Exhibit 4.3
Sale and Servicing Agreement
dated as of November 1, 1997
[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
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
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)
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)
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.
"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
"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
"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
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
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
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
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 Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx,
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 00 Xxxx Xxxxxx, Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000; 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
8
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
9
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.
10
"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
11
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
12
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 Xxxxx'x 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.
13
"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.
14
"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).
15
"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.
16
"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 XxXxxx-Xxxx 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
17
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).
18
"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.
19
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
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, 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
27
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
37
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
38
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
39
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
41
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
43
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
44
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
45
(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
46
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.
47
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.
48
(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
49
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
50
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.
51
(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
52
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.
53
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
54
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
55
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,
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx X-0X, Xxx Xxxxx, Xxxxxx 00000, (702-735-2514),
(b) in the case of the Servicer, to Caterpillar Financial Services
Corporation, 0000 Xxxx Xxx Xxxxxx, Xxxxxxxxx, XX 00000-0000 (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
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and (f) in the case of Standard & Poor's, to
Standard & Poor's Ratings Services, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx
Xxxx 00000, 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
56
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
57
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.
58
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/ XXXX X. XXXXXX
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
CATERPILLAR FINANCIAL FUNDING
CORPORATION,
Seller,
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CATERPILLAR FINANCIAL SERVICES
CORPORATION,
Servicer,
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
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/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
SCHEDULE A
SCHEDULE OF RECEIVABLES
A-1
SCHEDULE B
LOCATION OF RECEIVABLE FILES
Greenview Plaza
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx X-0X
Xxx Xxxxx, Xxxxxx 00000
B-1
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
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
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
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
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
(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 X-0
X-0
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
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
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 $[___]
original principal
amount)
(f) Total:_______________
A-1
(iii) Pool Balance at end of related Collection Period:________.
(iv) after giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class
A-1 Notes:_____________
(2) Class A-1 Note Pool Factor:______________
(b) (1) outstanding principal amount of Class
A-2 Notes:_____________
(2) Class A-2 Note Pool Factor:____________
(c) (1) outstanding principal amount of Class
A-3 Notes:_____________
(2) Class A-3 Note Pool Factor:____________
(d) (1) outstanding principal amount of Class B Notes:_____________
(2) Class B Note Pool Factor:____________
(e) (1) Certificate Balance:_____________
(2) Certificate Pool Factor:____________
(v) Amount of Servicing Fee being paid :____________.
(vi) Amount of Administration Fee being paid:____________.
(vii) Aggregate Purchase Amounts for Collection Period:____________.
(viii) Aggregate amount of Realized Losses for the Collection
Period:____________.
(ix) Amount in Reserve Account:_______________.
(x) Amount in Yield Supplement Account:______________.
A-2
EXHIBIT B
TO SCHEDULE E
STATEMENT FOR NOTEHOLDERS
PURSUANT TO SECTION 5.07(a)
Distribution Date:___________________
(i) Amount of principal being paid on Notes:
(a) Class A-1 Notes:_______________ ($____ 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
(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
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
