FORM OF SELLING AGENT AGREEMENT

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Exhibit 1.2

CATERPILLAR FINANCIAL SERVICES CORPORATION

$[______________]

POWERNOTES(R)

WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE

FORM OF SELLING AGENT AGREEMENT

[________ __, 20__]

[Agent Name]

[Agent Address]

[Agent Name]

[Agent Address]

----------

(R) Registered Trademark of Caterpillar Inc.

Dear Sirs:

Caterpillar Financial Services Corporation, a Delaware corporation (the

"Company"), proposes to issue and sell up to $[___________] aggregate principal

amount of its PowerNotes(R) With Maturities of 9 Months or More from Date of

Issue (the "Notes") to be issued pursuant to the provisions of an Indenture

dated as of April 15, 1985, as supplemented from time to time, between the

Company and U.S. Bank Trust National Association (formerly First Trust of New

York, National Association), which acts as Trustee (the "Indenture"). The terms

of the Notes are described in the Prospectus referred to below.

Subject to the terms and conditions contained in this Selling Agent

Agreement (the "Agreement"), the Company hereby (1) appoints you as agent of the

Company ("Agent") for the purpose of soliciting purchases of the Notes from the

Company and you hereby agree to use your reasonable best efforts to solicit

offers to purchase Notes upon terms acceptable to the Company at such times and

in such amounts as the Company shall from time to time specify and in accordance

with the terms hereof, and, after consultation with [Agent Name] (the

"Purchasing Agent"), the Company reserves the right to enter into agreements

substantially identical hereto with other agents and (2) agrees that whenever

the Company determines to sell Notes pursuant to this Agreement, such Notes

shall be sold pursuant to a Terms Agreement (as defined in Section IV(b) hereof)

relating to such sale in accordance with the provisions of Section IV(b) hereof

between the Company and the Purchasing Agent with the Purchasing Agent

purchasing such Notes as principal for resale to others.

I.

The Company has filed with the Securities and Exchange Commission (the

"Commission") a registration statement No. 333-______ relating to the Notes and

the offering

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thereof, from time to time, in accordance with Rule 415 under the Securities Act

of 1933, as amended (the "Securities Act"). Such registration statement,

including all documents incorporated therein by reference, as from time to time

amended or supplemented, is referred to herein as the "Registration Statement".

The Registration Statement has been declared effective by the Commission, and

the Indenture has been qualified under the Trust Indenture Act of 1939, as

amended (the "Trust Indenture Act"). The Company has prepared or will promptly

prepare for filing with, or transmission for filing to, the Commission, pursuant

to Rule 424 under the Securities Act, a prospectus supplement (the "Prospectus

Supplement") and a prospectus (the "Base Prospectus") for the purpose of

supplying information in respect of the public offering of the Notes. The

Prospectus Supplement, together with the Base Prospectus, including all

documents incorporated therein by reference, as from time to time amended or

supplemented, and including any Pricing Supplement, are referred to herein as

the "Prospectus".

II.

Your obligations hereunder are subject to the following conditions, each

of which shall be met on such date as you and the Company shall subsequently fix

for the commencement of your obligations hereunder (the "Commencement Date"):

(a) (i) No litigation or proceeding shall be threatened or pending to

restrain or enjoin the issuance or delivery of the Notes, or which in any way

questions or affects the validity of the Notes and (ii) no stop order suspending

the effectiveness of the Registration Statement shall be in effect, and no

proceedings for such purpose shall be pending before or threatened by the

Commission and there shall have been no material adverse change not in the

ordinary course of business in the consolidated financial condition of the

Company and its subsidiaries, taken as a whole, from that set forth in the

Registration Statement and the Prospectus; and you shall have received on the

Commencement Date a certificate dated such Commencement Date and signed by an

executive officer of the Company to the foregoing effect. The officer making

such certificate may rely upon the best of his knowledge as to proceedings

threatened.

(b) You shall have received a favorable opinion of Orrick, Herrington &

Sutcliffe LLP ("Orrick, Herrington & Sutcliffe"), counsel for the Company, dated

the Commencement Date, to the effect that:

(i) the Company has been duly incorporated, is validly existing

as a corporation in good standing under the laws of the State of

Delaware and has the corporate power and corporate authority to own its

properties and conduct its business as described in the Prospectus;

(ii) the Indenture has been duly authorized, executed and

delivered by the Company and is a legal, valid, binding and enforceable

agreement of the Company and has been duly qualified under the Trust

Indenture Act;

(iii) the issuance and sale of the Notes has been duly

authorized and the Notes, when the terms thereof have been established

in accordance with the Indenture and when executed and authenticated in

accordance with the provisions of the Indenture and

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delivered to and paid for by the purchasers, will be entitled to the

benefits of the Indenture and will be legal, valid, binding and

enforceable obligations of the Company;

(iv) this Agreement has been duly authorized, executed and

delivered by the Company and is a legal, valid, binding and enforceable

obligation of the Company; provided, that, the opinions of Orrick,

Herrington & Sutcliffe in (ii), (iii) and (iv) hereof are subject as to

enforcement to the laws of bankruptcy, insolvency, reorganization and

other laws of general applicability relating to or affecting creditors'

rights and to general equity principles and that rights to indemnity

hereunder may be limited by applicable law in the United States;

(v) no authorization, consent or approval of, or registration or

filing with, any United States or State of Delaware governmental or

public body or regulatory authority is required under applicable federal

law or the Delaware General Corporation Law on the part of the Company

for the issuance of the Notes in accordance with the Indenture or the

sale of the Notes in accordance with this Agreement other than the

registration of the Notes under the Securities Act, qualification of the

Indenture under the Trust Indenture Act and compliance with the

applicable state securities laws;

(vi) the execution and delivery of the Indenture, the issuance

of the Notes in accordance with the Indenture and the sale of the Notes

pursuant to this Agreement do not and will not contravene any provision

of any statute of the United States, the State of New York or the

Delaware General Corporation Law or any rule or regulation thereunder or

result in any violation by the Company of any of the terms or provisions

of the Certificate of Incorporation or Bylaws of the Company, or any

indenture, mortgage or other agreement or instrument filed as an exhibit

to the Registration Statement by which the Company is bound;

(vii) the Indenture conforms and the Notes will conform in all

material respects to the descriptions thereof in the Prospectus;

(viii) such counsel does not know of any litigation or any

governmental proceeding instituted or threatened against the Company or

any of its consolidated subsidiaries which in such counsel's opinion

would be likely to result in a judgment or decree having a material

adverse effect on the business or financial position of the Company and

its subsidiaries considered as a whole or be required to be disclosed in

the Registration Statement which is not disclosed and accurately

summarized in the Prospectus; and

(ix) Orrick, Herrington & Sutcliffe (1) is of the opinion that

each document, if any, filed pursuant to the Securities Exchange Act of

1934, as amended (the "Exchange Act") (except as to financial statements

contained therein, as to which Orrick, Herrington & Sutcliffe need not

express any opinion), and incorporated by reference in the Prospectus

complied when so filed as to form in all material respects with the

Exchange Act and the rules and regulations thereunder, (2) is of the

opinion that the Registration Statement and Prospectus, as amended or

supplemented, if applicable (except as to financial statements contained

therein, as to which Orrick, Herrington & Sutcliffe need

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not express any opinion), comply as to form in all material respects

with the Securities Act and the rules and regulations thereunder and (3)

has no reason to believe that (except for the financial statements

contained therein, as to which Orrick, Herrington & Sutcliffe need not

express any belief) the Registration Statement or the Prospectus, as

amended or supplemented, filed with the Commission pursuant to the

Securities Act together with the information incorporated therein,

contain any untrue statement of a material fact or omit to state a

material fact required to be stated therein or necessary to make the

statements therein, in light of the circumstances under which they were

made, not misleading; provided, that Orrick, Herrington & Sutcliffe may

state that its opinion with respect to this subsection (ix) is based

upon the participation by one or more of its attorneys, who participated

in the preparation of the Registration Statement and the Prospectus and

the information incorporated therein by reference and review and

discussion of the contents thereof and discussion of the answers made

and information furnished therein with such attorneys, certain officers

of the Company and its auditors, but is without independent check or

verification except as stated therein.

(c) You shall have received on the Commencement Date a letter dated the

Commencement Date from PricewaterhouseCoopers LLP, independent auditors,

containing statements and information of the type ordinarily included in

auditors' "comfort letters" to underwriters with respect to the financial

statements and certain financial information contained in or incorporated by

reference into the Registration Statement and the Prospectus relating to the

Notes.

(d) You shall have received a favorable opinion of Gibson, Dunn &

Crutcher LLP, counsel for the Agents, dated such Commencement Date, to the

effect that:

(i) the Indenture is a legal, valid, binding and enforceable

agreement of the Company and has been duly qualified under the Trust

Indenture Act;

(ii) the issuance and sale of the Notes has been duly authorized

and the Notes, when the terms thereof have been established in

accordance with the Indenture and when executed and authenticated in

accordance with the provisions of the Indenture and delivered to and

paid for by the purchasers, will be legal, valid, binding and

enforceable obligations of the Company;

(iii) this Agreement has been duly authorized, executed and

delivered by the Company; and

(iv) the Indenture conforms and the Notes will conform in all

material respects to the descriptions thereof in the Prospectus.

In addition, Gibson, Dunn & Crutcher LLP shall state that, based upon

such counsel's participation in conferences with officers and other

representatives of the Company, counsel for the Company, representatives of the

independent auditors of the Company and representatives of the Agents at which

the contents of the Registration Statement and Prospectus Supplement and related

matters were discussed, without independent verification of such contents except

as stated therein, on the basis of the foregoing, and except for the financial

statements and

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schedules and other financial and statistical data included therein and the

Statement of Eligibility on Form T-1 of the Trustee included or incorporated by

reference therein, as to which Gibson, Dunn & Crutcher LLP need not express any

opinion or belief, no facts have come to its attention that lead it to believe:

(1) that the Registration Statement, at the time it became effective, or the

Prospectus Supplement as of the date thereof and as of the date of its opinion,

were not appropriately responsive in all material respects to the requirements

of the Securities Act and the Trust Indenture Act and the applicable rules and

regulations of the Commission thereunder; or (2) (i) that the Registration

Statement, at the time it became effective, contained an untrue statement of a

material fact or omitted to state a material fact required to be stated therein

or necessary to make the statements therein not misleading, or (ii) that the

Prospectus Supplement as of its date and as of the date of its opinion contained

or contains an untrue statement of a material fact or omitted or omits to state

a material fact necessary in order to make the statements therein, in the light

of the circumstances under which they were made, not misleading. Such counsel

shall further state that it is of the opinion that insofar as the statements

contained in the Registration Statement and the Prospectus Supplement under the

captions "Description of Notes" and "Supplemental Plan of Distribution"

constitute a summary of the documents referred to therein, such statements

fairly present the information called for with respect to such documents by the

Securities Act and the Trust Indenture Act and the applicable rules and

regulations of the Commission thereunder relating to registration statements on

Form S-3 and prospectuses.

(e) You shall have received a certificate of the secretary or assistant

secretary of Caterpillar Inc., a Delaware corporation ("Caterpillar"), as to (i)

the Restated Certificate of Incorporation of Caterpillar, (ii) the Bylaws of

Caterpillar and (iii) no amendments to or action taken by Caterpillar or its

directors or officers in contemplation of making any amendment to the following

agreements between Caterpillar and the Company since the respective dates

thereof: (A) the Support Agreement, dated as of December 21, 1984, as amended by

First Amendment to the Support Agreement, dated June 14, 1995 (as so amended,

the "Support Agreement"); and (B) the Tax Sharing Agreement, dated as of June

21, 1984.

The obligations of the Purchasing Agent to purchase Notes as principal,

both under this Agreement and under any Terms Agreement are subject to the

conditions that (i) no litigation or proceeding shall be threatened or pending

to restrain or enjoin the issuance or delivery of the Notes, or which in any way

questions or affects the validity of the Notes, (ii) no stop order suspending

the effectiveness of the Registration Statement shall be in effect, and no

proceedings for such purpose shall be pending before or threatened by the

Commission and (iii) there shall have been no material adverse change not in the

ordinary course of business in the consolidated financial condition of the

Company and its subsidiaries, taken as a whole, from that set forth in the

Registration Statement and the Prospectus, each of which conditions shall be met

on the corresponding Settlement Date (as defined in Section IV(b) hereof).

Further, if specifically called for by any written agreement by the Purchasing

Agent to purchase Notes as principal, the Purchasing Agent's obligations

hereunder and under such agreement, shall be subject to such of the additional

conditions set forth in clause (a), as it relates to the executive officer's

certificate, and clauses (b), (c) and (d) above, as agreed to by the parties,

each of which such agreed conditions shall be met on the corresponding

Settlement Date.

III.

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In further consideration of your agreements herein contained, the

Company covenants as follows:

(a) To furnish to you, without charge, a copy of (i) the Indenture, (ii)

the resolutions of the Board of Directors (or Executive Committee) of the

Company authorizing the issuance and sale of the Notes, certified by the

Secretary or Assistant Secretary of the Company as having been duly adopted,

(iii) the Registration Statement including exhibits and materials incorporated

by reference therein and (iv) as many copies of the Prospectus, any documents

incorporated by reference therein and any supplements and amendments thereto as

you may reasonably request.

(b) Before amending or supplementing the Registration Statement or the

Prospectus (other than amendments or supplements to change interest rates), to

furnish you a copy of each such proposed amendment or supplement, and to afford

you a reasonable opportunity to comment on any such proposed amendment or

supplement.

(c) To furnish you copies of each amendment to the Registration

Statement and of each amendment and supplement to the Prospectus in such

quantities as you may from time to time reasonably request; and if at any time

when the delivery of a Prospectus shall be required by law in connection with

sales of any of the Notes, either (i) any event shall have occurred as a result

of which the Prospectus as then amended or supplemented would include any untrue

statement of a material fact, or omit to state any material fact necessary in

order to make the statements therein, in light of the circumstances under which

they were made, not misleading or (ii) for any other reason it shall be

necessary to amend or supplement the latest Prospectus, as then amended or

supplemented, or to file under the Exchange Act any document incorporated by

reference in the Prospectus in order to comply with the Securities Act or the

Exchange Act, the Company will (A) notify you to suspend the solicitation of

offers to purchase Notes and if notified by the Company, you shall forthwith

suspend such solicitation and cease using the Prospectus as then amended or

supplemented and (B) promptly prepare and file with the Commission such document

incorporated by reference in the Prospectus or an amendment or supplement to the

Registration Statement or the Prospectus which will correct such statement or

omission or effect such compliance and will provide to you without charge a

reasonable number of copies thereof, which you shall use thereafter.

(d) To endeavor to qualify such Notes for offer and sale under the

securities or Blue Sky laws of such jurisdictions as you shall reasonably

request and to pay all reasonable expenses (including fees and disbursements of

counsel) in connection with such qualification and in connection with the

determination of the eligibility of such Notes for investment under the laws of

such jurisdictions as you may designate; provided, that, in connection therewith

the Company shall not be required to qualify as a foreign corporation to do

business, or to file a general consent to service of process, in any

jurisdiction.

(e) The Company will make generally available to its security holders

and to you as soon as practicable earning statements that satisfy the provisions

of Section 11(a) of the Securities Act and the rules and regulations of the

Commission thereunder covering twelve month periods beginning, in each case, not

later than the first day of the Company's fiscal quarter next following the

"effective date" (as defined in Rule 158 under the Securities Act) of the

Registration Statement with respect to each sale of Notes. If such fiscal

quarter is the last fiscal

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quarter of the Company's fiscal year, such earning statement shall be made

available not later than 90 days after the close of the period covered thereby

and in all other cases shall be made available not later than 45 days after the

close of the period covered thereby.

(f) (i) To use its reasonable efforts, in cooperation with the

Purchasing Agent, to cause such Notes as the Company and the Purchasing Agent

agree to be accepted for listing on any stock exchange (each, a "Stock

Exchange"), in each case as the Company and the Purchasing Agent shall deem to

be appropriate. In connection with any such agreement to qualify Notes for

listing on a Stock Exchange, the Company shall use its reasonable efforts to

obtain such listing promptly and shall furnish any and all documents,

instruments, information and undertakings that may be necessary or advisable in

order to obtain and maintain the listing.

(ii) So long as any Note remains outstanding and listed on a

Stock Exchange, if either (A) there is a significant change affecting any matter

described in the Prospectus the inclusion of which was required by applicable

law, the listing rules and regulations of such Stock Exchange on which any Notes

are listed (the "Listing Rules"), or by such Stock Exchange or (B) a significant

new matter arises the inclusion of information with respect to which would have

been so required if it had arisen when the Prospectus was prepared, to provide

to the Purchasing Agent information about the change or matter, publish such

supplementary Prospectus as may be required by such Stock Exchange and otherwise

comply with applicable law and the Listing Rules in that regard.

(iii) To use reasonable efforts to comply with any undertakings

given by it from time to time to any Stock Exchange on which any Notes are

listed.

(g) To notify the Purchasing Agent promptly in writing in the event that

the Company does not have a security listed on the New York Stock Exchange.

(h) The Company will notify the Purchasing Agent as soon as practicable,

and confirm such notice in writing, of any change in the rating assigned by any

nationally recognized statistical rating organization, as such term is defined

in Rule 436(g)(2) under the Securities Act, to the Medium-Term Note Program

under which the Notes are issued (the "Program") or any debt securities

(including the Notes) of the Company, or the public announcement by any

nationally recognized statistical rating organization that it has under

surveillance or review, with possible negative implications, its rating of the

Program or any such debt securities, or the withdrawal by any nationally

recognized statistical rating organization of its rating of the Program or any

such debt securities. The Purchasing Agent will, in turn, notify promptly the

other Agents of any such change.

IV.

(a) Acting as Agent. You hereby agree, as Agents hereunder, to use your

reasonable best efforts to solicit and receive offers to purchase Notes upon the

terms and conditions set forth herein and in the Prospectus and upon the terms

communicated to you from time to time by the Company. For the purpose of such

solicitation you will use the Prospectus as then amended or supplemented which

has been most recently distributed to you by the Company, and you will solicit

purchases only as permitted or contemplated thereby and herein and will solicit

purchases

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of the Notes only as permitted by the Securities Act and the applicable

securities laws or regulations of any jurisdiction. The Company reserves the

right, in its sole discretion, to suspend solicitation of purchases of the Notes

commencing at any time for any period of time or permanently. Upon receipt of

instructions (which may be given orally) from the Company, you will forthwith

suspend solicitation of purchases until such time as the Company has advised you

that such solicitation may be resumed.

You are authorized to solicit orders for the Notes only in denominations

of $1,000 or more (in multiples of $1,000). You are not authorized to appoint

subagents or to engage the service of any other broker or dealer in connection

with the offer or sale of the Notes without the consent of the Company;

provided, however, the Purchasing Agent may engage the service of any other

broker or dealer without the consent of the Company. The Purchasing Agent will

however, on a periodic basis, provide the Company with a listing of those

brokers or dealers so engaged. In addition, unless otherwise instructed by the

Company, the Purchasing Agent shall communicate to the Company, orally or in

writing, offers to purchase Notes on an aggregate basis by CUSIP numbers of the

Notes. The Company shall have the sole right to accept offers to purchase Notes

offered through you and may reject any proposed purchase of Notes as a whole or

in part. You shall have the right, in your discretion reasonably exercised, to

reject any proposed purchase of Notes, as a whole or in part, and any such

rejection shall not be deemed a breach of your agreements contained herein. The

Company agrees to pay the Purchasing Agent, as consideration for soliciting the

sale of the Notes, a concession in the form of a discount equal to the

percentages of the initial offering price of each Note sold not in excess of the

concession set forth in Exhibit A hereto (the "Concession"). The Purchasing

Agent and the other Agents will share the above-mentioned Concession in such

proportions as they may agree.

(b) Acting as Principal. Each sale of Notes to an Agent as principal

shall be made in accordance with the terms of this Agreement and a separate

agreement, substantially in the form of Exhibit C hereto, to be entered into on

behalf of such Agent(s) by the Purchasing Agent, which will provide for the sale

of such Notes to, and the purchase and reoffering thereof by, the Purchasing

Agent as principal. Each such separate agreement (which may be an oral agreement

and confirmed in writing as described below between the Purchasing Agent and the

Company) is herein referred to as a "Terms Agreement". A Terms Agreement may

also specify certain provisions relating to the reoffering of such Notes by the

Purchasing Agent. The Purchasing Agent's agreement to purchase Notes pursuant to

any Terms Agreement shall be deemed to have been made on the basis of the

representations, warranties and agreements of the Company herein contained and

shall be subject to the terms and conditions herein set forth. Except pursuant

to a Terms Agreement, under no circumstances shall you be obligated to purchase

any Notes for your own account. Each Terms Agreement, whether oral (and

confirmed in writing which may be by facsimile transmission) or in writing,

shall describe the Notes to be purchased pursuant thereto by the Purchasing

Agent as principal, and may specify, among other things, the principal amount of

Notes to be purchased, the interest rate or formula and maturity date or dates

of such Notes, the interest payment dates, if any, the price to be paid to the

Company for such Notes, the initial public offering price at which the Notes are

proposed to be reoffered, and the time and place of delivery of and payment for

such Notes (the "Settlement Date"), whether the Notes provide for a survivor's

option or for optional redemption by the Company and on what terms and

conditions, and any other relevant terms. Terms Agreements may take the form of

an exchange of any standard form of written telecommunication between the

Purchasing Agent and the Company.

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In connection with the resale of the Notes purchased, without the

consent of the Company, you are not authorized to appoint subagents or to engage

the service of any other broker or dealer, nor may you reallow any portion of

the discount paid to you by the Company in excess of the designated reallowance

portion; provided, however, that the Purchasing Agent may engage the service of

any other broker or dealer without the consent of the Company. The Purchasing

Agent will however, on a periodic basis, provide the Company with a listing of

those brokers or dealers so engaged. Unless authorized by the Purchasing Agent

in each instance, each Agent agrees not to purchase and sell Notes for which an

order from a client has not been received.

Each purchase of Notes by the Purchasing Agent from the Company shall be

at a discount to the percentages of the initial offering price of each such Note

on the date of issue not in excess of the applicable Concession set forth in

Exhibit A hereto.

(c) Public Offering Price. Unless otherwise authorized by the Company,

all Notes shall be sold to the public at a purchase price not to exceed 100% of

the principal amount thereof, plus accrued interest, if any, with the exception

of Notes that bear a zero interest rate and are issued at a substantial discount

from the principal amount payable at the Maturity Date (a "Zero-Coupon Note").

Such Zero-Coupon Notes shall be sold to the public at a purchase price no

greater than an amount, expressed as a percentage of the principal face amount

of such Notes, equal to the net proceeds to the Company on the sale of such

Notes, plus the Concession, plus accrued interest, if any. Such purchase price

shall be set forth in the confirmation statement of the Selling Group member

responsible for such sale, and delivered to the purchaser along with a copy of

the Prospectus (if not previously delivered) and Pricing Supplement.

(d) Procedures. Procedural details relating to the issue and delivery

of, and the solicitation of purchases and payment for, the Notes, whether under

Section IV(a) or IV(b) of this Agreement, are set forth in the Administrative

Procedures attached hereto as Exhibit B (the "Procedures"), as amended from time

to time. The provisions of the Procedures shall apply to all transactions

contemplated hereunder. You and the Company each agree to perform the respective

duties and obligations specifically provided to be performed by each in the

Procedures as amended from time to time. The Procedures may only be amended by

written agreement of the Company and you.

(e) Prospectus Delivery; Marketing Materials. You shall, as required by

applicable law, furnish to each person to whom you sell or deliver Notes a copy

of the Prospectus (as then amended or supplemented) or, if delivery of the

Prospectus is not required by applicable law, inform each such person that a

copy thereof (as then amended or supplemented) will be made available upon

request. You are not authorized to give any information or to make any

representation not contained in the Prospectus or the documents incorporated by

reference or specifically referred to therein in connection with the offer and

sale of the Notes. The Company agrees that the Purchasing Agent may utilize the

Company's name, logo and trademark to identify the Company as a member of the

Direct Access Notes Program in the Purchasing Agent's general materials and

marketing objectives relating to the Direct Access Notes Program (the "Marketing

Materials") that are provided to and approved by the Company. The Company hereby

grants the Purchasing Agent a non-exclusive, nonsublicenseable, revocable,

royalty-free

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license to use the Company's name, logo and trademarks solely in connection

with their use in Marketing Materials that are provided to and approved by the

Company. Any approvals from or authorizations by the Company under this Section

IV(e) may be transmitted electronically by the Company to the Purchasing Agent.

V.

The Company represents and warrants to the Agents that as of the date

hereof, as of each date on which the Company accepts an offer to purchase Notes

(including any purchase by the Purchasing Agent as principal, pursuant to a

Terms Agreement or otherwise), as of each date the Company issues and sells

Notes and as of each date the Registration Statement or the Prospectus is

amended or supplemented:

(a) (i) each document, if any, filed, or to be filed, pursuant to the

Exchange Act and incorporated by reference in the Prospectus complied when so

filed, or will comply, in all material respects with such Act and the rules and

regulations thereunder; (ii) the Registration Statement (including the documents

incorporated by reference therein), filed with the Commission pursuant to the

Securities Act relating to the Notes, when it became effective, did not contain

any untrue statement of a material fact or omit to state a material fact

required to be stated therein or necessary to make the statements therein not

misleading; (iii) each Prospectus, if any, filed pursuant to Rule 424 under the

Securities Act, complied when so filed in all material respects with such Act

and the applicable rules and regulations thereunder; (iv) the Registration

Statement and each Prospectus comply and, as amended or supplemented, if

applicable, will comply in all material respects with the Securities Act and the

applicable rules and regulations thereunder; and (v) the Registration Statement

and each Prospectus relating to the Notes do not and, as amended or

supplemented, if applicable, will not contain any untrue statement of a material

fact or omit to state a material fact necessary in order to make the statements

therein, in the light of the circumstances under which they were made, not

misleading;

(b) the Company has been duly incorporated and is validly existing as a

corporation in good standing under the laws of the jurisdiction of its

incorporation, with corporate power and authority to own its properties and

conduct its business as described in the Prospectus, and has been duly qualified

as a foreign corporation for the transaction of business and is in good standing

under the laws of each other jurisdiction in which it owns or leases properties,

or conducts any business so as to require such qualification, or is subject to

no material liability or disability by reason of the failure to be so qualified

in any such jurisdiction;

(c) the Company has an authorized capitalization as set forth in the

Prospectus, and all of the issued shares of capital stock of the Company have

been duly and validly authorized and issued and are fully paid and

non-assessable, and all of such shares are owned directly or indirectly by

Caterpillar, free and clear of all liens, encumbrances, security interests or

claims;

(d) the Notes have been duly authorized, and, when issued and delivered

pursuant to this Agreement and any Terms Agreement, will have been duly

executed, authenticated, issued and delivered and will constitute valid and

legally binding obligations of the Company entitled to the benefits provided by

the Indenture; the Indenture has been duly authorized and duly qualified under

the Trust Indenture Act and constitutes a valid and legally binding instrument,

enforceable in accordance with its terms, subject, as to enforcement, to

bankruptcy, insolvency, reorganization and other laws of general applicability

relating to or affecting creditors' rights and

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to general equity principles; and the Indenture conforms and the Notes of any

particular issuance of Notes will conform to the descriptions thereof contained

in the Prospectus as amended or supplemented to relate to such issuance of

Notes;

(e) other than as set forth in the Prospectus, the Company and each of

its subsidiaries have conducted their businesses and are in compliance in all

material respects with all applicable federal and state laws and regulations,

except for any noncompliance which would not have a material adverse effect on

the Company and its subsidiaries considered as a whole;

(f) the issue and sale of the Notes, the compliance by the Company with

all of the provisions of the Notes, the Indenture, this Agreement and any Terms

Agreement, and the consummation of the transactions herein and therein

contemplated will not conflict with or result in a breach or violation of any of

the terms or provisions of, or constitute a default under, any indenture,

mortgage, deed of trust, loan agreement or other agreement or instrument to

which the Company or any of its subsidiaries is a party or by which the Company

or any of its subsidiaries is bound or to which any of the property or assets of

the Company or any of its subsidiaries is subject, nor will such action result

in any violation of the provisions of the Certificate of Incorporation or Bylaws

of the Company or any statute or any order, rule or regulation of any court or

governmental agency or body having jurisdiction over the Company or any of its

properties; and no consent, approval, authorization, order, registration or

qualification of or with any court or governmental agency or body is required

for the solicitation of offers to purchase Notes, the issue and sale of the

Notes or the consummation by the Company of the other transactions contemplated

by this Agreement, any Terms Agreement or the Indenture, except such as have

been, or will have been prior to the Commencement Date, obtained under the

Securities Act or the Trust Indenture Act and such consents, approvals,

authorizations, registrations or qualifications as may be required under state

securities or Blue Sky laws in connection with the solicitation by you of offers

to purchase Notes from the Company and with purchases of Notes by you as

principal, as the case may be, in each case in the manner contemplated hereby;

(g) other than as set forth in the Prospectus, there are no legal or

governmental proceedings pending to which the Company or any of its subsidiaries

is a party or to which any property of the Company or any of its subsidiaries is

subject, which are of a character which are required to be disclosed in the

Prospectus which have not been properly disclosed therein;

(h) immediately after any sale of Notes by the Company hereunder or

under any Terms Agreement, the aggregate amount of Notes which shall have been

issued and sold by the Company hereunder or under any Terms Agreement and of any

debt securities of the Company (other than such Notes) that shall have been

issued and sold pursuant to the Registration Statement will not exceed the

amount of debt securities registered under the Registration Statement;

(i) the Program and the Notes are rated A2 by Moody's Investors Service,

Inc. and A by Standard & Poor's Ratings Services, or such other rating as to

which the Company shall have most recently notified the Agents pursuant to

Section III(h) hereof;

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(j) since the respective dates as of which information is given in the

Registration Statement and the Prospectus, there has not been any material

increase in the consolidated long-term debt of the Company or any of its

subsidiaries (other than debt incurred in the ordinary course pursuant to the

Company's medium-term note programs) or any material adverse change, or any

development involving a prospective material adverse change, in or affecting the

general affairs, management, consolidated financial position, shareholder's

equity or results of operations of the Company and its subsidiaries, otherwise

than as set forth or contemplated in the Prospectus; and

(k) the Company is not, and upon the issuance and sale of the Notes as

herein contemplated and the application of the net proceeds therefrom as

described in the Prospectus will not be, an "investment company" within the

meaning of the Investment Company Act of 1940, as amended.

The above representations and warranties shall not apply to any

statements or omissions made in the Prospectus in reliance upon and in

conformity with information furnished in writing to the Company by you expressly

for use therein. Each acceptance by the Company of an offer for the purchase of

Notes and each issuance of Notes shall be deemed an affirmation by the Company

that the foregoing representations and warranties are true and correct at the

time, as the case may be, of such acceptance or of such issuance, in each case

as though expressly made at such time. The representations, warranties and

covenants of the Company shall survive the execution and delivery of this

Agreement and the issuance and sale of the Notes.

Each time the Registration Statement shall be amended by the filing of a

post-effective amendment with the Commission, or the filing by the Company of a

Form 10-K or Form 10-Q pursuant to Section 13 of the Exchange Act, or, if so

agreed in connection with a particular transaction, the Company shall furnish

the Agents with (1) a written opinion, dated the date of such amendment, filing,

or as otherwise agreed, of counsel to the Company, in substantially the form

previously delivered under Section II(b), but modified, as necessary, to relate

to the Registration Statement and the Prospectus as amended or supplemented at

such date; (2) a letter, dated the date of such amendment, filing, or as

otherwise agreed, of PricewaterhouseCoopers LLP, independent auditors, in

substantially the form previously delivered under Section II(c), but modified,

as necessary, to relate to the Registration Statement and the Prospectus as

amended or supplemented at such date; and (3) a certificate, dated the date of

such amendment, filing, or as otherwise agreed and signed by an executive

officer of the Company, in substantially the form previously delivered under

Section II(a), but modified, as necessary, to relate to the Registration

Statement and the Prospectus as amended or supplemented at such date.

VI.

The Company agrees to indemnify and hold harmless you, each person, if

any, who controls (within the meaning of either Section 15 of the Securities Act

or Section 20 of the Exchange Act) you and each of your and such person's

officers and directors against any and all losses, liabilities, costs or claims

(or actions in respect thereof) to which any of them may become subject

(including all reasonable costs of investigating, disputing or defending any

such claim or action), insofar as such losses, liabilities, costs or claims (or

actions in respect thereof) arise out of or in connection with any untrue

statement or alleged untrue statement of a material

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fact contained in the Registration Statement or any Prospectus, or any

amendment or supplement thereto, or any omission or alleged omission to state

therein a material fact required to be stated therein or necessary to make the

statements therein not misleading provided: (i) that the Company shall not be

liable for any such loss, liability, cost, action or claim arising from any

statements or omissions made in reliance on and in conformity with written

information provided by the Agents through the Purchasing Agent to the Company

expressly for use in the Registration Statement or Prospectus or any amendment

or supplement thereto; and (ii) that the Company shall not be liable to you or

any person controlling you with respect to the Prospectus to the extent any such

loss, liability, cost, action or claim to you or such controlling person results

from the fact that you sold Notes to a person to whom there was not sent or

given, at or prior to the earlier of either the mailing or delivery of the

written confirmation of such sale or the delivery of such Notes to such person,

a copy of the Prospectus as then amended or supplemented, if the Company has

previously furnished copies thereof to you.

Each Agent severally agrees to indemnify and hold harmless the Company, each

person, if any, who controls (within the meaning of either Section 15 of the

Securities Act or Section 20 of the Exchange Act) the Company, and the Company's

and such persons' officers and directors from and against any and all losses,

liabilities, costs or claims (or actions in respect thereof) to which any of

them may become subject (including all reasonable costs of investigating,

disputing or defending any such claim or action), insofar as such losses,

liabilities, costs or claims (or actions in respect thereof) arise out of or in

connection with any untrue statement or alleged untrue statement of a material

fact contained in the Registration Statement or Prospectus, or any amendment or

supplement thereto, or any omission or alleged omission to state therein a

material fact necessary to make the statements therein not misleading, in each

case only to the extent that such untrue statement or alleged untrue statement

or omission or alleged omission was made in the section of the Prospectus

Supplement or any amendment or supplement thereto entitled "Supplemental Plan of

Distribution" in reliance on and in conformity with written information

furnished to the Company by such Agent through the Purchasing Agent expressly

for use therein.

If any claim, demand, action or proceeding (including any governmental

investigation) shall be brought or alleged against an indemnified party in

respect of which indemnity is to be sought against an indemnifying party

pursuant to the preceding paragraphs, the indemnified party shall, promptly

after receipt of notice of the commencement of any such claim, demand, action or

proceeding, notify the indemnifying party in writing of the commencement of such

claim, demand, action or proceeding, enclosing a copy of all papers served, if

any; provided, that, the omission to so notify such indemnifying party will not

relieve the indemnifying party from any liability that it may have to any

indemnified party under the foregoing provisions of this Section VI unless, and

only to the extent that, such omission results in the forfeiture of substantive

rights or defenses by the indemnifying party. The indemnifying party, upon

request of the indemnified party, shall retain counsel reasonably satisfactory

to the indemnified party to represent the indemnified party and any others the

indemnified party may designate in such proceeding and shall pay the reasonable

fees and expenses of such counsel related to such proceeding. In any such

proceeding, any indemnified party shall have the right to retain its own

counsel, but the reasonable fees and expenses of such counsel shall be at the

expense of such indemnified party unless (i) the indemnifying party and the

indemnified party shall have mutually agreed to the retention of such counsel,

(ii) the indemnifying party has failed within a reasonable time to retain

counsel reasonably satisfactory to such indemnified party or (iii) the

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named parties to any such proceeding (including any impleaded parties) include

both the indemnifying party and the indemnified party and representation of both

parties by the same counsel would be inappropriate due to actual or potential

differing interests between them. It is agreed that the indemnifying party shall

not, in connection with any proceeding or related proceedings in the same

jurisdiction, be liable for the reasonable fees and expenses of more than one

separate law firm (in addition to local counsel where necessary) for all such

indemnified parties. Such firm shall be designated in writing by the indemnified

party. The indemnifying party shall not be liable for any settlement of any

proceeding effected without its written consent, but if settled with such

consent or if there be a final judgment for the plaintiff, the indemnifying

party agrees to indemnifying the indemnified party from and against any loss or

liability by reason of such settlement or judgment. No indemnifying party shall,

without the prior written consent of the indemnified party, effect any

settlement of any pending or threatened proceeding in respect of which any

indemnified party is or could have been a party and indemnity could have been

sought hereunder by such indemnified party, unless such settlement includes an

unconditional release of such indemnified party from all liability on claims

that are the subject matter of such proceeding.

If the indemnification provided for in this Section VI is unavailable to

or insufficient to hold harmless an indemnified party under the preceding

paragraphs of this Section VI in respect of any losses, claims, damages or

liabilities (or actions in respect thereof) referred to therein, then each

indemnifying party shall contribute to the amount paid or payable by such

indemnified party as a result of such losses, claims, damages or liabilities (or

actions in respect thereof) in such proportion as is appropriate to reflect the

relative benefits received by the Company on the one hand and each Agent on the

other from the offering of the Notes to which such loss, claim, damage or

liability (or action in respect thereof) relates. If, however, the allocation

provided by the immediately preceding sentence is not permitted by applicable

law, then each indemnifying party shall contribute to such amount paid or

payable by such indemnified party in such proportion as is appropriate to

reflect not only such relative benefits but also the relative fault of the

Company on the one hand and each Agent on the other in connection with the

statements or omissions which resulted in such losses, claims, damages or

liabilities (or actions in respect thereof), as well as any other relevant

equitable considerations. The relative benefits received by the Company on the

one hand and each Agent on the other shall be deemed to be in the same

proportion as the total net proceeds from the sale of Notes (before deducting

expenses) received by the Company bear to the total commissions or discounts

received by such Agent in respect thereof. The relative fault shall be

determined by reference to, among other things, whether the untrue or alleged

untrue statement of a material fact or the omission or alleged omission to state

a material fact required to be stated therein or necessary in order to make the

statements therein not misleading relates to information supplied by the Company

on the one hand or by any Agent on the other and the parties' relative intent,

knowledge, access to information and opportunity to correct or prevent such

statement or omission. The Company and each Agent agree that it would not be

just and equitable if contribution pursuant to this fourth paragraph of Section

VI were determined by per capita allocation (even if all Agents were treated as

one entity for such purpose) or by any other method of allocation which does not

take account of the equitable considerations referred to above in this fourth

paragraph of Section VI. The amount paid or payable by an indemnified party as a

result of the losses, claims, damages or liabilities (or actions in respect

thereof) referred to above in this fourth paragraph of Section VI shall be

deemed to include any legal or other expenses reasonably incurred by such

indemnified party in

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connection with investigating or defending any such action or claim.

Notwithstanding the provisions of this fourth paragraph of Section VI, no Agent

shall be required to contribute any amount in excess of any Concession received

by it and no person guilty of fraudulent misrepresentation (within the meaning

of Section 11(f) of the Act) shall be entitled to contribution from any person

who was not guilty of such fraudulent misrepresentation. The obligations of each

of the Agents under this fourth paragraph of Section VI to contribute are

several in proportion to the respective purchases made by or through it to which

such loss, claim, damage or liability (or action in respect thereof) relates and

are not joint.

The indemnity and contribution agreements contained in this Section VI

and the representations and warranties of the Company and you in this Agreement,

shall remain operative and in full force and effect regardless of: (i) any

termination of this Agreement; (ii) any investigation made by or on behalf of

the Agents; (iii) any investigation by an indemnified party or on such party's

behalf or any person controlling an indemnified party or by or on behalf of the

indemnifying party, its directors or officers or any person controlling the

indemnifying party; and (iv) acceptance of and payment for any of the Notes.

VII.

Except as provided in Section IV hereof, in soliciting purchases of

Notes from the Company, you are acting solely as agent for the Company, and not

as principal. You will make reasonable efforts to assist the Company in

obtaining performance by each purchaser whose offer to purchase Notes has been

accepted by the Company, but you shall not have any liability to the Company in

the event such purchase is not consummated for any reason, other than to repay

to the Company any commission with respect thereto. Except pursuant to a Terms

Agreement, under no circumstances shall you be obligated to purchase any Notes

for your own account.

VIII.

This Agreement shall be terminated at any time by either party hereto

upon the giving of five business days written notice of such termination to the

other party hereto. In the event of any such termination, neither party shall

have any liability to the other party hereto, except for obligations hereunder

which expressly survive the termination of this Agreement and except that, if at

the time of termination an offer for the purchase of Notes shall have been

accepted by the Company but the time of delivery to the purchaser or his agent

of the Note o