exv4w3



 






Exhibit 4.3




 

 






SALE AND SERVICING AGREEMENT




among




CATERPILLAR FINANCIAL ASSET TRUST 2005-A




Issuer




CATERPILLAR FINANCIAL FUNDING CORPORATION




Seller




and




CATERPILLAR FINANCIAL SERVICES CORPORATION




Servicer




Dated as of April 1, 2005




 

 






 









 












     SALE AND SERVICING AGREEMENT dated as of April 1, 2005, among CATERPILLAR FINANCIAL ASSET
TRUST 2005-A, a Delaware statutory trust, CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada
corporation, and CATERPILLAR FINANCIAL SERVICES CORPORATION, a Delaware corporation.



     WHEREAS the Issuer (as defined below) 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 CFSC (as defined below) in the ordinary course of its business;



     WHEREAS the Seller (as defined below) has purchased such portfolio of receivables from CFSC
and desires to sell such portfolio of receivables to the Issuer; and



     WHEREAS CFSC 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:



     “Additional Servicing Compensation” 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.



     “Administration Agreement” means the Administration Agreement, dated as of April 1,
2005, among the Trust, the Seller, CFSC, as administrator, and U.S. Bank National Association, as
indenture trustee, as the same may be amended, modified or 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 specified in the Indenture.



     “Agreement” means this Sale and Servicing Agreement, as the same may be amended,
modified or 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
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 specified 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 specified in the Trust Agreement.



     “Certificate Balance” means, on the Closing Date, $10,677,293 and, thereafter,
$10,677,293, 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 specified 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 specified 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, the Class
A-4 Notes or the Class B Notes, as applicable.



     “Class A Noteholders” has the meaning specified in 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, the Class A-3 Note Interest Rate
and the Class A-4 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 (i) the Class A Noteholders’ Monthly Interest Distributable Amount
for such Distribution Date and (ii) 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, the Class A-3 Notes and the Class A-4 Notes at the Class A-1 Note
Interest Rate, the Class A-2 Note Interest Rate, the Class A-3 Note Interest Rate and the Class A-4
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, the Class A-3 Notes and the
Class A-4 Notes, from and including the 25th day of the month preceding such
Distribution Date (or, in the case of the initial Distribution Date, from and including the Closing
Date), to but excluding the 25th day of the month of 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, the Class A-3 Notes
and the Class A-4 Notes, collectively.



     “Class A-1 Note Final Scheduled Distribution Date” means the Distribution Date
occurring in April 2006.



     “Class A-1 Note Interest Rate” has the meaning specified 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 2007.



     “Class A-2 Note Interest Rate” has the meaning specified 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 February 2009.



     “Class A-3 Note Interest Rate” has the meaning specified in the Indenture.



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     “Class A-3 Note Pool Factor” means 1.0000000 as of the Closing Date and, as of the
close of business on any Distribution Date thereafter means a seven digit decimal figure equal to
the Outstanding Principal Amount of the Class A-3 Notes as of such date (after giving effect to
payments in reduction of the principal amount of the Class A-3 Notes on such date) divided by the
original Outstanding Principal Amount of the Class A-3 Notes.



     “Class A-4 Note Final Scheduled Distribution Date” means the Distribution Date
occurring in June 2010.



     “Class A-4 Note Interest Rate” has the meaning specified in the Indenture.



     “Class A-4 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-4 Notes as of such date (after giving effect to
payments in reduction of the principal amount of the Class A-4 Notes on such date) divided by the
original Outstanding Principal Amount of the Class A-4 Notes.



     “Class B Note Final Scheduled Distribution Date” means the Distribution Date occurring
in April 2011.



     “Class B Noteholders” has the meaning specified in 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 (i) the Class B Noteholders’ Monthly Interest Distributable Amount
for such Distribution Date and (ii) 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 (or, in the case of the initial Distribution Date, from and including the
Closing 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 specified in the Indenture.



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     “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.



     “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, all Notes included in Class A-4 Notes or
all Notes included in Class B Notes, whichever is appropriate.



     “Closing Date” means April 28, 2005.



     “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 April 30, 2005 and, with respect to each subsequent Distribution
Date, the immediately preceding calendar month. Any amount stated “as of the close of business on
the last day of a Collection Period” shall give effect to the following calculations as determined
as of the end of the day on such last day: (i) all applications of collections and (ii) all
distributions to be made on the following Distribution Date.



     “Collateral” has the meaning specified in the Granting Clause of the Indenture.



     “Commission” means the Securities and Exchange Commission, and its successors.



     “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 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 209 South LaSalle Street, Suite 300, Chicago, Illinois,
60604, Attention: Caterpillar Financial Asset Trust 2005-A, 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 100 Wall
Street, Suite 1600, New York, New York 10005; or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders, the Owner Trustee and the Seller, or the
principal corporate trust office of any successor Indenture Trustee (the address of



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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.



     “Cumulative Realized Losses” means, with respect to any Collection Period, the product
of (i) all Realized Losses during the period since the Cut-off Date through the end of such
Collection Period divided by the Initial Pool Balance and (ii) 100.



     “Custodian” means U.S. Bank National Association, in its capacity as custodian of the
Receivable Files, and its successors and assigns in such capacity, pursuant to the Custodial
Agreement.



     “Custodial Agreement” means the Custodial Agreement, dated as of April 1, 2005, among
CFSC, the Seller, the Issuer and the Custodian, as the same may be amended, modified or
supplemented from time to time.



     “Cut-off Date” means April 1, 2005.



     “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.



     “Delivery Date” means the date on which the Receivable Files are delivered to the
Custodian.



     “Determination Date” means, with respect to any Distribution Date, the fifth Business
Day prior to such Distribution Date.



     “Discount Factor” means 6.25% per annum.



     “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 May 25, 2005.



     “Eligible Institution” means (a) the corporate trust department of the Indenture
Trustee, the Owner Trustee, JPMorgan Chase Bank, N.A. as long as it is paying agent under the Trust
Agreement or U.S. Bank 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 Moody’s or (2) a short-term unsecured debt rating or a certificate of deposit
rating of “A-1+” by Standard & Poor’s and “Prime-1” or better by



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Moody’s, or any other long-term,
short-term or certificate of deposit rating acceptable to the Rating Agencies and (B) whose
deposits-are insured by the FDIC or (ii)(A) the parent of which has a long-term or short-term
unsecured debt rating acceptable to the Rating Agencies and (B) whose deposits are insured by the
FDIC. If so qualified, the Indenture Trustee, the Owner Trustee, JPMorgan Chase Bank, N.A. or U.S.
Bank 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 (other than any 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;




          (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.




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     “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.



     “FDIC” means the Federal Deposit Insurance Corporation, and its successors.



     “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, the Class A-3 Note Final
Scheduled Distribution Date, the Class A-4 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 or refinanced, 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, not less than zero, 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 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, (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 and (iv) on and after the Class
A-4 Note Final Scheduled Distribution Date, the amount that is necessary to reduce the Outstanding
Principal Amount of the Class A-4 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 specified in 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 April 1, 2005, between the Issuer and the
Indenture Trustee, as the same may be amended, modified or supplemented from time to time.



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     “Indenture Trustee” means U.S. Bank 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
$853,817,293.



     “Initial Pool Balance” means the Pool Balance as of the Cut-off Date, which is
$860,601,737.



     “Insolvency Event” means, with respect to a specified Person, (i) 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 (ii) 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.



     “Installment Sales Contract” means, with respect to any applicable Receivable, the
related fixed rate retail installment sale contract for the purchase of machinery or equipment.



     “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.



     “Issuer” means Caterpillar Financial Asset Trust 2005-A, a Delaware statutory trust,
and its successors.



     “Lease” means, with respect to any applicable Receivable, the related equipment
finance lease contract.



     “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 monies
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



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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) monies collected in respect of any Liquidated Receivable in excess of the
Contract Balance therefor.



     “Moody’s” means Moody’s Investors Service, Inc., or its successor.



     “Net APR” means, with respect to any Receivable, the APR therefor less the Servicing
Fee Rate.



     “Net Excess Spread” means, with respect to any Distribution Date on or prior to the
Distribution Date on which the amount on deposit in the Reserve Account equals the Specified
Reserve Account Balance, the Total Available Amount reduced by (i) the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods, (ii) the Administration Fee and all unpaid
Administration Fees from prior Collection Periods, (iii) the Class A Noteholders’ Interest
Distributable Amount, (iv) the Class B Noteholders’ Interest Distributable Amount and (v) the
difference between (A) the Note Value at the end of the second preceding Collection Period, or in
the case of the initial Distribution Date, the Initial Note Value, and (B) the Note Value at the
end of the preceding Collection Period.



     “Net Investment” with respect to a Lease, means 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 New York Uniform Commercial Code.



     “Note Register” and “Note Registrar” have the meanings specified in the
Indenture.



     “Note Value” means, at any time, 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 Discount Factor. For purposes of calculating Note Value for any (i) delinquent
Receivable that has not had the Financed Equipment by which it is secured repossessed and
which is not a Liquidated Receivable or a 180-Day 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, (ii) Receivable
that has had the Financed Equipment by which it is secured repossessed but which has not yet become
a Liquidated Receivable or a 180-Day Receivable, the outstanding Contract Balance of that
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 that Receivable, (iii) Liquidated Receivable, it will be
assumed that no payments will be received on that Receivable and (iv) 180-Day Receivable, it will
be assumed that a payment on that Receivable in an amount equal to the estimated value of that
Receivable, as determined by the Servicer in accordance with its servicing standards, will be
received in the next Collection Period and it will be assumed that no other payments will be
received on that Receivable.



     “Noteholders’ Interest Distributable Amount” means, with respect to any Distribution
Date, the sum of (i) the Class A Noteholders’ Interest Distributable Amount and (ii) the Class B
Noteholders’ Interest Distributable Amount for such Distribution Date.



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     “Notes” means the Class A Notes and the Class B Notes, collectively.



     “Obligor” on a Receivable means (i) the purchaser, co-purchasers or lessees of the
Financed Equipment and (ii) any other Person, including the related Dealer, who owes payments under
the Receivable.



     “Officers’ Certificate” means a certificate signed by (i) 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 (ii) the controller (or chief accounting officer) or a
secretary or assistant secretary, in each case of the Seller or the Servicer, as appropriate.



     “180-Day Receivable” means, as of the last day of any Collection Period, any
Receivable as to which (i) a Scheduled Payment is more than 180 days past its due date, as
specified in the related Contract, and (ii) the Servicer has determined its estimated value in
accordance with its servicing standards.



     “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 or the Rating Agencies, as applicable.



     “Original Contract” means with respect to each Receivable, a related Contract that
satisfies the following conditions:




	        (a)	 	(i) Such Contract states as part of its terms:
	 
	 	   	“Although multiple counterparts of this document may be signed, only the
counterpart accepted, acknowledged and certified by CFSC on the signature
page thereof as the original will constitute original chattel paper.”; and






	 	(ii)  	CFSC has accepted, acknowledged and certified one originally
executed copy or version of such Contract (and no other) by stamping on the
signature page thereon the following legend and executing the same where
indicated (which execution will be effected in red by use of a stamp containing
a replica of an authorized signatory of CFSC):





	 	 	 	 	 	 	 
	 	 	ACCEPTED, ACKNOWLEDGED AND CERTIFIED BY
	 	 	CATERPILLAR FINANCIAL SERVICES
	 	 	CORPORATION AS THE ORIGINAL.
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:
	 	 	 	; or
	

	 	 	 	 	 	 







	 	(b)  	Such Contract is in “snap-set” or other form for which only one original may be
produced.
	 
	 	(c)  	The Contract is a Dealer Receivable and the Dealer has represented and
warranted to CFSC that such Contract is the original and only contract executed in
connection with the related Financed Equipment.




12









 











     “Outstanding” has the meaning specified in 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.



     “Over 60-day Delinquency Percentage” means, for any Distribution Date, the product of
(i) the aggregate Contract Balance of all Receivables for which a Scheduled Payment was more than
60 days past its related due date (as specified in the related Contract) as of the end of the
preceding Collection Period, divided by the Pool Balance on such Distribution Date and (ii) 100.



     “Owner Trust Estate” has the meaning specified in the Trust Agreement.



     “Owner Trustee” means Chase 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 received with respect to any Liquidated
Receivables received during such Collection Period and (iii) all Realized Losses on Liquidated
Receivables and 180 Day Receivables for that 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 established by the Indenture Trustee pursuant to Section 5.01(a)(i).



     “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 April 1, 2005, between
the Seller and CFSC, as the same may be amended, modified or 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
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 (i) purchased as of the close of business on
the last day of a Collection Period by the Servicer pursuant to Section 4.07, (ii)
repurchased as of the last day of a Collection Period by the Seller or CSFC pursuant to Section
3.02, or (iii) purchased by the Servicer pursuant to Section 9.01.



13









 





     “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, for any Distribution Date, the sum of (i) with respect to any
Receivable that became a Liquidated Receivable during the related Collection Period, the excess, if
any, of (a) the Contract Balance of such Liquidated Receivable minus the Write Down Amount for such
Receivable, if any, over (b) the Liquidation Proceeds for that Liquidated Receivable for that
Collection Period to the extent allocable to principal and (ii) the Write Down Amount, if any,
calculated during the related Collection Period, with respect to each 180-Day Receivable.



     “Receivable” means any Contract listed on the Schedule of Receivables.



     “Receivable File” means (a) with respect to each Receivable (other than a Dealer
Receivable), the Original Contract related to such Receivable and (b) with respect to each Dealer
Receivable, the Original Contract related to such Receivable and any documents used to assign such
Dealer Receivable and the related Dealer’s security interest in the related Transaction Equipment
to CFSC.



     “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 $12,807,259.



14









 





     “Schedule of Receivables” means the schedule of Receivables (which schedule may be in
the form of microfiche) attached 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.



     “Securities Intermediary” has the meaning specified in Section 5.01(c)(ii)(B) and
initially means U.S. Bank 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.



     “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” means, with respect to any Distribution Date, an
amount equal to the lesser of (i) the Outstanding Principal Amount of the Notes and (ii) 2.00% of
the Initial Note Value; provided, however, that the percentage specified in clause (ii) of this
definition of Specified Reserve Account Balance may be reduced as follows:




	 	•  	if on the Distribution Date in October 2006, (i) Cumulative Realized Losses for the
related Collection Period are less than 0.65% and (ii) the Three Month Rolling Over
60-Day Delinquency Percentage for such Distribution Date is less than 5.00%, the
percentage specified in clause (ii) of this definition of Specified Reserve Account
Balance will be 1.75% for the October 2006 Distribution Date and each subsequent




15









 






	 	   	Distribution Date, subject to any further reduction in accordance with the terms of
this definition;
	 
	 	•  	if on the Distribution Date in April 2007, (i) Cumulative Realized Losses for the
related Collection Period are less than 1.00% and (ii) the Three Month Rolling Over
60-Day Delinquency Percentage for such Distribution Date is less than 6.00%, the
percentage then specified in clause (ii) of this definition of Specified Reserve
Account Balance will be reduced by 0.50% for the April 2007 Distribution Date and each
subsequent Distribution Date, subject to any further reduction in accordance with the
terms of this definition; and
	 
	 	•  	if on the Distribution Date in October 2007, (i) Cumulative Realized Losses for the
related Collection Period are less than 1.20% and (ii) the Three Month Rolling Over
60-Day Delinquency Percentage for such Distribution Date is less than 7.00%, the
percentage then specified in clause (ii) of this definition of Specified Reserve
Account Balance will be reduced by 0.25% for the October 2007 Distribution Date and
each subsequent Distribution Date.





provided, further, that on and after the date on which the Seller eliminates the 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
McGraw-Hill Companies, Inc., or its successors.



     “Three Month Rolling Over 60-Day Delinquency Percentage” means, for any Distribution
Date, the average of the Over 60-day Delinquency Percentages for that Distribution Date and the two
immediately preceding Distribution Dates.



     “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 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 Additional Servicing Compensation.



     “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).



16









 





     “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 Account Property” means the Trust Accounts, all investment property,
instruments, money and other property credited to or on deposit in any Trust Account, from time to
time, including the Reserve Account Initial Deposit, and all proceeds of the foregoing.



     “Trust Accounts” has the meaning specified in Section 5.01(b).



     “Trust Agreement” means the Amended and Restated Trust Agreement, dated as of April
28, 2005, between the Seller and the Owner Trustee, as the same may be amended, modified or
supplemented from time to time.



     “Trust Officer” means, in the case of (a) 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) 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.



     “Write Down Amount” means, for any 180-Day Receivable, the excess of (i) the Contract
Balance of such 180-Day Receivable as of the last day of the Collection Period during which a
Scheduled Payment on such Receivable became more than 180 days past its due date, as specified in
the related Contract, over (ii) the estimated value of the Receivable, as determined by the
Servicer in accordance with its servicing standards, to the extent allocable to principal in the
same manner as a payment in such amount would be.



     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 meanings contained herein 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 document made or delivered pursuant hereto,
accounting terms not defined in this Agreement or in any such other document, and accounting terms
partly defined in this Agreement or in any such other document to the extent not defined, shall
have the respective meanings given to them under generally accepted




17









 








accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any such other document are
inconsistent with the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such other document shall control.



          (d) The words “hereof,” “herein,” “hereunder,” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; the term
“including” shall mean “including without limitation”; and the term “or” is not exclusive. Terms
used herein that are defined in the New York UCC and not otherwise defined herein shall have the
meanings set forth in the New York UCC.




          (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 $214,300,000, (ii) Class A-2 Notes with an aggregate Outstanding Principal Amount of
$219,000,000, (iii) Class A-3 Notes with an aggregate Outstanding Principal Amount of $244,000,000,
(iv) Class A-4 Notes with an aggregate Outstanding Principal Amount of $142,360,000, (v) Class B
Notes with an aggregate Outstanding Principal Amount of
$23,480,000 and (vi) the Certificate with a Certificate Balance of $10,677,293 the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse
(subject to the obligations herein), all right, title and interest of the Seller in and to the
following, whether now owned or hereafter acquired:



          (a) the Receivables, and all monies (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, as the case may be;





18









 








          (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 as provided
therein;




          (g) the interest of the Seller in any proceeds from recourse to, or other payments by, Dealers
on Receivables; 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 and the
other property described above by the Seller to the Issuer as provided in this Agreement be, and be
construed as, a sale of the Receivables and the other property described above 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 or the other property described above 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 or the other property described above 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 or the other property described above then, (a) this Agreement shall be a security
agreement within the meaning of Article 9 of the New York UCC and (b) the Seller hereby grants to
the Issuer a security interest in 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, in order
to secure the obligations of the Seller hereunder. In 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. Each of 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 the Receivables, such security interest would be
a perfected security interest 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 and the other property described in Section 2.01 shall take
place 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.



19









 





ARTICLE III




THE RECEIVABLES




     SECTION 3.01. Representations and Warranties of Seller. The Seller hereby 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 grant of a security interest therein 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
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 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 includes a description of collateral
covering the Receivables other than any financing statement 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 Seller. None of the Contracts that constitute or evidence
the Receivables has any mark or notation 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 and the proceeds thereof 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. On the Delivery Date all original executed copies of each
Contract that constitute or evidence the Receivables will be delivered to the Custodian. The
Seller will cause the Custodian to deliver a written acknowledgment that the Custodian is holding
the Receivable Files solely on behalf and for the benefit of the Issuer. Seller has caused or will
have caused, within 10 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




20









 








necessary in any jurisdiction to be taken to give (i) the Issuer a first priority perfected
ownership interest in the Receivables (exclusive of Receivables for which a governmental entity is
the Obligor) and (ii) the Indenture Trustee a first priority perfected security interest therein
(including UCC filings with the Delaware and Nevada Secretaries of State) have been taken or will
be taken within 10 days of the Closing Date.



          (f) Possession of Receivable Files. All of the Receivable Files have been or will be
delivered to the Custodian within 30 days of 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.




          (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 or the Owner Trustee, as the case may be, shall inform the other
parties to this 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 Seller or receipt by the Seller of
written notice from the Owner Trustee 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 with respect to such Receivable 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




21









 








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 documents described in the definition
of Receivable File.



     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, or cause to be held, 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.



22









 





     SECTION 3.05. Acceptance by Issuer and the Indenture Trustee of the Receivables;
Certification by the Indenture Trustee.



          (a) The Issuer hereby acknowledges and declares that on the Delivery Date the Custodian will
hold the Receivable Files 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 Custodian agrees that
it will execute and deliver the Custodian Certifications (as defined in the Custodial Agreement)
described in Sections 3.1 and 4.1 of the Custodial Agreement. Prior to delivering
the Receivable Files to the Custodian, the Servicer agrees to review (or cause to be reviewed) each
Receivable File. 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. On the Delivery Date the Servicer shall deliver to the Seller,
the Issuer, the Owner Trustee and each Rating Agency, a certification in the form attached as
Schedule C to the effect that, as to each Receivable (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 the Custodian pursuant to this
Agreement (including each of the items in the definition of Receivable File) have been delivered to
the Custodian, (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 in the Receivable
Files.



          (b) The Seller agrees to use reasonable efforts to (i) in connection with the delivery of the
Receivable Files on the Delivery Date, cause to be delivered to the Custodian, any
Receivable File that the Custodian determines is missing pursuant to Section 4.1 of
the Custodial Agreement and (ii) cause to be remedied a material defect in a document constituting
part of a Receivable File. If, however, the Seller has not caused (A) such missing Receivable File
to be delivered or (B) to be remedied any defect by the last day of the second month following the
month of the Delivery Date, 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. The obligation of the Seller to repurchase
any Receivable is subject to the receipt by the Seller of the Purchase Amount from CFSC in
accordance with the terms of the Purchase Agreement. 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 missing Receivable File or 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, if any, to repurchase such Receivables pursuant to the Purchase
Agreement. The Owner Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section.



          (c) Upon receipt by the Indenture Trustee of a certification of the Servicer of a repurchase
of a Receivable described in Section 3.05(b) and receipt of the Purchase Amount,



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the Indenture Trustee is required to release to CFSC the related Receivable 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 Issuer, 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. The Servicer
shall prepare, execute and deliver all certificates or other documents required to be delivered by
the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated
thereunder. The Servicer shall determine the estimated value of any Receivable as to which a
Scheduled Payment is more than 180 days past its due date as of the last day of a Collection Period
during or prior to the immediately following Collection Period.



     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



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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
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 Class B Note Final
Scheduled Distribution Date, it shall promptly purchase the Receivable from the Issuer in
accordance with the terms of Section 4.07. To the extent not otherwise required by
applicable law or the applicable Contract, 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 Additional Servicing Compensation that may be collected in the ordinary
course of servicing a Receivable. Notwithstanding anything in this Agreement to the contrary, in
the event that 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) the related 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 uncollectability 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 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.



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     SECTION 4.05. Maintenance of Security Interests in Financed Equipment. The Servicer
shall, in accordance with its customary servicing procedures, take such steps as are necessary to
maintain perfection of the security interest created by each Receivable (including each Receivable
on which a governmental entity is the Obligor) in the related Financed Equipment. The Servicer is
hereby authorized to take such steps as are necessary to re-perfect such security interest or to
maintain such perfected security interest on behalf of the Issuer and the Indenture Trustee in the
event of the relocation of the Obligor, 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 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 Servicer’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 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 uncollectability of, any Receivable.



     SECTION 4.08. Servicing Fee. On each Distribution 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
Additional Servicing Compensation with respect to Receivables, collected (from whatever source) on
the Receivables, which Additional Servicing Compensation shall be paid to the Servicer pursuant to
Section 5.08.



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     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 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 each of the Owner Trustee, the Indenture Trustee and the
Rating Agencies, on or before April 30 of each year beginning April 30, 2006, 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, 2006, the period from the
Closing Date to December 31, 2005) and of its performance under this Agreement has been made under
such officers’ supervision and (ii) to the best of such officers’ knowledge, based on such review,
the Servicer has fulfilled in all material respects all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment of any such obligation in
any material respect, specifying each such default known to such officers and the nature and status
thereof. The Indenture Trustee shall send a copy of such certificate and the report referred to in
Section 4.11 to the Rating Agencies. A copy of such certificate and the report referred to
in Section 4.11 may be obtained by any Certificateholder by a request in writing to the
Owner Trustee at its address in Section 10.03.



          (b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee and the Rating
Agencies, promptly after having obtained knowledge thereof, but in no event later
than five 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, 2006, 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



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ended December 31 (or in the case of
the report due on or before April 30, 2006, the period from the Closing Date to December 31, 2005)
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 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.



     SECTION 4.13. Reports to the Commission. The Servicer shall cause to be filed with
the Commission any periodic reports required to be filed by the Issuer under the provisions of the
Exchange Act, and the rules and regulations of the Commission thereunder. The Seller shall, at its
expense, cooperate in any reasonable request made by the Servicer in connection with such filings.



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 2005-A, subject to the
security interest of U.S. Bank National Association, as Indenture Trustee” an Eligible Securities
Account (the “Collection Account”), which is U.S. Bank National Association Account #789194001 as
of the Closing Date. 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”), which is U.S. Bank National Association
Account #789194002 as of the Closing Date.




               (i) The Seller, for the benefit of the Noteholders, shall establish and maintain in the
name “Caterpillar Financial Asset Trust 2005-A, subject to the security interest of U.S.
Bank National Association, as Indenture Trustee” an Eligible Securities Account (the
“Reserve Account”), which is U.S. Bank National Association Account #789194003 as of the
Closing Date.



          (b) Funds on deposit in the Collection Account (including 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



28









 





arising from such
investment in Eligible Investments (other than losses from nonpayment of investments in obligations
of U.S. Bank 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 credited to or 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 credited to or 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 credited to or 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 of the Indenture Trustee. 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 or any investments to such new Trust
Account. So long as U.S. Bank National Association is an Eligible Institution, any Trust Account
may be maintained with it as an Eligible Securities Account.




               (ii) With respect to the Trust Account Property, the Indenture Trustee and U.S.
Bank 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 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, 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



29









 






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 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, 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 “Prime-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.



          (b) By its acknowledgement of this Agreement, the Indenture Trustee agrees that on each
Distribution Date it will withdraw all Investment Earnings credited to the Reserve




30









 





Account since the preceding Distribution Date (or in the case of the initial Distribution
Date, the Indenture Trustee will withdraw all Investment Earnings credited to Reserve Account since
the Closing Date) and deposit such Investment Earnings in the Collection Account in accordance with
Section 8.03(a) of the Indenture.




     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, the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods;




     (ii) to the Administrator under the Administration Agreement, the Administration Fee
and all unpaid Administration Fees from prior Collection Periods;




     (iii) to the Class A 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;
provided, that, on or prior to the Distribution Date on which the amount on
deposit in the Reserve Account equals the Specified Reserve Account Balance, the amount
deposited in the Reserve Account pursuant to this clause (vii) shall not exceed the Net
Excess Spread for the applicable 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;



31









 






     (ix) to the Indenture Trustee under the Indenture, all unpaid Indenture Trustee’s fees
and expenses, and to the Custodian under the Custodial Agreement, all unpaid Custodian’s
fees and expenses; and




     (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;




     (iv) to the Class A-4 Noteholders in reduction of the Outstanding Principal Amount of
the Class A-4 Notes until the Outstanding Principal Amount thereof has been reduced to zero;




     (v) 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




     (vi) 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) or 5.04(c) 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





32









 







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 after any withdrawal from the
Reserve Account pursuant to Section 5.03(b), 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 Sections 5.03(b) or 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 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) or 5.04(c) 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 or make available 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



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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, the Class A-4 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 A-4
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;




     (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 the related Collection Period;




     (x) the amount of Cumulative Realized Losses with respect to the related Collection
Period;




     (xi) the balance of the Reserve Account on such Distribution Date, after giving effect
to withdrawals made on such Distribution Date;




     (xii) the Specified Reserve Account Balance for such Distribution Date;



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     (xiii) 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);




     (xiv) the amount, if any, to be withdrawn from the Reserve Account and deposited to the
Certificate Distribution Account pursuant to Section 5.05(c);




     (xv) 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);




     (xvi) the amount, if any, to be distributed to the Certificateholder pursuant to
Section 5.02(a)(i) of the Trust Agreement; and




     (xvii) 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 or the Administrator with respect to such Collection Period (including any Additional
Servicing Compensation 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 Additional Servicing Compensation by means of the Servicer making the deposit of such
collections net of the Additional Servicing Compensation 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.



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



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sale of the Receivables to the Issuer and the grant of a security interest therein 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
Issuer.




          (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.




          (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




36









 







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 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




37









 







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 Issuer and the Indenture Trustee
have been taken, including that all financing statements and continuation statements and amendments
thereto have been authorized and filed that are necessary fully to preserve and protect the
interest of the Issuer 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 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 grant of a security interest therein to the Indenture Trustee
pursuant to the Indenture.



          (a) Organization and Good Standing. The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation, and
has the corporate power and authority to own its properties and to conduct the business in which it
is currently engaged, and had at all relevant times, and has, the power, authority and legal right
to acquire, own, sell and service the Receivables.




38









 








          (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 by the Servicer of the transactions contemplated
by this Agreement and the fulfillment by the Servicer 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 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).




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     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
or the Seller, not including any taxes asserted with respect to, and as of the date of, the sale of
the Receivables to the Issuer or the issuance and original sale of the Certificate and the Notes,
or asserted with respect to ownership of the Receivables, or Federal or other income taxes arising
out of distributions on the Certificate or the Notes) and (ii) costs and expenses in defending
against the same.




          (c) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the
Indenture Trustee, the Seller, the Custodian, the Certificateholder and the Noteholders and any of
the officers, directors and agents of the Issuer, the Owner Trustee, the Indenture Trustee and the
Seller from and against any and all costs, expenses, losses, claims, damages and liabilities to the
extent that any such cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, the negligence, willful misfeasance or bad faith of the Servicer in
the performance of its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement or on account of the failure of the Servicer to be
qualified to do business as a foreign corporation or to have obtained a license or approval in any
jurisdiction.




          (d) The Servicer shall indemnify, defend and hold harmless the Owner Trustee, the Custodian
and the Indenture Trustee and their respective officers, directors and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties herein, and in the case of the Owner
Trustee, in the Trust Agreement, in the case of the Custodian, the Custodial Agreement and in the
case of the Indenture Trustee, the Indenture, except to the extent that any such cost, expense,
loss, claim, damage or liability: (i) shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Owner Trustee, 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.




40









 








          (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 authorized and filed that are necessary fully to preserve and protect
the interest of the Owner Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests. Notwithstanding anything herein
to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses
(w), (x), (y) and (z) above shall be conditions to the consummation of the transactions referred to
in clause (a), (b), (c) or (d) above.



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     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 (each, a
“Servicer Default”) shall occur and be continuing:



          (a) any failure by the Servicer (i) to deliver to the Indenture Trustee for deposit in any of
the Trust Accounts or the Certificate Distribution Account any required payment or (ii) to direct
the Indenture Trustee to make any required distribution therefrom that shall continue unremedied
for a period of three Business Days after written notice of such failure is received by the
Servicer from the Owner Trustee or the Indenture Trustee or after discovery of such failure by an
officer of the Servicer;




42









 








          (b) failure on the part of the Servicer to duly observe or to perform in any material respect
any other covenants or agreements of the Servicer 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 by the Owner Trustee or the Indenture Trustee or (B) to the Servicer 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 Certificateholder; or




          (c) an Insolvency Event occurs with respect to 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 Certificateholder, by notice then given
in writing to the Servicer (and to the Indenture Trustee and the Owner Trustee if given by the
Noteholders) may terminate all the rights and obligations (other than the obligations set forth in
Section 7.02 hereof) of the Servicer under this Agreement. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Notes, the Certificate or the Receivables or otherwise, shall, without
further action, pass to and be vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do
or accomplish all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the Receivables and
related documents, or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement, including the
transfer to the successor Servicer for administration by it of all cash amounts that shall at the
time be held by the predecessor Servicer for deposit, or shall thereafter be received by it with
respect to a Receivable. All reasonable costs and expenses (including reasonable attorneys’ fees)
incurred in connection (x) with transferring the computer or other records to the successor
Servicer in the form requested and (y) amending this Agreement to reflect such succession as
Servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of the occurrence of a
Servicer Default, the Owner Trustee shall give notice thereof to the Rating Agencies.




     SECTION 8.02. Appointment of Successor Servicer.



          (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,




43









 







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 Additional Servicing Compensation. 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 Additional
Servicing Compensation and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.




          (c) Subject to the Indenture Trustee’s right to appoint a successor Servicer pursuant to
Section 8.02(a) after the Indenture Trustee has become the Servicer pending the appointment
of and acceptance by a successor Servicer, the Servicer may not resign unless it is prohibited from
serving as such by law.




          (d) Notwithstanding any other provision of this Agreement, neither the Indenture Trustee nor
any successor Servicer shall be deemed in default, breach or violation of this Agreement as a
result of the failure of CFSC or any Servicer (i) to cooperate with the Indenture Trustee or any
successor Servicer pursuant to Section 8.01, (ii) to deliver funds required to be deposited
to any Trust Account or (iii) to deliver files or records relative to the Receivables as may be
requested by the Indenture Trustee or successor Servicer.




     SECTION 8.03. Notification to Noteholders and Certificateholder. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article VIII, the Owner Trustee
shall give prompt written notice thereof to the Certificateholder and the Indenture Trustee shall
give prompt written notice thereof to Noteholders and the Rating Agencies.



44









 





     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 Certificateholder, 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
U.S. Bank 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. U.S. Bank 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.



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-4
Notes and the Class B Notes.




          (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.




          (b) 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





45









 







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
Certificateholder 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.



     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.



46









 





     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 the 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
authorize and file such financing statements and cause to be authorized 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 a security interest therein has been granted to the
Indenture Trustee. Indication of the Issuer’s interest (which interest has been acquired from the
Seller) and the Indenture Trustee’s interest in a Receivable shall be deleted from or modified on
the Servicer’s computer systems when, and only when, the related Receivable shall have been paid in
full or repurchased.




          (f) If at any time the Seller or the Servicer shall propose to sell, grant a security interest
in, or otherwise transfer any interest in receivables comparable with the Receivables, to any
prospective purchaser, lender or other transferee, the Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever





47









 







to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by
the Issuer and a security interest therein has been granted 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 Collateral, 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 Collateral.




          (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
authorized 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.




     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, 4040 S. Eastern
Avenue, Suite 344,



48









 




Las Vegas, Nevada 89119, (702-735-2514), (b) in the case of the Servicer, to
Caterpillar Financial Services Corporation, 2120 West End Avenue, Nashville, TN 37203-0001
(615-341-1000), (c) the case of the Issuer or the Owner Trustee, at the “Corporate Trust Office”
(as defined in the Trust Agreement), with a copy to the Administrator, to 2120 West End Avenue,
Nashville, Tennessee 37203-0001 (615-341-1000), (d) in the case of the Indenture Trustee, at the
Corporate Trust Office, (e) in the case of Moody’s, to Moody’s Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007 and (f) in the case of Standard &
Poor’s, to Standard & Poor’s Ratings Services, 55 Water Street, 40th Floor, New York,
New York 10041, 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 GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS, REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.



     SECTION 10.10. Assignment to Indenture Trustee. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title



49









 




and interest of the Issuer in, to and under the Receivables and the other property constituting the
Owner Trust Estate 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 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 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 U.S. Bank National Association not in its individual capacity but
solely as Indenture Trustee, and in no event shall U.S. Bank 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.




[Signature Page Follows]




50









 








     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 2005-A
	 
	 	 	 	 
	

	 	By:
	 	CHASE BANK USA, NATIONAL ASSOCIATION,
	

	 	 	 	not in its individual capacity but
solely as Owner Trustee on behalf of the Issuer,
	 
	 	 	 	 
	

	 	By:
	 	/s/ John Cashin
	

	 	 	 	 
	

	 	 	 	Name: John Cashin
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	CATERPILLAR FINANCIAL FUNDING
	 	 	CORPORATION, as Seller,
	 
	 	 	 	 
	

	 	By:
	 	 /s/ James A. Duensing
	

	 	 	 	 
	

	 	 	 	Name: James A. Duensing
	

	 	 	 	Title: Treasurer
	 
	 	 	 	 
	 	 	CATERPILLAR FINANCIAL SERVICES
	 	 	CORPORATION, as Servicer
	 
	 	 	 	 
	

	 	By:
	 	/s/ James A. Duensing
	

	 	 	 	 
	

	 	 	 	Name: James A. Duensing
	

	 	 	 	Title: Treasurer






Acknowledged and Accepted:

U.S. BANK NATIONAL ASSOCIATION,

not in its individual capacity but only as

Indenture Trustee, Custodian and

Securities Intermediary



	 	 	 	 	 
	By:

	 	/s/ Melissa A. Rosal	 	 
	

	 	 	 	 
	

	 	Name: Melissa A. Rosal	 	 
	

	 	Title: Treasurer	 	 






Sale and Servicing Agreement















 








Acknowledged and Accepted:

CHASE BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity but solely

as Owner Trustee of the Issuer,



	 	 	 	 	 
	By:

	 	/s/ John Cashin	 	 
	

	 	 	 	 
	

	 	Name: John Cashin	 	 
	

	 	Title: Vice President	 	 






Sale and Servicing Agreement















 








SCHEDULE A




SCHEDULE OF RECEIVABLES





A-1









 








SCHEDULE B




LOCATION OF RECEIVABLE FILES




4040 S. Eastern Avenue, Suite 344

Las Vegas, Nevada 89121





B-1









 








SCHEDULE C




FORM OF RECEIVABLE FILES CERTIFICATION




[DATE]




[Issuer]



[Rating Agencies]



[Seller]



	 	 	 
	 

	Re:	Sale and Servicing Agreement (the “Sale and Servicing Agreement”),
dated as of April 1, 2005 among Caterpillar Financial Services Corporation, as
Servicer, Caterpillar Financial Funding Corporation and Caterpillar Financial
	

	 	Asset Trust 2005-A






     Gentlemen:



     In accordance with the provisions of Section 3.05 of the above-referenced Sale and Servicing
Agreement, the undersigned 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 has reviewed the Receivable Files and has determined that (i) all
documents required to be delivered to the Custodian pursuant to the Sale and Servicing Agreement
(including each of the items in the definition of Receivable File) have been delivered to the
Custodian, (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 in the Receivable Files.



     The undersigned has not made any independent examination of such documents beyond the review
specifically required in the above-referenced Sale and Servicing Agreement. The undersigned 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.



     Capitalized words and phrases used herein shall have the respective meanings assigned to them
in the above-referenced Sale and Servicing Agreement.



[Signature Page Follows]




C-1









 








	 	 	 	 	 
	 	 	CATERPILLAR FINANCIAL SERVICES CORPORATION,

   as Servicer
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name:

	

	 	 	 	Title:







C-2









 








SCHEDULE D




SERVICER’S CERTIFICATE




     The undersigned hereby certify that (i) they are, respectively, a duly elected [title] and
[title] of Caterpillar Financial Services Corporation and (ii) this Servicing Certificate complies
with the requirements of, and is being delivered pursuant to, Section 4.09 of the Sale and
Servicing Agreement (the “Sale and Servicing Agreement”) dated as of April 1, 2005 between
Caterpillar Financial Asset Trust 2005-A, Caterpillar Financial Funding Corporation and Caterpillar
Financial Services Corporation.



	 	 	 	 	 
	Dated:
	 	 	 	 
	

	 	 
	 	 
	

	 	 	 	Name:

	

	 	 	 	Title:
	 
	 	 	 	 
	

	 	 	 	 
	

	 	 	 	Name:
	

	 	 	 	Title:






D-1









 






Distribution Date:                                         





     (i) Servicing Fee;




     (ii)
Administration Fee;




     (iii) Total 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);



D-2









 






     (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 A-4 Notes, the Class A-4 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;




     (xxvi) the amount of Realized Losses, if any, for the related Collection Period; and




     (xxvii) the amount of Cumulative Realized Losses with respect to the related Collection
Period.



D-3









 





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 April 1, 2005 between
Caterpillar Financial Asset Trust 2005-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:







E-1









 






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 A-4 Notes:                    

	 	($  per $[___] original

principal amount)
	 
	 	 
	(e) Class B Notes:                    

	 	($  per $[___] original 

principal amount)
	(f) 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 A-4 Notes:                    

	 	($  per $[___]

original principal amount)
	 
	 	 
	(e) Class B Notes:                    

	 	($  per $[___]

original principal amount)






A-1









 






	 	 	 
	(f) Seller:                    
	 	 
	 
	 	 
	(g) Total:                    
	 	 






     (iv)      Pool Balance at end of related Collection Period:                    .



     (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 A-4 Notes:                    
	

	 	 	(2	)	 	Class A-4 Note Pool Factor:                    
	 
	 	 	 	 	 	 
	(e)

	 	 	(1	)	 	outstanding principal amount of Class B Notes:                    
	

	 	 	(2	)	 	Class B Note Pool Factor:                    
	 
	 	 	 	 	 	 
	(f)

	 	 	(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 related Collection Period:                    .



     (xi)      Aggregate amount of Cumulative Realized Losses with respect to the related Collection
Period:                     .



     (xii)      Amount in Reserve Account:                    .



     (xiii)      Specified Reserve Account Balance:                    .



A-2









 





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)  	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:                    ;
	 
	 	(x)  	Amount to be distributed from the Principal Distribution Account to each Class
of Noteholders, and to the holders of the Certificate;
	 
	 	(xi)  	Amount to be withdrawn from the Reserve Account and deposited to the Collection
Account pursuant to Section 5.05(b); and
	 
	 	(xii)  	Amount to be withdrawn from the Reserve Account and deposited to the
Certificate Distribution Account pursuant to Section 5.05(c).





F-3-1




 









 








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
	 	 	17	 
	SECTION 2.01. Conveyance of Receivables
	 	 	17	 
	SECTION 2.02. Closing
	 	 	18	 
	SECTION 2.03. Books and Records
	 	 	18	 
	ARTICLE III THE RECEIVABLES
	 	 	19	 
	SECTION 3.01. Representations and Warranties of Seller
	 	 	19	 
	SECTION 3.02. Repurchase by Seller or CFSC Upon Breach
	 	 	20	 
	SECTION 3.03. Custody of Receivable Files
	 	 	21	 
	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
	 	 	22	 
	ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES
	 	 	23	 
	SECTION 4.01. Duties of Servicer
	 	 	23	 
	SECTION 4.02. Collection of Receivable Payments
	 	 	24	 
	SECTION 4.03. Realization upon Receivables
	 	 	24	 
	SECTION 4.04. Physical Damage Insurance
	 	 	25	 
	SECTION 4.05. Maintenance of Security Interests in Financed Equipment
	 	 	25	 
	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
	 	 	26	 
	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
	 	 	30	 
	SECTION 5.05. Reserve Account
	 	 	32	 
	SECTION 5.06. [Reserved]
	 	 	32	 
	SECTION 5.07. Statements to the Certificateholder and Noteholders
	 	 	32	 
	SECTION 5.08. Net Deposits
	 	 	34	 
	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
	 	 	36	 
	SECTION 6.04. Limitation on Liability of Seller and Others
	 	 	36	 
	SECTION 6.05. Seller May Own the Certificate or Notes
	 	 	37	 
	ARTICLE VII THE SERVICER
	 	 	37	 
	SECTION 7.01. Representations of Servicer
	 	 	37	 
	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
	 	 	41	 
	SECTION
8.01. Servicer Default
	 	 	41	 
	SECTION
8.02. Appointment of Successor Servicer
	 	 	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
	 	 	44	 
	SECTION
9.01. Optional Purchase of All Receivables; Trust Termination
	 	 	44	 
	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
	 	 	48	 
	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 Receivable Files
	 	 	B-1	 
	SCHEDULE C — Receivable Files Certification
	 	 	C-1	 
	SCHEDULE D — Servicer’s Certificate
	 	 	D-1	 
	SCHEDULE E — Officers’ Certificate
	 	 	E-1	 






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