Document:

exh4-2.htm

  

  

  

EXHIBIT 4.2

 

 

FORM OF AMENDED AND RESTATED TRUST AGREEMENT

 

 

between

 

 

CATERPILLAR FINANCIAL FUNDING CORPORATION

 

 

Depositor

 

 

and

 

 

[Owner Trustee],

 

 

Owner Trustee

 

 

Dated as of [Date]

 

 

  

  

  

TABLE OF CONTENTS

 

Page

 

	
ARTICLE I

	
DEFINITIONS 

	
1

 

	
  

	
Section 1.01.

	
Capitalized Terms 

	
1

 

	
  

	
Section 1.02.

	
Other Definitional Provisions 

	
4

 

	
ARTICLE II

	
ORGANIZATION 

	
4

 

	
  

	
Section 2.01.

	
Name 

	
4

 

	
  

	
Section 2.02.

	
Office 

	
4

 

	
  

	
Section 2.03.

	
Purpose and Powers 

	
4

 

	
  

	
Section 2.04.

	
Appointment of Owner Trustee 

	
5

 

	
  

	
Section 2.05.

	
Initial Capital Contribution of Trust Estate 

	
5

 

	
  

	
Section 2.06.

	
Declaration of Trust 

	
5

 

	
  

	
Section 2.07.

	
Liability of the Certificateholders 

	
6

 

	
  

	
Section 2.08.

	
Title to Trust Property 

	
6

 

	
  

	
Section 2.09.

	
Situs of Trust 

	
6

 

	
  

	
Section 2.10.

	
Representations and Warranties of Depositor 

	
6

 

	
  

	
Section 2.11.

	
Amended and Restated Trust Agreement 

	
7

 

	
ARTICLE III

	
CERTIFICATES AND TRANSFER OF INTERESTS 

	
7

 

	
  

	
Section 3.01.

	
Initial Ownership 

	
7

 

	
  

	
Section 3.02.

	
Form of Certificates 

	
7

 

	
  

	
Section 3.03.

	
Authentication of the Certificates 

	
8

 

	
  

	
Section 3.04.

	
Registration of Transfer of the Certificates 

	
8

 

	
  

	
Section 3.05.

	
Mutilated, Destroyed, Lost or Stolen Certificate 

	
9

 

	
  

	
Section 3.06.

	
Persons Deemed Owner 

	
9

 

	
  

	
Section 3.07.

	
Access to List of Certificateholder’s Names and Addresses 

	
9

 

	
  

	
Section 3.08.

	
Maintenance of Office or Agency 

	
9

 

	
  

	
Section 3.09.

	
Appointment of Paying Agents 

	
9

 

	
  

	
Section 3.10.

	
Certificates Nonassessable and Fully Paid 

	
10

 

	
ARTICLE IV

	
ACTIONS BY OWNER TRUSTEE 

	
10

 

	
  

	
Section 4.01.

	
Prior Notice to Certificateholders with Respect to Certain Matters 

	
10

 

 

i

  

  

 

TABLE OF CONTENTS

(continued)

 

Page

 

	
  

	
Section 4.02.

	
Action By the Certificateholders with Respect to Certain Matters 

	
11

 

	
  

	
Section 4.03.

	
Action By Certificateholders with Respect to Bankruptcy 

	
11

 

	
  

	
Section 4.04.

	
Restrictions on Certificateholder’s Power 

	
11

 

	
ARTICLE V

	
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES 

	
11

 

	
  

	
Section 5.01.

	
Establishment of Trust Account 

	
11

 

	
  

	
Section 5.02.

	
Application of Trust Funds 

	
12

 

	
  

	
Section 5.03.

	
Method of Payment 

	
12

 

	
  

	
Section 5.04.

	
No Segregation of Monies; No Interest 

	
12

 

	
  

	
Section 5.05.

	
Accounting and Report to the Noteholders, the Certificateholders, the Internal Revenue Service and Others 

	
13

 

	
ARTICLE VI

	
AUTHORITY AND DUTIES OF OWNER TRUSTEE 

	
13

 

	
  

	
Section 6.01.

	
General Authority 

	
13

 

	
  

	
Section 6.02.

	
General Duties 

	
13

 

	
  

	
Section 6.03.

	
Action Upon Instructions 

	
13

 

	
  

	
Section 6.04.

	
No Duties Except as Specified in This Agreement or in Instructions 

	
14

 

	
  

	
Section 6.05.

	No Action Except under Specified Documents or Instructions	
15

 

	
  

	
Section 6.06.

	
Restrictions 

	
15

 

	
ARTICLE VII

	
CONCERNING THE OWNER TRUSTEE 

	
15

 

	
  

	
Section 7.01.

	
Acceptance of Trusts and Duties 

	
15

 

	
  

	
Section 7.02.

	
Furnishing of Documents 

	
16

 

	
  

	
Section 7.03.

	
Representations and Warranties 

	
16

 

	
  

	
Section 7.04.

	
Reliance; Advice of Counsel 

	
17

 

	
  

	
Section 7.05.

	
Not Acting in Individual Capacity 

	
17

 

	
  

	
Section 7.06.

	
Owner Trustee Not Liable for the Certificates, Notes or Receivables 

	
17

 

	
  

	
Section 7.07.

	
Owner Trustee May Own the Notes 

	
18

 

	
ARTICLE VIII

	
COMPENSATION OF OWNER TRUSTEE 

	
18

 

	
  

	
Section 8.01.

	
Owner Trustee’s Fees and Expenses 

	
18

 

 

ii

  

  

 

TABLE OF CONTENTS

(continued)

 

Page

 

	
  

	
Section 8.02.

	
Indemnification 

	
18

 

	
  

	
Section 8.03.

	
Payments to the Owner Trustee 

	
19

 

	
ARTICLE IX

	
TERMINATION OF TRUST AGREEMENT 

	
19

 

	
  

	
Section 9.01.

	
Termination of Trust Agreement 

	
19

 

	
ARTICLE X

	
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 

	
20

 

	
  

	
Section 10.01.

	
Eligibility Requirements for Owner Trustee 

	
20

 

	
  

	
Section 10.02.

	
Resignation or Removal of Owner Trustee 

	
20

 

	
  

	
Section 10.03.

	
Successor Owner Trustee 

	
21

 

	
  

	
Section 10.04.

	
Merger or Consolidation of Owner Trustee 

	
22

 

	
  

	
Section 10.05.

	
Appointment of Co-Trustee or Separate Trustee 

	
22

 

	
ARTICLE XI

	
MISCELLANEOUS 

	
23

 

	
  

	
Section 11.01.

	
Supplements and Amendments 

	
23

 

	
  

	
Section 11.02.

	
No Legal Title to Owner Trust Estate in the Owner 

	
24

 

	
  

	
Section 11.03.

	
Limitations on Rights of Others 

	
24

 

	
  

	
Section 11.04.

	
Notices 

	
24

 

	
  

	
Section 11.05.

	
Severability 

	
25

 

	
  

	
Section 11.06.

	
Separate Counterparts 

	
25

 

	
  

	
Section 11.07.

	
Successors and Assigns 

	
25

 

	
  

	
Section 11.08.

	
No Petition 

	
25

 

	
  

	
Section 11.09.

	
No Recourse 

	
25

 

	
  

	
Section 11.10.

	
Headings 

	
25

 

	
  

	
Section 11.11.

	
GOVERNING LAW 

	
25

 

	
  

	
Section 11.12.

	
Certificate Transfer Restrictions 

	
25

 

	
  

	
Section 11.13.

	
Depositor Payment Obligation 

	
26

 

	
ARTICLE XII

	
REGULATION AB COMPLIANCE 

	
26

 

	
  

	
Section 12.01.

	
Intent of the Parties; Reasonableness. 

	
26

 

	
  

	
Section 12.02.

	
Additional Representations and Warranties of the Owner Trustee. 

	
27

 

 

iii

  

  

 

TABLE OF CONTENTS

(continued)

 

Page

 

	
  

	
Section 12.03.

	
Information to Be Provided by the Owner Trustee. 

	
28

 

	
  

	
Section 12.04.

	
Indemnification; Remedies. 

	
28

 

EXHIBITS

EXHIBIT A – FORM OF CERTIFICATE A-1

EXHIBIT B – CERTIFICATE OF TRUST B-1

EXHIBIT C – CERTIFICATEHOLDER CERTIFICATION C-1

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AMENDED AND RESTATED TRUST AGREEMENT dated as of [Date], between CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation, as depositor (the “Depositor”), and [OWNER TRUSTEE], as trustee (the “Owner Trustee”).

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01. Capitalized Terms.  For all purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Administration Agreement” means the Administration Agreement, dated as of [Date], among the Administrator, the Issuing Entity, the Depositor and the Indenture Trustee, as the same may be amended, modified or supplemented from time to time.

 

“Administrator” means Caterpillar Financial Services Corporation, a Delaware corporation, or any successor Administrator under the Administration Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

 

“Agreement” means this Trust Agreement, as the same may be amended, modified or supplemented from time to time.

 

“Basic Documents” means the Purchase Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement, the Depository Agreement, the Notes, the Certificates and the other documents and certificates delivered in connection therewith.

 

“Benefit Plan Investor” has the meaning specified in Section 11.12.

 

“Certificate Balance” has the meaning specified in the Sale and Servicing Agreement.

 

“Certificate Distribution Account” has the meaning specified in Section 5.01.

 

 “Certificate of Trust” means the Certificate of Trust in the form of Exhibit B which has been filed for the Issuing Entity pursuant to Section 3810(a) of the Statutory Trust Statute.

 

“Certificate Register” and “Certificate Registrar” means the register mentioned and the registrar appointed pursuant to Section 3.04.

 

“Certificateholder” means a registered holder of a Certificate.

 

 “Certificateholder Certification” means a certification with respect to non-foreign status and Benefit Plan Investor status in the form of Exhibit C.

 

 

  

  

  

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commission” means the United States Securities and Exchange Commission or any successor entity.

 

“Corporate Trust Office” means, with respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee located at [Address of Owner Trustee]; or at such other address as the Owner Trustee may designate by notice to the Certificateholders, the Administrator and the Depositor, or the principal corporate trust office of any successor Owner Trustee (the address of which the successor owner trustee will notify the Depositor, the Administrator and the Certificateholders).

 

“Depositor” means Caterpillar Financial Funding Corporation in its capacity as Depositor, and its successors in such capacity.

 

“Depository Agreement” means the agreement, dated [Date], among the Issuing Entity, the Indenture Trustee and The Depository Trust Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expenses” has the meaning specified in Section 8.02.

 

“Indemnified Parties” has the meaning specified in Section 8.02.

 

“Indenture” means the Indenture, dated as of [Date], between the Issuing Entity and the Indenture Trustee, as the same may be amended, modified or supplemented from time to time.

 

“Indenture Trustee” means [Indenture Trustee], not in its individual capacity but solely as Indenture Trustee under the Indenture, and any successor Indenture Trustee under the Indenture.

 

“Issuing Entity” means Caterpillar Financial Asset Trust 200[_]-[_], a Delaware statutory trust, and its successors created pursuant to the Original Trust Agreement.

 

“Original Trust Agreement” means the Trust Agreement, dated as of [Date], between Depositor and Owner Trustee.

 

“Owner Trust Estate” means all right, title and interest of the Issuing Entity in and to the property and rights assigned to the Issuing Entity pursuant to Article II of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and the Certificate Distribution Account and all other property of the Issuing Entity from time to time, including any rights of the Owner Trustee and the Issuing Entity pursuant to the Sale and Servicing Agreement and the Administration Agreement.

 

“Owner Trustee” means [Owner Trustee], a national banking association, not in its individual capacity but solely as owner trustee under this Agreement, and any successor Owner Trustee hereunder.

 

 

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“Paying Agent” means any paying agent or co-paying agent appointed pursuant to Section 3.09 and shall initially be [Name].

 

“Person” means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“Record Date” means, with respect to any Distribution Date and the Certificates, at the close of business on the last calendar day of the month preceding the month in which such Distribution Date occurs.

 

“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

 

“Sale and Servicing Agreement” shall mean the Sale and Servicing Agreement, dated as of [Date], among the Issuing Entity, the Depositor, as depositor, and Caterpillar Financial Services Corporation, as servicer, as the same may be amended, modified or supplemented from time to time.

 

“Secretary of State” means the Secretary of State of the State of Delaware.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

 

“Statutory Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may be amended from time to time.

 

“Transaction Party” means the Issuing Entity, the Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Administrator and any other material transaction party in connection with the Notes.

 

“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

 

“Trust” means the Issuing Entity.

 

“Trustee Information” has the meaning specified in Section 12.04(a)(i)(A).

 

 

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Section 1.02. Other Definitional Provisions.

 

(a) Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Sale and Servicing Agreement or, if not defined therein, in the Indenture.

 

(b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.

 

(d) The words “hereof,” “herein,” “hereunder,” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”; the term “or” is not exclusive; and the term “proceeds” has the meaning set forth in the 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

 

ORGANIZATION

 

Section 2.01. Name.  The Trust created by the Original Trust Agreement shall be known as “Caterpillar Financial Asset Trust 20[__]-[_],” in which name the Owner Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

 

Section 2.02. Office.  The office of the Trust shall be in care of the Owner Trustee at the Corporate Trust Office or at such other address in the State of Delaware as the Owner Trustee may designate by written notice to the Depositor and the Administrator.

 

Section 2.03. Purpose and Powers.

 

(a) The purpose of the Trust is to engage in the following activities:

 

 

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(i) to issue the Class A-1 Notes, Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes pursuant to the Indenture and the Certificates pursuant to this Agreement, and to sell $[____] aggregate principal amount of the Class A-1 Notes, $[____] aggregate principal amount of Class A-2 Notes, $[____] aggregate principal amount of the Class A-3 Notes, $[____] aggregate principal amount of the Class A-4 Notes, $[____] aggregate principal amount of Class B Notes to or upon the written order of the Depositor pursuant to Section 2.01 of the Sale and Servicing Agreement and issue the Certificates with an initial Certificate Balance of $[____] to or upon the written order of the Depositor pursuant to Section 2.01 of the Sale and Servicing Agreement;

 

(ii) with the proceeds from capital contributions from the Depositor to pay the organizational, start-up and transactional expenses of the Trust and to fund the Reserve Account;

 

(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Certificateholders pursuant to the terms of the Sale and Servicing Agreement and this Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture;

 

(iv) to enter into and perform its obligations under the Basic Documents to which it is to be a party;

 

(v) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

 

(vi) subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions to the Certificateholders and the Noteholders.

 

The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the Basic Documents.

 

Section 2.04. Appointment of Owner Trustee.  The Depositor hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein.

 

Section 2.05. Initial Capital Contribution of Trust Estate.  Pursuant to the Original Trust Agreement, the Depositor sold, assigned, transferred, conveyed and set over to the Owner Trustee, as of the date thereof, the sum of $100.  The Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date of the Original Trust Agreement, of the foregoing contribution, which shall constitute the initial Owner Trust Estate and shall be deposited in the Certificate Distribution Account. The Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.

 

Section 2.06. Declaration of Trust.  The Owner Trustee hereby declares that it will hold the Owner Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Certificateholder, subject to the obligations of the Trust under the Basic Documents.  It is the intention of the parties hereto that the Trust constitute a statutory trust under the Statutory Trust Statute and that this Agreement constitute the governing instrument of such statutory trust.  It is the intention of the parties hereto that, for income and franchise tax purposes, the Trust shall be treated as a “disregarded entity” and, therefore, shall be disregarded as an entity separate from the Certificateholder.  The parties agree that, unless otherwise required by appropriate tax authorities, the Trust will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as a disregarded entity for such tax purposes. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute with respect to accomplishing the purposes of the Trust.

 

 

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Section 2.07. Liability of the Certificateholders.  No Certificateholder shall have any personal liability for any liability or obligation of the Trust.

 

Section 2.08. Title to Trust Property.  Legal title to all the Owner Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in one or more trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee or a separate trustee, as the case may be.

 

Section 2.09. Situs of Trust.  The Trust will be located and administered in the State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Delaware or the State of New York.  The Trust shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware.  Payments will be received by the Trust only in Delaware or New York, and payments will be made by the Trust only from Delaware or New York.  The only office of the Trust will be at the Corporate Trust Office in Delaware.

 

Section 2.10. Representations and Warranties of Depositor.  The Depositor hereby represents and warrants to the Owner Trustee that:

 

(a) The Depositor is duly organized and validly existing as a corporation in good standing under the laws of the State of Nevada, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

 

(b) The Depositor is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the failure to so qualify or to obtain such license or approval would render any Receivable unenforceable that would otherwise be enforceable by the Depositor, the Servicer or the Owner Trustee.

 

(c) The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Trust and the Depositor shall have duly authorized such sale and assignment and deposit to the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary corporate action.

 

 

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(d) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or by-laws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

 

(e) There are no proceedings or investigations pending, or, to the best of Depositor’s knowledge, threatened, before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties which (i) assert the invalidity of this Agreement or any of the Basic Documents, (ii) seek to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Basic Documents, or (iii) seek any determination or ruling that might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any of the Basic Documents.

 

Section 2.11. Amended and Restated Trust Agreement.  This Agreement amends and restates in its entirety the Original Trust Agreement.

 

ARTICLE III

 

CERTIFICATES AND TRANSFER OF INTERESTS

 

Section 3.01. Initial Ownership.  Upon the formation of the Trust pursuant to the Original Trust Agreement and thereafter so long as the Depositor remains the “sole Certificateholder,” the Depositor shall be the sole beneficiary of the Trust.  Notwithstanding any other provision of this Agreement, the interest of the Depositor in the Trust (including its interest by virtue of being the holder of the Certificates) shall be transferable only in whole and any successor to the Depositor pursuant to such a transfer shall thenceforth be deemed the Depositor for purposes of this Agreement.  No such transfer shall be effective until such time as written notice thereof signed by both the transferor and transferee and an executed copy of the Certificateholder Certification are delivered to the Owner Trustee.

 

Section 3.02. Form of Certificates.  The Certificates shall be issued in an original Certificate Balance of $[____] to or upon the order of the Depositor.  The Certificates shall be executed on behalf of the Trust by manual or facsimile signature of a Trust Officer of the Owner Trustee.  The Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall, when duly authenticated pursuant to Section 3.03, be validly issued and entitled to the benefits of this Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of the Certificates or did not hold such offices at the date of authentication and delivery of the Certificates.

 

 

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Section 3.03. Authentication of the Certificates.  Concurrently with the initial sale of the Receivables to the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause the Certificates in a principal amount equal to the initial Certificate Balance to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor, signed by its Chairman of the Board, its President, any Vice President, its Treasurer, its Secretary or any Assistant Treasurer, without further corporate action by the Depositor.  No Certificate shall entitle its holder to any benefit under this Agreement, or be valid for any purpose, unless there shall appear on the Certificate a certificate of authentication substantially in the form set forth in Exhibit A executed by the Owner Trustee or the Owner Trustee’s authentication agent, by manual signature; such authentication shall constitute conclusive evidence that the Certificate shall have been duly authenticated and delivered hereunder. Each Certificate shall be dated the date of its authentication.

 

Section 3.04. Registration of Transfer of the Certificates.  The Certificate Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 3.08, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Owner Trustee shall provide for the registration of the Certificates and of transfers of the Certificates as herein provided.  [Name] shall be the initial Certificate Registrar.

 

Upon surrender for registration of transfer of the Certificates at the office or agency maintained pursuant to Section 3.08, the Owner Trustee shall execute, authenticate and deliver (or shall cause its authenticating agent to authenticate and deliver), in the name of the designated transferee or transferees, a new Certificate of a like aggregate principal amount dated the date of authentication by the Owner Trustee or any authenticating agent.  The Owner Trustee shall not register a transfer of any Certificate unless (a) the transferee of the Certificate delivers to the Certificate Registrar and authenticating agent an executed Certificateholder Certification (b) such transfer is of all of the Certificates and (c) the requirements of Section 11.12 are satisfied.

 

A Certificate presented or surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Certificateholder or its attorney duly authorized in writing, along with a Certificateholder Certification duly executed by the transferee of such Certificate.  A Certificate surrendered for registration of transfer shall be cancelled and subsequently disposed of by the Owner Trustee in accordance with its customary practice.

 

No service charge shall be made for any registration of transfer of the Certificates, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of the Certificates.

 

The Certificates have not been and will not be registered under the Securities Act, or any state securities laws and neither the Certificates nor any interest therein may be offered, sold, pledged or otherwise transferred except in accordance with applicable securities laws of any state of the United States and in reliance on the private placement exemption of the Securities Act.  The Owner Trustee may (but shall not be obligated) at any time or times request an Opinion of Counsel as to compliance with this restriction in connection with any transfer of a Certificate.

 

 

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Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificate.  If  (a) a Certificate is mutilated and shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of a Certificate and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Certificate shall have been acquired by a protected purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee, or the Owner Trustee’s authenticating agent, shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and denomination.  In connection with the issuance of any new Certificate under this Section, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.  Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

 

Section 3.06. Persons Deemed Owner.  Prior to due presentation of a Certificate for registration of transfer, the Owner Trustee or the Certificate Registrar may treat the Person in whose name a Certificate is registered in the Certificate Register as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever, and neither the Owner Trustee nor the Certificate Registrar shall be bound by any notice to the contrary.

 

Section 3.07. Access to List of Certificateholder’s Names and Addresses.  The Owner Trustee shall furnish or cause to be furnished to the Servicer and the Depositor, within 15 days after receipt by the Owner Trustee of a request therefor from the Servicer or the Depositor in writing, the name and address of the Certificateholders as of the most recent Record Date.  Each Certificateholder, by receiving and holding a Certificate, shall be deemed to have agreed not to hold the Depositor, the Servicer or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

Section 3.08. Maintenance of Office or Agency.  The Owner Trustee shall maintain in the Borough of Manhattan, in the City of New York, an office or offices or agency or agencies where notices and demands to or upon the Owner Trustee in respect of the Certificates and the Basic Documents may be served.  The Owner Trustee initially designates [Name and address] as its principal corporate trust office for such purposes. The Owner Trustee shall give prompt written notice to the Depositor and the Administrator of any change in the location of the Certificate Register or any such office or agency.

 

Section 3.09. Appointment of Paying Agents.  The Paying Agent shall make distributions to the Certificateholders from the Certificate Distribution Account pursuant to Section 5.02 and shall report the amounts of such distributions to the Owner Trustee.  Any Paying Agent shall have the revocable power to withdraw funds from the Certificate Distribution Account for the purpose of making the distributions referred to above.  The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect.  The Paying Agent shall initially be [Name], and any co-paying agent chosen by [Name], and acceptable to the Owner Trustee.  [Name] shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Owner Trustee and the Administrator.  In the event that [Name] shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company).  The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to the Certificateholders.  The Paying Agent shall return all unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Owner Trustee.  The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder.  Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

 

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Section 3.10. Certificates Nonassessable and Fully Paid.  The interests represented by the Certificates shall be nonassessable for any losses or expenses of the Issuing Entity or for any reason whatsoever, and, upon the authentication thereof by the Owner Trustee pursuant to Section 3.03, 3.04 or 3.05, the Certificates are and shall be deemed fully paid.

 

ARTICLE IV

 

ACTIONS BY OWNER TRUSTEE

 

Section 4.01. Prior Notice to Certificateholders with Respect to Certain Matters.  With respect to the following matters, the Owner Trustee shall not take action unless at least 30 days before the taking of such action, the Owner Trustee shall have notified the Certificateholders in writing of the proposed action and the Certificateholders shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that Certificateholders evidencing more than 50% of the Certificate Balance have withheld consent or provided alternative direction:

 

(a) the initiation of any claim or lawsuit by the Trust (other than an action to collect on a Receivable) and the compromise of any action, claim or lawsuit brought by or against the Trust (other than an action to collect on a Receivable);

 

(b) the election by the Trust to file an amendment to the Certificate of Trust;

 

(c) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required;

 

 

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(d) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such amendment materially adversely affects the interest of the Certificateholders;

 

(e) the amendment, change or modification of the Administration Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner that would not materially adversely affect the interests of the Certificateholders; or

 

(f) the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Trustee or the appointment pursuant to this Agreement of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Paying Agent or Trustee or Certificate Registrar of its obligations under the Indenture or this Agreement, as applicable.

 

Section 4.02. Action By the Certificateholders with Respect to Certain Matters.  The Owner Trustee shall not have the power, except upon the direction of Certificateholders evidencing more than 50% of the Certificate Balance, to (a) remove the Administrator under the Administration Agreement pursuant to Section 8 thereof, (b) appoint a successor Administrator pursuant to Section 8 of the Administration Agreement, (c) remove the Servicer under the Sale and Servicing Agreement pursuant to Section 8.01 thereof or (d) except as expressly provided in the Basic Documents, sell the Receivables after the termination of the Indenture.  The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the holders of Certificates evidencing more than 50% of the Certificate Balance.

 

Section 4.03. Action By Certificateholders with Respect to Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary proceeding in bankruptcy relating to the Trust without the prior approval of Certificateholders evidencing more than 50% of the Certificate Balance and the delivery to the Owner Trustee by such Certificateholders of a certificate certifying that such Certificateholders reasonably believe that the Trust is insolvent.

 

Section 4.04. Restrictions on Certificateholder’s Power.  The Certificateholders shall not direct the Owner Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Basic Documents or would be contrary to Section 2.03 nor shall the Owner Trustee be obligated to follow any such direction, if given.

 

ARTICLE V

 

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

 

Section 5.01. Establishment of Trust Account.  The Owner Trustee, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trust an Eligible Securities Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders.

 

The Owner Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof.  Except as otherwise provided herein, the Certificate Distribution Account shall be under the sole dominion and control of the Owner Trustee for the benefit of the Certificateholders.  If, at any time, the Certificate Distribution Account ceases to be an Eligible Securities Account, the Owner Trustee shall within 10 Business Days following notification of such occurrence (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Certificate Distribution Account as an Eligible Securities Account and shall transfer any cash or any investments in the existing Certificate Distribution Account to such new Certificate Distribution Account.

 

 

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Section 5.02. Application of Trust Funds.

 

(a) On each Distribution Date, the Owner Trustee will distribute amounts deposited in the Certificate Distribution Account pursuant to Sections 5.04 and 5.05 of the Sale and Servicing Agreement or pursuant to Section 5.04(b) or 5.04(c) of the Indenture on or before such Distribution Date to the Certificateholders.

 

(b) On each Distribution Date, the Administrator shall send to the Certificateholders the statement provided to the Administrator by the Servicer pursuant to Section 4.09 of the Sale and Servicing Agreement on such Distribution Date.

 

(c) In the event that any withholding tax is imposed on the Trust’s payment (or allocations of income) to the Certificateholders, such tax shall reduce the amount otherwise distributable to the Certificateholders in accordance with this Section.  The Owner Trustee is hereby authorized and directed to retain from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed or required to be withheld by the Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed with respect to the Certificateholders shall be treated as cash distributed to the Certificateholders at the time it is withheld by the Trust and remitted to the appropriate taxing authority.  If there is a possibility that withholding tax is payable with respect to a distribution, the Owner Trustee may in its sole discretion withhold such amounts in accordance with this clause (c).  In the event that a Certificateholder wishes to apply for a refund of any such withholding tax, the Owner Trustee shall reasonably cooperate with the Certificateholder in making such claim so long as the Certificateholder agrees to reimburse the Owner Trustee for any out-of-pocket expenses incurred.

 

Section 5.03. Method of Payment.  Subject to Section 9.01(c), distributions required to be made to the Certificateholders on any Distribution Date shall be made to the Certificateholders of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of each such Certificateholder at a bank or other entity having appropriate facilities therefor, if the Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Distribution Date or, if not, by check mailed to the Certificateholder at the address of such Certificateholder appearing in the Certificate Register.

 

Section 5.04. No Segregation of Monies; No Interest.  Subject to Section 5.01 and 5.02, monies received by the Owner Trustee hereunder need not be segregated in any manner except to the extent required by law, this Agreement or the Sale and Servicing Agreement and may be deposited under such general conditions as may be prescribed by law, and the Owner Trustee shall not be liable for any interest thereon.

 

 

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Section 5.05. Accounting and Report to the Noteholders, the Certificateholders, the Internal Revenue Service and Others.  The Owner Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on a fiscal year basis ending December 31, (or such other period as may be required by applicable law), with the first year being a short year ending December 31, 20[__], and on the accrual method of accounting, (b) deliver to the Certificateholders, as may be required by the Code and applicable Treasury Regulations, such information as may be required to enable the Certificateholders to prepare their federal and state income tax returns, and make such elections as may from time to time be required or appropriate under any applicable state or federal statute or rule or regulation thereunder so as to maintain the Trust’s characterization as a disregarded entity for federal income tax purposes and (c) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.02(c) with respect to distributions from the Trust.

 

ARTICLE VI

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 6.01. General Authority.  The Owner Trustee is authorized and directed to execute and deliver the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party, or any amendment thereto or other agreement, in each case, in such form as the Depositor shall approve as evidenced conclusively by the Owner Trustee’s execution thereof.  In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust pursuant to the Basic Documents.  The Owner Trustee is further authorized from time to time to take such action as the Administrator directs in writing with respect to the Basic Documents.

 

Section 6.02. General Duties.  It shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and the Basic Documents and to administer the Trust in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the provisions of this Agreement.  Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Basic Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Owner Trustee hereunder or under any Basic Document, and the Owner Trustee shall not be liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement.

 

Section 6.03. Action Upon Instructions.

 

(a) Subject to Article IV, the Certificateholders evidencing more than 50% of the Certificate Balance may, by written instruction, direct the Owner Trustee in the management of the Trust.  Such direction may be exercised at any time by written instruction of the Certificateholders pursuant to Article IV.

 

 

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(b) The Owner Trustee shall not be required to take any action hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any Basic Document or is otherwise contrary to law.

 

(c) Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or any Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction given by Certificateholders evidencing more than 50% of the Certificate Balance, the Owner Trustee shall not be liable on account of such action to any Person.  If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interest of the Certificateholders, and shall have no liability to any Person for such action or inaction.

 

(d) In the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person.  If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Certificateholders and shall have no liability to any Person for such action or inaction.

 

Section 6.04. No Duties Except as Specified in This Agreement or in Instructions.  The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Owner Trustee pursuant to Section 6.03; and no implied duties or obligations shall be read into this Agreement or any Basic Document against the Owner Trustee.  The Owner Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Commission filing for the Trust or to record this Agreement or any Basic Document.  The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee that are not related to the ownership or the administration of the Owner Trust Estate.

 

 

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Section 6.05. No Action Except under Specified Documents or Instructions.  The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Owner Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 6.03.

 

Section 6.06. Restrictions.  The Owner Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust set forth in Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would result in the Trust being treated as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes.  The Owner Trustee and the Depositor agree that no election to treat the Trust as an association (or publicly traded partnership) taxable as a corporation for United States federal income tax purposes or any relevant state tax purposes shall be made by or on behalf of the Trust.  The Certificateholders shall not take, or direct the Owner Trustee or the Depositor to take action that would violate the provisions of this Section.

 

ARTICLE VII

 

CONCERNING THE OWNER TRUSTEE

 

Section 7.01. Acceptance of Trusts and Duties.  The Owner Trustee hereby accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement.  The Owner Trustee also agrees to disburse all monies actually received by it constituting part of the Owner Trust Estate upon the terms of the Basic Documents and this Agreement.  The Owner Trustee shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except (i) for its own willful misconduct or negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.03 expressly made by the Owner Trustee.  In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

(a) the Owner Trustee shall not be liable for any error of judgment made by a responsible officer of the Owner Trustee;

 

(b) the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the written instructions of the Administrator or the Certificateholders;

 

 

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(c) no provision of this Agreement or any Basic Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Basic Document, if the Owner Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;

 

(d) under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes;

 

(e) the Owner Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Owner Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Certificates, and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to the Certificateholders, other than as expressly provided for herein and in the Basic Documents;

 

(f) the Owner Trustee shall not be liable for the default or misconduct of the Administrator, the Indenture Trustee or the Servicer under any of the Basic Documents or otherwise, and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Servicer under the Sale and Servicing Agreement; and

 

(g) the Owner Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any Basic Document, at the request, order or direction of any Certificateholder, unless such Certificateholder has offered to the Owner Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby.  The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any Basic Document shall not be construed as a duty, and the Owner Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act.

 

Section 7.02. Furnishing of Documents.  The Owner Trustee shall furnish (a) to the Certificateholders or the Administrator promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Basic Documents and (b) to the Indenture Trustee promptly upon written request therefor, copies of the Purchase Agreement, the Sale and Servicing Agreement, the Administration Agreement and the Trust Agreement.

 

Section 7.03. Representations and Warranties.  The Owner Trustee hereby represents and warrants to the Certificateholders that:

 

(a) It is a banking association duly organized and validly existing in good standing under the federal laws of the United States and satisfies the eligibility criteria set forth in Section 10.01. It has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

 

 

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(b) It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement has been executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.

 

(c) Neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound.

 

Section 7.04. Reliance; Advice of Counsel.

 

(a) The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond, or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.  The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

(b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the Basic Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it.  The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons.

 

Section 7.05. Not Acting in Individual Capacity.  Except as provided in this Article VII and Article XII, in accepting the trusts hereby created, [Owner Trustee] acts solely as Owner Trustee hereunder and not in its individual capacity and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any Basic Document shall look only to the Owner Trust Estate for payment or satisfaction thereof.

 

Section 7.06. Owner Trustee Not Liable for the Certificates, Notes or Receivables.  The recitals contained herein and in the Certificates (other than the signature and counter-signature of the Owner Trustee on the Certificates and its representations and warranties in Section 7.03 and Article XII) shall not be taken as the statements of the Owner Trustee and the Owner Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, or of the Certificates (other than the signature and countersignature of the Owner Trustee on the Certificates), or the Notes or of any other Basic Document or of any Receivable or related documents.  The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Receivable, or the perfection and priority of any security interest created by any Receivable in any Financed Equipment or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Owner Trust Estate or its ability to generate the payments to be distributed to the Certificateholders under this Agreement or the Noteholders under the Indenture, including: the existence, condition and ownership of any Financed Equipment; the existence and enforceability of any insurance thereon; the existence and contents of any Receivable on any computer or other record thereof; the validity of the assignment of any Receivable to the Trust or of any intervening assignment; the completeness of any Receivable; the performance or enforcement of any Receivable; the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation or any action of the Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Owner Trustee.

 

 

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Section 7.07. Owner Trustee May Own the Notes.  The Owner Trustee in its individual or any other capacity may become the owner or pledgee of the Notes and may deal with the Depositor, the Administrator, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee.

 

ARTICLE VIII

 

COMPENSATION OF OWNER TRUSTEE

 

Section 8.01. Owner Trustee’s Fees and Expenses.  The Owner Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Depositor and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Depositor for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Owner Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder; provided, however, that the Owner Trustee’s right to enforce such obligation shall be subject to the provisions of Section 11.08.

 

Section 8.02. Indemnification.  The Depositor shall be liable as primary obligor for, and shall indemnify the Owner Trustee and its successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by, or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the Depositor shall not be liable for or required to indemnify the Owner Trustee from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 7.01; provided, however, that the Owner Trustee’s right to enforce such obligation shall be subject to the provisions of Section 11.08.  The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement.  In any event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Owner Trustee’s choice of legal counsel shall be subject to the approval of the Depositor, which approval shall not be unreasonably withheld.

 

 

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Section 8.03. Payments to the Owner Trustee.  Any amounts paid to the Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of the Owner Trust Estate immediately after such payment.

 

ARTICLE IX

 

TERMINATION OF TRUST AGREEMENT

 

Section 9.01. Termination of Trust Agreement.

 

(a) This Agreement (other than Article VIII and Section 11.08) and the Trust shall terminate and be of no further force or effect, upon the final distribution by the Owner Trustee of all monies or other property or proceeds of the Owner Trust Estate in accordance with the terms of the Indenture, the Sale and Servicing Agreement and Article V.  Any money or other property held as part of the Owner Trust Estate following such distribution shall be distributed to the Depositor.  The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder shall not (x) operate to terminate this Agreement or the Trust, or (y) entitle the Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Owner Trust Estate or (z) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b) Neither the Depositor nor any Certificateholder shall be entitled to revoke or terminate the Trust.

 

(c) Notice of any termination of the Trust, specifying the Distribution Date upon which the Certificateholders shall surrender the Certificates to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to the Certificateholders mailed within five Business Days of receipt of notice of such termination from the Servicer given pursuant to Section 9.01(c) of the Sale and Servicing Agreement, stating (i) the Distribution Date upon or with respect to which final payment of the Certificates shall be made upon presentation and surrender of the Certificates at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Certificates at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to the Certificateholders.  Upon presentation and surrender of the Certificates, the Paying Agent shall cause to be distributed to the Certificateholders amounts distributable on such Distribution Date pursuant to Section 5.02.

 

 

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In the event that a Certificateholder shall not surrender its Certificate for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to the Certificateholder to surrender the Certificate for cancellation and receive the final distribution with respect thereto.  If within one year after the second notice any Certificate shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the Certificateholder concerning surrender of the Certificate, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement.  Any funds remaining in the Trust after exhaustion of such remedies shall be distributed by the Owner Trustee to the Depositor.

 

(d) Upon the winding up of the Trust and its termination, the Owner Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 of the Statutory Trust Statute.

 

ARTICLE X

 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section 10.01. Eligibility Requirements for Owner Trustee.  The Owner Trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; authorized to exercise corporate trust powers; having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities; and having (or having a parent which has) a rating of at least “Baa3” by Moody’s and at least “BBB-” by Standard & Poor’s.  If such corporation shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 10.02.

 

Section 10.02. Resignation or Removal of Owner Trustee.  The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Depositor, the Certificateholders and the Administrator; provided, however, that such resignation and discharge shall only be effective upon the appointment of a successor Owner Trustee.  Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee.  If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee.

 

 

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If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 10.01 and shall fail to resign after written request therefor by the Depositor or the Administrator, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor or the Administrator may remove the Owner Trustee.  If the Depositor or the Administrator shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Administrator shall promptly appoint a successor Owner Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee and the Depositor shall pay all fees owed to the outgoing Owner Trustee.

 

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.  The Depositor shall provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies.

 

Section 10.03. Successor Owner Trustee.  Any successor Owner Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Depositor, the Certificateholders and to its predecessor Owner Trustee, with a copy thereof delivered to the Administrator, an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements, monies and other property held by it under this Agreement; and the Depositor and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties, and obligations.

 

No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 10.01.

 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Depositor shall mail notice of the appointment of such successor Owner Trustee to the Certificateholders, the Indenture Trustee, the Administrator, the Noteholders and the Rating Agencies.  If the Depositor shall fail to mail such notice within 10 days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Depositor.

 

 

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Section 10.04. Merger or Consolidation of Owner Trustee.  Any corporation into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Owner Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder; provided such corporation shall be eligible pursuant to Section 10.01, without the execution or filing of any instrument or any further act on the part of any of the parties hereto; anything herein to the contrary notwithstanding; provided, further, that the Owner Trustee shall mail notice of such merger or consolidation to the Rating Agencies and the Administrator.

 

Section 10.05. Appointment of Co-Trustee or Separate Trustee.  Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate or any Financed Equipment may at the time be located, the Depositor and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or separate trustee, of all or any part of the Owner Trust Estate, and to vest in such Person, in such capacity, such title to the Owner Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Depositor and the Owner Trustee may consider necessary or desirable.  If the Depositor shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Owner Trustee alone shall have the power to make such appointment.  No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 10.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03.

 

Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i) all rights, powers, duties, and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such acts, in which event such rights, powers, duties, and obligations (including the holding of title to the Owner Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Owner Trustee;

 

(ii) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and

 

(iii) the Depositor and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee.  Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Depositor, the Certificateholders and the Administrator.

 

 

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Any separate trustee or co-trustee may at any time appoint the Owner Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01. Supplements and Amendments.  This Agreement may be amended by the Depositor and the Owner Trustee, with prior written notice to the Rating Agencies, without the consent of any of the Noteholders or the Certificateholders 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 Certificateholders; provided, however, that such amendment shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder or the Certificateholders or the federal tax characteristics of the Notes.

 

This Agreement may also be amended from time to time by the Depositor and the Owner Trustee, with prior written notice to the Rating Agencies, with the consent of the holders of Notes evidencing not less than a majority of the Outstanding Principal Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of the Outstanding Principal Amount of the Notes or the Certificates required to consent to any such amendment, without the consent of the holders of all the outstanding Notes and Certificates.

 

Promptly after the execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to the Indenture Trustee, the Administrator and each of the Rating Agencies.

 

 

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It shall not be necessary for the consent of the Noteholders, the Certificateholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents shall be subject to such reasonable requirements as the Owner Trustee may prescribe.

 

No amendment to this Agreement shall affect the rights or duties of the Administrator without the written consent of the Administrator.

 

Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.

 

Prior to the execution of any amendment to this Agreement or any other Basic Document, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the other Basic Documents. The Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

Section 11.02. No Legal Title to Owner Trust Estate in the Owner.  No Certificateholder shall have legal title to any part of the Owner Trust Estate.  The Certificateholders shall be entitled to receive distributions with respect to their ownership interest therein only in accordance with Articles V and IX.  No transfer, by operation of law or otherwise, of any right, title, and interest of a Certificateholder to and in its ownership interest in the Trust shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.

 

Section 11.03. Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Depositor, the Certificateholders, the Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

 

Section 11.04. Notices.  (a)  Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given upon receipt by the intended recipient, if to the Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor, addressed to Caterpillar Financial Funding Corporation, 4040 S. Eastern Avenue, Suite 344, Las Vegas, Nevada 89119; if to the Administrator, 2120 West End Avenue, Nashville, Tennessee 37203-0001 or, as to each party, at such other address as shall be designated by such party in a written notice to each other party.

 

(b) Any notice required or permitted to be given to the Certificateholders shall be given by first-class mail, postage prepaid, at the address of such Certificateholders as shown in the Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not a Certificateholder receives such notice.

 

 

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Section 11.05. Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 11.06. Separate Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 11.07. Successors and Assigns.  All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Depositor, the Owner Trustee and its successors and the Certificateholders and their successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by the Certificateholders shall bind the successors and assigns of the Certificateholders.

 

Section 11.08. No Petition.  Notwithstanding any prior termination of this Agreement, the Owner Trustee, each Certificateholder (to the extent it is not the Depositor), by accepting the Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not, prior to the date which is one year and one day after the termination of the Issuing Entity, institute against the Depositor or the Issuing Entity, or join in any institution against the Depositor or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law.

 

Section 11.09. No Recourse.  Each Certificateholder by accepting a Certificate acknowledges that the Certificate represents a beneficial interest in the Trust only and does not represent an interest in or obligation of the Depositor, the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee or any Affiliate thereof, and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificates or the other Basic Documents.

 

Section 11.10. Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

Section 11.11. GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.12. Certificate Transfer Restrictions.

 

 

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(a) No Certificate may be acquired by or for the account of (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), that is subject to the provisions of Title I of ERISA, (ii) a plan (as defined in Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code, or (iii) any entity whose underlying assets include “plan assets” by reason of any such plan’s investment in the entity and the application of U.S. Department of Labor (the “DOL”) Regulation Section 2510.3-101, as modified by Section 3(42) of ERISA (the “Plan Asset Regulation”) (excluding any investment company that is registered under the Investment Company Act of 1940, as amended) (each, a “Benefit Plan Investor”), except as provided in the following sentence.  By accepting and holding a Certificate, each Certificateholder shall be deemed to have represented, warranted and covenanted that (A) it is not a Benefit Plan Investor, and that no assets of any Benefit Plan Investor were used to acquire the Certificate, or (B) it is an insurance company acting on behalf of its general account, and (i) on the date it acquires the Certificate, less than 25% of the assets of such general account constitute Plan Assets and (ii) if at any time during any calendar quarter after the initial acquisition of the Certificate, 25% or more of the assets of such general account constitute “plan assets” (as defined in the Plan Asset Regulation) and no exemption or exception from the prohibited transaction rules applies to the continued holding of the Certificate under Section 401(c) of ERISA and final regulations thereunder or an exemption or regulation issued by the DOL under ERISA, then such insurance company will dispose of the Certificates then held in its general account by the end of the next following calendar quarter, and shall deliver to the Owner Trustee at the time of acquisition of the Certificates a duly executed Certificateholder Certification in the form set forth in Exhibit C.

 

(b) No Certificate may be acquired or held by or for the account of an individual or entity that is not a U.S. person as defined in Section 7701(a)(30) of the Code.  By accepting and holding a Certificate, each Certificateholder shall be deemed to have represented and warranted under penalties of perjury that it (or, if it is acting as a nominee, the beneficial owner) is and, so long as it may be a Certificateholder, will remain a U.S. person and shall deliver to the Owner Trustee, at the time of acquisition of the Certificate and thereafter from time to time upon request, a duly executed Certificateholder Certification in the form set forth in Exhibit C.

 

(c) The Depositor shall be the initial holder of the Certificates and shall not transfer any Certificates to any entity that is not an Affiliate of the Depositor for so long as any Notes issued pursuant to the Indenture are outstanding.

 

Section 11.13. Depositor Payment Obligation.  The Depositor shall be responsible for payment of the Administrator’s fees under the Administration Agreement (to the extent not paid pursuant to Section 5.04 of the Sale and Servicing Agreement) and shall reimburse the Administrator for all expenses and liabilities of the Administrator incurred thereunder.

 

ARTICLE XII

 

REGULATION AB COMPLIANCE

 

Section 12.01. Intent of the Parties; Reasonableness.  The Depositor and the Owner Trustee acknowledge and agree that the purpose of this Article XII is to facilitate compliance by the Issuing Entity and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.  Neither the Issuing Entity nor the Depositor shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission under the Securities Act and the Exchange Act.  The Owner Trustee acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB.  The Owner Trustee shall cooperate fully with the Issuing Entity and the Depositor to deliver to the Issuing Entity and the Depositor any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuing Entity or the Depositor to permit the Issuing Entity or the Depositor to comply with the provisions of Regulation AB, together with such disclosures relating to the Owner Trustee and the Notes reasonably believed by the Issuing Entity or the Depositor to be necessary in order to effect such compliance.

 

 

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Section 12.02. Additional Representations and Warranties of the Owner Trustee.

 

(a) The Owner Trustee shall be deemed to represent and warrant to the Issuing Entity and to the Depositor, as of the date hereof and as of the date on which information is first provided to the Issuing Entity or the Depositor under Section 12.03, that, except as disclosed in writing to the Issuing Entity or such Depositor prior to such date:  (i) it is not aware and has not received notice that any default, early amortization or other performance triggering event has occurred as to any other securitization due to any act or failure to act of the Owner Trustee; (ii) it has not been terminated as trustee in a securitization of lease or installment contract receivables; (iii) there are no aspects of its financial condition that could have a material adverse effect on the performance by it of its trustee obligations under this Agreement; (iv) there are no legal or governmental proceedings pending (or known to be contemplated) against it that would have a material adverse impact on its ability to act as Owner Trustee hereunder; and (v) there are no affiliations, relationships or transactions relating to the Owner Trustee with respect to any Transaction Party required to be disclosed under Item 1119 of Regulation AB.

 

(b) If so requested by the Issuing Entity or the Depositor following the date hereof, the Owner Trustee shall, within five Business Days following such request, confirm in writing the accuracy of the representations and warranties set forth in paragraph (a) of this Section or, if any such representation and warranty is not accurate as of the date of such request or such confirmation, provide reasonably adequate disclosure of the pertinent facts, in writing, to the requesting party.

 

(c) The Owner Trustee hereby represents and warrants to the Issuing Entity and to the Depositor that the information set forth under the caption “Formation of the Issuing Entity – The Owner Trustee” in the Preliminary Prospectus Supplement dated [date] and the final Prospectus Supplement dated [date] relating to the Notes (i) does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) includes all information required to be included therein with respect to the Owner Trustee under Regulation AB.

 

 

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Section 12.03. Information to Be Provided by the Owner Trustee. 

 

(a) For the purpose of satisfying the reporting obligations of the Issuing Entity under the Exchange Act with respect to the Notes, the Owner Trustee shall (i) notify the Issuing Entity and the Depositor in writing of (A) any material litigation or governmental proceedings pending against the Owner Trustee, (B) any affiliations or relationships that develop following the date hereof between the Owner Trustee and any Transaction Party that are required to be disclosed under Item 1119 of Regulation AB, and (C) any change in control or sale of substantially all the assets of the Owner Trustee, and (ii) provide to the Issuing Entity and the Depositor a written description of such litigation proceedings, affiliations, relationships or corporate changes.

 

(b) In addition to such information as the Owner Trustee is obligated to provide pursuant to other provisions of this Agreement, if so requested by the Issuing Entity or the Depositor, the Owner Trustee shall provide such information reasonably available to the Owner Trustee regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB.

 

Section 12.04. Indemnification; Remedies.

 

(a) The Owner Trustee shall indemnify the Issuing Entity, each affiliate of the Issuing Entity, the Depositor, the Servicer and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to the Notes, each broker dealer acting as underwriter, placement agent or initial purchaser or each Person who controls any of such parties (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors, officers, employees and agents of each of the foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based upon:

 

(i) (A) any untrue statement of a material fact contained or alleged to be contained in any information, report, certification or other material provided under this Article XII by or on behalf of the Owner Trustee (collectively, the “Trustee Information”), or (B) the omission or alleged omission to state in the Trustee Information a material fact required to be stated in the Trustee Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by reference to the Trustee Information and not to any other information communicated in connection with a sale or purchase of securities, without regard to whether the Trustee Information or any portion thereof is presented together with or separately from such other information;

 

(ii) any failure by the Owner Trustee to deliver any information, report, certification or other material when and as required under this Article XII; or

 

 

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(iii) any breach by the Owner Trustee of a representation or warranty set forth in Section 12.02(a) or in a writing furnished pursuant to Section 12.02(b).

 

(b) In the case of any failure of performance described in clause (a)(ii) of this Section, the Owner Trustee shall promptly reimburse the Issuing Entity, the Depositor, as applicable, and each Person responsible for the preparation, execution or filing of any report required to be filed with the Commission with respect to the Notes for all costs reasonably incurred by each such party in order to obtain the information, report, certification or other material not delivered as required by the Owner Trustee.

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed by their respective officers hereunto duly authorized, as of the date first above written.

 

[OWNER TRUSTEE],

 

not in its individual capacity but solely as 

Owner Trustee,

 

By:                                                                                       

Name:

 

Title:

 

CATERPILLAR FINANCIAL FUNDING 

CORPORATION, as Depositor,

 

By:                                                                      

Name:

Title:

 

Amended and Restated Trust Agreement

 

  

  

  

EXHIBIT A

 

 

FORM OF CERTIFICATE

 

 

	NUMBER	 $[___________]
	R-1	 

 

 

 

 

SEE REVERSE FOR CERTAIN DEFINITIONS

 

THIS CERTIFICATE IS ONLY TRANSFERABLE IN WHOLE

AND IS SUBJECT TO RESTRICTIONS ON TRANSFER

SET FORTH IN THE TRUST AGREEMENT

 

THIS CERTIFICATE HAS NOT BEEN REGISTERED AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD OR DELIVERED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT.

 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (i) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A PLAN (AS DEFINED IN SECTION 4975(e)(1) OF THE CODE) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, OR (iii) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY SUCH PLAN’S INVESTMENT IN THE ENTITY AND THE APPLICATION OF U.S. DEPARTMENT OF LABOR (THE “DOL”) REGULATION SECTION 2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA (THE “PLAN ASSET REGULATION”) (EXCLUDING ANY INVESTMENT COMPANY THAT IS REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED) (EACH, A “BENEFIT PLAN INVESTOR”), EXCEPT AS PROVIDED IN THE FOLLOWING SENTENCE.  BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER THEREOF SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND COVENANTED THAT (A) IT IS NOT A BENEFIT PLAN INVESTOR, AND THAT NO ASSETS OF ANY BENEFIT PLAN INVESTOR WERE USED TO ACQUIRE THIS CERTIFICATE, OR (B) IT IS AN INSURANCE COMPANY ACTING ON BEHALF OF ITS GENERAL ACCOUNT, AND (i) ON THE DATE IT ACQUIRES THIS CERTIFICATE, LESS THAN 25% OF THE ASSETS OF SUCH GENERAL ACCOUNT CONSTITUTE PLAN ASSETS AND (ii) IF AT ANY TIME DURING ANY CALENDAR QUARTER AFTER THE INITIAL ACQUISITION OF THIS CERTIFICATE, 25% OR MORE OF THE ASSETS OF SUCH GENERAL ACCOUNT CONSTITUTE “PLAN ASSETS” (AS DEFINED IN THE PLAN ASSET REGULATION) AND NO EXEMPTION OR EXCEPTION FROM THE PROHIBITED TRANSACTION RULES APPLIES TO THE CONTINUED HOLDING OF THIS CERTIFICATE UNDER SECTION 401(c) OF ERISA AND FINAL REGULATIONS THEREUNDER OR AN EXEMPTION OR REGULATION ISSUED BY THE DOL UNDER ERISA, THEN SUCH INSURANCE COMPANY WILL DISPOSE OF THIS CERTIFICATE BY THE END OF THE NEXT FOLLOWING CALENDAR QUARTER, AND SHALL DELIVER TO THE OWNER TRUSTEE AT THE TIME OF ACQUISITION OF THIS CERTIFICATE A DULY EXECUTED CERTIFICATEHOLDER CERTIFICATION IN THE FORM SET FORTH IN EXHIBIT C TO THE TRUST AGREEMENT REFERRED TO HEREIN.

 

 

A-1

  

  

 

THIS CERTIFICATE MAY NOT BE ACQUIRED OR HELD BY OR FOR THE ACCOUNT OF AN INDIVIDUAL OR ENTITY THAT IS NOT A U.S. PERSON AS DEFINED IN SECTION 7701(a)(30) OF THE CODE.  BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT (OR, IF IT IS ACTING AS A NOMINEE, THE BENEFICIAL OWNER) IS AND, AS LONG AS IT MAY BE A HOLDER (OR BENEFICIAL OWNER), WILL REMAIN A U.S. PERSON AND SHALL DELIVER TO THE OWNER TRUSTEE, AT THE TIME OF ACQUISITION OF THIS CERTIFICATE AND THEREAFTER FROM TIME TO TIME UPON REQUEST, A DULY EXECUTED CERTIFICATION IN THE FORM SET FORTH IN EXHIBIT C TO THE TRUST AGREEMENT.

 

THIS CERTIFICATE MAY NOT BE TRANSFERRED TO ANY ENTITY OTHER THAN THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR FOR SO LONG AS THE NOTES ARE OUTSTANDING.

 

THE CERTIFICATE BALANCE OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS SET FORTH IN THE TRUST AGREEMENT.  ACCORDINGLY, THE OUTSTANDING CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

A-2  

  

  

CATERPILLAR FINANCIAL ASSET TRUST 20[__]-[_]

 

ASSET BACKED CERTIFICATE

 

evidencing an undivided beneficial interest in the Trust, as defined below, the property of which includes a pool of retail installment sale contracts and finance leases secured by new and used machinery and certain monies due or received thereunder and sold to the Trust (as defined below) by Caterpillar Financial Funding Corporation.

 

(This Certificate does not represent an interest in or obligation of Caterpillar Financial Funding Corporation, Caterpillar Financial Services Corporation, Caterpillar Inc. or any of their respective affiliates, except to the extent described below.)

 

THIS CERTIFIES THAT ______________________________________ is the registered holder of ______________________________________ DOLLARS ($___________) nonassessable, fully-paid, undivided beneficial interest in Caterpillar Financial Asset Trust 20[__]-[_] (the “Trust”) formed by Caterpillar Financial Funding Corporation, a Nevada corporation (the “Depositor”).

 

The Trust was created in connection with an Amended and Restated Trust Agreement, dated as of [Date] (the “Trust Agreement”), between the Depositor and [Owner Trustee], as trustee (the “Owner Trustee”), a summary of certain of the pertinent provisions of which is set forth below.  To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Trust Agreement or the Sale and Servicing Agreement, dated as of [Date] (the “Sale and Servicing Agreement”), among the Trust, the Depositor and Caterpillar Financial Services Corporation, as servicer (the “Servicer”), as applicable.

 

This Certificate is the duly authorized Certificate designated as the “Asset Backed Certificate” (herein called the “Certificate”).  Also issued under the Indenture, dated as of [Date], between the Trust and U.S. Bank National Association, as trustee (the “Indenture Trustee”), are Notes designated as “Class A-1 [__]% Asset Backed Notes” (the “Class A-1 Notes”), “Class A-2 [__]% Asset Backed Notes” (the “Class A-2 Notes”), “Class A-3 [__]% Asset Backed Notes” (the “Class A-3 Notes”), “Class A-4 [__]% Asset Backed Notes” (the “Class A-4 Notes”) and “Class B [__]% Asset Backed Notes” (the “Class B Notes”; together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the “Notes”). This Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Certificate by virtue of the acceptance hereof assents and by which such holder is bound.  The property of the Trust includes a pool of retail installment sale contracts and finance leases secured by new and used equipment (the “Receivables”), all monies received on or after [Date] from payments on the Receivables, security interests in the equipment financed thereby and certain other cross-collateralized equipment, certain bank accounts and the proceeds thereof, proceeds from claims on certain insurance policies and certain other rights under the Trust Agreement and the Sale and Servicing Agreement, all right, title, and interest of the Depositor in and to the Purchase Agreement dated as of [Date] between Caterpillar Financial Services Corporation and the Depositor and all proceeds of the foregoing.  The holder of this Certificate acknowledges and agrees that its rights to receive distributions in respect of this Certificate are subordinated to the rights of the Noteholders as described in the Sale and Servicing Agreement and the Indenture.

 

 

A-3

  

  

 

Under the Trust Agreement, there will be distributed on the 25th day of each month or, if such day is not a Business Day, the next Business Day (the “Distribution Date”), commencing on [Date] to the Person in whose name this Certificate is registered at the close of business on the last calendar day of the month preceding the month in which such Distribution Date occurs (the “Record Date”) the amount to be distributed to the Certificateholder on such Distribution Date.

 

Notwithstanding any prior termination of the Trust Agreement, the Certificateholder (to the extent it is not the Depositor), by its acceptance of this Certificate, covenants and agrees that it shall not, prior to the date which is one year and one day after the termination of the Trust, institute against the Depositor or the Issuing Entity, or join in any institution against the Depositor or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law.

 

Distributions on this Certificate will be made as provided in the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Certificate or the making of any notation hereon.  Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency maintained for the purpose by the Owner Trustee in the Borough of Manhattan, The City of New York.

 

This Certificate does not represent an obligation of, or an interest in, the Depositor, the Servicer, Caterpillar Inc., Caterpillar Financial Services Corporation, the Owner Trustee or any Affiliates of any of them and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein or in the Trust Agreement or the Basic Documents.  In addition, this Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections with respect to the Receivables (and certain other amounts), all as more specifically set forth herein and in the Sale and Servicing Agreement and the Trust Agreement.  A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined during normal business hours at the principal office of the Depositor, and at such other places, if any, designated by the Depositor, by the Certificateholder upon written request.

 

The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the Owner Trustee and the rights of the Certificateholders under the Trust Agreement at any time by the Depositor and the Owner Trustee with the consent of the holders of the Notes evidencing a majority of the outstanding Notes.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Owner Trustee in the Borough of Manhattan, in the City of New York, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the holder hereof or such holder’s attorney duly authorized in writing and a duly executed Certificateholder Certification of the transferee thereof, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate beneficial interest in the Trust will be issued to the designated transferee.  No service charge will be made for any such registration of transfer, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.  The initial Certificate Registrar appointed under the Trust Agreement is [Name], New York, New York.

 

 

A-4

  

  

 

The Owner Trustee, the Certificate Registrar and any agent of the Owner Trustee or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.

 

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to the Certificateholder of all amounts required to be paid to it pursuant to the Trust Agreement and the Sale and Servicing Agreement and the disposition of all property held as part of the Trust. The Servicer of the Receivables may at its option purchase the corpus of the Trust at a price specified in the Sale and Servicing Agreement, and such purchase of the Receivables and other property of the Trust will effect early retirement of the Certificates; provided, however, such right of purchase is exercisable only on any Distribution Date on which the Note Value is 10% or less of the Initial Note Value .

 

This Certificate may not be acquired by or for the account of (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is subject to the provisions of Title I of ERISA, (ii) a plan (as defined in Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code, or (iii) any entity whose underlying assets include “plan assets” by reason of any such plan’s investment in the entity and the application of U.S. Department of Labor (the “DOL”) Regulation Section 2510.3-101, as modified by Section 3(42) of ERISA (the “Plan Asset Regulation”) (excluding any investment company that is registered under the Investment Company Act of 1940, as amended) (each, a “Benefit Plan Investor”), except as provided in the following sentence.  By accepting and holding this Certificate, the holder thereof shall be deemed to have represented, warranted and covenanted that (A) it is not a Benefit Plan Investor, and that no assets of any Benefit Plan Investor were used to acquire this Certificate, or (B) it is an insurance company acting on behalf of its general account, and (i) on the date it acquires this Certificate, less than 25% of the assets of such general account constitute Plan Assets and (ii) if at any time during any calendar quarter after the initial acquisition of this Certificate, 25% or more of the assets of such general account constitute “plan assets” (as defined in the Plan Asset Regulation) and no exemption or exception from the prohibited transaction rules applies to the continued holding of this Certificate under Section 401(c) of ERISA and final regulations thereunder or an exemption or regulation issued by the DOL under ERISA, then such insurance company will dispose of this Certificate by the end of the next following calendar quarter, and shall deliver to the Owner Trustee at the time of acquisition of this Certificate a duly executed Certificateholder Certification in the form set forth in Exhibit C to the Trust Agreement.

 

 

A-5

  

  

 

This Certificate may not be acquired or held by or for the account of an individual or entity that is not a U.S. person as defined in Section 7701(a)(30) of the Code.  By accepting and holding this Certificate, the holder shall be deemed to have represented and warranted under penalties of perjury that it (or, if it is acting as a nominee, the beneficial owner) is and, as long as it may be a Certificateholder (or beneficial owner), will remain a U.S. person and shall deliver to the Owner Trustee, at the time of acquisition of this Certificate and thereafter from time to time upon request, a duly executed Certificateholder Certification in the form set forth in Exhibit C to the Trust Agreement.

 

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee, by manual signature, this Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.

 

THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.

 

  A-6

  

  

IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly executed.

 

 

	 	CATERPILLAR FINANCIAL ASSET TRUST 

    20[__]-[_],

	 	 
	 	
By: [Owner Trustee], as Owner Trustee

	 	 
	 	 
	Dated: __________	
By: ____________________

	 	Name:
	 	Title:

 

                                                                            

 

 

CERTIFICATE OF AUTHENTICATION

 

This is the Certificate referred to in the within-mentioned Trust Agreement.

 

	
[Owner Trustee], as Owner Trustee

	
or

	
[Owner Trustee], as Owner Trustee

	  	  	
By: [NAME], as Authenticating Agent

 

	
By: ____________________ 

    Authorized Signatory

	  	
By: ____________________

    Authorized Signatory

 

A-7

  

  

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE

 

 

____________________________________________________________________________

(Please print or type name and address, including postal zip code, of assignee)

 

 

____________________________________________________________________________

the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing

 

______________________________________________________ attorney to transfer said Certificate on the books of the Certificate Register, with full power of substitution in the premises.

 

 

 

	Dated:	________________________________________*
	 	Signature Guaranteed:
	 	 
	 	_________________________________________*

 

 

____________________

 

*      NOTICE:  The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever.

 

A-8  

  

  

EXHIBIT B

 

 

CERTIFICATE OF TRUST OF

CATERPILLAR FINANCIAL ASSET TRUST 20[__]-[_]

 

THIS Certificate of Trust of Caterpillar Financial Asset Trust 20[__]-[_] (the “Trust”) is being duly executed and filed on behalf of the Trust by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) (the “Act”).

 

Name.  The name of the statutory trust formed by this Certificate of Trust is Caterpillar Financial Asset Trust 20[__]-[_].

 

Delaware Trustee.  The name and business address of the trustee of the Trust in the State of Delaware are [Name, Address, Attention: _____].

 

Effective Date.  This Certificate of Trust shall be effective upon filing.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.

 

 

[Owner Trustee], not in its individual capacity but solely as Trustee

 

 

 

By:_________________________________

 

Name:

 

Title:

 

 

 B-1

  

  

EXHIBIT C

 

 

CERTIFICATEHOLDER CERTIFICATION

 

This Certificateholder Certification (“Certification”) is delivered pursuant to Section 11.12(b) of Caterpillar Financial Asset Trust 20[__]-[_] Amended and Restated Trust Agreement, dated as of [Date] (the “Trust Agreement”), between Caterpillar Financial Funding Corporation and [Owner Trustee], as Owner Trustee, in connection with the acquisition of, transfer to or possession by the undersigned, whether as beneficial owner (the “Beneficial Owner”), or nominee on behalf of the Beneficial Owner, of the Caterpillar Financial Asset Trust 20[__]-[_] Asset Backed Certificate (the “Certificate”).  Capitalized terms used but not defined in this Certification have the respective meanings given them in the Trust Agreement.

 

The holder must complete Part I, Part II (if the holder is a nominee), and in all cases sign and otherwise complete Part III of Section A.

 

Section A.  To confirm to the Trust that the provisions of the Internal Revenue Code (relating to withholding tax) do not apply in respect of the Certificate held by the undersigned, the undersigned hereby certifies:

 

Part I - Complete Either A or B

 

A.           Individual as Beneficial Owner

 

	
  

	
1.

	
I am (The Beneficial Owner is) not a non-resident alien for purposes of U.S. income taxation;

 

	
  

	
2.

	
My (The Beneficial Owner’s) name and home address are

 

_____________________________________________

 

_____________________________________________

 

_____________________________________________; and

 

	
  

	
3.

	
My (The Beneficial Owner’s) U.S. taxpayer identification number (Social Security Number) is ______________________.

 

B.           Corporate, Partnership or other Entity as Beneficial Owner

 

	
  

	
1.

	
________________________________ (Name of the Beneficial Owner) is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Treasury regulations);

 

C-1  

  

  

	
  

	
2.

	
The Beneficial Owner’s office address and place of incorporation (if applicable) is _________________________________________

 

	
  

	
_________________________________________; and

 

	
  

	
3.

	
The Beneficial Owner’s U.S. employer identification number (Social Security Number) is _______________.

 

Part II - Nominees

 

If the undersigned is the nominee for the Beneficial Owner, the undersigned certifies that this Certification has been made in reliance upon information contained in:

 

_________ an IRS Form W-9

 

_________ a form such as this or substantially similar

 

provided to the undersigned by an appropriate person and (i) the undersigned agrees to notify the Trust at least thirty (30) days prior to the date that the form relied upon becomes obsolete, and (ii) in connection with change in Beneficial Owners, the undersigned agrees to submit a new Certification of Non-Foreign Status to the Trust promptly after such change.

 

Part III - Declaration

 

The undersigned, as the Beneficial Owner or a nominee thereof, agrees to notify the Trust within sixty (60) days of the date that the Beneficial Owner becomes a foreign person.  The undersigned understands that this Certification may be disclosed to the Internal Revenue Service by the Trust and any false statement contained therein could be punishable by fines, imprisonment or both.

 

  C-2

  

  

Under penalty of perjury, I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have the authority* to sign this document

 

________________________________________________________________

Name

 

________________________________________________________________

Title (if applicable)

 

________________________________________________________________

Signature and Date

 

 

	
*NOTE:

	
If signed pursuant to a power of attorney, the power of attorney must accompany this Certification.

 

THE CERTIFICATION CONTAINED IN THIS SECTION A WILL BECOME OBSOLETE AT THE END OF THE THIRD YEAR AFTER THE TAXABLE YEAR OF THE TRUST DURING WHICH THIS CERTIFICATION IS DELIVERED TO THE TRUST.

 

Section B.  The undersigned hereby certifies that (check one):

 

1.  o    no assets of any Benefit Plan Investor were used to acquire the Certificate.

 

OR

 

2.  o I am an insurance company, acting on behalf of my general account, and

 

a.           on the date I acquired the Certificate, less than 25% of the assets of my general account constituted Plan Assets, and

 

b.           if, at any time during any calendar quarter after the initial acquisition of the Certificate, 25% or more of the assets of such general account constitute “plan assets” (as defined in the Plan Asset Regulation) and no exemption or exception from the prohibited transaction rules applies to the continued holding of the Certificate under Section 401(c) of ERISA and final regulations thereunder or an exemption or regulation issued by the DOL under ERISA, then I will dispose of the Certificate then held in my general account by the end of the next following calendar quarter and shall deliver to the Owner Trustee at the time of acquisition of the Certificate a duly executed Certificateholder Certification in the form set forth in this exhibit.

 

I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have the authority* to sign this document.

 

 

C-3

  

  

 

 

________________________________________________________________

Name

 

________________________________________________________________

Title (if applicable)

 

________________________________________________________________

Signature and Date

 

	
*NOTE:

	
If signed pursuant to a power of attorney, the power of attorney must accompany this Certification.

 

 

C-4exh4-3.htm

  

  

  

EXHIBIT 4.3

                                                                                                                                     

 

 

 

FORM OF SALE AND SERVICING AGREEMENT

 

 

among

 

 

CATERPILLAR FINANCIAL ASSET TRUST 200[_]-[_]

 

 

Issuing Entity

 

 

CATERPILLAR FINANCIAL FUNDING CORPORATION

 

 

Depositor

 

 

and

 

 

CATERPILLAR FINANCIAL SERVICES CORPORATION

 

 

Servicer

 

 

Dated as of [date]

 

 

  

  

  

TABLE OF CONTENTS

 

Page

	
ARTICLE I

	
DEFINITIONS 

	
1

 

	
  

	
SECTION 1.01.

	
Definitions 

	
1

 

	
  

	
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 

	
19

 

	
ARTICLE III

	
THE RECEIVABLES 

	
19

 

	
  

	
SECTION 3.01.

	
Representations and Warranties of Depositor 

	
19

 

	
  

	
SECTION 3.02.

	
Repurchase by Depositor or CFSC Upon Breach 

	
20

 

	
  

	
SECTION 3.03.

	
Custody of Receivable Files 

	
21

 

	
  

	
SECTION 3.04.

	
Duties of Servicer 

	
21

 

	
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 

	
26

 

	
  

	
SECTION 4.09.

	
Servicer Report 

	
26

 

	
  

	
SECTION 4.10.

	
Annual Statement as to Compliance; Notice of Default 

	
26

 

	
  

	
SECTION 4.11.

	
Annual Independent Certified Public Accountants’ Attestation 

	
27

 

	
  

	
SECTION 4.12.

	
Servicer Expenses 

	
27

 

	
  

	
SECTION 4.13.

	
Reports to the Commission 

	
27

 

	
ARTICLE V

	
DISTRIBUTIONS; RESERVE ACCOUNT; CERTIFICATEHOLDER AND NOTEHOLDER INFORMATION 

	
28

 

	
  

	
SECTION 5.01.

	
Establishment of Trust Accounts 

	
28

 

	
  

	
SECTION 5.02.

	
Collections 

	
30

 

 

i

  

  

 

TABLE OF CONTENTS

(continued)

 

Page

 

	
  

	
SECTION 5.03.

	
Additional Deposits 

	
30

 

	
  

	
SECTION 5.04.

	
Distributions 

	
31

 

	
  

	
SECTION 5.05.

	
Reserve Account 

	
33

 

	
  

	
SECTION 5.06.

	
Certificateholder and Noteholder Information 

	
33

 

	
  

	
SECTION 5.07.

	
Net Deposits 

	
35

 

	
  

	
SECTION 5.08.

	
Tax Monitoring 

	
35

 

	
ARTICLE VI

	
THE DEPOSITOR 

	
36

 

	
  

	
SECTION 6.01.

	
Representations of Depositor 

	
36

 

	
  

	
SECTION 6.02.

	
Liability of Depositor; Indemnities 

	
37

 

	
  

	
SECTION 6.03.

	
Merger or Consolidation of, or Assumption of the Obligations of, Depositor 

	
37

 

	
  

	
SECTION 6.04.

	
Limitation on Liability of Depositor and Others 

	
38

 

	
  

	
SECTION 6.05.

	
Depositor May Own the Certificates or Notes 

	
38

 

	
ARTICLE VII

	
THE SERVICER 

	
38

 

	
  

	
SECTION 7.01.

	
Representations of Servicer 

	
38

 

	
  

	
SECTION 7.02.

	
Indemnities of Servicer 

	
40

 

	
  

	
SECTION 7.03.

	
Merger or Consolidation of, or Assumption of the Obligations of, Servicer 

	
41

 

	
  

	
SECTION 7.04.

	
Limitation on Liability of Servicer and Others 

	
42

 

	
  

	
SECTION 7.05.

	
CFSC Not To Resign as Servicer 

	
42

 

	
ARTICLE VIII

	
DEFAULT 

	
42

 

	
  

	
SECTION 8.01.

	
Servicer Default 

	
42

 

	
  

	
SECTION 8.02.

	
Appointment of Successor Servicer 

	
44

 

	
  

	
SECTION 8.03.

	
Notification to Noteholders and Certificateholders 

	
45

 

	
  

	
SECTION 8.04.

	
Waiver of Past Defaults 

	
45

 

	
ARTICLE IX

	
TERMINATION 

	
45

 

	
  

	
SECTION 9.01.

	
Optional Purchase of All Receivables; Trust Termination 

	
45

 

	
ARTICLE X

	
MISCELLANEOUS PROVISIONS 

	
46

 

	
  

	
SECTION 10.01.

	
Amendment 

	
46

 

	
  

	
SECTION 10.02.

	
Protection of Title to Trust 

	
47

 

	
  

	
SECTION 10.03.

	
Notices 

	
48

 

	
  

	
SECTION 10.04.

	
Assignment 

	
49

 

 

ii

  

  

 

TABLE OF CONTENTS

(continued)

 

Page

 

	
  

	
SECTION 10.05.

	
Limitations on Rights of Others 

	
49

 

	
  

	
SECTION 10.06.

	
Severability 

	
49

 

	
  

	
SECTION 10.07.

	
Separate Counterparts 

	
49

 

	
  

	
SECTION 10.08.

	
Headings 

	
49

 

	
  

	
SECTION 10.09.

	
Governing Law 

	
49

 

	
  

	
SECTION 10.10.

	
Assignment to Indenture Trustee 

	
50

 

	
  

	
SECTION 10.11.

	
Nonpetition Covenants 

	
50

 

	
  

	
SECTION 10.12.

	
Limitation of Liability of Owner Trustee and Indenture Trustee 

	
50

 

	SCHEDULE A -	Schedule of Receivables A-1
	SCHEDULE B -	Location of Receivable Files B-1
	SCHEDULE C -	Servicer Report C-1
	SCHEDULE D -	Trustee Instructions D-1

 

 iii

  

  

SALE AND SERVICING AGREEMENT dated as of [date], among CATERPILLAR FINANCIAL ASSET TRUST 200[_]-[_], a Delaware statutory trust, CATERPILLAR FINANCIAL FUNDING CORPORATION, a Nevada corporation, and CATERPILLAR FINANCIAL SERVICES CORPORATION, a Delaware corporation.

 

WHEREAS the Issuing Entity (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 Depositor (as defined below) has purchased such portfolio of receivables from CFSC and desires to sell such portfolio of receivables to the Issuing Entity; 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 [date], among the Trust, the Depositor, CFSC, as administrator, and [trustee name], 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, $[  ] and, thereafter, $[   ], reduced by all amounts allocable to principal previously distributed to the Certificateholders 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.

 

“Certificateholders” 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.

 

 

2

  

  

 

“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 [date].

 

“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 [date].

 

“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 [date].

 

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

 

“Class A-3 Note Pool Factor” means 1.0000000 as of the Closing Date and, as of the close of business on any Distribution Date thereafter means a seven digit decimal figure equal to the Outstanding Principal Amount of the Class A-3 Notes as of such date (after giving effect 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 [date].

 

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

 

 

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“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 [date].

 

“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 [date].

 

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

 

 “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 [date] 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.

 

 “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 CFSC or the Depositor 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 [_____________], Attention: Caterpillar Financial Asset Trust 200[_]-[_], 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 [______], New York, New York [zip code]; or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Servicer, the Owner Trustee and the Depositor, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders, the Servicer, the Owner Trustee and the Depositor); 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.

 

 

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“Cross-Collateralized Equipment” means, with respect to any Contract, an item of machinery or equipment, other than the related Financed Equipment, 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 percentage equivalent of a fraction equal to all Realized Losses during the period since the Cut-off Date through the end of such Collection Period divided by the Initial Pool Balance.

 

“Cut-off Date” means [date].

 

“Dealer” means each Caterpillar dealer who sold an item of Financed Equipment relating to a Receivable.

 

“Dealer Receivable” means a Receivable originated by a Dealer and acquired by CFSC from such Dealer.

 

“Depositor” means Caterpillar Financial Funding Corporation, a Nevada corporation, and its successors in interest to the extent permitted hereunder.

 

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

 

“Discount Factor” means [  ]% 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 [date].

 

“Eligible Institution” means (a) the corporate trust department of the Indenture Trustee, the Owner Trustee, [   ], as long as it is paying agent under the Trust Agreement or [  ], 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 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, [  ] or [  ] may be considered an Eligible Institution for the purposes of clause (b) of this definition.

 

 

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“Eligible Investments” mean the following (other than any issued by CFSC, the holder of the Certificates or any of their respective Affiliates):

 

 direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America;

 

 demand deposits, time deposits or certificates of deposit of any depository institution 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;

 

 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;

 

 investments in money market funds having a rating from each Rating Agency in the highest investment category granted thereby (including any such funds for which the Indenture Trustee or the Owner Trustee or any of their respective Affiliates is investment manager or advisor);

 

 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);

 

 bankers’ acceptances issued by any depository institution referred to in clause (b) above;

 

 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 (acting as principal) described in clause (b) or (ii) a depository institution the deposits of which are insured by FDIC; or

 

 any other investment that is permitted by each of the Rating Agencies.

 

“Eligible Securities Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as such depository institution shall have a senior unsecured rating of at least investment grade from each Rating Agency in one of its generic rating categories.

 

 

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"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

“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 [date], between the Issuing Entity and the Indenture Trustee, as the same may be amended, modified or supplemented from time to time.

 

“Indenture Trustee” means [   ], 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 $[  ].

 

 

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“Initial Pool Balance” means the Pool Balance as of the Cut-off Date, which is $[  ].

 

“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.

 

“Issuing Entity” means Caterpillar Financial Asset Trust 200[_]-[_], 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 the sum of any amounts expended by the Servicer in connection with such liquidation and any amounts required by law or the applicable Contract 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.

 

 

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“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 (i) for any delinquent Receivable that is not a Liquidated Receivable, a Repossessed 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) for any Liquidated Receivable, it will be assumed that no payments will be received on that Receivable, (iii) for any Repossessed Receivable, the outstanding Contract Balance, reduced by the Write Down Amount, if any, 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 and (iv) for any 180-Day Receivable, the aggregate amount of unpaid Scheduled Payments of such 180-Day Receivable or Repossessed Receivable, as applicable, will be reduced by the Write Down Amount, if any, calculated during the preceding Collection Period and all remaining Scheduled Payments will be assumed to be received as originally scheduled.

 

“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.

 

“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.

 

 

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“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 Depositor 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 such Receivable has not become a Liquidated Receivable or a Repossessed Receivable, 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 Depositor, 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.

 

“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.

 

 

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“Over 60-day Delinquency Percentage” means, for any Distribution Date, the percentage equivalent of a fraction equal to 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.

 

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

 

“Owner Trustee” means [  ] 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 CFSC, the Depositor 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, Repossessed 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 [date], between the Depositor 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 Depositor or CSFC pursuant to Section 3.02, or (iii) purchased by the Servicer pursuant to Section 9.01.

 

“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 Depositor, notice of which designation shall be given to the Indenture Trustee, the Owner Trustee and the Servicer.

 

 

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“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 Depositor, 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 or Repossessed 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 or the applicable Contract 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.

 

“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

 

 

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“Repossessed Receivable” means, with respect to any Collection Period, any Receivable as to which the Financed Equipment securing the defaulted Receivable has been repossessed by the last day of the Collection Period.

 

“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 to the Reserve Account by the Issuing Entity on the Closing Date of $[  ].

 

“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 Certificates.

 

"Securities Act" means the Securities Act of 1933, as amended.

 

“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 [  ].

 

“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 Report” means an Officers’ Certificate of the Servicer delivered pursuant to Section 4.09, substantially in the form of Schedule C 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 [___]% per annum.

 

 

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“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) [ ]% 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 [date], (i) Cumulative Realized Losses for the related Collection Period are less than [___]% and (ii) the Three Month Rolling Over 60-Day Delinquency Percentage for such Distribution Date is less than [___]%, the percentage specified in clause (ii) of this definition of Specified Reserve Account Balance will be [___]% for the [date] Distribution Date and each subsequent Distribution Date, subject to any further reduction in accordance with the terms of this definition;

 

	
·  

	
if on the Distribution Date in [date], (i) Cumulative Realized Losses for the related Collection Period are less than [___]% and (ii) the Three Month Rolling Over 60-Day Delinquency Percentage for such Distribution Date is less than [___]%, the percentage then specified in clause (ii) of this definition of Specified Reserve Account Balance will be reduced by [___]% for the [date] 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 [date], (i) Cumulative Realized Losses for the related Collection Period are less than [___]% and (ii) the Three Month Rolling Over 60-Day Delinquency Percentage for such Distribution Date is less than [___]%, the percentage then specified in clause (ii) of this definition of Specified Reserve Account Balance will be reduced by [___]% for the [date] Distribution Date and each subsequent Distribution Date.

 

provided, further, that on and after the date on which the Depositor 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 Depositor, 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 Issuing Entity to the Depositor in accordance with Section 4.02 and (iii) any Additional Servicing Compensation.

 

 

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“Total Distribution Amount” means, with respect to any Distribution Date, the sum of (i) the Total Available Amount for such Distribution Date and (ii) the amount, if any withdrawn from the Reserve Account and deposited into the Collection Account on such Distribution Date pursuant to Section 5.05(b) on such Distribution Date.

 

“Total Required Payment” means, for each Distribution Date, the amounts payable pursuant to Section 5.04(b)(i) through 5.04(b)(vi).

 

“Transaction Equipment” means, collectively, the Financed Equipment and, if applicable, the Cross-Collateralized Equipment.

 

“Transfer Date” means, with respect to any Distribution Date, the Business Day preceding such Distribution Date.

 

“Trust 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 [date], between the Depositor 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 or Repossessed Receivable, the excess of (i) the Contract Balance of such Receivable as of the last day of the Collection Period during which the Receivable became a 180-Day Receivable or Repossessed Receivable, as applicable, 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.

 

 

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 (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 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, unless the contract requires otherwise.

 

 (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 Issuing Entity’s delivery to or upon the order of the Depositor of (i) Class A-1 Notes with an aggregate Outstanding Principal Amount of $[  ], (ii) Class A-2 Notes with an aggregate Outstanding Principal Amount of $[  ], (iii) Class A-3 Notes with an aggregate Outstanding Principal Amount of $[  ], (iv) Class A-4 Notes with an aggregate Outstanding Principal Amount of $[  ], (v) Class B Notes with an aggregate Outstanding Principal Amount of $[  ] and (vi) the Certificates with a Certificate Balance of $[  ] the Depositor does hereby sell, transfer, assign, set over and otherwise convey to the Issuing Entity, without recourse (subject to the obligations herein), all right, title and interest, whether now owned or hereafter acquired, of the Depositor in and to the following:

 

 (a)   the Receivables, and all monies (including accrued interest) due thereunder on or after the Cut-off Date;

 

 (b)   the Trust Account Property;

 

 

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(c)   the security interests in the Transaction Equipment granted by Obligors pursuant to the Receivables, the Transaction Equipment and all Liquidation Proceeds;

 

(d)           all proceeds of repossessed or returned Transaction Equipment;

 

(e)           all 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;

 

(f)           the Purchase Agreement, including the right of the Depositor to cause CFSC to repurchase Receivables from the Depositor as provided therein;

 

(g)           all proceeds from recourse to, or other payments by, Dealers on Receivables;

 

(h)           cash in the amount of the Reserve Account Initial Deposit; and

 

(i)           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 Depositor to the Issuing Entity as provided in this Agreement be, and be construed as, a sale of the Receivables and the other property described above by the Depositor to the Issuing Entity.  It is, further, not the intention of the parties that such conveyance be deemed the grant of a security interest in the Receivables or the other property described above by the Depositor to the Issuing Entity to secure a debt or other obligation of the Depositor.  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 Depositor, 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 Depositor hereby grants to the Issuing Entity a security interest in all of the Depositor’s right, title, and interest, whether now owned or hereafter acquired, in and to the property described in clauses (a) through (i) above, as security for the obligations of the Depositor hereunder.  In connection herewith, the Issuing Entity (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 Issuing Entity pursuant to this Section 2.01 shall also be an assignment of the security interest created hereby.  Each of the Depositor and the Issuing Entity 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 agreement relating to the Notes and the other Basic Documents.  Upon the delivery to or upon the order of the Depositor of the Notes and the Certificates, the ownership of each Receivable and the contents of the related Receivable File is vested in the Issuing Entity, subject only to the lien of the Indenture.

 

 

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 SECTION 2.03.   Books and Records.

 

The transfer of each Receivable shall be reflected on the Depositor’s balance sheets and other financial statements prepared in accordance with generally accepted accounting principles as a transfer of assets by the Depositor to the Issuing Entity.  The Depositor 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 Issuing Entity.

 

ARTICLE III

 

THE RECEIVABLES

 

SECTION 3.01.   Representations and Warranties of Depositor.  The Depositor hereby makes the following representations and warranties as to the Receivables on which the Issuing Entity 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 Issuing Entity and the grant of a security interest therein  to the Indenture Trustee pursuant to the Indenture.

 

(a)   Title.  It is the intention of the Depositor that the transfer and assignment herein contemplated constitute a sale of the Receivables from the Depositor to the Issuing Entity 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 Depositor under any bankruptcy law.  No Receivable has been sold, transferred, assigned or pledged by the Depositor to any Person other than the Issuing Entity.  Immediately prior to the transfer and assignment herein contemplated, the Depositor 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 Issuing Entity 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 Issuing Entity pursuant to this Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Depositor has not authorized the filing of and is not aware of any financing statement against the Depositor that includes a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Issuing Entity hereunder or that has been terminated.  The Depositor is not aware of any judgment or tax lien filings against the Depositor.  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 by the Depositor to any Person other than the Issuing Entity or the Indenture Trustee.

 

 

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(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 Issuing Entity, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Depositor.

 

(d)    Characterization of Receivables.  The Receivables constitute “tangible chattel paper” within the meaning of the UCC.

 

(e)    All Actions Taken.  On the Closing Date all original executed copies of each Contract that constitute or evidence the Receivables shall be deemed to have been delivered to the Servicer, in its capacity as custodian, for all purposes hereunder.  The Depositor 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 Issuing Entity hereunder.  All actions necessary in any jurisdiction to be taken to give (i) the Issuing Entity a first priority perfected ownership or security 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 Nevada Secretary 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 Servicer as custodian on or prior to the Closing Date.

 

(g)   Perfection of Security Interest in Financed Equipment.  The Depositor 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 Depositor of this Agreement or any other Basic Document, the performance by the Depositor of the transactions contemplated by this Agreement or any other Basic Document and the fulfillment by the Depositor 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 Depositor or the Issuing Entity or upon the collectability of any Receivable or upon the ability of the Depositor to perform its obligations under this Agreement).

 

SECTION 3.02.    Repurchase by Depositor or CFSC Upon Breach.

 

(a)    The Depositor, 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 Depositor’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 Depositor or receipt by the Depositor of written notice from the Owner Trustee or the Servicer of such breach, the Depositor shall be obligated, and, if necessary, the Depositor 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 Depositor’s option, as of the last day of the first month following the month of the discovery).

 

 

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(b)    In consideration of the repurchase of the Receivable, the Depositor 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 Depositor 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 Depositor of the Purchase Amount from CFSC.  Subject to the provisions of Section 6.02, the sole remedy of the Issuing Entity, the Owner Trustee, the Indenture Trustee, the Noteholders or the Certificateholders 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 Depositor to repurchase Receivables pursuant to this Section, subject to the conditions contained herein, or to enforce CFSC’s obligation, if any, to the Depositor 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.  To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Depositor and the Issuing Entity, as their interests may appear, hereby revocably appoint the Servicer, and the Servicer hereby accepts such appointment, to act for the benefit of the Issuing Entity and the Indenture Trustee as custodian of the documents described in the definition of Receivable File, which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuing Entity.

 

SECTION 3.04.    Duties of Servicer.

 

(a)    Receivable Files.  The Servicer, in its capacity as custodian, shall hold the Receivable Files for the benefit of the Issuing Entity and the Indenture Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to each Receivable File as shall enable itself and the Issuing Entity to comply with this Agreement.  The Depositor will cause the Servicer, in its capacity as custodian, to deliver a written acknowledgment that the Servicer, in its capacity as custodian, is holding the Receivable Files solely on behalf and for the benefit of the Issuing Entity and the Indenture Trustee.  In performing its duties as custodian, 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 Issuing Entity or the Indenture Trustee to verify the accuracy of the Servicer's record keeping.  The Servicer shall promptly report to the Issuing Entity and the Indenture Trustee any failure on its part to hold the Receivable Files or 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 Issuing Entity, the Owner Trustee or the Indenture Trustee of the Receivable Files.  Within 30 days from the Closing Date, the Servicer shall cause the Receivable Files to be removed from the State of Tennessee and delivered to the address listed in Schedule B.

 

 

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(b)   Maintenance of and Access to Records.  The Servicer shall maintain each Receivable File at its office located at 4040 S. Eastern Ave Suite 342, Las Vegas Nevada 89119, or at such other offices in the State of Nevada as the Servicer shall designate from time to time after giving the Issuing Entity, the Depositor, each Rating Agency and the Indenture Trustee prior written notice.  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 Receivable Files and 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 Issuing Entity (i) all file stamped copies of UCC financing statements evidencing the security interest of the Issuing Entity in Transaction Equipment and (ii) the Receivable Files and any other documents that CFSC or the Depositor 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 Issuing Entity 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.

 

(d)    Indemnification.  The Servicer, as custodian, shall indemnify the Issuing Entity, the Owner Trustee and the Indenture Trustee for any and all liabilities, obligations, losses, damages, payments, costs, or expenses of any kind whatsoever that may be imposed on, incurred or asserted against the Issuing Entity, the Owner Trustee or the Indenture Trustee as the result of any act or omission in any way relating to the maintenance and custody by the Servicer, as custodian, of the Receivable Files; provided, however, that the Servicer shall not be liable for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Issuing Entity, the Owner Trustee or the Indenture Trustee.

 

(e)    Term of Appointment as Custodian.  The Servicer's appointment as custodian shall continue in full force and effect until terminated pursuant to this Section 3.04(e) or until this Agreement shall be terminated.  If the Servicer shall resign as Servicer under Section 7.05 or if all of the rights and obligations of the Servicer shall have been terminated under Section 8.01, the appointment of the Servicer as custodian may be terminated by the Indenture Trustee or by the Holders of Notes evidencing not less than 25% of the Outstanding Principal Amount of the Notes, or if no Notes are Outstanding, either the Owner Trustee or the Certificateholders, in the same manner as the Indenture Trustee or such Holders may terminate the rights and obligations of the Servicer under Section 8.01.  As soon as practicable after any termination of such appointment, the Servicer shall, at its expense, deliver and/or electronically communicate the Receivable Files to the Issuing Entity or the Issuing Entity's agent at such place or places as the Issuing Entity may reasonably designate.  Notwithstanding the termination of the Servicer as custodian, the Issuing Entity agrees that upon any such termination, the Issuing Entity shall provide, or cause its agent to provide, access to the Receivable Files to the Servicer for the purpose of carrying out its duties and responsibilities with respect to the servicing of the Receivables hereunder.

 

 

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(f)    Release of Receivable Files. From time to time, the Servicer, as custodian, is hereby authorized to remove the Receivable File related to any Receivable or the specific documents identified in such request by the Servicer from the address listed in Schedule B.  The Servicer shall return the Receivable File, or such other documents which have been removed by the Servicer, to the address listed in Schedule B when Servicer's need therefor no longer exists, unless the Receivable shall be satisfied in full or liquidated.  The Servicer shall return a Receivable File removed by it within 30 days of such removal and if such Receivable File has not been returned to the address listed in Schedule B within such 30 day period, the Servicer shall repurchase the related Receivable pursuant to Section 4.07.

 

ARTICLE IV

 

ADMINISTRATION AND SERVICING OF RECEIVABLES

 

SECTION 4.01.    Duties of Servicer.  The Issuing Entity 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 servicer reports 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 Issuing Entity, the Owner Trustee, the Indenture Trustee, the Certificateholders 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 Issuing Entity (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 Issuing Entity, the Indenture Trustee, the Certificateholders 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 or cause to be executed and deliver all certificates or other documents required to be delivered by the Issuing Entity 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 and of each Repossessed Receivable.

 

 

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SECTION 4.02.    Collection of Receivable Payments.

 

(a)    The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due and shall follow such collection procedures as it follows with respect to all comparable machinery receivables that it services for itself or others.  The Servicer shall not reduce the principal balance of, reduce the APR of, reduce the aggregate amount of Scheduled Payments or the amount of any Scheduled Payment due under any Receivable, release or modify the 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 Issuing Entity 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 Depositor and such Liquidated Receivable shall be assigned by the Issuing Entity to the Depositor.

 

(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 5.03).  The new receivable created by the refinancing shall not be property of the Issuing Entity.  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 Depositor, the Indenture Trustee, the Owner Trustee, the Noteholders, or the Certificateholders, 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 Issuing Entity, 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.

 

 

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SECTION 4.04.    Physical Damage Insurance.  The Servicer shall, in accordance with its customary servicing procedures, require that each Obligor shall have obtained physical damage insurance covering the Transaction Equipment as of the execution of the Receivable.

 

SECTION 4.05.    Maintenance of Security Interests in Financed Equipment.  The Servicer shall, in accordance with its customary servicing procedures, take such steps as are necessary to maintain perfection of the security interest created by each Receivable (including each Receivable on which a governmental entity is the Obligor) in the related Financed Equipment.  The Servicer is hereby authorized to take such steps as are necessary to re-perfect such security interest or to maintain such perfected security interest on behalf of the Issuing Entity 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 Issuing Entity, the Indenture Trustee, the Certificateholders or the Noteholders in any Receivable; or (iii) modify or refinance a Receivable except in accordance with the terms of Section 4.02.

 

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 Depositor 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), 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 Issuing Entity, the Indenture Trustee, the Certificateholders 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 Issuing Entity, the Owner Trustee, the Indenture Trustee, the Certificateholders 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 Depositor, the Indenture Trustee, the Owner Trustee, the Noteholders, or the Certificateholders, 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.

 

 

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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 5.07.

 

SECTION 4.09.    Servicer Report.  On each Determination Date, the Servicer shall deliver to the Administrator, the Owner Trustee, the Paying Agent as defined in the Trust Agreement, the Indenture Trustee and the Depositor, with a copy to the Rating Agencies, a Servicer Report containing all information necessary to make the distributions pursuant to Sections 5.05, 5.06 and 5.07 for the Collection Period preceding the date of such Servicer Report.  The Servicer Report shall be substantially in the form of Schedule C (or such other form as is acceptable to the Indenture Trustee, the Owner Trustee and the Servicer).  Neither the Owner Trustee nor the Indenture Trustee shall be required to determine, confirm or recalculate the information contained in the Servicer Report.  Receivables to be purchased by the Servicer or to be repurchased by the Depositor or CSFC 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 the earlier of (1) April 30 of each year (commencing April 30, 20[  ]) or (2) with respect to any calendar year during which the Issuing Entity's Annual Report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, the date on which the Annual Report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, a servicer compliance statement, signed by an authorized officer of the Servicer, as described in Item 1123 of Regulation AB, to the effect that:

 

(i)    A review of the Servicer’s activities during the preceding 12-month period ended December 31 (or in the case of the initial statement, the period from the Closing Date to December 31) and of its performance under this Agreement has been made under such officer’s supervision; and

 

(ii)    To the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Agreement in all material respects throughout the reporting period or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof.

 

 

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(b)    The Servicer shall use commercially reasonable efforts to obtain from all other parties participating in the servicing function any additional certifications required under Item 1123 of Regulation AB to the extent required to be included in the Issuing Entity's Annual Report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a breach of the Servicer's duties hereunder if any such party fails to deliver such a certification.

 

(c)    The Indenture Trustee shall send a copy of such certificate and the accountants' attestation referred to in Section 4.11 to the Rating Agencies.  A copy of such certificate and the accountants' attestation 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.

 

(d)    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’ Attestation.  In order to confirm that the servicing of the Receivables has been conducted in compliance with the terms of this Agreement and to comply with the applicable provisions of Regulation AB, the Servicer shall deliver or shall cause a firm of independent certified public accountants, which may also render other services to the Servicer, the Depositor or CFSC, to deliver to the Owner Trustee and the Indenture Trustee on or before the earlier of (a) April 30 of each year (commencing April 30, 20[  ]) or (b) with respect to any calendar year during which the Issuing Entity's Annual Report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, the date on which the Annual Report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, the attestation required under Item 1122(b) of Regulation AB.

 

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 Certificateholders and the Noteholders.

 

SECTION 4.13.    Reports to the Commission.

 

(a)    The Servicer shall cause to be filed with the Commission any periodic reports required to be filed by the Issuing Entity under the provisions of the Exchange Act, and the rules and regulations of the Commission thereunder including, without limitation, reports on Form 10-K, Form 10-D and Form 8-K.  The Depositor shall, at its expense, cooperate in any reasonable request made by the Servicer in connection with such filings.

 

(b)    Any Form 10-K filed with the Commission in connection with this Section 4.13 shall include, with respect to the Notes:

 

(i)      A certification, signed by the senior officer in charge of the servicing functions of the Servicer, in the form required or permitted by the Commission (the “Form 10-K Certification”), in compliance with Rules 13a-14 and 15d-14 under the Exchange Act and any additional directives of the Commission.

 

 

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(ii)      A report regarding its assessment of compliance during the preceding calendar year with all applicable servicing criteria set forth in Item 1122(d) of Regulation AB with respect to transactions involving the Servicer that are backed by the same types of assets as those backing the Notes, as well as similar reports on assessment of compliance received from other parties participating in the servicing function as required by Item 1122(a) of Regulation AB.

 

(iii)    With respect to each assessment report described immediately above, a report by a registered public accounting firm that attests to, and reports on, the assessment made by the asserting party, as set forth in relevant Commission regulations, as described in Regulation 1122(b) of Regulation AB and Section 4.11.

 

(iv)     The servicer compliance statement required to be delivered pursuant Section 4.10.

 

(c)    The Servicer shall use commercially reasonable efforts to obtain from all other parties participating in the servicing function any required assessment report and related accountants' attestation to the extent required to be included in the Issuing Entity's Annual Report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a breach of the Servicer's duties hereunder if any such party fails to deliver such a report or attestation.

 

ARTICLE V

 

DISTRIBUTIONS; RESERVE ACCOUNT;

CERTIFICATEHOLDER AND NOTEHOLDER INFORMATION

 

SECTION 5.01.    Establishment of Trust Accounts.

 

 (a) (i)           The Servicer, for the benefit of the Noteholders and the Certificateholders, shall establish and maintain in the name of the Indenture Trustee an Eligible Securities Account (the “Collection Account”), which is [   ] Account #[    ] 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 Certificateholders (the “Principal Distribution Account”), which is [   ] Account #[   ] as of the Closing Date.

 

(ii)     The Servicer, for the benefit of the Noteholders and the Certificateholders, shall establish and maintain in the name of the Indenture Trustee an Eligible Securities Account (the “Reserve Account”), which is [   ] Account #[    ] 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 arising from such investment in Eligible Investments (other than losses from nonpayment of investments in obligations of the institution acting as Indenture Trustee).  All such Eligible Investments shall be held by the Indenture Trustee for the benefit of the applicable Noteholders and, if applicable, the Certificateholders. 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.

 

 

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(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 [   ] 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 [   ], 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 indicate by book-entry that the financial asset related to 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 Depositor, the Servicer or the Issuing Entity 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

 

 

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(C)  Upon release of the lien of the Indenture Trustee under the Indenture in accordance with the terms thereof, each of the Trust Accounts shall be put in the name of the Issuing Entity and the Issuing Entity 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 Issuing Entity monthly reflecting activity for each account created hereunder for the preceding month.  Although the Issuing Entity recognizes that it may obtain a broker confirmation at no additional cost, the Issuing Entity 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 Depositor 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 Depositor 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, CFSC or the Depositor separately.

 

 

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(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 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 Certificateholders.

 

(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 (and any funds are to be distributed pursuant to Section 6.14(d) of the Indenture), 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;

 

 

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(viii)   to the Principal Distribution Account, the Regular Principal Distribution Amount;

 

(ix)    pro rata, to the Indenture Trustee under the Indenture, all unpaid Indenture Trustee’s fees and expenses, and to the Issuing Entity, the amount of any state taxes payable by the Issuing Entity; 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 Schedule D (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 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.

 

 

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SECTION 5.05.     Reserve Account.

 

(a)    On the Closing Date, the Issuing Entity shall deposit the Reserve Account Initial Deposit into the Reserve Account using the cash supplied to it pursuant to Section 2.01(h).  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 Depositor may eliminate the Reserve Account and replace it with an alternative arrangement.

 

SECTION 5.06.    Certificateholder and Noteholder Information.  On each Distribution Date, the Indenture Trustee shall forward or make available to each Noteholder of record and the Administrator shall forward to each Certificateholder of record pursuant to the Trust Agreement the Servicer Report delivered by the Servicer pursuant o Section 4.09.  Such Servicer Report shall set 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 Certificates, to the extent applicable:

 

 

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(i)    the amount to be deposited to the Principal Distribution Account and the amounts to be paid to the Noteholders and the Certificateholders 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 CFSC, the Depositor 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 Certificateholders pursuant to Section 5.02(a)(i) of the Trust Agreement; and

 

(xvii)   the Certificate Balance for such Distribution Date.

 

Each amount set forth pursuant to paragraph (i) or (ii) 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 5.07.    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 Certificateholders as if the Servicing Fee and Administration Fee were paid individually.

 

SECTION 5.08.    Tax Monitoring.  The Servicer shall monitor whether any state taxes are payable by the Issuing Entity and shall notify the Indenture Trustee of the amount and due date of such taxes in a timely manner.

 

 

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ARTICLE VI

 

THE DEPOSITOR

 

SECTION 6.01.    Representations of Depositor.  The Depositor makes the following representations on which the Issuing Entity is deemed to have relied in acquiring the Receivables.  The representations speak as of the execution and delivery of this Agreement and shall survive the sale of the Receivables to the Issuing Entity and the grant of a security interest therein to the Indenture Trustee pursuant to the Indenture.

 

(a)    Organization and Good Standing.  The Depositor 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 Depositor 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 Depositor or the Issuing Entity.

 

(c)    Power and Authority.  The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the Receivables and other property to be sold and assigned to and deposited with the Issuing Entity and has duly authorized such sale and assignment to the Issuing Entity by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary corporate action.

 

(d)    Binding Obligation.  This Agreement constitutes a legal, valid and binding obligation of the Depositor 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 by the Depositor of the transactions contemplated by this Agreement and the fulfillment by the Depositor 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 Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is 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 Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

 

 

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(f)    No Proceedings.  There are no proceedings or investigations pending, or to the Depositor’s best knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties:  (i) asserting the invalidity of this Agreement, the Indenture, the Notes, the Certificates or any of the other Basic Documents, (ii) seeking to prevent the issuance of the Notes or the Certificates 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 Depositor of its obligations under, or the validity or enforceability of, this Agreement, the Indenture, the Notes, the Certificates 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 Certificates.

 

SECTION 6.02.    Liability of Depositor; Indemnities.  The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement.

 

(a)    The Depositor shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee and the Indenture Trustee and their officers, directors and agents from and against any taxes that may at any time be asserted against the Issuing Entity, the Owner Trustee, or the Indenture Trustee or their respective officers, directors, and agents with respect to the sale of the Receivables to the Issuing Entity or the issuance and original sale of the Certificates and the Notes, including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes (but, in the case of the Issuing Entity, 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 Depositor shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee and the Indenture Trustee and their officers, directors, and agents from and against any loss, liability or expense incurred by reason of (i) the Depositor’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 Depositor’s or the Issuing Entity’s violation or alleged violation of federal or state securities laws in connection with the offering and sale of the Notes and the Certificates.

 

Indemnification under this Section shall survive the resignation or removal of the Owner Trustee 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 Depositor 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 Depositor, without interest.

 

SECTION 6.03.    Merger or Consolidation of, or Assumption of the Obligations of, Depositor.  Any Person (a) into which the Depositor may be merged or consolidated, (b) which may result from any merger or consolidation to which the Depositor shall be a party or (c) which may succeed to the properties and assets of the Depositor substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Depositor under this Agreement, shall be the successor to the Depositor 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 Depositor shall have delivered to the Owner Trustee and the Indenture Trustee an Officers’ Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction and (iv) the Depositor 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 Issuing Entity 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 Issuing Entity 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.

 

 

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SECTION 6.04.    Limitation on Liability of Depositor and Others.  The Depositor and any director or officer or employee or agent of the Depositor 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 Depositor 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.    Depositor May Own the Certificates or Notes.  The Depositor and any Affiliate (other than CFSC) thereof may in its individual or any other capacity become the owner or pledgee of the Certificates or Notes with the same rights as it would have if it were not the Depositor 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 Issuing Entity 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 Issuing Entity and the grant of a security interest therein to the Indenture Trustee pursuant to the Indenture.

 

 

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

 

(b)    Power and Authority.  The Servicer has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Servicer by all necessary corporate action.

 

(c)    Binding Obligation.  This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable in accordance with its terms, except that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and the remedy of specific performance and injunctive relief may be subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

(d)    No Violation.  The consummation by the Servicer of the transactions contemplated by this Agreement and the fulfillment by the Servicer of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the 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 is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than 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 Certificates or any of the other Basic Documents; (ii) seeking to prevent the issuance of the Notes or the Certificates 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 Certificates 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 Certificates.

 

(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 Issuing Entity 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 Issuing Entity, the Owner Trustee, the Indenture Trustee, the Noteholders, the Certificateholders and the Depositor and any of the officers, directors and agents of the Issuing Entity, the Owner Trustee, the Indenture Trustee and the Depositor 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 Depositor or the Issuing Entity) thereof of any Transaction Equipment.

 

(b)    The Servicer shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee, the Indenture Trustee and the Depositor 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 Issuing Entity or the Depositor, not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Issuing Entity or the issuance and original sale of the Certificates and the Notes, or asserted with respect to ownership of the Receivables, or Federal or other income taxes arising out of distributions on the Certificates or the Notes) and (ii) costs and expenses in defending against the same.

 

(c)    The Servicer shall indemnify, defend and hold harmless the Issuing Entity, the Owner Trustee, the Indenture Trustee, the Depositor, the Certificateholders and the Noteholders and any of the officers, directors and agents of the Issuing Entity, the Owner Trustee, the Indenture Trustee and the Depositor 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 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, and in the case of the Indenture Trustee, the Indenture, except to the extent that any such cost, expense, loss, claim, damage or liability:  (i) shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Owner Trustee or the Indenture Trustee, as applicable; or (ii) shall arise from the breach by the Owner Trustee of any of its representations or warranties set forth in Section 7.03 of the Trust Agreement.

 

 

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(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 Issuing Entity or the issuance and original sale of the Certificates and the Notes, or Federal or other income taxes imposed on the Issuing Entity because of its classification or reclassification for tax purposes, or Federal or other income taxes arising out of distributions on the Certificates 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 Issuing Entity, the Noteholders or the Certificateholders, 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 Certificateholders 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:

 

 

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(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;

 

(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 Certificateholders 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 by Certificateholders evidencing not less than 25% of the Certificate Balance; 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 Certificateholders evidencing not less than 25% of the Certificate Balance, 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 that accrued prior to such termination) 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 Certificates or the Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such successor Servicer as may be appointed under Section 8.02; and, without limitation, the Indenture Trustee and the Owner Trustee are hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and related documents, or otherwise.  The predecessor Servicer shall cooperate with the successor Servicer, the Indenture Trustee and the Owner Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for deposit, or shall thereafter be received by it with respect to a Receivable.  All reasonable costs and expenses (including reasonable attorneys’ fees) incurred in connection (x) with transferring the computer or other records to the successor Servicer in the form requested and (y) amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses.  Upon receipt of notice of the occurrence of a Servicer Default, the Owner Trustee shall give notice thereof to the Rating Agencies.

 

 

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SECTION 8.02.    Appointment of Successor 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, 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.

 

 

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SECTION 8.03.    Notification to Noteholders and Certificateholders.  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 Certificateholders and the Indenture Trustee shall give prompt written notice thereof to Noteholders and the Rating Agencies.

 

SECTION 8.04.    Waiver of Past Defaults.  The Holders of Class A Notes evidencing more than a 50% of the Outstanding Principal Amount of such Notes or, if no Class A Notes are Outstanding, the Holders of Class B Notes evidencing more than 50% of the Outstanding Principal Amount of such Notes or, if no Notes are Outstanding, Certificateholders evidencing more than 50% of the Certificate Balance, may, on behalf of all Noteholders and the Certificateholders, 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.

 

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; and provided further that the Servicer shall not purchase the Owner Trust Estate if the aggregate Purchase Amount exceeds the fair market value of the Owner Trust Estate as determined by the Servicer in good faith.

 

(b)    Notice of any termination of the Issuing Entity shall be given by the Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable after the Servicer has received notice thereof.

 

(c)   Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders will succeed to the rights of the Noteholders hereunder (other than the right to receive payments under Section 5.05(b)), and the Owner Trustee will succeed to the rights of, and assume the obligations of, the Indenture Trustee pursuant to this Agreement.

 

 

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ARTICLE X

 

MISCELLANEOUS PROVISIONS

 

SECTION 10.01.    Amendment.  The Agreement may be amended by the Depositor, the Servicer and the Issuing Entity, with the consent of the Indenture Trustee, but without the consent of any of the Noteholders or the Certificateholders, 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 Certificateholders; 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 Certificateholders or the federal tax characterization of the Notes.

 

This Agreement may also be amended from time to time by the Depositor, the Servicer and the Issuing Entity, 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 Certificateholders evidencing more than 50% of the Certificate Balance, 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 Certificateholders; 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 Certificateholders, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to the Certificateholders.

 

It shall not be necessary for the consent of the Certificateholders 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.

 

 

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SECTION 10.02.    Protection of Title to Trust.

 

(a)    The Depositor shall take all actions necessary to perfect, and maintain perfection of, the interests of the Issuing Entity and the Indenture Trustee in the Receivables.  In the event it is determined that the Indenture Trustee’s or the Issuing Entity’s interests are no longer perfected, such actions shall include but shall not be limited to the enforcement of Section 3.04 of this Agreement and of Section 6.02 of the Purchase Agreement.  In addition, without limiting the rights of the Indenture Trustee or the Issuing Entity specified in the immediately preceding sentence, the Depositor 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 perfect, maintain, and protect the interest of the Issuing Entity and the interest of the Indenture Trustee in the Receivables and in the proceeds thereof.  The Depositor 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 Depositor 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 security interest of the Issuing Entity or the Indenture Trustee in the Receivables 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 Issuing Entity (which interest has been acquired from the Depositor) and the Indenture Trustee in such Receivable and that such Receivable is owned by the Issuing Entity and a security interest therein has been granted to the Indenture Trustee.  Indication of the Issuing Entity’s interest (which interest has been acquired from the Depositor) 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 Depositor or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest in receivables comparable with the Receivables, to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Issuing Entity and a security interest therein has been granted to the Indenture Trustee.

 

 

47

  

  

 

(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 Reports furnished before such request indicating removal of Receivables from the Collateral.

 

(i)    The Depositor 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 Issuing Entity 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 Issuing Entity 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 Depositor 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 Depositor, the Servicer, the Issuing Entity, 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 Depositor, to Caterpillar Financial Funding Corporation, 4040 S. Eastern Avenue, Suite 344, 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) in the case of the Issuing Entity 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/RMBS Monitoring Department, 7 World Trade Center, 250 Greenwich Street, 25th Floor, 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.

 

 

48

  

  

 

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 Depositor or the Servicer.

 

SECTION 10.05.    Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Depositor, the Servicer, the Issuing Entity, the Owner Trustee, the Certificateholders, 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.

 

 

49

  

  

 

SECTION 10.10.    Assignment to Indenture Trustee.  The Depositor hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuing Entity to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuing Entity in, to and under the Receivables and the other property constituting the Owner Trust Estate or the assignment of any or all of the Issuing Entity’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 Depositor, the Owner Trustee, the Securities Intermediary and the Indenture Trustee shall not, prior to the date which is one year and one day after the payment in full of the Notes, acquiesce, petition or otherwise invoke or cause the Issuing Entity to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuing Entity 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 Issuing Entity or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuing Entity.

 

(b)    Notwithstanding any prior termination of this Agreement, the Servicer, the Issuing Entity, the Owner Trustee, the Securities Intermediary and the Indenture Trustee shall not, prior to the date which is one year and one day after the payment in full of the Notes, acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor 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 Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor.

 

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 [   ] not in its individual capacity but solely in its capacity as Owner Trustee of the Issuing Entity, and in no event shall [   ] in its individual capacity or, except as expressly provided in the Trust Agreement, as owner trustee of the Issuing Entity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuing Entity 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 Issuing Entity.  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 Issuing Entity 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.

 

 

50

  

  

 

(b)    Notwithstanding anything contained herein to the contrary, this Agreement has been acknowledged and accepted by [   ] not in its individual capacity but solely as Indenture Trustee and Securities Intermediary, and in no event shall [   ] have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuing Entity 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 Issuing Entity.

 

[Signature Page Follows]

 

 

51

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the date first above written.

 

 

	 	 	

CATERPILLAR FINANCIAL ASSET TRUST 200[_]-[_]

	 	 	 
	 By:	 	

[   ], not in its individual capacity but solely as Owner 

Trustee on behalf of the Issuing Entity,

	 	 	 
	 	 	 
	 By:	 	                       
	 	 	 Name:
	 	 	 Title:
	 	 	 
	 	 	 
	 	 	

CATERPILLAR FINANCIAL FUNDING

    CORPORATION, as Depositor,

	 	 	 
	 	 	 
	By:	 	                       
	 	 	 Name:
	 	 	 Title:
	 	 	 
	 	 	 
	 	 	CATERPILLAR FINANCIAL SERVICES 

    CORPORATION, as Servicer

 

	 	 	 
	By:	 	                       
	 	 	 Name:
	 	 	 Title:
	 	 	 

 

Acknowledged and Accepted:

[   ],

  not in its individual capacity but only as

  Indenture Trustee and

  Securities Intermediary

By:                                                                               

Name:

Title:

Acknowledged and Accepted:

[   ],

  not in its individual capacity but solely

  as Owner Trustee of the Issuing Entity,

By:                                                                             

Name:

Title:

 

Sale and Servicing Agreement

 

 

  

  

  

 

SCHEDULE A

 

SCHEDULE OF RECEIVABLES

 

 

 

 A-1

  

  

SCHEDULE B

 

LOCATION OF RECEIVABLE FILES

 

4040 S. Eastern Avenue, Suite 342

Las Vegas, Nevada 89119

 

 

 

 

B-1

  

  

 

SCHEDULE C

 

SERVICER REPORT

 

The undersigned hereby certify that (i) they are, respectively, a duly elected [title] and [title] of Caterpillar Financial Services Corporation and (ii) this Servicer Report complies with the requirements of, and is being delivered pursuant to, Section 4.09 and Section 5.07 of the Sale and Servicing Agreement (the “Sale and Servicing Agreement”) dated as of [date] between Caterpillar Financial Asset Trust 200[_]-[_], Caterpillar Financial Funding Corporation and Caterpillar Financial Services Corporation.

 

 

 

	Dated:               	 	                    
	 	 	 Name:
	 	 	 Title:
	 	 	 
	 	 	 
	 	 	                   
	 	 	 Name:
	 	 	 Title:

                                                

 

C-1  

  

  

 

	
Caterpillar Financial Asset Trust 20[  ]-[ ]

	  	  
	
SERVICER REPORT

	  	  
	  	  	  
	
Record Date

	  	  
	
Distribution Date

	  	  
	
Transaction Month

	
1

	  
	  	  	  
	
Collection Period Month Begin

	  	  
	
Collection Period Month End

	  	  
	
Previous Payment Date (or Closing Date)

	  	  
	
Actual Days in Accrual Period

	
___

	  
	  	  	  
	
ORIGINAL DEAL PARAMETERS

	  	  
	
Initial Note Value

	  	  
	
Initial Aggregate Contract Balance

	  	  
	
Number of Contracts

	  	  
	
Weighted Average Annual Percentage Rate

	  	  
	
Weighted Average Remaining Term

	  	  
	
Annual Servicing Fee Rate

	  	  
	
Reserve Account Initial Deposit

	  	  
	
Specified Reserve Account Balance

	  	  
	
Class A-1 Note Original Principal Balance

	  	  
	
Class A-1 Note Rate

	  	  
	
Class A-1 Note Final Scheduled Distribution Date

	  	  
	
Class A-1 CUSIP Number

	  	  
	
Class A-2 Note Original Principal Balance

	  	  
	
Class A-2 Note Rate

	  	  
	
Class A-2 Note Final Scheduled Distribution Date

	  	  
	
Class A-2 CUSIP Number

	  	  
	
Class A-3 Note Original Principal Balance

	  	  
	
Class A-3 Note Rate

	  	  
	
Class A-3 Note Final Scheduled Distribution Date

	  	  
	
Class A-3 CUSIP Number

	  	  
	
Class A-4 Note Original Principal Balance

	  	  
	
Class A-4 Note Rate

	  	  
	
Class A-4 Note Final Scheduled Distribution Date

	  	  
	
Class A-4 CUSIP Number

	  	  
	
Class B Note Original Principal Balance

	  	  
	
Class B Note Rate

	  	  
	
Class B Note Final Scheduled Distribution Date

	  	  
	
Class B CUSIP Number

	  	  
	
Certificate Balance

	  	  
	  	  	  
	
INPUTS FROM PREVIOUS PERIOD SERVICER REPORT

	  	  
	
Note Value

	  	  
	
Aggregate Contract Balance

	  	  
	
Number of Contracts

	  	  
	
Weighted Average Annual Percentage Rate

	  	  
	
Weighted Average Remaining Term

	  	  
	
Reserve Account Balance

	  	  
	
Class A-1 Note Outstanding Principal Balance

	  	  

 

 

C-2

  

  

 

	
Class A-1 Note Interest Shortfall

	  	  
	
Class A-2 Note Outstanding Principal Balance

	  	  
	
Class A-2 Note Interest Shortfall

	  	  
	
Class A-3 Note Outstanding Principal Balance

	  	  
	
Class A-3 Note Interest Shortfall

	  	  
	
Class A-4 Note Outstanding Principal Balance

	  	  
	
Class A-4 Note Interest Shortfall

	  	  
	
Class B Note Outstanding Principal Balance

	  	  
	
Class B Note Interest Shortfall

	  	  
	
Servicing Fee Shortfall

	  	  
	  	  	  
	
CURRENT COLLECTION PERIOD ACTIVITY

	  	  
	
Total Interest Collections

	  	  
	
Total Principal Collections

	  	  
	
Residual Collections

	  	  
	
Warranty Repurchases Contracts

	  	  
	
Administrative Repurchases

	  	  
	
Liquidation Proceeds

	  	  
	
Reserve Account Reinvestment Income

	  	  
	
Total Available Amount

	  	  
	  	  	  
	
Beginning Note Value

	  	  
	
Ending Note Value

	  	  
	
Beginning Aggregate Contract Balance

	  	  
	
Ending Aggregate Contract Balance

	  	  
	
Number of Contracts at Beginning of Period

	  	  
	
Number of Contracts at End of Period

	  	  
	
Weighted Average Annual Percentage Rate

	  	  
	
Weighted Average Remaining Term

	  	  
	
Cumulative Prepayment Rate

	  	  
	
Aggregate Scheduled Amounts 31-60 days past due

	  	  
	
Aggregate Scheduled Amounts 61-90 days past due

	  	  
	
Aggregate Scheduled Amounts 91-120 days past due

	  	  
	
Aggregate Scheduled Amounts 121 days or more past due

	  	  
	
Net Losses on Liquidated Receivables this Period

	  	  
	
Repossessed Equipment not Sold or Reassigned (Beginning)

	  	  
	
Repossessed Equipment not Sold or Reassigned (End)

	  	  
	  	  	  
	
CALCULATION OF DISTRIBUTABLE AMOUNTS

	  	  
	
Servicing Fee Due

	  	  
	
Is CFSC or Affiliate Servicer (Yes / No)?

	  	  
	
Has Reserve Account Reached the Specified Reserve Account Balance (Yes / No)?

	  	  
	  	  	  
	
Administration Fee

	  	  
	
Class A-1 Noteholders' Monthly Interest Distributable Amount

	  	  
	
Class A-1 Noteholders' Interest Carryover Shortfall

	  	  
	
Class A-1 Noteholders' Interest Distributable Amount

	  	  
	  	  	  
	
Class A-2 Noteholders' Monthly Interest Distributable Amount

	  	  
	
Class A-2 Noteholders' Interest Carryover Shortfall

	  	  
	
Class A-2 Noteholders' Interest Distributable Amount

	  	  
	  	  	  

 

 

C-3

  

  

 

	
Class A-3 Noteholders' Monthly Interest Distributable Amount

	  	  
	
Class A-3 Noteholders' Interest Carryover Shortfall

	  	  
	
Class A-3 Noteholders' Interest Distributable Amount

	  	  
	  	  	  
	
Class A-4 Noteholders' Monthly Interest Distributable Amount

	  	  
	
Class A-4 Noteholders' Interest Carryover Shortfall

	  	  
	
Class A-4 Noteholders' Interest Distributable Amount

	  	  
	  	  	  
	
Class B Noteholders' Monthly Interest Distributable Amount

	  	  
	
Class B Noteholders' Interest Carryover Shortfall

	  	  
	
Class B Noteholders' Interest Distributable Amount

	  	  
	  	  	  
	
Noteholders' Monthly Interest Distributable Amount

	  	  
	
Noteholders' Interest Carryover Shortfall

	  	  
	
Noteholders' Interest Distributable Amount

	  	  
	  	  	  
	
First Priority Principal Distribution Amount

	  	  
	  	  	  
	
Regular Principal Distribution Amount

	  	  
	  	  	  
	
Net Excess Spread Amount

	  	  
	  	  	  
	
Total Required Payment

	  	  
	  	  	  
	
Draw from Reserve Account

	  	  
	  	  	  
	
Total Distribution Amount

	  	  
	  	  	  
	
Excess Cash flow deposited to Certificate Distribution Account

	  	  
	  	  	  
	  	  	  
	
DISTRIBUTIONS FROM COLLECTION ACCOUNT

	  	  
	
1.   Servicing Fee

	  	  
	
2.   Administration Fee

	  	  
	
3.   Noteholders' Interest Distributable Amount to Noteholders

	  	  
	
4.   First Priority Principal Distribution Amount to Principal Distribution Account

	  	  
	
5.   Deposit to Reserve Account

	  	  
	
6.   Regular Principal Distribution Amount to Principal Distribution Account

	  	  
	
7.  Pro rata, (a) Indenture Trustee Fees and (b) State taxes

	  	  
	
8.  Deposit to Certificate Distribution Account

	  	  
	  	  	  
	
DISTRIBUTIONS FROM PRINCIPAL DISTRIBUTION ACCOUNT

	  	  
	
1.   Principal to Class A-1 Noteholders

	  	  
	
2.   Principal to Class A-2 Noteholders

	  	  
	
3.   Principal to Class A-3 Noteholders

	  	  
	
4.   Principal to Class A-4 Noteholders

	  	  
	
4.   Principal to Class B Noteholders

	  	  
	
5.   Deposit to Certificate Distribution Account

	  	  
	  	  	  
	
RECONCILIATION OF RESERVE ACCOUNT

	  	  
	
Beginning Reserve Account Balance

	  	  

 

 

C-4

  

  

 

	
Draw from Reserve Account to cover shortfalls

	  	  
	
Interim Specified Reserve Account Balance

	  	  
	
Deposit to Reserve Account Needed

	  	  
	
Deposit to Reserve Account from Collection Account

	  	  
	
Specified Reserve Account Balance

	  	  
	
Reserve Account Release deposited into Certificate Distribution Account

	  	  
	
Ending Reserve Account Balance

	  	  
	  	  	  
	
SUMMARY OF DISTRIBUTIONS

	  	  
	
Servicing Fee Paid to Servicer

	  	  
	
Servicing Fee Shortfall

	  	  
	
Administration Fee

	  	  
	
Class A-1 Interest Paid

	  	  
	
Class A-1 Interest Shortfall

	  	  
	
Class A-1 Principal Paid

	  	  
	
Ending Class A-1 Principal Balance

	  	  
	  	  	  
	
Class A-2 Interest Paid

	  	  
	
Class A-2 Interest Shortfall

	  	  
	
Class A-2 Principal Paid

	  	  
	
Ending Class A-2 Principal Balance

	  	  
	  	  	  
	
Class A-3 Interest Paid

	  	  
	
Class A-3 Interest Shortfall

	  	  
	
Class A-3 Principal Paid

	  	  
	
Ending Class A-3 Principal Balance

	  	  
	  	  	  
	
Class A-4 Interest Paid

	  	  
	
Class A-4 Interest Shortfall

	  	  
	
Class A-4 Principal Paid

	  	  
	
Ending Class A-4 Principal Balance

	  	  
	  	  	  
	
Class B Interest Paid

	  	  
	
Class B Interest Shortfall

	  	  
	
Class B Principal Paid

	  	  
	
Ending Class B Principal Balance

	  	  
	  	  	  
	
Deposit to Certificate Distribution Account

	  	  
	  	  	  
	
CERTIFICATEHOLDER INFORMATION

	  	  
	  	  	  
	
ORIGINAL DEAL PARAMETERS

Certificate Balance

 

INPUTS FROM PREVIOUS PERIOD STATEMENT TO CERTIFICATEHOLDER

Certificate Balance

Certificate Pool Factor

	  	  
	  	  	  
	
CALCULATION OF DISTRIBUTABLE AMOUNTS

	  	  
	
Deposit to Certificate Distribution Account from Collection Account plus

	  	  
	
Deposit to Certificate Distribution Account from Principal Distribution Account

	  	  

 

 

C-5

  

  

 

	
Deposit to Certificate Distribution Account from Reserve Account

	  	  
	
Total Deposit to Certificate Distribution Account

	  	  
	  	  	  
	
DISTRIBUTIONS FROM CERTIFICATE DISTRIBUTION ACCOUNT

	  	  
	
1.  Amounts paid to Certificateholders

	  	  
	
2.  Amount of Principal being paid on Certificate

	  	  
	
     per $1,000 original principal balance

	  	  
	  	  	  
	
SUMMARY OF DISTRIBUTIONS

	  	  
	
Certificates Principal Paid

	  	  
	
Ending Certificates Principal Balance

	  	  
	
Certificate Pool Factor

	  	  
	  	  	  
	
Remaining amounts to the Certificateholder

	  	  
	  	  	  
	
NOTEHOLDER INFORMATION

	  	  
	  	  	  
	
(i) Amount of principal being paid on Notes

	  	  
	  	  	  
	
    (a) Class A-1 Notes (CUSIP No. [     ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (b) Class A-2a Notes (CUSIP No. [     ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (c) Class A-2b Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (d) Class A-3 Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (e) Class A-4 Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (f) Class B Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (g) Total

	  	  
	  	  	  
	  	  	  
	
(ii) Amount of interest being paid on Notes

	  	  
	  	  	  
	
    (a) Class A-1 Notes (CUSIP No. [   ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (b) Class A-2a Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (c) Class A-2b Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  

 

 

C-6

  

  

 

	
    (d) Class A-3 Notes (CUSIP No. [     ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (e) Class A-4 Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (f) Class B Notes (CUSIP No. [    ])

	  	  
	
          per $1,000 original principal balance

	  	  
	  	  	  
	
    (g) Total

	  	  
	  	  	  
	
(iii) (a) Aggregate Contract Balance at beginning of related collection period

	  	  
	
       (b) Aggregate Contract Balance at end of related collection period

	  	  
	
       (c) Note Value at beginning of related collection period

	  	  
	
       (d) Note Value at end of related collection period

	  	  
	  	  	  
	
(iv) Before and after giving effect to distributions on this Distribution Date

	  	  
	  	  	  
	
      (a) (1) outstanding principal amount of Class A-1 Notes

	  	  
	
            (2) outstanding principal amount of Class A-1 Notes

	  	  
	
            (3) Class A-1 Note Pool Factor

	  	  
	
            (4) Class A-1 Note Pool Factor

	  	  
	  	  	  
	
      (b) (1) outstanding principal amount of Class A-2 Notes

	  	  
	
            (2) outstanding principal amount of Class A-2 Notes

	  	  
	
            (3) Class A-2 Note Pool Factor

	  	  
	
            (4) Class A-2 Note Pool Factor

	  	  
	  	  	  
	
      (c) (1) outstanding principal amount of Class A-3 Notes

	  	  
	
            (2) outstanding principal amount of Class A-3 Notes

	  	  
	
            (3) Class A-3 Note Pool Factor

	  	  
	
            (4) Class A-3 Note Pool Factor

	  	  
	  	  	  
	
      (d) (1) outstanding principal amount of Class A-4 Notes

	  	  
	
            (2) outstanding principal amount of Class A-4 Notes

	  	  
	
            (3) Class A-4 Note Pool Factor

	  	  
	
            (4) Class A-4 Note Pool Factor

	  	  
	  	  	  
	
      (e) (1) outstanding principal amount of Class B Notes

	  	  
	
            (2) outstanding principal amount of Class B Notes

	  	  
	
            (3) Class B Note Pool Factor

	  	  
	
            (4) Class B Note Pool Factor

	  	  
	  	  	  
	
(v) Amount of Servicing Fee paid

	  	  
	  	  	  
	
(vi) Amount of Administration Fee being paid

	  	  
	  	  	  
	
(vii) Other expenses being paid

	  	  
	  	  	  
	
(viii)  Cumulative Prepayment Rate for the related Collection Period

	  	  
	  	  	  

 

 

C-7

  

  

 

	
(ix) Three-Month Rolling Over 60-Day Delinquency Percentage

	  	  
	  	  	  
	
(x) Aggregate Amount of Realized Losses for the related Collection Period

	  	  
	  	  	  
	
(xi) Aggregate amount of Cumulative Realized Losses through the related Collection period

	  	  
	  	  	  
	
(xii) Aggregate Purchase Amounts for the related Collection Period

	  	  
	  	  	  
	
(xiii) (a) Balance of Reserve Account at beginning of related Collection Period

	  	  
	
        (b) Balance of Reserve Account at end of related Collection Period

	  	  
	  	  	  
	
(xiv) Specified Reserve Account Balance at end of related Collection Period

	  	  

 

 

  C-8

  

  

SCHEDULE D

 

TRUSTEE INSTRUCTIONS

 

The undersigned hereby certify that (i) they are, respectively, a duly elected [title] and [title] of Caterpillar Financial Services Corporation and (ii) Exhibit A hereto complies with the requirements of, and is being delivered pursuant to, Section 5.0[5(b)] of the Sale and Servicing Agreement (the “Sale and Servicing Agreement”) dated as of [date] between Caterpillar Financial Asset Trust 200[_]-[_], Caterpillar Financial Funding Corporation and Caterpillar Financial Services Corporation.

 

 

	
Dated:               

	  	                    
	  	  	
Name:

	  	  	
Title:

	  	  	  
	  	  	  
	  	  	                     
	  	  	
Name:

	  	  	
Title:

 

D-1  

  

  

EXHIBIT A

TO SCHEDULE D

	
TRUSTEE INSTRUCTIONS

	  	  
	
 

Attn:  [name]

	  	  
	
           [trustee name]

	  	  
	
           Fax:  [                  ]

	  	  
	  	  	  
	
Re:  Caterpillar Financial Asset Trust 200[ ]-[ ],   Account #[______]

	  	  
	  	  	  
	
Please make the following distributions from the above referenced account:

	  	  
	  	  	  
	
(i )      Payment of Servicing Fee (including any previously unpaid Servicing  Fees) to Servicer pursuant to Section 5.05 (b)(i ):

	  	  
	  	  	  
	
(ii)      to the Administrator under the Administration Agreement, the

	  	  
	
Administration Fee (including any previously unpaid Administration Fees) pursuant to Section 5.05(b)(ii):

	  	  
	  	  	  
	
(iii)     Noteholders' Interest Distributable Amount to be remitted to the Noteholders pursuant to Section 5.05(b) (iii):

	  	  
	  	  	  
	
(iv)    Amount of First Priority Principal Distribution Amount to be deposited to the Principal Distribution Account pursuant to Section 5.05 (b) (iv) :

	  	  
	  	  	  
	
(v)  Deposit to Reserve Account pursuant to Section 5.05 (b)(v):

	  	  
	  	  	  
	
(vi)    Amount of the Regular Principal Distribution to be deposited to the Principal Distribution Account pursuant to Section 5.05(b)(vi):

	  	  
	  	  	  
	
(vii)    to the Indenture Trustee under the Indenture, all unpaid Indenture Trustee fees and expenses pursuant to Section 5.05(b)( vii):

	  	  
	  	  	  
	
(viii)    to the Issuing Entity under Section 5.05(b)(viii), the amount of any State taxes payable by the Issuing Entity:

	  	  
	  	  	  
	
(ix)  The amount to be deposited to the Certificate Distribution Account pursuant to Section 5.05 (b) (ix) for distribution to the holders of the Certificates:

	  	  
	  	  	  
	
(x)    Amount to be distributed from the Principal Distribution Account to each Class of Noteholders, and to the holders of the Certificates:

	  	  
	  	  	  
	
(xi)   Amount to be withdrawn from the Reserve Account and deposited to the Collection Account pursuant to Section 5.06(b); and

	  	  
	  	  	  
	
(xii)    Amount to be withdrawn from the Reserve Account and deposited to the Certificate Distribution Account pursuant to Section 5.06(c):

	  	  

 

 

D-A-1

  

  

 

	  	  	  
	  	  	  
	
Wire instructions for Certificate Distribution Account:

	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	
            FOR FURTHER CREDIT TO:

	  	  
	
            TAS Account # [__________]

	  	  
	
            Reference:  Cat Financial 200[  ]-[ ] Certificate Distribution Account

	  	  
	
Attention:

	  	  
	  	  	  
	  	  	  

D-A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]