to the Financed Equipment or Obligors, as
the case may be; (iv) the interest of the Seller in any proceeds from recourse
to or other payments by Dealers on Receivables; and (v) the proceeds of any and
all of the foregoing.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of November 25, 1997.
CATERPILLAR FINANCIAL SERVICES
CORPORATION
By:
-------------------------------
Name:
Title:
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
<PAGE>
Exhibit 10.2
Administration Agreement
dated as of November 1, 1997
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------------
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
Class A-1 5.805% Asset Backed Notes
and
Class A-2 6.018% Asset Backed Notes
Class A-3 6.16% Asset Backed Notes
Class B 6.35% Asset Backed Notes
ADMINISTRATION AGREEMENT
Dated as of November 1, 1997
--------------------
CATERPILLAR FINANCIAL SERVICES CORPORATION
Administrator
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Duties of Administrator. . . . . . . . . . . . . . . . . . . . 2
2. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Additional Information To Be Furnished to Issuer . . . . . . . 8
5. Independence of Administrator. . . . . . . . . . . . . . . . . 8
6. No Joint Venture . . . . . . . . . . . . . . . . . . . . . . . 8
7. Other Activities of Administrator. . . . . . . . . . . . . . . 8
8. Term of Agreement; Resignation and Removal of
Administrator. . . . . . . . . . . . . . . . . . . . . . . . . 8
9. Action upon Termination, Resignation or Removal. . . . . . . . 9
10. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 11
13. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 11
14. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 11
16. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 11
17. Not Applicable to Caterpillar Financial Services
Corporation in Other Capacities. . . . . . . . . . . . . . . . 12
18. Limitation of Liability of Owner Trustee and Trustee . . . . . 12
19. Third-Party Beneficiary. . . . . . . . . . . . . . . . . . . . 12
20. Successor Servicer and Administrator . . . . . . . . . . . . . 12
21. Nonpetition Covenants. . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT A - Form of Power of Attorney
<PAGE>
ADMINISTRATION AGREEMENT dated as of November 1, 1997, among CATERPILLAR
FINANCIAL ASSET TRUST 1997-B, a Delaware business trust (the "Issuer"),
CATERPILLAR FINANCIAL SERVICES CORPORATION, a Delaware corporation, as
administrator (the "Administrator"), CATERPILLAR FINANCIAL FUNDING CORPORATION,
a Nevada corporation (the "Seller"), and THE FIRST NATIONAL BANK OF CHICAGO, a
national banking association, not in its individual capacity but solely as
Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H :
WHEREAS the Issuer is issuing the Class A-1 5.805% Asset Backed Notes (the
"A-1 Notes"), the Class A-2 6.018% Asset Backed Notes (the "Class A-2 Notes"),
the Class A-3 6.16% Asset Backed Notes (the "A-3 Notes") and the Class B 6.35%
Asset Backed Notes (the "Class B Notes"; together with the A-1 Notes, A-2 Notes
and the Class A-3 Notes, the "Notes") pursuant to the Indenture dated as of
November 1, 1997 (as amended, modified or supplemented from time to time in
accordance with the provisions thereof, the "Indenture"), between the Issuer and
the Indenture Trustee.
WHEREAS the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of certain beneficial ownership interests of the
Issuer, including (i) a Sale and Servicing Agreement dated as of November 1,
1997 (the "Sale and Servicing Agreement") (capitalized terms used herein and not
defined herein shall have the meanings assigned such terms in the Sales and
Servicing Agreement, or if not defined therein, in the Indenture) among the
Issuer, Caterpillar Financial Services Corporation ("CFSC"), as servicer, and
the Seller, (ii) a Depository Agreement dated November 24, 1997 (the "Depository
Agreement") among the Issuer, the Indenture Trustee and The Depository Trust
Company, (iii) the Indenture, and (iv) the Custodial Agreement dated as of
November 1, 1997 (the "Custodial Agreement") among CFSC, the Seller, the Issuer,
the Indenture Trustee and The First National Bank of Chicago, as custodian (the
"Custodian") (the Sale and Servicing Agreement, the Depository Agreement, the
Custodial Agreement and the Indenture being hereinafter referred to collectively
as the "Related Agreements");
WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the Notes
and the collateral therefor pledged pursuant to the Indenture (the "Collateral")
and (b) the beneficial ownership interests in the Issuer (the holders of such
interests being referred to herein as the "Owners");
WHEREAS the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to in
the preceding clause, and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer and the
Owner Trustee may from time to time request;
<PAGE>
WHEREAS the Administrator has the capacity to provide the services required
hereby and is willing to perform such services for the Issuer and the Owner
Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. DUTIES OF ADMINISTRATOR. (a) DUTIES WITH RESPECT TO THE RELATED
AGREEMENTS. (i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee under the
Depository Agreement. In addition, the Administrator shall consult with the
Owner Trustee regarding the duties of the Issuer and the Owner Trustee under the
Related Agreements. The Administrator shall monitor the performance of the
Issuer and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's or the Owner Trustee's duties under the Related Agreements.
The Administrator shall prepare for execution by the Issuer or the Owner Trustee
or shall cause the preparation by other appropriate persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to any Related Agreement. In furtherance of the foregoing, the
Administrator shall take all appropriate action that it is the duty of the
Issuer or the Owner Trustee to take pursuant to the Indenture including, without
limitation, such of the foregoing as are required with respect to the following
matters under the Indenture (references are to sections of the Indenture):
(A) the duty to cause the Note Register to be kept and to give the
Indenture Trustee notice of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section 2.04);
(B) the notification of Noteholders of the final principal payment on
their Notes (Section 2.07(b));
(C) the fixing or causing to be fixed of any specified record date
and the notification of the Indenture Trustee and Noteholders with respect
to special payment dates, if any (Section 2.07(c));
(D) the preparation of or obtaining of the documents and instruments
required for authentication of the Notes, if any, and delivery of the same
to the Indenture Trustee (Section 2.02);
(E) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of collateral
(Section 2.09);
(F) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.03);
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<PAGE>
(G) the direction to Paying Agents to pay to the Indenture Trustee
all sums held in trust by such Paying Agents (Section 3.03);
(H) the obtaining and preservation of the Issuer's qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Collateral and each other instrument and agreement included in
the Trust Estate;
(I) the preparation of all supplements, amendments, financing
statements, continuation statements, if any, instruments of further
assurance and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);
(J) the obtaining of the Opinion of Counsel on the Closing Date and
the annual delivery of Opinions of Counsel, in accordance with Section 3.06
of the Indenture, as to the Trust Estate, and the annual delivery of the
Officers' Certificate and certain other statements, in accordance with
Section 3.09 of the Indenture, as to compliance with the Indenture
(Sections 3.06 and 3.09);
(K) the identification to the Indenture Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to perform its
duties under the Indenture (Section 3.07(b));
(L) the notification of the Indenture Trustee and the Rating Agencies
of a Servicer Default pursuant to the Sale and Servicing Agreement and, if
such Servicer Default arises from the failure of the Servicer to perform
any of its duties under the Sale and Servicing Agreement, the taking of all
reasonable steps available to remedy such failure (Section 3.07(d));
(M) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligation under the
Indenture (Section 3.11(b));
(N) the delivery of notice to the Indenture Trustee of each Event of
Default and each default by the Servicer or Seller under the Sale and
Servicing Agreement (Section 3.19);
(O) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an Officers'
Certificate and the obtaining of the Opinion of Counsel and the Independent
Certificate relating thereto (Section 4.01);
(P) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Trust Estate in a commercially
reasonable manner if an Event of Default shall have occurred and be
continuing (Section 5.04);
3
<PAGE>
(Q) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.08);
(R) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal
of any co-trustee or separate trustee (Sections 6.08 and 6.10);
(S) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is
not the Note Registrar (Section 7.01);
(T) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable state agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable state agencies and the transmission
of such summaries, as necessary, to the Noteholders (Section 7.03);
(U) the opening of one or more accounts in the Trust's name, the
preparation of Issuer Orders, Officers' Certificates and Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);
(V) the preparation of an Issuer Request and Officers' Certificate
and the obtaining of an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Trust Estate as defined in the Indenture
(Sections 8.04 and 8.05);
(W) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the
mailing to the Noteholders of notices with respect to such supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(X) the execution of new Notes conforming to any supplemental
indenture (Section 9.06);
(Y) the notification of Noteholders of redemption of the Notes
(Section 10.02);
(Z) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.01(a));
(AA) the preparation and delivery of Officers' Certificates and the
obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b));
4
<PAGE>
(BB) the notification of the Rating Agencies, upon the failure of the
Indenture Trustee to give such notification, of the information required
pursuant to Section 11.04 of the Indenture (Section 11.04);
(CC) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.06);
(DD) the recording of the Indenture, if applicable (Section 11.15);
and
(EE) causing the Servicer to comply with Sections 4.09, 4.10, 4.11
and 5.06 of the Sale and Servicing Agreement.
(ii) The Administrator will:
(A) pay the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee under the
Indenture (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of the Indenture (including the
reasonable compensation, expenses and disbursements of its agents and
either in-house counsel or outside counsel, but not both), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith;
(C) indemnify the Indenture Trustee and its agents for, and to hold
them harmless against, any losses, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the transactions contemplated by the
Indenture, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Indenture; and
(D) indemnify the Owner Trustee and its agents for, and to hold them
harmless against, any losses, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the transactions contemplated by the
Trust Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Trust Agreement.
(b) ADDITIONAL DUTIES. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such calculations
and shall prepare for execution by the Issuer or the Owner Trustee or shall
cause the preparation by other appropriate persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Related Agreements, and
5
<PAGE>
at the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the Related
Agreements, including the execution of any tax returns on behalf of the Trust
(to the extent permitted by procedures or regulations of the Internal Revenue
Service). Subject to SECTION 5 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Related Agreements) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Administrator shall be responsible for promptly notifying
the Owner Trustee in the event that any withholding tax is imposed on the
Trust's payments (or allocations of income) to the "Owner" as contemplated in
Section 5.02(c) of the Trust Agreement. Any such notice shall specify the amount
of any withholding tax required to be withheld by the Owner Trustee pursuant to
such provision.
(iii) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Administrator shall be responsible for performance of the
duties of the Owner Trustee set forth in Section 5.05 of the Trust Agreement
with respect to, among other things, accounting and reports to the
Certificateholder.
(iv) The Administrator may satisfy its obligations with respect to
clauses (ii) and (iii) above by retaining, at the expense of the Administrator,
a firm of independent public accountants (the "Accountants") acceptable to the
Owner Trustee which shall perform the obligations of the Administrator
thereunder. In connection with paragraph (ii) above, the Accountants will
provide prior to December 26, 1997 a letter in form and substance satisfactory
to the Owner Trustee as to whether any tax withholding is then required and, if
required, the procedures to be followed with respect thereto to comply with the
requirements of the Code. The Accountants shall be required to update the
letter in each instance that any additional tax withholding is subsequently
required or any previously required tax withholding shall no longer be required.
(v) The Administrator shall perform the duties of the Administrator
specified in Section 10.02 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Administrator under the Trust
Agreement.
(vi) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; PROVIDED, HOWEVER, that the terms of
any such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.
(vii) It is the intention of the parties hereto that the Administrator
shall, and the Administrator hereby agrees to, execute on behalf of the Issuer
or the Owner Trustee all such
6
<PAGE>
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. In furtherance thereof, the Owner Trustee
shall, on behalf of itself and of the Issuer, execute and deliver to the
Administrator, and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney substantially in the form of
Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Owner
Trustee and the Issuer for the purpose of executing on behalf of the Owner
Trustee and the Issuer all such documents, reports, filings, instruments,
certificates and opinions.
(c) NON-MINISTERIAL MATTERS. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have withheld consent or
provided an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Receivables);
(C) the amendment, change or modification of the Related Agreements;
(D) the appointment of successor Note Registrars, successor Paying
Agents and successor Trustees pursuant to the Indenture or the appointment
of successor Administrators or successor Servicers, or the consent to the
assignment by the Note Registrar, Paying Agent or Trustee of its
obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments to
the Noteholders or the Certificateholder under the Related Agreements, (y) sell
the Trust Estate pursuant to Section 5.04 of the Indenture or (z) take any other
action that the Issuer directs the Administrator not to take on its behalf.
2. RECORDS. The Administrator shall maintain appropriate books of account
and records relating to services performed hereunder, which books of account and
records shall be accessible for inspection by the Issuer, the Owner Trustee, the
Indenture Trustee and the Seller at any time during normal business hours.
3. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement, the Administrator shall be
entitled to $500 per month which shall be payable in accordance with Section
5.04 of the Sale and Servicing Agreement. The
7
<PAGE>
Seller shall reimburse the Administrator for any of its liabilities and expenses
related to its performance hereunder or under any Related Document (including
without limitation those expenses set forth in Section 1(a)(ii) of this
Agreement).
4. ADDITIONAL INFORMATION TO BE FURNISHED TO ISSUER. The Administrator
shall furnish to the Issuer from time to time such additional information
regarding the Collateral as the Issuer shall reasonably request.
5. INDEPENDENCE OF ADMINISTRATOR. For all purposes of this Agreement, the
Administrator shall be an independent contractor and shall not be subject to the
supervision of the Issuer or the Owner Trustee with respect to the manner in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by the Issuer, the Administrator shall have no authority to
act for or represent the Issuer or the Owner Trustee in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.
6. NO JOINT VENTURE. Nothing contained in this Agreement shall (i)
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) be construed to impose
any liability as such on any of them or (iii) be deemed to confer on any of them
any express, implied or apparent authority to incur any obligation or liability
on behalf of the others.
7. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent the
Administrator or its affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR. (a) This
Agreement shall continue in force until the dissolution of the Issuer, upon
which event this Agreement shall automatically terminate.
(b) Subject to SECTION 8(e) AND (f), the Administrator may resign its
duties hereunder by providing the Issuer with at least 60 days prior written
notice.
(c) Subject to SECTION 8(e) AND (f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least 60 days
prior written notice.
(d) Subject to SECTION 8(e) AND (f), at the sole option of the Issuer, the
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of
its duties under this Agreement and, after notice of such default, shall
not cure such default within ten days (or, if such default cannot be cured
in such time, shall not give within ten days such assurance of cure as
shall be reasonably satisfactory to the Issuer);
8
<PAGE>
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within 60 days, in respect of the Administrator in any involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Administrator
or any substantial part of its property or order the winding-up or
liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official
for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in clause (ii)
or (iii) of this Section shall occur, it shall give written notice thereof to
the Issuer and the Indenture Trustee within seven days after the happening of
such event.
(e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.
9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon the
effective date of termination of this Agreement pursuant to SECTION 8(a) or the
resignation or removal of the Administrator pursuant to SECTION 8(b) or (c),
respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to SECTION 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to SECTION
8(b) or (c), respectively, the Administrator shall cooperate with the Issuer and
take all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator.
9
<PAGE>
10. NOTICES. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to
Caterpillar Financial Asset Trust 1997-B
Chase Manhattan Bank Delaware
1201 Market Street
Ninth Floor
Wilmington, Delaware 19801
Attention: Corporate Trustee Administration Department
(b) if to the Administrator, to
Caterpillar Financial Services Corporation
3322 West End Avenue
Nashville, TN 37203-1071
(c) if to the Indenture Trustee, to
The First National Bank of Chicago
One North State Street
Chicago, Illinois 60602
(d) if to the Seller, to
Caterpillar Financial Funding Corporation
2950 East Flamingo Road
Suite C-3B
Las Vegas, Nevada 89121
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above, except that notices to the
Indenture Trustee are effective only upon receipt.
11. AMENDMENTS. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the written consent of the Owner Trustee,
without the consent of the Noteholders and the Certificateholder, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholder or for the purpose of enabling the
Trust to continue to qualify as a FASIT and the Notes to continue to qualify as
"regular interests" in the FASIT constituted by the Trust (including, without
limitation, compliance with regulations that have not yet been issued);
PROVIDED, HOWEVER, that such amendment will not, in the Opinion of Counsel,
10
<PAGE>
materially and adversely affect the interest of any Noteholder or the
Certificateholder or the tax characterization of the Notes or the Certificate.
This Agreement may also be amended by the Issuer, the Administrator and the
Indenture Trustee with the written consent of the Owner Trustee and the holders
of Notes evidencing a majority in the Outstanding Amount of the Notes and the
holder of the Certificate for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of Noteholders or the Certificateholder;
PROVIDED, HOWEVER, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that are required to be made for the
benefit of the Noteholders or the Certificateholder or (ii) reduce the aforesaid
percentage of the holders of Notes and the holder of the Certificate which are
required to consent to any such amendment, without the consent of the holders of
all the outstanding Notes and the Certificate. Notwithstanding the foregoing,
the Administrator may not amend this Agreement without the permission of the
Seller, which permission shall not be unreasonably withheld.
12. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by the
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Owner Trustee and subject to the satisfaction of the Rating
Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement in which such corporation or other organization agrees to be bound
hereunder by the terms of said assignment in the same manner as the
Administrator is bound hereunder. Subject to the foregoing, this Agreement
shall bind any successors or assigns of the parties hereto.
13. 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 AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
14. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which when so executed shall together constitute but one and the same agreement.
16. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability
11
<PAGE>
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
17. NOT APPLICABLE TO CATERPILLAR FINANCIAL SERVICES CORPORATION IN OTHER
CAPACITIES. Nothing in this Agreement shall affect any obligation Caterpillar
Financial Services Corporation may have in any other capacity.
18. LIMITATION OF LIABILITY OF OWNER TRUSTEE AND TRUSTEE. (a)
Notwithstanding anything contained herein to the contrary, this instrument
has been signed by Chase Manhattan Bank Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Chase Manhattan Bank Delaware in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
hereunder, 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 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 signed by The First National Bank of Chicago not in its
individual capacity but solely as Indenture Trustee and in no event shall The
First National Bank of Chicago 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.
19. THIRD-PARTY BENEFICIARY. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
20. SUCCESSOR SERVICER AND ADMINISTRATOR. The Administrator shall
undertake, as promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 8.02 of the
Sale and Servicing Agreement, to enforce the provisions of Section 8.02 with
respect to the appointment of a successor Servicer. Such successor Servicer
shall, upon compliance with the last sentence of the first paragraph of Section
8.02 of the Sale and Servicing Agreement, become the successor Administrator
hereunder; PROVIDED, HOWEVER, that if the Indenture Trustee shall become such
successor Administrator, the Indenture Trustee shall not be required to perform
any obligations or duties or conduct any activities as successor Administrator
that would be prohibited by law and not within the banking and trust powers of
the Indenture Trustee. In such event, the Indenture Trustee shall appoint a
sub-administrator to perform such obligations and duties.
21. NONPETITION COVENANTS. (a) Notwithstanding any prior termination
of this Agreement, the Seller, the Administrator, 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
12
<PAGE>
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 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
Issuer, the Administrator, 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.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
CATERPILLAR FINANCIAL ASSET
TRUST 1997-B
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee,
By: /S/ JOHN J. CAHSIN
----------------------------------
Name: John J. Cashin
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Indenture Trustee,
By: /S/ BARBARA G. GROSSE
----------------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
CATERPILLAR FINANCIAL SERVICES
CORPORATION, as Administrator,
By: /S/ KEVIN E. COLGAN
----------------------------------
Name: Kevin E. Colgan
Title: Vice President
CATERPILLAR FINANCIAL FUNDING
CORPORATION, as Seller
By: /S/ EDWARD J. SCOTT
----------------------------------
Name: Edward J. Scott
Title: Treasurer
<PAGE>
EXHIBIT A
[Form of Power of Attorney]
POWER OF ATTORNEY
STATE OF _______ )
)
COUNTY OF ______ )
KNOW ALL MEN BY THESE PRESENTS, that ______________________, a
____________________________, not in its individual capacity but solely as owner
trustee ("Owner Trustee") for the Caterpillar Financial Asset Trust 1997-B
("Trust"), does hereby make, constitute and appoint
____________________________, as Administrator under the Administration
Agreement (as defined below), and its agents and attorneys, as Attorneys-in-Fact
to execute on behalf of the Owner Trustee or the Trust all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Owner Trustee or the Trust to prepare, file or deliver pursuant to the
Related Documents (as defined in the Administration Agreement), including,
without limitation, to appear for and represent the Owner Trustee and the Trust
in connection with the preparation, filing and audit of federal, state and local
tax returns pertaining to the Trust, and with full power to perform any and all
acts associated with such returns and audits that the Owner Trustee could
perform, including without limitation, the right to distribute and receive
confidential information, defend and assert positions in response to audits,
initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements. For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Administration Agreement
dated as of November 1, 1997, among the Trust, Caterpillar Financial Services
Corporation, as Administrator and Servicer, and The First National Bank of
Chicago, as Indenture Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by the
Owner Trustee are hereby revoked.
EXECUTED this [___] day of November 1997.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as Owner
Trustee
By:
---------------------------------------------
Name:
Title:
15
<PAGE>
Exhibit 10.3
Custodial Agreement
dated as of November 1, 1997
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CUSTODIAL AGREEMENT
among
CATERPILLAR FINANCIAL SERVICES CORPORATION
Originator and Servicer
CATERPILLAR FINANCIAL FUNDING CORPORATION
Seller
CATERPILLAR FINANCIAL ASSET TRUST 1997-B
Issuer
and
THE FIRST NATIONAL BANK OF CHICAGO
Indenture Trustee and Custodian
DATED AS OF NOVEMBER 1, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2. Interpretation of the Agreement. . . . . . . . . . . . . 2
ARTICLE II
CUSTODIAL ARRANGEMENT
Section 2.1. Appointment as Custodian . . . . . . . . . . . . . . . . 2
Section 2.2. Maintenance of Office. . . . . . . . . . . . . . . . . . 3
ARTICLE III
CUSTODIAL ARRANGEMENT
Section 3.1. Transfer of Receivables; Delivery of Documents . . . . . 3
Section 3.2. Certification. . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3. Release of Receivables Files . . . . . . . . . . . . . . 4
Section 3.4. Purchase; Payment In Full. . . . . . . . . . . . . . . . 5
Section 3.5. Other Duties of Custodian. . . . . . . . . . . . . . . . 5
Section 3.6. Access to Records. . . . . . . . . . . . . . . . . . . . 6
Section 3.7. Instructions; Authority to Act . . . . . . . . . . . . . 6
ARTICLE IV
OWNERSHIP AND TRANSFER OF RECEIVABLES
Section 4.1. Transfer of Receivables. . . . . . . . . . . . . . . . . 6
Section 4.2. Substitution and Purchase of Receivables . . . . . . . . 7
Section 4.3. No Service Charge for Transfer of Receivables. . . . . . 7
Section 4.4. Defeasance . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V
CUSTODIAN
Section 5.1. Representations, Warranties and Covenants of Custodian . 7
Section 5.2. Charges and Expenses . . . . . . . . . . . . . . . . . . 9
Section 5.3. No Adverse Interests . . . . . . . . . . . . . . . . . . 9
Section 5.4. Inspections. . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.5. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.6. Limitation of Liability. . . . . . . . . . . . . . . . . 10
<PAGE>
Section 5.7. Indemnification. . . . . . . . . . . . . . . . . . . . . 10
Section 5.8. Further Rights of Custodian. . . . . . . . . . . . . . . 10
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Amendment. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.2. Governing Law. . . . . . . . . . . . . . . . . . . . . . 11
Section 6.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.4. Severability of Provisions . . . . . . . . . . . . . . . 11
Section 6.5. No Partnership . . . . . . . . . . . . . . . . . . . . . 12
Section 6.6. Termination of Agreement . . . . . . . . . . . . . . . . 12
Section 6.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.9. Headings . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.10. Advice of Counsel. . . . . . . . . . . . . . . . . . . . 12
Section 6.11. No Petition. . . . . . . . . . . . . . . . . . . . . . . 12
Section 6.12. Resignation of Custodian . . . . . . . . . . . . . . . . 12
Section 6.13. Limitation of Liability of Indenture Trustee and Owner
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT A Custodian Certification. . . . . . . . . . . . . . . . . A-1
EXHIBIT B Request for Release of Documents . . . . . . . . . . . . B-1
EXHIBIT C Transfer Certificate . . . . . . . . . . . . . . . . . . C-1
<PAGE>
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT is made as of November 1, 1997, by and among
CATERPILLAR FINANCIAL SERVICES CORPORATION (the "Originator"), CATERPILLAR
FINANCIAL SERVICES CORPORATION, as Servicer (the "Servicer"), CATERPILLAR
FINANCIAL FUNDING CORPORATION (the "Seller"), CATERPILLAR FINANCIAL ASSET TRUST
1997-B (the "Trust"), THE FIRST NATIONAL BANK OF CHICAGO, as Indenture Trustee
under the Indenture (the "Indenture Trustee") and THE FIRST NATIONAL BANK OF
CHICAGO, as Custodian ("Custodian").
RECITALS
WHEREAS, before the Closing Date the Originator is the owner of the
Receivables.
WHEREAS, pursuant to the Purchase Agreement, the Originator will sell
the Receivables to the Seller.
WHEREAS, pursuant to the Sale and Servicing Agreement, the Seller will
sell the Receivables acquired pursuant to the Purchase Agreement to the Trust.
WHEREAS, pursuant to the Indenture, the Trust will Grant to the
Indenture Trustee, as trustee for the benefit of the Noteholders (and to the
extent set forth in the Sale and Servicing Agreement, the Certificateholder),
all of the Trust's right, title and interest in, to and under the Receivables
and the other assets of the Trust.
WHEREAS, during such time as the Seller, the Trust or the Indenture
Trustee owns or has an interest in the Receivables, such Person or Persons shall
be referred to herein as the "Receivables Holder", and the Custodian shall hold
all Receivables as bailee of the Seller, the Trust and the Indenture Trustee
(for the benefit of the Noteholders and, to the extent set forth in the Sale and
Servicing Agreement, the Certificateholder) during such time as such Person is a
Receivables Holder.
WHEREAS, in connection with the foregoing, the parties hereto desire
to provide for the custody and management of the Receivables transferred
pursuant to the Purchase Agreement, the Sale and Servicing Agreement and the
Indenture (each, a "Transfer").
WHEREAS, Custodian is a financial institution regulated by the
Comptroller of the Currency of the United States.
WHEREAS, the Originator, the Seller, the Trust and the Indenture
Trustee, during such time as each such Person is a Receivables Holder, desire to
have the Custodian (i) hold the Receivables as custodian for each such party,
(ii) take possession of the Contracts and the Receivables Files related to the
Receivables, along with certain other documents
<PAGE>
specified in this Agreement, as the custodian for, and bailee of, such
Receivables Holder in accordance with the terms and conditions of this
Agreement, and (iii) retain possession of the Contracts and Receivables Files
and such other documents as custodian for and bailee of the Indenture Trustee.
Custodian is willing and able to perform the duties and obligations of a
custodian and bailee as set forth herein.
WHEREAS, Servicer will act as servicer of the Receivables pursuant to
the Sale and Servicing Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Originator, the Servicer, the Seller, the
Trust, the Indenture Trustee and Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. Certain capitalized terms used in this
Agreement and not otherwise defined herein shall have the respective meanings
assigned them in Article I of the Sale and Servicing Agreement dated as of
November 1, 1997 (the "Sale and Servicing Agreement") among the Trust, the
Seller and the Servicer or in Article I of the Indenture dated as of November 1,
1997 (the "Indenture") between the Trust and the Indenture Trustee. All
references in this Agreement to Articles, Sections, Subsections and Exhibits are
to the same contained in or attached to this Agreement unless otherwise
specified. All terms defined in this Agreement shall have the defined meanings
when used in any certificate, notice or other document made or delivered
pursuant hereto unless otherwise defined therein.
Section 1.2. INTERPRETATION OF THE AGREEMENT. In interpreting any
mistake or ambiguity contained herein, the parties hereto agree to resolve any
such mistakes or ambiguities in favor of the Indenture Trustee (for the benefit
of the Noteholders, and to the extent set forth in the Sale and Servicing
Agreement, for the benefit of the Certificateholder).
ARTICLE II
CUSTODIAL ARRANGEMENT
Section 2.1. APPOINTMENT AS CUSTODIAN. Subject to the terms and
conditions hereof, the Seller, the Trust and the Indenture Trustee (for the
benefit of the Noteholders and, to the extent set forth in the Sale and
Servicing Agreement, the Certificateholder), as their interests may appear,
hereby appoint The First National Bank of Chicago, and The First National Bank
of Chicago hereby accepts such appointment, as Custodian to maintain custody of
the Receivables, the Contracts and the Receivables Files during such time as
each such Person is a Receivables Holder.
2
<PAGE>
Section 2.2. MAINTENANCE OF OFFICE. The Custodian agrees to maintain
each Receivables File identified in Section 3.03 of the Sale and Servicing
Agreement and Section 2.04 of the Purchase Agreement at its office located at
2950 East Flamingo Road, Suite C-3C, Las Vegas, Nevada 89121, or at such of its
other offices in Nevada as Custodian shall designate from time to time after
giving the Originator, the Seller, the Trust, each of the Rating Agencies and
the Indenture Trustee prior written notice, which office shall be maintained
separate from the offices of the Originator, the Seller and the Servicer and
shall be at all times under the exclusive dominion of the Custodian. None of
the Custodian's employees shall be employees of the Originator, the Seller, the
Servicer or any of the Servicer's Affiliates.
ARTICLE III
CUSTODIAL ARRANGEMENT
Section 3.1. TRANSFER OF RECEIVABLES; DELIVERY OF DOCUMENTS. On or
before the Closing Date, the Originator shall deliver, or cause to be delivered,
to Custodian, the Receivables Files referred to in Section 2.04 of the Purchase
Agreement and Section 3.03 of the Sale and Servicing Agreement, including
without limitation, the Original Contract evidencing each Receivable. Until the
Closing Date and the occurrence of the initial Transfer described below, the
Custodian shall hold the Receivables (including the Receivables Files) as
custodian and bailee for the Originator.
On the Closing Date, the Originator shall deliver to the Custodian a
Transfer Certificate in the form attached hereto as EXHIBIT C evidencing the
Transfer by the Originator to the Seller of the Receivables pursuant to the
Purchase Agreement. Upon receipt of the Transfer Certificate duly executed by
the Originator, the Custodian shall acknowledge the Transfer Certificate as
provided thereon and shall issue to the Seller a Custodian Certification (as
defined below) (the "Seller's Custodian Certification"), as described in SECTION
3.2 below.
On the Closing Date, upon receipt of the Seller's Custodian
Certification, the Seller shall deliver to the Custodian a Transfer Certificate
in the form attached hereto as EXHIBIT C (a "Transfer Certificate") evidencing
the Transfer by the Seller to the Trust of the Receivables pursuant to the Sale
and Servicing Agreement, together with the Seller's Custodian Certification.
Upon receipt of the Transfer Certificate duly executed by the Seller and the
Seller's Custodian Certification, the Custodian shall acknowledge the Transfer
Certificate as provided thereon and shall issue to the Trust a Custodian
Certification (the "Trust's Custodian Certification"), as described in SECTION
3.2 below, and shall cancel the Seller's Custodian Certification.
On the Closing Date, upon receipt of the Trust's Custodian
Certification, the Trust shall deliver to the Custodian a Transfer Certificate
in the form attached hereto as EXHIBIT C evidencing the Transfer by the Trust to
the Indenture Trustee of the Receivables pursuant to the Indenture, together
with the Trust's Custodian Certification. Upon receipt of the Transfer
Certificate duly executed by the Trust and the Trust's Custodian Certification,
3
<PAGE>
the Custodian shall acknowledge the Transfer Certificate as provided thereon and
shall issue to the Indenture Trustee a Custodian Certification (the "Trustee's
Custodian Certification"), as described in SECTION 3.2 below, and shall cancel
the Trust's Custodian Certification.
Custodian hereby acknowledges receipt of the Purchase Agreement, the
Sale and Servicing Agreement and the Indenture. Custodian further acknowledges
that, on the Closing Date and pursuant to this Agreement, the Purchase
Agreement, the Sale and Servicing Agreement and the Indenture, Custodian will be
given possession of the Receivables Files relating to the Receivables
constituting a portion of the Collateral, each of which Receivables will be
described specifically on Schedule A to each of the Purchase Agreement, the Sale
and Servicing Agreement and the Indenture, a copy of which will be delivered to
Custodian simultaneously with the delivery of the Receivables Files relating
thereto. On and after the Closing Date and the completion of the Transfers
described above, and so long as this Agreement shall remain in effect, Custodian
shall hold the Receivables Files now and hereafter, from time to time, in its
sole custody and control as custodian for and bailee of the Indenture Trustee,
as trustee for the benefit of the Noteholders and the Certificateholder (as
their interests may appear), unless and until released from the lien of the
Indenture and otherwise in accordance with the Sale and Servicing Agreement, in
which event, Custodian shall hold the Receivables and the Receivables Files as
trustee and bailee for the benefit of the applicable Receivables Holder.
Section 3.2. CERTIFICATION. Upon delivery to Custodian of the
Receivables Files, as specified in SECTION 3.1, Custodian shall review the same
on account of the Indenture Trustee in accordance with the terms of Section 3.05
of the Sale and Servicing Agreement and (subject to SECTION 4.1 hereof) shall
confirm to the Indenture Trustee that all the documents in the Receivables Files
required to be delivered under SECTION 3.1 (being the documents described in
Section 3.03 of the Sale and Servicing Agreement) have been delivered.
Custodian shall hold such documents on behalf of the Indenture Trustee pursuant
to this Agreement. Upon consummation of a Transfer in accordance with ARTICLE
IV hereof, Custodian shall, with respect to the Receivables transferred to the
applicable Receivables Holder in connection with the applicable Transfer, as
described in SECTION 3.1 hereof, number, execute and deliver to the applicable
Receivables Holder (with a copy to the Servicer) one or more certifications
(each, a "CUSTODIAN CERTIFICATION") in the form attached hereto as EXHIBIT A.
Upon issuance of a Custodian Certification with respect to any Transfer, the
Custodian Certification relating to such Receivable previously delivered shall
be deemed and marked cancelled with respect to such Receivable.
Section 3.3. RELEASE OF RECEIVABLES FILES. From time to time and as
provided in the Sale and Servicing Agreement, Custodian is hereby authorized,
upon written request of Servicer (with the approval of the Indenture Trustee,
which approval shall not be unreasonably withheld) in the form annexed hereto as
EXHIBIT B, to release to the Servicer the Receivables File related to any
Receivable or the specific documents identified in such request to the Servicer.
All documents so released to the Servicer shall be held by it in trust for the
benefit of the Indenture Trustee (for the benefit of the Noteholders and, to the
extent set forth in the Indenture and the Sale and Servicing Agreement, the
Certificateholder). Servicer shall return the Receivables File, or such other
documents which have been released
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to Servicer, to Custodian when Servicer's need therefor in connection with a
foreclosure, modification, termination or repossession no longer exists, unless
the Receivable shall be satisfied in full or liquidated, in which case, upon
receipt of a certification to such effect from Servicer to Custodian in the form
annexed hereto as EXHIBIT B, the related Receivables File shall be released by
Custodian to Servicer, and Custodian shall thereupon reflect any such
liquidation on the related Receivable. Pursuant to Section 4.07 of the Sale and
Servicing Agreement, (i) the Servicer shall return a Receivables File released
to it within five (5) Business Days of such release and (ii) if such Receivables
File has not been returned to the Custodian within such five (5) Business Day
period, the Servicer shall repurchase the related Receivable.
Notwithstanding anything herein or in any other Basic Document to the
contrary, (i) the Servicer shall return any Receivables File released to it in
connection with a modification or extension of a Receivable to the Custodian on
the same day such file is released and (ii) the Custodian shall not release a
Receivables File to the Servicer in connection with a modification or extension
of a Receivable if, after giving effect to the release of such Receivables File,
the aggregate Principal Balance of all Receivables having released Receivables
Files in connection with modifications and extensions exceeds $500,000.
Section 3.4. PURCHASE; PAYMENT IN FULL. Upon the purchase of any
Receivable pursuant to Section 3.02, 3.05 or 4.07 of the Sale and Servicing
Agreement or Section 6.02 of the Purchase Agreement, or upon the payment in full
of any Receivable, which shall be evidenced by Custodian's receipt of the
request for release in the form annexed hereto as EXHIBIT B, Custodian shall
promptly release the related Receivables File to Servicer and the security
interest in such Receivable and related Receivables File granted by the Trust to
the Indenture Trustee pursuant to the Indenture shall terminate without any
further action by the Custodian, the Originator, the Seller or the Indenture
Trustee.
Section 3.5. OTHER DUTIES OF CUSTODIAN. The Custodian shall have and
perform the other following powers and duties:
(a) SAFEKEEPING. To segregate the Receivables and Receivables Files
from all other receivables and installment sale contracts and similar
records in its possession, to identify the Receivables Files as being held
and to hold the Receivables Files for and on behalf of the Receivables
Holders (which, on and after the Closing Date and after completion of the
Transfers described in SECTION 3.1, shall be the Indenture Trustee for the
benefit of the Noteholders and the Certificateholder, as their interests
may appear), to maintain accurate records pertaining to each Contract and
Receivable in the Receivables Files, to provide monthly a list of all
Receivable Files held by it, together with a current exception report, and
to provide such information as is necessary to enable the Servicer to
deliver the reports and notifications required by Section 4.09 of the Sale
and Servicing Agreement. Custodian will promptly report to the Indenture
Trustee any failure on its part to hold the Receivables Files as herein
provided and promptly take appropriate action to remedy any such failure.
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(b) ADMINISTRATION; REPORTS. In general, to attend to all
non-discretionary details in connection with maintaining custody of the
Receivables Files on behalf of the Receivables Holders as may be expressly
provided herein or as may be required or customary for a custodian or
bailee. In addition, Custodian shall assist the Indenture Trustee and the
Servicer (at Servicer's cost) generally in the preparation of reports to
holders or to regulatory bodies to the extent necessitated by Custodian's
custody of the Receivables Files.
Section 3.6. ACCESS TO RECORDS. Custodian shall permit the Indenture
Trustee and its duly authorized agents, attorneys or auditors and those Persons
permitted access pursuant to Section 4.12 of the Sale and Servicing Agreement to
inspect the Receivables Files and the books and records maintained by the
Custodian pursuant hereto at such reasonable times as they may reasonably
request, subject only to compliance with the terms of the Sale and Servicing
Agreement.
Section 3.7. INSTRUCTIONS; AUTHORITY TO ACT. The Custodian shall be
deemed to have received proper instructions with respect to the Receivables
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee and may conclusively rely on such instructions. In
addition, the Custodian may conclusively rely upon any release request delivered
to it in the form attached as EXHIBIT B hereto duly executed by an authorized
officer of the Servicer as set forth on Annex 1 to Exhibit B and, if required by
the terms thereof, by the Indenture Trustee.
ARTICLE IV
OWNERSHIP AND TRANSFER OF RECEIVABLES
Section 4.1. TRANSFER OF RECEIVABLES. The transfer of Receivables in
connection with any Transfer shall occur in the following manner:
(i) Custodian shall, promptly upon receiving a Transfer
Certificate relating to the transfer of Receivables pursuant to a Transfer:
(a) determine whether each document in the Receivables File
listed in Section 2.04 of the Purchase Agreement and Section 3.03 of
the Sale and Servicing Agreement with respect to each Receivable
listed on the Receivable Schedule has been delivered to Custodian, and
whether Custodian is able to deliver a Custodian Certification;
(b) promptly advise the applicable Receivables Holder, the
Indenture Trustee, the Originator, the Seller and each of the Rating
Agencies by telephone or by facsimile transmission if it determines
that any document referred to in (a) above has not been so delivered
and take no further action under this SECTION 4.1 until it determines
that such documents have been so delivered;
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(c) upon determining that such documents have been so
delivered, Custodian shall issue and deliver to applicable Receivables
Holder the Custodian Certification in accordance with SECTIONS 3.1 and
3.2 of this Agreement; and
(ii) Custodian shall hold the Receivables Files for each
Receivables Holder subject to satisfaction of the conditions precedent with
respect to the applicable Transfer.
Section 4.2. SUBSTITUTION AND PURCHASE OF RECEIVABLES. The purchase
of Receivables pursuant to Section 6.02 of the Purchase Agreement and Section
3.02, Section 3.05(b) or Section 4.07 of the Sale and Servicing Agreement shall
occur in the following manner:
(i) On or before the date of such purchase, the Servicer shall
send the Indenture Trustee notice, with a copy to Custodian, indicating the
Receivables to be purchased and the aggregate purchase prices to be paid on
such date.
(ii) Upon receiving written confirmation in the form annexed
hereto as EXHIBIT B, from the Seller and the Trust that they have received
the applicable Purchase Amount, Custodian shall return to the applicable
party (as identified to the Custodian by the Indenture Trustee) Receivables
Files related to the Receivables purchased on such date.
Section 4.3. NO SERVICE CHARGE FOR TRANSFER OF RECEIVABLES. No
service charge shall be made for any transfer of Receivables, but Custodian may
require payment from the Servicer of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer of
Receivables.
Section 4.4. DEFEASANCE. When a Receivable is purchased by the
Servicer, the Seller or the Originator pursuant to the terms of the Purchase
Agreement and the Sale and Servicing Agreement, the applicable Receivables
Holder's interest in such Receivable and all Collateral with respect to such
Receivable shall terminate, such Receivable and related Collateral shall be
conveyed to the Servicer, the Seller or the Originator, as applicable, and the
Receivables Holder's rights, title and interest therein shall cease, and the
Indenture Trustee shall execute such instruments acknowledging termination and
discharge of such pledge and security interest as are required by applicable
law.
ARTICLE V
CUSTODIAN
Section 5.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CUSTODIAN.
Custodian hereby represents and warrants to, and covenants with, the Originator,
the Seller, the Servicer, the Trust and the Indenture Trustee, that as of the
date of each Custodian Certification:
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(i) Custodian is duly organized, validly existing and in good
standing under the laws of the United States;
(ii) Custodian has the full power and authority to hold each
Receivable, to hold title to the Receivables as custodian on behalf of the
Receivables Holders, and to execute, deliver and perform, and to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, has
duly executed and delivered this Agreement, and this Agreement constitutes
a legal, valid and binding obligation of Custodian, enforceable against it
in accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and by the availability of equitable
remedies;
(iii) Neither the execution and delivery of this Agreement, the
delivery of Receivables to Custodian, the issuance of the Custodian
Certifications, the consummation of the transactions contemplated hereby or
thereby, nor the fulfillment of or compliance with the terms and conditions
of this Agreement will conflict with or result in a breach of any of the
terms, conditions or provisions of Custodian's charter or bylaws or any
agreement or instrument to which Custodian is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of
the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which Custodian or its property is subject;
except that no representation or warranty is made as to compliance with
laws and regulations, other than those of the United States and the State
of Illinois, relating to qualifications, licensure or regulation of
custodians of receivables originated in states other than Illinois;
(iv) Custodian does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(v) To Custodian's knowledge after due inquiry, there is no
litigation pending or threatened, which if determined adversely to
Custodian, would adversely affect the execution, delivery or enforceability
of this Agreement, or any of the duties or obligations of Custodian
thereunder, or which would have a material adverse effect on the financial
condition of Custodian;
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by Custodian of or compliance by Custodian with this Agreement
or the consummation of the transactions contemplated hereby or thereby;
except that no representation or warranty is made as to consents,
approvals, authorizations or orders of any courts or governmental agencies
or bodies, other than those of the United States and the State of Illinois,
relating to qualifications, licensure or regulation of custodians of
receivables originated in states other than Illinois;
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(vii) Upon written request of the Indenture Trustee, Custodian
shall take such steps as requested by the Indenture Trustee to protect or
maintain any interest in any Receivable; and
(viii) The Custodian has not been notified by any party
other than the Originator, the Seller, the Trust and the Indenture Trustee
that any such third party claims an interest in the Receivables or the
Receivables Files or is any such party requesting the Custodian to act as a
bailee with respect to the Receivables or the Receivables Files.
Custodian makes no representations or warranties as to the validity,
legality, sufficiency, enforceability, perfection, genuineness or prior recorded
status of any of the documents contained in each Receivables File or the
collectability, insurability, effectiveness or suitability of any Receivable.
Section 5.2. CHARGES AND EXPENSES. The Seller will pay all fees of
Custodian in connection with the performance of its duties hereunder in
accordance with written agreements to be entered into from time to time between
the parties hereto and Custodian, including fees and expenses of counsel
incurred by Custodian in the performance of its duties hereunder; provided,
however, that (i) Custodian shall in no event acquire any lien upon any
Receivable deposited under this Agreement or the Purchase Agreement or the Sale
and Servicing Agreement, or any claim against any Receivables Holder by reason
of the failure of the Seller to pay any of such charges or expenses and (ii) in
the event the Seller fails to pay the fees and expenses of Custodian as set
forth in such written agreements, Custodian shall have no obligation to take
actions or incur costs in connection with this Agreement unless the Seller or
another Person has made adequate provision for payment of Custodian's fees and
expenses. The Seller shall indemnify the Custodian against payment of any
documentary stamp taxes, intangible taxes and other similar taxes, penalties and
interest incurred in connection with the Receivables and the transactions
contemplated hereby.
Section 5.3. NO ADVERSE INTERESTS. Custodian covenants and warrants
to the Originator, the Seller, the Servicer, the Trust and the Indenture
Trustee, that as of the date of each Custodian Certification: (i) it holds no
adverse interest, by way of security or otherwise, in any Receivable; and (ii)
the execution of this Agreement and the creation of the custodial relationship
hereunder does not create any interest, by way of security or otherwise, of
Custodian in or to any Receivable, other than Custodian's rights as custodian
hereunder.
Section 5.4. INSPECTIONS. Upon reasonable prior written notice to
Custodian, the Servicer, the Seller, the Indenture Trustee and such Person's
agents, accountants, attorneys and auditors will be permitted during normal
business hours to examine Custodian's documents, records and other papers in
possession of or under the control of Custodian relating to the Receivables.
Section 5.5. INSURANCE. Custodian shall, at its own expense,
maintain at all times during the existence of this Agreement and keep in full
force and effect, (1) fidelity insurance, (2) theft of documents insurance, and
(3) forgery insurance subject to deductibles,
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all as is customary for amounts and with insurance companies reasonably
acceptable to the Servicer and the Indenture Trustee. A certificate of the
respective insurer as to each such policy or a blanket policy for such coverage
shall be furnished to the Servicer or the Indenture Trustee, upon request,
containing the insurer's statement or endorsement that such insurance shall not
terminate prior to receipt by such party, by registered mail, of 10 days advance
notice thereof.
Section 5.6. LIMITATION OF LIABILITY. Custodian assumes no
obligation, and shall be subject to no liability, under this Agreement, except
for its negligence or willful misconduct in the performance of the obligations
and duties as are specifically set forth herein. Custodian shall not be liable
for any action or non-action by it in reliance on advice of counsel believed by
it in good faith to be competent to give such advice. Custodian may rely and
shall be protected in acting upon any written notice, order, request, direction
or other document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
Section 5.7. INDEMNIFICATION. Servicer agrees to indemnify Custodian
against, and to hold it harmless from, any liabilities, and any related
out-of-pocket expenses, which it may incur in connection with this Agreement,
the Sale and Servicing Agreement, the Purchase Agreement or the Custodian
Certifications, other than any liabilities and expenses arising out of
Custodian's negligence or willful misconduct. The Custodian agrees to
indemnify, defend and hold harmless the Indenture Trustee against any liability
to Noteholders and/or Certificateholder arising out of the negligence or willful
misconduct of the Custodian (a) in the preparation or execution of any Custodian
Certification or (b) resulting in the loss of Receivables Files in the custody
of the Custodian. This indemnity shall include indemnification as to reasonable
attorneys' fees and costs, whether or not suit be brought, and including such
fees and costs on appeal. The Indenture Trustee shall give prompt written
notice to the Custodian of any claim for which indemnity is or may be sought and
shall afford to the Custodian the opportunity to defend such claim.
Section 5.8. FURTHER RIGHTS OF CUSTODIAN. If the Custodian is at any
time uncertain of its obligations hereunder, the Custodian, upon prior written
notice to the Indenture Trustee, the Originator, the Seller and the Servicer,
may refrain from taking any action with respect to such matter until such
uncertainty is removed. If conflicting demands are made on the Custodian with
respect to any matter, the Indenture Trustee's demand shall control, except
during the period prior to the issuance of the Trustee's Custodian Certification
pursuant to SECTION 3.1 hereof, when the applicable Receivables Holder's demand
shall control and the Custodian shall have the right to rely on such controlling
demand. The Custodian shall have the right in any such case to interplead any
or all of the documents contained in the Receivables Files in a court of
competent jurisdiction and, upon delivery thereof, shall have no further
obligations thereunder with respect to such documents.
(b) The obligations of the Custodian shall be determined solely by
the express provisions of this Agreement. No representation, warranty, covenant
or obligation of the Custodian shall be implied with respect to this Agreement
or the Custodian's service hereunder. Without limiting the generality of the
foregoing statement, except as specifically
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required herein, the Custodian shall be under no obligation to inspect, review
or examine the Receivables Files to determine that the contents thereof are
complete, genuine, enforceable or appropriate for the represented purpose or
that they have been actually recorded or filed in required offices or that they
are other than what they purport to be on their face.
(c) No provision of this Agreement shall require the Custodian to
spend or risk its own funds or otherwise incur financial liability in
performance of its duties under this Agreement unless, pursuant to Section 5.2
hereof, adequate provision has been made for the reimbursement of the
Custodian's expenses hereunder.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. AMENDMENT. This Agreement may be amended from time to
time by Custodian, the Originator, the Seller, the Servicer, the Trust and the
Indenture Trustee by written agreement signed by such parties and upon
satisfaction of the Rating Agency Condition.
SECTION 6.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK GOVERNING AGREEMENTS MADE AND
TO BE PERFORMED THEREIN, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 6.3. NOTICES. All demands, notices and communication
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by overnight mail, certified mail or
registered mail, postage prepaid, to (i) in the case of the Servicer and the
Originator, Caterpillar Financial Services Corporation, 3322 West End Avenue,
Nashville, Tennessee 37203-1071, (ii) in the case of the Seller, Caterpillar
Financial Funding Corporation, Greenview Plaza, 2950 East Flamingo Road, Suite
C-3B, Las Vegas, Nevada 89121, (iii) in the case of the Trust, c/o Chase
Manhattan Bank Delaware, as Owner Trustee, 1201 Market Street, Wilmington,
Delaware 19801, (iv) in the case of the Indenture Trustee, The First National
Bank of Chicago, One First National Plaza, Chicago, Illinois 60670-0126, (v) in
the case of the Custodian, The First National Bank of Chicago, One First
National Plaza, Chicago, Illinois 60670-0126, and (vi) in the case of the Rating
Agencies, at their respective addresses set forth in the Sale and Servicing
Agreement, and, in each such case, at such other addresses as may hereafter be
furnished to each party hereto in writing.
Section 6.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement.
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Section 6.5. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a co-partnership or joint venture between
Custodian and the other parties hereto.
Section 6.6. TERMINATION OF AGREEMENT. This Agreement shall be
terminated upon termination of the Sale and Servicing Agreement or at the option
of Indenture Trustee on 30 days written notice to Custodian, the Seller, the
Trust and the Originator. Concurrently with, or as soon as practicable after,
the termination of this Agreement, Custodian shall redeliver the Receivables
Files to the Indenture Trustee at such place as the Indenture Trustee may
reasonably designate and until such redelivery, Custodian shall hold such
Receivables Files in its sole custody and control as custodian for and bailee of
the Indenture Trustee (for the benefit of the Noteholders and, to the extent set
forth in the Sale and Servicing Agreement, the Certificateholder). In
connection with the administration of this Agreement, Custodian and the
Indenture Trustee may agree from time to time upon the interpretation of the
provisions of this Agreement, as such interpretation may in their opinion be
consistent with the general tenor and purposes of this Agreement, any such
interpretation to be signed and annexed hereto.
Section 6.7. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 6.8. ASSIGNMENT. No party hereto shall sell, pledge, assign
or otherwise transfer this Agreement without the prior written consent of the
other parties hereto and satisfaction of the Rating Agency Condition.
Section 6.9. HEADINGS. Section headings are for reference purposes
only and shall not be construed as a part of this Agreement.
Section 6.10. ADVICE OF COUNSEL. Custodian shall be entitled to rely
and act upon advice of counsel with respect to its performance hereunder as
Custodian and shall be without liability for any action reasonably taken
pursuant to such advice, provided that such action is not in violation of
application federal or state law. This paragraph shall not negate Custodian's
obligations under Section 5.7.
Section 6.11. NO PETITION. Custodian, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute
against the Seller or the Trust, or join in any institution against the Seller
or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificate, the Notes, this Agreement or any of the other Basic Documents.
Section 6.12. RESIGNATION OF CUSTODIAN. (a) The Custodian may at any
time resign and terminate its obligations under this Agreement upon at least 90
days' prior written notice to the Servicer and the Indenture Trustee. The
Custodian may be removed at any time
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at the written request of the Indenture Trustee. In the event of such
resignation or removal, the Indenture Trustee shall appoint a successor
custodian acceptable to the Servicer, which appointment must satisfy the Rating
Agency Condition. If the Servicer fails to appoint a successor custodian within
30 days, the Indenture Trustee shall appoint a successor custodian. In no event
shall the resignation of the Custodian be effective until a successor custodian
is duly appointed hereunder. One original counterpart of such instrument of
appointment shall be delivered to each of the Servicer, the Custodian and the
successor custodian. The Servicer shall notify the Rating Agencies of any such
resignation or removal and the appointment of a successor custodian.
(b) In the event of any resignation, the Custodian shall promptly
transfer to the successor custodian (or to the Indenture Trustee if no successor
custodian has been appointed) all of the Receivables (including the Receivables
Files) in its possession under this Agreement and take such other action as may
be requested by the Indenture Trustee to effect the transfer of the Custodian's
Receivables Files to the successor custodian, which shall provide a written
receipt for all such transferred documents and instruments. On completion of
such transfer, the Custodian shall be relieved of all further responsibilities
and obligations hereunder.
Section 6.13. LIMITATION OF LIABILITY OF INDENTURE TRUSTEE AND OWNER
TRUSTEE. (a) Notwithstanding anything contained herein to the contrary, in no
event shall The First National Bank of Chicago in its individual capacity 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.
(b) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by Chase Manhattan Bank Delaware, not in its
individual capacity but solely as Owner Trustee, and in no event shall Chase
Manhattan Bank Delaware 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 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 Article VI, VII and VIII of the Trust
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of
the day and year first above written.
ORIGINATOR
CATERPILLAR FINANCIAL SERVICES
CORPORATION,
By /s/ Kevin E. Colgan
--------------------------------------
Name: Kevin E. Colgan
Title: Vice President
SERVICER
CATERPILLAR FINANCIAL SERVICES
CORPORATION, as Servicer
By /s/ Kevin E. Colgan
--------------------------------------
Name: Kevin E. Colgan
Title: Vice President
SELLER
CATERPILLAR FINANCIAL FUNDING
CORPORATION
By /s/ Edward J. Scott
--------------------------------------
Name: Edward J. Scott
Title: Treasurer
<PAGE>
CATERPILLAR FINANCIAL ASSET
TRUST 1997-B,
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By /s/ John J. Cashin
--------------------------------------
Name: John J. Cashin
Title: Vice President
INDENTURE TRUSTEE
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee
By /s/ Barbara G. Grosse
--------------------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
CUSTODIAN
THE FIRST NATIONAL BANK OF CHICAGO,
as Custodian
By /s/ Barbara G. Grosse
--------------------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
<PAGE>
EXHIBIT A
CUSTODIAN CERTIFICATION
Certification No._____
[DATE]
To: [SELLER]
[TRUST]
[INDENTURE TRUSTEE]
Re: Custodial Agreement, dated as of November 1, 1997 (the "CUSTODIAL
AGREEMENT"), by and among Caterpillar Financial Services
Corporation (the "Originator"), Caterpillar Financial Services
Corporation, as Servicer (the "Servicer"), Caterpillar Financial
Funding Corporation (the "Seller"), Caterpillar Financial Asset
Trust 1997-B (the "Trust"), The First National Bank of Chicago,
as Indenture Trustee (the "Indenture Trustee") and The First
National Bank of Chicago, as Custodian (the "Custodian")
Gentlemen:
In accordance with the provisions of SECTION 3.2 of the
above-referenced Custodial Agreement, the undersigned, as Custodian, hereby
certifies that it has received all of the items listed in SECTION 3.1 of the
Custodial Agreement with respect to each Receivable identified on the Receivable
Schedule (the "Receivable Schedule") attached hereto dated as of November 1,
1997. The undersigned, as Custodian, confirms that the Receivable number in
each Receivables File conforms to the respective Receivable number listed on the
Receivable Schedule. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Custodial Agreement.
Custodian further certifies that as to each Receivable, Custodian
holds the Receivable in its name as custodian for the benefit of [the Seller]
[the Trust] [the Indenture Trustee], without written notice (a) of any adverse
claims, liens or encumbrances, (b) that any Receivable was overdue or has been
dishonored, (c) of evidence on the face of any Receivable or other document in
the Receivables File of any security interest therein, or (d) of any defense
against or claim to the Receivable by any other party.
Custodian makes no representations or warranties as to the validity,
legality, sufficiency, enforceability, genuineness or prior recorded status of
any of the documents
A-1
<PAGE>
contained in each Receivables File or the collectability, insurability,
effectiveness or suitability of any Receivable.
Custodian confirms that it holds each Receivable and the other
documents in the related Receivables File for the benefit of [the Seller][the
Trust][the Indenture Trustee].
Upon repurchase of the Receivables to which this Custodian
Certification relates and payment of the applicable repurchase price, the
Receivables to which this Custodian Certification relates shall be returned and
released by Custodian to the Person paying such repurchase price, and this
Custodian Certification shall be and be deemed to be canceled by Custodian and
of no force and effect.
------------------------
,
----------------
as Custodian
By
-----------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
To: [Custodian]
Re: Custodial Agreement, dated as of November 1, 1997, by and among
Caterpillar Financial Services Corporation (the "Originator"),
Caterpillar Financial Services Corporation, as Servicer (the
"Servicer"), Caterpillar Financial Funding Corporation (the
"Seller"), Caterpillar Financial Asset Trust 1997-B (the
"Trust"), The First National Bank of Chicago, as Indenture
Trustee (the "Indenture Trustee") and The First National Bank of
Chicago, as Custodian ("Custodian")
In connection with the administration of the Receivables held by you
as Custodian under the above-referenced Custodial Agreement, [_________], on
behalf of [________], requests the release, and acknowledges receipt, of the
following for the Receivable described below, for the reason indicated:
A. DOCUMENTS RELEASED
_____ 1a. Installment Sale Contract b. Principal Balance ______
_____ 2. Other documents:_______________________
_______________________________________
_______________________________________
_______________________________________
B. OBLIGOR'S NAME, ADDRESS & ZIP CODE:
C. RECEIVABLE NUMBER:
D. REASON FOR REQUESTING DOCUMENTS (check one)
_____ 1. Receivable Paid in Full.
_____ 2. Receivable Repurchased Pursuant to the Purchase Agreement and/or
the Sale and Servicing Agreement.
_____ 3. Receivable Liquidated.
B-1
<PAGE>
_____ 4. Receivable in Foreclosure or Repossession Proceedings.
_____ 5. Receivable to be modified or extended.
If box 1, 2 or 3 above is checked, and if all or part of
Receivables File was previously released to us, please release to us
our previous receipt on file with you, as well as any additional
documents in your possession relating to the above specified
Receivable. If box 1,2 or 3 is checked, evidence of receipt of
payment by the Indenture Trustee is required prior to release.
If box 4 or 5 above is checked, upon our return of all of
the above documents to you as Custodian, please acknowledge your
receipt by signing in the space indicated below, and returning this
form.
If box 5 above is checked, after giving effect to such
release, the aggregate Principal Balance of all Receivables released
in connection with modifications and extensions shall not exceed
$500,000. In addition, upon return of the Receivables File, we are
deemed to certify that the Receivables File as returned contains the
related Receivable as so modified and extended.
If box 1, 2 or 3 above is checked, this request is only
valid if also executed by the Seller and the Indenture Trustee.
Documents released hereby in connection with a modification or
extension must be returned to the Custodian on the same Business Day of release.
CATERPILLAR FINANCIAL
SERVICES CORPORATION,
as Servicer
By
--------------------------
Name:
Title:
Date:
[ ]
--------------------------
By
--------------------------
Name:
Title:
Date:
B-2
<PAGE>
Documents returned to Custodian:
- -----------------------------------------
as Custodian
By
----------------------------
Name:
Title:
Date:
B-3
<PAGE>
Annex 1
Authorized Officers of Servicer
B-4
<PAGE>
EXHIBIT C
TRANSFER CERTIFICATE
The First National Bank of Chicago,
as Custodian under the [DATE]
Custodial Agreement (defined below)
One First National Plaza
Chicago, Illinois 60670-0126
Re: Custodial Agreement, dated as of November 1, 1997 (the "Custodial
Agreement"), by and among Caterpillar Financial Services
Corporation (the "Originator"), Caterpillar Financial Services
Corporation, as Servicer (the "Servicer"), Caterpillar Financial
Funding Corporation (the "Seller"), Caterpillar Financial Asset
Trust 1997-B (the "Trust"), The First National Bank of Chicago,
as Indenture Trustee (the "Indenture Trustee") and The First
National Bank of Chicago, as Custodian ("Custodian")
To whom it may concern:
Pursuant to Section 3.1 of the above-referenced Custodial Agreement
(capitalized terms used herein but not otherwise defined shall have the same
meanings assigned to such terms in the Custodial Agreement), we hereby advise
you of the Transfer by the undersigned to [the Seller][the Trust][the Indenture
Trustee] of the Receivables identified on the Receivable Schedule[s] attached
[hereto] [to the [Seller's Custodian Certification] [to the Trust's Custodian
Certification] with respect to the undersigned which we are delivering to you
for cancellation]. You are instructed to hold such Receivables for [the Seller]
[the Trust] [the Indenture Trustee] and to deliver to [the Seller][the
Trust][the Indenture Trustee] a [Seller's] [Trust's] [Trustee's] Custodian
Certification acknowledging such transfer of these Receivables.
Very truly yours,
---------------------------------
By
--------------------------------
Name:
Title:
The Custodian hereby acknowledges receipt
of the foregoing instructions and agrees
to hold such Receivables for [the Seller]
[the Trust] [the Indenture Trustee].
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------------
Name:
Title:
C-1
