Exhibit 4.2
EXECUTION COPY
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CATERPILLAR FINANCIAL ASSET TRUST 1998-A
AMENDED AND RESTATED TRUST AGREEMENT
between
CATERPILLAR FINANCIAL FUNDING CORPORATION,
as Seller
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of July 1, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.01. Capitalized Terms. . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02. Other Definitional Provisions. . . . . . . . . . . . . . .4
ARTICLE II ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.02. Office . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 2.03. Purpose and Powers . . . . . . . . . . . . . . . . . . . .5
SECTION 2.04. Appointment of Owner Trustee . . . . . . . . . . . . . . .6
SECTION 2.05. Initial Capital Contribution of Trust Estate . . . . . . .6
SECTION 2.06. Declaration of Trust . . . . . . . . . . . . . . . . . . .6
SECTION 2.07. Liability of Certificateholders, the YSA Regular
Interest Holders and the Reserve Regular Interest Holders.7
SECTION 2.08. Title to Trust Property. . . . . . . . . . . . . . . . . .7
SECTION 2.09. Situs of Trust . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.10. Representations and Warranties of Seller . . . . . . . . .7
SECTION 2.11. Amended and Restated Trust Agreement . . . . . . . . . . .8
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS. . . . . . . . . . . . . .8
SECTION 3.01. Initial Ownership. . . . . . . . . . . . . . . . . . . . .8
SECTION 3.02. Form of Certificates . . . . . . . . . . . . . . . . . . .8
SECTION 3.03. Authentication of the Certificates . . . . . . . . . . . .9
SECTION 3.04. Registration of Transfer and Exchange of the
Certificates . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Certificates. . . . 10
SECTION 3.06. Persons Deemed Owner . . . . . . . . . . . . . . . . . . 10
SECTION 3.08. Maintenance of Office or Agency. . . . . . . . . . . . . 11
SECTION 3.09. Appointment of Paying Agents . . . . . . . . . . . . . . 11
ARTICLE IV ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.01. Prior Notice to Owner with Respect to Certain Matters. . 12
SECTION 4.02. Action By the Controlling Certificateholders with
Respect to Certain Matters . . . . . . . . . . . . . . . 13
SECTION 4.03. Action By Owner with Respect to Bankruptcy . . . . . . . 13
SECTION 4.04. Restrictions on Controlling Certificateholders' Power. . 13
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES. . . . . . . . . . . . 14
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TABLE OF CONTENTS
(continued)
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SECTION 5.01. Establishment of Trust Account . . . . . . . . . . . . . 14
SECTION 5.02. Application of Trust Funds . . . . . . . . . . . . . . . 15
SECTION 5.03. Method of Payment. . . . . . . . . . . . . . . . . . . . 18
SECTION 5.04. No Segregation of Monies; No Interest. . . . . . . . . . 18
SECTION 5.05. Accounting and Report to the Subordinated Interest
Holders and the Holder of the Residual Certificate, the
Internal Revenue Service and Others . . . . . . . . . . 18
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE. . . . . . . . . . . . . . 18
SECTION 6.01. General Authority. . . . . . . . . . . . . . . . . . . . 18
SECTION 6.02. General Duties . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.03. Action Upon Instruction. . . . . . . . . . . . . . . . . 19
SECTION 6.04. No Duties Except as Specified in This Agreement or in
Instructions . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.05. No Action Except under Specified Documents or
Instructions . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.06. Restrictions . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII CONCERNING THE OWNER TRUSTEE. . . . . . . . . . . . . . . . . . 21
SECTION 7.01. Acceptance of Trusts and Duties. . . . . . . . . . . . . 21
SECTION 7.02. Furnishing of Documents. . . . . . . . . . . . . . . . . 22
SECTION 7.03. Representations and Warranties . . . . . . . . . . . . . 22
SECTION 7.04. Reliance; Advice of Counsel. . . . . . . . . . . . . . . 22
SECTION 7.05. Not Acting in Individual Capacity. . . . . . . . . . . . 23
SECTION 7.06. Owner Trustee Not Liable for the Certificates, the
Reserve Regular Interest, the YSA Regular Interest,
the Notes or Receivables . . . . . . . . . . . . . . . . 23
SECTION 7.07. Owner Trustee May Own the Certificates and Notes . . . . 24
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE. . . . . . . . . . . . . . . . . 24
SECTION 8.01. Owner Trustee's Fees and Expenses. . . . . . . . . . . . 24
SECTION 8.02. Indemnification. . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.03. Payments to the Owner Trustee. . . . . . . . . . . . . . 24
ARTICLE IX TERMINATION OF TRUST AGREEMENT . . . . . . . . . . . . . . . . . 25
SECTION 9.01. Termination of Trust Agreement . . . . . . . . . . . . . 25
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES. . . . . . 26
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TABLE OF CONTENTS
(continued)
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SECTION 10.01. Eligibility Requirements for Owner Trustee. . . . . . . 26
SECTION 10.02. Resignation or Removal of Owner Trustee . . . . . . . . 26
SECTION 10.03. Successor Owner Trustee . . . . . . . . . . . . . . . . 27
SECTION 10.04. Merger or Consolidation of Owner Trustee. . . . . . . . 27
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee . . . . . 27
ARTICLE XI FASIT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 12.01. Supplements and Amendments. . . . . . . . . . . . . . . 30
SECTION 12.02. No Legal Title to Owner Trust Estate in the
Certificateholders, the Holder of the Reserve Regular
Interest or the Holder of the YSA Regular Interest. . . . . . 31
SECTION 12.03. Limitations on Rights of Others . . . . . . . . . . . . 31
SECTION 12.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.05. Severability. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.06. Separate Counterparts . . . . . . . . . . . . . . . . . 32
SECTION 12.07. Successors and Assigns. . . . . . . . . . . . . . . . . 32
SECTION 12.08. Covenant of the Seller. . . . . . . . . . . . . . . . . 32
SECTION 12.09. No Petition . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.10. No Recourse . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.11. Headings. . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.12. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.13. Seller Payment Obligation . . . . . . . . . . . . . . . 34
EXHIBIT A FORM OF FIXED-RATE CERTIFICATE. . . . . . . . . . . . . . . . . .A-1
EXHIBIT B FORM OF INTEREST ONLY CERTIFICATE . . . . . . . . . . . . . . . .B-1
EXHIBIT C FORM OF RESIDUAL CERTIFICATE. . . . . . . . . . . . . . . . . . .C-1
EXHIBIT D CERTIFICATE OF TRUST OF CATERPILLAR FINANCIAL ASSET TRUST
1998-A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D-1
EXHIBIT E FORM OF INVESTMENT LETTER . . . . . . . . . . . . . . . . . . . .E-1
EXHIBIT F FORM OF TRANSFER CERTIFICATE. . . . . . . . . . . . . . . . . . .F-1
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AMENDED AND RESTATED TRUST AGREEMENT dated as of July 1, 1998, between
CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation, as Seller, and
CHASE MANHATTAN BANK DELAWARE, as Owner Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.01. CAPITALIZED TERMS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Administration Agreement" means the Administration Agreement dated as of
July 1, 1998, among the Administrator, the Trust, the Seller and the Indenture
Trustee, as the same may be amended, modified or supplemented from time to time.
"Administrator" means Caterpillar Financial Services Corporation, a
Delaware corporation, or any successor Administrator under the Administration
Agreement.
"Agreement" shall mean this Trust Agreement, as the same may be amended and
supplemented from time to time.
"Basic Documents" shall mean the Purchase Agreement, the Sale and Servicing
Agreement, the Indenture, the Administration Agreement, the Depository
Agreement, the Custodial Agreement, the Notes, the Certificates and the other
documents and certificates delivered in connection therewith.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ., as the same may be amended from time
to time.
"Certificate Balance" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"Certificate Distribution Account" shall have the meaning assigned to such
term in SECTION 5.01.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit D which has been filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to SECTION 3.04.
"Certificateholders" or "Holders" when applicable to the Certificates shall
mean the registered holders of the Interest Only Certificates, the Fixed-Rate
Certificates and the Residual Certificate, and "Holders" when applicable to the
Reserve Regular Interest or YSA Regular Interest shall mean the Reserve Regular
Interest Holder or the YSA Regular Interest Holder, respectively.
"Certificate Yield Supplement Account Requirement" means for any
Distribution Date an amount equal to the excess of the Specified Certificate
Yield Supplement Account Balance over the sum of the amounts on deposit in the
Certificate Yield Supplement Account and the Yield Supplement Account.
"Certificate Yield Supplement Deposit Amount" means, with respect to any
Distribution Date, the amount by which the Yield Supplement Deposit Amount with
respect to such Distribution Date exceeds the Yield Supplement Deposit Amount
deposited to the Collection Account pursuant to Section 5.06(b) of the Sale and
Servicing Agreement.
"Certificates" shall mean the Fixed-Rate Certificates, the Interest Only
Certificates and the Residual Certificate.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Component A-1" shall mean the portion of the Interest Only Certificates
representing the part of the entitlement of such Certificate to interest at the
Component A-1 Rate applied to the Component A-1 Notional Amount as further set
forth herein and in the Sale and Servicing Agreement.
"Component A-2" shall mean the portion of the Interest Only Certificates
representing the part of the entitlement of such Certificate to interest at the
Component A-2 Rate applied to the Component A-2 Notional Amount as further set
forth herein and in the Sale and Servicing Agreement.
"Component A-3" shall mean the portion of the Interest Only Certificates
representing the part of the entitlement of such Certificate to interest at the
Component A-3 Rate applied to the Component A-3 Notional Amount as further set
forth herein and in the Sale and Servicing Agreement.
"Component B" shall mean the portion of the Interest Only Certificates
representing the part of the entitlement of such Certificate to interest at the
Component B Rate applied to the Component B Notional Amount as further set forth
herein and in the Sale and Servicing Agreement.
"Controlling Certificateholders" shall mean the Holders of Fixed-Rate
Certificates evidencing a majority of the Certificate Balance or if no
Fixed-Rate Certificates are then outstanding, the Holders of a majority of the
Notional Amount of the Interest Only Certificates.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; or at such other address as the Owner
Trustee may designate by notice to the Owner and the Seller, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Seller).
"Indenture Trustee" shall mean The First National Bank of Chicago, not in
its individual capacity but solely as Indenture Trustee under the Indenture, and
any successor Indenture Trustee under the Indenture.
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"Depository Agreement" means the agreement among the Trust, the Indenture
Trustee, the Administrator and The Depository Trust Company, dated as of the
Closing Date.
"Expenses" shall have the meaning assigned to such term in SECTION 8.02.
"Fixed-Rate Certificates" shall mean the Certificates substantially in the
form of Exhibit A attached hereto evidencing a beneficial ownership interest in
the Owner Trust Estate and entitled to distributions as set forth herein and in
the Sale and Servicing Agreement.
"Interest Only Certificates" shall mean shall mean the Certificates
substantially in the form of Exhibit B attached hereto evidencing a beneficial
ownership interest in the Owner Trust Estate and entitled to distributions as
set forth herein and in the Sale and Servicing Agreement.
"Investment Letter" shall mean the letter substantially in the form of
Exhibit E attached hereto.
"Notional Amount" shall mean, with respect to the Interest Only
Certificates, the sum of the Component Notional Amounts of the Components
thereof.
"Owner Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and the Certificate Distribution Account and all other
property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement and the
Administration Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" shall mean any paying agent or co-paying agent appointed
pursuant to SECTION 3.09 and shall initially be The Chase Manhattan Bank.
"Residual Certificate" shall mean the Certificate substantially in the form
of Exhibit C attached hereto evidencing a beneficial ownership interest in the
Owner Trust Estate and entitled to distributions as set forth herein and in the
Sale and Servicing Agreement. The Residual Certificate shall not have a
principal balance and shall not accrue interest.
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
among the Trust, the Seller, as seller, and Caterpillar Financial Services
Corporation, as servicer, dated as of July 1, 1998, as the same may be amended,
modified or supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" shall mean Caterpillar Financial Funding Corporation in its
capacity as Seller hereunder.
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"Specified Certificate Yield Supplement Account Balance" means for any
Distribution Date, an amount equal to the sum of (i) the aggregate amount, as of
the last day of the related Collection Period, by which interest on the Pool
Balance for the remaining term of the Receivables (assuming no prepayments or
delinquencies) at a rate equal to the sum of the Fixed-Rate Certificate Rate and
the Serving Fee Rate exceeds interest at such rate on the Adjusted Pool Balance
for such remaining term and (ii) the aggregate amount for each Class of Notes,
as of the last day of the Collection Period, by which interest on such Class at
a rate equal to the Class A-1 Note Interest Rate, Class A-2 Note Interest Rate,
Class A-3 Note Interest Rate, or Class B Note Interest Rate, as applicable, for
the remaining term of the Notes (assuming no prepayments or delinquencies)
exceeds interest on each Class of Notes computed based on a rate equal to the
weighted average (by Adjusted Contract Balance) Net APR of the Receivables for
such remaining term; provided, however, that on and after the date on which the
Seller eliminates the Yield Supplement Account in accordance with the provisions
of Section 5.06(f) of the Sale and Servicing Agreement, the "Specified
Certificate Yield Supplement Account Balance" shall be zero.
"Transfer Certificate" shall mean the certificate substantially in the form
of Exhibit F attached hereto.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder," and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and
Exhibit references contained in this
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Agreement are references to Sections and Exhibits in or to this Agreement
unless otherwise specified; and the term "including" shall mean "including
without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) All calculations of the amount of interest accrued on the
Fixed-Rate Certificates, the Reserve Regular Interest, the YSA Regular
Interest and the Components shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
ARTICLE II
ORGANIZATION
SECTION 2.01. NAME. The Trust created hereby shall be known as
"Caterpillar Financial Asset Trust 1998-A," in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the
Seller.
SECTION 2.03. PURPOSE AND POWERS. (a) The purpose of the Trust is to
engage in the following activities:
(i) to issue the Class A-1 Notes, Class A-2 Notes, the Class A-3
Notes and the Class B Notes pursuant to the Indenture and the Certificates,
the Reserve Regular Interest and the YSA Regular Interest pursuant to this
Agreement, and to sell $164,000,000 aggregate principal amount of the Class
A-1 Notes, $218,000,000 aggregate principal amount of Class A-2 Notes,
$183,114,000 aggregate principal amount of the Class A-3 Notes and
$24,176,000 aggregate principal amount of Class B Notes pursuant to
underwriting agreements upon the written order of the Seller and to issue
the Fixed-Rate Certificates with an initial Certificate Balance of
$16,388,534, the Reserve Regular Interest with an initial principal balance
of $7,570,982, the YSA Regular Interest with an initial principal balance
of $2,339,486, and the Interest Only Certificates with an initial aggregate
Notional Amount of $589,290,000 and the Residual Certificate without any
principal balance, in each case to or upon the written order of the Seller;
(ii) to pay the Seller the amounts owed pursuant to Section 2.01
of the Sale and Servicing Agreement by delivering to or upon the order of
the Seller the Notes, the Certificates, the Reserve Regular Interest and
the YSA Regular Interest to the Seller;
(iii) with the proceeds from capital contributions from the
Seller to pay the organizational, start-up and transactional expenses of
the Trust, and with the proceeds
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from the sale of the Notes, the Certificates, the YSA Regular Interest
and the Reserve Regular Interest, to fund the Reserve Account and the
Yield Supplement Account;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Certificateholders, the Reserve Regular Interest Holder and the YSA
Interest Holder pursuant to the terms of the Sale and Servicing Agreement
and this Agreement any portion of the Trust Estate released from the Lien
of, and remitted to the Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Certificateholders, the Reserve Regular Interest Holder and the YSA
Interest Holder and the Noteholders.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.04. APPOINTMENT OF OWNER TRUSTEE. The Seller hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account. The Seller shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.06. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
the YSA Regular Interest Holders and the Reserve Regular Interest Holders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, for income and franchise tax purposes, the Trust shall be treated as a
"financial asset securitization investment trust" or "FASIT" described in
Section 860L of the Code. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as a FASIT for such tax purposes. Effective as of
the date hereof, the Owner Trustee shall have all rights, powers and duties set
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forth herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
SECTION 2.07. LIABILITY OF CERTIFICATEHOLDERS, THE YSA REGULAR INTEREST
HOLDERS AND THE RESERVE REGULAR INTEREST HOLDERS. The Certificateholders, the
YSA Regular Interest Holders and the Reserve Regular Interest Holders shall not
have any personal liability for any liability or obligation of the Trust.
SECTION 2.08. TITLE TO TRUST PROPERTY. Legal title to all the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.09. SITUS OF TRUST. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any employees in any state other than
Delaware; PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the
Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller hereby
represents and warrants to the Owner Trustee that:
(a) The Seller is duly organized and validly existing as a
corporation in good standing under the laws of the State of Nevada, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted.
(b) The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the failure to so qualify or to
obtain such license or approval would render any Receivable unenforceable
that would otherwise be enforceable by the Seller, the Servicer or the
Owner Trustee.
(c) The Seller has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Seller has full
power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Seller shall have duly authorized
such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Seller by all necessary corporate
action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the certificate
of incorporation or by-laws of the Seller, or any indenture, agreement or
other instrument to which the Seller is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture,
7
agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Seller's
knowledge, any order, rule or regulation applicable to the Seller of any
court, federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(e) There are no proceedings or investigations pending, or, to
the best of Seller's knowledge, threatened, before any court, federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties which
(i) assert the invalidity of this Agreement or any of the Basic Documents,
(ii) seek to prevent the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, or (iii) seek
any determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents.
SECTION 2.11. AMENDED AND RESTATED TRUST AGREEMENT. This Agreement amends
and restates in its entirety the Trust Agreement dated as of July 1, 1998
between the Seller and Owner Trustee.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Seller pursuant to SECTION 2.05 and until the issuance of
the Certificates, the Seller shall be the sole beneficiary of the Trust.
SECTION 3.02. FORM OF CERTIFICATES. The Fixed-Rate Certificates shall be
issued in minimum denominations of $100,000 with an original aggregate
Certificate Balance of $16,388,534, the Interest Only Certificates shall be
issued in minimum denominations of $1,000,000 with an original aggregate
Notional Amount equal to $589,290,000 and the Residual Certificate shall be
issued in a percentage interest of not less than 100 percent without any
principal balance. The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of a Trust Officer of the Owner Trustee. The
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall, when duly authenticated pursuant to SECTION 3.03, be
validly issued and entitled to the benefits of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of the Certificates or did not hold such
offices at the date of authentication and delivery of the Certificates.
A transferee of a Certificate shall become a Certificateholder and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder upon compliance with the transfer requirements set forth in Sections
3.04 and 3.07.
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The Reserve Regular Interest and YSA Regular Interest shall be
uncertificated interests in the Trust as described herein, and shall be
transferable by the Reserve Regular Interest Holder or YSA Regular Interest
Holder by recordation of any such transfer in the Certificate Register in the
manner applicable with respect to a Certificate as described in Section 3.04 and
3.06 and, in any event, subject to compliance with Section 3.07.
SECTION 3.03. AUTHENTICATION OF THE CERTIFICATES. Concurrently with the
initial sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates in initial amounts
specified in Section 3.02 to be executed on behalf of the Trust, authenticated
and delivered to or upon the written order of the Seller, signed by its Chairman
of the Board, its President, any Vice President, its Treasurer, its Secretary or
any Assistant Treasurer, without further corporate action by the Seller. The
Certificates shall not entitle their Holders to any benefit under this
Agreement, or be valid for any purpose, unless there shall appear on the
Certificates a certificate of authentication substantially in the form set forth
in Exhibit A, Exhibit B or Exhibit C, as applicable, executed by the Owner
Trustee or the Owner Trustee's authentication agent, by manual signature; such
authentication shall constitute conclusive evidence that the Certificates shall
have been duly authenticated and delivered hereunder. The Certificates shall be
dated the date of their authentication.
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF THE CERTIFICATES.
The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to SECTION 3.08, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of the Certificates, the Reserve Regular
Interest, the YSA Regular Interest and of transfers and exchanges thereof. As
part of the Certificate Register, the Certificate Registrar shall keep records
of each Certificateholder's share of (i) the Certificate Balance (in the case of
the Fixed-Rate Certificates) and (ii) the Notional Amount (in the case of the
Interest Only Certificates), which records shall be controlling absent manifest
error. The Residual Certificate may not be subdivided into a percentage interest
of less than 100% in the Certificate Register and the Owner Trustee shall record
no transfer of the Residual Certificate otherwise permitted hereunder (including
with regard to subsection 3.04(c)) in less than such percentage interest. The
Chase Manhattan Bank shall be the initial Certificate Registrar.
(b) Upon surrender for registration of transfer of any Certificate
at the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or shall cause the authenticating
agent to authenticate and deliver), in the name of the designated transferee
or transferees, one or more new Certificates of a like tenor and denomination
dated the date of authentication by the Owner Trustee or any authenticating
agent. At the option of a Holder, Certificates may be exchanged for other
Certificates of a like tenor and denomination upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.08.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by an Investment Letter duly
executed by the transferee. In addition, the Residual Certificate shall be
transferable in whole and not in part, and as a condition to the registration
of any such transfer, the presentation or surrender of such Certificate for
registration
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or exchange shall be accompanied by a Transfer Certificate substantially in the
form attached hereto as Exhibit F executed by the transferee or such other form
as may be satisfactory to the FASIT Administrator. Each Certificate surrendered
for registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Owner Trustee in accordance with its customary practice.
(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
(e) Transfer of the Reserve Regular Interest and the YSA Regular
Interest shall only be made in accordance with Section 3.10.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any Certificate is mutilated and shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that the Certificate shall have been acquired by a
bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute and
the Owner Trustee, or the Owner Trustee's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section, the Owner Trustee or the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute conclusive evidence of an ownership interest in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNER. The Owner Trustee or the Certificate
Registrar may treat the Person in whose name a Certificate or the Reserve
Regular Interest or YSA Regular Interest is registered in the Certificate
Register as the owner of such Certificate or the Reserve Regular Interest or YSA
Regular Interest for the purpose of receiving distributions pursuant to
SECTION 5.02 and for all other purposes whatsoever, and neither the Owner
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 3.07. TRANSFER RESTRICTIONS. No Certificate, Reserve Regular
Interest or YSA Regular Interest may be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I or ERISA, (ii) a plan described in Section 4975(e)(1)
of the Code that is subject to Section 4975 of the Code or (iii) any entity
whose underlying assets include "plan assets" by reason of any such plan's
investment in the entity. No Fixed-Rate Certificate, Reserve Regular Interest
or YSA Regular Interest may be acquired or held by any Person (other than the
Seller or any of its affiliates) if as a result of such acquisition or holding
such Person would own more than 49% of the outstanding Certificate Balance of
the Fixed-Rate Certificates, more than 49% of the outstanding Reserve Regular
Interest Principal Balance or more than 49% of the YSA Regular Interest
Principal Balance. In
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addition, no Certificate or the Reserve Regular Interest or YSA Regular
Interest may be transferred to anyone other than an investor that qualifies
as an "qualified institutional buyer" or "accredited investor" (as such terms
are defined in the Investment Letter).
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in the Borough of Manhattan, in the City of New York, an office or
offices or agency or agencies where notices and demands to or upon the Owner
Trustee in respect of the Certificates, the Reserve Regular Interest, the YSA
Regular Interest and the Basic Documents may be served. The Owner Trustee
initially designates The Chase Manhattan Bank, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as its principal corporate trust office for such purposes. The Owner
Trustee shall give prompt written notice to the Seller of any change in the
location of the Certificate Register or any such office or agency.
SECTION 3.09. APPOINTMENT OF PAYING AGENTS. The Paying Agent shall make
distributions to the Subordinated Interest Holders and the Holder of the
Residual Certificate from the Certificate Distribution Account pursuant to
SECTION 5.02 and shall report the amounts of such distributions to the Owner
Trustee. Any Paying Agent shall have the revocable power to withdraw funds from
the Certificate Distribution Account for the purpose of making the distributions
referred to above. The Owner Trustee may revoke such power and remove the
Paying Agent if the Owner Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Paying Agent shall initially be The Chase
Manhattan Bank, and any co-paying agent chosen by The Chase Manhattan Bank, and
acceptable to the Owner Trustee. The Chase Manhattan Bank shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Owner Trustee. In
the event that The Chase Manhattan Bank shall no longer be the Paying Agent, the
Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a
bank or trust company). The Owner Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Owner Trustee to execute
and deliver to the Owner Trustee an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Owner Trustee that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Subordinated Interest Holders
and the Holder of the Residual Certificate in trust for the benefit of such
Holders until such sums shall be paid to such Holders. The Paying Agent shall
return all unclaimed funds to the Owner Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Owner Trustee. The provisions of SECTIONS 7.01, 7.03, 7.04 and 8.01 shall apply
to the Owner Trustee also in its role as Paying Agent, for so long as the Owner
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 3.10. FORM OF RESERVE REGULAR INTEREST AND YSA REGULAR INTEREST.
(a) The Reserve Regular Interest and YSA Regular Interest shall be
uncertificated interests in the Trust issuable in a single interest representing
all of the Reserve Regular Interest or YSA Regular Interest, as applicable.
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(b) The Reserve Regular Interest and the YSA Regular Interest shall be
entitled to the benefits of this Agreement and shall be valid for all purposes,
upon receipt by the Owner Trustee of a written instruction of the Seller to
register such interests in the names and in the principal amounts specified in
such instruction and the entry of such information in the Certificate Register
by the Certificate Registrar. The YSA Regular Interest and the Reserve Regular
Interest shall be deemed dated the date of the making of an entry relating to
the registration thereof in the Certificate Register.
(c) The Reserve Regular Interest and the YSA Regular Interest shall be
transferable only through appropriate entries made in the Certificate Register,
subject to compliance with Section 3.07. The transfer of the Reserve Regular
Interest or the YSA Regular Interest will be transferable at the office
maintained pursuant to Section 3.08 by presenting a transfer request in a form
and containing such information as is acceptable to the Owner Trustee together
with an Investment Letter duly executed by the transferee.
(d) The Certificate Registrar shall record the deemed date of issuance,
amount and transferee with respect to each transfer of a the Reserve Regular
Interest and the YSA Regular Interest in the Certificate Register in such manner
as is customary for the Certificate Registrar. A certificate of an officer of
the Certificate Registrar, setting forth in reasonable detail the information so
recorded, shall constitute, with respect to each of the Reserve Regular Interest
and the YSA Regular Interest, PRIMA FACIE evidence of the accuracy of the
information so recorded. The Certificate Registrar may require a Person
attempting to transfer such interest to produce such evidence of effective
transfer as the Certificate Registrar deems appropriate and evidence
satisfactory to the Certificate Registrar that the restrictions on transfer set
forth in this Agreement have been complied with, failing delivery of which the
Certificate Registrar may refuse to register any transfer and no transfer shall
be deemed to have occurred.
(e) No service charge shall be made for any registration of transfer or
exchange of the Reserve Regular Interest or the YSA Regular Interest, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of such interests.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. PRIOR NOTICE TO OWNER WITH RESPECT TO CERTAIN MATTERS. With
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Controlling Certificateholders in writing of the proposed action
and the Controlling Certificateholders shall not have notified the Owner Trustee
in writing prior to the 30th day after such notice is given that such Holders
have withheld consent or provided alternative direction:
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(a) the initiation of any claim or lawsuit by the Trust
(other than an action to collect on a Receivable) and the compromise
of any action, claim or lawsuit brought by or against the Trust
(other than an action to collect on a Receivable);
(b) the election by the Trust to file an amendment to the
Certificate of Trust;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
not required and such amendment materially adversely affects the
interest of the Certificateholders, the Holders of the Reserve
Regular Interest or the YSA Regular Interest;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend
or supplement any provision in a manner that would not materially
adversely affect the interests of the Certificateholders, the Holder
of the Reserve Regular Interest and the Holder of the YSA Regular
Interest; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Paying Agent or Trustee or the appointment
pursuant to this Agreement of a successor Certificate Registrar, or
the consent to the assignment by the Note Registrar, Paying Agent or
Trustee or Certificate Registrar of its obligations under the
Indenture or this Agreement, as applicable.
SECTION 4.02. ACTION BY THE CONTROLLING CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power, except upon the
direction of the Controlling Certificateholders, to (a) remove the Administrator
under the Administration Agreement pursuant to Section 8 thereof, (b) appoint a
successor Administrator pursuant to Section 8 of the Administration Agreement,
(c) remove the Servicer under the Sale and Servicing Agreement pursuant to
Section 8.01 thereof or (d) except as expressly provided in the Basic Documents,
sell the Receivables after the termination of the Indenture. The Owner Trustee
shall take the actions referred to in the preceding sentence only upon written
instructions signed by the Controlling Certificateholders.
SECTION 4.03. ACTION BY OWNER WITH RESPECT TO BANKRUPTCY. Subject to
Section 12.09 hereof, the Owner Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the prior
approval of the Controlling Certificateholders and the delivery to the Owner
Trustee by the Controlling Certificateholders of a certificate certifying that
the Controlling Certificateholders reasonably believes that the Trust is
insolvent.
SECTION 4.04. RESTRICTIONS ON CONTROLLING CERTIFICATEHOLDERS' POWER. The
Controlling Certificateholders shall not direct the Owner Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to SECTION 2.03 nor shall the Owner
Trustee be obligated to follow any such direction, if given.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee, for the
benefit of the Subordinated Interest Holders and the Holder of the Residual
Certificate, shall establish and maintain in the name of the Trust an Eligible
Securities Account (the "Certificate Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Subordinated Interest Holders. The Owner Trustee, for the benefit
of the Subordinated Interest Holders and the Holder of the Residual Certificate,
shall, upon the written request of the Servicer, establish and maintain in the
name of the Trust an Eligible Securities Account (the "Certificate Yield
Supplement Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Subordinated Interest Holders.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
the Certificate Yield Supplement Account and in all proceeds thereof. Except
as otherwise provided herein, the Certificate Distribution Account and the
Certificate Yield Supplement Account shall be under the sole dominion and
control of the Owner Trustee for the benefit of the Subordinated Interest
Holders. If, at any time, the Certificate Distribution Account or the
Certificate Yield Supplement Account ceases to be an Eligible Securities
Account, the Owner Trustee (or the Seller on behalf of the Owner Trustee, if
the Certificate Distribution Account or the Certificate Yield Supplement
Account is not then held by the Owner Trustee or an affiliate thereof) shall
within 10 Business Days following notification of such occurrence (or such
longer period, not to exceed 30 calendar days, as to which each Rating Agency
may consent) establish a new Certificate Distribution Account or Certificate
Yield Supplement Account, as the case may be, as an Eligible Securities
Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account or Certificate Yield Supplement Account, as
the case may be.
Funds on deposit in the Certificate Yield Supplement Account shall be
invested by the Owner Trustee, at the written direction of the Servicer, in
Eligible Investments selected by the Servicer; PROVIDED, HOWEVER, it is
understood and agreed that the Owner Trustee shall not be liable for any loss
arising from such investment in Eligible Investments (other than losses from
nonpayment of investments in obligations of The Chase Manhattan Bank). All such
Eligible Investments shall be held by the Owner Trustee for the benefit of the
Subordinated Interest Holders. Funds on deposit in the Certificate Yield
Supplement Account 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 the Certificate Yield Supplement Account may be invested in
Eligible Investments of The Chase Manhattan Bank which may mature so that such
funds will be available on the Distribution Date. Funds deposited in the
Certificate Yield Supplement 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.
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SECTION 5.02. APPLICATION OF TRUST FUNDS. (a) On each Distribution Date,
the Owner Trustee will, in accordance with the directions received from the
Servicer pursuant to Section 4.09 of the Sale and Servicing Agreement,
distribute to the Holders of the Fixed-Rate Certificates, the Interest Only
Certificates, the YSA Regular Interest, the Reserve Regular Interest and the
Residual Certificate the amounts deposited in the Certificate Distribution
Account pursuant to Sections 5.04, 5.05 and 5.06 of the Sale and Servicing
Agreement and required to be distributed to such Holders on or before such
Distribution Date in the following priority:
(i) to the Holders of the Fixed-Rate Certificates, pro
rata, from amounts deposited to the Certificate Distribution
Account, the portion of the Subordinated Holders' Interest
Distributable Amount allocable to the Fixed-Rate Certificates;
(ii) to the Holders of the Fixed-Rate Certificates, pro
rata, from amounts deposited to the Certificate Distribution Account
pursuant to Section 5.04(c)(v) of the Sale and Servicing Agreement
or, if no Class of Notes is Outstanding prior to giving effect to
distributions on such Distribution Date, to the extent of the
Regular Principal Distribution Amount as a payment of principal with
respect to the Fixed Rate Certificates, until the Certificate
Balance thereof has been reduced to zero;
(iii) to the YSA Regular Interest Holder, from amounts
deposited to the Certificate Distribution Account, the portion of
the Subordinated Holders' Interest Distributable Amount allocable to
the YSA Regular Interest;
(iv) from amounts deposited to the Certificate
Distribution Account pursuant to Section 5.06(d)(ii) of the Sale and
Servicing Agreement, first to (x) the Certificate Yield Supplement
Account to the extent of the Certificate Yield Supplement Account
Requirement and thereafter to (y) the YSA Regular Interest Holder as
a payment of principal with respect to the YSA Regular Interest
until the YSA Regular Interest Principal Balance has been reduced to
zero;
(v) to the Reserve Regular Interest Holder, from amounts
deposited to the Certificate Distribution Account, the portion of the
Subordinated Holders' Interest Distributable Amount allocable to the
Reserve Regular Interest;
(vi) to the Reserve Regular Interest Holder, from amounts
deposited to the Certificate Distribution Account pursuant to Section
5.05(c) of the Sale and Servicing Agreement, until the Reserve Regular
Interest Principal Balance has been reduced to zero;
(vii) to the Holders of the Interest Only
Certificates, pro rata, from amounts deposited to the Certificate
Distribution Account pursuant to Section 5.04(b)(x) of the Sale and
Servicing Agreement, the portion of the Certificateholders' Interest
Distributable Amount allocable to the Interest Only Certificates;
(viii) on each Distribution Date other than the
Distribution Date on which the Subordinated Interests have been paid
all outstanding principal and interest with respect
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thereto, to the Collection Account for application on the immediately
subsequent Distribution Date; and
(ix) to the Holder of the Residual Certificate, from
amounts deposited to the Certificate Distribution Account, any
remaining amounts on deposit in the Certificate Distribution Account.
(b) On each Distribution Date, the Owner Trustee shall
send to the Subordinated Interest Holders requesting it the
statement provided to the Owner Trustee by the Servicer pursuant to
Section 5.07(a) of the Sale and Servicing Agreement on such
Distribution Date.
(c) In the event that any withholding tax is imposed on
the Trust's payment (or allocations of income) to the Subordinated
Interest Holders or the Holder of the Residual Certificate, such tax
shall reduce the amount otherwise distributable to such Holders in
accordance with this Section. The Owner Trustee is hereby
authorized and directed to retain from amounts otherwise
distributable to the Subordinated Interest Holders or the Holder of
the Residual Certificate sufficient funds for the payment of any tax
that is legally owed or required to be withheld by the Trust (but
such authorization shall not prevent the Owner Trustee from
contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with
respect to a Subordinated Interest Holder or the Holder of the
Residual Certificate shall be treated as cash distributed to such
Holder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution, the Owner
Trustee may in its sole discretion withhold such amounts in
accordance with this clause (c). In the event that any Subordinated
Interest Holder or the Holder of the Residual Certificate wishes to
apply for a refund of any such withholding tax, the Owner Trustee
shall reasonably cooperate with such Subordinated Interest Holder or
the Holder of the Residual Certificate in making such claim so long
as such Subordinated Interest Holder or the Holder of the Residual
Certificate, as applicable, agrees to reimburse the Owner Trustee
for any out-of-pocket expenses incurred.
(d) On each Distribution Date after the establishment of
the Certificate Yield Supplement Account pursuant to Section 5.01,
the Owner Trustee shall, based upon instructions contained in the
Servicer's Certificate, deposit to the Certificate Yield Supplement
Account the amounts specified in Section 5.02(a)(iv)(x). On each
Transfer Date, the Owner Trustee shall, based upon instructions
contained in the Servicer's Certificate, transfer any Certificate
Yield Supplement Deposit Amount from the Certificate Yield
Supplement Account to the Certificate Distribution Account and shall
deposit any investment earnings with respect to the Eligible
Investments in the Certificate Yield Supplement Account to the
Certificate Distribution Account for application on the related
Distribution Date as part of the Total Distribution Amount to be
applied in accordance with Section 5.02(a). On each Determination
Date, the Servicer shall calculate the Specified Certificate Yield
Supplement Account Balance for the related Distribution Date and
shall notify the Owner Trustee of such amount pursuant to the
Servicer's Certificate. The Owner Trustee shall, based upon
instructions contained in the
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Servicer's Certificate, withdraw on the related Distribution Date
from the Certificate Yield Supplement Account the excess, if any, of
the amount by which the sum of (i) the amount then on deposit in the
Certificate Yield Supplement Account (after giving effect to the
withdrawals therefrom on the related Transfer Date previously
described in this subsection (d)) and (ii) the amount then on
deposit in the Yield Supplement Account (after giving effect to the
withdrawals therefrom on such Distribution Date pursuant to Section
5.06 of the Sale and Servicing Agreement) exceeds the Specified
Certificate Yield Supplement Account Balance and apply such excess
as an additional payment of principal to the YSA Regular Interest
Holder pursuant to Section 5.02(a)(iv)(y).
(e) In the event of a Sale and Liquidation of the Trust
Estate (including the Trust Accounts) pursuant to Section 5.04 of
the Indenture, the amounts distributed to the Certificate
Distribution pursuant to Section 5.04 of the Indenture Account and
on deposit in the Certificate Yield Supplement Account shall be
applied in the following order in lieu of that set forth in Section
5.02(a):
(i) to the Holders of the Fixed-Rate Certificates for
amounts due and unpaid on the Fixed Rate Certificates for interest
on the Certificate Balance at the Certificate Rate;
(ii) to the Holders of the Fixed-Rate Certificates for
amounts due and unpaid on the Fixed Rate Certificates for principal
in respect of the Certificate Balance;
(iii) to the YSA Regular Interest Holder for amounts due
and unpaid on the YSA Regular Interest for interest on the YSA
Regular Interest Principal Balance at the YSA Regular Interest Rate;
(iv) to the YSA Regular Interest Holder for amounts due
and unpaid on the YSA Regular Interest for principal in respect of
the YSA Regular Interest Principal Balance;
(v) to the Reserve Regular Interest Holder for amounts
due and unpaid on the Reserve Regular Interest for interest on the
Reserve Regular Interest Principal Balance at the Reserve Regular
Interest Rate;
(vi) to the Reserve Regular Interest Holder for amounts
due and unpaid on the Reserve Regular Interest for principal in
respect of the Reserve Regular Interest Principal Balance;
(vii) to the Holders of the Interest Only Certificates for
amounts due and unpaid on the each of the Components at the
applicable Component Rate ratably and without preference among such
Components; and
(viii) on each Distribution Date other than the Distribution
Date on which the Subordinated Interests have been paid all
outstanding principal and interest with respect thereto, to the
Certificate Distribution Account for application on the immediately
subsequent Distribution Date;
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(ix) to the Holder of the Residual Certificate, any
remaining amounts on deposit in the Certificate Distribution Account.
SECTION 5.03. METHOD OF PAYMENT. Subject to SECTION 9.01(C),
distributions required to be made to the Subordinated Interest Holders and the
Holder of the Residual Certificate on any Distribution Date shall be made to the
Subordinated Interest Holders and the Holder of the Residual Certificate either
by wire transfer, in immediately available funds, to the account of such Holder
at a bank or other entity having appropriate facilities therefor, if the
Subordinated Interest Holders and the Holder of the Residual Certificate shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Distribution Date, or, if not, by check
mailed to such Subordinated Interest Holder or Holder of the Residual
Certificate, as applicable, at the address of such Holder appearing in the
Certificate Register.
SECTION 5.04. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
SECTION 5.01 and 5.02, monies received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
SECTION 5.05. ACCOUNTING AND REPORT TO THE SUBORDINATED INTEREST HOLDERS
AND THE HOLDER OF THE RESIDUAL CERTIFICATE, THE INTERNAL REVENUE SERVICE AND
OTHERS. The Owner Trustee shall (a) maintain (or cause to be maintained) the
books of the Trust on a fiscal year basis ending December 31, (or such other
period as may be required by applicable law), with the first year being a short
year ending December 31, 1998, and on the accrual method of accounting or as
otherwise may be required by the FASIT Provisions, (b) deliver to the
Subordinated Interest Holders, as may be required by the Code and applicable
Treasury Regulations, such information as may be required to enable the
Subordinated Interest Holders to prepare their federal and state income tax
returns, and make such elections as may from time to time be required or
appropriate under any applicable state or federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as disregarded as an
entity for federal income tax purposes and (c) collect or cause to be collected
any withholding tax as described in and in accordance with SECTION 5.02(C) with
respect to distributions from the Trust.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, or any
amendment thereto or other agreement, in each case, in such form as the Seller
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Basic Documents. The Owner Trustee is further authorized from time to time
to take such action as the Administrator directs in writing with respect to the
Basic Documents.
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SECTION 6.02. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Basic Documents and to administer the Trust
in the interest of the Certificateholders, the Holder of the Reserve Regular
Interest and the Holder of the YSA Regular Interest, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Administrator to carry out its obligations
under the Administration Agreement.
SECTION 6.03. ACTION UPON INSTRUCTION. (a) Subject to ARTICLE IV, the
Controlling Certificateholders may, by written instruction, direct the Owner
Trustee in the management of the Trust. Such direction may be exercised at any
time by written instruction of the Controlling Certificateholders pursuant to
ARTICLE IV.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee
shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the
part of the Owner Trustee or is contrary to the terms hereof or of
any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by the
terms of this Agreement or any Basic Document, the Owner Trustee
shall promptly give notice (in such form as shall be appropriate
under the circumstances) to the Controlling Certificateholders, the
Holder of the Reserve Regular Interest and the Holder of the YSA
Regular Interest requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good
faith in accordance with any written instruction of the Controlling
Certificateholders received, the Owner Trustee shall not be liable
on account of such action to any Person. If the Owner Trustee shall
not have received appropriate instruction within ten days of such
notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this
Agreement or the Basic Documents, as it shall deem to be in the best
interest of the Controlling Certificateholders, the Holder of the
Reserve Regular Interest and the Holder of the YSA Regular Interest,
and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to
the application of any provision of this Agreement or any Basic
Document or any such provision is ambiguous as to its application,
or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as
to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may
give notice (in such form as shall be appropriate under the
circumstances) to the Controlling
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Certificateholders, the Holders of the Reserve Regular Interest and
the YSA Regular Interest requesting instruction and, to the extent
that the Owner Trustee acts or refrains from acting in good faith in
accordance with any such instruction received from the Controlling
Certificateholders, the Owner Trustee shall not be liable, on
account of such action or inaction, to any Person. If the Owner
Trustee shall not have received appropriate instruction within 10
days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this
Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Controlling Certificateholders, the Holder of the
Reserve Regular Interest and the Holder of the YSA Regular Interest
and shall have no liability to any Person for such action or
inaction.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to SECTION 6.03; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any liens
on any part of the Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to SECTION 6.03.
SECTION 6.06. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in
SECTION 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust being treated as a association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes. The
Owner Trustee and the Seller agree that no election to treat the Trust as an
association (or publicly traded partnership) taxable as a corporation for United
States Federal income tax purposes or any relevant state tax purposes shall be
made by or on behalf of the Trust. The Certificateholders, the Holders of the
Reserve Regular Interest and the Holders of the YSA Regular Interest shall not
direct the Owner Trustee or the Seller to take action that would violate the
provisions of this Section.
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ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder
or under any Basic Document under any circumstances, except (i) for its own
willful misconduct or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in SECTION 7.03 expressly made by the Owner
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Administrator, the Controlling
Certificateholders, the Holder of the Reserve Regular Interest or
the Holder of the YSA Regular Interest;
(c) no provision of this Agreement or any Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its
rights or powers hereunder or under any Basic Document, if the Owner
Trustee shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability
is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the
Basic Documents, including the principal of and interest on the
Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Seller or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner
Trust Estate or for or in respect of the validity or sufficiency of
the Basic Documents, other than the certificate of authentication on
the Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty, or obligation to any Noteholder, the
Certificateholders, the Holder of the Reserve Regular Interest or
the Holder of the YSA Regular Interest, other than as expressly
provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Administrator, the Indenture Trustee or the
Servicer under any of the Basic Documents or otherwise, and the
Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the Basic Documents
that are required to
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be performed by the Administrator under the Administration
Agreement, the Indenture Trustee under the Indenture or the Servicer
under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any Basic
Document, at the request, order or direction of the Controlling
Certificateholders, the Holder of the Reserve Regular Interest or
the Holder of the YSA Regular Interest unless such Holders have
offered to the Owner Trustee security or indemnity satisfactory to
it against the costs, expenses and liabilities that may be incurred
by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.
SECTION 7.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
(a) to any Certificateholder, any Holder of the Reserve Regular Interest or any
Holder of the YSA Regular Interest promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents and (b) to the Indenture Trustee
promptly upon written request therefor, copies of the Purchase Agreement, the
Sale and Servicing Agreement, the Administration Agreement and the Trust
Agreement.
SECTION 7.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Seller, for the benefit of the
Certificateholders, the Holder of the Reserve Regular Interest and the Holder of
the YSA Regular Interest that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and
this Agreement will be executed and delivered by one of its officers
who is duly authorized to execute and deliver this Agreement on its
behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any federal or Delaware law,
governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it,
or constitute any default under its charter documents or by-laws or
any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound.
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be
22
genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer or other authorized
officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under
this Agreement or the Basic Documents, the Owner Trustee (i) may act
directly or through its agents or attorneys pursuant to agreements
entered into with any of them, and the Owner Trustee shall not be
liable for the conduct or misconduct of such agents or attorneys if
such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable
care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants
or other such persons.
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created Chase Manhattan Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. OWNER TRUSTEE NOT LIABLE FOR THE CERTIFICATES, THE RESERVE
REGULAR INTEREST, THE YSA REGULAR INTEREST, THE NOTES OR RECEIVABLES. The
recitals contained herein and in the Certificates (other than the signature and
counter-signature of the Owner Trustee on the Certificates and its
representations and warranties in SECTION 7.03) shall be taken as the statements
of the Seller and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, or of the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates),
the Notes, the Reserve Regular Interest or the YSA Regular Interest or of any
other Basic Document or of any Receivable or related documents. The Owner
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any Financed Equipment or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to the Certificateholders,
the Holder of the Reserve Regular Interest and the Holder of the YSA Regular
Interest under this Agreement or the Noteholders under the Indenture, including,
without limitation: the existence, condition and ownership of any Financed
Equipment; the existence and enforceability of any insurance thereon; the
existence and contents of any Receivable on any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the
23
compliance by the Seller or the Servicer with any warranty or representation
made under any Basic Document or in any related document or the accuracy of
any such warranty or representation or any action of the Administrator, the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee.
SECTION 7.07. OWNER TRUSTEE MAY OWN THE CERTIFICATES AND NOTES. The Owner
Trustee in its individual or any other capacity may become a Holder or pledgee
of the Certificates, the Reserve Regular Interest, the YSA Regular Interest or
the Notes and may deal with the Seller, the Administrator, the Indenture Trustee
and the Servicer in banking transactions with the same rights as it would have
if it were not Owner Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Seller
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
however, that the Owner Trustee's right to enforce such obligation shall be
subject to the provisions of SECTION 11.09.
SECTION 8.02. INDEMNIFICATION. The Seller shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Seller shall not be liable
for or required to indemnify the Owner Trustee from and against Expenses arising
or resulting from any of the matters described in the third sentence of
SECTION 7.01; provided, however, that the Owner Trustee's right to enforce such
obligation shall be subject to the provisions of SECTION 12.09. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In any event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Seller, which approval shall not be unreasonably withheld.
SECTION 8.03. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. TERMINATION OF TRUST AGREEMENT. (a) This Agreement (other
than Article VIII) and the Trust shall terminate and be of no further force or
effect, upon the final distribution by the Owner Trustee of all moneys or other
property or proceeds of the Owner Trust Estate in accordance with the terms of
the Indenture, the Sale and Servicing Agreement and Article V. Any money or
other property held as part of the Owner Trust Estate following such
distribution shall be distributed to the Holder of the Residual Certificate.
The bankruptcy, liquidation, dissolution, death or incapacity of a
Certificateholder, the Holder of the Reserve Regular Interest or the Holder of
the YSA Regular Interest shall not (x) operate to terminate this Agreement or
the Trust, or (y) entitle such Holder's legal representatives or heirs to claim
an accounting or to take any action or proceeding in any court for a partition
or winding up of all or any part of the Trust or Owner Trust Estate or (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in SECTION 9.01(A), none of the
Seller, the Certificateholders, the Reserve Regular Interest Holder
or the YSA Regular Interest Holder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust shall be given
to the Certificateholders, the Reserve Regular Interest Holder and
the YSA Regular Interest Holder, specifying, in the case of the
Certificates, the Distribution Date upon which the
Certificateholders shall surrender the Certificates to the Paying
Agent for payment of the final distribution and cancellation. Such
notice shall be given by the Owner Trustee by letter to the
Certificateholders, the Reserve Regular Interest Holder and the YSA
Regular Interest Holder mailed within five Business Days of receipt
of notice of such termination from the Servicer given pursuant to
Section 9.01(c) of the Sale and Servicing Agreement, stating (i) the
Distribution Date upon or with respect to which final payment of the
Certificates, the Reserve Regular Interest and the YSA Regular
Interest shall be made upon presentation and surrender, in the case
of the Certificateholders, of the Certificates at the office of the
Paying Agent therein designated and (ii) the amount of any such
final payment. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the
Paying Agent at the same time. In the case of the Certificates,
upon presentation and surrender thereof, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable
on such Distribution Date pursuant to SECTION 5.02.
In the event that any Certificateholder shall not surrender a
Certificate for cancellation within six months after the date specified in the
above mentioned written notice, the Owner Trustee shall give a second written
notice to such Certificateholder to surrender the Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact such Certificateholder concerning
surrender of the Certificate, and the cost thereof shall be paid out of the
funds and other assets that shall remain subject to this Agreement. Any funds
25
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to the Holder of the Residual Certificate.
(d) Upon the winding up of the Trust and its termination,
the Owner Trustee shall cause the Certificate of Trust to be
canceled by filing a certificate of cancellation with the Secretary
of State in accordance with the provisions of Section 3810 of the
Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise corporate
trust powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent which has) a rating of at least Baa3 by Moody's and
at least BBB- by Standard & Poor's. If such corporation shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Owner Trustee
shall resign immediately in the manner and with the effect specified in
SECTION 10.02.
SECTION 10.02. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Seller and the Administrator; PROVIDED,
HOWEVER, that such resignation and discharge shall only be effective upon the
appointment of a successor Owner Trustee. Upon receiving such notice of
resignation, the Seller shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of SECTION 10.01 and shall fail to resign after
written request therefor by the Seller, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Seller may remove the Owner Trustee. If the Seller
shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Seller shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed and one copy to
the successor Owner Trustee and Seller shall pay all fees owed to the outgoing
Owner Trustee.
26
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Seller shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to SECTION 10.02 shall execute, acknowledge and deliver to
the Seller and to its predecessor Owner Trustee, with a copy thereof delivered
to the Administrator, an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties, and obligations of its predecessor under this
Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver
to the successor Owner Trustee all documents and statements and monies held by
it under this Agreement; and the Seller and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to SECTION 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Seller shall mail notice of the successor of such Owner
Trustee to the Certificateholders, the Holder of the Reserve Regular Interest,
the Holder of the YSA Regular Interest, the Indenture Trustee, the Noteholders
and the Rating Agencies. If the Seller shall fail to mail such notice within
10 days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Seller.
SECTION 10.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder; PROVIDED
such corporation shall be eligible pursuant to SECTION 10.01, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; anything herein to the contrary notwithstanding; PROVIDED,
FURTHER, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Equipment may at the time be
located, the Seller and the Owner Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or
27
separate trustees, of all or any part of the Owner Trust Estate, and to vest
in such Person, in such capacity, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Seller and the Owner Trustee may
consider necessary or desirable. If the Seller shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to SECTION 10.01 and
no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to SECTION 10.03.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred
or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act
or acts are to be performed, the Owner Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Owner Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Seller and the
Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE XI
FASIT PROVISIONS
SECTION 11.01. (a) The Owner Trustee shall not permit the creation of
any "interests" (within the meaning of Section 860L of the Code) in the FASIT
other than the Notes, the Certificates, the Reserve Regular Interest and the
YSA Regular Interest unless it first receives an Opinion of Counsel at the
expense of the party seeking the creation of such interests to the effect
that such creation will not cause an Adverse FASIT Event.
(b) Subject to any Internal Revenue Service procedures
or FASIT rovisions so requiring, the Owner Trustee shall sign (or,
if permitted by the Code, cause the Administrator to sign) all of
the Tax Returns delivered to it by the FASIT Administrator and
return them to the FASIT Administrator for filing in a timely
manner. The Owner Trustee shall promptly provide the FASIT
Administrator with such information in the possession of the Owner
Trustee as the FASIT Administrator may from time to time request
for the purpose of enabling the FASIT Administrator to prepare Tax
Returns.
(c) The Owner Trustee shall assist the Servicer and the
FASIT Administrator, to the extent reasonably requested by the
Servicer and the FASIT Administrator to do so, to take such actions
and cause the Trust to take such actions as they deem necessary or
desirable to maintain the status of the Trust as a FASIT under the
FASIT Provisions. The Owner Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the
Servicer or the FASIT Administrator, as applicable, has advised it
in writing that it has received an Opinion of Counsel to the effect
that an Adverse FASIT Event could occur with respect to such
action. In addition, prior to taking any action with respect to
the Trust or its assets, or causing the Trust to take any action,
which is not expressly permitted under the terms of this Agreement,
unless the Owner Trustee shall have received an Opinion of Counsel
that such action will not result in an Adverse FASIT Event, the
Owner Trustee will consult with the Servicer or the FASIT
Administrator, as applicable, or its designee, in writing, with
respect to whether such action could cause an Adverse FASIT Event
to occur with respect to the Trust, and the Owner Trustee shall not
take any such action or cause the Trust to take any such action as
to which the Servicer or the FASIT Administrator, as applicable,
has advised it in writing that an Adverse FASIT Event could occur.
(d) Following the Startup Day, the Owner Trustee shall
not accept any contributions of assets to the Trust unless (subject
to Section 10.01(f) of the Sale and Servicing Agreement) the
Servicer and the Owner Trustee shall have received an Opinion of
Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in
the Trust will not cause the Trust to fail to qualify as a FASIT at
any time that any Notes, the Certificates, the Reserve Regular
Interest or the YSA Regular Interest are outstanding or subject the
Trust to any tax under the FASIT Provisions or other applicable
provisions of federal, state and local law or ordinances.
(e) The Owner Trustee shall not (subject to Section
10.01(f) of the Sale and Servicing Agreement) enter into any
arrangement by which the Trust will receive a fee or
29
other compensation for services or will originate any loan nor
permit the Trust to receive any income from assets other than
"permitted assets" as defined in Section 860L(c) of the Code.
(f) The Owner Trustee shall not sell, dispose of or
substitute for any of the Receivables (except in connection with
(i) the default, imminent default or foreclosure of a Receivable,
including but not limited to, the acquisition or sale of Financed
Equipment acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of the Trust, (iii) the termination of the Trust
pursuant to Article IX of this Agreement or (iv) a repurchase of
Receivables pursuant to Article IX or Section 3.02 of the Sale and
Servicing Agreement) nor acquire any assets for the Trust, nor sell
or dispose of any investments in the Trust Accounts for gain nor
accept any contributions to the Trust after the Closing Date unless
it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not affect adversely the status of
the Trust as a FASIT.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. SUPPLEMENTS AND AMENDMENTS. This Agreement may be
amended by the Seller and the Owner Trustee, with prior written notice to the
Rating Agencies, without the consent of any of the Noteholders, the
Certificateholders, the Holder of the Reserve Regular Interest or the Holder
of the YSA Regular Interest, 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, the
Certificateholders the Holder of the Reserve Regular Interest or the Holder
of the YSA Regular Interest, or for the purpose of enabling the Trust to
continue to qualify as a FASIT and the Notes, the Certificates (other than
the Residual Certificate) and the Reserve Regular Interest and YSA Regular
Interest to continue to qualify as "regular interests" or the Residual
Certificate to continue to qualify as the "ownership interest" in the FASIT
constituted by the Trust (including, without limitation, compliance with
regulations that have not yet been issued); PROVIDED, HOWEVER, that such
amendment shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder or the federal tax
characteristics of the Notes.
This Agreement may also be amended from time to time by the Seller
and the Owner Trustee, with prior written notice to the Rating Agencies,
without the consent of the Holders of the Certificates or the Holders of the
Reserve Regular Interest or the YSA Regular Interest but with the consent of
the holders of Notes evidencing not less than a majority of the Outstanding
Principal Amount of the Notes, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders; PROVIDED,
HOWEVER, that no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of payments
on Receivables or distributions that shall be required to be made for the
benefit of the Noteholders or (b) reduce the aforesaid percentage of the
Outstanding Principal Amount of the Notes required to consent to any such
amendment, without the consent of the holders of all the outstanding Notes.
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At any time after the Notes have been retired in accordance with
the provisions of the Indenture, this Agreement may also be amended from time
to time by the Seller and the Owner Trustee, with the consent of the
Controlling Certificateholders, 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 Certificateholders
or the Holders of the Reserve Regular Interest and the YSA Regular Interest;
PROVIDED, HOWEVER, that no such amendment shall 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 Certificateholders or the Holders of the Reserve
Regular Interest and the YSA Regular Interest without the consent of the
Holders of the Fixed-Rate Certificates, the Interest Only Certificates and
the Holders of the YSA Regular Interest and the Reserve Regular Interest.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the Noteholders or the
Indenture Trustee pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or any
other Basic Document, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the other Basic Documents and
that such amendment will not cause an Adverse FASIT Event. The Owner Trustee
may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 12.02. NO LEGAL TITLE TO OWNER TRUST ESTATE IN THE
CERTIFICATEHOLDERS, THE HOLDER OF THE RESERVE REGULAR INTEREST OR THE HOLDER
OF THE YSA REGULAR INTEREST. The Certificateholders, the Holder of the
Reserve Regular Interest and the Holder of the YSA Regular Interest shall not
have legal title to any part of the Owner Trust Estate. The
Certificateholders, the Holder of the Reserve Regular Interest and the Holder
of the YSA Regular Interest shall be entitled to receive distributions with
respect to its ownership interest therein only in accordance with ARTICLES V
and IX. No transfer, by operation of law or otherwise, of any right, title,
and interest of the Certificateholders, the Holder of the Reserve Regular
Interest or the Holder of the YSA Regular Interest to their ownership
interest in the Owner Trust Estate shall operate to terminate this Agreement
or the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 12.03. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Seller, the
Certificateholders, the Reserve
30
Regular Interest Holder, the YSA Regular Interest Holder, the Administrator
and, to the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
SECTION 12.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that
notice to the Owner Trustee shall be deemed given only upon actual receipt by
the Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Seller, addressed to Caterpillar Financial Funding
Corporation, Greenview Plaza, 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx X-0X, Xxx Xxxxx,
Xxxxxx 00000; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to the
Certificateholders, the Holder of the Reserve Regular Interest or
the Holder of the YSA Regular Interest shall be given by
first-class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholders, the
Holder of the Reserve Regular Interest or the Holder of the YSA
Regular Interest, as the case may be, receives such notice.
SECTION 12.05. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 12.06. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 12.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Seller, the Owner Trustee and its successors and the Certificateholders and
the Subordinated Interest Holders and their successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or
other instrument or action by the Certificateholders and the Subordinated
Interest Holders shall bind the successors and assigns of the
Certificateholders.
SECTION 12.08. COVENANT OF THE SELLER. In the event that any litigation
with claims in excess of $1,000,000 to which the Seller is a party which
shall be reasonably likely to result in a material judgment against the
Seller that the Seller will not be able to satisfy shall be commenced by the
Certificateholders, the Holder of the Reserve Regular Interest or the Holder
of the YSA Regular Interest, during the period beginning nine months
following the commencement of such litigation and continuing until such
litigation is dismissed or otherwise terminated (and, if such litigation has
resulted in a final judgment against the Seller, such
32
judgment has been satisfied) the Seller shall not pay any dividend to
Caterpillar Financial Services Corporation, or make any distribution on or in
respect of its capital stock to Caterpillar Financial Services Corporation,
or repay the principal amount of any indebtedness of the Seller held by
Caterpillar Financial Services Corporation, unless (i) after giving effect to
such payment, distribution or repayment, the Seller's liquid assets shall not
be less than the amount of actual damages claimed in such litigation or (ii)
the Rating Agency Condition shall have been satisfied with respect to any
such payment, distribution or repayment. The Seller further agrees that
prior to the termination of the Trust it shall not revoke, modify or
otherwise amend any agreements with Caterpillar Financial Services
Corporation in effect on the Closing Date in any manner that would adversely
affect the rights of the Seller to receive from Caterpillar Financial
Services Corporation contributions of capital or payments on demand pursuant
to such agreements. The Seller further covenants and agrees that it will not
enter into any transaction or take any action (other than any transaction or
action contemplated by this Agreement or any of the Basic Documents) if, as a
result of such transaction or action, any rating of either the Notes or the
Certificates by any of the Rating Agencies would be downgraded or withdrawn.
SECTION 12.09. NO PETITION. The Owner Trustee, the Certificateholders,
by accepting their Certificates, the Reserve Regular Interest Holder and the
YSA Regular Interest Holder, by accepting their interests in the Reserve
Regular Interest and the YSA Regular Interest, and the Indenture Trustee and
each Noteholder by accepting the benefits of this Agreement, hereby covenant
and agree that they will not, prior to the date which is one year and one day
after the termination of the Trust, institute against the Seller or the
Issuer, or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificate, the Notes, this Agreement or any of the Basic Documents.
SECTION 12.10. NO RECOURSE. The Certificateholders by accepting their
Certificates and the Holder of the Reserve Regular Interest and the Holder of
the YSA Regular Interest acknowledge that the Certificates, the Reserve
Regular Interest and the YSA Regular Interest represent beneficial interests
in the Trust only and do not represent an interest in or obligation of the
Seller, the Servicer, the Administrator, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof, and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
in this Agreement, the Certificates or the other Basic Documents.
SECTION 12.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 12.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
33
SECTION 12.13. SELLER PAYMENT OBLIGATION. The Seller shall be
responsible for payment of the Administrator's fees under the Administration
Agreement (to the extent not paid pursuant to Section 5.04 of the Sale and
Servicing Agreement) and shall reimburse the Administrator for all expenses
and liabilities of the Administrator incurred thereunder.
34
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as
of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee,
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
CATERPILLAR FINANCIAL FUNDING
CORPORATION, as Seller,
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
EXHIBIT A
FORM OF FIXED-RATE CERTIFICATE
NUMBER Certificate Balance as of the Closing Date:
$[ ]
Portion of the Certificate Balance evidenced
by this Fixed-Rate Certificate:
SEE REVERSE FOR CERTAIN DEFINITIONS
THE SECURITIES REPRESENTED BY THIS FIXED-RATE CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH THE TRUST AGREEMENT.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OR ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (III)
ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
SUCH PLAN'S INVESTMENT IN THE ENTITY. NO FIXED-RATE CERTIFICATE MAY BE
ACQUIRED OR HELD BY ANY PERSON (OTHER THAN THE SELLER OR ANY OF ITS
AFFILIATES) IF AS A RESULT OF SUCH ACQUISITION OR HOLDING SUCH PERSON WOULD
OWN MORE THAN 49% OF THE OUTSTANDING CERTIFICATE BALANCE OF THE FIXED-RATE
CERTIFICATES.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS
SET FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF
THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "FINANCIAL ASSET SECURITIZATION INVESTMENT TRUST," AS
THOSE TERMS ARE DEFINED IN SECTIONS 860L OF THE INTERNAL REVENUE CODE OF 1986.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JULY __, 1998.
ASSUMING THAT THE INSTALMENT SALES CONTRACTS AND LEASES PREPAY AT A CONSTANT
RATE OF ___% PER ANNUM, THIS CERTIFICATE HAS
A-1
BEEN ISSUED WITH NO MORE THAN $ OF OID PER $100,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS % AND THE AMOUNT
OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $ PER
$100,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE
APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE INSTALMENT SALES
CONTRACTS OR LEASES WILL PREPAY AT A RATE BASED ON THE CONSTANT PREPAYMENT
RATE OR AT ANY OTHER RATE.]
A-2
CATERPILLAR FINANCIAL ASSET TRUST 1998-A
[ ]% FIXED-RATE ASSET BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the property
of which includes a pool of retail installment sale contracts and finance
leases secured by new and used machinery and certain monies due or received
thereunder and sold to the Trust (as defined below) by Caterpillar Financial
Funding Corporation.
(This Certificate does not represent an interest in or obligation of
Caterpillar Financial Funding Corporation, Caterpillar Financial Services
Corporation, Caterpillar Inc. or any of their respective affiliates, except
to the extent described below.)
THIS CERTIFIES THAT ______________________________________ is the
registered Holder of the portion of the Certificate Balance specified above in
a nonassessable, fully-paid, undivided interest designated as the Fixed-Rate
Certificates in Caterpillar Financial Asset Trust 1998-A (the "Trust") formed by
Caterpillar Financial Funding Corporation, a Nevada corporation (the "Seller").
The Trust was created pursuant to an Amended and Restated Trust
Agreement dated as of July 1, 1998 (the "Trust Agreement"), between the
Seller and Chase Manhattan Bank Delaware, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement
or the Sale and Servicing Agreement dated as of July 1, 1998 (the "Sale and
Servicing Agreement"), among the Trust, the Seller and Caterpillar Financial
Services Corporation, as servicer (the "Servicer"), as applicable.
This Certificate is one of a class of duly authorized Certificates
designated as Fixed-Rate Certificates (herein called the "Fixed-Rate
Certificates"). Interest Only Certificates and a Residual Certificate have
also been issued pursuant to the Trust Agreement (together with the
Fixed-Rate Certificates, the "Certificates"). A Reserve Regular Interest and
a YSA Regular Interest have also been issued pursuant to the Trust Agreement.
Also issued under the Indenture dated as of July 1, 1998, between the Trust
and The First National Bank of Chicago, as indenture trustee, are Notes
designated as "Class A-1 5.6375% Asset Backed Notes" (the "Class A-1 Notes"),
"Class A-2 5.75% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3
5.85% Asset Backed Notes" (the "Class A-3 Notes") and "Class B 5.85% Asset
Backed Notes" (the "Class B Notes"; together with the Class A-1 Notes, the
Class A-2 Notes and the Class A-3 Notes, the "Notes"). This Fixed-Rate
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of
this Fixed-Rate Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The property of the Trust includes a pool of
retail installment sale contracts and finance leases secured by new and used
equipment (the "Receivables"), all monies received on or after July 1, 1998
from payments on the Receivables, security interests in the equipment
financed thereby and certain other cross-collateralized equipment, certain
bank accounts and the proceeds thereof, proceeds from claims on certain
insurance policies and certain other rights under the Trust Agreement and the
Sale and Servicing Agreement, all right, title, and interest of the Seller in
and to the Purchase Agreement dated as of July 1, 1998 between Caterpillar
Financial Services
A-3
Corporation and the Seller and all proceeds of the foregoing. The Holder of
this Fixed-Rate Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Fixed-Rate Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
Under the Trust Agreement, there will be distributed on the 25th day of
each month or, if such day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on August 25, 1998 to the Person in whose
name this Fixed-Rate Certificate is registered at the close of business on
the last calendar day of the month preceding the month in which such
Distribution Date occurs (the "Record Date") the portion indicated on the
face hereof of the aggregate amount to be distributed to the Fixed-Rate
Certificates on such Distribution Date.
Notwithstanding any prior termination of the Trust Agreement, the
Certificateholder, by its acceptance of this Fixed-Rate Certificate,
covenants and agrees that it shall not, prior to the date which is one year
and one day after the termination of the Trust, institute against the Seller
or the Issuer, or join in any institution against the Seller or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Fixed-Rate Certificate, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Fixed-Rate Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Fixed-Rate Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Fixed-Rate
Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Fixed-Rate Certificate at the office or agency maintained for the
purpose by the Owner Trustee in the Borough of Manhattan, The City of New
York.
The Fixed-Rate Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, Caterpillar Inc., the Owner Trustee or
any Affiliates of any of them and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated herein
or in the Trust Agreement or the Basic Documents. In addition, this
Fixed-Rate Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections
with respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Sale and Servicing Agreement and the
Trust Agreement. The Fixed-Rate Certificates are limited in right of payment
to certain collections and recoveries respecting the Receivables, all as more
specifically set forth in the Sale and Servicing Agreement and the Trust
Agreement. A copy of each of the Sale and Servicing Agreement and the Trust
Agreement may be examined during normal business hours at the principal
office of the Seller, and at such other places, if any, designated by the
Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Seller and the rights of the
A-4
Certificateholders under the Trust Agreement at any time by the Seller and
the Owner Trustee with the consent of the holders of the Notes evidencing a
majority of the outstanding Notes.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Fixed-Rate Certificate is registered as the Owner hereof for all purposes,
and none of the Owner Trustee, the Certificate Registrar or any such agent
shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to the
Certificateholders, the Holder of the YSA Regular Interest and the Holder of
the Reserve Regular Interest of all amounts required to be paid to it
pursuant to the Trust Agreement and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Certificates, the Reserve Regular Interest and the YSA Regular Interest;
PROVIDED, HOWEVER, such right of purchase is exercisable only on any
Distribution Date on which the Pool Balance is 10% or less of the Initial
Pool Balance.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Fixed-Rate Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
THIS FIXED-RATE CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE.
A-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Fixed-Rate Certificate to be duly
executed.
CATERPILLAR FINANCIAL ASSET TRUST
1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee
Dated: By:
--------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Fixed-Rate Certificates referred to in the
within-mentioned Trust Agreement.
CHASE MANHATTAN BANK, or CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee DELAWARE, as Owner Trustee
By THE CHASE MANHATTAN
BANK, as Authenticating Agent
By: By:
--------------------------- --------------------------------
Authorized Signatory Authorized Signatory
A-6
EXHIBIT B
FORM OF INTEREST ONLY CERTIFICATE
NUMBER Notional Amount of the Interest Only
Certificates as of the Closing Date:
$[ ]
Portion of the Notional Amount evidenced
by this Interest Only Certificate:
SEE REVERSE FOR CERTAIN DEFINITIONS
THE SECURITIES REPRESENTED BY THIS INTEREST ONLY CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE
/SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH THE TRUST AGREEMENT.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OR ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (III)
ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
SUCH PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE IS NOT ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, EACH OF COMPONENT X-0,
XXXXXXXXX X-0, XXXXXXXXX X-0 AND COMPONENT B REPRESENTED BY THIS CERTIFICATE
IS A SEPARATE "REGULAR INTEREST" IN A "FINANCIAL ASSET SECURITIZATION
INVESTMENT TRUST," AS THOSE TERMS ARE DEFINED IN SECTIONS 860L OF THE
INTERNAL REVENUE CODE OF 1986.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING
THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS JULY __, 1998. ASSUMING
THAT THE INSTALMENT SALES CONTRACTS AND LEASES PREPAY AT A CONSTANT RATE OF
____% PER ANNUM, THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$ OF OID PER $100,000 OF INITIAL AGGREGATE NOTIONAL
AMOUNT, THE YIELD TO MATURITY IS % AND THE AMOUNT OF OID ATTRIBUTABLE TO
THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $ PER
$100,000 OF AGGREGATE NOTIONAL AMOUNT, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE
B-1
THAT THE INSTALMENT SALES CONTRACTS OR LEASES WILL PREPAY AT A RATE BASED ON
THE CONSTANT PREPAYMENT RATE OR AT ANY OTHER RATE.]
B-2
CATERPILLAR FINANCIAL ASSET TRUST 1998-A
[ ]% INTEREST ONLY ASSET BACKED CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the property
of which includes a pool of retail installment sale contracts and finance
leases secured by new and used machinery and certain monies due or received
thereunder and sold to the Trust (as defined below) by Caterpillar Financial
Funding Corporation.
(This Certificate does not represent an interest in or obligation of
Caterpillar Financial Funding Corporation, Caterpillar Financial Services
Corporation, Caterpillar Inc. or any of their respective affiliates, except
to the extent described below.)
THIS CERTIFIES THAT _______________________________________ is the
registered Holder of the portion of the Notional Amount specified on the face
hereof in a nonassessable, fully-paid, undivided interest designated as the
Interest Only Certificates in Caterpillar Financial Asset Trust 1998-A (the
"Trust") formed by Caterpillar Financial Funding Corporation, a Nevada
corporation (the "Seller").
The Trust was created pursuant to an Amended and Restated Trust
Agreement dated as of July 1, 1998 (the "Trust Agreement"), between the
Seller and Chase Manhattan Bank Delaware, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement
or the Sale and Servicing Agreement dated as of July 1, 1998 (the "Sale and
Servicing Agreement"), among the Trust, the Seller and Caterpillar Financial
Services Corporation, as servicer (the "Servicer"), as applicable.
This Certificate is one of a duly authorized class of Certificates
designated as "Interest Only Certificates" (herein called the "Interest Only
Certificates") issued pursuant to the Trust Agreement. An Asset Backed
Fixed-Rate Certificate and a Residual Certificate have also been issued
pursuant to the Trust Agreement (together with the Interest Only
Certificates, the "Certificates"). A Reserve Regular Interest and a YSA
Regular Interest have also been issued pursuant to the Trust Agreement. Also
issued under the Indenture dated as of July 1, 1998, between the Trust and
The First National Bank of Chicago, as indenture trustee, are Notes
designated as "Class A-1 5.6375% Asset Backed Notes" (the "Class A-1 Notes"),
"Class A-2 5.75% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3
5.85% Asset Backed Notes" (the "Class A-3 Notes") and "Class B 5.85% Asset
Backed Notes" (the "Class B Notes"; together with the A-1 Notes, the A-2
Notes and the Class A-3 Notes, the "Notes"). This Interest Only Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this Interest Only
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The property of the Trust includes a pool of retail
installment sale contracts and finance leases secured by new and used
equipment (the "Receivables"), all monies received on or after July 1, 1998
from payments on the Receivables, security interests in the equipment
financed thereby and certain other cross-collateralized equipment, certain
bank accounts and the proceeds thereof, proceeds from claims on certain
insurance policies and certain other rights under the Trust Agreement and the
Sale and Servicing Agreement, all right, title, and interest of the Seller in
and to the Purchase Agreement
B-3
dated as of July 1, 1998 between Caterpillar Financial Services Corporation
and the Seller and all proceeds of the foregoing. The Holder of this
Interest Only Certificate acknowledges and agrees that its rights to receive
distributions in respect of this Interest Only Certificate are subordinated
to the rights of the Noteholders and the Holders of the Fixed-Rate
Certificates as described in the Sale and Servicing Agreement and the
Indenture. Principal is not payable with respect to this Interest Only
Certificate.
Under the Trust Agreement, there will be distributed on the 25th day of
each month or, if such day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on August 25, 1998 to the Person in whose
name this Interest Only Certificate is registered at the close of business on
the last calendar day of the month preceding the month in which such
Distribution Date occurs (the "Record Date") the portion indicated on the
face hereof of the aggregate amount to be distributed to the Interest Only
Certificates on such Distribution Date.
Notwithstanding any prior termination of the Trust Agreement, the
Certificateholder, by its acceptance of this Interest Only Certificate,
covenants and agrees that it shall not, prior to the date which is one year
and one day after the termination of the Trust, institute against the Seller
or the Issuer, or join in any institution against the Seller or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Interest Only Certificate, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Interest Only Certificate will be made as provided
in the Trust Agreement by the Owner Trustee by wire transfer or check mailed
to the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Interest Only Certificate or the making of
any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Interest Only
Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Interest Only Certificate at the office or agency maintained for the
purpose by the Owner Trustee in the Borough of Manhattan, The City of New
York.
The Interest Only Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, Caterpillar Inc., the Owner Trustee or
any Affiliates of any of them and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated herein
or in the Trust Agreement or the Basic Documents. In addition, this Interest
Only Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections
with respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Sale and Servicing Agreement and the
Trust Agreement. The Interest Only Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all
as more specifically set forth in the Sale and Servicing Agreement and the
Trust Agreement. A copy of each of the Sale and Servicing Agreement and the
Trust Agreement may be examined during normal business hours at the principal
office of the Seller, and at such other places, if any, designated by the
Seller, by any Certificateholder upon written request.
B-4
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Seller and the rights of the Certificateholders under the Trust Agreement
at any time by the Seller and the Owner Trustee with the consent of the
holders of the Notes evidencing a majority of the outstanding Notes.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Interest Only Certificate is registered as the Owner hereof for all purposes,
and none of the Owner Trustee, the Certificate Registrar or any such agent
shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders, the Holder of the Reserve Regular Interest and the Holder
of the YSA Regular Interest of all amounts required to be paid to it pursuant
to the Trust Agreement and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Certificates, the Reserve Regular Interest and the YSA Regular Interest;
PROVIDED, HOWEVER, such right of purchase is exercisable only on any
Distribution Date on which the Pool Balance is 10% or less of the Initial
Pool Balance.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Interest Only Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
THIS INTEREST ONLY CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.
B-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Interest Only Certificate to be duly
executed.
CATERPILLAR FINANCIAL ASSET TRUST
1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee
Dated: By:
----------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Interest Only Certificates referred to in the
within-mentioned Trust Agreement.
CHASE MANHATTAN BANK, or CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee DELAWARE, as Owner Trustee
By THE CHASE MANHATTAN
BANK, as Authenticating Agent
By: By:
----------------------------- -------------------------------
Authorized Signatory Authorized Signatory
B-6
EXHIBIT C
FORM OF RESIDUAL CERTIFICATE
NUMBER Percentage Interest evidenced
by this Residual Certificate:
100%
THE SECURITIES REPRESENTED BY THIS RESIDUAL CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH THE TRUST AGREEMENT.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OR ERISA, (II) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (III)
ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
SUCH PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE HELD OR TRANSFERRED EXCEPT IN WHOLE, AND MAY
ONLY BE HELD BY OR TRANSFERRED TO AN ELIGIBLE HOLDER (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS AN
"OWNERSHIP INTEREST" IN A "FINANCIAL ASSET SECURITIZATION TRUST" AS THOSE
TERMS ARE DEFINED IN SECTIONS 860L OF THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER CERTIFICATE TO THE
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS AND, FOR SO LONG AS IT
HOLDS THE RESIDUAL CERTIFICATE, SHALL REMAIN A DOMESTIC C CORPORATION OTHER
THAN (I) A CORPORATION WHICH IS EXEMPT FROM, OR IS NOT SUBJECT TO, TAX UNDER
CHAPTER 1 OF SUBTITLE A OF THE CODE, (II) AN ENTITY DESCRIBED IN CODE SECTION
851(A) OR CODE SECTION 856(A), (III) A REAL ESTATE MORTGAGE INVESTMENT
CONDUIT, AND (IV) AN ORGANIZATION TO WHICH PART I OF SUBCHAPTER T OF SUBTITLE
A OF THE CODE APPLIES (SUCH DOMESTIC C CORPORATION, AN "ELIGIBLE HOLDER") (2)
NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE
C-1
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A PERSON OTHER THAN AN ELIGIBLE HOLDER, SUCH REGISTRATION
SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
CATERPILLAR FINANCIAL ASSET TRUST 1998-A
RESIDUAL CERTIFICATE
evidencing an undivided interest in the Trust, as defined below, the property
of which includes a pool of retail installment sale contracts and finance
leases secured by new and used machinery and certain monies due or received
thereunder and sold to the Trust (as defined below) by Caterpillar Financial
Funding Corporation.
(This Certificate does not represent an interest in or obligation of
Caterpillar Financial Funding Corporation, Caterpillar Financial Services
Corporation, Caterpillar Inc. or any of their respective affiliates, except
to the extent described below.)
THIS CERTIFIES THAT CATERPILLAR FINANCIAL FUNDING CORPORATION is the
registered Holder of percentage interest specified on the face hereof in a
nonassessable, fully-paid, undivided interest designated as the Residual
Certificate in Caterpillar Financial Asset Trust 1998-A (the "Trust") formed
by Caterpillar Financial Funding Corporation, a Nevada corporation (the
"Seller").
The Trust was created pursuant to an Amended and Restated Trust
Agreement dated as of July 1, 1998 (the "Trust Agreement"), between the
Seller and Chase Manhattan Bank Delaware, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement
or the Sale and Servicing Agreement dated as of July 1, 1998 (the "Sale and
Servicing Agreement"), among the Trust, the Seller and Caterpillar Financial
Services Corporation, as servicer (the "Servicer"), as applicable.
This Residual Certificate is the duly authorized Residual Certificate
referred to in the Trust Agreement. Asset-Backed Interest Only Certificates
and an Asset-Backed Fixed-Rate Certificate have also been issued pursuant to
the Trust Agreement (together with the Residual Certificate, the
"Certificates"). A Reserve Regular Interest and a YSA Regular Interest have
also been issued pursuant to the Trust Agreement. Also issued under the
Indenture dated as of July 1, 1998, between the Trust and The First National
Bank of Chicago, as indenture trustee, are Notes designated as "Class A-1
5.6375% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2 5.75% Asset
Backed Notes" (the "Class A-2 Notes"), "Class A-3 5.85% Asset Backed Notes"
(the "Class A-3 Notes") and "Class B 5.85% Asset Backed Notes" (the "Class B
Notes"; together with the A-1 Notes, the A-2 Notes and the Class A-3 Notes,
the "Notes"). This Residual Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust
C-2
Agreement, to which Trust Agreement the Holder of this Residual Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
The property of the Trust includes a pool of retail installment sale
contracts and finance leases secured by new and used equipment (the
"Receivables"), all monies received on or after July 1, 1998 from payments on
the Receivables, security interests in the equipment financed thereby and
certain other cross-collateralized equipment, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement, all right, title, and interest of the Seller in and to the
Purchase Agreement dated as of July 1, 1998 between Caterpillar Financial
Services Corporation and the Seller and all proceeds of the foregoing. The
Holder of this Residual Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Residual Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture and the rights of the holders of the
Fixed-Rate Certificates and the Interest Only Certificates as described in
the Sale and Servicing Agreement and the Trust Agreement.
Under the Trust Agreement, there will be distributed on the 25th day of
each month or, if such day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on August 25, 1998 to the Person in whose
name this Residual Certificate is registered at the close of business on the
last calendar day of the month preceding the month in which such Distribution
Date occurs (the "Record Date") the amount to be distributed to such
Certificateholder on such Distribution Date.
Notwithstanding any prior termination of the Trust Agreement, the
Certificateholder, by its acceptance of this Residual Certificate, covenants
and agrees that it shall not, prior to the date which is one year and one day
after the termination of the Trust, institute against the Seller or the
Issuer, or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Residual Certificate, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Residual Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Residual Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Residual
Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Residual Certificate at the office or agency maintained for the purpose
by the Owner Trustee in the Borough of Manhattan, The City of New York.
The Residual Certificate does not represent an obligation of, or an
interest in, the Seller, the Servicer, Caterpillar Inc., the Owner Trustee or
any affiliates of any of them and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated herein
or in the Trust Agreement or the Basic Documents. In addition, this Residual
Certificate is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein and in the Sale and Servicing Agreement
C-3
and the Trust Agreement. The Residual Certificate is limited in right of
payment to certain collections and recoveries respecting the Receivables, all
as more specifically set forth in the Sale and Servicing Agreement and the
Trust Agreement. A copy of each of the Sale and Servicing Agreement and the
Trust Agreement may be examined during normal business hours at the principal
office of the Seller, and at such other places, if any, designated by the
Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Seller and the rights of the Certificateholders under the Trust Agreement
at any time by the Seller and the Owner Trustee with the consent of the
holders of the Notes evidencing a majority of the outstanding Notes.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Residual Certificate is registered as the Owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders, the Holder of the Reserve Regular Interest and the Holder
of the YSA Regular Interest of all amounts required to be paid to it pursuant
to the Trust Agreement and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Certificates, the Reserve Regular Interest and the YSA Regular Interest;
PROVIDED, HOWEVER, such right of purchase is exercisable only on any
Distribution Date on which the Pool Balance is 10% or less of the Initial
Pool Balance.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Residual Certificate shall not entitle the Holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS RESIDUAL CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE.
C-4
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Residual Certificate to be duly
executed.
CATERPILLAR FINANCIAL ASSET TRUST
1998-A,
By: CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee
Dated: By:
------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the Residual Certificate referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK, or CHASE MANHATTAN BANK
DELAWARE, as Owner Trustee DELAWARE, as Owner Trustee
By THE CHASE MANHATTAN
BANK, as Authenticating Agent
By: By:
------------------------- -------------------------------
Authorized Signatory Authorized Signatory
C-5
EXHIBIT D
CERTIFICATE OF TRUST OF
CATERPILLAR FINANCIAL ASSET TRUST 1998-A
THIS Certificate of Trust of CATERPILLAR FINANCIAL ASSET TRUST 1998-A
(the "Trust"), dated July 1, 1998, is being duly executed and filed by Chase
Manhattan Bank Delaware, as trustee, to form a business trust under the
Delaware Business Trust Act (12 DEL. CODE, Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is CATERPILLAR
FINANCIAL ASSET TRUST 1998-A.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is Chase Manhattan Bank Delaware, 0000
Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate
Trustee Administration Department.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as
Owner Trustee,
By:
-----------------------------------------
Name:
Title:
D-1
EXHIBIT E
[FORM OF INVESTMENT LETTER]
Chase Manhattan Bank Delaware
[address]
Caterpillar Financial Funding Corporation
[address]
The undersigned hereby certifies on behalf of the Purchaser named below
(the "Purchaser") as follows:
1. I_________________, am an authorized officer of the Purchaser.
[2. I am familiar with the provisions of Rule 144A ("Rule 144A") under
the Securities Act of 1933 (the "1933 Act").
a. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A.
b. The Purchaser is aware that the Issuer may rely on the
exemption from the registration requirements of the 1933 Act provided by
Rule 144A.
c. The Purchaser acknowledges that the Purchaser has (i)
received such information regarding the Issuer's [Certificates]
[Reserve Regular Interest][YSA Regular Interest] (the "Interests") as
the Purchaser may require pursuant to Rule 144A or (ii) the Purchaser
has determined not to request such information.]
[2. I am familiar with the provisions of Regulation D under the
Securities Act of 1933 (the "1933 Act").
a. The Purchaser is an "accredited investor" within the meaning
of Rule 501 (a)(1), (2), (3), or (7) of Regulation D under the 1933 Act.
b. In the normal course of the Purchaser's business the Purchaser
invests in or purchases securities similar to the Interests, has such
knowledge and experience in financial and business matters that the
Purchaser is capable of evaluating the merits and risks of its
investment in the Interests.
E-1
c. The Purchaser is capable of bearing the economic risks of an
investment in the Interests.]
3. The Purchaser is acquiring the Interests for its own account and/or
the account of its affiliated entities for the purpose of investment or
resale under Rule 144A or any other exemption from registration available
under the 1933 Act and not with a view to the distribution thereof.
4. The Purchaser understands that it is the expressed intent of the
Issuer that the Interests are being issued only in transactions not involving
any public offering within the meaning of the 1933 Act [and that the
Certificates will bear a legend substantially as set forth in the form of the
Certificate attached to the Trust Agreement].
5. The Purchaser has no present intention of selling, negotiating or
otherwise disposing of the Interests; PROVIDED HOWEVER, that it is understood
that the disposition of the Purchaser's property shall at all times be and
remain within its control and without prejudice, however, to its right at all
times to sell or otherwise dispose of all or any part of the Interests in
accordance with the Trust Agreement under a registration statement under the
1933 Act, or under the exemption from such registration available under the
1933 Act.
6. The Purchaser is not (i) an employee benefit plan (as defined in
Section 3(3) Employee Retirement Income Security Act of 1974, as amended
("ERISA") that is subject to the provisions of Title I of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code, (iii) any
entity whose underlying assets include "plan assets" by reason of any such
plan's investment in the entity or (iv) any other Person who is directly or
indirectly purchasing the Interests or an interest therein on behalf of, as
named fiduciary of, as trustee of, or with "plan assets" of, any such plan.
7. [Not applicable for Interest Only or Residual Certificates] The
Purchaser will not, as a result of its purchase or holding of the
[Certificates][YSA Regular Interest][Reserve Regular Interest], own more than
49% of the outstanding [Certificate Balance of the Fixed-Rate Certificates]
[Reserve Regular Interest Principal Balance][ YSA Regular Interest Principal
Balance].
8. The Purchaser acknowledges that transfer of an Interest can only be
effected in accordance with the Trust Agreement.
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made
jointly and severally.
Executed at __________, __________ this ________ day of ____________, 199_.
---------------------------------- ----------------------
Purchaser's Name and Title (Print) Signature of Purchaser
----------------------------------
E-2
Address of Purchaser
--------------------------------------
Purchaser's Taxpayer Identification or
Social Security Number
E-3
EXHIBIT F
FORM OF TRANSFER CERTIFICATE
______________, 19__
Caterpillar Financial Funding Corporation
Greenview Plaza
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx X-0X
Xxx Xxxxx, Xxxxxx 00000
Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Caterpillar Financial Asset Trust 1998-A
RE: RESIDUAL CERTIFICATE
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") the Residual Certificate (the
"Residual Certificate"), issued pursuant to the Trust Agreement (the
"Agreement"), dated as of July 1, 1998 between the Seller and Chase Manhattan
Bank Delaware as owner trustee under the Trust Agreement (the "Owner Trustee").
All terms used herein and not otherwise defined shall have the meanings set
forth in the Trust Agreement or the other Basic Documents, as applicable. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the
Seller and the Owner Trustee that:
1. The Purchaser is acquiring and will hold the Residual
Certificate for its own account and as beneficial owner thereof, and
not for the account of any other Person.
2. The Purchaser shall account for its interest in the
Residual Certificate for U.S. federal income tax purposes in a
manner consistent with the FASIT Provisions and the provisions of
the Basic Documents, and will cooperate with the Seller and
Servicer with respect to such matters relating to the Basic
Documents as to which the Purchaser's cooperation reasonably may be
requested.
3. For United States federal income tax purposes the
Purchaser is and, for so long as it holds the Residual Certificate,
shall remain a domestic C corporation other than (i) a corporation
which is exempt from, or is not subject to, tax under chapter 1 of
subtitle A of the Code, (ii) an entity described in Code section
851(a)
F-1
or Code section 856(a), (iii) a real estate mortgage investment
conduit, and (iv) an organization to which part I of subchapter T
of subtitle A of the Code applies (such domestic C corporation, an
"Eligible Holder").
4. The Purchaser (a) has historically paid its debts as
they have become due, (b) intends and believes that it will be able
to continue to pay its debts as they become due in the future, (c)
understands that as beneficial owner of the Residual Certificate it
may incur tax liabilities in excess of any cash flows generated by
such Residual Certificate, and (d) intends to pay any taxes
associated with holding the Residual Certificate as they become
due. The Purchaser has no knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long
as the Residual Certificate remains outstanding. No purpose of the
Purchaser's acquisition of the Residual Certificate is or will be
to impede the assessment or collection of any tax.
5. The Purchaser will not transfer any interest in the
Residual Certificate except in whole and only to a transferee that
(i) is an Eligible Holder and (ii) has delivered to the Seller a
letter in the form of this letter and, if requested by the Seller,
an opinion of counsel (in form and substance satisfactory to the
Seller) that the transfer will not cause the interest in such
Residual Certificate to be held by other than an Eligible Holder.
In connection with any such transfer, the Purchaser shall (i)
certify to the Seller that no purpose relating to the transfer of
the Residual Certificate is or will be to impede the assessment or
collection of any tax and (ii) conduct a reasonable investigation
of the financial condition of the prospective transferee of the
sort described in Treasury Regulations Section 1.860E-1(c)(4)(i)
and, as a result of that investigation, determine that the
prospective transferee has historically paid its debts as they
become due and has found no significant evidence to indicate that
such prospective transferee will not continue to pay its debts as
they become due in the future.
6. The Purchaser hereby consents to any additional
restrictions or arrangements (including by amendment to any Basic
Document or otherwise) that the Seller shall deem necessary upon
advice of counsel to ensure that the Residual Certificate will be
owned by an Eligible Holder or that the Trust will qualify as a
FASIT under the FASIT Provisions.
7. The Purchaser's Taxpayer Identification Number
is __________________________.
8. Within 30 days after its acquisition of the Residual
Certificate, the Purchaser shall prepare and file with the United
States 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.
Under penalties of perjury, I declare that I am an officer of the
Purchaser and I am duly authorized to act on behalf of the Purchaser, and to
best of my knowledge and belief, the statements herein are true and complete.
F-2
Very truly yours,
By:
Name:
Title:
F-3
