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Exhibit 4.3
Sale and Servicing Agreement
dated as of July 1, 2001
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SALE AND SERVICING AGREEMENT
among
CATERPILLAR FINANCIAL ASSET TRUST 2001-A
Issuer
CATERPILLAR FINANCIAL FUNDING CORPORATION
Seller
and
CATERPILLAR FINANCIAL SERVICES CORPORATION
Servicer
Dated as of July 1, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................2
SECTION 1.01. Definitions......................................................2
SECTION 1.02. Other Definitional Provisions...................................16
ARTICLE II CONVEYANCE OF RECEIVABLES................................................16
SECTION 2.01. Conveyance of Receivables.......................................16
SECTION 2.02. Closing.........................................................18
SECTION 2.03. Books and Records...............................................18
ARTICLE III THE RECEIVABLES..........................................................18
SECTION 3.01. Representations and Warranties of Seller........................18
SECTION 3.02. Repurchase by Seller or CFSC Upon Breach........................20
SECTION 3.03. Custody of Receivable Files.....................................20
SECTION 3.04. Duties of Servicer..............................................21
SECTION 3.05. Acceptance by Issuer and the Indenture Trustee of the
Receivables; Certification by the Indenture Trustee.............21
ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES..............................23
SECTION 4.01. Duties of Servicer..............................................23
SECTION 4.02. Collection of Receivable Payments...............................23
SECTION 4.03. Realization upon Receivables....................................24
SECTION 4.04. Physical Damage Insurance.......................................24
SECTION 4.05. Maintenance of Security Interests in Financed Equipment.........24
SECTION 4.06. Covenants of Servicer...........................................25
SECTION 4.07. Purchase by Servicer of Receivables upon Breach.................25
SECTION 4.08. Servicing Fee...................................................25
SECTION 4.09. Servicer's Certificate..........................................25
SECTION 4.10. Annual Statement as to Compliance; Notice of Default............26
SECTION 4.11. Annual Independent Certified Public Accountants' Report.........26
SECTION 4.12. Servicer Expenses...............................................27
ARTICLE V DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS
TO CERTIFICATEHOLDER AND NOTEHOLDERS.....................................27
SECTION 5.01. Establishment of Trust Accounts.................................27
SECTION 5.02. Collections.....................................................29
SECTION 5.03. Additional Deposits.............................................29
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.04. Distributions...................................................29
SECTION 5.05. Reserve Account.................................................31
SECTION 5.06. [Reserved]......................................................32
SECTION 5.07. Statements to the Certificateholder and Noteholders.............32
SECTION 5.08. Net Deposits....................................................33
ARTICLE VI THE SELLER...............................................................34
SECTION 6.01. Representations of Seller.......................................34
SECTION 6.02. Liability of Seller; Indemnities................................35
SECTION 6.03. Merger or Consolidation of, or Assumption of the
Obligations of, Seller..........................................35
SECTION 6.04. Limitation on Liability of Seller and Others....................36
SECTION 6.05. Seller May Own the Certificate or Notes.........................36
ARTICLE VII THE SERVICER.............................................................36
SECTION 7.01. Representations of Servicer.....................................36
SECTION 7.02. Indemnities of Servicer.........................................38
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer........................................39
SECTION 7.04. Limitation on Liability of Servicer and Others..................40
SECTION 7.05. CFSC Not To Resign as Servicer..................................40
ARTICLE VIII DEFAULT..................................................................40
SECTION 8.01. Servicer Default................................................40
SECTION 8.02. Appointment of Successor........................................42
SECTION 8.03. Notification to Noteholders and Certificateholder...............43
SECTION 8.04. Waiver of Past Defaults.........................................43
SECTION 8.05. Appointment of Custodians.......................................43
ARTICLE IX TERMINATION..............................................................43
SECTION 9.01. Optional Purchase of All Receivables; Trust Termination.........43
ARTICLE X MISCELLANEOUS PROVISIONS.................................................44
SECTION 10.01. Amendment.......................................................44
SECTION 10.02. Protection of Title to Trust....................................45
SECTION 10.03. Notices.........................................................47
SECTION 10.04. Assignment......................................................47
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 10.05. Limitations on Rights of Others.................................47
SECTION 10.06. Severability....................................................47
SECTION 10.07. Separate Counterparts...........................................47
SECTION 10.08. Headings........................................................48
SECTION 10.09. Governing Law...................................................48
SECTION 10.10. Assignment to Indenture Trustee.................................48
SECTION 10.11. Nonpetition Covenants...........................................48
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.........................................................48
SCHEDULE A - Schedule of Receivables............................................. A-1
SCHEDULE B - Location of Receivables Files....................................... X-0
XXXXXXXX X-0 - Xxxx xx Xxxxxxxxx Trustee's Initial Certification................. C-1-1
SCHEDULE C-2 - Form of Indenture Trustee's Final Certification................... C-2-1
SCHEDULE D - Servicer's Certificate.............................................. D-1
SCHEDULE E - Officers' Certificate............................................... E-1
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SALE AND SERVICING AGREEMENT dated as of July 1, 2001, among CATERPILLAR
FINANCIAL ASSET TRUST 2001-A, a Delaware business trust (the "Issuer"),
CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation (the "Seller"),
and CATERPILLAR FINANCIAL SERVICES CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with (i) retail installment sale contracts for the
purchase of machinery or equipment and (ii) equipment finance lease contracts
for the lease of machinery or equipment, in each case acquired or originated by
Caterpillar Financial Services Corporation in the ordinary course of its
business;
WHEREAS the Seller has purchased such portfolio of receivables from
Caterpillar Financial Services Corporation and desires to sell such portfolio of
receivables to the Issuer; and
WHEREAS Caterpillar Financial Services Corporation desires to service
such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Administration Agreement" means the Administration Agreement dated as
of July 1, 2001 among the Trust, the Seller, CFSC, as Administrator, and Bank
One, National Association, as indenture trustee, as the same may be amended and
supplemented from time to time.
"Administration Fee" means the fee payable to the Administrator pursuant
to Section 3 of the Administration Agreement.
"Administrator" means the administrator under the Administration
Agreement.
"Affiliate" has the meaning assigned thereto in Section 1.01 of the
Indenture.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Amount Financed" means with respect to a Receivable related to a Lease,
the original Net Investment with respect to such Lease, and with respect to a
Receivable related to an Installment Sales Contract, the sum of the amount
advanced under the Receivable toward the purchase price of the related Financed
Equipment, plus any related costs.
"APR" or "Annual Percentage Rate" with respect to any Receivable related
to an Installment Sales Contract means the annual percentage rate of interest of
such Receivable as set
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forth on the Schedule of Receivables for such Receivable and with respect to any
Receivable related to a Lease, the Implicit Interest Rate.
"Basic Documents" has the meaning assigned to such term in the
Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Nashville,
Tennessee, Las Vegas, Nevada or Wilmington, Delaware are authorized or obligated
by law, regulation or executive order to remain closed.
"Caterpillar" means Caterpillar Inc., a Delaware corporation, and its
successors.
"Certificate" has the meaning assigned to such term in the Trust
Agreement.
"Certificate Balance" equals, on the Closing Date, $12,422,797 and,
thereafter, equals $12,422,797, reduced by all amounts allocable to principal
previously distributed to the Certificateholder pursuant to Section 5.02(a) of
the Trust Agreement.
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Pool Factor" means 1.0000000 as of the Closing Date, and as
of the close of business on any Distribution Date thereafter a seven-digit
decimal figure equal to the Certificate Balance as of such date (after giving
effect to reductions of the Certificate Balance on such date) divided by the
Certificate Balance at the Closing Date.
"Certificateholder" has the meaning assigned to such term in the Trust
Agreement.
"CFSC" means Caterpillar Financial Services Corporation, a Delaware
corporation, and its successors.
"Class" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes or the Class B Notes, as applicable.
"Class A Noteholders" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Class A Noteholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (i) the excess, if any, of (A) the sum of
(1) the Class A Noteholders' Monthly Interest Distributable Amount for the
preceding Distribution Date and (2) any outstanding Class A Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over (B) the
amount in respect of interest that is actually distributed to the Class A
Noteholders on such preceding Distribution Date, and (ii) interest on the amount
of interest due but not paid to Class A Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-1 Note
Interest Rate, the Class A-2 Note Interest Rate and the Class A-3 Note Interest
Rate, as applicable, from and including such preceding Distribution Date to, but
excluding, the current Distribution Date.
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"Class A Noteholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Class A Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and (b) the Class A
Noteholders' Interest Carryover Shortfall for such Distribution Date.
"Class A Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, an amount equal to the aggregate amount of
interest accrued on the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes at the Class A-1 Note Interest Rate, the Class A-2 Note Interest Rate and
the Class A-3 Note Interest Rate, respectively, with respect to the Class A-1
Notes, from and including the preceding Distribution Date (or, in the case of
the initial Distribution Date, from and including the Closing Date), to but
excluding such Distribution Date (based on a 360-day year and the actual number
of days elapsed), and, with respect to the Class A-2 Notes and the Class A-3
Notes, from and including the 25th day of the month preceding such Distribution
Date, to but excluding the 25th day of the month containing such Distribution
Date (in each case based on a 360-day year of twelve 30-day months).
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, and the
Class A-3 Notes, collectively.
"Class A-1 Note Final Scheduled Distribution Date" means the
Distribution Date occurring in July 2002.
"Class A-1 Note Interest Rate" has the meaning assigned to such term in
the Indenture.
"Class A-1 Note Pool Factor" means 1.0000000 as of the Closing Date, and
as of the close of business on any Distribution Date thereafter means a seven
digit decimal figure equal to the Outstanding Principal Amount of the Class A-1
Notes as of such date (after giving effect to payments in reduction of the
principal amount of the Class A-1 Notes on such date) divided by the original
Outstanding Principal Amount of the Class A-1 Notes.
"Class A-2 Note Final Scheduled Distribution Date" means the
Distribution Date occurring in December 2003.
"Class A-2 Note Interest Rate" has the meaning assigned to such term in
the Indenture.
"Class A-2 Note Pool Factor" means 1.0000000 as of the Closing Date and
as of the close of business on any Distribution Date thereafter means a seven
digit decimal figure equal to the Outstanding Principal Amount of the Class A-2
Notes as of such date (after giving effect to payments in reduction of the
principal amount of the Class A-2 Notes on such date) divided by the original
Outstanding Principal Amount of the Class A-2 Notes.
"Class A-3 Note Final Scheduled Distribution Date" means the
Distribution Date occurring in April 2007.
"Class A-3 Note Interest Rate" has the meaning assigned to such term in
the Indenture.
"Class A-3 Note Pool Factor" means 1.0000000 as of the Closing Date and,
as of the close of business on any Distribution Date thereafter means a seven
digit decimal figure equal to
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the Outstanding Principal Amount of the Class A-3 Notes as of such date (after
giving effect to payments in reduction of the principal amount of the Class A-3
Notes on such date) divided by the original Outstanding Principal Amount of the
Class A-3 Notes.
"Class B Note Final Scheduled Distribution Date" means the Distribution
Date occurring in July 2007.
"Class B Noteholders" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Class B Noteholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (i) the excess, if any, of (A) the sum of
(1) the Class B Noteholders' Monthly Interest Distributable Amount for the
preceding Distribution Date and (2) any outstanding Class B Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over (B) the
amount in respect of interest that is actually distributed to the Class B
Noteholders on such preceding Distribution Date, and (ii) interest on the amount
of interest due but not paid to Class B Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class B Note Interest
Rate from and including the 25th day of the month preceding such Distribution
Date, to but excluding the 25th day of the month containing such Distribution
Date (based on a 360-day year of twelve 30-day months).
"Class B Noteholders' Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Class B Noteholders' Monthly
Interest Distributable Amount for such Distribution Date and (b) the Class B
Noteholders' Interest Carryover Shortfall for such Distribution Date.
"Class B Noteholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, an amount equal to the aggregate interest
accrued on the Class B Notes at the Class B Note Interest Rate from and
including the 25th day of the month preceding such Distribution Date, to but
excluding the 25th day of the month containing such Distribution Date (based on
a 360-day year of twelve 30-day months).
"Class B Note Interest Rate" has the meaning assigned to such term in
the Indenture.
"Class B Note Pool Factor" means 1.0000000 as of the Closing Date and,
as of the close of business on any Distribution Date thereafter means a seven
digit decimal figure equal to the Outstanding Principal Amount of the Class B
Notes as of such date (after giving effect to payments in reduction of the
principal amount of the Class B Notes on such date) divided by the original
Outstanding Principal Amount of the Class B Notes.
"Closing Date" means July 25, 2001.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01 (a)(i).
"Collection Period" means, with respect to the first Distribution Date,
the calendar month ending on and including July 31, 2001 and, with respect to
each subsequent Distribution Date, the immediately preceding calendar month. Any
amount stated "as of the close of business on
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the last day of a Collection Period" shall give effect to the following
calculations as determined as of the end of the day on such last day: (1) all
applications of collections and (2) all distributions to be made on the
following Distribution Date.
"Commission" means the Securities and Exchange Commission.
"Contract" means an Installment Sales Contract or a Lease, as
applicable, and shall include all documents relating to an amendment or
modification of such Contract.
"Contract Balance" of a Receivable, as of the close of business on the
last day of a Collection Period or as of the Cut-off Date, as applicable, means
the Amount Financed minus the sum of (i) that portion of all Scheduled Payments
paid on or prior to such day allocable to principal using the actuarial method,
(ii) any payment of the Purchase Amount with respect to such Receivable
purchased by the Servicer or repurchased by the Seller and allocable to
principal and (iii) any prepayment in full or any partial prepayments (including
any Liquidation Proceeds) applied to reduce the Contract Balance of such
Receivable, in each case plus accrued and unpaid interest. With respect to each
Lease, the Servicer shall allocate all Scheduled Payments thereon between
"principal" and "interest" based upon each such Lease's Implicit Interest Rate.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Division, except that for purposes of Section 3.02 of
the Indenture, such term shall mean the office or agency of the Indenture
Trustee in the Borough of Manhattan in the City of New York which office at the
date hereof is located at 00 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; or at such other address as the Indenture Trustee may designate from time
to time by notice to the Noteholders, the Owner Trustee and the Seller, or the
principal corporate trust office of any successor Indenture Trustee (the address
of which the successor Indenture Trustee will notify the Noteholders, the Owner
Trustee and the Seller); provided that for purposes of Section 3.02 of the
Indenture, the address of any such office shall be in the Borough of Manhattan
in the City of New York.
"Cross-Collateralized Equipment" means, with respect to any Contract, an
item of machinery or equipment, other than the related Financed Equipment, which
is owned or leased by the related Obligor and which also secures an Obligor's
indebtedness or obligations under the respective Receivable in addition to the
related Financed Equipment.
"Custodian" means Bank One, National Association, as custodian of the
Receivable Files, and each successor thereto pursuant to the Custodial
Agreement.
"Custodial Agreement" means the Custodial Agreement, dated as of July 1,
2001, among CFSC, as originator and Servicer, the Seller, as depositor, the
Issuer, and Bank One, National Association, as Indenture Trustee and Custodian,
as the same may be amended and supplemented from time to time.
"Cut-off Date" means the beginning of business on July 1, 2001.
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"Cut-off Date APR" means 8.52% per annum, which is the weighted average
APR of the Receivables (based on the respective Contract Balances) as of the
Cut-off Date.
"Dealer" means each Caterpillar dealer who sold an item of Financed
Equipment relating to a Receivable.
"Dealer Receivable" means a Receivable originated by a Dealer and
acquired by CFSC from such Dealer.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day prior to such Distribution Date.
"Distribution Date" means the 25th day of each calendar month or, if
such day is not a Business Day, the immediately following Business Day,
commencing on August 27, 2001.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee, the Owner Trustee, The Chase Manhattan Bank as long as it is
paying agent under the Trust Agreement or Bank One, National Association, so
long as it is a paying agent under the Indenture, or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank) (i)(A) which has either (1) a long-term unsecured debt rating of
AAA or better by Standard & Poor's and Aaa or better by Xxxxx'x or (2) a
short-term unsecured debt rating or a certificate of deposit rating of A-1+ by
Standard & Poor's and P-1 or better by Xxxxx'x, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies
and (B) whose deposits-are insured by the FDIC or (ii)(A) the parent of which
has a long-term or short-term unsecured debt rating acceptable to the Rating
Agencies and (B) whose deposits are insured by the FDIC. If so qualified, the
Indenture Trustee, the Owner Trustee, The Chase Manhattan Bank or Bank One,
National Association may be considered an Eligible Institution for the purposes
of clause (b) of this definition.
"Eligible Investments" mean the following investment property,
instruments, money, or other property, book-entry securities, negotiable
instruments or securities (other than any investment property issued by CFSC,
the holder of the Certificates or any of their respective Affiliates):
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall have a credit rating
from each Rating Agency in the highest investment category granted thereby;
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(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each Rating Agency in
the highest investment category granted thereby;
(d) investments in money market funds having a rating from each
Rating Agency in the highest investment category granted thereby (including
funds for which the Indenture Trustee or the Owner Trustee or any of their
respective Affiliates is investment manager or advisor);
(e) investments in common trust funds having a rating from each
Rating Agency in the highest investment category granted thereby maintained and
operated by Eligible Institutions (including the Indenture Trustee or the Owner
Trustee);
(f) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(g) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (i) a depository institution or trust company (acting as principal)
described in clause (b) or (ii) a depository institution or trust company the
deposits of which are insured by FDIC; or
(h) any other investment that is permitted by each of the Rating
Agencies.
"Eligible Securities Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
such depository institution shall have a senior unsecured rating of at least
investment grade from each Rating Agency in one of its generic rating
categories.
"Final Maturity Date" means June 30, 2007.
"Final Scheduled Distribution Date" means any of the Class A-1 Note
Final Scheduled Distribution Date, the Class A-2 Note Final Scheduled
Distribution Date, Class A-3 Note Final Scheduled Distribution Date or the Class
B Note Final Scheduled Distribution Date.
"Financed Equipment" means an item of machinery or equipment, together
with all accessions thereto, which was purchased, in the case of an Installment
Sales Contract or leased, in the case of a Lease, by an Obligor pursuant to the
terms of the related Contract, and in either case which secures such related
Obligor's indebtedness or obligations under the respective Receivable.
"First Priority Principal Distribution Amount" means, with respect to
any Distribution Date, an amount equal to the excess, if any, of (i) the
Outstanding Principal Amount of all Class A Notes as of the preceding
Distribution Date (after giving effect to any principal payments
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made on the Class A Notes on such preceding Distribution Date) over (ii) the
Note Value at the end of the Collection Period preceding such Distribution Date;
provided, however, that the First Priority Principal Distribution Amount shall
not be less than the aggregate of (i) on and after the Class A-1 Note Final
Scheduled Distribution Date, the amount that is necessary to reduce the
Outstanding Principal Amount of the Class A-1 Notes to zero, (ii) on and after
the Class A-2 Note Final Scheduled Distribution Date, the amount that is
necessary to reduce the Outstanding Principal Amount of the Class A-2 Notes to
zero and (iii) on and after the Class A-3 Note Final Scheduled Distribution
Date, the amount that is necessary to reduce the Outstanding Principal Amount of
the Class A-3 Notes to zero.
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holder" or "Noteholder" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"Implicit Interest Rate" means with respect to any Receivable related to
a Lease, the rate set forth with respect to such Receivable on the Schedule of
Receivables.
"Indenture" means the Indenture dated as of July 1, 2001, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Indenture Trustee" means Bank One, National Association, a national
banking association in its capacity as indenture trustee under the Indenture,
its successors in interest and any successor indenture trustee under the
Indenture.
"Initial Note Value" means the Note Value as of the Cut-off Date, which
is $621,084,797.
"Initial Pool Balance" means the Pool Balance as of the Cut-off Date,
which is $624,415,987.
"Insolvency Event" means, with respect to a specified Person, (a) the
entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 90 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
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"Installment Sales Contract" means a fixed rate retail installment sales
contract for the purchase of machinery or equipment related to a Receivable.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
"Issuer" means Caterpillar Financial Asset Trust 2001-A, a Delaware
business trust.
"Lease" means the equipment finance lease contract related to a
Receivable.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind with respect to any Receivable other than mechanics'
liens and any liens which attach to such Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidated Receivable" means any Receivable which has been liquidated
by the Servicer through the sale or other disposition of the related Financed
Equipment.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
the moneys collected in respect thereof, from whatever source (including the
proceeds of insurance policies with respect to the related Financed Equipment or
Obligor on a Liquidated Receivable), net of the sum of any amounts expended by
the Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Liquidated Receivable, excluding (i)
Recoveries and (ii) moneys collected in respect of any Liquidated Receivable in
excess of the Contract Balance therefor.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Net APR" means, with respect to any Receivable, the APR therefor less
the Servicing Fee Rate.
"Net Investment" with respect to a Lease equals the present value of the
sum of (i) Scheduled Payments due thereunder and (ii) the residual payment
amount at the end of the Lease term, discounted at the Implicit Interest Rate
for such Lease.
"New York UCC" means the Uniform Commercial Code in effect in the State
of New York.
"Note Register" or "Note Registrar" have the meanings specified in
Section 2.04 of the Indenture.
"Note Value" means, with respect to any date of determination, the
present value of the unpaid Scheduled Payments on the Receivables (including all
lease residual payments on the Leases), discounted on a monthly basis at the
Cut-off Date APR. For purposes of calculating Note Value, (i) for any delinquent
Receivable that has not had the Financed Equipment relating to such Receivable
repossessed and which is not a Liquidated Receivable, the amount of any
delinquent payments will be assumed to be received in the next collection period
and all other payments which have not yet become due will be assumed to be
received as originally scheduled,
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(ii) for any Receivable that has had Financed Equipment relating to such
Receivable repossessed but which has not yet become a Liquidated Receivable, the
outstanding Contract Balance of such Receivable will be assumed to be received
in the next Collection Period and it will be assumed that no other payments will
be received on such Receivable, and (iii) for any Liquidated Receivable, it will
be assumed that no payments will be received on such Receivable.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of (a) the Class A Noteholders' Interest
Distributable Amount and (b) the Class B Noteholders' Interest Distributable
Amount for such Distribution Date.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Notes of a Class" or "Class of Notes" means all Notes included in Class
A-1 Notes, all Notes included in Class A-2 Notes, all Notes included in Class
A-3 Notes, or all Notes included in Class B Notes, whichever is appropriate.
"Obligor" on a Receivable means (a) the purchaser, co-purchasers or
lessees of the Financed Equipment and (b) any other Person, including the
related Dealer, who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed by (a) the chairman
of the board, the president, the vice chairman of the board, the executive vice
president, any vice president, a treasurer or any assistant treasurer and (b)
the controller (or chief accounting officer) or a secretary or assistant
secretary, in each case of the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the Seller, CFSC or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee and/or
the Rating Agencies, as applicable.
"Original Contract" means with respect to each Receivable, a related
Contract that satisfies the following conditions:
(a) (i) Such Contract states as part of its terms:
"Although multiple counterparts of this document may be
signed, only the counterpart accepted, acknowledged and
certified by CFSC on the signature page thereof as the
original will constitute original chattel paper."; and
(ii) CFSC has accepted, acknowledged and certified one
originally executed copy or version of such Contract (and
no other) by stamping on the signature page thereon the
following legend and executing the same where indicated
(which execution will be effected in red by use of a stamp
containing a replica of an authorized signatory of CFSC):
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ACCEPTED, ACKNOWLEDGED AND CERTIFIED BY
CATERPILLAR FINANCIAL SERVICES
CORPORATION AS THE ORIGINAL.
By:
----------------------------
Title: ; or
----------------------------
(b) Such Contract is in "snap-set" or other form for which only one
original may be produced.
"Outstanding" has the meaning assigned to such term in Section 1.01 of
the Indenture.
"Outstanding Principal Amount" means the aggregate principal amount of
all Notes, or a Class of Notes, as applicable, Outstanding at the date of
determination.
"Owner" means the Holder of the Certificate.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means Chase Manhattan Bank USA, National Association in
its capacity as owner trustee under the Trust Agreement, its successors in
interest and any successor owner trustee under the Trust Agreement.
"Pool Balance" means, at any time, the aggregate of the Contract
Balances of the Receivables at the end of the preceding Collection Period, after
giving effect to (i) all payments received from Obligors and Purchase Amounts
remitted by the Seller or the Servicer, as the case may be, for such Collection
Period, (ii) Liquidation Proceeds (not in excess of the Contract Balance of any
Liquidated Receivable) received with respect to any Liquidated Receivables
received during such Collection Period and (iii) all Realized Losses on
Liquidated Receivables during such Collection Period.
"Pool Factor" means 1.0000000 as of the Cut-off Date and, as of the
close of business on the last day of a Collection Period thereafter means a
seven digit decimal figure equal to the Pool Balance as of such date divided by
the Initial Pool Balance.
"Principal Distribution Account" means the administrative subaccount
within the Collection Account for the benefit of the Noteholders and the
Certificateholder established by the Indenture Trustee pursuant to Section 5.01.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum of the First Priority Principal Distribution Amount, the Second
Priority Principal Distribution Amount and the Regular Principal Distribution
Amount for such Distribution Date.
"Purchase Agreement" means the Purchase Agreement dated as of July 1,
2001, between the Seller and CFSC, as the same may be amended and supplemented
from time to time.
"Purchase Amount" means, with respect to an Installment Sales Contract
or a Lease, the Contract Balance calculated as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable under the terms thereof, in each case plus
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interest at the related APR to the end of the month during which the Installment
Sales Contract or Lease became a Purchased Receivable.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or repurchased as of such time by the Seller or CSFC pursuant to
Section 3.02.
"Rating Agencies" means Moody's and Standard & Poor's. If no such
organization or successor is in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Seller, notice of which designation shall be given to the Indenture
Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Seller, the Servicer, the Owner Trustee and the
Indenture Trustee in writing that such action will not result in a reduction or
withdrawal of the then current rating of any Class of Notes.
"Realized Loss" means, with respect to any Collection Period, for any
Liquidated Receivable the excess of the Contract Balance of such Liquidated
Receivable over the Liquidation Proceeds with respect to such Receivable for
such Collection Period to the extent allocable to principal.
"Receivable" means any Contract listed on the Schedule of Receivables.
"Receivable Files" means the documents specified in Sections 3.03(a) and
(b).
"Recoveries" means, with respect to any Liquidated Receivable, (a)
monies collected in respect thereof, from whatever source, but after (i) such
Receivable became a Liquidated Receivable and (ii) the proceeds from the sale or
other disposition of the related Financed Equipment have been received by the
Servicer for deposit in the Collection Account, net of (b) the sum of any
amounts expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Regular Principal Distribution Amount" means, with respect to any
Distribution Date, an amount, not less than zero, equal to (i) the excess of (A)
the sum of the Outstanding Principal Amount of all Notes and the Certificate
Balance as of the preceding Distribution Date (in each case, after giving effect
to any principal payments made on the Notes and Certificates on such preceding
Distribution Date) over (B) the Note Value at the end of the Collection Period
preceding such Distribution Date, minus (ii) the sum of (A) the First Priority
Principal Distribution Amount and (B) the Second Priority Principal Distribution
Amount for such Distribution Date.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a)(ii).
"Reserve Account Initial Deposit" means the initial deposit by the
Seller on the Closing Date of $7,763,560.
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"Schedule of Receivables" means the schedule of Receivables (which
schedule may be in the form of microfiche) attached hereto as Schedule A.
"Scheduled Payment" on a Receivable means the scheduled periodic payment
required to be made by the Obligor.
"Securities" means, collectively, the Notes and the Certificate.
"Second Priority Principal Distribution Amount" means, with respect to
any Distribution Date, an amount, not less than zero, equal to (i) the excess,
if any, of (A) the Outstanding Principal Amount of all Notes as of the preceding
Distribution Date (after giving effect to any principal payments made on the
Notes on such preceding Distribution Date) over (B) the Note Value at the end of
the Collection Period preceding such Distribution Date minus (ii) the First
Priority Principal Distribution Amount for such Distribution Date; provided,
however, that on and after the Class B Note Final Scheduled Distribution Date,
the Second Priority Principal Distribution Amount shall be not less than an
amount that is necessary to reduce the Outstanding Principal Amount of the Class
B Notes to zero.
"Security Entitlement" has the meaning specified in Section 8-102 of
the applicable UCC.
"Securities Intermediary" has the meaning specified in Section
5.01(c)(ii)(B) and initially means Bank One, National Association.
"Seller" means Caterpillar Financial Funding Corporation, a Nevada
corporation, and its successors in interest to the extent permitted hereunder.
"Servicer" means CFSC, as the servicer of the Receivables, and each
successor to CFSC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Schedule D or
in such other form that is acceptable to the Indenture Trustee, the Owner
Trustee and the Servicer.
"Servicer's Yield" means, with respect to any Receivable, any late fees,
extension fees and other administrative fees or similar charges allowed by
applicable law with respect to such Receivable.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to Section
4.08.
"Servicing Fee Rate" means 1.0% per annum.
"Specified Reserve Account Balance" with respect to any Distribution
Date, means an amount equal to the lesser of (a) the Outstanding Principal
Amount of the Notes and (b) $7,763,560; provided, however, that on and after the
date on which the Seller eliminates the
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Reserve Account in accordance with the provisions of Section 5.05(e), the
Specified Reserve Account Balance shall be zero.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., or its successor.
"Total Available Amount" means, for each Distribution Date, the sum of
the aggregate collections in respect of Receivables (including any Liquidation
Proceeds, any Purchase Amounts paid by the Seller, CFSC and/or the Servicer and
any amounts received from Dealers with respect to Receivables) received during
the related Collection Period and Investment Earnings on the Trust Accounts
during such Collection Period, but shall not include any payments or proceeds
(including any Liquidation Proceeds and any amounts received from Dealers with
respect to Receivables) of (i) any Receivables the Purchase Amount of which has
been included in the Total Available Amount in a prior Collection Period, (ii)
any Liquidated Receivable after and to the extent of the reassignment of such
Liquidated Receivable by the Trust to the Seller in accordance with Section 4.02
and (iii) any Servicer's Yield.
"Total Distribution Amount" means, with respect to any Distribution
Date, the sum of (i) the Total Available Amount for such Distribution Date and
(ii) the amount, if any withdrawn from the Reserve Account and deposited into
the Collection Account on such Distribution Date pursuant to Section 5.05(b) on
such Distribution Date.
"Total Required Payment" means, for each Distribution Date, the amounts
payable pursuant to Section 5.04(b)(i) through 5.04(b)(vi).
"Transaction Equipment" means, collectively, the Financed Equipment and,
if applicable, the Cross-Collateralized Equipment.
"Transfer Date" means, with respect to any Distribution Date, the
Business Day preceding such Distribution Date.
"Trust" means the Issuer.
"Trust Accounts" has the meaning assigned thereto in Section 5.01(b).
"Trust Account Property" means the Trust Accounts, all amounts and
investments or other investment property held from time to time in any Trust
Account, including the Reserve Account Initial Deposit, and all proceeds of the
foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of July 1, 2001, between the Seller and the Owner Trustee, as the same may be
amended and supplemented from time to time.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including, without limitation,
all property and interests Granted (as defined in the Indenture) to the
Indenture Trustee), including all proceeds thereof.
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"Trust Officer" means, (a) in the case of the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Trust Officer, Secretary,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officers' knowledge of and
familiarity with the particular subject, and (b) with respect to the Owner
Trustee, any officer in the Corporate Trustee Administration Department of the
Owner Trustee with direct responsibility for the administration of the Trust
Agreement and the Basic Documents on behalf of the Owner Trustee.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of (i) Class A-1 Notes with
an aggregate Outstanding Principal Amount of $181,448,000, (ii) Class A-2 Notes
with an aggregate Outstanding Principal Amount of $134,000,000, (iii) Class A-3
Notes with an aggregate Outstanding Principal Amount of $277,687,000, (iv) Class
B Notes with an aggregate Outstanding Principal Amount of $15,527,000 and (v)
the Certificate with a Certificate Balance of $12,422,797 the Seller does
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hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse (subject to the obligations herein) all right, title and
interest of the Seller in and to the following, whether now owned or hereafter
acquired:
(a) the Receivables, and all moneys (including accrued interest)
due thereunder on or after the Cut-off Date;
(b) the interest of the Seller in the Trust Account Property;
(c) the interest of the Seller in the security interests in the
Transaction Equipment granted by Obligors pursuant to the Receivables and any
other interest of the Seller in the Transaction Equipment, including any
Liquidation Proceeds;
(d) the interest of the Seller in any proceeds of repossessed or
returned Transaction Equipment;
(e) the interest of the Seller in any proceeds with respect to
the Receivables from claims on any physical damage, credit life, liability or
disability insurance policies covering Financed Equipment or Obligors;
(f) all right, title and interest of the Seller in and to the
Purchase Agreement, including the right of the Seller to cause CFSC to
repurchase Receivables from the Seller under certain circumstances;
(g) the interest of the Seller in any proceeds from recourse to
or other payments by Dealers; and
(h) the proceeds of any and all of the foregoing.
It is the express intent of the parties hereto that the conveyance of
the Receivables by the Seller to the Issuer as provided in this Agreement be,
and be construed as, a sale of the Receivables by the Seller to the Issuer. It
is, further, not the intention of the parties that such conveyance be deemed a
pledge of the Receivables by the Seller to the Issuer to secure a debt or other
obligation of the Seller. However, in the event, notwithstanding the intent of
the parties, the Receivables are held to be property of the Seller, or if for
any reason this Agreement is held or deemed to create a security interest in the
Receivables then, (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Article 9 of the UCC; and (b) the conveyance
provided for in this Agreement shall be a grant by the Seller to the Issuer of a
security interest in and to all of the Seller's right, title, and interest,
whether now owned or hereafter acquired, in and to the property described in
clauses (a) through (h) above. The possession by the Custodian of the Contracts
and other property shall be deemed to be possession by the secured party or
possession by a purchaser for purposes of perfecting the security interest
pursuant to the UCC (including, without limitation, Section 9-313 and 9-314
thereof) as in force in the relevant jurisdiction. Notifications to persons
holding such property, and acknowledgments, receipts or confirmations from
persons holding such property, shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, securities intermediaries,
bailees or agents of, or persons holding for, the Issuer or its assignee (as
applicable) for the purpose of perfecting such security interest under
applicable law. In
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connection herewith, the Issuer (or its assignee) shall have all of the rights
and remedies of a secured party and creditor under the UCC.
Any assignment of the interest of the Issuer pursuant to this Section
2.01 shall also be an assignment of the security interest created hereby. The
Seller and the Issuer shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement creates a
security interest in or lien on the Receivables, such security interest or lien
would be a perfected security interest or lien of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement.
SECTION 2.02. Closing.
The conveyance of the Receivables shall take place at the offices of
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, on the Closing Date, simultaneously with the closing of the
transactions contemplated by the Purchase Agreement, the underwriting agreements
relating to the Notes and the other Basic Documents. Upon the acceptance by the
Seller of the proceeds of the sale of the Notes and the Certificate, the
ownership of each Receivable and the contents of the related Receivable File is
vested in the Issuer, subject only to the lien of the Indenture.
SECTION 2.03. Books and Records.
The transfer of each Receivable shall be reflected on the Seller's
balance sheets and other financial statements prepared in accordance with
generally accepted accounting principles as a transfer of assets by the Seller
to the Issuer. The Seller shall be responsible for maintaining, and shall
maintain, a complete and accurate set of books and records and computer files
for each Receivable which shall be clearly marked to reflect the ownership of
each Receivable by the Issuer.
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Seller. The Seller makes
the following representations and warranties as to the Receivables on which the
Issuer is deemed to have relied in acquiring the Receivables. Such
representations and warranties speak as of the execution and delivery of this
agreement, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Issuer and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller owns and has good and marketable title to the
Receivables free and clear of any Lien, claim or
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encumbrance of any Person and, immediately upon the transfer thereof, the Issuer
shall have good and marketable title to each such Receivable, free and clear of
all Liens and rights of others; and the transfer has been perfected under the
applicable UCC.
(b) Priority. Other than the Security Interest granted to the
Issuer pursuant to this Agreement, the Seller has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Receivables.
The Seller has not authorized the filing of and is not aware of any financing
statement against the Seller that include a description of collateral covering
the Receivables other than any financing statements relating to the security
interest granted to the Issuer hereunder or that has been terminated. The Seller
is not aware of any judgment or tax lien filings against the Debtor. None of the
Contracts that constitute or evidence the Receivables has any marks or notations
indicating that it has been pledged, assigned or otherwise conveyed to any
Person other than the Issuer or the Indenture Trustee.
(c) Security Interest. This Agreement creates a valid and
continuing security interest (as defined in the UCC) in the Receivables in favor
of the Issuer, which security interest is prior to all other Liens, and is
enforceable as such against creditors of and purchasers from the Seller.
(d) Characterization of Receivables. The Receivables constitute
"tangible chattel paper" within the meaning of the UCC.
(e) All Actions Taken. All original executed copies of each
Contract that constitute or evidence the Receivables have been delivered to the
Custodian. The Seller has received a written acknowledgment from the Custodian
that the Custodian is holding the Contracts that constitute or evidence the
Collateral solely on behalf and for the benefit of the Issuer. Seller has caused
or will have caused, within ten days of the Closing Date, the filing of all
appropriate financing statements in the proper filing office in the appropriate
jurisdiction under applicable law in order to perfect the security interest in
the Receivables granted to the Issuer hereunder. All actions necessary in any
jurisdiction to be taken (i) to give the Issuer a first priority perfected
ownership interest in the Receivables (exclusive of Receivables for which a
governmental entity is the Obligor) (including without limitation delivery of
the Receivables Files pursuant to the Custodial Agreement), and (ii) to give the
Indenture Trustee a first priority perfected security interest therein
(including, without limitation, UCC filings with the Delaware and Nevada
Secretaries of State and precautionary UCC filings with the Tennessee Secretary
of State) have been taken.
(f) Possession of Receivable Files. All of the Receivables Files
have been or will be delivered to the Custodian on or prior to the Closing Date,
subject to Section 3.05(b).
(g) Perfection of Security Interest in Financed Equipment. The
Seller has taken all steps necessary to perfect its security interest against
the Obligors in the property securing the Contracts.
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(h) No Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Seller of this
Agreement or any other Basic Document, the performance by the Seller of the
transactions contemplated by this Agreement or any other Basic Document and the
fulfillment by the Seller of the terms hereof or thereof, have been obtained or
have been completed and are in full force and effect (other than approvals,
authorizations, consents, orders or other actions which if not obtained or
completed or in full force and effect would not have a material adverse effect
on the Seller or the Issuer or upon the collectability of any Receivable or upon
the ability of the Seller to perform its obligations under this Agreement).
SECTION 3.02. Repurchase by Seller or CFSC Upon Breach. (a) The Seller,
the Servicer, CFSC or the Owner Trustee, as the case may be, shall inform the
other parties to the Agreement, CFSC and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of the Seller's representations and
warranties made pursuant to Section 3.01 or any breach of CFSC's representations
and warranties made pursuant to Section 3.02(b) of the Purchase Agreement.
Unless any such breach shall have been cured by the last day of the second month
following the month of the discovery thereof by the Owner Trustee or receipt by
the Owner Trustee of written notice from the Seller or the Servicer of such
breach, the Seller shall be obligated, and, if necessary, the Seller or the
Owner Trustee shall enforce, the obligation of CFSC, if any, under Section
6.02(a)(i) of the Purchase Agreement to repurchase any Receivable materially and
adversely affected by any such breach as of such last day (or, at the Seller's
option, as of the last day of the first month following the month of the
discovery).
(b) In consideration of the repurchase of the Receivable, the
Seller shall remit the Purchase Amount in the manner specified in Section 5.03;
provided, however, that the obligation of the Seller to repurchase any
Receivable arising solely as a result of a breach of CFSC's representations and
warranties pursuant to Section 3.02(b) of the Purchase Agreement is subject to
the receipt by the Seller of the Purchase Amount from CFSC. Subject to the
provisions of Section 6.02, the sole remedy of the Issuer, the Owner Trustee,
the Indenture Trustee, the Noteholders or the Certificateholder with respect to
a breach of representations and warranties pursuant to Section 3.01, Section
3.02(b) of the Purchase Agreement and the agreement contained in this Section
shall be to require the Seller to repurchase Receivables pursuant to this
Section, subject to the conditions contained herein, or to enforce CFSC's
obligation, if any, to the Seller to repurchase such Receivables pursuant to the
Purchase Agreement. The Owner Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section.
SECTION 3.03. Custody of Receivable Files. The Seller, the Issuer and
the Indenture Trustee have appointed the Custodian pursuant to the Custodial
Agreement, and the Custodian has thereby accepted such appointment, to act as
custodian of the following documents:
(a) the Original Contract related to each Receivable; and
(b) with respect to each Dealer Receivable, any documents used
to assign such Dealer Receivable and the related Dealer's security interest in
the Transaction Equipment to CFSC.
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SECTION 3.04. Duties of Servicer.
(a) Receivable Files. The Servicer shall maintain such accurate
and complete accounts, records and computer systems pertaining to each
Receivable File as shall enable itself and the Issuer to comply with this
Agreement. In performing its duties, the Servicer shall act with reasonable
care, using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable receivables that the
Servicer services for itself or others. The Servicer shall conduct, or cause to
be conducted, periodic audits of the related accounts, records and computer
systems, in such a manner as shall enable the Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer and the Indenture Trustee any failure on its part
to maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Owner Trustee or the Indenture Trustee.
(b) Access to Records. The Servicer shall notify the Owner
Trustee and the Indenture Trustee of any change in the location of its principal
place of business in writing not later than 90 days after any such change. The
Servicer shall make available to the Owner Trustee and the Indenture Trustee, or
their respective duly authorized representatives, attorneys or auditors, a list
of locations of the related accounts, records and computer systems maintained by
the Servicer at such times as the Owner Trustee or the Indenture Trustee shall
instruct. The Indenture Trustee shall have access to such accounts, records and
computer systems.
(c) Safekeeping. The Servicer shall hold on behalf of the Issuer
(i) all file stamped copies of UCC financing statements evidencing the security
interest of CFSC in Transaction Equipment, and (ii) any and all documents, other
than the Receivable Files, that CFSC or the Seller shall keep on file, in
accordance with its customary procedures, relating to a Receivable, an Obligor
or Transaction Equipment, and shall maintain such accurate and complete records
pertaining to each Receivable as shall enable the Issuer to comply with this
Agreement. Upon instruction from the Indenture Trustee, the Servicer shall
release any such UCC Filing or other document to the Indenture Trustee, the
Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate, as soon as
practicable.
SECTION 3.05. Acceptance by Issuer and the Indenture Trustee of the
Receivables; Certification by the Indenture Trustee.
(a) The Issuer hereby acknowledges constructive receipt, through
the Custodian, for each Receivable, of a Receivable File in the form delivered
to it by the Seller and declares that it will hold such documents and any
amendments, replacements or supplements thereto, as well as any other assets
delivered to it, in trust upon and subject to the conditions set forth in the
Trust Agreement for the benefit of the Certificateholder, subject to the terms
and conditions of the Indenture and this Agreement. By its acknowledgment of
this Agreement, the Indenture Trustee agrees to execute and deliver on the
Closing Date an acknowledgement of receipt by it, or by the Custodian on its
behalf, of a Receivables File for each Receivable in the form attached as
Schedule C-1 hereto, and declares that it will hold such documents and any
amendments, replacements or supplements thereto, as well as any other assets
delivered to it in trust upon and
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subject to the conditions of the Indenture for the benefit of the Noteholders
and, to the extent set forth therein and herein, for the benefit of the
Certificateholder. The Indenture Trustee agrees to review (or cause to be
reviewed) each Receivable File within 45 days after the Closing Date and to
deliver to the Seller, the Issuer, the Owner Trustee, each Rating Agency and the
Servicer a final certification in the form attached hereto as Schedule C-2 to
the effect that, as to each Receivable listed on the Schedules of Receivables
(other than any Receivable paid in full or any Receivable specifically
identified in such certification as not covered by such certification): (i) all
documents required to be delivered to it pursuant to this Agreement (including
without limitation each of the items listed in Section 3.03(a) and (b)) are in
its possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged, torn or otherwise physically altered (handwritten additions,
changes or corrections shall not constitute physical alteration if initialed by
the Obligor) and relate to such Receivable, and (iii) based on its examination
and only as to the foregoing documents, the information set forth on the
Schedule of Receivables accurately reflects the information set forth on the
Receivable Files. The Indenture Trustee shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face.
(b) If the Indenture Trustee during the process of reviewing the
Receivable Files finds any document constituting a part of a Receivable File
which is not executed, has not been received, is unrelated to the related
Receivable identified on Schedule A hereto, or does not conform to the
requirements of Section 3.03 or substantively to the description thereof as set
forth on the Schedule of Receivables, the Indenture Trustee shall promptly so
notify the Servicer, the Owner Trustee and the Seller. In performing any such
review, the Indenture Trustee may conclusively rely on the Servicer as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Indenture Trustee's review of the Receivable
Files is limited solely to confirming that the documents listed in Section 3.03
have been executed and received and relate to the Receivable Files identified on
the Schedule of Receivables. The Servicer agrees to use reasonable efforts to
cause to be remedied a material defect in a document constituting part of a
Receivable File of which it is so notified by the Indenture Trustee. If,
however, the Servicer has not caused to be remedied any defect described in such
final certification by the last day of the second month following the month of
receipt by it of the final certification referred to in paragraph (a) of this
Section 3.05, and such defect materially and adversely affects the interests of
the Noteholders or the Certificateholder in the related Receivable, the Seller
shall remit the Purchase Amount in the manner specified in Section 5.03;
provided, however, that the obligation of the Seller to repurchase any
Receivable is subject to the receipt by the Seller of the Purchase Amount from
CFSC. Subject to the provisions of Section 5.03, the sole remedy of the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholder with respect to such a defect and the agreement contained in
this Section shall be to require the Seller to repurchase Receivables pursuant
to this Section, subject to the conditions contained herein, or to enforce
CFSC's obligation to the Seller to repurchase such Receivables pursuant to the
Purchase Agreement. The Owner Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section.
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(c) Upon receipt by the Indenture Trustee of a certification of
the Servicer of a repurchase of a Receivable described in Section 3.05(b) above
and receipt of the Purchase Amount, the Indenture Trustee is required to release
to CFSC the related Receivables File and shall execute, without recourse, and
deliver such instruments of transfer as may be necessary to transfer such
Receivable to CFSC.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. The Issuer hereby engages the Servicer
and the Servicer hereby agrees to manage, service, administer and make
collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for itself
or others. The Servicer's duties shall include calculating, billing, collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, reporting tax information to Obligors
(to the extent required under the related Contracts), accounting for
collections, and furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions. Subject to the
provisions of Section 4.02, the Servicer shall follow its customary standards,
policies and procedures in performing its duties as Servicer. Without limiting
the generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the
Indenture Trustee, the Certificateholder and the Noteholders or any of them, any
and all instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to such
Receivables or to the Transaction Equipment securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer
(in the case of a Receivable other than a Purchased Receivable) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Owner Trustee shall, at the Servicer's expense and
direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Owner Trustee, the Indenture Trustee, the
Certificateholder or the Noteholders. The Owner Trustee shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
SECTION 4.02. Collection of Receivable Payments. (a) The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
machinery receivables that it services for itself or others. The Servicer shall
not reduce the principal balance of, reduce the APR of, reduce the aggregate
amount of Scheduled Payments or the amount of any Scheduled Payment due under
any Receivable, release or modify CFSC's security interest in the Financed
Equipment securing such Receivable, or otherwise amend or modify a Receivable in
a manner that would have a material adverse effect on the interests of the
Noteholders. Notwithstanding the foregoing, the
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Servicer may grant extensions on a Receivable; provided, however, that if the
Servicer extends the due date of any Scheduled Payment to a date beyond the
Final Maturity Date, it shall promptly purchase the Receivable from the Issuer
in accordance with the terms of Section 4.07. The Servicer shall allocate
payments made by or on behalf of the Obligor with respect to the Receivables
first to any overdue scheduled payment (including taxes and miscellaneous
billables), second to the current scheduled payment (including taxes and
miscellaneous billables) and third to late fees. The Servicer may in its
discretion waive any other amounts of Servicer's Yield that may be collected in
the ordinary course of servicing a Receivable. Notwithstanding anything in this
Agreement to the contrary, in the event a Receivable becomes a Liquidated
Receivable, any Recoveries relating thereto shall be paid to the Seller and such
Liquidated Receivable shall be assigned by the Trust to the Seller.
(b) Notwithstanding anything in this Agreement to the contrary
(but subject to the immediately succeeding sentence), the Servicer may refinance
any Receivable only if (i) such Obligor executes a new installment sales
contract or lease and (ii) the proceeds of such refinancing are used to pre-pay
all obligations in full of such Obligor under such Receivable (which amount
shall be applied in accordance with Section 5.02). The new receivable created by
the refinancing shall not be property of the Trust. The parties hereto intend
that the Servicer will not refinance a Receivable pursuant to this Section
4.02(b) in order to provide direct or indirect assurance to the Seller, the
Indenture Trustee, the Owner Trustee, the Noteholders, or the Certificateholder,
as applicable, against loss by reason of the bankruptcy or insolvency (or other
credit condition) of, or default by, the Obligor on, or the uncollectibility of,
any Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer, the
Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise realize upon the Transaction Equipment
securing any Receivable as to which the Servicer shall have determined eventual
payment in full is unlikely or, with respect to Financed Equipment relating to
any Lease, as to which the related Obligor has returned the Financed Equipment.
The Servicer shall follow such customary and usual practices and procedures as
it shall deem necessary or advisable in its servicing of comparable receivables,
which may include selling the Transaction Equipment at public or private sale.
The foregoing shall be subject to the provision that, in any case in which any
item of Transaction Equipment shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such
Transaction Equipment unless it shall determine in its discretion that such
repair and/or repossession will increase the Liquidation Proceeds by an amount
greater than the amount of such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Transaction Equipment
as of the execution of the Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed Equipment.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable (including each Receivable on which a governmental
entity is the Obligor) in the related Financed Equipment. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest or to maintain such perfected security interest on behalf of the Issuer
and
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the Indenture Trustee in the event of the relocation of Financed Equipment, or
for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not: (i) release
the Transaction Equipment securing any Receivable from the security interest
granted by such Receivable in whole or in part or modify such security interest
except (A) in accordance with Section 4.03 or (B) in the event of payment in
full by the Obligor thereunder; (ii) impair the rights of the Issuer, the
Indenture Trustee, the Certificateholder or the Noteholders in any Receivable;
(iii) modify or refinance a Receivable except in accordance with the terms of
Section 4.02; or (iv) fail to return a Receivable File released to it pursuant
to Section 3.3 of the Custodial Agreement within five (5) Business Days of such
release.
SECTION 4.07. Purchase by Servicer of Receivables upon Breach. The
Servicer or the Owner Trustee shall inform the other party and the Indenture
Trustee, the Seller and CFSC promptly, in writing, upon the discovery of any
breach pursuant to Section 4.02, 4.05 or 4.06. Unless the breach shall have been
cured by the last day of the second month following such discovery (or, at the
Seller's election, the last day of the first following month) (except for the
failure to return a released Receivable File, for which there is no grace period
beyond the specified five (5) Business Days), the Servicer shall purchase any
Receivable materially and adversely affected by such breach. If the Servicer
takes any action pursuant to Section 4.02 that impairs the rights of the Issuer,
the Indenture Trustee, the Certificateholder or the Noteholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall purchase
such Receivable. In consideration of the purchase of any such Receivable
pursuant to either of the two preceding sentences, the Servicer shall remit the
Purchase Amount in the manner specified in Section 5.03. Subject to Section
7.02, the sole remedy of the Issuer, the Owner Trustee, the Indenture Trustee,
the Certificateholder or the Noteholders with respect to a breach pursuant to
Section 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Receivables pursuant to this Section. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Receivable pursuant to this Section. The parties
hereto intend that the Servicer will not intentionally breach or cause a breach
pursuant to Section 4.02, 4.05 or 4.06 in order to provide direct or indirect
assurance to the Seller, the Indenture Trustee, the Owner Trustee, the
Noteholders, or the Certificateholder, as applicable, against loss by reason of
the bankruptcy or insolvency (or other credit condition) of, or default by, the
Obligor on, or the uncollectibility of, any Receivable.
SECTION 4.08. Servicing Fee. On each Determination Date, the Servicer
shall be entitled to receive the Servicing Fee in respect of the immediately
preceding Collection Period equal to the product of (a) one-twelfth of the
Servicing Fee Rate and (b) the Note Value as of the first day of such preceding
Collection Period. The Servicer shall also be entitled to any Servicer's Yield
with respect to Receivables, collected (from whatever source) on the
Receivables, which Servicer's Yield shall be paid to the Servicer pursuant to
Section 5.08.
SECTION 4.09. Servicer's Certificate. On each Determination Date, the
Servicer shall deliver to the Owner Trustee (and each Paying Agent of the Owner
Trustee), the Indenture Trustee and the Seller, with a copy to the Rating
Agencies, a Servicer's Certificate containing all information necessary to make
the distributions pursuant to Sections 5.04, 5.05 and 5.06 for the Collection
Period preceding the date of such Servicer's Certificate. Neither the Owner
Trustee
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nor the Indenture Trustee shall be required to determine, confirm or recalculate
the information contained in the Servicer's Certificate. Receivables to be
purchased by the Servicer or to be repurchased by the Seller shall be identified
by the Servicer by account number with respect to such Receivable as specified
in Schedule A.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
The Servicer shall deliver to the Owner Trustee and the Indenture Trustee and
the Rating Agencies, on or before April 30 of each year beginning April 30,
2002, an Officers' Certificate stating that (i) a review of the activities of
the Servicer during the preceding 12-month period ending on December 31 (or, in
the case of April 30, 2002, the period from the Closing Date to December 31,
2001) and of its performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled in all material respects all its
obligations under this Agreement throughout such period or, if there has been a
default in the fulfillment of any such obligation in any material respect,
specifying each such default known to such officers and the nature and status
thereof. The Indenture Trustee shall send a copy of such certificate and the
report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee at its address in
Section 11.03.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
8.01(a) or (b).
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
In order to confirm that the servicing of the Receivables has been conducted in
compliance with the terms of this Agreement, the Servicer shall deliver or shall
cause a firm of independent certified public accountants, which may also render
other services to the Servicer, the Seller or CFSC, to deliver to the Owner
Trustee and the Indenture Trustee on or before April 30 of each year beginning
April 30, 2002, a report addressed to the Board of Directors of the Servicer
and, with respect to the report described in clause (b) below, the Indenture
Trustee, to the effect that such firm has (a) examined the Servicer's assertion
concerning the suitability of design and operating effectiveness of its controls
over financial reporting and issued its report thereon and that such examination
(i) was made in accordance with generally accepted auditing standards and
accordingly included such tests of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances; (ii)
included tests relating to contracts serviced for others in accordance with
requirements agreed to by the Servicer and the Indenture Trustee, to the extent
the tests are applicable to the servicing obligations set forth in this
Agreement; and (iii) discloses the results of such tests during the preceding
12-month period ended December 31 (or in the case of the report due on or before
April 30, 2002, the period from the Closing Date to December 31, 2001) that, in
the firm's opinion, such program requires such firm to report or (b) subject to
the Rating Agency Condition, performed other procedures pertaining to contracts
serviced under this Agreement, the sufficiency of which is agreed to by the
Servicer and the Indenture Trustee. For purposes of this Section 4.11, a firm of
certified public accountants is independent of the
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Servicer if that the firm is independent of the Servicer within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants.
SECTION 4.12. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and reports
to the Owner Trustee, the Indenture Trustee, the Certificateholder and the
Noteholders.
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDER AND NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.
(a)(i) The Servicer, for the benefit of the Noteholders and the
Certificateholder, shall establish and maintain in the name "Caterpillar
Financial Asset Trust 2001-A, subject to the security interest of Bank One,
National Association, as Indenture Trustee" an Eligible Securities Account (the
"Collection Account"). The Indenture Trustee shall establish and maintain an
administrative subaccount within the Collection Account for the benefit of the
Noteholders and the Certificateholder (the "Principal Distribution Account").
(ii) The Seller, for the benefit of the Noteholders, shall
establish and maintain in the name "Caterpillar Financial Asset Trust
2001-A, subject to the security interest of Bank One, National
Association, as Indenture Trustee" an Eligible Securities Account
(the "Reserve Account").
(b) Funds on deposit in the Collection Account (including,
without limitation, the Principal Distribution Account) and the Reserve Account
(collectively, the "Trust Accounts") shall be invested by the Indenture Trustee
in Eligible Investments selected by the Servicer; provided, however, it is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from such investment in Eligible Investments (other than losses
from nonpayment of investments in obligations of Bank One, National
Association). All such Eligible Investments shall be held by the Indenture
Trustee for the benefit of the applicable Noteholders and, if applicable, the
Certificateholder. Other than as permitted by the Rating Agencies, funds on
deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature so that such funds will be available at the close of business on the
Transfer Date preceding the immediately following Distribution Date; provided,
however, that funds on deposit in Trust Accounts may be invested in Eligible
Investments of the Indenture Trustee which may mature so that such funds will be
available on the Distribution Date. Funds deposited in a Trust Account on a
Transfer Date which immediately precedes a Distribution Date upon the maturity
of any Eligible Investments are not required to be invested overnight, but if so
invested, such investments must meet the conditions of the immediately preceding
sentence.
(c) (i) The Trust Accounts shall be under the control (within
the meaning of Section 8-106 of the applicable UCC) of the Indenture Trustee for
the benefit of the Noteholders
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and the Certificateholder or the Noteholders, as applicable. If, at any time,
any of the Trust Accounts ceases to be an Eligible Securities Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Trust Account as an Eligible Securities
Account and shall transfer any cash and/or any investments to such new Trust
Account. So long as Bank One, National Association is an Eligible Institution,
any Trust Account may be maintained with it in an Eligible Securities Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee and Bank One, National Association, as Securities
Intermediary, agree, and each subsequent Securities Intermediary
shall agree, by its acceptance hereof, that:
(A) any Trust Account Property held in securities
accounts shall be held solely in the Eligible Securities
Accounts; and each such Eligible Securities Account shall
be subject to the control (within the meaning of Section
8-106 of the UCC) of the Indenture Trustee, and the
Indenture Trustee shall have sole signature authority with
respect thereto;
(B) all Trust Account Property shall be delivered
to the Indenture Trustee by causing the financial
institution then maintaining the related Trust Account
(each such institution being referred to herein as a
"Securities Intermediary") to create a Security
Entitlement in such Trust Account with respect to such
Trust Account Property by indicating by book-entry that
such Trust Account Property has been credited to such
Trust Account. Each Trust Account shall only be
established at a financial institution which agrees (i) to
comply with entitlement orders with respect to such Trust
Account issued by the Indenture Trustee without further
consent of the Seller, Servicer or Issuer and (ii) that
each item of property credited to such Trust Account shall
be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC, and the Securities
Intermediary does hereby agree to the foregoing; and
(C) Upon release of the lien of the Indenture
Trustee under the Indenture in accordance with the terms
thereof, each of the Trust Accounts shall be put in the
name of the Trust and the Trust shall have all rights
granted to the Indenture Trustee pursuant to this
Agreement.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Servicer or the Owner Trustee to carry out its
respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
(iv) The Indenture Trustee is hereby authorized to execute
purchase and sales directed by the Servicer through the facilities of
its own trading or capital markets operations. The Indenture Trustee
shall send statements to the
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Servicer and the Issuer monthly reflecting activity for each amount
created hereunder for the preceding month. Although the Issuer
recognizes that it may obtain a broker confirmation at no additional
cost, the Issuer hereby agrees that confirmations of investments are
not required to be issued by the Indenture Trustee for each month in
which a monthly statement is rendered. No statement need be rendered
pursuant to the provision hereof if no activity occurred in the
account for such month.
SECTION 5.02. Collections. Subject to Section 5.03, the Servicer shall
remit to the Collection Account (i) all payments by or on behalf of the Obligors
with respect to the Receivables (other than Purchased Receivables) and (ii) all
Liquidation Proceeds (except to the extent of Recoveries applied in accordance
with Section 4.02), in each case as collected during each Collection Period
within two Business Days of receipt and identification thereof. Notwithstanding
the foregoing, if (i) CFSC is the Servicer, (ii) a Servicer Default shall not
have occurred and be continuing and (iii) CFSC maintains a short-term rating of
at least A-1 by Standard & Poor's and P-1 by Moody's, the Servicer may remit
such collections with respect to each Collection Period to the Collection
Account on or before the second Business Day prior to the following Distribution
Date. For purposes of this Article V, the phrase "payments by or on behalf of
Obligors" shall mean payments made with respect to the Receivables by Persons
other than the Servicer or CFSC.
SECTION 5.03. Additional Deposits. (a) The Servicer and the Seller shall
deposit or cause to be deposited in the Collection Account the Purchase Amounts
with respect to Purchased Receivables as set forth in the immediately following
sentence, and the Servicer shall deposit in the Collection Account all amounts
to be paid under Section 9.01 as set forth therein. The Servicer and the Seller
will deposit the Purchase Amount with respect to each Purchased Receivable when
such obligations are due, unless, with respect to Purchase Amounts to be
remitted by the Servicer, the Servicer shall be permitted to make deposits
monthly prior to each Distribution Date pursuant to Section 5.02, in which case
such deposits shall be made in accordance with such Section. The Servicer shall
account for Purchase Amounts paid by itself and the Seller separately.
SECTION 5.04. Distributions. (a) On each Determination Date, the
Servicer shall calculate all amounts required to determine the amounts to be
remitted to the Class A Noteholders, the Class B Noteholders and the
Certificateholder.
(b) On the second Business Day prior to each Distribution Date,
the Servicer shall instruct the Indenture Trustee, which instruction shall be in
the form of Exhibit B to Schedule E (or such other form that is acceptable to
the Indenture Trustee and the Servicer), to make the following deposits and
distributions for receipt by the Servicer, the Noteholders, or for deposit in
the applicable Trust Account or Certificate Distribution Account by 11:00 A.M.
(New York time) on such following Distribution Date to the extent of the Total
Distribution Amount on deposit in the Collection Account, in the following order
of priority:
(i) to the Servicer (if CFSC or an Affiliate is not the
Servicer), the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
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(ii) to the Administrator under the Administration Agreement,
the Administration Fee and all unpaid Administration Fees from prior
Collection Periods;
(iii) to the Class A Noteholders pro rata based upon the
amount of interest accrued on each such Class of Class A Notes, the
Class A Noteholders' Interest Distributable Amount;
(iv) to the Principal Distribution Account, the First
Priority Principal Distribution Amount, if any;
(v) to the Class B Noteholders, the Class B Noteholders'
Interest Distributable Amount;
(vi) to the Principal Distribution Account, the Second
Priority Principal Distribution Amount, if any;
(vii) to the Reserve Account, an amount equal to the excess
of the Specified Reserve Account Balance over the amount on deposit
in the Reserve Account on such Distribution Date;
(viii) if any Class of Notes is Outstanding prior to giving
effect to distributions on such Distribution Date, to the Principal
Distribution Account, the Regular Principal Distribution Amount;
(ix) to the Servicer (if CFSC or an affiliate is the
Servicer), the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;
(x) to the Certificate Distribution Account, the remaining
Total Distribution Amount.
(c) On the second Business Day prior to each Distribution Date,
the Servicer shall instruct the Indenture Trustee, which instruction shall be in
the form of Exhibit B to Schedule E (or such other form that is acceptable to
the Indenture Trustee and the Servicer), to make the following distributions
from the Principal Distribution Account by 11:00 A.M. (New York time) on such
following Distribution Date in the following order of priority:
(i) to the Class A-1 Noteholders in reduction of the
Outstanding Principal Amount of the Class A-1 Notes until the
Outstanding Principal Amount thereof has been reduced to zero;
(ii) to the Class A-2 Noteholders in reduction of the
Outstanding Principal Amount of the Class A-2 Notes until the
Outstanding Principal Amount thereof has been reduced to zero;
(iii) to the Class A-3 Noteholders in reduction of the
Outstanding Principal Amount of the Class A-3 Notes until the
Outstanding Principal Amount thereof has been reduced to zero;
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(iv) to the Class B Noteholders in reduction of the
Outstanding Principal Amount of the Class B Notes until the
Outstanding Principal Amount thereof has been reduced to zero; and
(v) to the Certificate Distribution Account, any funds
remaining on deposit in the Principal Distribution Account.
(d) Notwithstanding anything in this Section 5.04 to the
contrary, if an Event of Default under the Indenture occurs and the maturities
of the Notes are accelerated pursuant to Section 5.02 of the Indenture, all
amounts on deposit in the Collection Account shall be applied in accordance with
Section 5.04(b) of the Indenture.
(e) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to the Class B Noteholders, such tax
shall reduce the amount otherwise distributable to the Class B Noteholders in
accordance with this Section. The Indenture Trustee is hereby authorized to
retain from amounts otherwise distributable to the Class B Noteholders
sufficient funds for the payment of any tax that is legally owed or required to
be withheld by the Trust (but such authorization shall not prevent the Trust or
the Indenture Trustee from contesting any such tax in appropriate proceedings,
and withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to the
Class B Noteholders shall be treated as cash distributed to the Class B
Noteholders at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution, the Indenture Trustee may in its sole
discretion withhold such amounts in accordance with this clause (e). In the
event that the Class B Noteholders wish to apply for a refund of any such
withholding tax, the Indenture Trustee shall reasonably cooperate with the Class
B Noteholders in making such claim so long as the Class B Noteholders agrees to
reimburse the Indenture Trustee for any out-of-pocket expenses incurred.
SECTION 5.05. Reserve Account. (a) On the Closing Date, the Seller shall
deposit the Reserve Account Initial Deposit into the Reserve Account. The
Servicer shall determine the Specified Reserve Account Balance for each
Distribution Date.
(b) On each Determination Date, the Servicer shall determine if
the Total Required Payment exceeds the Total Available Amount for the related
Distribution Date, and if such an excess exists the Servicer shall instruct the
Indenture Trustee to withdraw from the Reserve Account on the related
Distribution Date, to the extent of funds available therein, an amount equal to
such excess and deposit such funds into the Collection Account for inclusion as
part of the Total Distribution Amount for distribution on such Distribution Date
in accordance with the priorities set forth in Section 5.04(b).
(c) On each Determination Date, the Servicer shall determine if
the amount on deposit in the Reserve Account (after taking into account any
deposits thereto pursuant to Sections 5.04(b) and any withdrawals therefrom
pursuant to Section 5.05(b)) is greater than the Specified Reserve Account
Balance for such Distribution Date (which shall be calculated to give effect to
the reduction in the Outstanding Principal Amount of the Notes to result from
payments
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to Noteholders pursuant to Section 5.04(c) on such Distribution Date) and the
Servicer shall instruct the Indenture Trustee to deposit such amounts in the
Certificate Distribution Account.
(d) Notwithstanding anything in this Section 5.05 to the
contrary, if an Event of Default under the Indenture occurs and the maturities
of the Notes are accelerated pursuant to Section 5.02 of the Indenture, amounts
on deposit in the Reserve Account shall be applied by the Indenture Trustee in
accordance with Section 5.04(b) of the Indenture.
(e) Upon satisfaction of the Rating Agency Condition, the Seller
may eliminate the Reserve Account and replace it with an alternative
arrangement.
SECTION 5.06. [Reserved].
SECTION 5.07. Statements to the Certificateholder and Noteholders. On
the second Business Day prior to each Distribution Date, the Servicer shall
provide to the Indenture Trustee for the Indenture Trustee to forward to each
Noteholder of Record (with a copy to the Rating Agencies) and to the Owner
Trustee (for the Owner Trustee to forward to each Certificateholder of record
pursuant to the Trust Agreement) a statement substantially in the form of
Exhibit A to Schedule E (or such other form that is acceptable to the Indenture
Trustee, the Owner Trustee and the Servicer) setting forth at least the
following information as to the Notes (separately stating such information as to
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class B
Notes) and the Certificate, to the extent applicable:
(i) the amount to be deposited to the Principal Distribution
Account and the amounts to be paid to the Noteholders and the
Certificateholder therefrom;
(ii) the Class A Noteholders' Interest Distributable Amount,
the Class B Noteholders' Interest Distributable Amount and the
amounts paid to such Noteholders in respect thereof;
(iii) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
(iv) the Note Value as of the close of business on the last
day of the preceding Collection Period;
(v) the Outstanding Principal Amount of each class of the
Notes, the Class A-1 Note Pool Factor, the Class A-2 Note Pool
Factor, the Class A-3 Note Pool Factor, the Class B Note Pool Factor
and the Certificate Balance, in each case as of the close of business
on the last day of the preceding Collection Period, after giving
effect to payments allocated to principal reported under (i) above;
(vi) the amount of the Servicing Fee paid to the Servicer
with respect to the related Collection Period;
(vii) the amount of the Administration Fee paid to the
Administrator with respect to the preceding Collection Period;
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(viii) the aggregate amount of the Purchase Amounts for
Purchased Receivables with respect to the related Collection Period
paid by each of the Seller and the Servicer (accounted for
separately);
(ix) the amount of Realized Losses, if any, for such
Collection Period;
(x) the balance of the Reserve Account on such Distribution
Date, after giving effect to withdrawals made on such Distribution
Date;
(xi) the Specified Reserve Account Balance for such
Distribution Date;
(xii) the amount, if any, to be withdrawn from the Reserve
Account and deposited into the Collection Account on such
Distribution Date pursuant to Section 5.05(b);
(xiii) the amount, if any, to be withdrawn from the Reserve
Account and deposited to the Certificate Distribution Account
pursuant to Section 5.05(c);
(xiv) the Certificate Balance for such Distribution Date and
the aggregate amount to be deposited to the Certificate Distribution
Account pursuant to Section 5.04(c);
(xv) the amount, if any, to be distributed to the
Certificateholder pursuant to Section 5.02(a)(i) of the Trust
Agreement; and
(xvi) the amount, if any, to be distributed to the Seller
pursuant to Section 5.02(a)(ii) of the Trust Agreement.
Each amount set forth pursuant to paragraph (i), (ii) or (iv) above
shall be expressed as a dollar amount per $1,000 of original principal balance
of a Note.
The Indenture Trustee shall only be required to provide to the
Noteholders the information furnished to it by the Servicer. The Indenture
Trustee shall not be required to determine, confirm or recompute any such
information.
SECTION 5.08. Net Deposits. As an administrative convenience, so long as
CFSC is the Servicer and the Administrator, if the Servicer is permitted to
remit collections monthly rather than within two Business Days of their receipt
and identification pursuant to Section 5.02, the Servicer will be permitted to
make the deposit of collections on the Receivables and Purchase Amounts for or
with respect to the Collection Period net of distributions to be made to the
Servicer and the Administrator with respect to such Collection Period (including
any Servicer's Yield and the Servicing Fee to the extent of amounts available
for payment thereof), and the Servicer shall pay amounts owing to the
Administrator directly; provided, that if the Servicer is required to remit
collections within two Business Days, the Servicer shall be paid the Servicer's
Yield by means of the Servicer making the deposit of such collections net of the
Servicer's Yield and deposits of such amounts may not be made net of the
Servicing Fee. The Servicer, however, will account to the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholder as if the Servicing
Fee and Administration Fee were paid individually.
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ARTICLE VI
THE SELLER
SECTION 6.01. Representations of Seller. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller is duly organized
and validly existing as a corporation in good standing under the laws of the
State of Nevada with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the failure to
so qualify or to obtain any such license or approval would render any Receivable
unenforceable that would otherwise be enforceable by the Seller or the Owner
Trustee.
(c) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement and to carry out its terms; the Seller has
full power and authority to sell and assign the Receivables and other property
to be sold and assigned to and deposited with the Issuer and has duly authorized
such sale and assignment to the Issuer by all necessary corporate action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable in accordance with its
terms, except to the extent that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and the remedy of specific
performance and injunctive relief may be subject to certain equitable defenses
and to the discretion of the court before which any proceeding therefor may be
brought.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Seller, or any indenture, agreement
or other instrument to which the Seller is a party or by which it shall be
bound; (ii) result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or (iii) violate any
law or, to the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
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(f) No Proceedings. There are no proceedings or investigations
pending, or to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, the Notes, the Certificate or any
of the other Basic Documents, (ii) seeking to prevent the issuance of the Notes
or the Certificate or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents; (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, the Notes, the Certificate or
any other of the Basic Documents or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes or the Certificate.
SECTION 6.02. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Custodian and the Indenture Trustee and their
officers, directors and agents from and against any taxes that may at any time
be asserted against the Issuer, the Owner Trustee, the Custodian or the
Indenture Trustee or their respective officers, directors, and agents with
respect to the sale of the Receivables to the Issuer or the issuance and
original sale of the Certificate and the Notes, including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, not including any taxes asserted with
respect to ownership of the Receivables or Federal or other income taxes arising
out of the transactions contemplated by this Agreement) and costs and expenses
in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Custodian and the Indenture Trustee and their
officers, directors, and agents from and against any loss, liability or expense
incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement and
(ii) the Seller's or the Issuer's violation or alleged violation of Federal or
state securities laws in connection with the offering and sale of the Notes and
the Certificate.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Custodian or the Indenture Trustee and the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section 6.02 and the Person to or on behalf of whom
such payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Seller, without interest.
SECTION 6.03. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the
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Seller under this Agreement, shall be the successor to the Seller hereunder
without the execution or filing of any document or any further act by any of the
parties to this Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.01 shall have been breached and no Servicer Default, and no event
that, after notice or lapse of time, or both, would become a Servicer Default
shall have occurred and be continuing, (ii) the Seller shall have delivered to
the Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (iv) the Seller shall
have delivered to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all actions
necessary to perfect the interests of the Owner Trustee and the Indenture
Trustee have been taken, including that all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Owner Trustee
and Indenture Trustee, respectively, in the Receivables and reciting the details
of such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv)
above shall be conditions to the consummation of the transactions referred to in
clause (a), (b) or (c) above.
SECTION 6.04. Limitation on Liability of Seller and Others. The Seller
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 6.05. Seller May Own the Certificate or Notes. The Seller and
any Affiliate (other than CFSC) thereof may in its individual or any other
capacity become the owner or pledgee of the Certificate or Notes with the same
rights as it would have if it were not the Seller or an Affiliate thereof,
except as expressly provided herein (including, without limitation, the
definition of "Outstanding" contained in each of the Indenture and the Trust
Agreement) or in any Basic Document.
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of the Agreement (or as of the date a Person (other than the Indenture
Trustee) becomes Servicer pursuant to Sections 7.03 and 8.02, in the case of a
successor to the Servicer) and shall survive the sale of the Receivables to the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
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(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has the corporate power and
authority to own its properties and to conduct the business in which it is
currently engaged, and had at all relevant times, and has, the power, authority
and legal right to acquire, own, sell and service the Receivables.
(b) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms, except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and the remedy of specific performance
and injunctive relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Servicer, or any indenture,
agreement or other instrument to which the Servicer is a party or by which it
shall be bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than as contemplated by the Basic Documents); nor violate any
law or, to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(e) No Proceedings. To the Servicer's best knowledge, there are
no proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, the Notes, the Certificate or any
of the other Basic Documents; (ii) seeking to prevent the issuance of the Notes
or the Certificate or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents; (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, the Notes, the Certificate or
any of the other Basic Documents; or (iv) relating to the Servicer and which
might adversely affect the Federal or state income tax attributes of the Notes
or the Certificate.
(f) No Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Servicer of this
Agreement or any other Basic Document, the performance by the Servicer of the
transactions contemplated by this Agreement or any other Basic Document and the
fulfillment by the Servicer of the terms hereof or thereof, have been
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obtained or have been completed and are in full force and effect (other than
approvals, authorizations, consents, orders or other actions which if not
obtained or completed or in full force and effect would not have a material
adverse effect on the Servicer or the Issuer or upon the collectability of any
Receivable or upon the ability of the Servicer to perform its obligations under
this Agreement).
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Custodian, the
Noteholders, the Certificateholder and the Seller and any of the officers,
directors and agents of the Issuer, the Owner Trustee, the Indenture Trustee,
the Custodian and the Seller from and against any and all costs, expenses,
losses, damages, claims and liabilities, arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate (other than the
Seller or the Issuer) thereof of any Transaction Equipment.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Custodian and the Seller
and their respective officers, directors and agents from and against (i) any
taxes that may at any time be asserted against any such Person with respect to
the transactions contemplated herein, including any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with respect
to, and as of the date of, the sale of the Receivables to the Issuer or the
issuance and original sale of the Certificate and the Notes, or asserted with
respect to ownership of the Receivables, or Federal or other income taxes
arising out of distributions on the Certificate or the Notes) and (ii) costs and
expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the Custodian, the
Certificateholder and the Noteholders and any of the officers, directors and
agents of the Issuer, the Owner Trustee, the Indenture Trustee and the Seller
from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that any such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, the
negligence, willful misfeasance or bad faith of the Servicer in the performance
of its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement or on account of the failure of the
Servicer to be qualified to do business as a foreign corporation or to have
obtained a license or approval in any jurisdiction.
(d) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee, the Custodian and the Indenture Trustee and their respective
officers, directors and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in connection with
the acceptance or performance of the trusts and duties herein, and in the case
of the Owner Trustee, in the Trust Agreement, in the case of the Custodian, the
Custodial Agreement and in the case of the Indenture Trustee, the Indenture,
except to the extent that any such cost, expense, loss, claim, damage or
liability: (i) shall be due to the willful misfeasance,
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bad faith or negligence (except for errors in judgment) of the Owner Trustee,
the Custodian or the Indenture Trustee, as applicable; or (ii) shall arise from
the breach by the Owner Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement.
(e) The Servicer shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate, other than any taxes asserted
with respect to, and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the Certificate and the Notes, or
Federal or other income taxes imposed on the Issuer because of its
classification or reclassification for tax purposes, or Federal or other income
taxes arising out of distributions on the Certificate or the Notes.
For purposes of this Section, in the event of the termination of the
rights and obligations of CFSC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Servicer shall have made any indemnity payments pursuant
to this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) (i) into which the Servicer may be
merged or consolidated, (ii) which may result from any merger or consolidation
to which the Servicer shall be a party, (iii) which may succeed to the
properties and assets of the Servicer substantially as a whole, or (iv) which is
a corporation 50% or more of the voting stock of which is owned, directly or
indirectly, by Caterpillar, and (b) in the case of any of (i), (ii), (iii) or
(iv), which has executed an agreement of assumption to perform every obligation
of the Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (w) immediately after giving effect to such
transaction, no Servicer Default, and no event which, after notice or lapse of
time, or both, would become a Servicer Default shall have occurred and be
continuing, (x) the Servicer shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with, (y)
the Rating Agency Condition shall have been satisfied with respect to such
transaction and (z) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Owner Trustee and the Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses
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(w), (x), (y) and (z) above shall be conditions to the consummation of the
transactions referred to in clause (a), (b), (c) or (d) above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholder, except as provided under this Agreement, for any action taken
or for refraining from the taking of any action pursuant to this Agreement or
for errors in judgment; provided, however, that this provision shall not protect
the Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer as the case may be, may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the other Basic
Documents and the rights and duties of the parties to this Agreement and the
other Basic Documents and the interests of the Certificateholder under this
Agreement and the Noteholders under the Indenture.
SECTION 7.05. CFSC Not To Resign as Servicer. Subject to the provisions
of Section 7.03, CFSC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law (if it is also determined that such
determination may not be reversed). Notice of any such determination permitting
the resignation of CFSC shall be communicated to the Owner Trustee and the
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and obligations of CFSC in accordance with Section
8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer (i) to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate Distribution
Account any required payment or (ii) to direct the Indenture Trustee to make any
required distribution therefrom that shall continue
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unremedied for a period of three Business Days after written notice of such
failure is received by the Servicer from the Owner Trustee or the Indenture
Trustee or after discovery of such failure by an officer of the Servicer; or
(b) failure on the part of the Servicer or the Seller, as the
case may be, duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer or the Seller (as the case may be) set
forth in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of the Certificateholder or
Noteholders and (ii) continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given (A) to the Servicer or the Seller (as the case may be) by
the Owner Trustee or the Indenture Trustee or (B) to the Servicer or the Seller
(as the case may be), and to the Owner Trustee and the Indenture Trustee by the
Holders of Notes evidencing not less than 25% of the Outstanding Principal
Amount of the Notes or the "Holder" (as defined in the Trust Agreement) of the
Certificate; or
(c) an Insolvency Event occurs with respect to the Seller or the
Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Holders of Class A Notes
evidencing not less than 25% of the Outstanding Principal Amount of such Notes,
or if no Class A Notes are Outstanding, the Holders of Class B Notes evidencing
not less than 25% of the Outstanding Principal Amount of such Notes, or if no
Notes are Outstanding, either the Owner Trustee or the Holder of the
Certificate, by notice then given in writing to the Servicer (and to the
Indenture Trustee and the Owner Trustee if given by the Noteholders) may
terminate all the rights and obligations (other than the obligations set forth
in Section 7.02 hereof) of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes, the
Certificate or the Receivables or otherwise, shall, without further action, pass
to and be vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee and
the Owner Trustee are hereby authorized and empowered to execute and deliver, on
behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer, the Indenture Trustee and the Owner Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Servicer under this Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection (x) with transferring the computer or
other records to the successor Servicer in the form requested and (y) amending
this Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Owner Trustee shall give notice thereof to
the Rating Agencies.
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SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's receipt
of notice of termination, pursuant to Section 8.01 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the earlier of (x) the date 45
days from the delivery to the Owner Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Owner Trustee and the Indenture
Trustee. In the event that a successor Servicer has not been appointed at the
time when the predecessor Servicer has ceased to act as Servicer in accordance
with this Section, pending the appointment of and acceptance by a successor
Servicer, the Indenture Trustee without further action shall automatically be
appointed and serve as the successor Servicer and the Indenture Trustee shall be
entitled to the Servicing Fee and the Servicer's Yield. Notwithstanding the
above, the Indenture Trustee shall, if it shall be legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established institution who has demonstrated its capability to service the
Receivables to the satisfaction of the Indenture Trustee, as the successor to
the Servicer under this Agreement, having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of
receivables comparable with the Receivables, as the successor to the Servicer
under this Agreement.
The Indenture Trustee, acting in its capacity as successor Servicer, and
any successor Servicer appointed by it, shall have no responsibility or
obligation (i) for any breach by any predecessor Servicer of any of its
representations and warranties, or (ii) any acts or omissions of CFSC or any
other Servicer prior to its termination.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor servicer) shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and the Servicer's Yield and all the rights granted to the predecessor Servicer
by the terms and provisions of this Agreement.
(c) Subject to the Indenture Trustee's right to appoint a
successor Servicer pursuant to Section 8.02(a) after the Indenture Trustee has
become the Servicer pending the appointment of and acceptance by a successor
Servicer, the Servicer may not resign unless it is prohibited from serving as
such by law.
(d) Notwithstanding any other provision of this Agreement,
neither the Indenture Trustee nor any successor Servicer shall be deemed in
default, breach or violation of this Agreement as a result of the failure of
CFSC or any Servicer (i) to cooperate with the Indenture Trustee or any
successor Servicer pursuant to Section 8.01, (ii) to deliver funds required to
be
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deposited to any Trust Account, or (iii) to deliver files or records relative to
the Receivables as may be requested by the Indenture Trustee or successor
Servicer.
SECTION 8.03. Notification to Noteholders and Certificateholder. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof to
the Certificateholder and the Indenture Trustee shall give prompt written notice
thereof to Noteholders and the Rating Agencies.
SECTION 8.04. Waiver of Past Defaults. The Holders of Class A Notes
evidencing more than a 50% of the Outstanding Principal Amount of such Notes or,
if no Class A Notes are Outstanding, the Holders of Class B Notes evidencing
more than 50% of the Outstanding Principal Amount of such Notes or, if no Notes
are Outstanding, the "Holder" (as defined in the Trust Agreement) of the
Certificate, may, on behalf of all Noteholders and the Certificateholder, waive
in writing any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required deposits
to or payments from any of the Trust Accounts in accordance with this Agreement.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
SECTION 8.05. Appointment of Custodians. CFSC, the Seller, the Issuer
and the Indenture Trustee may, with the consent of the Servicer and notice to
the Rating Agencies, appoint Bank One, National Association, as Custodian to
hold all or a portion of the Receivable Files as agent for such Person during
such time as such Person owns or has an interest in the Receivables, in
accordance with the Custodial Agreement. Bank One, National Association is
appointed Custodian and, for so long as it shall be the Custodian thereunder,
agrees to comply with the terms of the Custodial Agreement applicable to it. The
Indenture Trustee agrees to comply with the terms of the Custodial Agreement and
to enforce the terms and provisions thereof against the Custodian for the
benefit of the Noteholders and the Certificateholder.
ARTICLE IX
TERMINATION
SECTION 9.01. Optional Purchase of All Receivables; Trust Termination.
(a) If on the last day of any Collection Period the Note Value is 10% or less of
the Initial Note Value the Servicer shall have the option to purchase the Owner
Trust Estate, other than the Trust Accounts, which purchase shall be effective
as of such last day by depositing in the Collection Account on or prior to the
second Business Day prior to the next succeeding Distribution Date an amount
equal to the aggregate Purchase Amount for the Receivables (including defaulted
Receivables but not including Liquidated Receivables) pursuant to Section 5.03;
provided, however, that the aggregate Purchase Amount for the Receivables, after
payment of all amounts due pursuant to Section 5.04(b)(i) on such next
succeeding Distribution Date, is an amount at least equal to the aggregate
Redemption Price for the Class A-3 Notes and the Class B Notes. Upon the
exercise of such option, the Servicer shall succeed to all interests in and to
the Trust.
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(b) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
after the Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholder will succeed to the rights of the Noteholders hereunder (other
than the right to receive payments under Section 5.05(b)), and the Owner Trustee
will succeed to the rights of, and assume the obligations of, the Indenture
Trustee pursuant to this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. The Agreement may be amended by the Seller,
the Servicer and the Trust, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholder, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholder; provided, however, that such
amendment shall not, as evidenced by an Opinion of Counsel delivered to the
Owner Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholders or the federal tax characterization of
the Notes.
This Agreement may also be amended from time to time by the Seller, the
Servicer and the Trust, with the consent of the Indenture Trustee, the consent
of the Holders of Notes evidencing at least a majority of the Outstanding
Principal Amount of the Notes and the consent of the "Holder" (as defined in the
Trust Agreement) of the Certificate, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholder; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or (b) reduce the aforesaid
percentage of the Outstanding Principal Amount of the Notes, the holders of
which are required to consent to any such amendment, without the consent of the
Holders of all the Outstanding Notes.
Prior to the execution of any such amendment or consent, the Servicer
shall furnish written notification of the substance of such amendment or consent
to each of the Rating Agencies. Promptly after the execution of any such
amendment or consent without the consent of the Certificateholder, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Certificateholder.
It shall not be necessary for the consent of the Certificateholder or
the Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
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Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.02(i)(1). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Seller shall take
all actions necessary to perfect, and maintain perfection of, the interests of
the Trust and the Indenture Trustee in the Receivables. In the event it is
determined that the Indenture Trustee's or the Issuer's interests are no longer
perfected, such actions shall include but shall not be limited to enforcement of
the terms of the Custodial Agreement and of Section 6.02 of the Purchase
Agreement. In addition, without limiting the rights of the Indenture Trustee or
the Issuer specified in the immediately preceding sentence, the Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to present, maintain, and protect the interest of the
Issuer and the interest of the Indenture Trustee in the Receivables and in the
proceeds thereof. The Seller shall deliver (or cause to be delivered) to the
Owner Trustee and the Indenture Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller nor the Servicer shall change its name or
type or jurisdiction of organization unless it shall have given the Owner
Trustee and the Indenture Trustee at least (30) days' prior written notice
thereof and, if applicable, shall have timely filed appropriate amendments to
any and all previously filed financing statements or continuation statements (so
that the Lien of the Issuer or the Indenture Trustee is not adversely affected).
(c) The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
Recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or Recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer to
a Receivable shall indicate clearly the interest of the Issuer (which interest
has been acquired from the Seller) and the Indenture Trustee in such Receivable
and that such Receivable is owned by the Issuer and has been pledged to the
Indenture Trustee. Indication of the Issuer's interest (which interest has been
acquired from the Seller) and the Indenture Trustee's interest in a Receivable
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Receivable shall have been paid in full or repurchased.
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(f) If at any time the Seller or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
receivables comparable with the Receivables, to any prospective purchaser,
lender or other transferee, the Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including any restored from backup archives) that, if they shall refer in any
manner whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Issuer and has been pledged to the Indenture
Trustee.
(g) The Servicer shall permit the Indenture Trustee and its
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner
Trustee or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Seller shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of
this Agreement and of each amendment thereto, an Opinion of
Counsel either (A) stating that, in the opinion of such counsel,
all actions have been taken that are necessary fully to perfect
the interests of the Trust and the Indenture Trustee in the
Receivables, and reciting the details of such action or referring
to prior Opinions of Counsel in which such details are given, or
(B) stating that, in the opinion of such counsel, no such action
shall be necessary to perfect such interest; and
(2) within 120 days after the beginning of each
calendar year beginning with the first calendar year beginning
more than three months after the Cut-off Date, an Opinion of
Counsel, dated as of a date during such 120-day period, either
(A) stating that, in the opinion of such counsel, all actions
have been taken, and, if applicable, all financing statements and
continuation statements have been executed and filed, that are
necessary fully to perfect the interests of the Trust and the
Indenture Trustee in the Receivables and reciting the details of
such filings or referring to prior Opinions of Counsel in which
such details are given, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to perfect such
interest.
Each Opinion of Counsel referred to in clause (1) or (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to perfect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section 12(b)
or Section 12(g) of the Exchange Act within the time periods specified in such
sections.
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SECTION 10.03. Notices. All demands, notices and communications upon or
to the Seller, the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee or the Rating Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller, to Caterpillar Financial Funding Corporation, 0000 X. Xxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000, (702-735-2514), (b) in the case of the
Servicer, to Caterpillar Financial Services Corporation, 0000 Xxxx Xxx Xxxxxx,
Xxxxxxxxx, XX 00000-0000 (615-341-1000), (c) the case of the Issuer or the Owner
Trustee, at the "Corporate Trust Office" (as defined in the Trust Agreement),
(d) in the case of the Indenture Trustee, at the Corporate Trust Office, (e) in
the case of Moody's, to Xxxxx'x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (f) in the case of
Standard & Poor's, to Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance
Department, or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.03 and 7.03 and as provided
in the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee, the Certificateholder, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS, REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and the other property constituting
the Owner Trust Estate and/or the assignment of any or all of the Issuer's
rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer, the Seller, the Owner Trustee and
the Indenture Trustee shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer, the Issuer, the Owner Trustee and the Indenture Trustee shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Seller, acquiesce, petition or otherwise invoke or
cause the Seller to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Seller under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank USA, National
Association not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer, and in no event shall Chase Manhattan Bank USA, National
Association in its individual capacity or, except as expressly provided in the
Trust Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been acknowledged and accepted by Bank One, National
Association not in its individual capacity but solely as Indenture Trustee, and
in no event shall Bank One, National Association have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
CATERPILLAR FINANCIAL ASSET TRUST 2001-A
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust,
By: /s/ XXXX X. XXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
CATERPILLAR FINANCIAL FUNDING CORPORATION,
Seller,
By: /s/ XXXXXX X. XXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CATERPILLAR FINANCIAL SERVICES CORPORATION,
Servicer,
By: /s/ XXX X. XXXXXX
---------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
Acknowledged and Accepted:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Indenture Trustee, as Custodian
and as Securities Intermediary
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Assistant Secretary
54
SCHEDULE A
Schedule of Receivables
-----------------------
A-1
55
SCHEDULE B
Location of Receivable Files
----------------------------
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
B-1
56
SCHEDULE C-1
FORM OF INDENTURE TRUSTEE INITIAL CERTIFICATION
-----------------------------------------------
[DATE]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of July 1, 2001 among Caterpillar Financial
Services Corporation as Servicer, Caterpillar Financial Funding
Corporation and Caterpillar Financial Asset Trust 2001-A
Gentlemen:
In accordance with Section 3.05 of the Sale and Servicing Agreement, the
undersigned, as Indenture Trustee under the Indenture, hereby certifies that it
or the Custodian on its behalf has received a Receivable File with respect to
each Receivable listed in the Schedule of Receivables and the documents
contained therein appear to bear original signatures.
Neither the Indenture Trustee nor the Custodian on its behalf has made
any independent examination of any such documents beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any such documents contained in the Receivables
Files, or (ii) collectability, insurability, effectiveness or suitability of any
Receivable identified on the Schedule of Receivables.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Sale and Servicing Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
--------------------------------
C-1-1
57
SCHEDULE C-2
FORM OF INDENTURE TRUSTEE FINAL CERTIFICATION
---------------------------------------------
[DATE]
[Trust]
[Servicer]
[Seller]
Re: Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of July 1, 2001 among Caterpillar Financial
Services Corporation, as Servicer, Caterpillar Financial Funding
Corporation and Caterpillar Financial Asset Trust 2001-A
Gentlemen:
In accordance with the provisions of Section 3.05 of the
above-referenced Sale and Servicing Agreement, the undersigned, as Indenture
Trustee under the Indenture, hereby certifies that as to each Receivable listed
on the Schedule of Receivables (other than any Receivable paid in full or any
Receivable listed on the exception report attached hereto), it or the Custodian
on its behalf has reviewed the Receivables Files delivered to it or the
Custodian on its behalf pursuant to Section 3.03 of the Sale and Servicing
Agreement and has determined that (i) all such documents are in its possession
or in the possession of the Custodian on its behalf, (ii) all documents to be
included in the Receivables Files pursuant to the Sale and Servicing Agreement
including, without limitation, the Original Contract have been reviewed by it or
the Custodian on its behalf and have not been mutilated, damaged, torn or
otherwise physically altered and relate to such Receivable and (iii) based on
its examination, or the examination of the Custodian on its behalf, and only as
to the foregoing documents, the information set forth on the Schedule of
Receivables respecting such Receivables accurately reflects the information set
forth in the Receivables .
Neither the Indenture Trustee nor the Custodian on its behalf has made
any independent examination of such documents beyond the review specifically
required in the above-referenced Sale and Servicing Agreement. The Indenture
Trustee makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any documents contained in the Receivable
Files, or (ii) the collectability, insurability, effectiveness or suitability of
any Receivable identified on the Schedule of Receivables.
C-2-1
58
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-referenced Sale and Servicing Agreement.
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
--------------------------------
Name:
Title:
X-0-0
00
XXXXXXXX X
Servicer's Certificate
----------------------
The undersigned hereby certify that (i) they are, respectively, a duly
elected [title] and [title] of Caterpillar Financial Services Corporation and
(ii) this Servicing Certificate complies with the requirements of, and is being
delivered pursuant to, Section 4.09 of the Sale and Servicing Agreement (the
"Sale and Servicing Agreement") dated as of July 1, 2001 between Caterpillar
Financial Asset Trust 2001-A, Caterpillar Financial Funding Corporation and
Caterpillar Financial Services Corporation.
Dated:
--------------------------- -----------------------------
Name:
Title:
-----------------------------
Name:
Title:
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60
Distribution Date: ______________
(i) Servicing Fee;
(ii) Administration Fee;
(iii) Total Available Amount;
(iv) Total Distribution Amount;
(v) the weighted average Net APR for the related Collection Period;
(vi) Class A Noteholders' Monthly Interest Distributable Amount;
(vii) Class A Noteholders' Interest Carryover Shortfall;
(viii) Class B Noteholders' Monthly Interest Distributable Amount;
(ix) Class B Noteholders' Interest Carryover Shortfall;
(x) The amount to be deposited to the Principal Distribution Account
pursuant to Section 5.04(b)(iv);
(xi) The amount to be deposited to the Principal Distribution Account
pursuant to Section 5.04(b)(vi);
(xii) The amount to be deposited to the Principal Distribution Account
pursuant to Section 5.04(b)(viii);
(xiii) The amount to be remitted to each Class of Noteholders and the
Holder of the Certificate from amounts on deposit in the Principal Distribution
Account;
(xiv) the amount to be withdrawn from the Reserve Account and deposited
to the Collection Account pursuant to Section 5.05(b);
(xv) the Specified Reserve Account Balance;
(xvi) the amount to be deposited into the Reserve Account pursuant to
Section 5.04(b);
(xvii) the excess, if any, of the amount in the Reserve Account (after
giving effect to Section 5.04(b)) over the Specified Reserve Account Balance;
(xviii) the amount to be withdrawn from the Reserve Account and
remitted to the Certificate Distribution Account pursuant to Section 5.05(c);
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61
(xix) the amount to be withdrawn from the Collection Account and
remitted to the Certificate Distribution Account pursuant to Section 5.04(b)(x);
(xx) the amount to be remitted to the Certificateholder pursuant to
Section 5.02(a)(i) of the Trust Agreement;
(xxi) the amount to be remitted to the Seller pursuant to Section
5.02(a)(ii) of the Trust Agreement;
(xxii) the Pool Balance as of the close of business on the last day of
the related Collection Period;
(xxiii) the Note Value as of the close of business on the last day of
the preceding Collection Period;
(xxiv) the Outstanding Principal Amount of the Class A-1 Notes, the
Class A-1 Note Pool Factor, the Outstanding Principal Amount of the Class A-2
Notes, the Class A-2 Note Pool Factor, the Outstanding Principal Amount of the
Class A-3 Notes, the Class A-3 Note Pool Factor, the Outstanding Principal
Amount of the Class B Notes, the Class B Note Pool Factor, the Certificate
Balance and the Certificate Pool Factor as of the close of business on the last
day of the related Collection Period, after giving effect to payments of
principal on such Distribution Date;
(xxv) the aggregate amount of the Purchase Amounts for Purchased
Receivables with respect to the related Collection Period; and
(xxvi) the amount of Realized Losses, if any, for the related
Collection Period.
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62
SCHEDULE E
Officers' Certificate
---------------------
The undersigned hereby certify that (i) they are, respectively, a duly
elected [title] and [title] of Caterpillar Financial Services Corporation, (ii)
Exhibit A hereto complies with the requirements of, and is being delivered
pursuant to, Section 5.07 of the Sale and Servicing Agreement (the "Sale and
Servicing Agreement") dated as of July 1, 2001 between Caterpillar Financial
Asset Trust 2001-A, Caterpillar Financial Funding Corporation and Caterpillar
Financial Services Corporation, and (iii) Exhibit B hereto complies with the
requirements of, and is being delivered pursuant to, Section 5.04(b) of the Sale
and Servicing Agreement.
Dated:
--------------------------- -----------------------------
Name:
Title:
-----------------------------
Name:
Title:
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63
EXHIBIT A
TO SCHEDULE E
Statement for Noteholders and Certificateholder
pursuant to Section 5.07
Distribution Date:___________________
(i) Amount of principal being paid on Notes:
(a) Class A-1 Notes: _______________ ($____ per $[___]
original principal amount)
(b) Class A-2 Notes: _______________ ($____ per $[___] original
principal amount)
(c) Class A-3 Notes: _______________ ($____ per $[___] original
principal amount)
(d) Class B Notes: _______________ ($____ per $[___] original
principal amount)
(e) Total: _______________
(ii) Amount of principal being paid on
Certificate:_____________ ($____ per $[___] original
principal amount)
(iii) Amount of interest being paid or distributed:
(a) Class A-1 Notes:_____________ ($____ per $[___]
original principal amount)
(b) Class A-2 Notes:_____________ ($____ per $[___]
original principal amount)
(c) Class A-3 Notes:_____________ ($____ per $[___]
original principal amount)
(d) Class B Notes:_____________ ($____ per $[___]
original principal amount)
(e) Seller:_____________
(f) Total:_______________
(iv) Pool Balance at end of related Collection Period:_________.
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64
(v) Note Value at end of related Collection Period:_____________.
(vi) after giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1 Notes:_________
(2) Class A-1 Note Pool Factor:______________
(b) (1) outstanding principal amount of Class A-2 Notes:_________
(2) Class A-2 Note Pool Factor:__________
(c) (1) outstanding principal amount of Class A-3 Notes:_________
(2) Class A-3 Note Pool Factor:__________
(d) (1) outstanding principal amount of Class B Notes:___________
(2) Class B Note Pool Factor:__________
(e) (1) Certificate Balance of Certificate:__________
(2) Certificate Pool Factor:__________
(vii) Amount of Servicing Fee being paid:____________.
(viii) Amount of Administration Fee being paid:______________________.
(ix) Aggregate Purchase Amounts for Collection Period:____________.
(x) Aggregate amount of Realized Losses for the Collection
Period:__________.
(xi) Amount in Reserve Account:___________________.
(xii) Specified Reserve Account Balance:______________.
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EXHIBIT B
TO SCHEDULE E
Instructions to the Indenture Trustee for payments and deposits pursuant to
Section 5.04(b) of the Sale and Servicing Agreement:
Date:________
(i) Payment of Servicing Fee (including any previously unpaid
Servicing Fees) to Servicer pursuant to Section 5.04(b)(i):
__________.
(ii) Payment of Administration Fee to Administrator:________________.
(iii) Class A Noteholders' Interest Distributable Amount to be remitted
to the Class A Noteholders: __________.
(iv) Amount of First Priority Principal Distribution Amount to be
deposited to the Principal Distribution Account pursuant to
Section 5.04(b)(iv);
(v) Class B Noteholders' Interest Distributable Amount to be remitted
to the Class B Noteholders: __________.
(vi) Amount of Second Priority Principal Distribution Amount to be
deposited to the Principal Distribution Account pursuant to
Section 5.04(b)(vi);
(vii) Deposit to Reserve Account pursuant to Section 5.04(b)(vii);
(viii) Amount to be deposited to the Principal Distribution Account
pursuant to Section 5.04(b)(viii);
(ix) Payment of Servicing Fee (including any previously unpaid
Servicing Fees) to Servicer pursuant to Section 5.04(b)(ix):
_________.
(x) The amount to be deposited to the Certificate Distribution
Account pursuant to Section 5.04(b)(x) for distribution to the
holder of the Certificate:
__________;
(xi) Amount to be distributed from the Principal Distribution Account
to each Class of Noteholders, and to the holders of the
Certificate;
(xii) Amount to be withdrawn from the Reserve Account and deposited to
the Collection Account pursuant to Section 5.05(b); and
(xiii) Amount to be withdrawn from the Reserve Account and deposited to
the Certificate Distribution Account pursuant to Section 5.05(c).
B-1
