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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 21, 1996
CIT RV Trust 1996-B
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-28744
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(Commission File Number) (IRS Employer Identification No.)
c/o Mellon Bank (DE), National Association
919 North Market Street
Wilmington, Delaware 19801
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (412) 234-4694
N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On August 21, 1996 The CIT Group Securitization Corporation II
(the "Company") sold $88,000,000 aggregate principal amount of Class A-1
6.00% Asset-Backed Notes, $75,000,000 aggregate principal amount of Class
A-2 6.40% Asset-Backed Notes and $62,600,000 aggregate principal amount of
Class A-3 6.65% Asset-Backed Notes (the "Notes") and $14,400,000 aggregate
principal amount of 7.10% Asset-Backed Certificates (the "Certificates").
The Certificates have the benefit of certain funds deposited in a reserve
account established pursuant to a Sale and Servicing Agreement annexed
hereto as Exhibit 4.3 (the "Sale and Servicing Agreement"). The Notes and
Certificates were offered for sale to the public pursuant to a prospectus
supplement dated August 14, 1996 to the prospectus dated July 24, 1996
(the "Prospectus").
The Certificates represent an ownership interest in the CIT RV
Trust 1996-B (the "Trust") and the Notes represent obligations of the
Trust. The Trust was created, and the Certificates were issued, pursuant
to a Trust Agreement annexed hereto as Exhibit 4.2 (the "Trust
Agreement"). The Notes were issued pursuant to an Indenture annexed hereto
as Exhibit 4.1.
The property of the Trust primarily consists of a pool of
simple interest retail installment sale contracts secured by the new and
used recreational vehicles financed thereby (the "Contracts") and certain
other property described in the Prospectus, including, without limitation,
$75,723,906 which was deposited in a Pre-Funding Account and $730,838
which was deposited in a Capitalized Interest Account. Amounts on deposit
in the Pre-Funding Account will be used to purchase additional simple
interest retail installment sale contracts secured by the new and used
recreational vehicles financed thereby and amounts on deposit in the
Capitalized Interest Account will be used, to the extent necessary, to
make payments of interest on the Notes and Certificates while funds remain
on deposit in the Pre-Funding Account, all as described in the Prospectus.
All of the Contracts were acquired by the Company from The CIT
Group/Sales Financing, Inc. pursuant to the terms of a Purchase Agreement
annexed hereto as Exhibit 10.1, and sold by the Company to the Trust
pursuant to the Sale and Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Sale and Servicing Agreement.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following are filed herewith. The exhibit numbers
correspond with Item 601(b) of Regulation S-K.
Exhibit No. Description
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1.1 Underwriting Agreement among The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc., The CIT
Group Holdings, Inc. and Salomon Brothers Inc on behalf of itself
and as representative of the several underwriters dated August
14, 1996.
4.1 Indenture between the CIT RV Trust 1996-B and The Bank of New
York, as Indenture Trustee, dated as of August 1, 1996.
4.2 Trust Agreement between The CIT Group Securitization Corporation
II and Mellon Bank (DE), National Association, as Owner Trustee,
dated as of August 1, 1996.
4.3 Sale and Servicing Agreement between The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc. and the CIT
RV Trust 1996-B, dated as of August 1, 1996.
10.1 Purchase Agreement between The CIT Group/Sales Financing, Inc.
and The CIT Group Securitization Corporation II, dated as of
August 1, 1996.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CIT RV TRUST 1996-B
By: Mellon Bank
(DE), National Association, as Owner
Trustee
By: /s/ E.D. RENN
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Name: E.D. Renn
Title: Vice President
Dated: August 30, 1996
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EXHIBIT 1.1
EXECUTION COPY
CIT RV TRUST 1996-B
$88,000,000 CLASS A-1 6.00% ASSET BACKED NOTES
$75,000,000 CLASS A-2 6.40% ASSET BACKED NOTES
$62,600,000 CLASS A-3 6.65% ASSET BACKED NOTES
$14,400,000 7.10% ASSET BACKED CERTIFICATES
THE CIT GROUP SECURITIZATION CORPORATION II
(SELLER)
August 14, 1996
UNDERWRITING AGREEMENT
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SALOMON BROTHERS INC
as Representative of
the Several Underwriters (the "Representative"),
Seven World Trade Center
New York, New York 10048
Dear Sirs:
1. Introductory. The CIT Group Securitization Corporation II, a
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Delaware corporation (the "Seller") and a wholly-owned limited-purpose finance
subsidiary of The CIT Group Holdings, Inc., a Delaware corporation ("CIT"), and
CIT (collectively, the "Registrants") have previously filed a registration
statement with the Securities and Exchange Commission relating to the issuance
and sale from time to time of up to $275,000,000 of recreational vehicle backed
notes or certificates. The Seller proposes to cause CIT RV Owner Trust 1996-B
(the "Trust") to issue and sell $88,000,000 principal amount of its Class A-1
6.00% Asset Backed Notes (the "Class A-1 Notes"), $75,000,000 principal amount
of its Class A-2 6.40% Asset Backed Notes (the "Class A-2 Notes"), $62,600,000
principal amount of its Class A-3 Notes 6.65% (the "Class A-3 Notes," and,
together with the Class A-1 Notes and the Class A-2 Notes, the "Notes") and
$14,400,000 principal amount of its 7.10% Asset Backed Certificates (the
"Certificates," and, together with the Notes, the "Securities"). The Securities
are registered under the registration statement referred to in Section 2(a).
The assets of the Trust include, among other things, a pool of retail
receivables generated pursuant to motor
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vehicle retail installment sale contracts (the "Initial Contracts") secured by
new and used recreational vehicles financed thereby (the "Initial Financed
Vehicles"), and certain monies received thereunder on or after August 1, 1996,
amounts deposited in the Pre-Funding Account, the Capitalized Interest Account
and the Reserve Account, additional retail receivables generated pursuant to
motor vehicle retail installment sale contracts (the "Subsequent Contracts,"
and, together with the Initial Contracts, the "Contracts") secured by new and
used recreational vehicles financed thereby (the "Subsequent Financed Vehicles,"
and, together with the Initial Financed Vehicles, the "Financed Vehicles") to be
conveyed to the Trust subsequent to the date of issuance of the Securities and
certain monies received thereunder on or after their respective subsequent
cutoff dates, and the other property and the proceeds thereof to be conveyed to
the Trust pursuant to the Sale and Servicing Agreement to be dated as of August
1, 1996 (the "Sale and Servicing Agreement") among the Trust, the Seller, and
The CIT Group/Sales Financing, Inc., a wholly-owned subsidiary of CIT, as
servicer ("CITSF" or the "Servicer"). The Contracts and other assets of the
Trust will be sold by CITSF to the Seller pursuant to a Purchase Agreement to be
dated as of August 1, 1996 (the "Purchase Agreement") between CITSF and the
Seller, and finally by the Seller to the Trust pursuant to the Sale and
Servicing Agreement. Certain of the Contracts and other property sold by CITSF
to the Seller will first be purchased by CITSF from The CIT Group/Consumer
Finance, Inc. (NY) ("CITCF-NY") pursuant to a Purchase Agreement to be dated as
of August 1, 1996 (the "CITCF-NY Sale Agreement") between CITCF-NY and CITSF.
The Servicer will service the Contracts on behalf of the Trust pursuant to the
Sale and Servicing Agreement. The Notes will be issued pursuant to the Indenture
to be dated as of August 1, 1996 (as amended and supplemented from time to time,
the "Indenture"), between the Trust and The Bank of New York, as indenture
trustee (the "Indenture Trustee"). Pursuant to the Sale and Servicing Agreement,
the Servicer will agree to perform certain administrative tasks imposed on the
Trust under the Indenture. The Certificates, each representing a fractional
undivided interest in the Trust, will be issued pursuant to a Trust Agreement to
be dated as of August 1, 1996 (the "Trust Agreement"), between the Seller and
Mellon Bank (DE), National Association, as owner trustee (the "Owner Trustee").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Sale and Servicing Agreement and the Indenture.
The Seller and CITSF hereby agree with the several Underwriters named
in Schedule I hereto (the "Underwriters") as follows:
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2. Representations and Warranties of the Seller, CITSF and CIT. Each
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of the Seller and CITSF, jointly and severally, and CIT with respect to the
representations and warranties appearing in clauses (a), (b), (c)(i), (d),
(e)(ii) and (j)(ii) below represents and warrants to, and agrees with, the
Underwriters, as of the date hereof and as of the date of the purchase and sale
of the Securities pursuant to Section 3 hereof (the "Closing Date") that:
(a) A registration statement on Form S-3 (No. 333-07249), including a
prospectus, relating to the Securities has been filed with the Securities and
Exchange Commission ("Commission") and, as amended, has become effective. Such
registration statement, as amended as of the date of this Agreement, is
hereinafter referred to as the "Registration Statement," and the prospectus
included in such Registration Statement, as supplemented to reflect the terms of
the Securities as first filed with the Commission after the date of this
Agreement pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Securities Act of 1933 ("Act"), including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus." A
"preliminary prospectus" means any form of prospectus, including any prospectus
supplement, relating to the Securities used prior to the date of this Agreement
that is subject to completion.
(b) On the effective date of the registration statement relating to
the Securities, such registration statement conformed in all respects to the
requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission promulgated
under the Act and the Trust Indenture Act (the "Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, on the date of this Agreement, the Registration
Statement and the preliminary prospectus conform, and at the time of the filing
of the Prospectus in accordance with Rule 424(b), the Registration Statement and
the Prospectus will conform, in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such documents
include, or will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, except that the foregoing does
not apply to statements in or omissions from any of such documents based upon
(i) written information furnished to the Seller by any Underwriter through the
Representative specifically for use therein, it being understood that the only
such information consists of the Underwriters' Information (as defined in
Section 8(a) or (ii) the Underwriter Derived Information (as defined in
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Section 7 below) contained in the Current Report (as defined in Section 5(m)
below) or in any amendment thereof or supplement thereto, incorporated by
reference in such Registration Statement or such Prospectus (or any amendment
thereof or supplement thereto). The Seller and CITSF acknowledge that any
information furnished by any of the Underwriters specifically for use in the
Registration Statement, any preliminary prospectus or the Prospectus is the
Underwriters' Information (as defined in Section 8(a)).
(c) (i) CIT meets the requirements for use of Form S-3 under the Act
and (ii) the Seller meets the requirements for use of Form S-3 under the Act.
(d) The documents incorporated by reference in the Registration
Statement and Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations of the Commission thereunder.
(e) (i) Each of the Seller, CITSF and The CIT GP Corporation V ("CIT
GP") have been duly organized and are validly existing as corporations in good
standing under the laws of the State of Delaware. CITCF-NY has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of New York. Each of the Seller, CITSF, CITCF-NY and CIT GP
have corporate power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the
Prospectus and to enter into and perform their obligations under each of the
Basic Documents (as defined below) to which it is a party; and each of the
Seller, CITSF, CITCF-NY and CIT GP is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a material
adverse effect on its respective business, properties, assets, or condition
(financial or other) or on its ability to perform its obligations under any of
the Basic Documents to which it is a party. "Basic Documents" means this
Agreement, the Sale and Servicing Agreement, the Trust Agreement, the Indenture,
the CITCF-NY Sale Agreement, the Purchase Agreement, the Note Depository
Agreement and the Certificate Depository Agreement and (ii) CIT has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure so to qualify
would have a material adverse effect on its respective business, properties,
assets, or condition (financial or other).
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(f) Neither the Seller nor CIT GP is in violation of its certificate
of incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which it is a party or by which it or its properties may be bound, which
default might result in any material adverse change in the financial condition,
earnings, affairs or business of the Seller or CIT GP, as the case may be, or
which might materially and adversely affect the properties or assets thereof or
the ability to perform its obligations under any of the Basic Documents to which
it is a party.
(g) Neither CITSF nor CITCF-NY is in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which it is a party or by which it or its respective properties may be bound,
which default might result in any material adverse change in the financial
condition, earnings, affairs or business of either of CITSF or CITCF-NY or which
might materially and adversely affect the properties or assets thereof or their
ability to perform its obligations under any of the Basic Documents to which it
is a party.
(h) The execution and delivery by each of the Seller and CIT GP on the
Closing Date of the Basic Documents to which it is a party and the performance
of its obligations thereunder will be within its corporate power of the Seller
and CIT GP and duly authorized by all necessary corporate action on the part of
the Seller and CIT GP on and as of the Closing Date; and neither the issuance
and sale of the Securities to the Underwriters, nor the execution and delivery
by each of the Seller and CIT GP of the Basic Documents to which it is a party,
nor the consummation by the Seller or CIT GP of the transactions therein
contemplated, nor compliance by the Seller or CIT GP with the provisions hereof
or thereof, nor the grant of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, will materially conflict with or
result in a material breach of, or constitute a material default under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Seller or CIT GP or its properties or the certificate of
incorporation or by-laws of the Seller or CIT GP or any of the provisions of any
indenture, mortgage, contract or other instrument to which the Seller or CIT GP
is a party or by which the Seller or CIT GP is bound or result in the creation
or imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, contract or other
instrument.
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(i) The execution and delivery by each of CITSF and CITCF-NY on and as
of the Closing Date of any of the Basic Documents to which it is a party and the
performance of its obligations thereunder, will be within the corporate power of
each of CITSF and CITCF-NY and duly authorized by all necessary corporate action
on the part of each of CITSF and CITCF-NY on and as of the Closing Date; and
neither the issuance and sale of the Securities to the Underwriters, nor the
execution and delivery by CITSF and CITCF-NY of any of the Basic Documents to
which it is a party, nor the consummation by CITSF and CITCF-NY of the
transactions therein contemplated, nor compliance by CITSF and CITCF-NY with the
provisions hereof or thereof, nor the grant of the security interest in the
Collateral to the Indenture Trustee pursuant to the Indenture, will materially
conflict with or result in a material breach of, or constitute a material
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on CITSF or CITCF-NY or their respective
properties or the certificate of incorporation or by-laws of CITSF or CITCF-NY,
or any of the provisions of any material indenture, mortgage, contract or other
instrument to which CITSF or CITCF-NY is a party or by which CITSF or CITCF-NY
is bound or result in the creation or imposition of any lien, charge or
encumbrance upon any of their respective property pursuant to the terms of any
such material indenture, mortgage, contract or other instrument.
(j) (i) This Agreement has been duly authorized, executed and
delivered by each of the Seller and CITSF, and it constitutes a legal, valid and
binding instrument enforceable against each of the Seller and CITSF in
accordance with its terms, subject (x) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (y) as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law) and (z) as
to enforceability with respect to rights of indemnity thereunder, to limitations
of public policy under applicable securities laws and (ii) this Agreement has
been duly authorized, executed and delivered by CIT, and it constitutes a legal,
valid and binding instrument enforceable against CIT in accordance with its
terms, subject (x) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally, (y) as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (z) as to
enforceability with respect to rights of indemnity thereunder, to limitations of
public policy under applicable securities laws and.
(k) The Sale and Servicing Agreement when executed and delivered on
the Closing Date will be duly authorized, executed and delivered by each of the
Seller and CITSF, and will
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constitute a legal, valid and binding instrument enforceable against each of the
Seller and CITSF in accordance with its terms, subject (i) to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and (ii) as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(l) The Trust Agreement when executed and delivered on the Closing
Date will be duly authorized, executed and delivered by each of the Seller and
CIT GP, and will constitute a legal, valid and binding instrument enforceable
against each of the Seller and CIT GP in accordance with its terms, subject (i)
to applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(m) The Certificates, when duly and validly executed by the Owner
Trustee or an agent thereof on behalf of the Trust, authenticated and delivered
in accordance with the Trust Agreement, and delivered to and paid for pursuant
hereto will be validly issued and outstanding and entitled to the benefits of
the Trust Agreement.
(n) The Notes, when duly and validly executed by the Owner Trustee or
an agent thereof on behalf of the Trust, authenticated and delivered in
accordance with the Indenture, and delivered and paid for pursuant hereto will
be validly issued and outstanding and entitled to the benefits of the Indenture.
(o) No filing or registration with, notice to or consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by any of the Seller, CITSF and CIT GP of the
transactions contemplated by any of the Basic Documents to which it is a party,
except such as may be required under the Act, the Rules and Regulations, or
state securities or Blue Sky laws or such other filings, registrations, notices,
consents, approvals, authorizations, orders or permits as have been obtained.
(p) The Seller, CITSF, CITCF-NY and CIT GP each possess all material
licenses, certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
businesses now operated by them and as described in the Prospectus, other than
such licenses, certificates, authorities or permits the failure of which to
possess would not have a material adverse effect on the interests of the
Certificateholders or the Noteholders under the Basic Documents,
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and neither the Seller, CITSF, CITCF-NY nor CIT GP have received any notice of
proceedings relating to the revocation or modification of any such license,
certificate, authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially and
adversely affect the conduct of the business, operations, financial condition or
income of any of the Seller, CITSF, CITCF-NY or CIT GP or their ability to
perform their respective obligations under any of the Basic Documents to which
it is a party.
(q) As of the Closing Date, the Initial Contracts and related property
will have been duly and validly assigned to the Owner Trustee in accordance with
the Basic Documents; and when such assignment is effected, a duly and validly
perfected transfer of all such Initial Contracts subject to no prior lien,
mortgage, security interest, pledge, charge or other encumbrance created by the
Seller, CITSF, CITCF-NY or CIT GP will have occurred. As of the Closing Date,
the Trust's grant of a security interest in the Collateral to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, charge
or other encumbrance created by the Seller, CITSF, CITCF-NY or CIT GP. As of
each Subsequent Transfer Date, the Subsequent Contracts and related property
conveyed to the Trust on such date will have been duly and validly assigned to
the Owner Trustee in accordance with the Basic Documents; and when such
assignment is effected, the duly and validly perfected transfer of all such
Subsequent Contracts will be subject to no prior lien, mortgage, security
interest, pledge, charge or other encumbrance created by the Seller, CITSF,
CITCF-NY or CIT GP. As of each Subsequent Transfer Date, the Trust's grant of a
security interest in the Collateral sold to the Trust on such Subsequent
Transfer Date pursuant to the Indenture will vest in the Indenture Trustee, for
the benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, charge
or other encumbrance created by the Seller, CITSF, CITCF-NY or CIT GP.
(r) As of the Closing Date, each of the Initial Contracts will meet
the eligibility criteria described in the Prospectus and as of each Subsequent
Transfer Date, each of the Subsequent Contracts being transferred to the Trust
will meet the eligibility criteria described in the Prospectus.
(s) The financial statements of CIT included or incorporated in the
Registration Statement and Prospectus present fairly the financial position of
CIT and its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and
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such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis; and any schedules included in the Registration Statement present fairly
the information required to be stated therein.
(t) The chief executive office of each of the Seller, CITSF and CITCF-
NY is listed opposite its name on Schedule II hereto, which office is the place
where it is "located" for the purposes of Section 9-103(3)(d) of the Uniform
Commercial Code as in effect in the State of New York, and the offices of each
of the Seller, CITSF and CITCF-NY where it keeps its respective records
concerning the Contracts are also listed in said Schedule opposite its name and
there have been no other such locations during the four months preceding the
Closing Date.
(u) Except as disclosed or incorporated by reference in the
Prospectus, since the date of the latest audited financial statements of CIT
included or incorporated by reference in the Prospectus there has been no
material adverse change, nor any development or event which is reasonably likely
to result in a material adverse change, in the condition (financial or other),
business, properties or results of operations of CITSF and its subsidiaries
taken as a whole.
(v) Neither the Seller, CITSF, CIT GP nor the Trust Fund created by
the Sale and Servicing Agreement will be subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(w) In connection with the offering of the Securities in the State of
Florida, the Seller hereby certifies that they have complied with all provisions
of Section 5.17.075 of the Florida Securities and Investor Protection Act.
(x) As of the Closing Date, each of the respective representations and
warranties of the Seller, CITSF, CITCF-NY and CIT GP set forth in the Basic
Documents will be true and correct, and the Underwriters may rely on such
representations and warranties as if they were set forth herein in full.
(y) The Seller has filed the preliminary prospectus supplement
relating to the Securities pursuant to and in accordance with Rule 424(b).
3. Purchase, Sale and Delivery of Securities. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Seller agrees to cause the Trust to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Trust, the principal amount of the Class of Notes set forth
opposite the name of such Underwriter
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in Schedule I hereto at a purchase price equal to the Total Price to Seller
specified in Schedule III hereto plus accrued interest, if any, at the
applicable Class A Rate from August 21, 1996 to (but excluding) the Closing
Date, and the principal balance of the Certificates set forth opposite the name
of such Underwriter in Schedule I hereto at a purchase price equal to the Total
Price to Seller specified in Schedule IV hereto plus accrued interest, if any,
at the Pass-Through Rate from August 21, 1996 to (but excluding) the Closing
Date.
The Seller will deliver the Securities (except for one Certificate in
the principal amount of $150,000) to the Representative, for the account of the
Underwriters, against payment of the purchase price by wire transfer of
immediately available funds to the Seller, or to such bank as may be designated
by the Seller, at the office of Schulte Roth & Zabel, 900 Third Avenue, New
York, New York 10022 on August 21, 1996 at 10:00 a.m., New York City time, or at
such other time not later than seven full business days thereafter as the
Representative and the Seller determine, such time being herein referred to as
the "Closing Date." The Securities to be so delivered will be initially
represented by one or more Class A-1 Notes, Class A-2 Notes and Class A-3 Notes
and one or more Certificates registered in the name of Cede & Co., the nominee
of The Depository Trust Company ("DTC"). The interests of beneficial owners of
the Securities will be represented by book entries on the records of DTC and
participating members thereof. One Certificate in definitive form in the
principal amount of $150,000 will be retained by the Seller and registered in
the name of CIT GP (the "GP Certificate"). Definitive Notes and Definitive
Certificates (other than the GP Certificate) will be available only under the
limited circumstances set forth in the Indenture and Trust Agreement. The notes
and certificates evidencing the Notes and Certificates will be made available
for checking and packaging at the offices of Schulte Roth & Zabel at least 24
hours prior to the Closing Date.
4. Offering by Underwriters. It is understood that, after the
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Registration Statement becomes effective, the Underwriters propose to offer the
Securities for sale to the public (which may include selected dealers), on the
terms set forth in the Prospectus.
5. Covenants of the Seller and CITSF. Each of the Seller and CITSF,
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jointly and severally, covenants and agrees with the several Underwriters that:
(a) The Seller will file the Prospectus, properly completed, with the
Commission pursuant to and in accordance with subparagraph (2) (or, if
applicable and if consented to by the Representative which consent shall not be
unreasonably
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withheld, subparagraph (5)) of Rule 424(b) no later than the second business day
following the earlier of the date of the determination of the offering price or
the date it is first used. The Seller will advise the Representative promptly of
any such filing pursuant to Rule 424(b).
(b) The Seller will advise the Representative promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus, and will
not effect any such amendment or supplementation without the Representative's
consent which consent shall not be unreasonably withheld; and the Seller will
also advise the Representative promptly of any amendment or supplementation of
the Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(c) The Seller will arrange for the qualification of the Securities
for offering and sale under the securities laws of such jurisdictions in the
United States as the Representative may reasonably designate and will continue
such qualifications in effect so long as necessary under such laws for the
distribution of such Securities, provided that in connection therewith the
Seller shall not be required to qualify as a foreign corporation to do business
nor become subject to service of process generally, but only to the extent
required for such qualification, in any jurisdiction in which it is not
currently so qualified.
(d) If, at any time when a prospectus relating to the Securities is
required to be delivered by law in connection with sales by any Underwriter or
dealer, 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 the 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 Prospectus to comply with the Act, the Seller will
promptly notify the Representative and will promptly prepare and file with the
Commission, at their own expense, an amendment or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance.
Neither the consent of the Representative to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6 hereof.
(e) The Seller will timely prepare and file all periodic reports, on
behalf of the Trust, with the Commission referred to in its No-Action Letter to
the Commission dated
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January 23, 1996 until no longer required to do so as permitted by Section 15(d)
of the 1934 Act.
(f) The Seller will furnish to each of the Underwriters copies of the
Registration Statement (two of which will be signed and include all exhibits),
each related preliminary prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Representative may from time to time reasonably request.
(g) So long as any of the Securities are outstanding, the Seller or
CITSF, as the case may be, will furnish to the Representative copies of all
written reports or other written communications (financial or otherwise)
furnished or made available to Noteholders and/or Certificateholders, and
deliver to the Representative during such same period, (i) as soon as they are
available, copies of any reports and financial statements filed by or on behalf
of the Trust by the Seller with the Commission pursuant to the 1934 Act, and
(ii) such additional information concerning the Seller or CITSF (relating to the
Contracts, the servicing thereof or the ability of CITSF to act as Servicer),
the Notes, the Certificates or the Trust as the Representative may reasonably
request from time to time.
(h) Whether or not the transactions contemplated by this Agreement are
consummated CITSF will pay or cause to be paid all costs and expenses incident
to the performance of CITSF's, the Seller's and CIT GP's respective obligations
hereunder, including (i) the preparation, issuance and delivery of the
Securities, (ii) any fees charged by Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Structured Ratings Group, a Division of The McGraw-Hill
Companies, Inc. ("S&P" and, together with Moody's, the "Rating Agencies"), for
the rating of the Securities, (iii) the expenses incurred in printing,
reproducing and distributing the registration statement as filed, the
Registration Statement, preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto required pursuant to Section 5(d)
hereof), (iv) the fees and disbursements of counsel to the Seller, CITSF, CIT
and CIT GP and the independent public accountants of the Seller, (v) the fees
and disbursements of the Indenture Trustee and its counsel, (vi) the fees and
disbursement of the Owner Trustee and its counsel, (vii) the fees of DTC in
connection with the book-entry registration of the Securities, (viii) the
reasonable expenses of the Representative including the reasonable fees and
disbursements of its counsel, in connection with the initial qualification of
the Securities for sale in the jurisdictions that the Representative may
designate pursuant to Section 5(c) hereof and in connection with the preparation
of any blue sky survey and legal investment survey and (ix) the printing and
delivery to the Underwriters, in such quantities as
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the Underwriters may reasonably request, of copies of the Basic Documents.
Subject to Section 9 hereof, the Underwriters shall be responsible for their own
costs and expenses, including the fees and expenses of their counsel (other than
the reasonable expenses of the Representative including the reasonable fees and
disbursements of its counsel, in connection with the initial qualification of
the Securities for sale in the jurisdictions that the Representative may
designate pursuant to Section 5(c) hereof and in connection with the preparation
of any blue sky survey and legal investment survey).
(i) On or before the Closing Date, the Seller, CITSF and CITCF-NY
shall cause each of their respective books and records (including any computer
records) relating to the Initial Contracts to be marked to show the absolute
ownership by the Owner Trustee in accordance with Section 3.01B(d) of the Sale
and Servicing Agreement, on behalf of the Trust, of the Initial Contracts, and
from and after the Closing Date neither the Seller, CITSF, as Servicer, nor
CITCF-NY shall take any action inconsistent with the ownership by the Owner
Trustee on behalf of the Trust of the Initial Contracts, other than as permitted
by the Basic Documents.
(j) On or before each Subsequent Transfer Date, the Seller, CITSF and
CITCF-NY shall cause each of their respective books and records (including any
computer records) relating to the Subsequent Contracts to be sold on such
Subsequent Transfer Date to be marked to show the absolute ownership by the
Owner Trustee in accordance with Section 3.01B(d) of the Sale and Servicing
Agreement, on behalf of the Trust, of such Subsequent Contracts, and from and
after such Subsequent Transfer Date neither the Seller, CITSF, as Servicer, nor
CITCF-NY shall take any action inconsistent with the ownership by the Owner
Trustee on behalf of the Trust of such Subsequent Contracts, other than as
permitted by the Basic Documents.
(k) Until the retirement of the Securities, or until such time as the
Underwriters shall cease to maintain a secondary market in the Securities,
whichever occurs first, the Seller or CITSF will deliver to the Representative
the certified public accountants' annual statements of compliance furnished to
the Indenture Trustee or the Owner Trustee pursuant to Section 4.11 of the Sale
and Servicing Agreement, as soon as such statements are furnished to the
Indenture Trustee or the Owner Trustee.
(l) To the extent, if any, that either of the ratings provided with
respect to the Securities by either Rating Agency is conditional upon the
furnishing of documents or the taking of any other actions by the Seller, CITSF,
CITCF-NY or CIT GP, the Seller, CITSF, CITCF-NY or CIT GP, as the case may be,
shall furnish such documents and take any such other actions as may be
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required to satisfy such conditions. A copy of any such document shall be
provided to the Representative at the time it is delivered to the Rating
Agencies.
(m) Provided that the Seller has received the letter from KPMG Peat
Marwick LLP, described in Section 7(a) relating to the Computational Materials,
the Seller will cause such Computational Materials (as defined in Section 7
below) with respect to the Securities which are delivered to the Seller as
provided in Section 7 below to be filed with the Commission on a Current Report
on Form 8-K (the "Current Report") not later than the date on which a prospectus
supplement relating to the Securities is available for distribution to
investors.
6. Conditions of the Obligations of the Underwriters. The obligations
-------------------------------------------------
of the several Underwriters to purchase and pay for the Securities will be
subject to the accuracy of the representations and warranties on the part of the
Seller, CIT and CITSF, and contained or incorporated herein, to the accuracy of
the statements of officers of the Seller, CIT and CITSF made pursuant to the
provisions hereof, to the performance by the Seller, CIT and CITSF of its
obligations hereunder and to the following additional conditions precedent:
(a) (i) On the date of this Agreement, the Representative and the
Seller shall have received a draft of a letter, dated the date of delivery
thereof, of KPMG Peat Marwick LLP confirming that they are independent public
accountants with respect to the Seller and CITSF within the meaning of the Act
and the Rules and Regulations, substantially in the form of the draft to which
the Representative has previously agreed and otherwise in form and substance
satisfactory to the Representative and counsel for the Underwriters and (ii) on
the Closing Date, a letter, dated the date of delivery thereof, of KPMG Peat
Marwick LLP confirming that they are independent public accountants with respect
to the Seller and CITSF within the meaning of the Act and the Rules and
Regulations, consistent with the letter delivered pursuant to clause (i) above
and otherwise in form and substance satisfactory to the Representative and
counsel for the Underwriters.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) hereof. On or prior
to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Registrants,
shall be contemplated by the Commission.
(c) The Representative shall have received a certificate, dated the
Closing Date, executed by any two of the President, any Vice President, the
principal financial officer
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or the principal accounting officer of (i) the Seller representing and
warranting that, as of the Closing Date, to the best of each such officer's
knowledge after reasonable investigation, the representations and warranties of
the Seller in this Agreement and the other Basic Documents to which it is a
party are true and correct, that the Seller has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder or
thereunder at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the best of their knowledge, are
contemplated by the Commission, (ii) CITSF in which such officers shall state
that, to the best of each such officer's knowledge after reasonable
investigation, the representations and warranties of CITSF in this Agreement and
the other Basic Documents to which it is a party are true and correct and that
CITSF has complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder or thereunder at or prior to the Closing
Date, and (iii) CIT representing and warranting that, as of the Closing Date, to
the best of each such officer's knowledge after reasonable investigation, the
representations and warranties of CIT in this Agreement are true and correct.
(d) The Representative shall have received a certificate, dated the
Closing Date, executed by any two of the President, any Vice President, the
principal financial officer or the principal accounting officer of CIT GP in
which such officers shall state that, to the best of each such officer's
knowledge after reasonable investigation, (i) the representations and warranties
of CIT GP in the Trust Agreement are true and correct and (ii) that CIT GP has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied under the Trust Agreement at or prior to the Closing
Date. Such certificate shall have attached thereto a true and correct photocopy
of the demand note furnished to CIT GP by CIT.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Seller, CITSF, CITCF-NY or CIT GP which, in the judgment of a
majority in interest of the Underwriters (including the Representative),
materially impairs the investment quality of the Securities or makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities; (ii) any downgrading in the rating of any debt securities of
CIT or CITSF or any of their direct or indirect subsidiaries by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such organization has
under
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surveillance or review its rating of any such debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange or
any setting of minimum prices for trading on such exchange; (iv) any banking
moratorium declared by Federal, New Jersey or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters (including the Representative), the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities.
(f) The Representative shall have received a written opinion of in-
house General Counsel of the Seller, CITSF and CITCF-NY, or other counsel
satisfactory to the Representative in its reasonable judgment, dated the Closing
Date, in substantially the form set forth below, with such changes therein as
the Representative and counsel for the Underwriters shall reasonably agree:
(i) The Seller and CITSF have each been duly organized and are validly
existing as corporations in good standing under the laws of the State of
Delaware. CITCF-NY has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New York.
(ii) The Seller, CITSF and CITCF-NY each have the corporate power and
corporate authority to carry on their respective businesses as described in
the Prospectus and to own and operate their respective properties in
connection therewith.
(iii) The Seller, CITSF and CITCF-NY are each corporations duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their organization and each has the corporate power to own
its assets and to transact the business in which it is currently engaged
and to perform their respective obligations under each of the Basic
Documents to which it is a party. The Seller, CITSF and CITCF-NY are each
qualified to do business as a foreign corporation and each is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
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adverse effect on the business, properties, assets, or condition (financial
or other) of the Seller, CITSF or CITCF-NY, respectively or on their
ability to perform their respective obligations under the Basic Documents.
(iv) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CITSF, and is a valid and binding obligation of
each of the Seller and CITSF enforceable against each of the Seller and
CITSF in accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (B) such enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (C) the enforceability as to rights to indemnity
thereunder may be limited under applicable law.
(v) Each of the Basic Documents to which the Seller, CITSF or CITCF-NY
is a party have been duly authorized, executed and delivered by each of the
Seller, CITSF and CITCF-NY, and each constitutes a valid and binding
obligation of, each of the Seller, CITSF and CITCF-NY, enforceable against
each of the Seller, CITSF and CITCF-NY in accordance with its terms, except
that (A) 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 (B) such enforcement may be
limited by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(vi) The execution and delivery by each of the Seller, CITSF and
CITCF-NY of each of the Basic Documents to which it is a party, the
performance of their respective obligations thereunder and the signing of
the Registration Statement by the Seller are within the corporate power of
the Seller, CITSF and CITCF-NY, as applicable, and have been duly
authorized by all necessary corporate action on the part of the Seller,
CITSF and CITCF-NY, as applicable; and neither the issue and sale of the
Securities, nor the consummation of the transactions contemplated by the
Basic Documents nor the fulfillment of the terms thereof, nor the grant of
the security interest in the Collateral to the Indenture Trustee pursuant
to the Indenture will, to the best of such counsel's knowledge, conflict
with or constitute a breach of, or
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default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or asset of the Seller, CITSF or CITCF-NY
pursuant to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument, if any, to which the Seller, CITSF or CITCF-NY is a
party or by which either may be bound or to which the property or assets of
the Seller, CITSF or CITCF-NY are subject (which contracts, indentures,
mortgages, loan agreements, notes, leases and other such instruments, if
any, have been identified by the Seller, CITSF or CITCF-NY to such
counsel), nor will such action result in any violation of the provisions of
the certificate of incorporation or by-laws of the Seller, CITSF or CITCF-
NY or, to the best of such counsel's knowledge, any law, administrative
regulation or administrative or court decree of any state or federal
courts, regulatory bodies, other body, governmental entity or arbitrator
having jurisdiction over the Seller, CITSF or CITCF-NY.
(vii) The Seller has duly authorized and executed the written order
to the Owner Trustee to execute and deliver the Issuer Order to the
Indenture Trustee.
(viii) The Seller has duly authorized and executed the written order
to the Owner Trustee to execute and deliver the Certificates.
(ix) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or order
of any New Jersey, New York or federal court or governmental authority or
agency is required for the consummation by the Seller, CITSF or CITCF-NY of
the transactions contemplated by this Agreement, except such as may be
required under the Act or the Rules and Regulations, or state securities or
Blue Sky laws or such other filings, registrations, notices, consents,
approvals, authorizations, orders or permits as have been obtained.
(x) There are no legal or governmental proceedings pending to which
the Seller, CITSF or CITCF-NY is a party or of which any property of the
Seller, CITSF or CITCF-NY is the subject, and no such proceedings are known
by such counsel to be threatened or contemplated by governmental
authorities or threatened by others, (A) that are required to be disclosed
in the Registration Statement and are not disclosed therein or (B)(1)
asserting the invalidity
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of all or part of any of the Basic Documents, (2) seeking to prevent the
issuance of the Notes or the Certificates, (3) that could materially and
adversely affect the Seller's, CITSF's or CITCF-NY's obligations under any
of the Basic Documents or (4) seeking to affect adversely the federal or
state income tax attributes of the Securities.
(xi) Such counsel is familiar with CITSF's and CITCF-NY's standard
operating procedures relating to CITSF's and CITCF-NY's acquisition of a
perfected first priority security interest in the vehicles financed by
CITSF and CITCF-NY's pursuant to motor vehicle retail installment sale
contracts and motor vehicle installment loan contracts in the ordinary
course of CITSF's and CITCF-NY's business. Other than with respect to
mechanic's and materialmen's liens, assuming that CITSF's standard
procedures are followed with respect to the perfection of security
interests in the Financed Vehicles (and such counsel has no reason to
believe that either CITSF or CITCF-NY has not or will not continue to
follow its standard procedures in connection with the perfection of
security interests in the Financed Vehicles), CITSF and CITCF-NY have
acquired or will acquire a perfected first priority security interest in
the Financed Vehicles.
(xii) The Contracts are chattel paper, as defined in the UCC in the
State of New Jersey.
(xiii) The form of assignment to be executed and delivered by CITSF to
the Seller pursuant to the Purchase Agreement is sufficient in form and
substance to convey to the Seller all of CITSF's right, title and interest
in and to the Contracts and any security interests securing the Contracts.
When the Purchase Agreement has been duly executed and delivered by all
parties thereto, the assignment described in the Purchase Agreement has
been duly executed and delivered to the Seller by CITSF, and the purchase
price has been paid to CITSF by the Seller in the manner specified in the
Purchase Agreement, all of CITSF's right, title and interest in and to the
Contracts and any security interests securing the Contracts will have been
conveyed to the Seller and the Seller will be the holder of a valid,
binding and enforceable security interest in the Contracts against CITSF.
(xiv) The form of assignment to be executed and delivered by the
Seller to the Owner Trustee pursuant
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to the Sale and Servicing Agreement is sufficient in form and substance to
convey to the Owner Trustee all of the Seller's right, title and interest
in and to the Contracts and any security interests securing the Contracts.
When the Basic Documents have each been duly executed and delivered by all
parties thereto, the assignment described in the Sale and Servicing
Agreement has been duly executed and delivered to the Trust by the Seller,
the purchase price therefor has been paid to the Seller by the Trust in the
manner specified in the Sale and Servicing Agreement, and the Notes and the
Certificates have been duly executed and duly authenticated and delivered
by the Owner Trustee or the Indenture Trustee, as applicable, to or upon
the order of the Seller in accordance with the Sale and Servicing
Agreement, the Indenture and the Trust Agreement, all of the Seller's
right, title and interest in and to the Contracts and any security
interests securing the Contracts will have been conveyed to the Trust and
the Trust will be the holder of a valid and binding security interest in
the Contracts against the Seller.
(xv) The documents incorporated by reference in the Registration
Statement and Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the Rules and Regulations, except as to
the financial statements and other financial and statistical data included
therein, to which such counsel need not express any opinion.
(g) The Representative shall have received a written opinion of in-
house General Counsel to CIT GP, dated the Closing Date, in substantially the
form set forth below, with such changes therein as counsel for the Underwriters
shall reasonably agree:
(i) CIT GP is duly qualified and licensed and in good standing in each
jurisdiction where its business requires such qualification or licensing.
(ii) The performance by CIT GP of its obligations under the Trust
Agreement will not, to the best of such counsel's knowledge, conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or asset of
CIT GP pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which CIT GP is a party or by
which it
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may be bound or to which the property or assets of CIT GP are subject
(which material contracts, indentures, mortgages, loan agreements, notes,
leases and other such instruments have been identified by CIT GP to such
counsel), nor will such action result in any violation of the provisions of
the certificate of incorporation or by-laws of CIT GP or, to the best of
such counsel's knowledge, any law, administrative regulation or
administrative or court decree of any state or federal courts, regulatory
bodies, other body, governmental entity or arbitrator having jurisdiction
over CIT GP.
(iii) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or order
of any Delaware or federal court or governmental authority or agency is
required for the consummation by CIT GP of the transactions contemplated by
the Trust Agreement, except such as may be required under the Act or the
Rules and Regulations, or state securities or Blue Sky laws or such other
filings, registrations, notices, consents, approvals, authorizations,
orders or permits as have been obtained.
(iv) There are no legal or governmental proceedings pending to which
CIT GP is a party or of which any property of CIT GP is the subject, and no
such proceedings are known by such counsel to be threatened or contemplated
by governmental authorities or threatened by others, (A) that are required
to be disclosed in the Registration Statement and are not disclosed therein
or (B)(1) asserting the invalidity of all or part of the Trust Agreement,
(2) that could materially and adversely affect CIT GP's obligations under
the Trust Agreement or (3) seeking to affect adversely the federal or state
income tax attributes of the Securities.
(v) CIT GP has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
the corporate power and corporate authority to perform its obligations
under the Trust Agreement.
(vi) The Trust Agreement has been duly authorized, executed and
delivered by CIT GP.
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are reasonably
acceptable to counsel to the Underwriters.
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(h) The Representative shall have received an opinion of in-house
General Counsel of CIT or other counsel satisfactory to the Representative in
its reasonable judgment, dated the Closing Date, in substantially the form set
forth below, with such changes therein as the Representative and counsel for the
Underwriters shall reasonably agree:
(i) CIT has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) This Agreement has been duly authorized, executed and delivered
by CIT and is a valid and binding obligation of CIT enforceable against CIT
in accordance with its terms, except that (A) 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 (B) such enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(iii) The signing of the Registration Statement by CIT is within the
corporate power of CIT and has been duly authorized by all necessary
corporate action on the part of CIT; the consummation of the transactions
contemplated herein and the fulfillment of the terms hereof will not, to
the best of such counsel's knowledge, conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or asset of CIT pursuant to, any
material contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which CIT is a party or by which it may be bound or to
which the property or assets of CIT are subject (which material contracts,
indentures, mortgages, loan agreements, notes, leases and other such
instruments have been identified by CIT to such counsel), nor will such
action result in any violation of the provisions of the certificate of
incorporation or by-laws of CIT or, to the best of such counsel's
knowledge, any law, administrative regulation or administrative or court
decree of any state or federal courts, regulatory bodies, other body,
governmental entity or arbitrator having jurisdiction over CIT.
(iv) The documents with respect to CIT incorporated by reference in the
Registration Statement and Prospectus, at the time they were or hereafter
are filed with the Commission, complied and
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will comply in all material respects with the requirements of the 1934 Act
and the Rules and Regulations, except as to the financial statements and
other financial and statistical data included therein, to which such
counsel need not express any opinion.
(v) To the best of such counsel's knowledge, there are no contracts or
documents of CIT which are required to be filed as exhibits to the
Registration Statement pursuant to the Act or the Rules and Regulations
including any documents incorporated by reference pursuant to Item 12 of
Form S-3 which were filed under the 1934 Act which have not been so filed.
(i) The Representative shall have received a written opinion of
Lowenstein, Sandler, Kohl, Fisher and Boylan, special local New Jersey counsel
for the Seller and CITSF, dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriters, to the
effect that:
(i)(A) If the transfer of the Contracts is deemed to be the grant of
a security interest, and not a true sale, (1) to the extent that the
Uniform Commercial Code as in effect in the State of New Jersey (the "New
Jersey UCC") applies to the perfection of the Seller's security interests
in the Contracts and the proceeds thereof under Section 9-103 of the New
Jersey UCC, when the financing statements executed by CITSF as debtor (the
"First Step Financing Statements") have been duly executed and delivered
and filed or recorded, as appropriate, in the office of the Secretary of
State of New Jersey, such security interests will be perfected and (2) to
the extent that the New Jersey UCC applies to the perfection of the Trust's
security interests in the Contracts and the proceeds thereof under Section
9-103 of the New Jersey UCC, when the First Step Financing Statements and
the financing statements executed by the Seller as "debtor" ("Second Step
Financing Statements") have been duly executed and delivered and filed or
recorded, as appropriate, in the office of the Secretary of State of New
Jersey, such security interests will be perfected and (B) based solely on
such counsel's review of those Financing Statements, officer certificates
and specified New Jersey UCC search reports, the security interests of the
Trust in the Contracts are subject to no equal or prior security interest
under the New Jersey UCC; provided, however that (1) for purposes of its
opinions in this paragraph, such counsel may assume that: (a) the Seller
is the holder of valid, binding and enforceable security interests in the
Contracts and the Trust is the holder of valid, binding and enforceable
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security interests in the Contracts; (b) the Contracts constitute "chattel
paper," as such term is defined in Section 9-105 of the New Jersey UCC; (c)
the New Jersey UCC governs the perfection of the security interest in the
Contracts, the priority of those security interests and the classification
of the Contracts; (d) the chief executive office of each of the Company and
the Seller is, and during the past four months has been, in the State of
New Jersey; (e) neither CITSF, the Seller nor the Trust has assigned, nor
will assign, any Contract to a buyer who takes possession of it in the
ordinary course of its business and who acts without knowledge that such
Contract is subject to a security interest; (f) the Contracts exist and
each of CITSF and the Seller, respectively, has rights in the Contracts;
(g) (i) no lien creditor has executed on or attached to the Contracts prior
to the perfection of the security interests of the Seller or the Trust in
the Contracts and the proceeds thereof; and (ii) the Contracts are not
subject to the rights of the holder of a perfected "purchase money security
interest" (as such term is defined in Section 9-107 of the New Jersey UCC);
(h) no Contract, or the proceeds thereof, constitutes proceeds of any
property subject to the security interest of a third party; (i) none of the
proceeds of the Contracts which constitute "securities" under Article 8 of
the New Jersey UCC are transferred to a bona fide purchaser (other than the
Indenture Trustee) under Section 8-302 of the New Jersey UCC; (j) the
Seller, the Indenture Trustee and the Owner Trustee have and will maintain
a list describing the Contracts for inspection during normal business hours
by interested parties; (k) the underlying facts in the officer certificates
to be received by such counsel are correct; (l) all financing statements or
other notice of liens, other than the financing statements, in which CITSF,
the Seller or the Trust is named as debtor were properly filed and indexed,
that the New Jersey UCC search reports have revealed all recorded liens
against CITSF and the Seller and that no filings or notices covering CITSF
or the Seller were made between the dates last searched and reported on in
the New Jersey UCC search reports and the time of such financing
statements, and (m) from and after the date hereof CITSF, acting in a
capacity as servicer and custodian for the Trustee, will have taken, and
will maintain, exclusive possession of the Contracts; and (2) such counsel
need express no opinion: (a) regarding perfection as to any government or
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governmental agency (including without limitation the United States of
America or any State thereof or any agency or department of the United
States of America or any State thereof) of any security interest in any
Contracts with respect to which such government or agency is obligated; (b)
on the perfection of any security interests in the collateral described in
the Contracts; (c) as to the priority of any perfected security interests
under the New Jersey UCC of any liens, claims or other interests that do
not require filing or similar action to attach or that arise by operation
of law against any claim or lien in favor of the United States or any State
or any agency or instrumentality of the United States or any State
(including, without limitation, liens arising under the federal tax laws or
the Employment Retirement Income Security Act of 1974, as amended) or
against the rights of a "lien creditor" (as defined in the New Jersey UCC);
and (d) as to the effect of the laws of any other state that may govern the
perfection or priority of the security interest in the Contracts by
possession or other than by filing a financing statement under the UCC; (3)
such opinions may be subject to the effect of (i) the limitations on the
existence and perfection of security interests in proceeds resulting from
the operation of Section 9-306 of the New Jersey UCC; (ii) the limitations
with respect to documents and instruments imposed by Section 9-309 of the
New Jersey UCC; (iii) bankers' liens, rights of set-off and other rights of
persons in possession of money, instruments and proceeds constituting
certificated or uncertificated securities; (iv) the priority of any
security interests perfected by possession; (v) the priority of security
interests which may be perfected by any means other than by filing a
financing statement under the New Jersey UCC and (and such counsel may note
that CITSF, the Seller and the Trust have respectively represented that no
such security interests exist) and (vi) Section 552 of the Bankruptcy Code
with respect to any Contracts acquired by the Seller or the Trust
subsequent to the commencement of a case by or against CITSF, the Seller or
the Trust under the Bankruptcy Code; (4) such counsel's opinions may be
inapplicable to any Subsequent Contracts unless, upon the proper filing of
New Jersey UCC financing statements describing the Subsequent Contracts,
(i) the assumptions, qualifications and limitations in this letter shall be
true as to conditions then existing and as to the Subsequent Contracts,
(ii) there are no changes in law, and (iii) all searches have been updated
and reveal no liens against any of the
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Subsequent Contracts; and (5) such counsel's opinion may be further subject
to the effect of general principles of equity, regardless of whether such
principles are considered in a proceeding in equity or at law, as the same
may be applied in a proceeding seeking to enforce any obligation.
(i) Solely insofar as the present laws of the State of New Jersey and
the Federal law of the United States of America are concerned, in a
properly presented and decided case, a court would conclude that the
transfer of the Contracts and the proceeds thereof by CITSF to the Seller
constitute true sales of such Contracts and, assuming a court reached that
conclusion, in such a case a court would conclude that the Contracts and
the proceeds would not be considered property of the estate of CITSF
pursuant to Section 541 of the Bankruptcy Code, and the Contracts and the
proceeds thereof would not be subject to the automatic stay pursuant to
Section 362 of the Bankruptcy Code; provided, however, such counsel need
-------- -------
express no opinion (A) with respect to how long the Seller could be denied
possession of the Contracts before the issues discussed in this paragraph
are finally decided on appeal or other review, (B) with respect to the
availability of a preliminary injunction or temporary restraining order
pursuant to the broad equitable powers granted to a bankruptcy court and
(C) as to the conveyance of any Subsequent Contracts unless, upon the
proper filing of UCC financing statements describing the Subsequent
Contracts, (1) the assumptions, qualifications and limitations in such
opinion shall be true as to conditions then existing and (2) all searches
have been updated and reveal no liens against any of the Subsequent
Contracts.
(ii) Solely insofar as the present laws of the State of New Jersey
and the Federal law of the United States of America are concerned, in a
properly presented and decided case, a court would conclude that the
transfer of the Contracts and the proceeds thereof by the Seller to the
Trust constitute true sales of such Contracts and, assuming a court reached
that conclusion, in such a case a court would conclude that the Contracts
and the proceeds would not be considered property of the estate of the
Seller pursuant to Section 541 of the Bankruptcy Code, and the Contracts
and the proceeds thereof would not be subject to the automatic stay
pursuant to Section 362 of the Bankruptcy Code; provided, however, such
-------- -------
counsel need express no opinion (A) with respect to how long the Trust
could be denied possession of the
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Contracts before the issues discussed in this paragraph are finally decided
on appeal or other review, (B) with respect to the availability of a
preliminary injunction or temporary restraining order pursuant to the broad
equitable powers granted to a bankruptcy court and (C) as to the conveyance
of any Subsequent Contracts unless, upon the proper filing of UCC financing
statements describing the Subsequent Contracts, (1) the assumptions,
qualifications and limitations in such opinion shall be true as to
conditions then existing and (2) all searches have been updated and reveal
no liens against any of the Subsequent Contracts.
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are reasonably
acceptable to counsel to the Underwriters. In rendering such opinion, such
counsel may state that they express no opinion as to the laws of any
jurisdiction other than the Federal law of the United States of America and the
laws of the State of New Jersey.
(j) The Representative shall have received a written opinion of
Schulte Roth & Zabel, special counsel to the Seller, CITSF and CITCF-NY, dated
the Closing Date, in substantially the form set forth below, with such changes
therein as the Representative and counsel for the Underwriters shall reasonably
agree:
(i) When the Notes have been duly executed, delivered and
authenticated in accordance with the Indenture and delivered and paid for
pursuant to this Agreement, the Notes will be validly issued, outstanding
and entitled to the benefits of the Indenture, except that (A) enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (B) enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(ii) The Registration Statement became effective under the Act as of
July 29, 1996 and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof or any amendment thereto has been issued under the Act and no
proceeding for that purpose has been instituted or threatened by the
Commission.
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(iii) The form of the Indenture has been qualified under the Trust
Indenture Act.
(iv) Neither the Trust Agreement nor the Sale and Servicing Agreement
need to be qualified under the Trust Indenture Act. The Trust is not, and
will not as a result of the offer and sale of the Securities as
contemplated in the Prospectus and in this Agreement become, required to
register as an "investment company" under the Investment Company Act.
(v) The statements in the prospectus supplement relating to the
Securities dated the date hereof, under the caption "The Notes," "The
Certificates" and "The Purchase Agreements and The Trust Documents" insofar
as such statements purport to summarize certain terms of the Notes, the
Certificates and the Basic Documents, present a fair summary of the terms
of such documents.
(vi) To the best of such counsel's knowledge, there are no contracts
or documents of the Seller which are required to be filed as exhibits to
the Registration Statement pursuant to the Act or the Rules or Regulations
which have not been so filed.
(vii) The statements in the Prospectus under the headings "Certain
Federal Income Tax Consequences" and "ERISA Considerations," to the extent
that they constitute matters of law or legal conclusions with respect
thereto are correct in all material respects.
(viii) The registration statement on Form S-3 (No. 333-07249) relating
to the Securities as of its effective date, the Registration Statement and
the Prospectus as of the date of this Agreement, and any amendment or
supplement thereto, as of its date, complied as to form in all material
respects with the requirements of the Act and the applicable Rules and
Regulations. Such counsel need express no opinion with respect to the
financial statements, the exhibits, annexes and other financial,
statistical, numerical or portfolio data, economic conditions or financial
condition of the portfolio information included in or incorporated by
reference into the registration statement on Form S-3 (No. 333-07249)
relating to the Securities, the Registration Statement, the Prospectus or
any amendment or supplement thereto.
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Such counsel shall state that it has participated in conferences with
officers and representatives of the Seller, CITSF, Counsel to CITSF and officers
and representatives of the Underwriters, at which conferences certain of the
contents of the Registration Statement and the Prospectus were discussed and,
although such counsel is not passing upon and does not assume any responsibility
whatsoever for, the factual accuracy, completeness or fairness of the statements
contained in the registration statement on Form S-3 (No. 333-07249) relating to
the Securities, the Registration Statement or Prospectus (except as stated in
Sections 6(j)(v) and 6(j)(vii) above) and has made no independent check or
verification thereof for the purpose of rendering this opinion, on the basis of
the foregoing (relying as to materiality to a large extent upon the certificates
of officers and other representatives of the Seller, CITSF and CIT GP), no facts
have come to their attention that leads such counsel to believe that the
registration statement on Form S-3 (No. 333-07249) relating to the Securities,
as of its effective date, the Registration Statement, as of the date of this
Agreement, or any amendment thereto, as of its date when it became effective,
contained any 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 that the Prospectus on its date contained or on the Closing
Date contains, any untrue statement of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that such counsel need express no view with
respect to the financial statements, tables, schedules, exhibits, annexes and
other financial, statistical, numerical or portfolio data, or information on
economic conditions or financial condition of the portfolio included in or
incorporated by reference into, the Registration Statement or Prospectus.
Said counsel may state that they are admitted to practice only in the
State of New York, that they are not admitted to the Bar in any other State and
are not experts in the law of any other State and to the extent that the
foregoing opinions concern the laws of any other State such counsel may rely
upon the opinion of counsel satisfactory to the Underwriters and admitted to
practice in such jurisdiction. Any opinions relied upon by such counsel as
aforesaid shall be addressed to the Underwriters and shall be delivered together
with the opinion of such counsel, which shall state that such counsel believes
that their reliance thereon is justified.
(k) The Representative shall have received, in form and substance
satisfactory to the Representative and counsel for the Underwriters an opinion
of Schulte Roth & Zabel, special counsel to the Trust, dated the Closing Date,
regarding the creation of a security interest in the Collateral in favor of the
Indenture Trustee on behalf of the Noteholders to the extent
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that a security interest in such Collateral can be created under Article 9 of
the UCC as currently in effect in the State of New York. Such opinion may
contain such assumptions, qualifications and limitations as are customary in
opinions of this type and as are reasonably acceptable to counsel to the
Underwriters. In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the Federal law
of the United States of America and the laws of the State of New York.
(l) The Representative shall have received an opinion of Stroock &
Stroock & Lavan, counsel for the Underwriters, dated the Closing Date, with
respect to the validity of the Securities and such other related matters as the
Representative shall require and the Seller shall have furnished or caused to be
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(m) The Representative shall have received an opinion of Emmet, Marvin
& Martin, LLP, counsel to the Indenture Trustee, dated the Closing Date, in form
and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Indenture constitutes a legal, valid and binding agreement of
the Indenture Trustee, enforceable against the Indenture Trustee in
accordance with its terms, except as enforceability thereof may be limited
by bankruptcy, insolvency, liquidation, reorganization, moratorium or other
similar laws affecting the enforcement of rights of creditors against the
Indenture Trustee generally, as such laws would apply in the event of
bankruptcy, insolvency, liquidation, receivership, or reorganization or any
moratorium or similar occurrence affecting the Indenture Trustee, and the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or law).
(ii) The Notes have been duly authenticated and delivered by the
Indenture Trustee in accordance with the terms of the Indenture.
(iii) The Indenture Trustee is a banking corporation validly existing
under the laws of the state of New York and has full power and authority to
enter into, and to take all action required of it, under the Indenture.
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(iv) The Indenture has been duly authorized, executed and delivered by
the Indenture Trustee.
(n) The Representative shall have received an opinion of Richards,
Layton & Finger, counsel to the Owner Trustee, dated the Closing Date, in form
and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Owner Trustee is duly incorporated and validly existing as a
national banking association under the laws of the United States of America
and has the power and authority to execute and deliver the Trust Agreement.
(ii) The execution and delivery of the Trust Agreement by the Owner
Trustee and the performance by the Owner Trustee of its obligations under
the Trust Agreement have been duly authorized by all necessary action of
the Owner Trustee and the Trust Agreement has been duly executed and
delivered by the Owner Trustee.
(iii) The Trust Agreement constitutes valid and binding obligations
of the Owner Trustee enforceable against the Owner Trustee in accordance
with its terms, except as the enforceability thereof may be (a) limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or other
similar laws affecting the rights of creditors generally, and (b) subject
to general principals of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(iv) The execution and delivery by the Owner Trustee of the Trust
Agreement and the transactions contemplated thereby do not require any
consent, approval or authorization of, or any registration or filing with,
any applicable governmental authority of the State of Delaware which has
not been obtained or done.
(v) Neither the consummation by the Owner Trustee of the transactions
contemplated in the Trust Agreement, nor the fulfillment of the terms
thereof by the Owner Trustee will conflict with, result in a breach or
violation of, or constitute a default under the charter or the other
organizational documents of the Owner Trustee.
(o) The Representative shall have received an opinion of Richards,
Layton & Finger, special Delaware counsel for the
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<PAGE>
Trust, dated the Closing Date, in form and substance satisfactory to the
Representative and counsel for the Underwriters, to the effect that:
(i) The Trust Agreement is the legal, valid and binding agreement of
the Owner Trustee, CIT GP and the Seller, enforceable against the Owner
Trustee, CIT GP and the Seller in accordance with its terms subject to (i)
applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent conveyance and similar laws relating to and
affecting the rights and remedies of creditors generally, (ii) principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
(ii) The Certificate of Trust has been duly filed with the Secretary
of State of the State of Delaware. The Trust has been duly formed and is
validly existing as a business trust under the Delaware Business Trust Act.
(iii) The Trust has the power and authority under the Trust Agreement
and the Delaware Business Trust Act to execute, deliver and perform its
obligations under the Trust Agreement, the Indenture, the, the Sale and
Servicing Agreement, the Notes and the Certificates, and to issue the Notes
and the Certificates.
(iv) The Trust has duly authorized and executed the Trust Agreement,
the Indenture, the Sale and Servicing Agreement, the Notes and the
Certificates.
(v) The Trust has the power under the Trust Agreement and the Delaware
Business Trust Act to pledge the Trust Estate to the Indenture Trustee as
security for the Notes.
(vi) The Certificates have been executed, authenticated and delivered
by the Owner Trustee upon the order of the Seller in accordance with the
Trust Agreement and when delivered to and paid for pursuant to this
Agreement, the Certificates will be validly issued and outstanding, and the
holder of record of any such Certificates will be entitled to the benefits
accorded by the Trust Agreement subject to (i) applicable bankruptcy,
insolvency, moratorium, receivership, reorganization, fraudulent conveyance
and similar laws relating to and affecting the rights
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and remedies of creditors generally, (ii) principles of equity (regardless
of whether considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
(vii) The Notes have been executed, authorized and delivered by the
Owner Trustee upon the order of the Seller in accordance with the Trust
Agreement and the Indenture.
(viii) To the extent that Article 9 of the Uniform Commercial Code as
in effect in the State of Delaware (the "Delaware UCC") is applicable
(without regard to conflicts of laws principles), and assuming that the
security interest created by the Indenture in the Collateral has been duly
created and has attached, upon the filing of a UCC-1 financing statement
with the Secretary of State of the State of Delaware, the Indenture Trustee
will have a perfected security interest in such Collateral and the proceeds
thereof; and such security interest will be prior to any other security
interest granted by the Trust that is perfected solely by the filing of
financing statements under the Delaware UCC, excluding purchase money
security interests under (S) 9-312 of the Delaware UCC and temporarily
perfected security interests in proceeds under (S) 9-306 of the Delaware
UCC.
(ix) No re-filing or other action is necessary under the Delaware UCC
in the State of Delaware in order to maintain the perfection of the
security interest referenced above except for the filing of continuation
statements at five-year intervals.
(x) Under (S) 3805(b) of the Delaware Business Trust Act, no creditor
of any Certificateholder shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the
property of the Trust except in accordance with the terms of the Trust
Agreement subject to (i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
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(xi) Under (S) 3805(c) of the Delaware Business Trust Act, and
assuming that the Sale and Servicing Agreement conveys good title to the
Contracts to the Trust as a true sale and not as a security arrangement,
the Trust, rather than the Certificateholders, is the owner of the
Contracts subject to (i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(xii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture and the Sale and
Servicing Agreement do not require any consent, approval or authorization
of, or any registration or filing with, any governmental authority of the
State of Delaware, except for the filing of the Certificate of Trust with
the Secretary of State.
(xiii) Neither the consummation by the Owner Trustee of the
transactions contemplated by the Trust Agreement or, on behalf of the
Trust, the transactions contemplated by the Trust Agreement, Indenture and
the Sale and Servicing Agreement nor the fulfillment of the terms thereof
by the Owner Trustee will conflict with or result in a breach or violation
of any law of the State of Delaware.
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are reasonably
acceptable to counsel to the Underwriters. In rendering such opinion, such
counsel may state that they express no opinion as to the laws of any
jurisdiction other than the Federal law of the United States of America and the
laws of the State of Delaware.
(p) The Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
shall each have been rated "Aaa" by Moody's and "AAA" by S&P, and the
Certificates shall have been rated at least "Baa2" by Moody's and "BBB" by S&P.
(q) The Representative shall have received copies of each opinion of
counsel delivered to either Rating Agency, together with a letter addressed to
the Representative, dated the Closing Date, to the effect that each Underwriter
may rely
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on each such opinion to the same extent as though such opinion was addressed to
each as of its date.
(r) The Representative shall have received evidence satisfactory to it
and counsel for the Underwriters that, on or before the Closing Date, UCC-1
financing statements shall have been submitted to the Trustee for filing in the
appropriate filing offices reflecting (1) the transfer of the interest in the
Contracts and the proceeds thereof (A) from CITCF-NY to CITSF, to the extent
such Contracts have been transferred to CITSF from CITCF-NY, (B) from CITSF to
the Seller, (C) from the Seller to the Owner Trustee, on behalf of the Trust, or
the Trust, as the case may be, and (2) the grant of the security interest by the
Trust in the Contracts and the proceeds thereof to the Indenture Trustee.
(s) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Seller in connection with the issuance and sale of
the Securities as herein contemplated shall be in form and substance
satisfactory to the Representative and counsel for the Underwriters.
7. Computational Materials. (a) Not later than 10:30 a.m. New York
-----------------------
time, on the business day before the date on which the Current Report relating
to the Securities is required to be filed by the Seller with the Commission
pursuant to Section 5(m) hereof, each Underwriter shall deliver to the Seller
five complete copies of all materials, if any, provided by such Underwriter to
prospective investors in such Securities which constitute "Computational
Materials" within the meaning of the no-action letter dated May 20, 1994 issued
by the Division of Corporation Finance of the Commission to Kidder, Peabody
Acceptance Corporation I, Kidder, Peabody & Co. Incorporated, and Kidder
Structured Asset Corporation, the no-action letter dated May 27, 1994 issued by
the Division of Corporation Finance of the Commission to the Public Securities
Association and the no-action letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the "Kidder/PSA
Letters") and the filing of which is a condition of the relief granted in such
letters (such materials being the "Computational Materials"). Each delivery of
Computational Materials to the Seller pursuant to this paragraph (a) shall be
effected by delivering four copies of such materials to counsel for the Seller
on behalf of the Seller and one copy of such materials to the Seller. The
Computational Materials so delivered shall be accompanied by a letter from KPMG
Peat
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Marwick LLP, addressed to the Seller and the Representative, in form and
substance reasonably satisfactory to the Seller and the Representative, to the
effect that KPMG Peat Marwick LLP have performed certain agreed upon procedures
with respect to such Computational Materials as a result of which they have
determined that such Computational Materials are mathematically correct.
(b) Each Underwriter that so delivers Computational Materials
represents and warrants to and agrees with the Seller, as of date hereof and as
of the Closing Date, that:
(i) on the date any such Computational Materials with respect to the
Securities were last furnished to each prospective investor by such
Underwriter and on the date of delivery thereof to the Seller pursuant
to Section 7(a), any Underwriter Derived Information (defined below)
included therein did not and will not include any untrue statement of
a material fact, or, when read in conjunction with the Prospectus and
a prospectus supplement relating to the Securities, did not and will
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(ii) the Computational Materials contain customary legends and are in
substantially the same form as previously furnished to the Seller.
Notwithstanding the foregoing, no Underwriter makes any representation or
warranty as to any information other than the Underwriter Derived Information
provided by such Underwriter. "Underwriter Derived Information" means such
portion, if any, of the information delivered to the Seller pursuant to Section
5(m) for filing with the Commission on Form 8-K as: (i) is not contained in the
Prospectus without taking into account information incorporated therein by
reference and (ii) does not constitute Seller Provided Information. "Seller
Provided Information" means any computer tape furnished to the Underwriters by
the Seller concerning the assets comprising the Trust upon which the
mathematical calculations reflected in the Underwriter Derived Information of
any Underwriter are based.
(c) Each Underwriter severally covenants with the Seller that if any
Underwriter Derived Information required to be provided to the Seller pursuant
to this Section 7 is determined to contain any information that is inaccurate or
misleading, such Underwriter (whether or not such Underwriter Derived
Information was provided to the Seller or filed by the Seller with the
Commission) shall promptly prepare and deliver to the Seller and each
prospective investor which received such Underwriter Derived Information
corrected Underwriter Derived
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Information. All information provided to the Seller pursuant to this Section
7(c) shall be provided within the time periods set forth in Section 7(a).
(d) Each Underwriter shall comply with all applicable laws and
regulations in connection with the use of Computational Materials including the
Kidder/PSA Letters.
(e) Each Underwriter shall provide the Company with representative
forms of all Computational Materials prior to their first use, to the extent
such forms have not previously been approved by the Company for use by such
Underwriter.
(f) If an Underwriter does not provide any Computational Materials to
the Company pursuant to Section 7(e), such Underwriter shall be deemed to have
represented, as of the Closing Date, that it did not provide any prospective
investors with any information in written or electronic form in connection with
the offering of the Certificates that is required to be filed with the
Commission in accordance with the Kidder/PSA Letters.
(g) In the event of any delay in the delivery by any Underwriter to
the Company of all Computational Materials required to be delivered in
accordance with Section 7(a), the Company shall have the right to delay the
release of the Prospectus to investors or to any Underwriter, to delay the
Closing Date and to take other appropriate actions in each case as necessary in
order to allow the Company to comply with its agreement set forth in Section
5(m) to file the Computational Materials by the time specified therein.
8. Indemnification and Contribution. (a) CITSF will indemnify and
--------------------------------
hold each Underwriter harmless against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that (i) CITSF will not be liable in any such case to the
- -------- -------
extent that any such loss, claim, damage or liability arises out of or is based
upon
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an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents (x) in reliance upon and in conformity with
written information furnished to the Seller or CITSF by any Underwriter through
the Representative specifically for use therein it being understood and agreed
that the only such information furnished by any Underwriter consists of the
following information contained in the prospectus supplement relating to the
Securities dated the date hereof: (a) the last paragraph at the bottom of the
cover page concerning the terms of the offering by the Underwriters, (b) the
legend concerning over-allotments and (c) the information contained under the
caption "Plan of Distribution" (the "Underwriters' Information") or (y) with
respect to Underwriter Derived Information included in any Current Report or any
amendment or supplement thereof, except to the extent that any untrue statement
or alleged untrue statement therein results (or is alleged to have resulted)
from an error (a "Seller Error") in the Seller Provided Information other than a
Seller Error which is corrected by information subsequently furnished by the
Seller in writing or by electronic transmission to such Underwriter prior to the
time such Computational Materials are furnished to the Seller pursuant to
Section 7(a), (ii) such indemnity with regard to any related preliminary
prospectus shall not inure to the benefit of each Underwriter (or any person
controlling each Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the Prospectus (or, in the
event it is amended or supplemented, such Prospectus as amended or supplemented)
at or prior to the confirmation of the sale of such Securities to such person if
such Prospectus (or, in the event it is amended or supplemented, such Prospectus
as amended or supplemented) was timely forwarded to each Underwriter as required
by this Agreement and the untrue statement or omission of a material fact
contained in such related preliminary prospectus was corrected in the Prospectus
(or, in the event it is amended or supplemented, such Prospectus as amended or
supplemented) and (iii) CITSF shall not, in connection with any one such action
or separate but substantially similar or related transactions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters, which firm shall be designated in
accordance with Section 8(c) hereof.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Seller and CITSF against any losses, claims, damages or
liabilities to which the Seller or CITSF may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact
-38-
<PAGE>
contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Seller or CITSF by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Seller or CITSF
in connection with investigating or defending any such action or claim as such
expenses are incurred, it being understood and agreed that (i) the only such
information furnished by any Underwriter consists of (x) the Underwriters'
Information and (y) in any Underwriter Derived Information (or amendments or
supplements thereof) furnished to the Seller by such Underwriter pursuant to
Section 7 (except that no such indemnity shall be available for any losses,
claims, damages or liabilities (or actions in respect thereof) resulting from a
Seller Error other than a Seller Error which is corrected by information
subsequently furnished by the Seller in writing or by electronic transmission to
such Underwriter prior to the time such Computational Materials are furnished to
the Seller pursuant to Section 7(a), and (ii) the Underwriters shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys for each of the Seller and CITSF, which
firm shall be designated in accordance with Section 8(c) hereof.
(c) Promptly after receipt by an indemnified party under this Section
of written notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and after
-39-
<PAGE>
acceptance by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action 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 any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, in such proportion as is
appropriate to reflect not only the relative benefits received by the Seller and
CITSF on the one hand and the Underwriters on the other from the offering of the
Securities but also the relative fault of the Seller and CITSF on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. The relative benefits received by the
Seller and CITSF on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by the Seller and CITSF
bear to the total underwriting discounts and commissions received by the
Underwriters. 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 relates to
information supplied by the Seller, CITSF or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such
-40-
<PAGE>
untrue or alleged untrue statement or omission or alleged omission. 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 Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of CITSF under this Section shall be in addition
to any liability which the Seller or CITSF may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller or CITSF, to each officer of the
Seller or CITSF who has signed the Registration Statement and to each person, if
any, who controls the Seller or CITSF within the meaning of the Act.
9. Survival of Certain Representations and Obligations. The
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Seller and CITSF or their respective officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation or statement as to the results
thereof, made by or on behalf of any Underwriter, the Seller, CITSF or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Securities. If this
Agreement is terminated pursuant to Section 10 or if for any reason the purchase
of the Securities by the Underwriters is not consummated, the Seller, CITSF and
CITCF-NY shall remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 5 hereof and the respective obligations of the Seller,
CITSF and the Underwriters pursuant to Section 8 hereof shall remain in effect.
If the purchase of the Securities by the Underwriters is not consummated for any
reason other than solely because of the termination of this Agreement pursuant
to Section 10 or the occurrence of any event specified in clauses (iii), (iv) or
(v) of Section 6(e) hereof, the Seller and CITSF will reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Securities.
-41-
<PAGE>
10. Failure to Purchase the Securities. If any Underwriter or
----------------------------------
Underwriters default in their obligations to purchase the principal amount of
the Class or Classes of Notes and/or the Certificates opposite such
Underwriter's name on Schedule I hereto and the aggregate principal amount of
the Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total principal amount of the
Securities, the Representative may make arrangements satisfactory to the Seller
and CITSF for the purchase of such Notes or Certificates by other persons,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Class or
Classes of Notes and/or the Certificates that such defaulting Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters so default
and the aggregate principal amount of the Notes and/or the Certificates with
respect to such default or defaults exceeds 10% of the total principal amount of
the Securities and arrangements satisfactory to the Representative, the Seller
and CITSF for the purchase of such Notes and/or Certificates by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Seller or
CITSF, except as provided in Section 9. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter or Underwriters
from liability for its default.
11. Notices. All communications hereunder will be in writing and, if
-------
sent to the Representative or the Underwriters, will be mailed, delivered or
sent by facsimile transmission and confirmed to the Representative at Seven
World Trade Center, New York, NY 10048, Attention: Legal Department (facsimile
number (212) 783-4009); if sent to the Seller, will be mailed, delivered or sent
by facsimile transmission and confirmed to it at The CIT Group Securitization
Corporation II, 650 CIT Drive, Livingston, New Jersey 07039, Attention: James J.
Egan, Jr., President (facsimile number (201) 740-5410); if sent to CIT, will be
mailed, delivered or sent by facsimile transmission and confirmed to it by The
CIT Group Holdings, Inc., 1211 Avenue of the Americas, New York, New York 10036,
Attention: Joseph M. Leone, Executive Vice President and Chief Financial Officer
(facsimile number (212) 536-1971); and if sent to CITSF, will be mailed,
delivered or sent by facsimile transmission and confirmed to it at The CIT
Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: James J. Egan, Jr., President (facsimile number (201) 740-5410).
12. No Bankruptcy Petition. Each Underwriter agrees that, prior to
----------------------
the date which is one year and one day after the payment in full of all
securities issued by the Seller or by a
-42-
<PAGE>
trust for which the Seller was the depositor or by the Trust, which securities
were rated by any nationally recognized statistical rating organization, it will
not institute against, or join any other person in instituting against, the
Seller, the Trust or CIT GP any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any Federal or
state bankruptcy or similar law.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the Underwriters, the Seller, CIT and CITSF and their respective
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligations hereunder.
14. Representation of Underwriters. The Representative will act for
------------------------------
the several Underwriters in connection with the transactions described in this
Agreement, and any action taken by Representative under this Agreement will be
binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
16. Applicable Law. This Agreement shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
-43-
<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to us a counterpart
hereof, whereupon it will become a binding agreement among CIT, the Seller,
CITSF and the several Underwriters in accordance with its terms.
Very truly yours,
THE CIT GROUP HOLDINGS, INC.
By: /s/ ERNEST D. STEIN
________________________________________
Name: Ernest D. Stein
Title: Executive Vice President
THE CIT GROUP SECURITIZATION CORPORATION II
By:/s/ RICHARD J. GUGLIADA
_________________________________________
Name: Richard J. Gugliada
Title: Senior Vice President
THE CIT GROUP/SALES FINANCING, INC.
By:/s/ RICHARD J. GUGLIADA
_________________________________________
Name: Richard J. Gugliada
Title: Senior Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written:
SALOMON BROTHERS INC
By:/s/ GREGORY T. KOSINSKI
____________________________
Name: Gregory T. Kosinski
Title: Associate
Acting on behalf of itself
and as the Representative
of the several Underwriters.
-44-
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Initial Principal
Amount of
Underwriter Class A-1 Notes
- ----------- -----------------
<S> <C>
Salomon Brothers Inc.. $29,400,000
UBS Securities LLC.... 29,300,000
BA Securities, Inc.... 29,300,000
-----------
Total
$88,000,000
===========
Initial Principal
Amount of
Underwriter Class A-2 Notes
- ----------- -----------------
Salomon Brothers Inc.. $25,000,000
UBS Securities LLC.... 25,000,000
BA Securities, Inc.... -----------------
25,000,000
Total -----------
$75,000,000
===========
Initial Principal
Amount of
Underwriter Class A-3 Notes
- ----------- -----------------
Salomon Brothers Inc.. $21,000,000
UBS Securities LLC.... 20,800,000
BA Securities, Inc.... 20,800,000
-----------
Total
$62,600,000
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Initial Principal
Amount of
Underwriter Certificates
- ----------- -----------------
<S> <C>
Salomon Brothers Inc.. $ 4,750,000
UBS Securities LLC.... 4,750,000
-----------
BA Securities, Inc....
4,750,000
Total -----------
$14,250,000
===========
</TABLE>
<PAGE>
SCHEDULE II
Locations of Chief Executive Offices and Principal Places of Business
---------------------------------------------------------------------
The CIT Group Securitization
Corporation II 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Sales Financing, Inc. 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Consumer Finance,
Inc. (NY) 650 CIT Drive
Livingston, NJ 07039-0491
Locations of Records
--------------------
The CIT Group Securitization
Corporation II 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
The CIT Group/Sales Financing, Inc. 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
The CIT Group/Consumer Finance,
Inc. (NY) 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
<PAGE>
SCHEDULE III
<TABLE>
<CAPTION>
Original
Principal Class A
Security Amount $ Price % Price $ Rate%
- -------- --------- ------- ------------- --------
<S> <C> <C> <C> <C>
Class A-1 Notes.. 88,000,000 99.97896 87,981,484.80 6.00
Class A-2 Notes.. 75,000,000 99.95361 74,965,207.50 6.40
Class A-3 Notes.. 62,600,000 99.90563 62,540,924.38 6.65
</TABLE>
Total Price to Public: $225,487,616
Total Price to Seller: 224,767,416
------------
Underwriting Discounts
and Commissions: $ 720,200
<PAGE>
SCHEDULE IV
Original Pass-
Principal Through
Security Balance $ Price % Price $ Rate%
- ------------ ------------- ------- ------- ------
Certificates 14,250,000 99.79104 14,220,223.20 7.10
Total Price to Public: $14,220,223
Total Price to Seller: 14,148,973
-----------
Underwriting Discounts
and Commissions: $ 71,250
<PAGE>
EXHIBIT 4.1
================================================================================
THE CIT RV TRUST 1996-B
Class A-1 6.00% Asset-Backed Notes
Class A-2 6.40% Asset-Backed Notes
Class A-3 6.65% Asset-Backed Notes
____________________________________
INDENTURE
Dated as of August 1, 1996
____________________________________
THE BANK OF NEW YORK,
Indenture Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1)................ 6.11
(a)(2)................ 6.11
(a)(3)................ 6.10
(a)(4)................ 6.14
(b)................ 6.11
(c)................ N.A.
311(a)................... 6.12
(b)................... 6.12
(c)................... N.A.
312(a)................... 7.1, 7.2
(b)................... 7.2
(c)................... 7.2
313(a)................... 7.4(a), 7.4(b)
(b)(1)................... 7.4(a)
(b)(2)................... 7.4(a)
(c)................... 7.4(a)
(d)................... 7.4(a)
314(a)................... 7.3(a), 3.9
(b)................... 3.6
(c)(1)................... 2.2, 2.9, 4.1, 11.1
(c)(2)................... 11.1(a)
(c)(3)................... 11.1(a)
(d)................... 2.9, 11.1(b)
(e)................... 11.1(a)
(f)................... 11.1(a)
315(a)................... 6.1(b)
(b)................... 6.5
(c)................... 6.1(a)
(d)................... 6.2, 6.1(c)
(e)................... 5.13
316(a) last
sentence.................... 1.1
(a)(1)(A)................... 5.11
(a)(1)(B)................... 5.12
(a)(2)................... Omitted
316(b),(c).................. 5.7
317(a)(1)................... 5.3(b)
(a)(2)...................... 5.3(d)
(b)...................... 3.3
318(a)...................... 11.7
Note: This cross reference table shall not, for any purpose, be deemed to
be part of this Indenture.
N.A. means Not Applicable
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I: DEFINITIONS AND INCORPORATION BY REFERENCE................................... 2
SECTION 1.1 DEFINITIONS................................................................ 2
SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.......................... 2
ARTICLE II: THE NOTES................................................................... 3
SECTION 2.1 FORM....................................................................... 3
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY..................................... 3
SECTION 2.3 TEMPORARY NOTES............................................................ 4
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE OF NOTES............... 4
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES................................. 6
SECTION 2.6 PERSONS DEEMED NOTEHOLDERS................................................. 7
SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST.......................................... 7
SECTION 2.8 CANCELLATION OF NOTES...................................................... 9
SECTION 2.9 RELEASE OF COLLATERAL...................................................... 9
SECTION 2.10 BOOK-ENTRY NOTES.......................................................... 9
SECTION 2.11 NOTICES TO DEPOSITORY.....................................................10
SECTION 2.12 DEFINITIVE NOTES..........................................................10
SECTION 2.13 SELLER AS NOTEHOLDER......................................................11
SECTION 2.14 TAX TREATMENT.............................................................11
ARTICLE III: COVENANTS..................................................................12
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST..........................................12
SECTION 3.2 MAINTENANCE OF AGENCY OFFICE...............................................12
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.....................................12
</TABLE>
<PAGE>
INDENTURE, dated as of August 1, 1996, between THE CIT RV TRUST 1996-B, a
Delaware business trust (the "Issuer"), and THE BANK OF NEW YORK, a New York
banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Notes:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders, all of the Issuer's right, title and
interest in and to (i) the Contracts (except, to the extent provided in the Sale
and Servicing Agreement, any Post Cut-off Date Insurance Add-Ons); (ii) all
monies received under the Initial Contracts on or after the Initial Cut-off Date
and under the Subsequent Contracts on or after the related Subsequent Cut-off
Date; (iii) such amounts as from time to time may be held in one or more
accounts (other than the Excluded Assets) established and maintained by the
Servicer pursuant to the Sale and Servicing Agreement (including all investments
in such accounts and all income from the funds therein and all proceeds
thereof); (iv) all monies on deposit in the Pre-Funding Account and the
Capitalized Interest Account (including all investments in such accounts and all
income from the funds therein and all proceeds thereof); (v) an assignment of
the security interests in the Financed Vehicles granted by the Obligors and any
accessions thereto and any other interest of the Issuer in the Financed
Vehicles; (vi) the right to proceeds from physical damage, credit life and
disability insurance policies, if any, covering individual Financed Vehicles or
Obligors, as the case may be; (vii) the rights of the Issuer under the Sale and
Servicing Agreement (but excluding all rights of the Issuer to the Excluded
Assets) and the Subsequent Transfer Agreements and the Subsequent Purchase
Agreements; and (viii) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any and all proceeds of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture.
1
<PAGE>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Indenture and not otherwise defined herein shall have the respective meanings
assigned them in the Sale and Servicing Agreement (the "Sale and Servicing
Agreement") dated as of August 1, 1996, among, the Issuer, The CIT Group
Securitization Corporation II (the "Company" or the "Seller") and The CIT
Group/Sales Financing, Inc., as Servicer ("CITSF"), as hereafter supplemented
and amended. All references in this Indenture to Articles, Sections,
subsections and exhibits are to the same contained in or attached to this
Indenture unless otherwise specified. All terms defined in this Indenture shall
have the defined meanings when used in any certificate, notice, Note or other
document made or delivered pursuant hereto unless otherwise defined therein.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a Commission rule
have the respective meanings assigned to them by such definitions.
2
<PAGE>
ARTICLE II
THE NOTES
SECTION 2.1 Form.
----
(a) The Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, in each case together with the Indenture Trustee's certificate of
authentication, shall be substantially in the form set forth in Exhibit A-1,
Exhibit A-2 and Exhibit A-3, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) The terms of the Notes as provided for in Exhibit A-1, Exhibit
A-2 and Exhibit A-3 hereto are part of the terms of this Indenture.
SECTION 2.2 Execution, Authentication and Delivery.
--------------------------------------
(a) Each Note shall be dated the date of its authentication, and
shall be issuable as a registered Note in the minimum denomination of $1,000 and
in integral multiples thereof (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).
(b) The Notes shall be executed on behalf of the Issuer by any of
its Authorized Officers. The signature of any such Authorized Officer on the
Notes may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature of individuals
who were Authorized Officers of the Issuer at the time such signatures were
affixed shall bind the Issuer, notwithstanding that such individuals or any of
them have ceased to hold such office prior to the authentication and delivery of
such Notes or did not hold such office at the date of such Notes.
(d) The Indenture Trustee, in exchange for the Grant of the
Contracts and the other components of the Trust, and simultaneously with the
constructive delivery to the Indenture Trustee of the Contract Files with
respect to the Initial Contracts and the other components and assets of the
Trust, shall cause to be authenticated and delivered to or upon the
3
<PAGE>
order of the Issuer, the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes for original issue in aggregate principal amount of $88,000,000,
$75,000,000 and $62,600,000, respectively. The aggregate principal amount of the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes outstanding at any
time may not exceed $88,000,000, $75,000,000 and $62,600,000, respectively,
except as provided in Section 2.5.
(e) No Notes shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form set forth in Exhibit
A-1, Exhibit A-2 and Exhibit A-3, as applicable, executed by the Indenture
Trustee by the manual signature of one of its Authorized Officers, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
SECTION 2.3 Temporary Notes.
---------------
(a) Pending the preparation of Definitive Notes, if any, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, such Temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations as are
consistent with the terms of this Indenture as the officers executing such Notes
may determine, as evidenced by their execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the Temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more Temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so delivered in exchange, the Temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange of
------------------------------------------------------
Notes.
- -----
(a) The Issuer shall cause to be kept the Note Register, in which,
subject to such reasonable regulations as the Issuer may prescribe, the Issuer
shall provide for the registration of the Notes and the registration of
transfers and exchanges of the Notes. The Indenture Trustee shall initially be
the Note Registrar for the purpose of registering the Notes and transfers of the
Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer
shall promptly appoint a successor Note Registrar or, if it elects not to make
such an appointment, assume the duties of the Note Registrar.
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(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register. The Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes of the same class in any authorized denominations, of a like aggregate
principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes of the same class in any authorized denominations, of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
(e) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee, (i) duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("Stamp") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Indenture
Trustee may require.
(g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer or Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with
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any registration of transfer or exchange of Notes, other than exchanges pursuant
to Sections 2.3 or 9.6 not involving any transfer.
(h) The preceding provisions of this Section 2.4 notwithstanding,
the Issuer shall not be required to transfer or make exchanges, and the Note
Registrar need not register transfers or exchanges, of Notes that: (i) have been
selected for redemption pursuant to Article X, if applicable; or (ii) are due
for repayment within 15 days of submission to the Corporate Trust Office or the
Agency Office.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.
------------------------------------------
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, the Issuer shall execute and upon the
Issuer's request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of a like class and aggregate principal amount; provided,
--------
however, that if any such destroyed, lost or stolen Note, but not a mutilated
- -------
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may make payment to the Holder of such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date, if applicable, without
surrender thereof.
(b) If, after the delivery of a replacement Note or payment in
respect of a destroyed, lost or stolen Note pursuant to subsection (a), a bona
fide purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from (i) any Person to whom it was delivered, (ii) the Person taking such
replacement Note from the Person to whom such replacement Note was delivered; or
(iii) any assignee of such Person, except a bona fide purchaser, and the Issuer
and the Indenture Trustee shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Indenture Trustee in connection therewith.
(c) In connection with the issuance of any replacement Note under
this Section 2.5, the Issuer may require the payment by the Holder of such Note
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including all
fees and expenses of the Indenture Trustee) connected therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual
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obligation of the Issuer, whether or not the mutilated, destroyed, lost or
stolen Note shall be found at any time or be enforced by any Person, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Noteholders. Prior to due presentment for
--------------------------
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the Noteholder for
the purpose of receiving payments of principal of and interest on such Note and
for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest.
---------------------------------
(a) Interest on the Notes shall accrue in the manner set forth in
the form of the Notes set forth in Exhibit A-1, Exhibit A-2 and Exhibit A-3, as
applicable, at the respective Interest Rate for each class of Note, and such
interest shall be payable on each Distribution Date as specified in the form of
the Notes set forth in Exhibit A-1, Exhibit A-2 and Exhibit A-3, as applicable.
Any interest payable on any Note shall be punctually paid or duly provided for
by a deposit by or at the direction of the Issuer into the Note Distribution
Account on the applicable Distribution Date and shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
applicable Record Date, by check mailed first-class, postage prepaid to such
Person's address as it appears on the Note Register on such Record Date;
provided, however, that, unless and until Definitive Notes have been issued
- -------- -------
pursuant to Section 2.12, with respect to Notes registered on the applicable
Record Date in the name of the Depository (initially, Cede & Co.), payment shall
be made by wire transfer in immediately available funds to the account
designated by the Depository.
(b) Prior to the occurrence of an Event of Default and a declaration
in accordance with Section 5.2 that the Notes have become immediately due and
payable, the outstanding principal of each class of the Notes shall be payable
in full on the Note Final Scheduled Distribution Date for such class and, to the
extent of funds available therefor, in installments on the Distribution Dates
(if any) preceding the applicable Note Final Scheduled Distribution Date, in
accordance with Section 8.2(c). Any principal payable on any Note shall be
punctually paid or duly provided for by a deposit by or at the direction of the
Issuer into the Note Distribution Account on the applicable Distribution Date
and shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the applicable Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the
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Note Register on such Record Date; provided, however, that, unless and until
-------- -------
Definitive Notes have been issued pursuant to Section 2.12, with respect to
Notes registered on the Record Date in the name of the Depository (initially,
Cede & Co.), payment shall be made by wire transfer in immediately available
funds to the account designated by the Depository, except for: (i) the final
installment of principal on any Note; and (ii) the Redemption Price (as
hereinafter defined) for any Notes, if so called, which, in each case, shall be
payable as provided herein. The funds represented by any such checks in respect
of interest or principal returned undelivered shall be held in accordance with
Section 3.3.
(c) The entire unpaid principal amount of each class of the Notes
shall be due and payable, if not previously paid, if:
(i) an Event of Default shall have occurred and be continuing;
and
(ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the aggregate outstanding principal amount of the
Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2.
(d) If the Issuer defaults in a payment of interest on any of the
Notes, the Issuer shall pay such defaulted interest in any lawful manner. The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder and the Trustee a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
(e) With respect to any Distribution Date on which the final
installment of principal and interest on a class of the Notes is to be paid, the
Indenture Trustee shall notify each Noteholder of record for such class as of
the Record Date for such Distribution Date of the fact that the final
installment of principal of and interest on such Note is to be paid on such
Distribution Date. Such notice shall be sent (i) on such Record Date by
facsimile, if Book-Entry Notes are outstanding; or (ii) not later than three
Business Days after such Record Date in accordance with Section 11.5(a) if
Definitive Notes are outstanding, and shall specify that such final installment
shall be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for payment
of such installment. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 10.2.
SECTION 2.8 Cancellation of Notes. All Notes surrendered for
---------------------
payment, redemption, exchange or registration of transfer shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired
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in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 2.8, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided, however, that
-------- -------
such Issuer Order is timely and the Notes have not been previously disposed of
by the Indenture Trustee.
SECTION 2.9 Release of Collateral. Subject to Section 11.1, the
---------------------
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA
(S)(S)314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
----------------
shall be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Depository by or on behalf of the Issuer. Such Note or Notes shall be
registered on the Note Register in the name of the Depository, and no Note Owner
shall receive a Definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.12. Unless and until the Definitive Notes
have been issued to Note Owners pursuant to Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force and
effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole holder of the Notes and shall have no
obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10 conflict
with any other provisions of this Indenture, the provisions of this Section 2.10
shall control;
(d) the rights of the Note Owners shall be exercised only through
the Depository and shall be limited to those established by law and agreements
between such Note Owners and the Depository and/or the Depository Participants.
Unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Depository shall make book-entry transfers between the Depository
Participants and receive and transmit payments of principal of and interest on
the Notes to such Depository Participants, pursuant to the Depository Agreement;
and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a specified
percentage of the aggregate outstanding principal amount of the Notes, the
Depository shall be deemed to represent such
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percentage only to the extent that it has (i) received instructions to such
effect from Note Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the Notes;
and (ii) has delivered such instructions to the Indenture Trustee.
SECTION 2.11 Notices to Depository. Whenever a notice or other
---------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Depository and shall have no
obligation to the Note Owners.
SECTION 2.12 Definitive Notes.
----------------
If (i) the Servicer advises the Indenture Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Issuer is unable to locate a
qualified successor; (ii) the Servicer, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Depository; or (iii) after the occurrence of an Event of Default or an Event of
Termination, Note Owners representing beneficial interests aggregating at least
a majority of the aggregate outstanding principal amount of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Note Owners, then the
Depository shall notify all Note Owners and the Indenture Trustee of the
occurrence of any such event and the Depository shall, after being informed by
the Indenture Trustee, notify the Note Owners of the availability of Definitive
Notes to Note Owners requesting the same. Upon surrender to the Indenture
Trustee of the typewritten Note or Notes representing the Book-Entry Notes by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Depository. None of the Issuer, the
Servicer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
SECTION 2.13 Seller as Noteholder. The Seller in its individual or
--------------------
any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Issuer or its affiliates with the same rights it would
have if it were not the Seller.
SECTION 2.14 Tax Treatment. The Issuer and the Indenture Trustee, by
-------------
entering into this Indenture, and the Noteholders, by acquiring any Note or
interest therein, (i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Contracts, and (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the Notes
as indebtedness secured by the Contracts for the purpose of federal income
taxes, state
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and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall duly
---------------------------------
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. On each Distribution Date and on the
Redemption Date (if applicable), the Issuer shall cause amounts on deposit in
the Note Distribution Account to be distributed to the Noteholders in accordance
with Sections 2.7 and 8.2, less amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal. Any
amounts so withheld shall be considered as having been paid by the Issuer to
such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the
----------------------------
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "Agency Office"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such office or
agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Indenture Trustee, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
--------------------------------------
(a) As provided in Section 8.2(a) and (b), all payments of amounts
due and payable with respect to any Notes that are to be made from amounts
withdrawn from the Note Distribution Account pursuant to Section 8.2(c) shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Note Distribution Account for
payments of Notes shall be paid over to the Issuer except as provided in this
Section 3.3.
(b) On or before each Distribution Date or the Redemption Date (if
applicable), the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due with respect to the Notes, such sum to be held in trust for the
benefit of the Persons entitled thereto and (unless the Paying Agent is the
Indenture Trustee) shall promptly notify the Indenture Trustee of its action or
failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall
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agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section 3.3, that
such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met by
a Paying Agent in effect at the time of determination; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each
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Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be repaid to the Issuer. The
Indenture Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.4 Existence. Subject to Section 3.10, the Issuer shall
---------
keep in full effect its existence, rights and franchises as a business trust
under the laws of the State of Delaware and shall obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Collateral and each other instrument or agreement
included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge.
----------------------------------------------------
The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any rights under this Indenture against the Collateral;
or
preserve and defend title to the Trust Estate and the rights of the Indenture
Trustee and the Noteholders in such Trust Estate against the claims of all
persons and parties, and the Issuer hereby designates the Indenture Trustee its
agent and attorney-in-fact to execute any financing statement, continuation
statement or other instrument required by the Indenture Trustee pursuant to this
Section 3.5.
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SECTION 3.6 Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to perfect and make
effective the lien and security interest of this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before April 15 in each calendar year, beginning April 15,
1997, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain the lien and security interest created by this Indenture. Such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 15 in
the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Contracts.
--------------------------------------------------
(a) The Issuer shall not take any action and shall use its
reasonable efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as otherwise expressly provided in this Indenture, the Sale
and Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in the Basic Documents or an
Officers' Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and
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agreements included in the Trust Estate, including but not limited to filing or
causing to be filed all UCC financing statements and continuation statements
required to be filed by the terms of this Indenture, the Sale and Servicing
Agreement and the Purchase Agreement in accordance with and within the time
periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Termination under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall specify
in such notice the response or action, if any, the Issuer has taken or is taking
with respect to such default. If an Event of Termination shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Contracts, the Issuer and the
Indenture Trustee shall take all reasonable steps available to them pursuant to
the Sale and Servicing Agreement to remedy such failure or to effect a Service
Transfer pursuant to the Sale and Servicing Agreement.
Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it shall not, without the prior
written consent of the Indenture Trustee or the Holders of at least a majority
in aggregate outstanding principal amount of the Notes, as applicable in
accordance with the terms thereof, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any of the Basic Documents, or waive timely
performance or observance by the Servicer or the Seller under the Sale and
Servicing Agreement, a Subsequent Purchase Agreement, a Subsequent Transfer
Agreement or the Purchase Agreement. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, as applicable, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are
------------------
outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except the Issuer may (i) collect,
liquidate, sell or otherwise dispose of Contracts (including Repurchased
Contracts and Liquidated Contracts) and Financed Vehicles, (ii) make cash
payments out of the Designated Accounts and (iii) take other actions, in each
case as contemplated by the Basic Documents;
(b) claim any credit on or, make any deduction from, the principal
or interest payable in respect of the Notes (other than amounts properly
withheld from such payments under
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the Code or applicable state law) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or assessed upon
any part of the Trust Estate;
(c) voluntarily commence any insolvency, readjustment of debt,
marshalling of assets and liabilities or other proceeding, or apply for an order
by a court or agency or supervisory authority for the winding-up or liquidation
of its affairs or any other event specified in Section 5.1(e) or 5.1(f); or
(d) either (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the Lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (ii) permit any Lien or
other encumbrance (other than the Lien of this Indenture) to be created on or
extend to or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof (other than tax liens,
mechanics' liens and other liens that arise by operation of law, in each case on
a Financed Vehicle and arising solely as a result of an action or omission of
the related Obligor) or (iii) permit the Lien of this Indenture not to
constitute a valid first priority security interest in the Trust Estate (other
than with respect to any such tax, mechanics' or other Lien).
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
---------------------------------
deliver to the Indenture Trustee, on or before April 15 of each year, beginning
April 15, 1997, and otherwise in compliance with Section 314(a)(4) of the TIA,
an Officer's Certificate signed by an Authorized Officer, dated as of April 15
of such year, stating that a review of the activities of the Issuer during such
fiscal year and of performance under this Indenture has been made and, to the
best of such Authorized Officer's knowledge, based on such review, the Issuer
has fulfilled all of its obligations under this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such Authorized Officer and the nature and
status thereof. A copy of such certificate may be obtained by any Noteholder by
a request in writing to the Issuer addressed to the Corporate Trust Office of
the Indenture Trustee.
SECTION 3.10 Consolidation, Merger, etc. of Issuer; Disposition of
-----------------------------------------------------
Trust Assets
- ------------
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form satisfactory to the Indenture Trustee, the due and timely payment of
the principal of and interest on all Notes and the performance or
observance of every
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agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein;
(ii) immediately after giving effect to such merger or
consolidation, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and such Person;
(iv) any action as is necessary to maintain the Lien created
by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating:
(A) that such consolidation or merger and such supplemental
indenture comply with this Section 3.10;
(B) that such consolidation or merger and such supplemental
indenture shall have no material adverse tax consequence to the Trust
or any Noteholder or Certificateholder; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
(b) Except as otherwise expressly permitted by this Indenture or the
other Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets (other than the Excluded
Assets), including those included in the Trust Estate, to any Person unless:
(i) the Person that acquires such properties or assets of the
Issuer (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State or the
District of Columbia and (B) by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee:
(1) expressly assumes the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein;
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(2) expressly agrees that all right, title and interest so
sold, conveyed, exchanged, transferred or otherwise disposed of shall
be subject and subordinate to the rights of Noteholders;
(3) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under
or related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction and such Person;
(iv) any action as is necessary to maintain the Lien created by
this Indenture shall have been taken: and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating that:
(A) such sale, conveyance, exchange, transfer or disposition
and such supplemental indenture comply with this Section 3.10;
(B) such sale, conveyance, exchange, transfer or disposition
and such supplemental indenture has no material adverse tax
consequence to the Trust or to any Noteholders or Certificateholders;
and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
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SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer under this Indenture with the
same effect as if such Person had been named as the Issuer herein.
(b) Upon a sale, conveyance, exchange, transfer or disposition of
all the assets and properties of the Issuer pursuant to Section 3.10(b), the
Trust shall be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee from
the Person acquiring such assets and properties stating that the Trust is to be
so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in any
-----------------
business or activity other than acquiring, holding and managing the Contracts,
the other assets of the Trust Estate, and the Excluded Assets and the proceeds
therefrom in the manner contemplated by the Basic Documents, issuing the Notes
and the Certificates, making payments on the Notes and the Certificates and
engaging in such other activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto, as set forth in Section 2.3
of the Trust Agreement.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.15 Servicer's Obligations. The Issuer shall use its best
----------------------
efforts to cause the Servicer to comply with its obligations under the Sale and
Servicing Agreement.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (whether by long-term or operating lease or otherwise) for capital
assets (either real, personal or intangible property) other than the purchase of
the Contracts and other property and rights from the Seller pursuant to the
Basic Documents.
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SECTION 3.17 Removal of Servicer. So long as any Notes are
-------------------
outstanding, the Issuer shall not remove the Servicer without cause unless the
Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18 Restricted Payments. Except for payments of principal
-------------------
of or interest on or redemption of the Notes and except as expressly provided in
the Basic Documents, so long as any Notes are outstanding, the Issuer shall not,
directly or indirectly:
(a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise, in each case with respect to any ownership or equity
interest or similar security in or of the Issuer or to the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
- -------- -------
to the Servicer, the Owner Trustee, the holder of the GP Interest and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or the Trust Agreement.
The Issuer shall not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with the Basic Documents.
SECTION 3.19 Notice of Events of Default. The Issuer agrees to give
---------------------------
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each Event of Termination, any Insolvency Event with
respect to the holder of the GP Interest, each default on the part of the Seller
or the Servicer of their obligations under the Basic Documents.
SECTION 3.20 Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.21 Representations and Warranties by the Issuer to the
---------------------------------------------------
Indenture Trustee. The Issuer hereby represents and warrants to the Indenture
- -----------------
Trustee as follows:
(a) Good Title. No Contract has been sold, transferred, assigned or
----------
pledged by the Trust to any Person other than the Indenture Trustee; immediately
prior to the conveyance of the Contracts pursuant to this Indenture, the Trust
had good and marketable title thereto, free of any Lien; and, upon execution and
delivery of this Indenture by the Trust, the Indenture
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Trustee shall have all of the right, title and interest of the Trust in, to and
under the Contracts, the unpaid indebtedness evidenced thereby and the
collateral security therefor, free of any Lien; and
(b) All Filings Made. All filings (including, without limitation,
----------------
UCC filings) necessary in any jurisdiction to give the Indenture Trustee a first
perfected ownership interest in the Contracts shall have been made.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall cease to be of further effect with respect to the Notes except as to: (i)
rights of registration of transfer and exchange; (ii) substitution of mutilated,
destroyed, lost or stolen Notes; (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon; (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.19 and 3.21; (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Sections
4.2 and 4.4); and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and delivered (other
than (A) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.5 and (B) Notes for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been delivered to the
Indenture Trustee for cancellation: or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on the Class A-3 Note Final
Scheduled Distribution Date within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the
giving of notice of redemption by the Indenture Trustee in the name,
and at the expense, of the Issuer,
and the Issuer, in the case of (A), (B) or (C) of subsection 4.1(a)(2) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire unpaid principal of and accrued interest on such Notes not
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theretofore delivered to the Indenture Trustee for cancellation when due on the
applicable Note Final Scheduled Distribution Date for such Notes or the
Redemption Date for such Notes (if such Notes have been called for redemption
pursuant to Section 10.1(a)(i) or (ii), or Section 10.1(b)), as the case may be;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1(a) and each stating
that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 4.2 Application of Trust Money. All monies deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Sale and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Monies Held by Paying Agent. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.3 and thereupon such Paying Agent shall be released from all
further liability with respect to such monies.
SECTION 4.4 Duration of Position of Indenture Trustee.
-----------------------------------------
Notwithstanding the earlier payment in full of all principal and interest due to
the Noteholders under the terms of the Notes and the cancellation of the Notes
pursuant to Section 4.1, the Indenture Trustee shall continue to act in the
capacity as Indenture Trustee hereunder and, for the benefit of the
Certificateholders, shall comply with its obligations under the Basic Documents,
as appropriate, until such time as all payments in respect of Certificate
Balance and interest due to the Certificateholders have been paid in full.
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ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. For the purposes of this Indenture,
-----------------
"Event of Default" wherever used herein, means any one of the following events:
(a) failure to pay any interest on any Note as and when the same
becomes due and payable which failure continues unremedied for a period of five
(5) days; or
(b) except as set forth in Section 5.1(c), failure to pay any
installment of the principal of any Note as and when the same becomes due and
payable, and such failure continues unremedied for a period of thirty (30) days
after there shall have been given, by registered or certified mail, written
notice thereof to the Servicer by the Indenture Trustee or to the Servicer and
the Indenture Trustee by the Holders of not less than 25% of the aggregate
outstanding principal amount of the Notes; or
(c) failure to pay in full the outstanding principal balance of each
class of the Notes on or prior to the Note Final Scheduled Distribution Date for
such class; or
(d) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other than a
covenant or agreement for payment of principal or interest) which failure
materially and adversely affects the rights of the Noteholders, and such default
shall continue or not be cured, for a period of 30 days after there shall have
been given, by registered or certified mail, to the Issuer and the Seller (or
the Servicer, as applicable) by the Indenture Trustee or to the Issuer and the
Seller (or the Servicer, as applicable) and the Indenture Trustee by the Holders
of at least 25% of the aggregate outstanding principal amount of the Notes, a
written notice specifying such default and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Trust Estate 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 of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(f) the commencement by the Issuer 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 the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Trust Estate, or the making by the Issuer of any general
assignment for the benefit of
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creditors, or the failure by the Issuer generally to pay its debts as such debts
become due, or the taking of action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under Section 5.1(c), its status and
what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default should occur and be continuing, then and
in every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the aggregate outstanding principal
amount of the Notes may declare all the Notes to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
the Noteholders) setting forth the Event or Events of Default, and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
(b) At any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter provided in this Article
V, the Holders of Notes representing not less than a majority of the aggregate
outstanding principal amount of the Notes, by written notice to the Issuer and
the Indenture Trustee, may waive all Defaults set forth in the notice delivered
pursuant to Section 5.2(a), and rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided herein;
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provided, that no such rescission and annulment shall extend to or affect any
- --------
subsequent default or impair any right consequent thereto; and provided further,
----------------
that if the Indenture Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission and annulment or for any other reason, or shall have
been determined adversely to the Indenture Trustee, then and in every such case,
the Indenture Trustee, the Issuer and the Noteholders, as the case may be, shall
be restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall continue as though no such proceedings
had been taken.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee.
- -----------------
(a) The Issuer covenants that if an Event of Default occurs and is
continuing under Sections 5.1(a), 5.1(b) or 5.1(c) of this Indenture, then the
Issuer shall, upon demand of the Indenture Trustee, pay to the Indenture
Trustee, for the benefit of the Noteholders in accordance with their respective
outstanding principal amounts, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal at
the rate borne by the respective class of the Notes, and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken
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possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor trustee except as a
result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
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Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such Proceedings instituted
by the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under Section 5.2(a), the Indenture Trustee may
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by declaration
of acceleration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
- -------- -------
liquidate the Trust Estate following an Event of Default, unless (A) the Holders
of all of the aggregate outstanding principal amount of the Notes consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to pay in full the principal of and the accrued
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interest on the Notes at the date of such sale or liquidation or (C) the
Indenture Trustee determines that the Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
and when they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of Holders of not less
than a majority of the aggregate outstanding principal amount of the Notes. In
determining such sufficiency or insufficiency with respect to clauses (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of
an Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7;
SECOND: to the Servicer for the Servicer Payment;
THIRD: to Noteholders for amounts due and unpaid on the Notes
for interest, ratably among all Noteholders, without preference or priority of
any kind, according to the amounts due and payable on all the Notes for
interest;
FOURTH: to the holders of the Class A-1 Notes for amounts due
and unpaid on the Class A-1 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class A-1
Notes for principal, until the principal amount of the Class A-1 Notes is
reduced to zero;
FIFTH: to the holders of the Class A-2 Notes for amounts due
and unpaid on the Class A-2 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class A-2
Notes for principal, until the principal amount of the Class A-2 Notes is
reduced to zero;
SIXTH: to the holders of the Class A-3 Notes for amounts due
and unpaid on the Class A-3 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class A-3
Notes for principal, until the principal amount of the Class A-3 Notes is
reduced to zero;
SEVENTH: to the Certificateholders for amounts due and unpaid
on the Certificates for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Certificates for interest;
EIGHTH: to the Certificateholders for amounts due and unpaid on
the Certificates for the Certificate Balance and the Aggregate Allocated Loss
Amount, ratably,
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without preference or priority of any kind, according to the amounts due and
payable on the Certificates for the Certificate Balance and the Aggregate
Allocated Loss Amount;
NINTH: if CITSF or one of its affiliates is the Servicer, the
Servicing Fee (including any unpaid Servicing Fees for past Distribution Dates)
shall (to the extent not previously paid to the Servicer) be paid to the
Servicer; and
TENTH: to the Issuer for distribution to the holder of the GP
Interest.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.4. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the payment date and the
amount to be paid.
SECTION 5.5 Optional Preservation of the Contracts. If the Notes have
--------------------------------------
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to take and maintain
possession of the Trust Estate. In determining whether to take and maintain
possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate outstanding
principal amount of the Notes have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its own name
as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in complying with such request;
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(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceedings;
and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of a
majority of the aggregate outstanding principal amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders of Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Notes. For the protection and enforcement of the provisions of
this Section 5.6, each and every Noteholder shall be entitled to such relief as
can be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the aggregate outstanding principal amount
of the Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
--------------------------------------------------------
and Interest. Notwithstanding any other provisions in this Indenture, the
- ------------
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, if applicable, on or after the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or
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hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of
------------------------------
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority of
----------------------
the aggregate outstanding principal amount of the Notes shall, subject to
provision being made for indemnification against costs, expenses and liabilities
in a form satisfactory to the Indenture Trustee, have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided, however, that:
-------- -------
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by the
Holders of Notes representing not less than 100% of the aggregate outstanding
principal amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to Section
5.5, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the aggregate outstanding principal amount of the
Notes to sell or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
- -------- -------
take any action that it determines might cause it to incur any liability or
might materially adversely affect the rights of any Noteholders not consenting
to such action.
SECTION 5.12 Waiver of Past Defaults.
-----------------------
(a) Prior to the declaration of the acceleration of the maturity of
the Notes as provided in Section 5.2, the Holders of not less than a majority of
the aggregate outstanding
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principal amount of the Notes may waive any past Default or Event of Default and
its consequences except a Default (i) in the payment of principal of or interest
on any of the Notes or (ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Note. In
the case of any such waiver, the Issuer, the Indenture Trustee and the
Noteholders shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
Proceeding for the enforcement of any right or remedy under this Indenture, or
in any Proceeding against the Indenture Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such Proceeding
of an undertaking to pay the costs of such Proceeding, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate outstanding principal amount of the Notes; or
(c) any Proceeding instituted by any Noteholder for the enforcement
of the payment of principal of or interest on any Note on or after the
respective due dates expressed in such Note and in this Indenture (or, in the
case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
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SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer.
SECTION 5.16 Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Indenture Trustee to do so
and at the Servicer's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may reasonably request to compel or secure the
performance and observance by CITSF, the Seller and the Servicer of their
respective obligations to the Issuer under or in connection with the Basic
Documents (other than the Excluded Assets) in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner reasonably directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by CITSF, the Seller or
the Servicer of each of their obligations under the Basic Documents (other than
with respect to the Excluded Assets).
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of not less than 66-2/3% of the aggregate outstanding principal amount
of the Notes shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Servicer under or in connection with the
Basic Documents (other than with respect to the Excluded Assets), including the
right or power to take any action to compel or secure performance or observance
by the Seller or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver thereunder, and any right of the Issuer to take such action
shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so
and at the Servicer's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may reasonably request to compel or secure the
performance and observance by CITSF of each of its obligations to the Seller
under or in connection with the Sale and Servicing Agreement, the Purchase
Agreement and the Subsequent Purchase Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement, the Purchase Agreement and the Subsequent Purchase
Agreement to the extent and in the manner reasonably
35
<PAGE>
directed by the Indenture Trustee, including the transmission of notices of
default on the part of the Seller thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by CITSF
of each of its obligations under the Sale and Servicing Agreement, the Purchase
Agreement and the Subsequent Purchase Agreement.
If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of not less
than 66-2/3% of the aggregate outstanding principal amount of the Notes shall,
exercise all rights, remedies, powers, privileges and claims of the Seller
against CITSF under or in connection with the Sale and Servicing Agreement, the
Purchase Agreement and the Subsequent Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by CITSF
of each of its obligations to the Seller thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Sale and
Servicing Agreement, the Purchase Agreement and the Subsequent Purchase
Agreement, and any right of the Seller to take such action shall be suspended.
36
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
----------------------------
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
-------- -------
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this Section 6.1(c) does not limit the effect of Section
6.1(b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction properly delivered to it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture, the Sale and Servicing Agreement or the Trust Agreement.
37
<PAGE>
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
(h) The Indenture Trustee shall take the actions required to be taken
by it set forth in Article XI of the Sale and Servicing Agreement in connection
with a sale of the Contracts.
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; provided, however, that the Indenture
-------- -------
Trustee's conduct does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.3 Indenture Trustee May Own Notes. The Indenture Trustee
-------------------------------
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise
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deal with the Issuer, the Servicer or any of their respective Affiliates with
the same rights it would have if it were not Indenture Trustee; provided,
--------
however, that the Indenture Trustee shall comply with Sections 6.10 and 6.11.
- -------
Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the
same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee
------------------------------
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of the Default within
90 days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note, the Indenture Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder the information and documents set forth
in Article VII, and, in addition, all such information with respect to the Notes
as may be required to enable such holder to prepare its federal and state income
tax returns.
SECTION 6.7 Compensation; Indemnity.
-----------------------
(a) The Issuer shall cause the Servicer pursuant to the Sale and
Servicing Agreement to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Servicer pursuant to the Sale and Servicing Agreement to
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall cause the Servicer
pursuant to the Sale and Servicing Agreement to indemnify the Indenture Trustee
in accordance with Section 8.02 of the Sale and Servicing Agreement.
(b) The Issuer's obligations to the Indenture Trustee pursuant to
this Section 6.7 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(d) or (e) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
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SECTION 6.8 Replacement of Indenture Trustee.
--------------------------------
(a) The Indenture Trustee may resign at any time by so notifying the
Issuer. The Holders of a majority in aggregate outstanding principal amount of
the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. Such resignation or removal
shall become effective in accordance with Section 6.8(c). The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
(b) If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Holders of a majority in aggregate outstanding principal amount of the Notes may
appoint a successor Indenture Trustee, but until a successor Indenture Trustee
shall have been so appointed by the Holders of the Notes, the Issuer shall
appoint a successor Indenture Trustee, and until the Issuer has appointed such
successor the resignation of the Indenture Trustee shall not become effective.
After any such appointment other than by the holders of the Notes, the person
making such appointment shall forthwith cause notice thereof to be mailed to the
holders of the Notes at their addresses as the same then appear in the register
of the Issuer; but any successor Trustee so appointed shall, immediately and
without further act, be superseded by a successor Trustee appointed by the
holders of the Notes in the manner above prescribed, if such appointment be made
prior to the expiration of one year from the date of the mailing of such notice
by the Issuer, or by such receivers, trustees, custodians, or assignees. A
retiring Indenture Trustee shall not be liable for any acts or omissions of a
successor Indenture Trustee occurring after the retirement of such retired
Indenture Trustee, which retirement was effected pursuant to the terms and
subject to the conditions of this Indenture.
(c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
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(d) If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee resigns or is removed, the retiring
Trustee, the Issuer or the Holders of a majority of the aggregate outstanding
principal amount of the Notes may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's obligations under Section 6.7 and the
Servicer's corresponding obligations under the Sale and Servicing Agreement
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
--------------------------------------------
(a) Any corporation into which the Indenture Trustee may be merged
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
--------
however, that such corporation shall be eligible under the provisions of Section
- -------
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding.
(b) If at the time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Notes or herein with respect to the certificate of authentication of the
Indenture Trustee.
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SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
-----------------------------------------------
Indenture Trustee.
- -----------------
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust or any Financed Vehicle may at the time be located,
the Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Trust, or any part hereof, and,
subject to the other provisions of this Section 6.10, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8.
(b) Every 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 Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture 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 Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every
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provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee
-----------------------------
shall at all times satisfy the requirements of TIA (S) 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term unsecured debt rating of Baa3 or better by Moody's and BBB or better
by Standard & Poor's. The Indenture Trustee shall comply with TIA (S) 310(b);
provided, however, that there shall be excluded from the operation of TIA (S)
- -------- -------
310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture Trustee.
---------------------------------------------------
The Indenture Trustee represents and warrants as of the Closing Date that:
(a) the Indenture Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;
(b) the Indenture Trustee has full power, authority and legal right
to execute, deliver and perform this Indenture, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Indenture;
(c) the execution, delivery and performance by the Indenture Trustee
of this Indenture (i) shall not violate any provision of any applicable law or
regulation governing the banking and trust powers of the Indenture Trustee or
any order, writ, judgment or decree of any court, arbitrator, or governmental
authority applicable to the Indenture Trustee or any of its assets, (ii) shall
not violate any provision of the corporate charter or by-laws of the Indenture
Trustee, or (iii) shall not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of any Lien on any properties included in the Trust pursuant to the
provisions of any mortgage, indenture, contract, agreement
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or other undertaking to which it is a party, which violation, default or Lien
could reasonably be expected to have a materially adverse effect on the
Indenture Trustee's performance or ability to perform its duties under this
Indenture or on the transactions contemplated in this Indenture;
(d) the execution, delivery and performance by the Indenture Trustee
of this Indenture shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of the Indenture Trustee; and
(e) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of the
Indenture Trustee, enforceable in accordance with its terms.
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession
-------------------------------------------------------
of Notes. All rights of action and claims under this Indenture or the Notes may
- --------
be prosecuted and enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Indenture Trustee shall be brought in
its own name as Indenture Trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders in respect of which such judgment has
been obtained.
SECTION 6.15 Suit for Enforcement. If an Event of Default shall
--------------------
occur and be continuing, the Indenture Trustee, in its discretion may, subject
to the provisions of Section 6.1, proceed to protect and enforce its rights and
the rights of the Noteholders under this Indenture by Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee.
-------------------------------------------------
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal amount of the Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee; provided, however, that subject to Section 6.1, the Indenture
-------- -------
Trustee shall have the right to decline to follow any such direction if the
Indenture Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Indenture Trustee in good faith
shall, by a Responsible Officer, determine that the proceedings so directed
would be illegal or subject it to personal liability or be unduly prejudicial to
the rights of Noteholders not parties to such direction; and provided, further,
-------- -------
that nothing in this Indenture
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shall impair the right of the Indenture Trustee to take any action deemed proper
by the Indenture Trustee and which is not inconsistent with such direction by
the Noteholders.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer shall furnish or cause to be furnished by the
- --------------
Servicer to the Indenture Trustee (a) not more than five days before each
Distribution Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of the close of
business on the Record Date, and (b) at such other times as the Indenture
Trustee may request in writing, within 14 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
-------- -------
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information, Communications to
----------------------------------------------
Noteholders.
- -----------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer.
-----------------
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer
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with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA (S)
313(c)) such summaries of any information, documents and reports required
to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.3(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of such year.
SECTION 7.4 Reports by Trustee.
------------------
(a) If required by TIA (S) 313(a), within 60 days after each June 1,
beginning with June 1, 1997, the Indenture Trustee shall mail to each Noteholder
as required by TIA (S) 313(c) a brief report dated as of such date that complies
with TIA (S) 313(a). The Indenture Trustee also shall comply with TIA (S)
313(b). A copy of any report delivered pursuant to this Section 7.4(a) shall,
at the time of its mailing to Noteholders, be filed by the Indenture Trustee
with the Commission and each stock exchange, if any, on which the Notes are
listed. The Issuer shall notify the Indenture Trustee if and when the Notes are
listed on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall include
with each payment to each Noteholder a copy of the statement for the related Due
Period applicable to such Distribution Date as required pursuant to the Sale and
Servicing Agreement.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.2 Designated Accounts and the Reserve Account; Payments.
-----------------------------------------------------
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee or
Owner Trustee, as appropriate, for the benefit of the Noteholders or the
Certificateholders as appropriate, the accounts as provided in Section 5.01 of
the Sale and Servicing Agreement.
(b) On or before each Distribution Date, all amounts of monies
relating to the preceding Due Period will be deposited into the Collection
Account as provided in Section 5.02 of the Sale and Servicing Agreement. On or
before each Distribution Date, the amount which is due to the Noteholders with
respect to the preceding Due Period will be transferred from the Collection
Account to the Note Distribution Account as provided in Section 5.05 of the Sale
and Servicing Agreement.
(c) On each Distribution Date and Redemption Date (other than pursuant
to a redemption referred to in Section 10.1(a)(iii) or the second sentence of
Section 10.1(a)), the Indenture Trustee shall distribute all amounts on deposit
in the Note Distribution Account to Noteholders in respect of the Notes to the
extent of amounts due and unpaid on the Notes for principal and interest. To the
extent that the funds available for distribution in the Note Distribution
Account are not sufficient to pay all amounts of accrued and unpaid principal
and interest on the Notes, such amounts will be distributed first in respect of
interest on a pro rata basis and then in respect of principal in the following
order of priority; (i) to the principal balance of the Class A-1 Notes until the
principal balance of the Class A-1 Notes is reduced to zero; (ii) to the
principal balance of the Class A-2 Notes until the principal balance of the
Class A-2 Notes is reduced to zero and (iii) to the principal balance of the
Class A-3 Notes until the principal balance of the Class A-3 Notes is reduced to
zero.
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(d) On the Redemption Date pursuant to a redemption referred to in
Section 10.1(a)(iii), the Indenture Trustee shall distribute all amounts on
deposit in the Note Distribution Account to Noteholders in respect of the Notes
to the extent of amounts due and unpaid on the Notes for principal and interest.
To the extent that the funds available for distribution in the Note Distribution
Account are not sufficient to pay all amounts of accrued and unpaid principal
and interest on the Notes, such amounts will be distributed first in respect of
interest on a pro rata basis and then in respect of principal on a pro rata
basis.
(e) On the Redemption Date pursuant to a redemption referred to in the
second sentence of Section 10.1(a), the Indenture Trustee shall distribute all
amounts on deposit in the Pre-Funding Account to the Class A-1 Noteholders on a
pro rata basis.
SECTION 8.3 General Provisions Regarding Accounts.
-------------------------------------
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Designated Accounts and the
Reserve Account shall be invested in Eligible Investments and, in the case in
the Collection Account and the Note Distribution Account, reinvested by the
Indenture Trustee upon Issuer Order, and in the case of the Certificate
Distribution Account and the Reserve Account, reinvested by the Owner Trustee
(or its designated agent) subject to the provisions of Section 5.01(c) of the
Sale and Servicing Agreement. The Issuer shall not direct the Indenture Trustee
to make any investment of any funds or to sell any investment held in any of the
Collection Account and the Note Distribution Account unless the security
interest granted and perfected in such account (to the extent provided in the
Basic Documents) shall continue to be perfected in such investment or the
proceeds of such sale, in either case without any further action by any Person,
and, in connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Designated
Accounts or the Reserve Account resulting from any loss on any Eligible
Investment included therein except for losses attributable to the Indenture
Trustee's failure to make payments on such Eligible Investments issued by the
Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Designated Accounts to the Indenture
Trustee by 11:00 a.m., New York City Time (or such other time as may be agreed
by the Servicer and the Indenture Trustee) on any Business Day; or (ii) a
Default or Event of Default shall have occurred and be continuing with respect
to the Notes but the Notes shall not have been declared due and payable pursuant
to Section 5.2, or, if such Notes shall have been declared due and payable
following an Event of
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Default, amounts collected or receivable from the Trust Estate are being applied
in accordance with Section 5.5 as if there had not been such a declaration; then
the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in such Designated Accounts in one or more Eligible Investments
selected by the Indenture Trustee; provided that the Indenture Trustee will not
be liable for the performance of such investments so long as it invests the
funds in such Designated Accounts in Eligible Investments.
SECTION 8.4 Release of Trust Estate.
-----------------------
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the Lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are consistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7
have been paid, release any remaining portion of the Trust Estate that secured
the Notes from the Lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Designated Accounts (to
the extent such funds were subject to the Lien of this Indenture). The
Indenture Trustee shall release property from the Lien of this Indenture
pursuant to this Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA (S)(S) 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1 or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall receive
------------------
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action shall not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
-------- -------
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
------------------------------------------------------
Without the consent of the Holders of any Notes but with prior written
notice to the Rating Agencies and, in the case of clause (viii), satisfaction of
the Rating Agency Condition, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the
following purposes:
(i) to correct or amplify the description of the Collateral or add
additional collateral;
(ii) to provide for the assumption of the Note and the Indenture
obligations by a permitted successor to the Trust;
(iii) to add additional covenants for the benefit of the related
Noteholders, or to surrender any rights or power conferred upon the Trust;
(iv) to convey, transfer, assign mortgage or pledge any property to or
with the Indenture Trustee;
(v) to cure any ambiguity or correct or supplement any provision in
the Indenture or any supplemental indenture which may be inconsistent with any
other provision of the Indenture or in any supplemental indenture;
(vi) to provide for the acceptance of the appointment of a successor
Indenture Trustee or to add or change any of the provisions of the Indenture as
shall be necessary and permitted to facilitate the administration by more than
one trustee;
(vii) to modify, eliminate or add to the provisions of the Indenture
in order to comply with the Trust Indenture Act of 1939, as amended; or
(viii) to add any provisions to, change in any manner or eliminate
any of the provisions of, the Indenture, or modify in any manner the rights of
Noteholders under such Indenture; provided that any action specified in this
clause (viii) shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder unless Noteholder
consent is otherwise obtained as described herein.
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
---------------------------------------------------
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(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the aggregate outstanding
principal amount of the Notes, by Act (as defined in Section 11.3 hereof) of
such Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, changing in any manner, or eliminating any of the provisions of,
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, however, that no such supplemental indenture shall,
-------- -------
without the consent of the Holder of each outstanding Note affected thereby:
(i) change the due date of any installment of principal of or
interest on any Note or reduce the principal amount thereof, the interest
rate specified thereon or the redemption price with respect thereto or
change any place of payment where or the coin or currency in which any Note
or any interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of
certain provisions of the Indenture regarding payment;
(iii) reduce the percentage of the aggregate principal amount of
the outstanding Notes the consent of the holders of which is required for
any such supplemental indenture or the consent of the holders of which is
required for any waiver of compliance with certain provisions of the
Indenture or of certain defaults thereunder and their consequences as
provided for in the Indenture;
(iv) modify or alter the provisions of the Indenture regarding
the voting of Notes held by the Trust, any other obligor on the Notes, the
Seller or an Affiliate of any of them;
(v) reduce the percentage of the aggregate outstanding amount of
the Notes the consent of the holders of which is required to direct the
Indenture Trustee to sell or liquidate the Contracts if the proceeds of
such sale would be insufficient to pay the principal amount and accrued but
unpaid interest on the outstanding Notes;
(vi) decrease the percentage of the aggregate principal amount of
the Notes required to amend the sections of the Indenture which specify the
applicable percentage of aggregate principal amount of the Notes necessary
to amend the Indenture or certain other related agreements; or
(vii) permit the creation of any Lien ranking prior to or on a
parity with the Lien of the Indenture with respect to any of the collateral
for the Notes or, except as otherwise permitted or contemplated in the
Indenture, terminate the Lien of the Indenture
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on any such collateral or deprive the Holder of any Note of the security
afforded by the Lien of the Indenture.
(b) The Indenture Trustee may in its discretion determine whether or
not any Notes would be affected (such that the consent of each would be
required) by any supplemental indenture proposed pursuant to this Section 9.2
and any such determination shall be conclusive upon the Holders of all Notes,
whether authenticated and delivered thereunder before or after the date upon
which such supplemental indenture becomes effective. The Indenture Trustee shall
not be liable for any such determination made in good faith.
(c) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.
(d) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Noteholders to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment of
-----------------------------------
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
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SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for outstanding Notes of the same class.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
----------
(a) The Notes are subject to redemption upon (i) the exercise by
CITSF of its option to purchase the Contracts pursuant to Section 11.01 of the
Sale and Servicing Agreement, (ii) the mandatory sale of the Contracts pursuant
to Section 11.02 of the Sale and Servicing Agreement, or (iii) at the end of the
Funding Period to the extent more than $100,000 remains on deposit in the Pre-
Funding Account pursuant to Section 5.01(b)(vi) of the Sale and Servicing
Agreement. The Class A-1 Notes only are subject to redemption to the extent
$100,000 or less remains on deposit in the Pre-Funding Account pursuant to
Section 5.01(b)(vi) of the Sale and Servicing Agreement. Such redemption shall
occur on any Distribution Date. The purchase price for the Notes shall be equal
to the applicable redemption price as set forth in such Sections (the
"Redemption Price"), provided the Issuer has available funds sufficient to pay
such amount. The Issuer shall furnish the Rating Agencies notice of such
redemption. If the Notes are to be redeemed pursuant to Section 10.1(a)(i) or
10.1(a)(ii), the Issuer shall furnish notice thereof to the Indenture Trustee
not later than 25 days prior to the Redemption Date and the Issuer shall deposit
into the Note Distribution Account, on or before the Redemption Date, the
aggregate Redemption Price of the Notes to be redeemed, whereupon all such Notes
shall be due and payable on the Redemption Date. The Servicer shall give the
Indenture Trustee written notice on the Determination Date prior to the
Distribution Date on which funds are to be released from the Pre-Funding Account
pursuant to Section 5.01(b)(vi) of the Sale and Servicing Agreement with respect
to redemption of the Notes pursuant to Section 10.1(a)(iii) or the second
sentence of this Section 10.1(a).
(b) If the assets of the Trust are sold pursuant to Section 7.2 of
the Trust Agreement, all amounts deposited in the Note Distribution Account
pursuant to the Sale and Servicing Agreement as a result thereof shall be paid
to the Noteholders first, to the payment of interest on the Notes pro rata,
second, to the payment of principal on the Class A-1 Notes until the principal
amount of the Class A-1 Notes is reduced to zero, third, to the payment of
principal on the Class A-2 Notes until the principal amount of the Class A-2
Notes is reduced to zero, and fourth, to the payment of principal on the Class
A-3 Notes until the principal amount of the Class A-3 Notes is reduced to zero.
If amounts are to be paid to Noteholders pursuant to this Section 10.1(b), the
Servicer or the Issuer shall, to the extent practicable, furnish notice of such
event to the Indenture Trustee not later than 25 days prior to the Redemption
Date whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice.
-------------------------
(a) Notice of redemption of any of the Notes under Section 10.1(a)
shall be given by the Indenture Trustee by first class mail, postage prepaid,
mailed not less than five days
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in the case of Section 10(a)(i) and (ii) and not less than three Business Days
in the case of Section 10(a)(iii) or the second sentence of Section 10.1(a),
prior to the applicable Redemption Date to each affected Noteholder of record at
such Noteholder's address appearing in the Note Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price; and
(iii) the place where Notes are to be surrendered for payment of
the Redemption Price (which shall be the Agency Office of the Indenture
Trustee to be maintained as provided in Section 3.2).
(c) Notice of redemption of any of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
(d) Prior notice of redemption under Section 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date.
--------------------------------
The Notes subject to redemption shall, following notice of redemption
as required by Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), on the Redemption Date cease to be outstanding for purposes of this
Indenture and shall thereafter represent only the right to receive the
applicable Redemption Price and (unless the Issuer shall default in the payment
of such Redemption Price) no interest shall accrue on such Redemption Price for
any period after the date to which accrued interest is calculated for purposes
of calculating such Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
------------------------------------------
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) (if required by the TIA) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section 11.1, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such
signatory, such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with
(b) (i) Prior to the deposit with the Indenture Trustee of any
Collateral or other property or securities that is to be made the basis for
the release of any property or securities subject to the Lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
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(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (b)(i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the then
current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (b)(ii), is 10% or
more of the aggregate outstanding principal amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the aggregate outstanding principal amount of the Notes.
(iii) Other than with respect to the release of any Repurchased
Contracts or Liquidated Contracts or disbursement from the Pre-Funding
Account, whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
Person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signatory thereof as to the matters described in clause (b)(iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than Repurchased Contracts or
Liquidated Contracts or disbursement from the Pre-Funding Account, or
securities released from the lien of this Indenture since the commencement
of the then current calendar year, as set forth in the certificates
required by clause (b)(iii) above and this clause (b)(iv), equals 10% or
more of the aggregate outstanding principal amount of the Notes, but such
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
aggregate outstanding principal amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Contracts, Financed Vehicles and the Excluded Assets as and to
the extent expressly permitted or required by the Basic Documents, (B) make
cash payments out of the Designated Accounts, the Reserve Account and the
other Excluded Assets as and to the extent expressly permitted or required
by the Basic Documents and (C) take any other action not inconsistent with
the TIA.
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SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
(a) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
SECTION 11.3 Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders or a class of Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such
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instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent,
- --------
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office and,
unless otherwise specified in this Indenture, may be sent by electronic
facsimile transmission (with hard copy to follow via first class mail), mailed
by certified mail, return receipt requested, or delivered by hand; or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and either sent by
electronic facsimile transmission (with hard copy to follow via first class
mail) or mailed, by certified mail, return receipt requested to the Issuer and
the Owner Trustee, care of the Owner Trustee at its Corporate Trust Office or at
any other address previously furnished in writing to the Indenture Trustee by
the Issuer.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall likewise
promptly transmit any notice received by it from the Noteholders to the Issuer,
with a copy to the Owner Trustee at its Corporate Trust Office.
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(c) Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, sent by electronic facsimile transmission (with hard copy to follow
via first class mail) or mailed by certified mail, return receipt requested to:
(i) in the case of Moody's Investors Service, Inc., at the following address:
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007; and (ii) in the case of Standard & Poor's Ratings
Service, at the following address: Standard & Poor's Ratings Service, 26
Broadway (15th Floor), New York, New York 10004, Attn: Asset-Backed Surveillance
Department or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver.
------------------------------
(a) Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if it is in writing and mailed, first-class, postage prepaid
to each Noteholder affected by such event, at such Person's address as it
appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. If notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given regardless of whether such notice is in fact actually
received.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as
a result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
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SECTION 11.6 Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes to
the contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA (S)(S) 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
----------------------
(a) All covenants and agreements in this Indenture and the Notes by
the Issuer shall bind its successors and assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability.
------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, and any
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other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays.
--------------
If the date on which any payment is due shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
SECTION 11.13 Governing Law.
-------------
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.15 Recording of Indenture.
----------------------
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16 No Recourse.
-----------
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against:
(i) the Indenture Trustee or the Owner Trustee in its individual
capacity;
(ii) any owner of a beneficial interest in the Issuer; or
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(iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of any holder of a beneficial interest in the Issuer or of the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of the
Trust Agreement.
SECTION 11.17 No Petition.
-----------
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note issued hereunder, hereby covenant and agree that
they shall not, prior to the date which is one year and one day after the
termination of this Indenture with respect to the Trust pursuant to Section 4.1,
acquiesce, petition or otherwise invoke or cause the Seller, the holder of the
GP Interest (which initially shall be The CIT GP Corporation V) or the Trust to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Seller or the Trust under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Trust or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller or the Trust.
SECTION 11.18 Inspection.
----------
The Issuer agrees that, on reasonable prior notice, it shall permit
any representative of the Indenture Trustee, during the Issuer's normal business
hours, to examine all the books of account, records, reports, and other papers
of the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder. Notwithstanding anything herein to the
contrary, the foregoing shall not be construed to prohibit (i) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Indenture Trustee from sources other than the Servicer or the Seller or
any of their affiliates, (ii) disclosure of any and all information (A) if
required to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory
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body having authority to regulate or oversee any respects of the Indenture
Trustee's business, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Indenture Trustee is a party, (D) to any independent or
internal auditor, agent, employee or attorney of the Indenture Trustee
reasonably having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed and such recipient agrees to keep the same confidential in accordance
with the terms hereof, or (iii) any other disclosure authorized by the Servicer
or the Seller; provided, however, the Indenture Trustee shall give the Servicer
-------- -------
prior notice of any such disclosure.
SECTION 11.19 Indemnification by and Reimbursement of the Servicer.
----------------------------------------------------
The Indenture Trustee further acknowledges and accepts the conditions
and limitations with respect to the Servicer's obligation to indemnify, defend
and hold the Indenture Trustee harmless as set forth in the Sale and Servicing
Agreement.
* * * * *
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
CIT RV TRUST 1996-B
BY: MELLON BANK (DE), NATIONAL
ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee,
By: /s/ E.D. Renn
--------------------------
Name: E.D. Renn
Title: Vice President
THE BANK OF NEW YORK,
a New York banking corporation
as Indenture Trustee,
By: /s/ Joseph G. Ernst
--------------------------
Name: JOSEPH G. ERNST
Title: Assistant Vice President
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EXHIBIT A-1
FORM OF ASSET-BACKED NOTES
REGISTERED $_____________
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 172850AA7
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1996-B
CLASS A-1 6.00% ASSET-BACKED NOTES
CIT RV TRUST 1996-B, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of _______________ DOLLARS ($_________) payable in accordance with
the Indenture, prior to the occurrence of an Event of Default and a declaration
that the Notes are due and payable, on each Distribution Date to the extent of
amounts available therefor in an amount equal to the Principal Distribution
Amount and any Principal Distribution Amount not paid on a prior Distribution
Date; provided, however, that the outstanding principal balance of this Note
-------- -------
shall be due and payable on the earlier of the August 2003 Distribution Date
(the "Class A-1 Note Final Scheduled Distribution Date") and the Redemption Date
with respect to a redemption of Notes, if any, pursuant to Section 10.1(a) or
Section 10.1(b) of the Indenture. On each Distribution Date until the principal
A-1-1
<PAGE>
of this Note is paid or made available for payment, the Issuer shall pay
interest on this Note, to the extent of amounts available therefor, pursuant to
the Sale and Servicing Agreement, in an amount equal to one-twelfth of the
product of the rate per annum shown above and the principal amount of this Note
outstanding immediately preceding such Distribution Date (or, in the case of the
first Distribution Date, in an amount equal to interest accruing at the rate per
annum shown above (computed on the basis of a 360-day year consisting of twelve
30-day months) from August 21, 1996 to but excluding September 15, 1996, on the
principal amount of this Note outstanding as of the Closing Date). Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-1-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CIT RV TRUST 1996-B
By: MELLON BANK (DE), NATIONAL ASSOCIATION
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By: ______________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
a New York banking corporation
not in its individual capacity but solely as
Indenture Trustee
By: ______________________________________
Name:
Title:
A-1-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-1 6.00% Asset-Backed Notes (herein called the "Class A-1
Notes"), issued under an Indenture, dated as of August 1, 1996 (such Indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and The Bank of New York, a New York banking corporation, as trustee (the
"Indenture Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. Also
issued under the Indenture, are the Class A-2 6.40% Asset-Backed Notes (the
"Class A-2 Notes") and the Class A-3 6.65% Asset-Backed Notes (the "Class A-3
Notes," and together with the Class A-1 Notes and the Class A-2 Notes, the
"Notes"). The Class A-1 Notes are subject to all terms of the Indenture. All
terms used and not otherwise defined in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture.
The Class A-1 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-1 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-1 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1(a) or Section 10.1(b) of the
Indenture. In addition, principal on the Class A-1 Notes will be payable in
installments on earlier Distribution Dates to the extent of amounts available
therefor, in the amounts and in the priorities set forth in Section 8.2(c) of
the Indenture. "Distribution Date," with respect to the Notes means the
fifteenth day of each month or, if any such date is not a Business Day, the next
succeeding Business Day, commencing September 1996.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than a majority of
the aggregate outstanding principal amount of the Notes have declared the Notes
to be immediately due and payable in the manner provided in Section 5.2 of the
Indenture. In such event, the Holders of all Notes shall be entitled to receive
repayment of principal in proportion to their respective unpaid principal
balances in the order of priority provided in Section 5.4 of the Indenture.
All principal payments on the Class A-1 Notes shall be made pro rata
to the Holders of the Class A-1 Notes.
Payments of interest on this Note shall be due and payable on each
Distribution Date, together with the installment of principal, if any, if not in
full payment of this Note, shall be
A-1-4
<PAGE>
made by check mailed to the Person whose name appears as the Registered Holder
of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Depository
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. The Record Date, with respect to any Distribution Date, means the
Business Day immediately preceding such Distribution Date, or if Definitive
Notes are issued, the last Business Day of the month immediately preceding the
month in which such Distribution Date occurs. Any reduction in the principal
amount of this Note (or any one or more Predecessor Notes) effected by any
payments made on any Distribution Date shall be binding upon all future Holders
of this Note and of any Note issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, shall
notify the Person who is the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice sent in accordance with Section
2.7(e) of the Indenture, and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in their
individual
A-1-5
<PAGE>
capacities, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the any
holder of a beneficial interest in the Issuer or of the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller, the holder of the GP Interest or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller, the holder of the GP Interest or the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Issuer or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller, the holder of the GP Interest or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon
A-1-6
<PAGE>
such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the holder of
the GP Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-1-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________, as attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _______________________/1/
Signature Guaranteed:
_____________________________
_____________________________
/1/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-8
<PAGE>
EXHIBIT A-2
FORM OF ASSET-BACKED NOTES
REGISTERED $_____________
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 172850AB5
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1996-B
CLASS A-2 6.40% ASSET-BACKED NOTES
CIT RV TRUST 1996-B, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of _______________ DOLLARS ($_________) payable in accordance with
the Indenture, prior to the occurrence of an Event of Default and a declaration
that the Notes are due and payable, on each Distribution Date on or after the
Distribution Date on which the Class A-1 Notes are paid in full, to the extent
of amounts available therefor in an amount equal to the Principal Distribution
Amount and any Principal Distribution Amount not paid on a prior Distribution
Date (or, on the Distribution Date on which the Class A-1 Notes are paid in
full, the portion of the Principal Distribution Amount not distributed to the
Class A-1 Noteholders); provided, however, that the outstanding principal
-------- -------
balance of this Note shall be due and payable on the earlier of the February
2007 Distribution
A-2-1
<PAGE>
Date (the "Class A-2 Note Final Scheduled Distribution Date") and the Redemption
Date with respect to a redemption of Notes, if any, pursuant to Section
10.1(a)(i) or (ii) or Section 10.1(b) of the Indenture. On each Distribution
Date until the principal of this Note is paid or made available for payment, the
Issuer shall pay interest, to the extent of amounts available therefor, pursuant
to the Sale and Servicing Agreement, on this Note in an amount equal to one-
twelfth of the product of the rate per annum shown above and the principal
amount of this Note outstanding immediately preceding such Distribution Date
(or, in the case of the first Distribution Date, in an amount equal to interest
accruing at the rate per annum shown above (computed on the basis of a 360-day
year consisting of twelve 30-day months) from August 21, 1996 to but excluding
September 15, 1996, on the principal amount of this Note outstanding as of the
Closing Date). Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CIT RV TRUST 1996-B
By: MELLON BANK (DE), NATIONAL ASSOCIATION
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By: ______________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
a New York banking corporation
not in its individual capacity but solely as
Indenture Trustee
By: ______________________________________
Name:
Title:
A-2-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-2 6.40% Asset-Backed Notes (herein called the "Class A-2
Notes"), issued under an Indenture, dated as of August 1, 1996 (such Indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and The Bank of New York, a New York banking corporation, as trustee (the
"Indenture Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. Also
issued under the Indenture, are the Class A-1 6.00% Asset-Backed Notes (the
"Class A-1 Notes") and the Class A-3 6.65% Asset-Backed Notes (the "Class A-3
Notes," and together with the Class A-1 Notes and the Class A-2 Notes, the
"Notes"). The Class A-2 Notes are subject to all terms of the Indenture. All
terms used and not otherwise defined in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture.
The Class A-2 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-2 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-2 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1(a)(i) or (a)(ii) or Section
10.1(b) of the Indenture. In addition, principal on the Class A-2 Notes will be
payable in installments on earlier Distribution Dates on or after the
Distribution Date on which the Class A-1 Notes are paid in full, to the extent
of amounts available therefor, in the amounts and in the priorities set forth in
Section 8.2(c) of the Indenture. "Distribution Date," with respect to the Notes
means the fifteenth day of each month or, if any such date is not a Business
Day, the next succeeding Business Day, commencing September 1996.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than a majority of
the aggregate outstanding principal amount of the Notes have declared the Notes
to be immediately due and payable in the manner provided in Section 5.2 of the
Indenture. In such event, the Holders of all Notes shall be entitled to receive
repayment of principal in proportion to their respective unpaid principal
balances in the order of priority provided in Section 5.4 of the Indenture.
All principal payments on the Class A-2 Notes shall be made pro rata
to the Holders of the Class A-2 Notes.
A-2-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date, together with the installment of principal, if any, if not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. The Record Date, with respect to any
Distribution Date, means the Business Day immediately preceding such
Distribution Date, or if Definitive Notes are issued, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Distribution Date shall
be binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who is the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice sent in
accordance with Section 2.7(e) of the Indenture, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in the City of New
York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture
A-2-5
<PAGE>
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in their individual capacities, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of any holder of a beneficial interest in the Issuer or of
the Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in their individual capacities, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller, the holder of the GP Interest or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller, the holder of the GP Interest or the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Issuer or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller, the holder of the GP Interest or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain
A-2-6
<PAGE>
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the holder of
the GP Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-2-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________, as attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _______________________/2/
Signature Guaranteed:
_____________________________
_____________________________
/2/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-8
<PAGE>
EXHIBIT A-3
FORM OF ASSET-BACKED NOTES
REGISTERED $_____________
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 172850AC3
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1996-B
CLASS A-3 6.65% ASSET-BACKED NOTES
CIT RV TRUST 1996-B, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of _______________ DOLLARS ($_________) payable in accordance with
the Indenture, prior to the occurrence of an Event of Default and a declaration
that the Notes are due and payable, on each Distribution Date on or after the
Distribution Date on which the Class A-2 Notes are paid in full, to the extent
of amounts available therefor in an amount equal to the Principal Distribution
Amount and any Principal Distribution Amount not paid on a prior Distribution
Date (or, on the Distribution Date on which the Class A-2 Notes are paid in
full, the portion of the Principal Distribution Amount not distributed to the
Class A-2 Noteholders); provided, however, that the outstanding principal
-------- -------
balance of this Note shall be due and payable on the earlier of the December
2017 Distribution
A-3-1
<PAGE>
Date (the "Class A-3 Note Final Scheduled Distribution Date") and the Redemption
Date with respect to a redemption of Notes, if any, pursuant to Section
10.1(a)(i) or (ii) or Section 10.1(b) of the Indenture. On each Distribution
Date until the principal of this Note is paid or made available for payment, the
Issuer shall pay interest, to the extent of amounts available therefor, pursuant
to the Sale and Servicing Agreement on this Note in an amount equal to one-
twelfth of the product of the rate per annum shown above and the principal
amount of this Note outstanding immediately preceding such Distribution Date
(or, in the case of the first Distribution Date, in an amount equal to interest
accruing at the rate per annum shown above (computed on the basis of a 360-day
year consisting of twelve 30-day months) from August 21, 1996 to but excluding
September 15, 1996, on the principal amount of this Note outstanding as of the
Closing Date). Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-3-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CIT RV TRUST 1996-B
By: MELLON BANK (DE), NATIONAL ASSOCIATION
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By: ______________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
a New York banking corporation
not in its individual capacity but solely as
Indenture Trustee
By: ______________________________________
Name:
Title:
A-3-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-3 6.65% Asset-Backed Notes (herein called the "Class A-3
Notes"), issued under an Indenture, dated as of August 1, 1996 (such Indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and The Bank of New York, a New York banking corporation, as trustee (the
"Indenture Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. Also
issued under the Indenture, are the Class A-1 6.00% Asset-Backed Notes (the
"Class A-1 Notes") and the Class A-2 6.40% Asset-Backed Notes (the "Class A-2
Notes," and together with the Class A-1 Notes and the Class A-3 Notes, the
"Notes"). The Class A-3 Notes are subject to all terms of the Indenture. All
terms used and not otherwise defined in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture.
The Class A-3 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-3 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-3 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1(a)(i) or (a)(ii) or Section
10.1(b) of the Indenture. In addition, principal on the Class A-3 Notes will be
payable in installments on earlier Distribution Dates on or after the
Distribution Date on which the Class A-2 Notes are paid in full, to the extent
of amounts available therefor, in the amounts and in the priorities set forth in
Section 8.2(c) of the Indenture. "Distribution Date," with respect to the Notes
means the fifteenth day of each month or, if any such date is not a Business
Day, the next succeeding Business Day, commencing September 1996.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than a majority of
the aggregate outstanding principal amount of the Notes have declared the Notes
to be immediately due and payable in the manner provided in Section 5.2 of the
Indenture. In such event, the Holders of all Notes shall be entitled to receive
repayment of principal in proportion to their respective unpaid principal
balances in the order of priority provided in Section 5.4 of the Indenture.
All principal payments on the Class A-3 Notes shall be made pro rata
to the Holders of the Class A-3 Notes.
A-3-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date, together with the installment of principal, if any, if not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. The Record Date, with respect to any
Distribution Date, means the Business Day immediately preceding such
Distribution Date, or if Definitive Notes are issued, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Distribution Date shall
be binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who is the Registered Holder
hereof as of the Record Date preceding such Distribution Date by notice sent in
accordance with Section 2.7(e) of the Indenture, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in the City of New
York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture
A-3-5
<PAGE>
Trustee on the Notes or under the Indenture or any certificate or other writing
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in their individual capacities, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of any holder of a beneficial interest in the Issuer or of
the Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in their individual capacities, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller, the holder of the GP Interest or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller, the holder of the GP Interest or the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Issuer or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller, the holder of the GP Interest or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain
A-3-6
<PAGE>
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the holder of
the GP Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-3-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _______________________________, as attorney, to transfer said Note
on the books kept for registration thereof, with full power of substitution in
the premises.
Dated: _______________________/3/
Signature Guaranteed:
_____________________________
_____________________________
/3/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-8
<PAGE>
EXHIBIT 4.2
================================================================================
TRUST AGREEMENT
BETWEEN
THE CIT GROUP SECURITIZATION CORPORATION II
SELLER
AND
MELLON BANK (DE), NATIONAL ASSOCIATION
OWNER TRUSTEE
DATED AS OF AUGUST 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.......................................................... 1
SECTION 1.1 Definitions................................................................................. 1
ARTICLE II ORGANIZATION....................................................................................... 1
SECTION 2.1 Name........................................................................................ 1
SECTION 2.2 Office...................................................................................... 1
SECTION 2.3 Purposes and Powers......................................................................... 1
SECTION 2.4 Appointment of Owner Trustee................................................................ 2
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate.......................................... 2
SECTION 2.6 Declaration of Trust........................................................................ 2
SECTION 2.7 Transfer of Interest to The CIT GP Corporation V; Liability of The CIT GP Corporation V..... 3
SECTION 2.8 Title to Trust Property..................................................................... 4
SECTION 2.9 Situs of Trust.............................................................................. 4
SECTION 2.10 Representations and Warranties of the Seller............................................... 4
SECTION 2.11 Representations and Warranties of the Holder of the GP Interest............................ 5
SECTION 2.12 Tax Treatment.............................................................................. 6
ARTICLE III THE CERTIFICATES.................................................................................. 8
SECTION 3.1 Initial Certificate Ownership............................................................... 8
SECTION 3.2 Form of the Certificates.................................................................... 8
SECTION 3.3 Execution, Authentication and Delivery...................................................... 8
SECTION 3.4 Registration; Registration of Transfer and Exchange of Certificates......................... 9
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates........................................... 10
SECTION 3.6 Persons Deemed Certificateholders........................................................... 11
SECTION 3.7 Access to List of Certificateholders' Names and Addresses................................... 11
SECTION 3.8 Maintenance of Corporate Trust Office....................................................... 11
SECTION 3.9 Appointment of Paying Agent................................................................. 11
SECTION 3.10 Disposition by the Holder of the GP Interest............................................... 12
SECTION 3.11 Book-Entry Certificates.................................................................... 12
SECTION 3.12 Notices to Depository...................................................................... 13
SECTION 3.13 Definitive Certificates.................................................................... 13
SECTION 3.14 Seller as Certificateholder................................................................ 14
ARTICLE IV ACTIONS BY OWNER TRUSTEE........................................................................... 15
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain Matters.......................... 15
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters................................ 15
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy..................................... 16
SECTION 4.4 Restrictions on Certificateholders' Power................................................... 16
SECTION 4.5 Majority Control............................................................................ 16
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.......................................................... 17
SECTION 5.1 Establishment of Accounts................................................................... 17
SECTION 5.2 Application of Trust Funds.................................................................. 17
SECTION 5.3 Method of Payment........................................................................... 18
SECTION 5.4 Accounting and Reports to the Certificateholders. The Internal Revenue Service and Others.. 19
SECTION 5.5 Signature on Returns; Tax Matters Partner................................................... 19
ARTICLE VI THE OWNER TRUSTEE.................................................................................. 20
SECTION 6.1 Duties of Owner Trustee..................................................................... 20
SECTION 6.2 Rights of Owner Trustee..................................................................... 21
SECTION 6.3 Acceptance of Trusts and Duties............................................................. 21
SECTION 6.4 Action Upon Instruction by Certificateholders............................................... 23
SECTION 6.5 Furnishing of Documents..................................................................... 23
SECTION 6.6 Representations and Warranties of Owner Trustee............................................. 24
SECTION 6.7 Reliance; Advice of Counsel................................................................. 24
SECTION 6.8 Owner Trustee May Own Certificates and Notes................................................ 25
SECTION 6.9 Compensation and Indemnity.................................................................. 25
SECTION 6.10 Replacement of Owner Trustee............................................................... 26
SECTION 6.11 Merger or Consolidation of Owner Trustee................................................... 27
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.............................................. 27
SECTION 6.13 Eligibility Requirements for Owner Trustee................................................. 28
ARTICLE VII TERMINATION OF TRUST AGREEMENT.................................................................... 30
SECTION 7.1 Termination of Trust Agreement.............................................................. 30
SECTION 7.2 Dissolution upon Bankruptcy of the Holder of the GP Interest................................ 32
ARTICLE VIII AMENDMENTS....................................................................................... 33
SECTION 8.1 Amendments Without Consent of Certificateholders or Noteholders............................. 33
SECTION 8.2 Amendments With Consent of Certificateholders and Noteholders............................... 33
SECTION 8.3 Form of Amendments.......................................................................... 34
ARTICLE IX MISCELLANEOUS...................................................................................... 35
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
SECTION 9.1 No Legal Title to Owner Trust Estate........................................................ 35
SECTION 9.2 Limitations on Rights of Others............................................................. 35
SECTION 9.3 Notices..................................................................................... 35
SECTION 9.4 Severability................................................................................ 36
SECTION 9.5 Counterparts................................................................................ 36
SECTION 9.6 Successors and Assigns...................................................................... 36
SECTION 9.7 No Petition Covenant........................................................................ 36
SECTION 9.8 No Recourse................................................................................. 36
SECTION 9.9 Headings.................................................................................... 36
SECTION 9.10 Governing Law.............................................................................. 37
SECTION 9.11 Certificate Transfer Restrictions.......................................................... 37
SECTION 9.12 Indemnification by the Servicer............................................................ 37
</TABLE>
-iii-
<PAGE>
TRUST AGREEMENT, dated as of August 1, 1996, between THE CIT GROUP
SECURITIZATION CORPORATION II, a Delaware corporation, as Seller, and MELLON
BANK (DE), NATIONAL ASSOCIATION, a national banking association formed under the
laws of the United States with its principal place of business in the State of
Delaware, as Owner Trustee.
The Seller and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in the Sale and
Servicing Agreement of even date herewith, among the Seller, the Servicer and
the Trust (the "Sale and Servicing Agreement"). All references herein to "the
Agreement" or "this Agreement" are to the Trust Agreement, and all references
herein to Articles, Sections and subsections are to Articles, Sections and
subsections of this Agreement unless otherwise specified.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as "CIT RV
----
Trust 1996-B" 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 on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificate Owners and the
Seller.
SECTION 2.3 Purposes and Powers. The purpose of the Trust is to
-------------------
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement, and to sell, transfer or exchange the Notes and
the Certificates;
(ii) with the proceeds of the sale of the Notes and the Certificates
to fund the Capitalized Interest Account and the Pre-Funding Account and to
pay the organizational, start-up and transactional expenses of the Trust
and to pay the balance of the proceeds to the Seller pursuant to the Sale
and Servicing Agreement;
(iii) to acquire, manage and hold the Contracts;
<PAGE>
(iv) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate pursuant to the terms of the Indenture and to hold, manage and
distribute to the Certificate Owners pursuant to the terms of this
Agreement and the Sale and Servicing Agreement any portion of the Trust
Estate released from the lien of, and remitted to the Trust pursuant to,
the Indenture;
(v) to enter into and perform its obligations and exercise its rights
under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith;
(vii) to hold and administer the Certificate Distribution Account and
Reserve Account and apply the proceeds thereof as provided in the Sale and
Servicing Agreement;
(viii) to acquire Subsequent Contracts from the Seller from time to
time with funds on deposit in the Pre-Funding Account; and
(ix) 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 is hereby authorized to engage in the foregoing activities
and 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 2.4 Appointment of Owner Trustee. The Seller hereby appoints
----------------------------
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
--------------------------------------------------
Seller hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
--------------------
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificate Owners,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for purposes of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by,
-2-
<PAGE>
or based upon gross or net income, the Trust shall be treated as a partnership.
The parties agree that, unless otherwise required by appropriate tax
authorities, the Trust shall file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the characterization of the
Trust as a partnership 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 Business Trust Statute with respect to accomplishing the purposes of the
Trust.
SECTION 2.7 Transfer of Interest to The CIT GP Corporation V;
-------------------------------------------------
Liability of The CIT GP Corporation V.
- -------------------------------------
(a) On the Closing Date, the Seller shall and does hereby transfer and
assign its entire interest in the Trust (including the GP Interest but excluding
the Certificates sold on the Closing Date to the underwriters) to CIT through
the issuance of a dividend and The CIT GP Corporation V acknowledges receipt of
such interest in the Trust (including the GP Interest) from CIT as a capital
contribution. The holder of the GP Interest 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. The holder of the GP Interest shall be liable directly to and shall
indemnify the injured party for all losses, claims, damages, liabilities and
expenses of the Trust to the extent that the holder of the GP Interest would be
liable if the Trust were a partnership under the Delaware Revised Uniform
Limited Partnership Act in which the holder of the GP Interest were a general
partner; provided, however, that the holder of the GP Interest shall not be
-------- -------
liable for (i) any losses incurred by a Certificateholder or a Certificate Owner
in its capacity as an investor in the Certificates or by a Noteholder or Note
Owner in its capacity as an investor in the Notes or (ii) any losses, claims,
damages, liabilities and expenses arising out of the imposition by any taxing
authority of any federal, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Certificateholders, the Certificate
Owners, the Noteholders, the Note Owners, the Owner Trustee in its individual
capacity or the Indenture Trustee (including any liabilities, costs or expenses
with respect thereto) with respect to the Contracts not specifically indemnified
or represented to hereunder. In addition, any third party creditors of the
Trust (other than in connection with the obligations described in the preceding
sentence for which the holder of the GP Interest shall not be liable) shall be
deemed third party beneficiaries of this subsection 2.7(a). The obligations of
the holder of the GP Interest under this subsection 2.7(a) shall be evidenced by
the Certificates issued pursuant to Section 3.10, which for purposes of the
Business Trust Statute shall be deemed to be a separate class of Certificates
from all other Certificates issued by the Trust; provided, however, that the
-------- -------
rights and obligations evidenced by all Certificates, regardless of class,
shall, except as provided in this subsection 2.7(a), be identical.
(b) No Certificate Owner, other than to the extent set forth in
subsection 2.7(a) with respect to the holder of the GP Interest, shall have any
personal liability for any liability or obligation of the Trust.
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<PAGE>
(c) No Certificate Owner, including the holder of the GP Interest,
shall have the right to exercise any control of the Trust other than to the
extent of its percentage ownership of the Certificates as provided herein.
SECTION 2.8 Title to Trust Property. Legal title to all the Owner
-----------------------
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be, for the benefit of the Trust.
SECTION 2.9 Situs of Trust. The Trust shall 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 or New York; provided, however, that nothing herein shall
-------- -------
restrict or prohibit the Owner Trustee from having employees within or without
the State of Delaware. Payments shall 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 principal office of the Trust shall be the Corporate Trust Office in
Delaware.
SECTION 2.10 Representations and Warranties of the Seller. The
--------------------------------------------
Seller hereby represents and warrants to the Owner Trustee, as of the Closing
Date, that:
(a) The Seller has been organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted and had at all
relevant times, and now has, power, authority and legal right to acquire and own
the Contracts.
(b) The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualifications.
(c) The Seller has the power and authority to execute and deliver this
Agreement and to carry out its terms, the Seller has full power and authority to
sell and assign the property to be sold and assigned to and deposited with, as
part of, the Trust and the Seller has duly authorized such sale and assignment
to the Trust by all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the Seller by all
necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement 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 its certificate of
incorporation or by-laws of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it is bound, or result in
the creation or imposition of any
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Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to or as contemplated by the
Basic Documents), or violate any law or, to the best of its knowledge, any
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or any of its properties.
SECTION 2.11 Representations and Warranties of the Holder of the GP
------------------------------------------------------
Interest. The CIT GP Corporation V, as intended holder of the GP Interest,
- --------
hereby represents and warrants to the Owner Trustee, as of the Closing Date,
that:
(a) It has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently conducted.
(b) It 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 ownership or lease of property or the conduct of its
business requires such qualifications.
(c) It 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 has been duly authorized by all necessary corporate action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms of this Agreement 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 its certificate of
incorporation or by-laws, or any indenture, agreement or other instrument to
which it is a party or by which it is bound, or 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 or as
contemplated by the Basic Documents), or violate any law or, to the best of its
knowledge, any order, rule or regulation applicable to the Seller of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over it or any of its
properties.
(e) It has been duly capitalized by the delivery of cash and a demand
note (the "Demand Note") from The CIT Group Holdings, Inc. ("CIT"), which Demand
Note has not been canceled, waived or terminated. The proceeds of such Demand
Note have not been used and will not be used to pay (i) any of the expenses of
the holder of the GP Interest in connection with the transfer contemplated by
the Basic Documents or (ii) the acquisition of such Certificates acquired
pursuant to Section 2.7. Such Demand Note is enforceable against CIT, subject
to its terms, and subject to the applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and similar laws now or hereafter in
effect relating to creditors' rights generally and subject to the general
principles of equity (whether applied in a proceeding at law or in equity).
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<PAGE>
SECTION 2.12 Tax Treatment.
-------------
(a) The Trust shall maintain capital accounts ("Capital Accounts") for
each Certificateholder and allocations of income, gain, loss or deduction as
provided herein shall be credited or debited, as the case may be, to such
Capital Accounts. Contributions to, and distributions from, the Trust shall be
credited or debited, as the case may be, to such Capital Accounts.
(b) Net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated as determined by the
Servicer as follows:
(i) to the extent of available net income, among the
Certificateholders as of the first Record Date following the end of such
month, in proportion to their ownership of principal amount of Certificates
on such date, an amount of net income up to the sum of (x) the amount of
any interest that accrues on the Certificates for such month based on the
Pass-Through Rate, (y) an amount equivalent to any overdue interest on the
Certificates that accrued during a prior month (to the extent that no
allocation of taxable income has been previously made for such amount under
clause (x)), and (z) any Trust income attributable to discount on the
Contracts that corresponds to any excess of the principal amount of the
Certificates over initial issue price; and
(ii) to the holder of the GP Interest, to the extent of any
remaining net income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (b) (i) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
clause (b) (ii). Net losses of the Trust, if any, for any month as determined
for Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated to the
holder of the GP Interest to the extent the holder of the GP Interest is
reasonably expected, as determined by the Servicer, to bear the economic burden
of such net losses, then net losses shall be allocated among the
Certificateholders as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of Certificates on such
Record Date until the principal balance of the Certificates is reduced to zero.
The holder of the GP Interest is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the holder of
the GP Interest, the Certificateholders, or as otherwise required by the Code.
(c) Notwithstanding anything in this Section 2.12 to the contrary, (i)
items of net loss and deduction attributable to nonrecourse debt of the Trust
and to "partner nonrecourse debt" (as defined in the Section 704(b) Regulations)
shall be allocated as provided in the Section 704(b) Regulations; (ii) if in any
period, there is a net decrease in the amount of "minimum gain"
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(as defined in the Section 704(b) Regulations) of the Trust, or in the amount of
"minimum gain" attributable to "partner nonrecourse debt", then the
Certificateholders shall be allocated items of income or gain for such period
and subsequent periods to the extent and in the manner provided in Treasury
Regulations Sections 1.704-2(f) and 1.704-(2)(i)(4) as a "minimum gain
chargeback" (as defined in the Section 704(b) Regulations); (iii) allocations of
income of the Trust shall be made in a manner necessary to satisfy a "qualified
income offset" provision as described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d); and (iv) in no event shall net losses or deductions be allocated
to a Certificateholder to the extent that such allocation would result in such
Certificateholder having a negative balance in its Capital Account which exceeds
the sum of its share of "minimum gain" of the Trust and "minimum gain"
attributable to "partner nonrecourse debt" and the amount such Certificateholder
is obligated (or deemed obligated) to contribute to the Trust upon liquidation
of the Trust.
(d) For purposes of Treasury Regulations Section 1.752-3(a)(3),
"excess nonrecourse liabilities" shall be allocated among the Certificateholders
in accordance with the manner in which it is reasonably expected that the
deductions attributable to those nonrecourse liabilities will be allocated.
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<PAGE>
ARTICLE III
THE CERTIFICATES
SECTION 3.1 Initial Certificate Ownership. Upon the formation of the
-----------------------------
Trust by the contribution by the Seller pursuant to Section 2.5 and until the
issuance of the Certificates, the Seller shall be the sole beneficiary of the
Trust.
SECTION 3.2 Form of the Certificates.
------------------------
(a) The Certificates shall be substantially in the form set forth in
Exhibit A and shall be issued in minimum denominations of $20,000 and in
- ---------
integral multiples of $1,000 in excess thereof; provided, however, that (a)
-------- -------
Certificates shall be issued to the holder of the GP Interest pursuant to
Section 2.7 in such denominations as to represent at least 1% of the initial
Certificate Balance and (b) one Certificate may be issued in a denomination
other than an integral multiple of $1,000. The Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of a Responsible Officer of
the Owner Trustee. 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 be valid and binding
obligations of the Trust, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
(b) The Definitive Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders) all as determined by the officers executing
such Certificates, as evidenced by their execution of such Certificates.
(c) The terms of the Certificates set forth in Exhibit A shall form
---------
part of this Agreement.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently with
--------------------------------------
the sale of the Initial Contracts to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Certificates in an
aggregate 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 Seller, signed by its chairman of the board, its president
or any vice president, without further corporate action by the Seller, in
authorized denominations. No Certificate shall entitle its holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Certificate a certificate of authentication substantially
in the form set forth in Exhibit A, executed by the Owner Trustee, or by the
---------
Owner Trustee's authenticating agent, by manual signature. Such authentication
shall constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
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<PAGE>
SECTION 3.4 Registration; Registration of Transfer and Exchange of
------------------------------------------------------
Certificates.
- ------------
(a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as provided herein; provided, however, that no
-------- -------
Certificate may be subdivided upon transfer or exchange such that the
denomination of any resulting Certificate is less than $20,000. Mellon Bank
(DE), National Association shall be the initial Certificate Registrar. Upon any
resignation of a Certificate Registrar, the Owner Trustee shall promptly appoint
a successor or, if it elects not to make such an appointment, assume the duties
of Certificate Registrar.
(b) Upon surrender for registration or transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute on behalf of the Trust, authenticate and deliver (or shall cause its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by the
Owner Trustee or any authenticating agent.
(c) At the option of a Holder of Certificates, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
principal amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office maintained pursuant to Section 3.8. Whenever any
Certificates are so surrendered for exchange, the Owner Trustee shall execute on
behalf of the Trust, authenticate and deliver (or shall cause its authenticating
agent to authenticate and deliver) one or more Certificates dated the date of
authentication by the Owner Trustee or any authenticating agent. Such
Certificates shall be delivered to the Holder making the exchange.
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or his attorney duly authorized in writing with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently destroyed by the
Owner Trustee or Certificate Registrar in accordance with its customary
practice.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
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<PAGE>
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates.
-------------------------------------------------
(a) If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Certificate Registrar, the Owner Trustee and the Trust such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to the Certificate Registrar or the Owner Trustee that such
Certificate has been acquired by a bona fide purchaser, the Owner Trustee shall
execute on behalf of the Trust and the Owner Trustee shall authenticate and
deliver (or shall cause its authenticating agent to authenticate and deliver),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a replacement Certificate of a like aggregate principal amount;
provided, however, that if any such destroyed, lost or stolen Certificate, but
- -------- -------
not a mutilated Certificate, shall have become or within seven days shall be due
and payable, then instead of issuing a replacement Certificate the Owner Trustee
may pay such destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or payment in
respect of a destroyed, lost or stolen Certificate pursuant to subsection
3.5(a), a bona fide purchaser of the original Certificate in lieu of which such
replacement Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such replacement
Certificate (or such payment) from the Person to whom it was delivered or any
Person taking such replacement Certificate from such Person to whom such
replacement Certificate was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Owner Trustee in connection therewith.
(c) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Owner Trustee may require the payment by the Holder
of such Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Owner Trustee and the Certificate
Registrar) connected therewith.
(d) Any duplicate Certificate issued pursuant to this Section 3.5 in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the Trust, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be found at
any time or be enforced by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Certificates
duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. 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 any Certificate
shall be registered in the Certificate Register as the
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<PAGE>
Certificateholder of such Certificate for the purpose of receiving distributions
pursuant to Article V and for all other purposes whatsoever, and neither the
Owner Trustee nor the Certificate Registrar shall be affected by any notice to
the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Seller and the holder of the GP Interest, within 15 days after
receipt by the Owner Trustee of a request therefor from the Servicer, the Seller
or the holder of the GP Interest in writing, a list, in such form as the
Servicer, the Seller or the holder of the GP Interest may reasonably require, of
the names and addresses of the Certificateholders as of the most recent Record
Date. If three or more Holders of Certificates or one or more Holder of
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to hold
the Seller, the holder of the GP Interest 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 3.8 Maintenance of Corporate Trust Office. The Owner Trustee
-------------------------------------
shall maintain in the Borough of Manhattan, the City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and 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 the offices of Mellon Bank,
N.A. c/o Mellon Securities Trust Company, 120 Broadway, 13th Floor, New York, NY
10271 as its principal office for such purposes. The Owner Trustee shall give
prompt written notice to the Seller and to the Certificateholders of any change
in the location of the Certificate Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall make
---------------------------
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.2 and make withdrawals from the Reserve Account of amounts
to be deposited in the Certificate Distribution Account and amounts, if any, to
be paid to the holder of the GP Interest, in each case pursuant to the Sale and
Servicing Agreement, and the Paying Agent shall report the amounts of such
distributions and withdrawals to the Owner Trustee and the Servicer. Any Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account and/or the Reserve 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 Mellon
Bank (DE), National Association, and any co-paying agent chosen by the Owner
Trustee, and acceptable to the Servicer. The Paying
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<PAGE>
Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Owner Trustee. If Mellon Bank (DE), National Association shall no longer
be the Paying Agent, the Owner Trustee shall appoint a successor to act as
Paying Agent (which shall be an Eligible Institution). 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 shall 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 such 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 6.3, 6.6, 6.7 and
6.9 shall apply to the Owner Trustee also in its role as Paying Agent (if the
Owner Trustee shall also act as Paying Agent), for so long as the Owner Trustee
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
SECTION 3.10 Disposition by the Holder of the GP Interest. On and
--------------------------------------------
after the Closing Date, The CIT GP Corporation V, as the holder of the GP
Interest, shall retain beneficial and record ownership of Certificates
representing at least 1% of the Certificate Balance. Any attempted transfer of
any Certificate that would reduce such interest of the holder of the GP Interest
below 1% of the Certificate Balance shall be void. The Owner Trustee shall
cause any Certificate issued to the Seller to contain a legend to such effect.
The CIT GP Corporation V shall notify the Rating Agencies of any transfer of the
Demand Note.
SECTION 3.11 Book-Entry Certificates. The Certificates, upon
-----------------------
original issuance, shall be issued in the form of a typewritten Certificate or
Certificates representing Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Depository by or on behalf of the Trust;
provided, however, that one Definitive Certificate shall be acquired by The CIT
- -------- -------
GP Corporation V, as holder of the GP Interest, pursuant to Section 2.7. Such
Certificate or Certificates (other than the Definitive Certificate acquired by
The CIT GP Corporation V) shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the initial Depository and no
Certificate Owner shall receive a definitive Certificate representing such
Certificate Owner's interest in such Certificate, except as provided in Section
3.13. Unless and until definitive fully registered Certificates (the
"Definitive Certificates") shall have been issued to Certificate Owners pursuant
to Section 3.13:
(a) the provisions of this Section 3.11 shall be in full force and
effect;
(b) the Certificate Registrar and the Owner Trustee shall be entitled
to deal with the Depository for all purposes of this Agreement (including the
payment of principal of and interest on the Certificates and the giving of
instructions or directions hereunder) as the sole Holder of the Certificate, and
shall have no obligation to the Certificate Owners;
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<PAGE>
(c) to the extent that the provisions of this Section 3.11 conflict
with any other provisions of this Agreement, the provisions of this Section 3.11
shall control;
(d) the rights of the Certificate Owners shall be exercised only
through the Depository and shall be limited to those established by law and
agreements between such Certificate Owners and the Depository and/or the
Depository Participants. Pursuant to the Certificate Depository Agreement
unless and until Definitive Certificates are issued pursuant to Section 3.13,
the initial Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and interest on
the Certificates to such Depository Participants;
(e) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Certificates evidencing a
specified percentage of the Certificate Balance, the Depository shall be deemed
to represent such percentage only to the extent that it has received
instructions to such effect from Certificate Owners and/or Depository
Participants owning or representing, respectively, such required percentage of
Certificates and has delivered such instructions to the Owner Trustee.
SECTION 3.12 Notices to Depository. Whenever a notice or other
---------------------
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 3.13, the Owner Trustee shall give all such notices and
communications specified herein to be given to Certificateholders to the
Depository and shall have no further obligation to the Certificate Owners,
except to the holder of the GP Interest.
SECTION 3.13 Definitive Certificates. If (i) the Servicer advises
-----------------------
the Owner Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to the Certificates, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Owner Trustee in writing that it elects to terminate the
book-entry system through the Depository, or (iii) after the occurrence of an
Event of Default or an Event of Termination, Certificate Owners representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interest of the Certificate
Owners, then the Depository shall notify all Certificate Owners and the Owner
Trustee of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Owner Trustee of the typewritten Certificate or Certificates
representing the Book-Entry Certificates by the Depository, accompanied by
registration instructions, the Owner Trustee shall execute and authenticate the
Definitive Certificates in accordance with the instructions of the Depository.
Neither the Certificate Registrar nor the Owner Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Owner Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders.
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<PAGE>
SECTION 3.14 Seller as Certificateholder. The Seller in its
---------------------------
individual or any other capacity may become the owner or pledgee of Certificates
and may otherwise deal with the Owner Trustee or its Affiliates as if it were
not the Seller.
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<PAGE>
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to
--------------------------------------------------
Certain Matters. The Owner Trustee shall not take action with respect to the
- ---------------
following matters, unless (i) the Owner Trustee shall have notified the
Certificateholders in writing of the proposed action at least 30 days before the
taking of such action, and (ii) the Certificateholders shall not have notified
the Owner Trustee in writing prior to the 30th day after such notice is given
that such Certificateholders have withheld consent or provided alternative
direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuit brought in connection with the collection of payments
due on the Contracts) and the compromise of any material action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of payments due on the
Contracts);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
(e) the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholders or in circumstances in which the Sale and Servicing
Agreement expressly provides that the consent of the Certificateholders is not
required; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.2 Action by Certificateholders with Respect to Certain
----------------------------------------------------
Matters. The Owner Trustee shall not have the power, except upon the written
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direction of the Certificateholders evidencing not less than a majority of the
Certificate Balance, to (a) remove the Servicer under the Sale and Servicing
Agreement pursuant to Section 9.01 thereof, (b) appoint a successor Servicer
pursuant to Section 9.02 of the Sale and Servicing Agreement, or (c) except as
expressly provided in the Basic Documents, sell the Contracts or any interest
therein after the termination of the Indenture.
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SECTION 4.3 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 unanimous prior approval of all
Holders of Certificates (including the holder of the GP Interest) and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.4 Restrictions on Certificateholders' 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 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein,
----------------
any action that may be taken or consent that may be given or withheld by the
Certificateholders under this Agreement may be taken, given or withheld by the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by Holders of Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Accounts.
-------------------------
(a) On or prior to the Closing Date, the Trust shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee or the
Owner Trustee, as appropriate, for the benefit of the Noteholders and
Certificateholders the accounts as provided in Section 5.01 of the Sale and
Servicing Agreement.
(b) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Certificate Distribution
Account and the Reserve Account and in all proceeds thereof. Except as otherwise
provided herein or in the Sale and Servicing Agreement, the Certificate
Distribution Account and the Reserve 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 or the Reserve Account ceases
to be held as an Eligible Account, the Owner Trustee (or the Servicer on behalf
of the Owner Trustee, if the Certificate Distribution Account or the Reserve
Account is not then held by the Owner Trustee or an Affiliate thereof) 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 Certificate
Distribution Account or Reserve Account as an Eligible Account and shall
transfer any cash and/or any investments to such new Certificate Distribution
Account or Reserve Account, as the case may be.
SECTION 5.2 Application of Trust Funds.
--------------------------
(a) On each Distribution Date, the Owner Trustee shall (i) transfer or
cause the transfer of amounts on deposit in the Reserve Account to the
Certificate Distribution Account pursuant to Section 5.06 of the Sale and
Servicing Agreement, (ii) transfer and distribute, or cause to be transferred
and distributed, amounts on deposit in the Reserve Account to the holder of the
GP Interest, pursuant to Section 5.06 of the Sale and Servicing Agreement, on or
prior to such Distribution Date, and (iii) distribute to the Certificateholders,
on a pro rata basis, amounts deposited in the Certificate Distribution Account
pursuant to the Sale and Servicing Agreement on or prior to such Distribution
Date first in respect of interest and then in respect of principal.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.08 of the Sale and Servicing Agreement on such
Distribution Date setting forth, among other things, the amount of the
distribution allocable to principal and to interest, the Certificate Balance
after giving effect to such distribution, the amount of funds on deposit in the
Pre-Funding Account during the Funding Period, the number and aggregate
principal balance of Subsequent Contracts purchased by the Trust on the related
Distribution Date during the Funding Period and the Servicer Payment with
respect to such Distribution Date.
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(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this Section
5.2. 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 by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder 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 (such as a distribution to a non-U.S.
Certificateholder), the Owner Trustee may in its sole discretion withhold such
amounts in accordance with this subsection 5.2(c). If a Certificateholder
wishes to apply for a refund of any such withholding tax, the Owner Trustee
shall reasonably cooperate with such Certificateholder in making such claim so
long as such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.
(d) If the Indenture Trustee holds escheated funds for payment to the
Trust pursuant to Section 3.3(e) of the Indenture, the Owner Trustee shall, upon
notice from the Indenture Trustee that such funds exist, submit on behalf of the
Trust an Issuer Order to the Indenture Trustee pursuant to Section 3.3(e) of the
Indenture instructing the Indenture Trustee to pay such funds to or at the order
of the Seller.
SECTION 5.3 Method of Payment. Subject to subsection 7.1(c),
-----------------
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the immediately preceding
Record Date either by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if (i) such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Record Date and such Holder's Certificates in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) such Certificateholder is the
holder of the GP Interest, or an Affiliate thereof, or, if not, by check mailed
to such Certificateholder at the address of such holder appearing in the
Certificate Register; provided, however, that, unless Definitive Certificates
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have been issued pursuant to Section 3.13, with respect to Certificates
registered on the Record Date in the name of the nominee of the Depository
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of
the Certificates (whether on the Certificate Final Distribution Date or
otherwise) will be payable only upon presentation and surrender of such
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.4 Accounting and Reports to 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 calendar year basis on the
accrual method of accounting, (b) deliver to each
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Certificateholder, as may be required by the Code and applicable Treasury
Regulations or otherwise, such information as may be required to enable each
Certificateholder to prepare its federal and state income tax returns, (c) file
or cause to be filed such tax returns relating to the Trust and make or cause to
be made 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 partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or cause to be collected any withholding tax as described in and
in accordance with subsection 5.2(c) with respect to income or distributions to
Certificateholders.
SECTION 5.5 Signature on Returns; Tax Matters Partner. The Owner
-----------------------------------------
Trustee shall sign on behalf of the Trust any and all tax returns of the Trust,
unless applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the holder of the GP Interest. To
the extent one may be required, the holder of the GP Interest shall be the "tax
matters partner" of the Trust pursuant to the Code.
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ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 Duties of Owner Trustee
-----------------------
(a) The Owner Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Agreement and the other Basic
Documents to which the Trust is a party, including the administration of the
Trust in the interest of the Certificateholders, subject to the Basic Documents
and in accordance with the provisions of this Agreement and the Basic Documents
to which the Trust is a party. No implied covenants or obligations shall be
read into this Agreement.
The Owner Trustee is authorized from time to time to take such action
as the Servicer directs in writing with respect to the Basic Documents and
shall, upon the written direction of the Servicer, execute and deliver any
amendments to this Agreement or any of the Basic Documents.
(b) 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 Servicer has agreed in the Sale and Servicing
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 Servicer to carry out its obligations under
the Sale and Servicing Agreement.
(c) In the absence of bad faith on its part, the Owner Trustee may
conclusively rely upon certificates or opinions furnished to the Owner Trustee
and conforming to the requirements of this Agreement in determining the truth of
the statements and the correctness of the opinions contained therein; provided,
--------
however, that the Owner Trustee shall have examined such certificates or
- -------
opinions so as to determine compliance of the same with the requirements of this
Agreement.
(d) The Owner Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection 6.1(d) shall not limit the effect of
subsection 6.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Owner Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Owner Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 4.1, 4.2 or 6.4.
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(e) Subject to Sections 5.1 and 5.2, monies received by the Owner
Trustee hereunder need not be segregated in any manner except to the extent
required by law or the Sale and Servicing Agreement and may be deposited under
such general conditions as may be prescribed by law, and the Owner Trustee shall
not be liable for any interest thereon.
(f) The Owner Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3 or (ii)
would, to the actual knowledge of a Responsible Officer of the Owner Trustee,
result in the Trust's becoming taxable as a corporation for federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.1 and any such
direction shall be null and void.
SECTION 6.2 Rights of Owner Trustee. The Owner Trustee is authorized
-----------------------
and directed to execute and deliver the Basic Documents 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, in such form as the Seller shall approve as
evidenced conclusively by the Owner Trustee's execution thereof. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as the
Servicer recommends with respect to the Basic Documents.
SECTION 6.3 Acceptance of Trusts and Duties. Except as otherwise
-------------------------------
provided in this Article VI, in accepting the trusts hereby created Mellon Bank
(DE), National Association 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. The Owner Trustee accepts the trusts hereby created and agrees to
perform its duties hereunder with respect to such trusts but only upon the terms
of this Agreement. The Owner Trustee also agrees to disburse all 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
liable or accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own negligent action, its own negligent
failure to act or its own willful misconduct or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.6 and
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 at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any Financed Vehicle 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
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Financed Vehicle; the existence and enforceability of any insurance thereon; the
existence and contents of any Contract on any computer or other record thereof;
the
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validity of the assignment of any Contract to the Trust or of any intervening
assignment; the completeness of any Contract; the performance or enforcement of
any Contract; the compliance by the Seller or the Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the Servicer,
the Trustee or the Servicer or any subservicer taken in the name of the Owner
Trustee.
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Servicer or any Certificateholder;
(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 or the Certificate Balance of and
interest on the Certificates;
(e) the Owner Trustee shall not be responsible for or in respect of
and makes no representation as to the validity or sufficiency of any provision
of this Agreement or for the due execution hereof by the Seller or for the form,
character, genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, the Notes, the Certificates (other than the certificate of
authentication on the Certificates) or of any Contracts or any related
documents, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to any Noteholder or to any Certificateholder,
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 Servicer, the Indenture Trustee, the Seller 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
Servicer under the Sale and Servicing Agreement or the Indenture Trustee under
the Indenture; 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 of
the Certificateholders, unless such Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act.
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SECTION 6.4 Action Upon Instruction by Certificateholders.
---------------------------------------------
(a) Subject to Section 4.4, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Section 4.5.
(b) Notwithstanding the foregoing, 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, or is unsure as to the application, intent, interpretation or
meaning of any provision of this Agreement or the Basic Documents, 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 such instruction received, the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instructions within ten days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action which is consistent,
in its view, with this Agreement or the Basic Documents, and as it shall deem to
be in the best interests of the Certificateholders, and the Owner Trustee shall
have no liability to any Person for any such action or inaction.
SECTION 6.5 Furnishing of Documents. The Owner Trustee shall furnish
-----------------------
(a) to the Certificateholders, 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 Noteholders, promptly
upon receipt of a written request therefor, copies of the Purchase Agreement,
any Subsequent Purchase Agreements, the Sale and Servicing Agreement, any
Subsequent Transfer Agreements and this Agreement.
SECTION 6.6 Representations and Warranties of Owner Trustee. The
-----------------------------------------------
Owner Trustee hereby represents and warrants to the Seller, for the benefit of
the Certificateholders, that:
(a) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States with its
principal place of business in the State of Delaware.
(b) It has full power, authority and legal right to execute, deliver
and perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
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(c) The execution, delivery and performance by it of this Agreement
(i) shall not violate any provision of any law or regulation governing the
banking and trust powers of the Owner Trustee or any order, writ, judgment or
decree of any court, arbitrator or governmental authority applicable to the
Owner Trustee or any of its assets, (ii) shall not violate any provision of the
corporate charter or by-laws of the Owner Trustee, or (iii) shall not violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust pursuant to the provisions of any mortgage,
indenture, contract, agreement or other undertaking to which it is a party,
which violation, default or lien could reasonably be expected to have a
materially adverse effect on the Owner Trustee's performance or ability to
perform its duties as Owner Trustee under this Agreement or on the transactions
contemplated in this Agreement.
(d) The execution, delivery and performance by the Owner Trustee of
this Agreement shall not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of banks or trust companies in the
jurisdiction in which the Trust was formed.
(e) This Agreement has been duly executed and delivered by the Owner
Trustee and constitutes the legal, valid and binding agreement of the Owner
Trustee, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
SECTION 6.7 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 and
need not investigate any fact or matter in any such document. 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,
attorneys, custodians or nominees pursuant to
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agreements entered into with any of them, and the Owner Trustee shall not be
liable for the conduct or misconduct of such agents, attorneys, custodians or
nominees if such agents, attorneys, custodians or nominees shall have been
selected by the Owner Trustee with reasonable care; and (ii) may consult with
counsel, accountants and other skilled professionals 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
opinion or advice of any such counsel, accountants or other such Persons and not
contrary to this Agreement or any Basic Document.
SECTION 6.8 Owner Trustee May Own Certificates and Notes. The Owner
--------------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Seller, the Indenture Trustee and
the Servicer in transactions in the same manner as it would have if it were not
the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. The Owner Trustee shall
--------------------------
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Seller, or any person
representing the Seller, and the Owner Trustee, and the Owner Trustee shall be
entitled to be reimbursed by the Servicer for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, custodians, nominees, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder. If the Seller shall fail to compensate the
Owner Trustee, the Servicer shall pay to the Owner Trustee such compensation.
The Servicer shall indemnify the Owner Trustee and its successors, assigns,
agents and servants in accordance with the provisions of Section 8.02 of the
Sale and Servicing Agreement. The indemnities contained in this Section 6.9
shall survive the resignation, removal or termination of the Owner Trustee or
the termination of this Agreement. Any amounts paid to the Owner Trustee
pursuant to this Article VI shall be deemed not to be a part of the Owner Trust
Estate immediately after such payment.
SECTION 6.10 Replacement of Owner Trustee.
----------------------------
(a) The Owner Trustee may resign at any time and be discharged from
the trusts hereby created by giving 30 days' prior written notice thereof to the
Servicer, provided that such resignation shall not become effective until a
successor Owner Trustee has been appointed. The Servicer may appoint a
successor Owner Trustee by delivering a written instrument pursuant to Section
6.10(b). If no successor Owner Trustee shall have been 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. The Servicer
shall remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 6.13 and shall fail to resign after written
request therefor by the Servicer;
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(ii) the Owner Trustee shall be adjudged bankrupt or insolvent;
(iii) a receiver or other public officer shall be appointed or
take charge or control of the Owner Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
(b) If the Owner Trustee resigns or is removed or if a vacancy exists
in the office of Owner Trustee for any reason the Servicer 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 shall pay all fees owed to the
outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment of
a successor Owner Trustee pursuant to any of the provisions of this Section 6.10
shall not become effective until a written acceptance of appointment is
delivered by the successor Owner Trustee to the outgoing Owner Trustee and the
Servicer and all fees and expenses due to the outgoing Owner Trustee are paid.
Any successor Owner Trustee appointed pursuant to this Section 6.10 shall be
eligible to act in such capacity in accordance with Section 6.13 and, following
compliance with the preceding sentence, 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 Servicer shall
provide notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.
(d) The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement. The Servicer 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.
(e) Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 6.10, the Servicer shall mail notice of the successor
of such Owner Trustee to all Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies.
SECTION 6.11 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 6.13,
and without the execution or filing of any instrument or any further act on the
part of any of the parties hereto; provided, however, that
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the Owner Trustee shall mail notice of such merger, conversion or consolidation
to the Rating Agencies.
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust Estate or any Financed Vehicle may at the time
be located, the Servicer 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 as separate trustee or trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 6.12, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer 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 6.13 and no notice of the appointment of any co-
trustee or separate trustee shall be required pursuant to Section 6.10.
(b) 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 jointly by the Owner Trustee and such separate trustee or co-
trustee (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or co-
trustee.
(c) 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
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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 Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as 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.
SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee shall at all times: (a) be authorized to exercise corporate trust
powers; (b) have a combined capital and surplus of at least $50,000,000 and be
subject to supervision or examination by federal or state authorities; and (c)
have (or have a parent which has) a long-term unsecured debt rating of at least
"BBB" by Standard & Poor's and have a long-term unsecured debt rating of at
least "Baa3" by Moody'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 6.13,
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. If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.13, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
At all times at least one of the Owner Trustee or the Co-trustee appointed
pursuant hereto shall be a person that satisfies the provisions of Section
3807(a) of the Business Trust Statute (the "Delaware Trustee").
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ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
------------------------------
(a) This Agreement has been entered into in part to induce the
Indenture Trustee and the Certificateholders from time to time to participate in
the transactions contemplated hereby, and each of the Owner Trustee, the holder
of the GP Interest and the Seller agree that the Indenture Trustee (so long as
the Indenture shall not have been terminated in accordance with its terms) and
the Certificateholders from time to time are third party beneficiaries hereof,
and shall be entitled to enforce the terms of this Agreement to the same extent
as if they were signatories hereto, subject, however, to Article IV hereof and
to the applicable provisions of the Indenture. So long as the Indenture shall
not have been terminated in accordance with its terms, this Agreement and the
Trust created hereby are irrevocable by the Owner Trustee and the Seller, unless
the Indenture Trustee and the Certificateholders consent in writing to such
termination. This Agreement (other than Section 6.9) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i) 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 (including the exercise by CITSF of its option to
purchase the Contracts pursuant to Section 11.01 of the Sale and Servicing
Agreement or resulting from the mandatory sale of all Contracts pursuant to
Section 11.02 of the Sale and Servicing Agreement) and Article V, (ii) at the
time provided in Section 7.2 or (iii) twenty-one years less one day after the
death of the last survivor of all of the descendants of the grandparents of
David C. Rockefeller living on the date of the earliest execution of this
Agreement by any party hereto, but if this Agreement and the Trust created
hereby shall be or become authorized under applicable law to be valid for a
period commencing on the twenty-first anniversary of the death of such last
survivor (or, without limiting the generality of the foregoing, if legislation
shall become effective providing for the validity of this Agreement and the
Trust created hereby for a period in gross exceeding the period for which this
Agreement and the Trust created hereby are hereinabove stated to extend and be
valid), then this Agreement and the Trust created hereby shall not terminate
under this subsection (iii), but shall extend to and continue in effect, but
only if such non- termination and extension shall then be valid under
applicable law, until the day proceeding such date as the same shall, under
applicable law, cease to be valid. Upon such termination, all monies or other
property or proceeds constituting part of the Owner Trust Estate shall be
distributed in accordance with the terms of the Agreement. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder, other
than the holder of the GP Interest as described in Section 7.2, shall not (x)
operate to terminate this Agreement or the Trust, nor (y) entitle such
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 the Owner Trust Estate nor (z) otherwise affect
the rights, obligations and liabilities of the parties hereto. The bankruptcy,
liquidation or dissolution of the Owner Trustee (or any other beneficiary
herewith) will not terminate this Agreement or the Trust, nor entitle such
person's legal representatives or heirs, as appropriate, to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of the Trust or Owner Trust Estate, nor otherwise affect
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<PAGE>
the rights, obligations and liabilities of the parties hereto. No creditor of
any Certificateholder shall obtain legal title to or exercise legal or equitable
remedies with respect to the Owner Trust Estate as a result of such
Certificateholder's holding of the Certificate. No transfer, by operation of law
or otherwise, of any right, title and interest of any Certificateholder in and
to its undivided beneficial interest in the Owner Trust Estate shall operate to
terminate this Agreement or the Trust created hereby.
(b) Except as provided in Section 7.1(a), neither the Seller nor the
holder of the GP Interest 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 their
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from CITSF given pursuant to Section 11.01 of the Sale and Servicing
Agreement, or within five Business Days of the Owner Trustee receiving notice of
such termination from the Indenture Trustee pursuant to Section 11.02 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
Certificateholders. Upon presentation and surrender of the Certificates, the
Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.2.
(d) If all of the Certificateholders shall not surrender their
Certificates 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 remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates 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 remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Subject to applicable laws with respect to escheat
of funds, any funds remaining in the Trust after exhaustion of such remedies in
the preceding sentence shall be deemed property of the holder of the GP Interest
and distributed by the Owner Trustee to the holder of the GP Interest.
(e) 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 of the State of Delaware
in accordance with the provisions of Section 3810 of the Business Trust Statute.
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<PAGE>
SECTION 7.2 Dissolution upon Bankruptcy of the Holder of the GP
---------------------------------------------------
Interest. Upon the occurrence of an Insolvency Event with respect to the holder
- --------
of the GP Interest, this Agreement and the Trust shall be terminated and the
Contracts liquidated in accordance with Section 7.1 unless, within 90 days after
such occurrence, the Owner Trustee shall have received written instructions from
(a) each of the Certificateholders (other than the holder of the GP Interest)
and (b) each of the Noteholders, to the effect that each such party disapproves
of the liquidation of the Contracts and termination of the Trust. Promptly
after the occurrence of any Insolvency Event with respect to the holder of the
GP Interest: (i) the holder of the GP Interest shall give the Indenture Trustee
and the Owner Trustee written notice of such Insolvency Event; (ii) the Owner
Trustee shall, upon the receipt of such written notice from the holder of the GP
Interest, give prompt written notice to the Certificateholders and the Indenture
Trustee of the occurrence of such event and (iii) the Indenture Trustee shall,
upon receipt of written notice of such Insolvency Event from the Owner Trustee
or the holder of the GP Interest, give prompt written notice to the Noteholders
of the occurrence of such event; provided, however, that any failure to give a
-------- -------
notice required by this sentence shall not prevent or delay in any manner a
termination of the Trust pursuant to the first sentence of this Section 7.2. If
no such instructions are received within such 90-day period, the Owner Trustee
shall direct the Indenture Trustee promptly to sell the assets of the Trust
(other than the Designated Accounts and the Reserve Account) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of any
such sale, disposition or liquidation of the assets of the Trust shall be
treated as collections on the Contracts and deposited in the Collection Account
pursuant to Section 5.02 of the Sale and Servicing Agreement.
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ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or
---------------------------------------------------
Noteholders. This Agreement may be amended by the Seller and the Owner Trustee
- -----------
without the consent of any of the Noteholders or the Certificateholders (but
with prior written notice to each of the Rating Agencies and in the case of
clauses (iii) and (vi), satisfaction of the Rating Agency Condition), to (i)
correct manifest error or cure any ambiguity, (ii) correct or supplement any
provision in this Agreement that may be inconsistent with any other provision in
this Agreement, (iii) add or amend any provision as requested by Moody's or
Standard & Poor's to maintain or improve the rating of the Notes or
Certificates, (iv) add to the covenants, restrictions or obligations of the
Seller, the holder of the GP Interest, the Owner Trustee or the Indenture
Trustee, (v) evidence and provide for the acceptance of the appointment of a
successor trustee with respect to the Owner Trust Estate and add to or change
any provisions as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee pursuant to Article VI and (vi) add,
change or eliminate any other provision of this Agreement provided that an
amendment pursuant to this clause (vi), as evidenced by an Opinion of Counsel,
does not adversely affect in any material respect the interests of the
Noteholders or the Certificateholders.
SECTION 8.2 Amendments With Consent of Certificateholders and
-------------------------------------------------
Noteholders. This Agreement may be amended from time to time by the Seller and
- -----------
the Owner Trustee with the consent of Noteholders whose Notes evidence not less
than a majority of the aggregate outstanding principal amount of the Notes as of
the close of the preceding Distribution Date and the consent of
Certificateholders whose Certificates evidence not less than a majority of the
Certificate Balance as of the close of the preceding Distribution Date (which
consent, whether given pursuant to this Section 8.2 or pursuant to any other
provision of this Agreement, shall be conclusive and binding on such Person and
on all future Holders of such Notes or Certificates and of any Notes or
Certificates issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Notes or
Certificates) 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 increase or reduce in any manner the
- -------
amount of, or accelerate or delay the timing of, distributions that shall be
required to be made on any Note or Certificate, the Pass Through Rate or any
Interest Rate. The Owner Trustee shall furnish notice to each of the Rating
Agencies prior to obtaining consent to any proposed amendment under this Section
8.2.
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<PAGE>
SECTION 8.3 Form of Amendments.
------------------
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 8.1 or 8.2, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(b) It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to Section 8.2 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 (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(c) 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 of the State of Delaware.
(d) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, 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. 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.
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<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Legal Title to Owner Trust Estate. The
------------------------------------
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and VII. No transfer, by operation of law or otherwise, of any
right, title, and interest of the Certificateholders to and in their ownership
interest in the Owner Trust Estate shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 9.2 Limitations on Rights of Others. Except as expressly
-------------------------------
provided herein, the provisions of this Agreement are solely for the benefit of
the Owner Trustee, the Seller, the Certificateholders, the Servicer 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 9.3 Notices.
-------
(a) All demands, notices and communications upon or to the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or the Rating Agencies under
this Agreement shall be in writing personally delivered, sent by electronic
facsimile (with hard copy to follow via first class mail), provided, however,
receipt of such is acknowledged by return facsimile or otherwise in writing, or
mailed by certified mail-return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Seller, at the following
address: 650 CIT Drive, Livingston, N.J. 07039, (b) in the case of the
Servicer, at the following address: 650 CIT Drive, Livingston, N.J. 07039, (c)
in the case of the Indenture Trustee, at its Corporate Trust Office, (d) in the
case of the Trust or the Owner Trustee, to the Owner Trustee at its Corporate
Trust Office, (e) in the case of Moody's Investors Service, Inc., to Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007 and (f) in the case of Standard & Poor's Ratings Service, to
Standard & Poor's Ratings Service, 26 Broadway (15th Floor), New York, New York
10004, Attention: Asset-Backed Surveillance Department, or at such other address
as shall be designated by such Person in a written notice to the other parties
to this Agreement.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 9.4 Severability. If any one or more of the covenants,
------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such
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<PAGE>
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the holders thereof.
SECTION 9.5 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 one and the same instrument.
SECTION 9.6 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, the Seller,
the Owner Trustee and each Certificateholder and their respective successors and
permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall bind
the successors and assigns of such Certificateholder.
SECTION 9.7 No Petition Covenant. Notwithstanding any prior
--------------------
termination of this Agreement, the Trust (or the Owner Trustee on behalf of the
Trust), the Owner Trustee, each Certificateholder or Certificate Owner, the
Indenture Trustee and each Noteholder or Note Owner shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the holder of the GP Interest or the Seller, acquiesce, petition or
otherwise invoke or cause the holder of the GP Interest to invoke the process of
any court or governmental authority for the purpose of commencing or sustaining
a case against the holder of the GP Interest or the Seller under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the holder of the GP Interest or the Seller or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the holder
of the GP Interest or the Seller.
SECTION 9.8 No Recourse. Each Certificateholder by accepting a
-----------
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Seller, the holder of the GP Interest, the Servicer, 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 Basic
Documents.
SECTION 9.9 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 9.10 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.
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<PAGE>
SECTION 9.11 Certificate Transfer Restrictions.
---------------------------------
The Certificates may not be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1)
of the Code or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof and the Certificate
Owner shall each be deemed to have represented and warranted that it is not a
Benefit Plan and not subject to the foregoing limitation.
SECTION 9.12 Indemnification by the Servicer. The Owner Trustee
-------------------------------
further acknowledges and accepts the conditions and limitations with respect to
the Servicer's obligation to indemnify, defend and hold the Owner Trustee
harmless as set forth in Section 8.02 of the Sale and Servicing Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
MELLON BANK (DE), NATIONAL ASSOCIATION,
as Owner Trustee
By: /s/ E.D. Renn
___________________________
Name: E.D. Renn
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ RICHARD J. GUGLIADA
___________________________
Name: Richard J. Gugliada
Title: Vice President
Accepted and Agreed
with respect to the
provisions relating to
the intended holder of
the GP Interest:
THE CIT GP CORPORATION V
By: /s/ RICHARD J. GUGLIADA
___________________________
Name: Richard J. Gugliada
Title: Vice President
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<PAGE>
EXHIBIT A
NUMBER ______ $ _________________
CUSIP NO. 172850AD1
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO INTEREST IN THIS 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 DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT
LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS), OR (iii) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY. BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND
THE CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED
THAT IT IS NOT A BENEFIT PLAN.
PURSUANT TO THE TRUST AGREEMENT (AS DEFINED BELOW), THE CIT GP
CORPORATION V ("GP CORP") SHALL RETAIN BENEFICIAL AND RECORD OWNERSHIP OF
CERTIFICATES REPRESENTING AT LEAST 1% OF THE CERTIFICATE BALANCE, AND ANY
ATTEMPTED TRANSFER OF THIS CERTIFICATE THAT REDUCES THE BENEFICIAL AND RECORD
INTEREST OF GP CORP TO BELOW 1% OF THE CERTIFICATE BALANCE SHALL BE VOID.
CIT RV TRUST 1996-B
7.10% ASSET-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used recreational vehicles and sold to the Trust by The CIT Group
Securitization Corporation II (This Certificate does not represent an interest
in or obligation of The CIT Group Securitization Corporation II, The CIT
<PAGE>
Group/Sales Financing, Inc. or The CIT Group Holdings, Inc. or any of their
respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT ___________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in CIT RV Trust 1996-B
(the "Trust") formed by The CIT Group Securitization Corporation II, a Delaware
corporation.
The Trust was created pursuant to a Trust Agreement, dated as of
August 1, 1996 (as amended and supplemented from time to time, the "Trust
Agreement"), between the Seller and Mellon Bank (DE), National Association, as
owner trustee (the "Owner Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as 7.10% Asset-Backed Certificates (the "Certificates"). 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 simple interest retail installment sale contracts
(the "Contracts") secured by the new and used recreational vehicles financed
thereby (the "Financed Vehicles"), certain monies received under the Initial
Contracts on and after August 1, 1996 (the "Initial Cut-off Date") or under the
Subsequent Contracts as of the related Subsequent Cut-off Date, security
interests in the Initial Financed Vehicles, the Collection Account, the Reserve
Account, the Note Distribution Account, the Certificate Distribution Account,
the Capitalized Interest Account and the Pre-Funding Account, in each case
together with the proceeds thereof, the proceeds from claims under certain
insurance policies in respect of individual Initial Financed Vehicles or the
related Obligors and certain rights under the Sale and Servicing Agreement. The
rights of the holders of the Certificates are subordinated to the rights of the
holders of the Notes, as set forth in the Sale and Servicing Agreement.
Under the Trust Agreement, there shall be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next Business Day,
commencing September 1996 (each, a "Distribution Date"), to the person in whose
name this Certificate is registered on the related Record Date (as defined
below), such Certificateholder's fractional undivided interest in the amount of
interest and principal to be distributed to Certificateholders on such
Distribution Date. On each Distribution Date interest on this Certificate shall
be distributed, to the extent of amounts available therefor, in an amount equal
to one-twelfth of the product of the rate per annum shown above and the
outstanding Certificate Balance of this Certificate immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, in an amount
equal to interest accruing at the rate per annum shown above (computed on the
basis of a 360-day year consisting of twelve 30-day months) from August 21, 1996
to but excluding September 15, 1996, on the principal amount of this Note
outstanding as of the Closing Date). The "Record Date," with respect to any
Distribution Date, means the close of business on the Business Day immediately
preceding
A-2
<PAGE>
such Distribution Date, or if Definitive Certificates are issued, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
The distributions in respect of Certificate Balance, Aggregate
Allocated Loss Amount and interest on this Certificate are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Trust
with respect to this Certificate shall be applied, to the extent of the
remaining Available Amount and the Available Reserve Amount, first to interest
due and payable on this Certificate as provided above, then to the unpaid
distributions in respect of Certificate Balance on this Certificate and then to
any Aggregate Allocated Loss Amount, if any.
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 and to the extent described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Seller, the Servicer and the
Certificateholders that, for purposes of federal income, state and local income
and franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income, the Trust shall be treated as a partnership. Except as
otherwise required by appropriate taxing authorities, the Seller and the other
Certificateholders by acceptance of a Certificate, agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as interests in such partnership.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate or, in the case of a Certificate Owner, a beneficial interest in a
Certificate, covenants and agrees that such Certificateholder or Certificate
Owner, as the case may be, shall not, prior to the date which is one year and
one day after the termination of the Trust Agreement, acquiesce, petition or
otherwise invoke or cause the Seller, the Issuer or the holder of the GP
Interest to invoke the process of any court or governmental authority for the
purpose of commencing or sustaining a case against the Seller, the Issuer or the
holder of the GP Interest under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller, the
Issuer or the holder of the GP Interest or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller, the
Issuer or the holder of the GP Interest.
Distributions on this Certificate shall 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
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments shall be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate shall be made after due notice by the Owner Trustee of the pendency
A-3
<PAGE>
of such distribution and only upon presentation and surrender of this
Certificate at the office maintained for such purpose by the Owner Trustee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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, 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.
A-4
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
CIT RV TRUST 1996-B
BY: MELLON BANK (DE), NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
By: ________________________
Name:
Title:
Dated: _____________________
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
MELLON BANK (DE), NATIONAL ASSOCIATION
not in its individual
capacity but solely
as Owner Trustee
By: ____________________________
Mellon Bank (DE), National Association, as
authenticating agent
A-5
<PAGE>
REVERSE OF CERTIFICATE
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, The CIT Group Holdings, Inc., the holder of the GP
Interest, the Indenture Trustee, 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 and recoveries with respect to the Contracts (and certain
other amounts), all as more specifically set forth herein and in the Trust
Agreement and the Sale and Servicing Agreement. A copy of each of the Sale and
Servicing Agreement and the Trust Agreement may be examined during normal
business hours at the principal office of the Seller, and at such other places,
if any, designated by the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the Holders of the
Notes evidencing not less than a majority of the aggregate outstanding principal
amount of the Notes as of the close of the preceding Distribution Date and the
consent of Certificateholders whose Certificates evidence not less than a
majority of the Certificate Balance as of the close of the preceding
Distribution Date. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates or the 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 for such purposes, 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 thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Mellon Bank (DE), National Association.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $20,000 or integral multiples of $1,000 in excess
thereof; provided, however, that one Certificate may be issued in a denomination
other than an integral multiple of $1,000 such that the holder of the GP
Interest may own at least 1% of the Certificate Balance (as described in the
Trust Agreement). As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing
A-6
<PAGE>
the same aggregate denomination, as requested by the Holder surrendering the
same; provided, however, that no Certificate may be subdivided such that the
-------- -------
denomination of any resulting Certificate is less than $20,000. No service
charge shall be made for any such registration of transfer or exchange, 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 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
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. CITSF may at its option purchase the
Contracts at a price specified in the Sale and Servicing Agreement, and such
purchase of the Contracts shall effect early retirement of the Certificates;
provided, however, that such right of purchase is exercisable on any
- -------- -------
Distribution Date as of which the Pool Balance as of the last day of the related
Due Period is 10% or less of the Initial Pool Balance. In addition, within ten
days following the first Distribution Date as of which the Pool Balance as of
the last day of the related Due Period is 5% or less of the Initial Pool Balance
an auction sale of the remaining Contracts may be conducted (in each case, as
described in the Sale and Servicing Agreement) and such auction may effect early
retirement of the Certificates.
A-7
<PAGE>
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 Registrar, 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. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
A-8
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
CIT RV TRUST 1996-B
-------------------
THIS Certificate of Trust of CIT RV Trust 1996-B (the "Trust"), dated as of
August 1, 1996, is being duly executed and filed by Mellon Bank (DE), National
Association, a national banking association, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. C. 3801 et seq.).
------- -- ---
1. Name. The name of the business trust formed hereby is CIT RV Trust
----
1996-B.
2. Delaware Trustee. The name and business address of the Trustee
resident in the State of Delaware is 919 North Market Street, Wilmington,
Delaware 19801.
3. This Certificate of Trust shall be effective as of August 9, 1996.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
executed this Certificate of Trust as of the date first-above written.
Mellon Bank (DE), National Association, not in its individual capacity but
solely as Owner Trustee under a Trust Agreement dated as of August 1, 1996
By: ________________________________________
Name:
Title:
<PAGE>
EXHIBIT 4.3
================================================================================
THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
CIT RV TRUST 1996-B
as Issuer
_______________________________
SALE AND SERVICING AGREEMENT
Dated as of August 1, 1996
________________________________
$240,000,000
CIT RV Trust 1996-B
Class A-1 6.00% Asset-Backed Notes
Class A-2 6.40% Asset-Backed Notes
Class A-3 6.65% Asset-Backed Notes
7.10% Asset-Backed Certificates
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS 1
Section 1.01 General.................................................................................... 1
Section 1.02 Specific Terms............................................................................. 1
ARTICLE II CONVEYANCE OF CONTRACTS; ACCEPTANCE BY TRUSTEE....................................................22
Section 2.01 Conveyance of the Initial Contracts........................................................22
Section 2.02 Conveyance of the Subsequent Contracts.....................................................23
Section 2.03 Acceptance by Owner Trustee................................................................23
ARTICLE III REPRESENTATIONS AND WARRANTIES; THE CONTRACTS....................................................25
Section 3.01A Representations and Warranties Regarding Each Contract....................................25
Section 3.01B Representations and Warranties Regarding the Contracts in the Aggregate....................29
Section 3.01C Representations and Warranties Regarding the Contract Files...............................30
Section 3.01D Conditions of Closing for the Subsequent Contracts.........................................31
Section 3.02 Repurchase of Contracts for Breach of Representations and Warranties.......................33
Section 3.03 Custody of Contract Files..................................................................34
Section 3.04 Duties of Servicer as Custodian............................................................34
Section 3.05 Instructions; Authority to Act.............................................................35
Section 3.06 Effective Period and Termination...........................................................36
ARTICLE IV ADMINISTRATION AND SERVICING OF CONTRACTS.........................................................37
Section 4.01 Duties of Servicer.........................................................................37
Section 4.02 Collection of Contract Payments............................................................39
Section 4.03 Realization Upon Contracts.................................................................39
Section 4.04 Physical Damage Insurance..................................................................40
Section 4.05 Maintenance of Security Interests in Financed Vehicles; Retitling..........................42
Section 4.06 Covenants of Servicer......................................................................43
Section 4.07 Purchase of Contracts Upon Breach..........................................................44
Section 4.08 Servicing Fee..............................................................................44
Section 4.09 Monthly Report.............................................................................45
Section 4.10 Annual Statement as to Compliance..........................................................45
Section 4.11 Annual Report of Accountants...............................................................46
Section 4.12 Duties of Owner Trustee....................................................................46
Section 4.13 Reports to Securityholders and the Rating Agencies.........................................46
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission Policy................................47
Section 4.15 Satisfaction of Contract...................................................................47
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 4.16 Costs and Expenses.........................................................................47
ARTICLE V ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS..........................................48
Section 5.01 Collection Account, Pre-Funding Account, Capitalized Interest Account and Reserve Account..48
Section 5.02 Collections; Applications..................................................................53
Section 5.03 Monthly Advances...........................................................................55
Section 5.04 Additional Deposits........................................................................55
Section 5.05 Distributions..............................................................................55
Section 5.06 Reserve Account............................................................................57
Section 5.07 Net Deposits...............................................................................58
Section 5.08 Statements to Securityholders..............................................................58
ARTICLE VI [RESERVED]........................................................................................62
ARTICLE VII THE COMPANY......................................................................................63
Section 7.01 Representations of Company.................................................................63
Section 7.02 Merger or Consolidation of Company.........................................................64
Section 7.03 Limitation on Liability of the Company and Others..........................................64
Section 7.04 The Company May Own Securities.............................................................64
Section 7.05 Indebtedness of and Sale of Assets by the Company..........................................65
ARTICLE VIII THE SERVICER; REPRESENTATIONS AND INDEMNITIES...................................................66
Section 8.01 Representations of CITSF...................................................................66
Section 8.02 Liability of Servicer, Indemnities.........................................................67
Section 8.03 Merger or Consolidation of Servicer........................................................68
Section 8.04 Limitation on Liability of Servicer and Others.............................................69
Section 8.05 Servicer Not To Resign.....................................................................69
Section 8.06 Assignment of Servicing....................................................................69
ARTICLE IX EVENT OF TERMINATION..............................................................................71
Section 9.01 Events of Termination......................................................................71
Section 9.02 Indenture Trustee to Act; Appointment of Successor.........................................72
Section 9.03 Notification to Securityholders............................................................73
Section 9.04 Rights to Direct Trustees and Waiver of Events of Termination..............................74
Section 9.05 Effect of Transfer.........................................................................74
ARTICLE X [RESERVED].........................................................................................76
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE XI OPTIONAL PURCHASE AND AUCTION SALE.................................................................77
Section 11.01 Optional Purchase of All Contracts........................................................77
Section 11.02 Mandatory Sale of all Contracts...........................................................77
Section 11.03 Contract Repurchase Procedures............................................................79
ARTICLE XII MISCELLANEOUS PROVISIONS.........................................................................80
Section 12.01 Amendment.................................................................................80
Section 12.02 Protection of Title to Trust..............................................................81
Section 12.03 Limitation on Rights of Securityholders...................................................83
Section 12.04 Governing Law.............................................................................84
Section 12.05 Notices...................................................................................84
Section 12.06 Severability of Provisions................................................................85
Section 12.07 Submission to Jurisdiction; Venue.........................................................85
Section 12.08 Counterparts..............................................................................85
Section 12.09 Merger and Integration....................................................................85
Section 12.10 Headings..................................................................................86
</TABLE>
EXHIBITS
Exhibit A List of Initial Contracts
Exhibit B Form of Subsequent Purchase Agreement
Exhibit C Form of Subsequent Transfer Agreement
Exhibit D Form of Assignment
Exhibit E Form of Owner Trustee's Acknowledgment and Certification
Exhibit F Form of Servicer's Certificate
Exhibit G Form of Monthly Report
Exhibit H Termination - Auction Procedures
Exhibit I Form of Officers' Certificate
<PAGE>
This Sale and Servicing Agreement, dated as of August 1, 1996, is made
among The CIT Group Securitization Corporation II, as seller (together with its
permitted successors and assigns, the "Company" or the "Seller"), The CIT
Group/Sales Financing, Inc., a corporation organized and existing under the laws
of the State of Delaware, as Servicer (in its individual capacity, "CITSF," or,
together with its permitted successors and assigns, the "Servicer"), and CIT RV
Trust 1996-B (the "Issuer" and the "Trust"), for which Mellon Bank (DE),
National Association, a national banking association formed under the laws of
the United States with its principal place of business in the State of Delaware,
acts not in its individual capacity but solely as Owner Trustee (together with
permitted successors and assigns, the "Owner Trustee").
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereto agree as provided herein:
ARTICLE I
DEFINITIONS
-----------
Section 1.01 General.
-------
For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Section references refer to Sections of this Agreement.
Section 1.02 Specific Terms.
--------------
"Affiliate" of any specified Person means 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" or "controlled" have meanings
correlative to the foregoing.
"Agency Office" means the office of the Trust maintained pursuant to
-------------
Section 3.2 of the Indenture.
"Aggregate Allocated Loss Amount" means, on any Distribution Date, the
-------------------------------
sum of the Allocated Losses on all prior Distribution Dates less any amount
theretofore distributed to Certificateholders in respect of such Allocated
Losses.
"Allocated Losses" means, on any Distribution Date, the excess, if
----------------
any, prior to the Cross-Over Date, of the Principal Liquidation Loss Amount or,
on or after the Cross-Over Date, the Principal Distribution Amount (or portion
thereof distributable to Certificateholders on
<PAGE>
the Cross-Over Date) over the amount distributed to Certificateholders in
respect of principal on such Distribution Date.
"Authorized Officer" means with respect to the Trust, any officer of
------------------
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Trust and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
"Available Amount" means for any Distribution Date, an amount equal to
----------------
the excess of (A) the sum of (i) all amounts on deposit in the Collection
Account attributable to collections or deposits made in respect of the Contracts
(including any Late Fees) in the related Due Period and (ii) the Purchase Price
for any Repurchased Contracts and any Monthly Advances made by the Servicer if
such Purchase Price or Monthly Advance is paid on the Deposit Date immediately
preceding such Distribution Date over (B) the sum of the following amounts (to
the extent that the Servicer has not already withheld such amounts from
collections on the Contracts): (i) any repossession profits on Liquidated
Contracts, any Liquidation Expenses incurred and taxes and insurance advanced by
the Servicer in respect of Financed Vehicles that are reimbursable to the
Servicer hereunder, (ii) any amounts incorrectly deposited in the Collection
Account, (iii) net investment earnings on the funds in the Collection Account
due to the Servicer hereunder, and (iv) any other amounts permitted to be
withdrawn from the Collection Account by the Servicer (or to be retained by the
Servicer from collections on the Contracts) hereunder.
"Available Reserve Amount" means, as of any Distribution Date, the
------------------------
lesser of (i) the Specified Reserve Amount and (ii) the amount on deposit in the
Reserve Account, before giving effect to any deposit to be made to the Reserve
Account on such Distribution Date.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
---------------
the Sale and Servicing Agreement, the Indenture, the Purchase Agreement, any
Subsequent Purchase Agreement and any Subsequent Transfer Agreements.
"Benefit Plan" means a benefit plan as described in Section 9.11 of
------------
the Trust Agreement.
"Book-Entry Certificates" means a beneficial interest in the
-----------------------
Certificates, ownership and transfers of which shall be made through book
entries by a Depository as described in Section 3.11 of the Trust Agreement.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership
----------------
and transfers of which shall be made through book entries by a Depository as
described in Section 2.10 of the Indenture.
-2-
<PAGE>
"Business Day" means any day other than a Saturday, Sunday or any day
------------
on which banking institutions or trust companies in the States of New York,
Delaware, or Oklahoma are authorized or required by law, regulation or executive
order to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
----------------------
Code, 12 Del. Code (S) 3801 et seq., as the same may be amended from time to
--------- -------
time.
"Buyer" has the meaning assigned in Section 11.03 hereof.
-----
"Capitalized Interest Account" means the account designated as such,
----------------------------
established and maintained pursuant to Section 5.01(b) hereof.
"Certificate" means any one of the 7.10% Asset-Backed Certificates
-----------
executed by the Owner Trustee and authenticated by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.
"Certificate Balance" initially means, as of the Closing Date,
-------------------
$14,400,000 and, on any Distribution Date thereafter, the initial Certificate
Balance reduced by (i) all distributions in respect of principal actually made
to the Certificateholders, including payments of any Principal Liquidation Loss
Amount and payments of any Principal Distribution Amount, and (ii) the Aggregate
Allocated Loss Amount.
"Certificate Depository Agreement" means an agreement, if any, among
--------------------------------
the Trust, the Servicer, the Owner Trustee and The Depository Trust Company (as
the initial Depository), relating to the Certificates, as the same may be
amended and supplemented from time to time.
"Certificate Distribution Account" means the account designated as
--------------------------------
such, established and maintained pursuant to Section 5.1 of the Trust Agreement.
"Certificate Final Distribution Date" means the December 2017
-----------------------------------
Distribution Date.
"Certificateholder" means the holder of record of a Certificate
-----------------
(including the holder of the GP Interest) pursuant to the terms of the Trust
Agreement.
"Certificate Interest Distribution Amount" means the amount of
----------------------------------------
interest payable on a Distribution Date to the Holders of the Certificates.
Such amount will equal (i) one-twelfth of the product of the Pass-Through Rate
and the Certificate Balance immediately preceding such Distribution Date or (ii)
in the case of the first Distribution Date, $68,160.
"Certificate of Trust" means the certificate of trust of the Issuer
--------------------
substantially in the form of Exhibit B to the Trust Agreement to be filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Owners" means with respect to a Book-Entry Certificate,
------------------
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Depository, or on the books of a Person
maintaining an account with such Depository (directly as
-3-
<PAGE>
a Depository Participant or as an Indirect Participant, in each case in
accordance with the rules of such Depository).
"Certificate Pool Factor" means a seven-digit decimal which the
-----------------------
Servicer will compute each month indicating the remaining Certificate Balance as
of the Distribution Date, as a fraction of the initial Certificate Balance. The
Certificate Pool Factor will be 1.0000000 as of the Initial Cut-off Date, and
thereafter will decline to reflect reductions in the outstanding principal
balance of the Certificates. A Certificateholder's portion of the aggregate
outstanding Certificate Balance is the product of (i) the original denomination
of the Certificateholder's Certificate and (ii) the Certificate Pool Factor.
"Certificate Pre-Funded Percentage" means the percentage derived from
---------------------------------
the fraction, the numerator of which is the Certificate Balance and the
denominator of which is the sum of the initial principal balance of the Notes
and the initial Certificate Balance.
"Certificate Register" means the register of Certificates specified in
--------------------
Section 3.4 of the Trust Agreement.
"Certificate Registrar" means the registrar at any time of the
---------------------
Certificate Register, appointed pursuant to Section 3.4 of the Trust Agreement.
"CIT" means The CIT Group Holdings, Inc.
---
"CITCF-NY" means The CIT Group/Consumer Finance, Inc. (NY).
--------
"CITSF" means The CIT Group/Sales Financing, Inc., and its successors
-----
in interest as permitted under the related agreement.
"Class A-1 Interest Rate" means 6.00% per annum, calculated on the
-----------------------
basis of a 360-day year comprised of twelve 30-day months.
"Class A-2 Interest Rate" means 6.40% per annum, calculated on the
-----------------------
basis of a 360-day year comprised of twelve 30-day months.
"Class A-3 Interest Rate" means 6.65% per annum, calculated on the
-----------------------
basis of a 360-day year comprised of twelve 30-day months.
"Class A-1 Note" means any one of the Class A-1 6.00% Asset-Backed
--------------
Notes in the aggregate principal amount of $88,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-1 to the Indenture.
"Class A-2 Note" means any one of the Class A-2 6.40% Asset-Backed
--------------
Notes in the aggregate principal amount of $75,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-2 to the Indenture.
-4-
<PAGE>
"Class A-3 Note" means any one of the Class A-3 6.65% Asset-Backed
--------------
Notes in the aggregate principal amount of $62,600,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-3 to the Indenture.
"Class A-1 Note Final Scheduled Distribution Date" means the August
------------------------------------------------
2003 Distribution Date.
"Class A-2 Note Final Scheduled Distribution Date" means the February
------------------------------------------------
2007 Distribution Date.
"Class A-3 Note Final Scheduled Distribution Date" means the December
------------------------------------------------
2017 Distribution Date.
"Closing Date" means August 21, 1996.
------------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, and the Treasury Regulations promulgated thereunder.
"Collateral" means the collateral 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) hereof.
"Company" means The CIT Group Securitization Corporation II, and its
-------
successors in interest as permitted under the related agreement.
"Computer Tape" means the computer tape generated by the Servicer
-------------
which provides information relating to the Contracts, and includes the master
file and the history file.
"Contract(s)" means one or more of the Initial Contracts and/or
-----------
Subsequent Contracts.
"Contract File" means, as to each Contract (i) an original copy of the
-------------
Contract, (ii) either (a) the original title document for the related Financed
Vehicle or a duplicate certified by the appropriate governmental authority which
issued the original thereof or the application for such title document, or (b)
if the laws of the jurisdiction in which the related Financed Vehicle is located
do not provide for the issuance to the lender of title documents for
recreational vehicles, other evidence of ownership of the related Financed
Vehicle which is customarily relied upon in such jurisdiction as evidence of
title to a recreational vehicle; (iii) evidence of one or more of the following
types of perfection of the security interest in the related Financed Vehicle
granted by such Contract, as appropriate: (a) notation of such security interest
on the title document, (b) a financing statement meeting the requirements of the
UCC, with evidence of recording indicated thereon, or (c) such other evidence of
perfection of a security interest in a recreational vehicle as is customarily
relied upon in the jurisdiction in which the related Financed Vehicle is
located; (iv) an assignment of the Contract evidencing the chain of title of the
Contract from the Dealer
-5-
<PAGE>
which is the originator thereof to CITSF or CITCF-NY; and (v) any extension,
modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the
-------------
rate of interest specified in that Contract.
"Corporate Trust Office" means with respect to the Indenture Trustee
----------------------
or the Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or the Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 101 Barclay Street, New York,
New York 10286, and in the case of the Owner Trustee, at 919 North Market
Street, Wilmington, Delaware 19801 attn: Robert H. Bell.
"Cross-over Date" means the Distribution Date on which all classes of
---------------
the Notes have been paid in full.
"Dealer" means the Recreational Vehicle dealer which sold a Financed
------
Vehicle and which originated and assigned the Contract relating to such Financed
Vehicle to CITSF or CITCF-NY under a Dealer Agreement.
"Dealer Agreement" means the agreement, if any, under which Contracts
----------------
were originated by a Dealer and sold to CITSF or CITCF-NY, and all documents and
instruments relating thereto.
"Default" means any occurrence that is, or with notice or the lapse of
-------
time or both would become an Event of Default.
"Definitive Certificates" means the Certificates specified in Section
-----------------------
3.13 of the Trust Agreement.
"Definitive Notes" means the Notes specified in Section 2.12 of the
----------------
Indenture.
"Demand Note" means the note issued by CIT to The CIT GP Corporation V
-----------
which is payable on demand.
"Deposit Date" means, with respect to any Distribution Date, the
------------
Business Day immediately preceding such related Distribution Date.
"Depository" means the initial Depository, The Depository Trust
----------
Company, the nominee of which is CEDE & CO., and any permitted successor
depository. The Depository shall at all times be a "clearing corporation"
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York.
"Depository Agreement" means an agreement, if any, among the Trust,
--------------------
the Servicer, the Indenture Trustee and the Depository, relating to the Notes,
as the same may be amended and supplemented from time to time.
-6-
<PAGE>
"Depository Participant" means a broker, dealer, bank or other
----------------------
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Designated Accounts" means the Collection Account, the Note
-------------------
Distribution Account, the Certificate Distribution Account, the Pre-Funding
Account and the Capitalized Interest Account, collectively.
"Determination Date" means the third Business Day prior to each
------------------
Distribution Date.
"Distribution Date" means the date on which payments of interest and
-----------------
principal on the Securities will be made. Such Distribution Dates will be on
the fifteenth day of each month or, if any such day is not a Business Day, on
the next succeeding Business Day, commencing September 1996.
"Draw Amount" has the meaning specified in Section 5.06(b) hereof.
-----------
"Due Date" means, with respect to each payment under each Contract,
--------
the day set forth in such Contract as the date on which such payment under such
Contract is scheduled to be made.
"Due Period" means, with respect to any Distribution Date, the period
----------
during which principal, interest and other amounts will be collected on the
Contracts for application towards the payment of principal and interest to the
Securityholders, the payment of fees on such Distribution Date, and other
purposes specified in this Agreement. The "Due Period" will be the calendar
----------
month immediately preceding the Distribution Date. The first Due Period will
commence on and include the Initial Cut-off Date and will end on and include
August 31, 1996.
"Electronic Ledger" means the electronic master record of installment
-----------------
sale contracts of the Servicer.
"Eligible Account" means any account which is (i) an account
----------------
maintained with an Eligible Institution; (ii) an account or accounts the
deposits in which are fully insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC; (iii) a "segregated trust
account" maintained with the corporate trust department of a federal or state
chartered depository institution or trust company with trust powers and acting
in its fiduciary capacity for the benefit of a Trustee, which depository
institution or trust company has capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the capital and surplus of the bank holding company) of not less than
$50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and such
depository institution's securities are not rated, the securities of the bank
holding company) have a credit rating from each Rating Agency in one of its
generic credit rating categories which signifies investment grade; or (iv) an
-7-
<PAGE>
account that will not cause any Rating Agency to downgrade or withdraw its then-
current rating assigned to the Securities, as confirmed in writing by each
Rating Agency.
"Eligible Institution" means any depository institution organized
--------------------
under the laws of the United States or any state, the deposits of which are
insured to the full extent permitted by law by the Bank Insurance Fund
(currently administered by the Federal Deposit Insurance Corporation) whose
short-term deposits have been rated in one of the two highest rating categories
or such other rating category as will not adversely affect the ratings assigned
to the Certificates and/or the Notes.
"Eligible Investments" means, at any time, any one or more of the
--------------------
obligations and securities described in Section 5.01(c) hereof.
"Eligible Servicer" means CITSF, the Trustees or any other Person
-----------------
qualified to act as Servicer of the Contracts under applicable federal and state
laws and regulations, which Person services not less than $100,000,000 in
outstanding principal amount of recreational or motor vehicle installment sale
contracts.
"ERISA" means The Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" means an event as described in Section 5.1 of the
----------------
Indenture.
"Event of Termination" means an event specified in Section 9.01
--------------------
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Excluded Assets" means any amounts on deposit in the Certificate
---------------
Distribution Account and Reserve Account and any Investment Earnings thereon.
"Final Draw Amount" has the meaning set forth in Section 5.06(c)
-----------------
hereof.
"Financed Vehicle" with respect to a Contract means the new or used
----------------
Recreational Vehicle, together with all accessions thereto, securing an
Obligor's indebtedness under such Contract.
"Force-Placed Insurance" means insurance described in Section 4.04(a)
----------------------
hereof.
"Force-Placed Insurance Premium" means any premium for theft and
------------------------------
physical damage insurance purchased by CITSF or CITCF-NY or a successor Servicer
on behalf of an Obligor who has failed to obtain required insurance coverage(s).
"Funding Period" means the period commencing on the Closing Date and
--------------
ending on the earliest to occur of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of investment earnings) is less than
$100,000, (ii) the date on which an Event of Default occurs under the Indenture,
(iii) the date on which an Event of Termination occurs
-8-
<PAGE>
hereunder, (iv) the insolvency of the Company, CITSF, CITCF-NY or CIT or (v) the
close of business on November 15, 1996.
"GP Interest" means the ownership interest of at least 1% of the
-----------
Certificate Balance, which shall be held by The CIT GP Corporation V, as
described in Section 2.7 of the Trust Agreement.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
-----
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note or Certificate is
------
registered on the Note Register or the Certificate Register, as applicable.
"Indenture" means the indenture, dated as of August 1, 1996, between
---------
the Issuer and the Indenture Trustee, as amended and supplemented from time to
time.
"Indenture Trustee" means The Bank of New York, not in its individual
-----------------
capacity but solely as trustee under the Indenture, or any successor trustee
under the Indenture.
"Independent" when used with respect to any specified Person, means
-----------
that the Person (i) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliates of any of the foregoing Persons, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
-----------------------
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
-9-
<PAGE>
"Indirect Participant" means a broker, dealer, bank or other financial
--------------------
institution for whom a Depository Participant may, from time to time, effect
book-entry transfers through a Depository.
"Initial Capitalized Interest Deposit" means the amount deposited in
------------------------------------
the Capitalized Interest Account on the Closing Date from the proceeds of the
sale of the Notes and Certificates, which amount is $730,838.
"Initial Contract" means one or more of the fixed-rate simple interest
----------------
installment sale contracts described in the List of Initial Contracts, which
constitute part of the corpus of the Trust, and which Contracts are to be
assigned by the Company to the Trust.
"Initial Cut-off Date" means August 1, 1996.
--------------------
"Initial Cut-off Date Principal Balance" means the aggregate unpaid
--------------------------------------
principal balance of all of the Initial Contracts as of the Initial Cut-off
Date.
"Initial Financed Vehicle" means a Financed Vehicle with respect to an
------------------------
Initial Contract.
"Initial Pool Balance" means the sum of (i) the Pool Balance as of the
--------------------
Initial Cut-off Date and (ii) the aggregate principal balance of all Subsequent
Contracts added to the Trust as of their respective Subsequent Cut-off Dates.
"Insolvency Event" with respect to a specified Person, (i) the entry
----------------
of a decree or order by a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator for such Person, in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of such Person's affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; (ii) the
consent by such Person to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to such Person or of or
relating to substantially all of such Person's property, or (iii) such Person
shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations.
"Insurance Policy" means, with respect to each Contract, the policy of
----------------
physical damage and all other insurance covering the Financed Vehicles or the
Obligors, as provided in Section 4.04(a) hereof, and which, as provided therein,
may be a blanket policy maintained by the Servicer in accordance with the terms
and conditions of such Section 4.04(b) hereof.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to
------------------
any Insurance Policy.
-10-
<PAGE>
"Interest Rates" means collectively the Class A-1 Interest Rate, the
--------------
Class A-2 Interest Rate and the Class A-3 Interest Rate.
"Interest Shortfall" means with respect to any Contract and any
------------------
Distribution Date, the excess of (x) the product of (i) the sum of (a) one-
twelfth of the current weighted average of the Pass-Through Rate and the
Interest Rates and (b) one-twelfth of the Servicing Fee Rate and (ii) the
outstanding principal amount of such Contract as of the last day of the second
preceding Due Period (or, in the case of the first Due Period ending after the
Contract was acquired by the Trust, as of the Initial Cut-off Date or the
Subsequent Cut-off Date, as the case may be) over (y) the amount of interest, if
any, collected on such Contract in the related Due Period.
"Investment Earnings" means investment earnings deposited in a
-------------------
Designated Account or the Reserve Account, as applicable, net of losses and
investment expenses.
"Issuer" means the Trust until a successor replaces it and,
------
thereafter, means the successor and, for purposes of any provision contained in
the Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
------------ --------------
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Late Fees" means any late fees, prepayment charges, extension fees or
---------
other administrative fees or similar charges allowed by applicable law with
respect to the Contracts.
"Lien" means any security interest, charge, pledge, equity or
----
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach by operation of law.
"Liquidated Contract" means any defaulted Contract as to which the
-------------------
Servicer has recovered all amounts that it expects to recover either by sale or
disposition of the related Financed Vehicle or otherwise, but in any event a
Contract shall be deemed to become a Liquidated Contract no later than the date
on which the Servicer has received proceeds from the sale or disposition of such
Financed Vehicle.
"Liquidation Expenses" means all reasonable fees of third parties and
--------------------
other expenses incurred by the Servicer in the course of converting any
defaulted Contract or Financed Vehicle into cash proceeds (including, without
limitation, expenses relating to recovery, repossession and sale of such
Financed Vehicle).
"List of Initial Contracts" means the list attached hereto as Exhibit
-------------------------
A identifying each Initial Contract constituting part of the corpus of the
Trust, which list (i) identifies each Initial Contract and (ii) sets forth as to
each Initial Contract (a) the Initial Cut-off Date Principal Balance, (b) the
amount of the monthly payment due from the Obligor as of the Initial Cut-off
Date, (c) the Contract Rate as of the Initial Cut-off Date and (d) the maturity
date.
-11-
<PAGE>
"List of Subsequent Contracts" means, with respect to the sale of any
----------------------------
Subsequent Contracts by the Company to the Trust pursuant to a Subsequent
Transfer Agreement, the list attached to such Subsequent Transfer Agreement
identifying each Subsequent Contract which, upon the execution and delivery of
such Subsequent Transfer Agreement, will constitute part of the corpus of the
Trust, which list (i) identifies each such Subsequent Contract and (ii) sets
forth as to each such Subsequent Contract (a) the Subsequent Cut-off Date
Principal Balance, (b) the amount of monthly payment due from the Obligor as of
the applicable Subsequent Cut-off Date, (c) the Contract Rate as of the
applicable Subsequent Cut-off Date and (d) the maturity date.
"Military Reservist Relief Act" means the California Military
-----------------------------
Reservist Relief Act of 1991.
"Monthly Advance" means, with respect to any Distribution Date, any
---------------
payment made by the Servicer pursuant to Section 5.03 hereof.
"Monthly Report" has the meaning assigned in Section 4.09 hereof. The
--------------
form of Monthly Report is attached as Exhibit G hereto.
"Moody's" means Moody's Investors Service, Inc. and its successors in
-------
interest.
"Net Liquidation Proceeds" means the monies collected (from whatever
------------------------
source) during a Due Period on a Liquidated Contract (except such amounts as are
allocable to Post Cut-off Date Insurance Add-ons in accordance with Section 4.04
hereof), net of the sum of (a) Liquidation Expenses, plus (b) any payments
required by law to be remitted to any creditor of, or to the Obligor.
"Nonrecoverable Advance" means any advance made or proposed to be made
----------------------
pursuant to Section 5.03 hereof in respect of a Contract, which the Servicer
believes, in its good faith judgment, is not, or if made would not be,
ultimately recoverable from subsequent collections in respect of interest on
such Contract made by or on behalf of the Obligor thereunder, or from Net
Liquidation Proceeds or Insurance Proceeds in respect of such Contract. In
determining whether an advance is or will be nonrecoverable, the Servicer need
not take into account that it might receive any amounts in a deficiency
judgment. The determination by the Servicer that any advance is, or if made
would constitute, a Nonrecoverable Advance, shall be evidenced by an officer's
certificate of the Servicer delivered to the Trustees and stating the reasons
for such determination.
"Note Distribution Account" means the account designated as such,
-------------------------
established and maintained pursuant to Section 5.01(a)(ii) hereof.
"Note Final Scheduled Distribution Date" means the Class A-1 Note
--------------------------------------
Final Scheduled Distribution Date, the Class A-2 Note Final Scheduled
Distribution Date or the Class A-3 Note Final Scheduled Distribution Date, as
applicable.
"Noteholder" means the holder of record of a Note pursuant to the
----------
Indenture.
-12-
<PAGE>
"Note Interest Distribution Amount" means the amount of interest
---------------------------------
payable on a Distribution Date to the Holders of a class of Notes. Such amount
will equal (i) one-twelfth of the product of the applicable Interest Rate and
the outstanding principal amount of such class of Notes immediately preceding
such Distribution Date or (ii) in the case of the first Distribution Date,
$949,526.67.
"Note Owners" with respect to a Book-Entry Note, means the Person who
-----------
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository Participant or as an Indirect Participant,
in each case in accordance with the rules of such Depository).
"Note Pool Factor" means a seven-digit decimal which the Servicer will
----------------
compute each month indicating the remaining outstanding principal balance of
each class of the Notes as of the Distribution Date, as a fraction of the
initial outstanding principal balance of such class of the Notes. The Note Pool
Factor will be 1.0000000 as of the Initial Cut-off Date, and thereafter will
decline to reflect reductions in the outstanding principal balance of the
applicable class of the Notes. A Noteholder's portion of the aggregate
outstanding principal balance of the related class of Notes is the product of
(i) the original denomination of the Noteholder's Note and (ii) the applicable
Note Pool Factor.
"Note Pre-Funded Percentage" means the percentage derived from the
--------------------------
fraction the numerator of which is the initial principal balance of each class
of the Notes and the denominator of which is the initial principal balance of
the Notes and the initial Certificate Balance.
"Note Register" means the register of the Notes as specified in
-------------
Section 2.4 of the Indenture.
"Note Registrar" means the registrar at any time of the Note Register,
--------------
appointed pursuant to Section 2.4 of the Indenture.
"Notes" means the Class A-1 Notes, the Class A-2 Notes and the Class
-----
A-3 Notes.
"Obligor" means each Person who is indebted under a Contract.
-------
"Officers' Certificate" means a certificate signed by any Authorized
---------------------
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an officer's certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel who may,
------------------
except as otherwise expressly provided herein, in the Trust Agreement or in the
Indenture, be counsel (internal or external) for the Seller or Servicer. In
addition, for the purposes of the Indenture: (i) the opinion shall be addressed
to the Indenture Trustee as Indenture Trustee and (ii) the opinion
-13-
<PAGE>
shall comply with any applicable requirements of Section 11.1 of the Indenture
and shall be in form and substance satisfactory to the Indenture Trustee.
"Original Pre-Funded Amount" means the amount deposited in the Pre-
--------------------------
Funding Account on the Closing Date from the proceeds of the sale of the Notes
and Certificates, which amount is $75,723,906.
"Owner Trust Estate" means all right, title and interest of the Trust
------------------
in and to the property and rights assigned to the Trust pursuant to Article II
hereof, all funds deposited from time to time in the Designated Accounts and the
Reserve Account (except the Note Distribution Account) and all other property of
the Trust from time to time, including any rights of the Owner Trustee and the
Trust pursuant to the Basic Documents.
"Owner Trustee" means Mellon Bank (DE), National Association, a
-------------
national banking association, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, or any successor trustee under the Trust
Agreement.
"Pass-Through Rate" means 7.10% per annum, calculated on the basis of
-----------------
a 360-day year comprised of twelve 30-day months.
"Paying Agent" with respect to the Indenture means the Indenture
------------
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is authorized
by the Issuer to make the payments to and distributions from the Collection
Account and the Note Distribution Account, including payment of principal and
interest on the Notes on behalf of the Issuer. "Paying Agent" with respect to
------------
the Trust Agreement means any paying agent or co-paying agent appointed pursuant
to Section 3.9 of the Trust Agreement that meets the eligibility requirements of
Section 6.13 of the Trust Agreement.
"Permitted Investments" will include the following obligations and
---------------------
securities: (i) obligations of the United States or any agency thereof, backed
by the full faith and credit of the United States; (ii) general obligations of
or obligations guaranteed by any State, and certificates of deposit, demand or
time deposits, federal funds or banker's acceptances issued by any depository
institution or trust company incorporated under the laws of the United States or
of any state and subject to supervision and examination by federal or state
banking authorities; in each case rated in the highest rating of each Rating
Agency for such obligations, or such lower rating as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to either
the Notes or the Certificates by such Rating Agency; and (iii) demand or time
deposits or certificates of deposit issued by any bank, trust company, savings
bank or other savings institution, which deposits are fully insured by the FDIC;
in each case rated in the highest rating of each Rating Agency for such
obligations, or such lower rating as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to either the Notes or the
Certificates by such Rating Agency.
"Person" means any legal person, including any individual,
------
corporation, partnership, joint venture, association, joint stock company, trust
(including any beneficiary
-14-
<PAGE>
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means the aggregate outstanding principal balance of
------------
the Contracts; provided that a Liquidated Contract and a Repurchased Contract
shall cease to be included in the Pool Balance as of the last day of the Due
Period in which such Contract became a Liquidated Contract or a Repurchased
Contract, as the case may be.
"Post Cut-off Date Insurance Add-Ons" means Force-Placed Insurance
-----------------------------------
Premiums added to the Contracts on or after the Initial Cut-off Date with regard
to each Initial Contract, or on or after the related Subsequent Cut-off Date
with regard to each Subsequent Contract, which amounts are to be repaid to an
account separate from the Collection Account over the remaining life of such
Contract.
"Predecessor Notes" with respect to any particular Note means every
-----------------
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for purposes of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Pre-Funded Amount" means, with respect to any Determination Date, the
-----------------
amount on deposit in the Pre-Funding Account.
"Pre-Funding Account" means the Pre-Funding Account established and
-------------------
maintained in accordance with Section 5.01(b) hereof.
"Pre-Funding Earnings" means (i) with respect to the September 1996
--------------------
Distribution Date, the actual Investment Earnings earned on the Pre-Funded
Amount during the period beginning on the Closing Date through September 14,
1996 (inclusive), (ii) with respect to the October 1996 Distribution Date, the
actual Investment Earnings earned on the Pre-Funded Amount during the period
beginning on September 15, 1996 through October 14, 1996 (inclusive), and (iii)
with respect to the November 1996 Distribution Date, the actual Investment
Earnings earned on the Pre-Funded Amount during the period beginning on October
15, 1996 through November 14, 1996 (inclusive).
"Principal Distribution Amount" means, on each Distribution Date, the
-----------------------------
sum of the following amounts with respect to the related Due Period, in each
case calculated in accordance with the method specified in each Contract: (i)
all payments of principal (including all Principal Prepayments applied during
the related Due Period) made on each Contract during the related Due Period,
(ii) the Stated Principal Balance of each Contract which, during the related Due
Period, was purchased by CITSF or the Servicer hereunder, and (iii) the Stated
Principal Balance of each Contract that became a Liquidated Contract during the
related Due Period; provided, however, that (x) payments of principal (including
Principal Prepayments) with respect to a Liquidated Contract or a Repurchased
Contract received after the last day of the Due Period in which the Contract
became a Liquidated Contract or a Repurchased Contract shall not be
-15-
<PAGE>
included in the Principal Distribution Amount, and (y) if a Liquidated Contract
is purchased by CITSF or the Servicer hereunder on the Deposit Date immediately
following the Due Period in which it became a Liquidated Contract, no amount
will be included with respect to such Contract in the Principal Distribution
Amount pursuant to clause (iii) above. The Principal Distribution Amount on the
Note Final Scheduled Distribution Date of a class will be not less than the
outstanding principal amount of such class of Notes as of such date, and the
Principal Distribution Amount on the Certificate Final Distribution Date will
equal the Certificate Balance on such date. The Principal Distribution Amount
will not exceed the outstanding principal balance of the Notes or, after the
Cross-Over Date, the Certificate Balance (or, on the Cross-Over Date, the sum of
the principal balance of the Notes and the Certificate Balance).
"Principal Liquidation Loss Amount" for any Distribution Date equals
---------------------------------
the amount, if any, by which the sum of the aggregate outstanding principal
balance of the Notes and the Certificate Balance (after giving effect to all
distributions of principal on such Distribution Date but before giving effect to
any other reductions in the Certificate Balance on such Distribution Date)
exceeds the sum of the Pool Balance (excluding Liquidated Contracts and
Repurchased Contracts) plus the Pre-Funded Amount (exclusive of Pre-Funding
Earnings), if any, at the close of business on the last day of the related Due
Period.
"Principal Prepayment" means a payment or other recovery of principal
--------------------
on a Contract (including Insurance Proceeds and Net Liquidation Proceeds applied
to principal on a Contract) which is received in advance of its Due Date and
applied upon receipt (or, in the case of a partial Principal Prepayment, upon
the next scheduled payment date on such Contract) to reduce the outstanding
principal amount of such Contract prior to the date or dates on which such
principal amount is scheduled to be paid.
"Principal Prepayment in Full" means any Principal Prepayment of the
----------------------------
entire principal balance of a Contract.
"Proceeding" means any suit in equity, action at law or other judicial
----------
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of August
------------------
1, 1996, between the Seller and CITSF, as amended and supplemented from time to
time.
"Purchase Price" means, with respect to a Contract to be purchased
--------------
hereunder, an amount equal to the remaining principal amount outstanding on such
Contract on the date of purchase, plus 30 days' interest thereon in an amount
equal to the sum of (i) the product of one-twelfth of the current weighted
average of the Pass-Through Rate and of the Interest Rates and the remaining
principal amount outstanding (without giving effect to any reductions thereof
for Nonrecoverable Advances) on the Contract and (ii) accrued and unpaid
Servicing Fees thereon at the Servicing Fee Rate to the date of such purchase.
-16-
<PAGE>
"Rating Agencies" as of any date means the nationally recognized
---------------
statistical rating organizations requested by the Seller to provide ratings of
the Notes and the Certificates which are rating the Notes and Certificates on
such date.
"Rating Agency Condition" with respect to any action means, the
-----------------------
condition that each Rating Agency shall have notified the Seller, the Servicer
and the Issuer in writing that such action shall not result in a downgrade or
withdrawal of the then current rating of the Notes or Certificates.
"Record Date" with respect to any Distribution Date means the Business
-----------
Day immediately preceding the related Distribution Date or, in the event
Definitive Securities have been issued, the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
"Recreational Vehicle" means new or used motor homes, travel trailers
--------------------
and other types of recreational vehicles.
"Redemption Date" means the Distribution Date specified by the
---------------
Servicer or the Issuer pursuant to Section 10.1(a) or (b) of the Indenture, as
applicable.
"Related Contract Assets" has the meaning assigned in Section 2.01
-----------------------
hereof.
"Relief Act Reduction" shall mean the reduction of the rate of
--------------------
interest payable on any Contract to a rate below the Contract Rate pursuant to
the Soldiers' and Sailors' Civil Relief Act or the Military Reservist Relief
Act.
"Repurchased Contract" means a Contract which (i) CITSF purchased
--------------------
pursuant to Section 3.02 or (ii) the Servicer purchased pursuant to Section 4.02
or 4.07 hereof. The purchase of a Repurchased Contract shall be deemed
effective as of the last day of the Due Period preceding the Deposit Date on
which the Purchase Price therefor was paid, and it shall cease to be included in
the Pool Balance as of such last day of the Due Period.
"Required Capitalized Interest Amount" for any Distribution Date
------------------------------------
during the Funding Period is an amount equal to the product of (x) the current
weighted average of the Interest Rates and the Pass-Through Rate minus 2.5%, (y)
the undisbursed funds (excluding investment earnings) in the Pre-Funding Account
(as of such Distribution Date after giving effect to any purchases of Subsequent
Contracts on such Distribution Date) and (z) a fraction, the numerator of which
is equal to the maximum number of Distribution Dates remaining in the Funding
Period and the denominator of which is 12.
"Reserve Account" means the deposit account established and maintained
---------------
pursuant to Section 5.01(a)(iv) hereof.
"Responsible Officer" with respect to the Indenture Trustee or the
-------------------
Owner Trustee means, any officer within its Corporate Trust Office, and, with
respect to the Servicer, the
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<PAGE>
President, any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer or assistant officer of such Person 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 officer's knowledge and familiarity
with the particular subject.
"Sale and Servicing Agreement" means this Agreement, as amended and
----------------------------
supplemented from time to time.
"Securities" means the Notes and the Certificates.
----------
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations thereunder.
"Securityholders" means the Person in whose name a Note or Certificate
---------------
is registered on the Note Register or the Certificate Register, as applicable.
"Seller" means the Person executing this Agreement as the Seller, or
------
any successor in interest to the Seller pursuant to the terms hereof.
"Service Transfer" has the meaning assigned in Section 9.01 hereof.
----------------
"Servicer" means the Person executing this Agreement as the Servicer,
--------
or any successor Servicer pursuant to a Service Transfer hereunder.
"Servicer Payment" means, with respect to a Distribution Date, the sum
----------------
of the reimbursement then due to the Servicer for outstanding Monthly Advances,
the Servicing Fee for such Distribution Date and the aggregate unpaid Servicing
Fees for past Distribution Dates; provided, however, that if CITSF or one of its
affiliates is the Servicer, the Servicing Fee (including any unpaid Servicing
Fees for past Distribution Dates) shall not be included in the Servicer Payment
but instead shall be payable to the Servicer on each Distribution Date only from
the Available Amount, if any, remaining after the principal and interest payable
on the Securities on such Distribution Date have been paid.
"Servicer's Certificate" means a certificate, substantially in the
----------------------
form of Exhibit F to the Sale and Servicing Agreement, completed by and executed
on behalf of the Servicer by a Servicing Officer in accordance with Section 4.09
hereof.
"Servicer's Errors and Omissions Protection Policy" means the errors
-------------------------------------------------
and omissions policy maintained by the Servicer or any similar replacement
policy, if any, pursuant to Section 4.14 hereof.
"Servicing Fee" means, as to any Distribution Date, the sum of (i)
-------------
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date)
-18-
<PAGE>
and (ii) any Investment Earnings on amounts on deposit in the Collection
Account, the Note Distribution Account and the Certificate Distribution Account.
"Servicing Fee Rate" means 0.50%; provided, however, if CITSF or an
------------------ -------- -------
affiliate is not the Servicer, the Servicing Fee Rate shall be a rate determined
at the time of the appointment of a Servicer but not to exceed 1.00%.
"Servicing Officer" means any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officers' Certificate
furnished to the Trust by the Servicer, as the same may be amended from time to
time.
"Simple Interest Contract" means a Contract as to which interest is
------------------------
calculated each day on the basis of the actual principal balance outstanding on
such day.
"Soldiers' and Sailors' Civil Relief Act" means the Soldiers' and
---------------------------------------
Sailors' Civil Relief Act of 1940, as amended.
"Specified Reserve Amount" means 1.0% of the Pool Balance as of the
------------------------
first day of the related Due Period, but in no event less than $1,200,000;
provided, however, that if, with respect to any Distribution Date, (a) the
- -------- -------
average of the principal balance of Contracts 60 days or more delinquent
(including Contracts relating to Financed Vehicles that have been repossessed)
as a percentage of the Pool Balance for the three preceding Due Periods exceeds
1.75% or (b) the average of the principal balances of all Contracts which became
Liquidated Contracts in the three preceding Due Periods, less any Net
Liquidation Proceeds on Liquidated Contracts, expressed as an annualized
percentage of the average outstanding Pool Balance of the three preceding Due
Periods exceeds 1.75%, then the Specified Reserve Amount with respect to such
Distribution Date shall be 4.50% of the Pool Balance as of the first day of the
related Due Period, but in no event (i) less than $1,200,000 or (ii) greater
than $2,400,000; provided, further, however, that the Specified Reserve Amount
-------- -------
shall never be greater than the outstanding Certificate Balance and may be
reduced from time to time (to amounts less than the Specified Reserve Amount
calculated above) if the Rating Agencies shall have given prior written notice
to the Seller, the Servicer and the Issuer that such reduction will not result
in a downgrade or withdrawal of the then current rating of the Notes or the
Certificates.
"Standard & Poor's" means Standard & Poor's Ratings Service, a
-----------------
division of The McGraw-Hill Companies, Inc. and its successors in interest.
"Stated Principal Balance" means, with respect to any Contract for any
------------------------
Due Period, its unpaid principal balance at the end of the related Due Period,
but without giving effect to any adjustments due to bankruptcy or similar
proceedings.
"Subsequent Contracts" means one or more of the fixed-rate simple
--------------------
interest installment sale contracts described in the List of Subsequent
Contracts, which constitute part of the corpus of the Trust, and which Contracts
are to be assigned by the Company to the Trust.
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<PAGE>
"Subsequent Cut-off Date" means the beginning of business on the first
-----------------------
day of the month of the related Subsequent Transfer Date specified in a
Subsequent Transfer Agreement with respect to those Subsequent Contracts which
are transferred and assigned to the Trust pursuant to the related Subsequent
Transfer Agreement.
"Subsequent Cut-off Date Pool Principal Balance" means, as of any
----------------------------------------------
Subsequent Transfer Date, the sum of (i) the Initial Cut-off Date Principal
Balance and (ii) the aggregate unpaid principal balances of the Subsequent
Contracts to be sold on such Subsequent Transfer Date as of the related
Subsequent Cut-off Date and (iii) if applicable, an amount calculated as
provided in clause (ii) with respect to all Subsequent Transfer Dates, if any,
occurring prior to such Subsequent Transfer Date.
"Subsequent Cut-off Date Principal Balance" means the aggregate unpaid
-----------------------------------------
principal balance of all of the Subsequent Contracts transferred pursuant to a
Subsequent Transfer Agreement, as of the related Subsequent Cut-off Date.
"Subsequent Financed Vehicle" means a Financed Vehicle with regard to
---------------------------
a Subsequent Contract.
"Subsequent Purchase Agreement" means a Subsequent Purchase Agreement
-----------------------------
dated as of a Subsequent Cut-off Date between CITSF and the Company providing
for the sale of Subsequent Contracts from CITSF to the Company and substantially
in the form of Exhibit B hereto.
"Subsequent Transfer Agreement" means each Subsequent Transfer
-----------------------------
Agreement dated as of a Subsequent Transfer Date between the Trust and the
Company substantially in the form of Exhibit C hereto, by which Subsequent
Contracts are sold and assigned to the Trust.
"Subsequent Transfer Date" means the date specified in the related
------------------------
Subsequent Transfer Agreement.
"Temporary Notes" means the Notes specified in Section 2.3 of the
---------------
Indenture.
"TIA" or "Trust Indenture Act" means The Trust Indenture Act of 1939
--- -------------------
as in force on the date hereof, unless otherwise specifically provided.
"Treasury Regulations" means any proposed, temporary or final
--------------------
regulation promulgated under the Code.
"Trust" means CIT RV Trust 1996-B, a Delaware business trust created
-----
by the Trust Agreement.
"Trust Agreement" means the Trust Agreement dated as of August 1, 1996
---------------
between the Seller and the Owner Trustee.
-20-
<PAGE>
"Trust Estate" means all money, instruments, rights and other property
------------
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including, without limitation,
all property and interest Granted to the Indenture Trustee), including any
proceeds thereof, but excluding the Excluded Assets.
"Trustees" means both the Indenture Trustee and the Owner Trustee.
--------
"UCC" means the Uniform Commercial Code as in effect in the relevant
---
jurisdiction.
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<PAGE>
ARTICLE II
CONVEYANCE OF CONTRACTS;
------------------------
ACCEPTANCE BY TRUSTEE
---------------------
Section 2.01 Conveyance of the Initial Contracts.
-----------------------------------
In consideration of the purchase price for the Initial Contracts and
the retention of the GP Interest, on the Closing Date, the Company shall, and by
execution of this Agreement hereby does, sell, transfer, assign absolutely, set
over and otherwise convey to the Trust by execution of an assignment
substantially in the form of Exhibit D hereto, and the Trust shall, and by
execution of this Agreement hereby does, purchase, (i) all the right, title and
interest of the Company in and to the Initial Contracts and all the rights,
benefits, and obligations arising from and in connection with each Initial
Contract, (ii) an assignment of the security interests in the Initial Financed
Vehicles granted by the Obligors pursuant to the Initial Contracts, (iii) all
payments received by the Company on or with respect to the Initial Contracts on
or after the Initial Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any Initial
Financed Vehicle (including any right to receive future Net Liquidation
Proceeds) that secures the Initial Contracts and that shall have been
repossessed by the Servicer by or on behalf of the Trust; (v) all rights of the
Company to proceeds of Insurance Policies covering the Obligors and the Initial
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket physical damage policy, to the extent
such proceeds relate to any Initial Financed Vehicle, (vii) all rights of
recourse against any cosigner or under any personal guarantee with respect to
the Initial Contracts (other than any right as against a Dealer under a Dealer
Agreement), (viii) all amounts held for the Trust in the Collection Account,
(ix) all amounts held for the Trust in the Pre-Funding Account, (x) all amounts
held for the Trust in the Capitalized Interest Account, (xi) all proceeds in any
way derived from any of the foregoing items, and (xii) all documents contained
in the Contract Files relating to the Initial Contracts (the items in clauses
(ii) through (xii) are referred to herein as the "Related Contract Assets").
The parties intend and agree that the conveyance of the Company's right, title
and interest in and to the Initial Contracts (and all rights, entitlements and
amounts listed above) pursuant to this Agreement shall constitute an absolute
sale. The "purchase price" for the Initial Contracts shall be an amount equal
to $164,276,094. Such purchase price shall be payable in immediately available
funds on the Closing Date.
The Company hereby declares and covenants that it shall at no time
have any legal, equitable or beneficial interest in, or any right, including
without limitation any reversionary or offset right, to the Collection Account,
the Pre-Funding Account, the Capitalized Interest Account and the Reserve
Account, and that, in the event it receives any of the same, it shall hold same
in trust for the benefit of the Trust on behalf of the Securityholders and shall
immediately endorse over to the Trust any such amount it receives. Neither the
Seller nor the Servicer shall have the right to remove any Contracts from the
Trust after the Closing Date.
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<PAGE>
Section 2.02 Conveyance of the Subsequent Contracts.
--------------------------------------
In consideration of the Owner Trustee's delivery on the related
Subsequent Transfer Date to or upon the order of the Company of the purchase
price for the Subsequent Contracts to be conveyed to the Trust on such date up
to the balance of funds on deposit in the Pre-Funding Account on such related
Subsequent Transfer Date, the Company shall sell, transfer, assign, set over and
otherwise convey to the Trust by execution of an assignment substantially in the
form of the Subsequent Transfer Agreement attached hereto as Exhibit C, and the
Trust shall purchase, (i) all the right, title and interest of the Company in
and to the Subsequent Contracts and all the rights, benefits, and obligations
arising from and in connection with each Subsequent Contract, (ii) an assignment
of the security interests in the Subsequent Financed Vehicles granted by the
Obligors pursuant to the Subsequent Contracts, (iii) all payments received by
the Company on or with respect to the Subsequent Contracts on or after the
Subsequent Cut-off Date (exclusive of payments with respect to Post Cut-off Date
Insurance Add-Ons), (iv) the interest of the Company in any Subsequent Financed
Vehicles (including any right to receive future Net Liquidation Proceeds) that
secure the Subsequent Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Company to proceeds
of Insurance Policies covering the Obligors and the Subsequent Contracts, (vi)
the proceeds from any Servicer's Errors and Omissions Protection Policy, any
fidelity bond and any blanket physical damage policy, to the extent such
proceeds relate to any Subsequent Financed Vehicle, (vii) all rights of recourse
against any cosigner or under any personal guarantee with respect to the
Subsequent Contracts (other than any right as against a Dealer under a Dealer
Agreement), (viii) all proceeds in any way derived from any of the foregoing
items, and (ix) all documents contained or required to be contained in the
Contract Files relating to the Subsequent Contracts. The parties intend and
agree that the conveyance of the Company's right, title and interest in and to
the Subsequent Contracts pursuant to this Agreement shall constitute an absolute
sale. The "purchase price" for the Subsequent Contracts shall be one hundred
percent (100%) of the aggregate principal amount outstanding on the Subsequent
Contracts so transferred as of the related Subsequent Cut-off Date and shall be
payable in immediately available funds on the related Subsequent Transfer Date.
Section 2.03 Acceptance by Owner Trustee.
---------------------------
(a) On the Closing Date, the Owner Trustee shall deliver a certificate
to the Company substantially in the form of Exhibit E hereto acknowledging to
the best of its knowledge conveyance of the Initial Contracts and Contract Files
relating thereto to the Owner Trustee and declaring that the Owner Trustee,
through the Servicer, as custodian, pursuant to Section 3.03 hereof, will hold
all Contracts that have been delivered in trust, upon the trusts herein set
forth, for the use and benefit of all Certificateholders and Noteholders, as
their respective interests may appear, subject to the terms and provisions of
this Agreement and the Basic Documents.
(b) On any Subsequent Transfer Date, the Owner Trustee shall deliver a
certificate to the Company substantially in the form of Exhibit E hereto
acknowledging to the
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<PAGE>
best of its knowledge conveyance of the Subsequent Contracts and Contract Files
relating thereto to the Owner Trustee and declaring that the Owner Trustee,
through the Servicer, as custodian, pursuant to Section 3.04 hereof, will hold
all Contracts that have been delivered in trust, upon the trusts herein set
forth, for the use and benefit of all Certificateholders and Noteholders, as
their respective interests may appear, subject to the terms and provisions of
this Agreement and the Basic Documents.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES; THE CONTRACTS
---------------------------------------------
Section 3.01A Representations and Warranties Regarding Each Contract.
------------------------------------------------------
The Initial Contracts have been sold by CITSF to the Company pursuant
to the Purchase Agreement. Any Subsequent Contracts will be sold by CITSF to
the Company pursuant to a Subsequent Purchase Agreement. In connection with
such sales, CITSF made the representations and warranties in Sections 3.01A,
3.01B, 3.01C and 8.01 of this Agreement to the Company (such representations and
warranties being incorporated in the Purchase Agreement and any Subsequent
Purchase Agreement) and assumed the obligations in Section 3.02 of this
Agreement. As a condition of the purchase by the Company, the Company has
required that CITSF make such representations and warranties directly to the
Trust and the Securityholders so that the Trust may recover directly against
CITSF on such representations and warranties rather than indirectly through
claims by the Company against CITSF. Consequently, CITSF represents and
warrants to the Trust and the Securityholders as to each Initial Contract as of
the Closing Date and as to each Subsequent Contract as of the related Subsequent
Transfer Date (except as otherwise expressly stated):
(a) List of Contracts. The information set forth in the List of
-----------------
Initial Contracts or the List of Subsequent Contracts, as applicable, is true
and correct as of its date.
(b) Payments. With respect to an Initial Contract, as of the Initial
--------
Cut-off Date, the payment (if any) of principal and interest for its Due Date
next preceding the Cut-off Date was made by or on behalf of the Obligor (without
any advance from CITSF or any Person acting at the request of CITSF) or was not
delinquent for more than 30 days and, with respect to a Subsequent Contract, as
of the related Subsequent Cut-off Date (or the date of origination, if later)
the payment (if any) of principal and interest for its Due Date next preceding
the related Subsequent Cut-off Date was made by or on behalf of the Obligor
(without an advance from CITSF or any Person acting at the request of CITSF) or
was not more than 30 days delinquent.
(c) No Waivers. The terms of the Contract have not been waived,
----------
altered, amended or modified in any respect, except by instruments or documents
identified in the Contract File with respect thereto, and no waiver, alteration,
amendment or modification has caused such Contract to fail to meet any of the
other representations and warranties made by CITSF with respect thereto.
(d) Binding Obligation. The Contract is the legal, valid and binding
------------------
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally and equitable remedies.
-25-
<PAGE>
(e) No Defenses. No Contract is or will be subject to any right of
-----------
rescission, set-off, counterclaim or defense, including the defense of usury,
and, to the knowledge of CITSF, no such right has been asserted with respect to
any Contract.
(f) Insurance. The Obligor on the Contract is required to maintain
---------
physical damage insurance covering the related Financed Vehicle in accordance
with CITSF's normal requirements or, if the related Financed Vehicle is not so
covered by an Obligor's insurance, it is covered by a blanket insurance policy
maintained by CITSF or the Servicer. As of the Initial Cut-off Date, neither
CITSF nor the Servicer has obtained Force-Placed Insurance with respect to any
Initial Contract and, as of any Subsequent Cut-off Date, neither CITSF nor the
Servicer has obtained Force-Placed Insurance with respect to any Subsequent
Contract.
(g) Lawful Assignment. The Contract was not originated in and is not
-----------------
subject to the laws of any jurisdiction whose laws would prohibit the transfer
of the Contract to the Company under the Purchase Agreement in the case of an
Initial Contract, or under a Subsequent Purchase Agreement in the case of a
Subsequent Contract, the transfer of the Contract to the Trust under this
Agreement in the case of an Initial Contract, or under a Subsequent Transfer
Agreement in the case of a Subsequent Contract, or pursuant to transfers of
Securities, or the ownership of the Contracts by the Trust.
(h) Compliance with Law. All requirements of any federal, state or
-------------------
local law, including, without limitation, usury, truth in lending and equal
credit opportunity laws, applicable to the Contract have been complied with in
all material respects and such compliance is not affected by the Trust's
ownership of the Contracts, and CITSF shall for at least the period of this
Agreement, maintain in its possession, available for the Trust's inspection, and
shall deliver to the Trust upon demand, evidence of compliance with all such
requirements.
(i) Contract in Force. The Contract has not been satisfied or
-----------------
subordinated in whole or in part or rescinded, and the Financed Vehicle securing
the Contract has not been released from the security interest of the Contract in
whole or in part.
(j) Valid Security Interest. The Contract creates a valid and
-----------------------
enforceable perfected first priority security interest in favor of CITSF, CITCF-
NY or the Dealer which originated such Contract in the Financed Vehicle covered
thereby as security for payment of the amounts due under such Contract which
security interest (if in favor of CITCF-NY or the Dealer) has been validly and
effectively assigned to CITSF. CITSF has assigned all of its right, title and
interest in such Contract, including the security interest in the Financed
Vehicle covered thereby, to the Company, and the Company has assigned all of its
right, title and interest in such Contract and such Financed Vehicle to the
Trust.
(k) Notation of Security Interest. CITSF or CITCF-NY has taken all
-----------------------------
necessary action with respect to the Contract to perfect the security interest
in the Financed Vehicle covered thereby in favor of CITSF or CITCF-NY. With
respect to each Contract, if the related Financed Vehicle is located in a state
in which notation of a security interest on the title document is required or
permitted to perfect such security interest, the title document shows, or if
-26-
<PAGE>
a new or replacement title document with respect to such Financed Vehicle is
being applied for such title document will be issued within 180 days and will
show, CITSF or CITCF-NY as the holder of a first priority security interest in
such Financed Vehicle; if the related Financed Vehicle is located in a state in
which the filing of a financing statement under the UCC is required to perfect a
security interest in a Recreational Vehicle, such filings or recordings have
been duly made and show CITSF or CITCF-NY as secured party.
(l) Capacity of Parties. All parties to the Contract had legal
-------------------
capacity to execute the Contract.
(m) Good Title. CITSF or CITCF-NY purchased the Contract for fair
----------
value and took possession thereof, without knowledge that the Contract was
subject to a security interest in favor of a third party. Neither CITSF, CITCF-
NY nor the Company has sold, assigned or pledged the Contract to any person
other than CITSF, the Company or the Trust, respectively. Prior to the transfer
of the Contract by CITCF-NY to CITSF, CITSF to the Company and by the Company to
the Trust, CITCF-NY, CITSF or the Company, respectively, had good and marketable
title thereto free and clear of any lien, encumbrance, equity, loan, pledge,
charge, claim or security interest and was the sole owner thereof with full
right to transfer the Contract to the Company and the Trust, respectively. The
Company paid fair value to CITSF for the Contracts. Immediately upon the
transfer thereof, the Trust for the benefit of the Securityholders shall acquire
good and marketable title to each Contract free and clear of any encumbrance,
equity, loan, pledge, charge, claim or security interest, and the transfer
thereof shall have been perfected under applicable law.
(n) No Defaults. As of the Initial Cut-off Date for each Initial
-----------
Contract, and as of the related Subsequent Cut-off Date for each Subsequent
Contract, there was no default, breach, violation or event permitting
acceleration existing under the Contract and no event which, with notice and the
expiration of any grace or cure period, would constitute such a default, breach,
violation or event permitting acceleration under such Contract (except payment
delinquencies permitted by subsection (b) above). Neither CITCF-NY nor CITSF
has waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by subsection (b) above.
(o) No Liens. As of the Closing Date for each Initial Contract, and
--------
as of the related Subsequent Transfer Date for each Subsequent Contract, there
are no liens or claims which have been filed for work, labor or materials
affecting the Financed Vehicle securing the Contract which are or may be liens
prior to, or equal or coordinate with the security interest granted under the
Contract.
(p) Equal Installments. The Contract is a Simple Interest Contract
------------------
and provides for level monthly payments which provide interest at the stated
Contract Rate and, if paid in accordance with its schedule, fully amortize the
loan over its original term.
(q) Enforceability. The Contract contains customary and enforceable
--------------
provisions such as to render the rights and remedies of the holder thereof
adequate for the
-27-
<PAGE>
realization against the collateral of the benefits of the security, except as
enforceability of such provisions may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(r) Obligor Not a Governmental Entity. The Obligor on the Contract is
---------------------------------
not the United States of America or any state or any agency, department,
instrumentality or political subdivision thereof.
(s) Obligor Not Subject to Bankruptcy Proceedings. The Obligor on the
---------------------------------------------
Contract was not in a bankruptcy proceeding as of the Initial Cut-off Date for
each Initial Contract or as of the related Subsequent Cut-off Date for each
Subsequent Contract.
(t) No Repossession. As of the Initial Cut-off Date for each Initial
---------------
Contract, or as of the related Subsequent Cut-off Date for each Subsequent
Contract, the Financed Vehicle which secured the Contract had not been
repossessed without reinstatement.
(u) Obligor Not a Relief Act Obligor. If (i) the Obligor on the
--------------------------------
Contract is in the military (including an Obligor who is a member of the
National Guard or is in the reserves) and (ii) the Contract is subject to the
Soldiers' and Sailors' Civil Relief Act or the Military Reservist Relief Act,
such Obligor has not made a claim to CITSF that
(A) the amount of interest on the related Contract should be
limited to 6% pursuant to the Soldiers' and Sailors' Civil Relief Act
during the period of such Obligor's active duty status, or
(B) payments on such Contract should be delayed pursuant to the
Military Reservist Relief Act,
in either case, unless a court has ordered otherwise upon application of CITSF.
(v) Only One Original. There is only one original executed copy of
-----------------
the Contract, which, immediately prior to the execution of this Agreement, was
in the possession of CITSF.
(w) Contract is Chattel Paper. The Contract is "chattel paper" as
-------------------------
defined in the New Jersey UCC.
(x) Selection Criteria. As of the Initial Cut-off Date for each
------------------
Initial Contract, or as of the related Subsequent Cut-off Date for each
Subsequent Contract, the Contract satisfies the eligibility criteria discussed
in the Prospectus Supplement for the Securities under the heading "The Contract
Pool-General".
(y) Valid Transfer. All of the right, title and interest of CITSF,
--------------
the Company and, if applicable, CITCF-NY in the Contract has been validly sold,
transferred and assigned to
-28-
<PAGE>
the Trust and all filings necessary to evidence such sale, transfer and
conveyance have been made in all appropriate jurisdictions.
(z) Trust License. The Trust is in compliance with any and all
-------------
license, permit and other requirements of any Federal or state law applicable to
its ownership of the Contract and its exercise of rights under the Contract and
the Basic Documents.
(aa) Origination. The Contract was originated in the United States
-----------
of America.
Section 3.01B Representations and Warranties Regarding the Contracts
------------------------------------------------------
in the Aggregate.
- ----------------
CITSF represents and warrants to the Trust and the Securityholders,
that:
(a) Amounts. The aggregate principal amounts payable by Obligors
-------
under the Initial Contracts as of the Initial Cut-off Date equal the Initial
Cut-off Date Principal Balance.
(b) Characteristics. The Contracts have the following characteristics
---------------
as of the Initial Cut-off Date:
(i) each Contract is secured by a Financed Vehicle which is a new
or used Recreational Vehicle;
(ii) each Initial Contract has a fixed Contract Rate, which is
equal to or greater than 8.49%;
(iii) the remaining maturity of each Initial Contract is at
least 9 months, but not more than 240 months;
(iv) the original maturity of each Initial Contract was at least
12 months, but not more than 240 months;
(v) the weighted average remaining term to stated maturity of the
Initial Contracts was 152 months;
(vi) the weighted average Contract Rate of the Initial Contracts
was 10.31%;
(vii) the final scheduled payment dates on the Initial Contracts
range from May 1997 to August 2016;
(viii) the average remaining principal balance of the Initial
Contracts per contract was $24,247;
(ix) the outstanding principal balances of the Initial Contracts
ranged from $1,070 to $298,209;
-29-
<PAGE>
(x) each of the Initial Contracts was first entered onto the
Servicer's or CITCF-NY's servicing system (which, typically, represents the
date on which CITSF or CITCF-NY funds the purchase of such Contracts from
Dealers) between September 1995 and July 1996;
(xi) not more than 5% of the Obligors under the Initial Contracts
by Initial Cut-off Date Principal Balance had mailing addresses in any one
state, as determined by information provided by Obligors (except Obligors
with mailing addresses in California, Texas, Florida and Arizona, which
represent approximately 22.04%, 10.31%, 7.33% and 5.35%, respectively, of
the Initial Cut-off Date Principal Balance); less than 10% of the Obligors
under the Initial Contracts by Initial Cut-off Date Principal Balance had
mailing addresses in Oklahoma;
(xii) at least 70.41% of the Contracts, based on Initial Cut-off
Date Principal Balance, were secured by new Financed Vehicles at
origination; and
(xiii) not more than 4.75% of the Contracts, based on Initial
Cut-off Date Principal Balance, were secured by Recreational Vehicles other
than motor homes and travel trailers.
(c) Computer Tape. As of the Closing Date, in the case of the Initial
-------------
Contracts, and as of the related Subsequent Transfer Date, in the case of any
Subsequent Contracts, the Computer Tape made available by the Servicer was
complete and accurate as of its date and included a description of the same
Contracts that are described in the List of Initial Contracts or the applicable
List of Subsequent Contracts, as the case may be.
(d) Marking Records. By the Closing Date in the case of the Initial
---------------
Contracts or by the related Subsequent Transfer Date in the case of the
Subsequent Contracts, CITSF has caused the portions of the Electronic Ledger
relating to the Contracts constituting part of the Trust to be clearly and
unambiguously marked to indicate that such Contracts constitute part of the
Trust and are owned by the Trust in accordance with the terms of the trust
created hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
--------------------
employed in selecting the Contracts from the recreational vehicle installment
sale contracts owned by CITSF which were purchased by CITSF from CITCF-NY or
Dealers, except that CITSF did not select any such contract which would cause a
breach of any representation or warranty of CITSF contained in this Agreement
that would materially adversely affect the Trust's interest in such Contract.
Section 3.01C Representations and Warranties Regarding the Contract
-----------------------------------------------------
Files.
- -----
CITSF represents and warrants to the Trust and the Securityholders
that:
(a) Possession. Immediately prior to the Closing Date in the case of
----------
the Initial Contracts, or the Subsequent Transfer Date in the case of the
Subsequent Contracts, CITSF will
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have possession of each original Contract and the related Contract File, and
there are and there will be no custodial agreements in effect materially and
adversely affecting the right of CITSF to make, or to cause to be made, any
delivery required in connection with the conveyance of the Contracts to the
Company or from the Company to the Trust.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of
------------------
the Contracts and the Contract Files from CITSF to the Company and from the
Company to the Trust are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.
Section 3.01D Conditions of Closing for the Subsequent Contracts.
--------------------------------------------------
On or before the transfer of any Subsequent Contracts on the related
Subsequent Transfer Date, the following conditions shall have been satisfied:
(a) The Servicer shall have provided the Rating Agencies and the
Trustees with notice, at least two Business Days prior to the Subsequent
Transfer Date, of the Subsequent Contracts to be sold and the aggregate
principal balance thereof;
(b) The Servicer shall have delivered to the Trustees a duly executed
Subsequent Transfer Agreement;
(c) The Funding Period shall not have terminated;
(d) The Servicer shall have delivered to the Trustees an Officer's
Certificate confirming the satisfaction of each condition precedent specified in
this Section 3.01D and in the related Subsequent Transfer Agreement;
(e) The Company shall have delivered to the Trustees an Assignment in
the form of Exhibit D hereto and the Opinion of Counsel required by the related
Subsequent Purchase Agreement;
(f) The Company shall have delivered an Officers' Certificate to each
Trustee and each Rating Agency certifying that immediately following the
transfer of such Subsequent Contracts to the Trust that none of the following
would occur: (i) the weighted average Contract Rate of the Contracts based on
the Subsequent Cut-off Date Pool Principal Balance would be less than 10.15%,
(ii) less than 66% of the Contracts by Subsequent Cut-off Date Pool Principal
Balance would be attributable to Contracts to finance the purchase of new
Recreational Vehicles at the time the related Contract was originated, (iii)
more than 6% of the Contracts by Subsequent Cut-off Date Pool Principal Balance
would be attributable to Contracts to finance the purchase of Recreational
Vehicles other than motor homes and travel trailers, (iv) the weighted average
remaining term to maturity of the Contracts based on the Subsequent Cut-off Date
Pool Principal Balance would be more than 157 months, (v) more than 35% of the
Contracts based on the Subsequent Cut-off Date Pool Principal Balance would have
a credit score of less than 179, and (vi) more than 9.99% of the Obligors under
the Contracts by Subsequent Cut-off Date Pool
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Principal Balance had mailing addresses in Oklahoma. In addition, all of such
Subsequent Contracts must (i) be secured by Recreational Vehicles with Obligors
having mailing addresses in the United States at the time of origination, (ii)
have a Due Date not later than the month following the Subsequent Cut-off Date
with respect to such Subsequent Contract, (iii) have a final scheduled payment
date of no later than November 2016; (iv) satisfy the representations and
warranties specified in this Agreement, (v) not be selected by either CITSF or
the Seller in a manner that it believes is adverse to the interest of the
Securityholders, (vi) have a Contract Rate of at least 8.25%, (vii) provide for
level monthly payments which provide interest at the related Contract Rate and,
if paid in accordance with their schedules, fully amortize the amount financed
over an original term of no greater than 240 months, (viii) as of the related
Subsequent Cut-off Date, the most recent scheduled payment, if any, of principal
and interest on each Subsequent Contract had been made by or on behalf of the
related Obligor or not have been delinquent more than 30 days, (ix) no
Subsequent Financed Vehicle will have been repossessed without reinstatement as
of the related Subsequent Cut-off Date, (x) as of the related Subsequent Cut-Off
Date, no Obligor on any Subsequent Contract will be the subject of a bankruptcy
proceeding, (xi) as of the related Subsequent Cut-off Date, each Subsequent
Contract will have a remaining principal balance of not less than $1,000 and not
more than $300,000, and (xii) satisfy such other requirements as the Rating
Agencies shall request;
(g) The Servicer shall have delivered to the Trustees the relevant
List of Subsequent Contracts;
(h) The Servicer shall have delivered an Officer's Certificate to the
Trustees substantially in the form of Exhibit I hereto;
(i) The Servicer shall file in the following jurisdictions the
following executed UCC-1 Financing Statements, each listing the relevant
Subsequent Contracts as required by Article 9 of the UCC and shall provide a
copy thereof to the Trustees: (i) UCC-1 Financing Statements executed by CITSF
as debtor, naming the Company as Secured Party and filed in New Jersey and
Oklahoma to perfect the sale from CITSF to the Company, (ii) UCC-1 Financing
Statements executed by the Company as debtor naming the Trust as secured party
and filed in New Jersey and Oklahoma to perfect the sale from the Company to the
Trust, and (iii) UCC-1 Financing Statements executed by the Trust as debtor,
naming the Indenture Trustee as secured party and filed in New Jersey, Oklahoma
and Delaware;
(j) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has reviewed each such Subsequent Contract
and the Contract File with respect thereto, and confirming that each such
Subsequent Contract and the Contract File with respect thereto conforms in all
material respects to the relevant List of Subsequent Contracts, that each
Contract File with respect to such Subsequent Contract is complete in all
material respects, and that each Recreational Vehicle securing any such
Subsequent Contract is covered by a physical damage insurance policy as required
by this Agreement;
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(k) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that all funds received with respect to such Subsequent
Contract on and after the relevant Subsequent Cut-off Date through the
Subsequent Transfer Date have been deposited in the Collection Account;
(l) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has accepted delivery of such Subsequent
Contracts and the Contract Files with respect to such Subsequent Contracts and
will hold such Subsequent Contracts and Contract Files as custodian on behalf of
the Trustees for the benefit of the Trust as provided herein;
(m) The Servicer shall have delivered to the Trustees one or more
Opinions of Counsel, either (i) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Trustees in the Contracts, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (ii) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; it being understood that the opinions on
perfection delivered by counsel on the Closing Date, if delivered on the
Subsequent Transfer Date as to the Subsequent Contracts, shall satisfy the
foregoing requirement; and
(n) The Seller and the Trustees shall not have been advised by either
Rating Agency that the conveyance of such Subsequent Contracts will result in a
qualification, modification or withdrawal of its then current rating of either
the Notes or the Certificates.
Section 3.02 Repurchase of Contracts for Breach of Representations
-----------------------------------------------------
and Warranties.
- --------------
(a) Subject to Section 3.02(b), CITSF shall repurchase a Contract, at
its Purchase Price, not later than 85 days after CITSF receives written notice
from either of the Trustees or the Servicer, or not later than 90 days after
CITSF otherwise becomes aware, of a breach of any representation or warranty of
CITSF set forth in Section 3.01A or 3.01B of this Agreement that materially and
adversely affects the Trust's interest in such Contract and which breach has not
been cured. CITSF shall effect such repurchase by paying to the Servicer for
deposit in the Collection Account on the Deposit Date immediately following the
determination that such Purchase Price is owed the aggregate of the Purchase
Price of all Contracts that are required to be repurchased pursuant to the
preceding sentence. With respect to any Contract incorrectly described on the
List of Initial Contracts or any List of Subsequent Contracts, as the case may
be, only with respect to remaining unpaid principal balance, which CITSF would
otherwise be required to repurchase pursuant to this Section 3.02, CITSF may, in
lieu of repurchasing such Contract, deposit in the Collection Account, not later
than one Business Day after the first Determination Date which is more than 90
days after CITSF becomes aware or receives written notice from the Trustees or
the Servicer of such incorrect description, cash in an amount sufficient to cure
such deficiency or discrepancy. CITSF shall send written notice of any
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such cash deposit to the Rating Agencies as promptly as possible following such
deposit. Notwithstanding any other provision of the Agreement, the obligation of
CITSF under this Section shall not terminate upon a Service Transfer pursuant to
Article VII.
(b) The repurchase obligation of CITSF set forth in this Section 3.02
shall constitute the sole remedy available to the Trust and the Securityholders
for a breach of any representation and warranty hereunder with respect to the
Contracts (but not with respect to any other breach by CITSF of its obligations
hereunder, as set forth herein).
Section 3.03 Custody of Contract Files.
-------------------------
To assure uniform quality in servicing the Contracts and to reduce
administrative costs, the Trust, upon the execution and delivery of this
Agreement, revocably appoints the Servicer, and the Servicer accepts such
appointment, to act as the agent of the Trust and as custodian of the Contract
File with respect to each Contract, each of which is hereby constructively
delivered to the Trust.
Section 3.04 Duties of Servicer as Custodian.
-------------------------------
(a) Safekeeping. The Servicer, in its capacity as custodian, shall
-----------
hold the Contract Files on behalf of the Trust for the use and benefit of the
Trust and maintain such accurate and complete accounts, records and computer
systems pertaining to the Contracts as shall enable the Owner Trustee and the
Indenture Trustee to comply with their obligations pursuant to this Agreement
and the other Basic Documents.
As custodian, the Servicer shall have and perform the following powers
and duties:
(i) hold the Contract Files on behalf of the Trust, maintain
accurate records pertaining to each Contract to enable it to comply with
the terms and conditions of this Agreement, maintain a current inventory
thereof, conduct annual physical inspections of Contract Files held by it
under this Agreement and certify to the Trust annually that it continues to
maintain possession of such Contract Files;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract Files on the Servicer's premises, and the receipting for Contract
Files taken from their storage area by an employee of the Servicer for
purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Trust.
In performing its duties under this Section 3.04, the Servicer agrees
to act with reasonable care, consistent with the same degree of skill and care
that it exercises with respect to similar contracts serviced by it for its own
account. The Servicer shall promptly report to the
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Trust in writing any material failure by it to hold the Contract Files as herein
provided and shall promptly take appropriate action to remedy any such failure.
In acting as custodian of the Contract Files, the Servicer agrees further not to
assert any beneficial ownership interests in the Contracts or the Contract
Files. The Servicer agrees to indemnify the Trust, the Certificateholders, the
Noteholders, the Owner Trustee and the Indenture Trustee for any and all
liabilities, obligations, losses, damages, payments, costs, or expense of any
kind whatsoever which may be imposed on, incurred or asserted against the Trust,
the Certificateholders, the Noteholders, the Owner Trustee and the Indenture
Trustee as the result of any act or omission by the Servicer relating to the
maintenance and custody of the Contract Files; provided, however, that the
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Servicer will not be liable for any portion of any such amount resulting from
the negligence or willful misconduct of the Trust, the Certificateholders, the
Noteholders, the Owner Trustee or the Indenture Trustee.
(b) Maintenance of and Access to Records. The Servicer, in its
------------------------------------
capacity as custodian, agrees to maintain the Contract Files at its office in
the State of Oklahoma, or at such of its offices as shall from time to time be
identified to the Trust by written notice. The Servicer, in its capacity as
custodian, may temporarily move individual Contract Files or any portion thereof
without notice as necessary to conduct collection and other servicing activities
in accordance with its customary practices and procedures, but shall promptly
return such Contract File as soon as practicable after it is no longer needed
for such purpose.
The Servicer, in its capacity as custodian, shall make available to
the Trust, or its duly authorized representatives, attorneys or auditors, the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal business hours as the Trust shall
reasonably instruct which do not unreasonably interfere with the Servicer's
normal operations or customer or employee relations.
(c) Release of Documents. Upon written instruction from the Trust,
--------------------
the Servicer, in its capacity as custodian, shall release or cause to be
released any document in the Contract Files to the Trust, the Trust's agent or
the Trust's designee, as the case may be, at such place or places as the Trust
may designate, as soon as practicable. The Servicer, in its capacity as
custodian, shall not be responsible for any loss occasioned by the failure of
the Trust, its agent or its designee to return any document or any delay in
doing so.
Section 3.05 Instructions; Authority to Act.
------------------------------
The Servicer shall be deemed to have received proper instructions from
either of the Trustees with respect to the Contract Files upon its receipt of
written instructions signed by a Responsible Officer of such Trustee. A
certified copy of a by-law or of a resolution of the Board of Directors of the
Owner Trustee or the Indenture Trustee, as applicable, shall constitute
conclusive evidence of the authority of any such Responsible Officer to act and
shall be considered in full force and effect until receipt by the Servicer of
written notice to the contrary given by the Trust.
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Section 3.06 Effective Period and Termination. The Servicer's
--------------------------------
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect until terminated pursuant to this Section 3.06
or until this Agreement shall be terminated. The Servicer may perform its
duties as custodian through one or more agents, which agents may maintain
physical possession of Contract Files as agent for the Servicer acting as
custodian. If the Servicer shall resign as Servicer under Section 8.05 hereof
or if all of the rights and obligations of the Servicer shall have been
terminated under Section 9.01 hereof, the appointment of the Servicer as
custodian may be terminated by the Indenture Trustee or by the Holders of Notes
evidencing not less than a majority of the aggregate outstanding principal
balance of the Notes as of the close of the preceding Distribution Date (or, if
the Notes have been paid in full and the Indenture has been discharged in
accordance with its terms, by the Owner Trustee or by the Holders of
Certificates evidencing not less than a majority of the Certificate Balance as
of the close of the preceding Distribution Date), in the same manner as rights
and obligations of the Servicer may be terminated under Section 9.01 hereof.
The Trust may terminate the Servicer's appointment as custodian at any time with
cause upon written notification to the Servicer. As soon as practicable after
any termination of such appointment, the Servicer shall deliver the Contract
Files to the Trust or the Trust's agent at such place or places as the Trust may
reasonably designate. The Servicer shall cooperate with the Trust in making the
transfer and shall bear all of the Servicer's costs and expenses with respect to
such transfer, but the Trust shall bear the actual costs and expenses of packing
and transporting the Contract Files to the location designated by the Trust.
Notwithstanding the termination of the Servicer as custodian, the Trust agrees
that upon any such termination, the Trust shall provide, or cause its agent to
provide, access to the Contract Files to the Servicer for the purpose of
carrying out its duties and responsibilities with respect to the servicing of
the Contracts hereunder.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF CONTRACTS
-----------------------------------------
Section 4.01 Duties of Servicer.
------------------
(a) The Servicer, as agent for the Trust, shall manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Trust, at the request of a Servicing Officer,
shall furnish the Servicer with any reasonable documents or take any action
reasonably requested, necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.
(b) In managing, administering, servicing and making collections on
the Contracts pursuant to this Agreement, the Servicer will exercise the same
degree of skill and care that the Servicer exercises with respect to similar
contracts serviced by the Servicer for its own account.
(c) The Servicer may enter into subservicing agreements with one or
more subservicers (which shall be Eligible Servicers) for the servicing and
administration of certain of the Contracts. References in this Agreement to
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by the Servicer in servicing the Contracts shall include
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by a subservicer on behalf of the Servicer. Each
subservicing agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and the standard of care set forth herein and
as the Servicer and the subservicer have agreed. All compensation payable to a
subservicer under a subservicing agreement shall be payable by the Servicer from
its servicing compensation or otherwise from its own funds, and none of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders will have any liability to the subservicer with respect thereto.
Notwithstanding any subservicing agreement or any of the provisions of
this Agreement relating to agreements or any arrangements between the Servicer
or a subservicer or any reference to actions taken through such Persons or
otherwise, the Servicer shall remain obligated and liable to the Trust, the
Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders
for the servicing and administering of the Contracts and the other Trust
property in accordance with the provisions of this Agreement without diminution
of such obligation or liability by virtue of such subservicing agreements.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Contracts and the other
Trust property involving a subservicer in its capacity as such shall be deemed
to be between the subservicer and the Servicer alone, and the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the subservicer except as set forth in the next
succeeding paragraph.
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In the event the Servicer shall for any reason no longer be acting as
such, the successor Servicer may, in its discretion, thereupon assume all of the
rights and obligations of the outgoing Servicer under a subservicing agreement.
In such event, the successor Servicer shall be deemed to have assumed all of the
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such subservicing agreement to the same extent as if such
subservicing agreement had been assigned to the successor Servicer, except that
the outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the Trust,
but at the expense of the outgoing Servicer, deliver to the successor Servicer
all documents and records relating to each such subservicing agreement and the
Contracts and other Trust property then being serviced thereunder and an
accounting of amount collected and held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of any subservicing agreement to
the successor Servicer. In the event that the successor Servicer elects not to
assume a subservicing agreement, the outgoing Servicer, at its expense, shall
cause the subservicer to deliver to the successor Servicer all documents and
records relating to the Contracts and the other Trust property being serviced
thereunder and all amounts held (or thereafter received) by such subservicer
(together with an accounting of such amounts) and shall otherwise use its best
efforts to effect the orderly and efficient transfer of servicing of the
Contracts and the other Trust property being serviced by such subservicer to the
successor Servicer.
(d) The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors or by federal, state or local
governmental authorities with respect to the Contracts, investigating
delinquencies, reporting federal income tax information to Obligors, monitoring
the collateral in cases of Obligor default and handling the foreclosure or other
liquidation of Financed Vehicles in appropriate instances (subject to
reimbursement of its expenses incurred in connection with such foreclosure,
liquidation or other realization on the Contracts), administering and enforcing
Insurance Policies in accordance with its customary practices, accounting for
collections, furnishing monthly and annual statements to the Trust with respect
to distributions, and making Monthly Advances pursuant to Section 5.03 hereof.
The Servicer shall be authorized and empowered by the Trust to execute
and deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
or with respect to the Financed Vehicles.
Upon written request of the Servicer and receipt by the Trust of an
Officer's Certificate setting forth the facts underlying such request, the Trust
shall furnish the Servicer with any limited powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder and the Trust shall not be held
liable for such actions of the Servicer thereunder.
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Section 4.02 Collection of Contract Payments. The Servicer shall
-------------------------------
make reasonable efforts, consistent with the customary servicing procedures
employed by the Servicer with respect to Contracts owned or serviced by it, to
collect all payments called for under the terms and provisions of the Contracts
as and when the same shall become due, and in connection therewith shall follow
such normal collection practices and procedures as it follows with respect to
comparable new or used Recreational Vehicle installment sale contracts that it
services for itself and others. The Servicer shall not reduce or defer
scheduled payments, extend any Contract or otherwise modify the terms of any
Contract; provided, however, that, consistent with its customary servicing
-------- -------
procedures, the Servicer may, in its discretion, arrange with an Obligor to,
defer, reschedule, extend or modify the payment schedule of any Contract for
credit related reasons that would be acceptable to the Servicer with respect to
a comparable Contract secured by a new or used Recreational Vehicle that it
services for itself or others, if (a) the maturity of such Contract would not be
extended beyond the 180th day prior to the Certificate Final Scheduled
Distribution Date and (b) the deferral, rescheduling, extension or other
modification of the terms of the Contract would not constitute a cancellation of
such Contract and the creation of a new installment sale contract. If, as a
result of deferring, rescheduling or extending of payments or any other
modification, such deferring, rescheduling, extension or modification breaches
any of the terms of the preceding sentence, then the Servicer shall be obligated
to purchase such Contract pursuant to Section 4.07 hereof on the Deposit Date
immediately following the date on which it became aware or received written
notice from the Trust of such failure. The Servicer shall follow such normal
collection practices and procedures as it deems necessary or advisable to
realize upon any Contract with respect to which it determines that eventual
payment in full is unlikely or to realize upon any defaulted Contract. The
Servicer may, in accordance with its customary standards, policies and
procedures, in its discretion, waive any Late Fees that may be due or payable
under any Contract.
Section 4.03 Realization Upon Contracts.
--------------------------
(a) The Servicer will, consistent with customary servicing procedures
and the terms of this Agreement, act with respect to the Contracts in such
manner as it reasonably believes will maximize the receipt of principal and
interest on the Contracts and Net Liquidation Proceeds in respect of defaulted
Contracts.
Notwithstanding the standard of care specified in Section 4.01 hereof,
the Servicer shall commence procedures for the repossession of any Financed
Vehicle or take such other steps that in the Servicer's reasonable judgment will
maximize the receipt of principal and interest or Net Liquidation Proceeds with
respect to the Contract secured by such Financed Vehicle, including, without
limitation, selling such Financed Vehicle at a public or private sale, subject
to the requirements of applicable state and federal laws. In connection with
such repossession or foreclosure, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with Section 4.01 hereof. In the event that title to any Financed Vehicle is
acquired in foreclosure or by conveyance in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trust, or, at its election, to its
nominee on behalf of the Trust.
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(b) The Servicer shall be entitled to recover all Liquidation Expenses
relating to a defaulted Contract, from the liquidation proceeds with respect to
such Contract or related Financed Vehicle. The Net Liquidation Proceeds
realized in connection with any such action with respect to a Contract shall be
deposited by the Servicer in the Collection Account in the manner specified in
Section 5.02 hereof and shall be applied to reduce (or to satisfy, as the case
may be) the Purchase Price of the Contract, if such Contract is to be purchased
by CITSF pursuant to Section 3.02 hereof, is to be purchased by the Servicer
pursuant to Section 4.07 hereof, or is to be purchased by CITSF pursuant to
Section 11.01 hereof. The foregoing shall be subject to the provision that, in
any case in which the Financed Vehicle shall have suffered damage, the Servicer
shall not expend funds in connection with the repair or the repossession of such
Financed Vehicle unless it shall determine in its sole discretion that such
repair and/or repossession will increase the Net Liquidation Proceeds of the
related Contract.
(c) The Servicer may sue to enforce or collect upon Contracts,
including foreclosure of any security interest in a Financed Vehicle, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract or any Insurance Policy in
respect thereof, the act of commencement shall be deemed to be an automatic
assignment of the Contract to the Servicer for purposes of collection only. If,
however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Contract on the ground that it is not a real party in
interest or a holder entitled to enforce the Contract, the Trust shall, at the
Servicer's expense, take such steps as the Servicer deems necessary to enforce
the Contract, including bringing suit in its name or the names of the
Securityholders.
(d) Prior to a Service Transfer, the Servicer may grant to the Obligor
on any Contract any rebate, refund or adjustment out of the Collection Account
that the Servicer in good faith believes is required because of a Principal
Prepayment or a Principal Prepayment in Full. The Servicer will not permit any
rescission or cancellation of any Contract, except to the extent required by
law.
(e) The Servicer may enforce any due-on-sale clause in a Contract if
such enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
Insurance Policy.
Section 4.04 Physical Damage Insurance.
-------------------------
(a) The Servicer, in accordance with its customary servicing
procedures, shall use its best efforts to require that each Obligor shall have
obtained and shall maintain physical damage insurance covering the Financed
Vehicle, provided that such insurance shall be in an amount no greater than the
outstanding principal balance of the related Contract or, if such insurance also
covers the interest of the related Obligor in the Financed Vehicle, no greater
than the greater of the outstanding principal balance of the related Contract
and the value of the Financed Vehicle, or such lesser amount permitted by
applicable law. The Servicer shall enforce
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its rights under the Contracts to require the Obligors to maintain physical
damage insurance, in accordance with the Servicer's customary practices and
procedures with respect to comparable new or used recreational vehicles financed
by installment sale contracts that it services for itself or others. If an
Obligor fails to maintain such insurance, the Servicer shall obtain insurance
and advance such premiums for such insurance on behalf of such Obligor, as
required under the terms of the applicable Contract and this Agreement, each
insurance policy naming the Servicer as an additional insured and loss payee,
and issued by an insurer having a rating of "A" or better by A.M. Best (such
insurance being referred to herein as "Force-Placed Insurance"). Such Force-
Placed Insurance and any commissions or finance charges collected by the
Servicer in connection therewith shall be, to the extent permitted by law, in an
amount in accordance with customary servicing procedures, but in no event shall
such Force-Placed Insurance be in an amount greater than the outstanding
principal balance of the related Contract or, if such insurance also covers the
interest of the related Obligor in the Financed Vehicle, no greater than the
greater of the outstanding principal balance of the related Contract and the
value of the Financed Vehicle, or such lesser amount permitted by applicable law
and the Servicer shall disclose to the related Obligor all information with
respect to such Force-Placed Insurance, commissions and finance charges as
required by applicable law. The Servicer does not, under its customary servicing
procedures, obtain Force-Placed Insurance when the principal balance of the
related retail installment sale contract or installment loan falls below the
level or levels periodically established in accordance with such customary
servicing procedures. In accordance with such customary servicing procedures,
the Servicer may periodically readjust such levels, suspend Force-Placed
Insurance or arrange other methods of protection of the Financed Vehicles that
it deems necessary or advisable, provided that the Servicer determines that such
actions do not materially and adversely affect the interests of the
Certificateholders or the Noteholders. Any portion of the principal balance of a
Contract attributable to Post Cut-off Date Insurance Add-Ons will not be owned
by the Trust, and amounts allocable thereto will not be available for
distribution in respect of the Securities. Unless otherwise designated by the
Obligor, the Servicer shall not allocate payments to Post Cut-off Date Insurance
Add-Ons in respect of such Contracts if any amount of principal or interest is
due but unpaid on such Contracts. The Servicer shall not deposit payments
allocable to Post Cut-off Date Insurance Add-Ons in the Collection Account and
shall instead promptly pay such amounts to an account of the Servicer maintained
for that purpose. In the event that an Obligor under a Contract with respect to
which the Servicer has advanced funds to obtain Force-Placed Insurance makes
scheduled payments under the Contract, but fails to make scheduled payments of
such Post Cut-off Date Insurance Add-Ons as due, and the Servicer has determined
that eventual payment of such amount is unlikely, the Servicer may, but shall
not be required to, take any action available to it, including determining that
the related Contract is in default, taking remedial action and determining that
the Contract is a Liquidated Contract; provided, however, that any Net
-------- -------
Liquidation Proceeds with respect to such Contract shall be applied first to the
accrued and unpaid interest at the Contract Rate, then to the principal amount
outstanding, and the remainder, if any, to repayment of any Post Cut-off Date
Insurance Add-Ons.
(b) The Servicer may, in lieu of causing individual Insurance Policies
to be maintained with respect to each Financed Vehicle pursuant to subsection
(a) of this Section 4.04
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maintain one or more blanket insurance policies covering losses on the Obligor's
interest in the Contracts resulting from the absence or insufficiency of
individual Insurance Policies. To the extent that the Obligor's individual
insurance policy does not cover theft of the Financed Vehicle (to the extent
required under the Servicer's customary practices and procedures with respect to
comparable new or used recreational vehicle installment sale contracts that it
services for itself or others), the Servicer shall obtain Force-Placed
Insurance, which may be obtained pursuant to one or more blanket insurance
policies covering theft and other risks. The proceeds of any such blanket
insurance policies relating to the Contracts shall be deposited in the
Collection Account as collections on the Contracts in accordance with the
provisions of Article V hereof.
Any such blanket policy shall be substantially in the form and in the
amount carried by the Servicer as of the date of this Agreement. The Servicer
shall pay the premium for such policy on the basis described therein. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to (i) claims under individual physical damage insurance policies
maintained pursuant to subsection (a) of this Section 4.04, or (ii) claims under
any blanket insurance policy. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy. The Servicer shall provide each Rating Agency with
notice of the occurrence of any event specified in the preceding sentence.
(c) The Servicer, or any affiliate of the Servicer, may, to the extent
permitted by law (i) enter into agreements with one or more insurers or other
Persons pursuant to which the Servicer or such affiliate will earn commissions
and fees in connection with any insurance policy purchased by an Obligor
including, without limitation, any physical damage insurance policy (whether or
not such physical damage insurance policy is force-placed pursuant to the
provisions of any Contract), or any other insurance policy whatsoever, and (ii)
in connection with the foregoing, to solicit, or permit and assist any insurer
or any agent thereof to solicit (including, without limitation, providing such
insurer or agent a list of Obligors including name, address or other
information) any Obligor.
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
-------------------------------------------------------
Retitling.
- ---------
(a) The Servicer, in accordance with its customary servicing
procedures, shall, at its own expense, take such steps as are necessary to
maintain perfection of the security interest created by each Contract in the
related Financed Vehicle in favor of CITSF or CITCF-NY. The Servicer hereby
agrees to take such steps as are necessary to re-perfect such security interest
in the name of CITSF or CITCF-NY in the event of the relocation of a Financed
Vehicle to a jurisdiction other than the jurisdiction in which steps had been
taken to perfect the security interest in favor of CITSF or CITCF-NY. In the
event that the assignment of the Contract to the Trust is insufficient, without
a notation on the related Financed Vehicle's certificate of title, to grant to
the Trust a perfected security interest in the related Financed Vehicle, CITSF
or CITCF-NY hereby agrees to serve as the Trust's agent for the purpose of
perfecting the security interest in such Financed Vehicle and that CITSF's or
CITCF-NY's listing as the secured party on the certificate of title is in the
capacity as agent of the Trust.
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(b) If, at any time, a Service Transfer has occurred and CITSF is no
longer the Servicer, and the successor Servicer is unable to foreclose upon a
Financed Vehicle because the title document for such Financed Vehicle does not
show such successor Servicer or the Trust as the lienholder, CITSF shall, at its
expense, take all necessary steps to apply for a replacement title document
showing the successor Servicer or the Trust as the secured party.
(c) In order to facilitate the successor Servicer's actions, as
described in subsection 4.05(b) hereof, CITSF will provide the successor
Servicer with any necessary power of attorney permitting it to retitle the
Financed Vehicle. The Company hereby appoints the Trust (acting through the
Owner Trustee or the Servicer) its attorney-in-fact to endorse, as appropriate,
the certificate of title relating to any Financed Vehicle in order to cause a
change in the registration of legal owner of the Financed Vehicle to the Trust
at such time as such certificate of title is endorsed and delivered to the
Department of Motor Vehicles of the State of California (or any other state
department of motor vehicles) with appropriate fees. The Company will provide
the Trust with any necessary power of attorney for such purpose.
(d) If the successor Servicer is unable to retitle the Financed
Vehicle, in the event that the successor Servicer seeks to foreclose on a
Financed Vehicle then CITSF, at its expense, will take all actions necessary to
act with the successor Servicer, to the extent permitted by law, to foreclose
upon the Financed Vehicle, including, as appropriate, the filing of any UCC-1 or
UCC-2 financing statements necessary to perfect the security interest in any
Financed Vehicle.
Section 4.06 Covenants of Servicer. The Servicer shall not:
---------------------
(i) Security Interest to Remain in Force. Release a Financed
------------------------------------
Vehicle securing a Contract from the security interest granted by the
Contract in whole or in part except as contemplated herein or as required
by the terms of such Contract or applicable law;
(ii) No Impairment. Impair the rights of the Trust in the
-------------
Contracts or take any action inconsistent with the Trust's ownership of the
Contracts, except as expressly provided herein;
(iii) Amendments. Increase the number of payments under a
----------
Contract, nor increase the principal amount of such Contract which is used
to finance the purchase price of the related Financed Vehicles, nor extend
or forgive payments on a Contract or extend or modify the payment schedule
or other terms of a Contract, except as provided in Section 4.02 hereof;
(iv) Compliance with Insurance Policies. Fail to comply with the
----------------------------------
provisions of any Insurance Policy, if the failure to comply would impair
the protection or benefit to be afforded by such Insurance Policies; and
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(v) Trust License. Fail to obtain and maintain any license,
-------------
permit or other approval required by any Federal or state law in order for
the Trust to own any Contract or to exercise the rights under any Contract
or the Basic Documents.
Section 4.07 Purchase of Contracts Upon Breach.
---------------------------------
The Servicer or the Trustees, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery of any breach by the
Servicer of its covenants under Section 4.02 hereof, Section 4.04 hereof, or
Section 4.06 hereof, which materially and adversely affects the Trust's interest
in any Contract. The Trustees shall not be deemed to have discovered such a
breach until such time as a Responsible Officer of each of the Trustees receives
written notice of such breach. Except as otherwise specified in Section 4.02
hereof, unless the breach shall have been cured, the Servicer shall purchase
such Contract, at its Purchase Price, not later than the first Deposit Date
which is more than 60 days after the Servicer receives written notice from the
Trustees, or not later than 60 days after the Servicer otherwise becomes aware
of, a breach of any of its obligations under Section 4.02 hereof, under Section
4.04 hereof or any covenant of the Servicer in Section 4.06 hereof which
materially and adversely affects the Trust's interest in such Contract. The
Servicer shall effect such purchase by depositing on such Deposit Date, in
accordance with Section 5.04 hereof, the Purchase Price of such Contract (less
any Net Liquidation Proceeds deposited, or to be deposited, by the Servicer in
the Collection Account with respect to such Contract pursuant to Section 5.02
hereof) in the Collection Account. The effective date of such purchase shall be
the last day of the Due Period preceding such Deposit Date. The sole remedy of
the Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders against the Servicer with respect to a breach pursuant to
Section 4.02 hereof, Section 4.04 hereof or Section 4.06 hereof shall be to
require the Servicer to purchase Contracts pursuant to this Section 4.07.
Section 4.08 Servicing Fee.
-------------
The Servicing Fee for a Distribution Date shall be equal to the sum of
(i) one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as
of the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date) and (ii) any Investment
Earnings (net of investment expenses and losses) on amounts on deposit in the
Collection Account, the Certificate Distribution Account and the Note
Distribution Account.
Section 4.09 Monthly Report.
--------------
On or before each Determination Date, the Servicer shall furnish a
report (the "Monthly Report"), which shall be in substantially the form of
Exhibit G hereto (with such additional information as the Servicer shall elect
to include therein), to the Owner Trustee, the Indenture Trustee, any Paying
Agent (under the Indenture and the Trust Agreement) and (if CITSF is not the
Servicer) CITSF. The determination by the Servicer of the amount of the
distributions to be made pursuant to Section 5.05 hereof shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder, and the Trustees shall be
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protected in relying upon the same without any independent check or
verification. The Servicer shall also specify in the Monthly Report each
Contract which CITSF or the Servicer is required to repurchase as of the last
day of the related Due Period and each Contract which the Servicer shall have
determined to be a Liquidated Contract during such Due Period. The Trustees
shall not be required to recompute, verify or recalculate information contained
in the Servicer's Certificate.
Each Monthly Report shall be accompanied by a certificate of a
Servicing Officer substantially in the form of Exhibit F hereto, certifying the
accuracy of the Monthly Report and that no Event of Termination or event that
with notice or lapse of time or both would become an Event of Termination has
occurred, or if such event has occurred and is continuing, specifying the event
and its status.
In addition, the Servicer shall, on request of the Trustees, furnish
the Trustees such reasonably pertinent underlying data on the Contracts as can
be generated by the Servicer's existing data processing system without undue
modification or expense.
Section 4.10 Annual Statement as to Compliance.
---------------------------------
(a) The Servicer shall deliver to the Trustees within 90 days after
the end of each calendar year commencing March 31, 1997, a certificate signed by
a Responsible Officer of the Servicer, stating that (i) a review of the
activities of the Servicer during the preceding calendar year 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 its obligations under this Agreement throughout such preceding
calendar year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Trustees, promptly after having
obtained knowledge thereof, a certificate of a Responsible Officer of the
Servicer specifying any event which with the giving of notice or lapse of time,
or both, would become an Event of Termination under subsection (a) or (b) of
Section 9.01 hereof. The Company shall deliver to the Trustees, promptly after
having obtained knowledge thereof, a certificate of a Responsible Officer of the
Servicer specifying any event which with the giving of notice or lapse of time,
or both, would become an Event of Termination under subsection (a) or (b) of
Section 9.01 hereof.
Section 4.11 Annual Report of Accountants. On or before March 31 of
----------------------------
each year, commencing March 31, 1997, the Servicer, at its expense, shall cause
a firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement which opines
on, at a minimum, the Servicer's compliance with the minimum servicing standards
set forth in the Uniform Single Attestation Program for Mortgage Bankers (in
accordance with the 1995 revisions thereto). Such examination and report of
independent public accountants will be prepared in accordance with the
requirements set forth in the Uniform Single Attestation Program for Mortgage
Bankers (in accordance with the 1995
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revisions thereto). Copies of the annual statement of accountants shall also be
provided to each Rating Agency and to the Trustees.
Section 4.12 Duties of Owner Trustee.
-----------------------
The Servicer shall monitor the performance of the Issuer and the Owner
Trustee and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's or the Owner Trustee's duties under the Indenture and the
Trust Agreement. If the Seller shall fail to compensate the Owner Trustee
pursuant Section 6.9 of the Trust Agreement, the Servicer shall pay to the Owner
Trustee such compensation. The Servicer shall reimburse the Owner Trustee as
provided in Section 6.9 of the Trust Agreement for its reasonable expenses
thereunder. The Servicer agrees to take the actions required to be taken by it
under Section 6.10 of the Trust Agreement.
The Servicer shall prepare for execution by the Issuer or the Owner
Trustee, or shall cause to be prepared by other appropriate persons, all
documents, reports, filings, instruments, certificates and opinions as shall be
required to be prepared, filed or delivered by the Issuer or the Owner Trustee
pursuant to the Indenture or the Trust Agreement.
In furtherance of the foregoing, the Servicer's duties shall include,
without limitation, compliance with the requirements of Sections 5.4 and 5.5 of
the Trust Agreement and Sections 2.2, 2.4, 2.7(d), 2.7(e), 2.9, 3.3, 3.4, 3.5,
3.6, 3.7(b), 3.7(d), 3.9, 3.10, 3.19, 4.1, 5.4, 6.8, 6.10, 7.1, 7.3, 8.2, 8.3,
8.4, 8.5, 9.1, 9.2, 9.3, 9.6, 10.2, 11.1(a), 11.1(b), 11.4, 11.6 and 11.15 of
the Indenture.
Section 4.13 Reports to Securityholders and the Rating Agencies.
--------------------------------------------------
(a) Concurrently with each distribution charged to the Certificate
Distribution Account and the Note Distribution Account, the Owner Trustee and
the Indenture Trustee, respectively, so long as each has received the Monthly
Report from the Servicer, shall forward or cause to be forwarded by mail to each
Securityholder, such Monthly Report. The Servicer shall furnish to each
Securityholder of record during any calendar year information for tax reporting
purposes not later than the latest date permitted by law.
(b) The Servicer shall forward to each Rating Agency each letter of
the independent certified public accountants' described in Section 4.11 hereof,
each Servicer's Certificate described in Section 4.09 hereof, each annual
statement as to compliance described in Section 4.10 hereof and each statement
to Securityholders described in Section 5.08 hereof.
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
----------------------------------------------------
Policy.
- ------
The Servicer shall during the term of its service as Servicer maintain
in force (a) at such time as the long-term debt of its parent is rated less than
A by Standard & Poor's or less than A3 by Moody's, a policy or policies of
insurance covering errors and omissions for failure to maintain insurance as
required by this Agreement, and (b) a fidelity bond in respect of its
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officers, employees and agents. Such policy or policies and such fidelity bond
shall have such deductibles and be in such form and amount as is generally
customary among Persons which service a portfolio of recreational vehicle
installment sale contracts having an aggregate principal amount of $100,000,000
or more and which are generally regarded as servicers acceptable to
institutional investors.
Section 4.15 Satisfaction of Contract.
------------------------
Upon payment in full on any Contract, the Servicer is authorized to
execute an instrument in satisfaction of such Contract and to do such other acts
and execute such other documents as the Servicer deems necessary to discharge
the Obligor thereunder and eliminate the security interest in the Financed
Vehicle related thereto. The Servicer shall determine when a Contract has been
paid in full. To the extent that insufficient payments are received on a
Contract credited by the Servicer as prepaid or paid in full and satisfied, the
shortfall shall be paid by the Servicer out of its own funds.
Section 4.16 Costs and Expenses.
------------------
Except as provided in Section 4.03 hereof, all costs and expenses
incurred by the Servicer in carrying out its duties hereunder, including all
fees and expenses incurred in connection with the enforcement of Contracts
(including enforcement of defaulted Contracts and repossessions of Financed
Vehicles securing such Contracts), shall be paid by the Servicer and the
Servicer shall not be entitled to reimbursement hereunder.
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ARTICLE V
ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
---------------------------------------------------------
Section 5.01 Collection Account, Pre-Funding Account, Capitalized
----------------------------------------------------
Interest Account and Reserve Account.
- ------------------------------------
(a) (i) On or before the Closing Date, there shall be established
and maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders and Certificateholders, an Eligible Account (which initially
shall be maintained with the Indenture Trustee) known as the "CIT RV Trust
1996-B Collection Account" (the "Collection Account"), bearing an
additional designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders and Certificateholders and
owned by the Trust.
(ii) On or before the Closing Date, there shall be established
and maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders, an Eligible Account (which initially shall be maintained with
the Indenture Trustee) known as the "CIT RV Trust 1996-B Note Distribution
Account" (the "Note Distribution Account"), bearing an additional
designation clearly indicating that the funds deposited therein are held
for the benefit of the Noteholders and owned by the Trust.
(iii) On or before the Closing Date, pursuant to the Trust
Agreement, there shall be established and maintained in the name of the
Owner Trustee, for the benefit of the Certificateholders, an Eligible
Account (which initially shall be maintained with the Paying Agent of the
Owner Trustee) known as the "CIT RV Trust 1996-B Certificate Distribution
Account" (the "Certificate Distribution Account"), bearing an additional
designation clearly indicating that the funds deposited therein are held
for the benefit of the Certificateholders and owned by the Trust.
(iv) On or before the Closing Date, there shall be established
and maintained in the name of the Owner Trustee an Eligible Account (which
initially shall be maintained with the Paying Agent of the Owner Trustee),
known as the "CIT RV Trust 1996-B Reserve Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders and owned by the Trust.
(b) Pre Funding Account and Capitalized Interest Account.
----------------------------------------------------
(i) On or before the Closing Date, there shall be established and
maintained as an Eligible Account, the Pre-Funding Account and the
Capitalized Interest Account, in the name of the Owner Trustee, on behalf
of the Trust for the benefit of the Noteholders and Certificateholders
(which initially shall be maintained with the Indenture Trustee) and the
funds on deposit therein will be invested solely in Permitted Investments
that mature not later than one Business Day prior to the next succeeding
Distribution
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Date, until they are applied by the Owner Trustee. If, at any time during
the Funding Period, the Pre-Funding Account or the Capitalized Interest
Account ceases to be an Eligible Account, the Indenture Trustee (or the
Servicer on its behalf) shall within five (5) Business Days (or such longer
period, not to exceed thirty (30) calendar days, as to which the Rating
Agency may consent) establish a new Pre-Funding Account or Capitalized
Interest Account as an Eligible Account and any cash and/or any investments
shall be transferred to such new Pre-Funding Account or Capitalized
Interest Account and from the date such new Pre-Funding Account or
Capitalized Interest Account is established, they shall be the "Pre-Funding
Account" or "Capitalized Interest Account", as appropriate. The Pre-Funding
Account shall be entitled the "CIT RV Trust 1996-B Pre-Funding Account".
The Capitalized Interest Account shall be entitled the "CIT RV Trust 1996-B
Capitalized Interest Account". Each of the Pre-Funding Account and the
Capitalized Interest Account shall bear an additional designation clearly
indicating that the funds on deposit therein are held for the benefit of,
and owned by, the Trust. On the Closing Date, the Trust will deposit the
Original Pre-Funded Amount into the Pre-Funding Account and deposit the
Initial Capitalized Interest Deposit into the Capitalized Interest Account.
(ii) On any Subsequent Transfer Date, the Servicer shall instruct
the Owner Trustee to withdraw from the Pre-Funding Account an amount equal
to 100% of the unpaid principal balance thereof as of the related
Subsequent Cut-off Date of the Subsequent Contracts sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of
Company with respect to such transfer. In no event shall the Servicer be
permitted to instruct the Owner Trustee to release from the Pre-Funding
Account with respect to Subsequent Contracts to be transferred to the Trust
an amount, which, when added to the amounts previously released from the
Pre-Funding Account to acquire Subsequent Contracts, would exceed the
Original Pre-Funded Amount.
(iii) On the Distribution Dates occurring in September, October
and November of 1996, the Owner Trustee shall withdraw Pre-Funding Earnings
from the Pre-Funding Account, to the extent available, and deposit such
amount in the Collection Account for payment to the Holders of the
Securities on such Distribution Dates, in an amount equal to the
difference, if any, between (x) the sum of the amount of interest payable
to the Noteholders on such Distribution Date and the amount of interest
payable to the Certificateholders on such Distribution Date and (y) that
portion of the Available Amount allocated to make such interest payments to
Noteholders and Certificateholders, respectively, on such Distribution
Dates. On such Distribution Dates, such funds, if any, shall be used first
-----
to pay to the Noteholders, to the extent available, the Pre-Funding
Earnings so withdrawn such that the Noteholders will receive such amounts
of interest due on such Distribution Date, and second, to pay to the
------
Certificateholders, to the extent available, the remaining Pre-Funding
Earnings so withdrawn such that the Certificateholders will receive such
amounts of interest due on such Distribution Date.
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(iv) On the Distribution Dates occurring in September, October
and November of 1996, the Owner Trustee shall withdraw monies on deposit in
the Capitalized Interest Account, to the extent available, and deposit such
amount in the Collection Account for payment to the Holders of the
Securities on such Distribution Date, in an amount equal to the excess, if
any, of (x) the product of (1) one-twelfth of the current weighted average
of the Interest Rates and the Pass-Through Rate and (2) the undisbursed
funds (excluding investment earnings) in the Pre-Funding Account (as of the
last day of the related Due Period) over (y) the amount of any Pre-Funding
Earnings in the Pre-Funding Account that are available to pay interest on
the Securities on each such Distribution Date pursuant to clause (iii)
above. On such Distribution Dates, such funds, if any, shall be used first
-----
to pay to the Noteholders, to the extent available, the amount so withdrawn
such that the Noteholders will receive such amounts of interest due on such
Distribution Date, and second, to pay to the Certificateholders, to the
------
extent available, the amount so withdrawn such that the Certificateholders
will receive such amounts of interest due on such Distribution Date.
(v) On the Distribution Dates occurring in September, October and
November 1996, the Owner Trustee shall withdraw the difference between the
amount on deposit in the Capitalized Interest Account on such Distribution
Date (after giving effect to all withdrawals therefrom pursuant to
subsection (iv) above) and the Required Capitalized Interest Amount for
such Distribution Date, and distribute the amount of such difference to the
holder of the GP Interest.
(vi) On the last day of the Funding Period (or, if such day is
not a Business Day, on the next succeeding Business Day) (but in no event
later than the November 1996 Distribution Date) the Servicer shall instruct
the Owner Trustee to withdraw from the Pre-Funding Account, and the Owner
Trustee shall so withdraw, the difference, if any, between (A) the sum of
the Original Pre-Funded Amount, and (B) all amounts theretofore withdrawn
from the Pre-Funding Account with respect to the purchase and transfer to
the Trust of Subsequent Contracts, and the Owner Trustee shall (x) if such
amount is less than or equal to $100,000, deposit such amount into the Note
Distribution Account or (y) if such amount is greater than $100,000 (i)
deposit the Note Pre-Funded Percentage of such amounts into the Note
Distribution Account and (ii) deposit the Certificate Pre-Funded Percentage
of such amounts into the Certificate Distribution Account. In the case of
(y) above, such amounts will be used to prepay the principal amount of each
class of the Notes pro rata and Certificates in accordance with the Note
Pre-Funded Percentage and the Certificate Pre-Funded Percentage,
respectively, and in the case of (x) above, such amounts will be used to
prepay the principal amount of the outstanding Class A-1 Notes, in either
case on the Distribution Date immediately following the Funding Period or
if the end of the Funding Period is on a Distribution Date, then on such
date.
(vii) Any Pre-Funding Earnings on deposit in the Pre-Funding
Account and all amounts remaining on deposit in the Capitalized Interest
Account on the last day
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of the Funding Period which were not distributed to the Securityholders or
the holder of the GP Interest pursuant to this Section 5.01(b) shall be
deposited by the Owner Trustee in the Collection Account on such date and
shall constitute part of the Available Amount on the first Distribution
Date thereafter or, if the end of the Funding Period is on a Distribution
Date, then on such date.
(c) The amounts on deposit in the accounts described in Sections
5.01(a) and (b) above shall, in the name of the Trust be invested solely in
Eligible Investments (which, in the case of the Reserve Account, may include
obligations of CIT so long as such obligations qualify as Eligible Investments),
except for the Pre-Funding Account which shall be invested solely in Permitted
Investments, that mature not later than one Business Day prior to the next
succeeding Distribution Date, in accordance with instructions provided to the
Trustees by the Servicer in writing. Notwithstanding the foregoing, amounts
deposited in the Collection Account from funds on deposit in the Pre-Funding
Account pursuant to Section 5.01(b) hereof may not be invested at all. All
Investment Earnings from the investment of funds in the accounts described in
Sections 5.01(a) and (b) hereof shall be deposited in the accounts in which such
Investment Earnings were earned. All Investment Earnings realized from any such
investment of funds in the Collection Account, Certificate Distribution Account
and Note Distribution Account (to the extent investment of such funds is
permitted hereunder) shall be for the benefit of the Servicer and may be
withdrawn by the Servicer on each Distribution Date pursuant to subsection
5.05(b)(ii) hereof. All Investment Earnings realized from any such investment
of funds in the Pre-Funding Account and the Capitalized Interest Account shall
be distributed as provided in Section 5.01(b) hereof. All Investment Earnings
realized from any such investment of funds in the Reserve Account shall remain
in such account and be a part of the Available Reserve Amount. An amount equal
to any net loss on investments in any Designated Account shall be deposited in
the Collection Account by the Servicer out of its own funds, without right to
reimbursement, immediately as realized. "Eligible Investments" are any of the
following:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage Corporation
(if then rated Aaa by Moody's), the Federal National Mortgage Association,
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America and which are non-callable;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustees or any Affiliate of
the Trustees, acting in their commercial capacity) incorporated under the
laws of the United States of America or any state thereof or the District
of Columbia (or any domestic branch or agency of a foreign bank) and
subject to supervision and examination by federal and/or state authorities,
so long as, at the time of such investment or contractual commitment
providing for such investment, the commercial paper or other short-term
debt obligations of such depository institution or trust company have been
rated at least P-1 or higher from Moody's and A-1+ from Standard & Poor's
(or, with respect to the investment of any amounts on deposit
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in the Reserve Account or the Certificate Distribution Account, such
Standard & Poor's rating shall be at least A-1); or any other demand or
time deposit or certificate of deposit which is fully insured by the
Federal Deposit Insurance Corporation and which is rated at least P-1 by
Moody's;
(iii) repurchase obligations with respect to any security
described in either clause (i) or (ii) above and entered into with any
institution whose commercial paper is at least rated P-1 from Moody's and
at least A-1+ by Standard & Poor's (or, with respect to the investment of
any amounts on deposit in the Reserve Account or the Certificate
Distribution Account, such Standard & Poor's rating shall be at least A-1);
(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America
or any State thereof which have a credit rating of at least A2 or P-1 from
Moody's and at least AAA from Standard & Poor's at the time of such
investment (or, with respect to the investment of any amounts on deposit in
the Reserve Account or the Certificate Distribution Account, such Standard
& Poor's rating shall be at least A);
(v) commercial paper having a rating of at least P-1 from Moody's
and at least A-1+ from Standard & Poor's (or, with respect to the
investment of any amounts on deposit in the Reserve Account or the
Certificate Distribution Account, such Standard & Poor's rating shall be at
least A-1) at the time of such investment; and
(vi) money market funds which are rated Aaa by Moody's and at
least AAAm or AAAm-G by Standard & Poor's, including funds which meet such
rating requirements for which the Trustees or an affiliate of the Trustees
serves as an investment advisor, administrator, shareholder servicing agent
and/or custodian or subcustodian, notwithstanding that (i) such Trustee or
an affiliate of such Trustee charges and collects fees and expenses from
such funds for services rendered, (ii) such Trustee charges and collects
fees and expenses for services rendered pursuant to this instrument, and
(iii) services performed for such funds and pursuant to this instrument may
converge at any time. (The Seller and the Servicer specifically authorize
such Trustee or an affiliate of such Trustee to charge and collect all fees
and expenses from such funds for services rendered to such funds, in
addition to any fees and expenses such Trustee may charge and collect for
services rendered pursuant to this instrument).
The Trustees may trade with themselves, each other, or with an
Affiliate on an arm's length basis in the purchase or sale of such Eligible
Investments. The Trustees shall not be liable for the selection of or for any
investment losses made at the written direction of the Servicer on any Eligible
Investments.
Section 5.02 Collections; Applications.
-------------------------
(a) Deposits to Collection Account. Subject to subsections 5.02(b)
------------------------------
and (c) hereof, the Servicer shall deposit in the Collection Account, no later
than two Business Days
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after the Closing Date, any amounts representing payments received on the
Contracts on or after the Initial Cut-off Date through and including the Closing
Date. Subject to subsections 5.02(b) and (c), the Servicer shall deposit in the
Collection Account, no later than two Business Days after each Subsequent
Transfer Date, any amounts representing payments received on the related
Subsequent Contracts on or after such Subsequent Cut-off Date. Subject to
subsections 5.02(b) and (c) hereof, the Servicer shall deposit in the Collection
Account as promptly as practicable (not later than the second Business Day)
following the receipt thereof by the Servicer, all amounts received in respect
of the Contracts, including all loan payments from Obligors, Net Liquidation
Proceeds and Insurance Proceeds.
(b) Monthly Deposits to Collection Account. Notwithstanding anything
--------------------------------------
in this Agreement to the contrary, for so long as, and only so long as,
(i) the Servicer or the direct or indirect parent of the Servicer
shall have and maintain a short-term debt rating of at least A-1 by
Standard & Poor's and either a short-term debt rating of P-1 or a long-term
debt rating of at least A2 by Moody's, or
(ii) the Servicer obtains a letter of credit, surety bond or
insurance policy (the "Servicer Letter of Credit") under which demands for
payment may be made to secure timely remittance of monthly collections to
the Collection Account and the Trustees are provided with a letter from
each Rating Agency to the effect that the utilization of such alternative
remittance schedule and any amendment required to be made to this Agreement
in connection therewith will not result in a qualification, reduction or
withdrawal of its then-current rating of the Notes or Certificates,
the Servicer may make the deposits to the Collection Account specified in
subsection 5.02(a) hereof on a monthly basis, but not later than the Deposit
Date following the last day of the Due Period within which such payments were
processed by the Servicer, in an amount equal to the net amount of such deposits
and payments which would have been made to the Collection Account during such
Due Period but for the provisions of this subsection 5.02(b). In the event that
the Servicer is permitted to make remittances of collections to the Collection
Account pursuant to Section 5.02(b)(ii) hereof, this Agreement may be modified,
to the extent necessary, without the consent of any Securityholder. The
Servicer shall notify the Trustees if the Servicer no longer complies with the
requirements set forth in clause (i) or (ii) above.
(c) Amounts Not Required to be Deposited. The Servicer shall not be
------------------------------------
required to deposit in the Collection Account amounts relating to the Contracts
attributable to the following:
(i) amounts received with respect to each Contract (or property
acquired in respect thereof) which has been purchased by CITSF or the
Servicer pursuant to this Agreement,
(ii) net investment earnings on funds deposited in the Collection
Account, the Certificate Distribution Account and the Note Distribution
Account,
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(iii) amounts received in respect of Post Cut-off Date Insurance
Add-ons,
(iv) any repossession profits on Liquidated Contracts,
(v) amounts received as liquidation proceeds, to the extent the
Servicer is entitled to reimbursement of Liquidation Expenses relating
thereto pursuant to Section 4.03 hereof, and
(vi) amounts to be reimbursed to the Servicer in respect of
Nonrecoverable Advances.
(d) Permitted Withdrawals from the Collection Account. The Indenture
-------------------------------------------------
Trustee will, from time to time as provided herein, make withdrawals from the
Collection Account of amounts deposited in said account pursuant to this
Agreement that are attributable to the Contracts for the following purposes:
(i) to make payments and distributions in the amounts and in the
manner provided for in Section 5.05 hereof;
(ii) to pay to CITSF or the Servicer with respect to each
Contract or property acquired in respect thereof that has been purchased
pursuant to Section 3.02, 4.02, 4.07 or 11.01 hereof, all amounts received
thereon and not required to be distributed to Noteholders and
Certificateholders;
(iii) to pay to the Buyer with respect to each Contract or
property acquired in respect thereof that has been purchased pursuant to
Section 11.02 hereof, all amounts received thereon and not required to be
distributed to Noteholders and Certificateholders;
(iv) to withdraw any amount deposited in the Collection Account
that was not required to be deposited therein; and
(v) to reimburse the Servicer out of liquidation proceeds for
Liquidation Expenses incurred by it, to the extent such expenses have not
otherwise been reimbursed.
Since, in connection with withdrawals pursuant to clauses (ii), (iii) and (v) of
this subsection 5.02(d), CITSF's entitlement thereto is limited to collections
or other recoveries on the related Contract, the Servicer shall keep and
maintain separate accounting, on a Contract by Contract basis, for the purpose
of justifying any withdrawal from the Collection Account pursuant to such
clauses. The Servicer shall keep and maintain an accounting for the purpose of
justifying any withdrawal from the Collection Account pursuant to clause (iv) of
this subsection 5.02(d).
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Section 5.03 Monthly Advances. With respect to each Contract as to
----------------
which there has been an Interest Shortfall during the related Due Period (other
than an Interest Shortfall arising from either (i) a Principal Prepayment in
Full of a Contract or (ii) a Contract which has been subject to a Relief Act
Reduction during such Due Period), the Servicer shall make a Monthly Advance in
the amount of such Interest Shortfall, but only to the extent the Servicer, in
its good faith judgment, expects to recover such Monthly Advance from subsequent
collections with respect to interest payments on such Contract made by or on
behalf of the Obligors or from Net Liquidation Proceeds or Insurance Proceeds
with respect to the related Contract. The Servicer shall not be obligated to
make any advance to the Trust in respect of the principal component of scheduled
payments on any Contract which is not paid during the Due Period in which it is
due.
The Servicer shall deposit any such Monthly Advance into the
Collection Account in next-day funds or immediately available funds no later
than 12:00 noon, New York time, on the related Deposit Date. The Servicer shall
be reimbursed for any such Monthly Advance from subsequent collections in
respect of interest on such Contract made by or on behalf of the Obligor, or
from Net Liquidation Proceeds or Insurance Proceeds with respect to such
Contract. If an unreimbursed Monthly Advance shall become a Nonrecoverable
Advance, the Servicer shall be reimbursed from collections on all the Contracts
in the Trust in the order of priority set forth in Section 5.05 hereof.
Section 5.04 Additional Deposits. CITSF, the Servicer or the Buyer,
-------------------
as the case may be, shall deposit into the Collection Account the aggregate
Purchase Price pursuant to Sections 3.02, 4.02, 4.07, 11.01 and 11.02 hereof, as
applicable. All remittances shall be made to the Collection Account, in next-
day funds or immediately available funds, no later than 12:00 noon, New York
time, on the related Deposit Date.
Section 5.05 Distributions.
-------------
(a) On or before the Determination Date preceding a Distribution Date,
the Servicer shall make a determination and inform the Indenture Trustee and the
Owner Trustee (and the Paying Agent, if any, appointed pursuant to the Trust
Agreement or the Indenture) of the following amounts with respect to the
preceding Due Period: (i) the aggregate amount of collections on the Contracts;
(ii) the aggregate amount of Monthly Advances to be remitted by the Servicer;
(iii) the aggregate Purchase Price of Contracts to be purchased by CITSF or the
Servicer; (iv) the aggregate amount to be distributed as principal and interest
on the Notes on the related Distribution Date; (v) the aggregate amount to be
distributed as principal and interest on the Certificates on the related
Distribution Date; (vi) the Servicer Payment; (vii) the amounts required to be
withdrawn from the Reserve Account for such Distribution Date in accordance with
Sections 5.05(b) and 5.06 hereof; (viii) any amounts to be deposited into the
Reserve Account pursuant to Section 5.05(b)(ix) and 5.06 hereof and (ix) the
aggregate amount of unreimbursed Monthly Advances to be reimbursed to the
Servicer.
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(b) On each Distribution Date the Indenture Trustee, based on the
instruction provided by the Servicer in subsection (a) above, shall withdraw the
Available Amount from the Collection Account and the Indenture Trustee or the
Paying Agent on behalf of the Indenture Trustee shall make the following
payments (to the extent sufficient funds are available therefor) in the
following order and priority:
(i) the Servicer Payment (to the extent not previously retained
by the Servicer) shall be paid to the Servicer;
(ii) the Note Interest Distribution Amount, including any overdue
Note Interest Distribution Amount, shall be deposited into the Note
Distribution Account, for pro rata payment to the Noteholders;
(iii) on and prior to the Cross-over Date, the Principal
Distribution Amount, including any overdue Principal Distribution Amount,
shall be deposited into the Note Distribution Account, for payment to the
Noteholders in the following order of priority (i) to the principal balance
of the Class A-1 Notes until the principal balance of the Class A-1 Notes
is reduced to zero; (ii) to the principal balance of the Class A-2 Notes
until the principal balance of the Class A-2 Notes is reduced to zero; and
(iii) to the principal balance of the Class A-3 Notes until the principal
balance of the Class A-3 Notes is reduced to zero;
(iv) the Certificate Interest Distribution Amount, including any
overdue Certificate Interest Distribution Amount, shall be deposited into
the Certificate Distribution Account, for payment to the
Certificateholders;
(v) prior to the Cross-over Date, the Principal Liquidation Loss
Amount, if any, shall be deposited into the Certificate Distribution
Account, for payment to the Certificateholders;
(vi) on and after the Cross-over Date, the Principal Distribution
Amount (to the extent not paid to Noteholders on the Cross-over Date) shall
be deposited into the Certificate Distribution Account, for payment to the
Certificateholders;
(vii) the Aggregate Allocated Loss Amount shall be deposited
into the Certificate Distribution Account, for payment to the
Certificateholders;
(viii) if CITSF or one of its affiliates is the Servicer, the
Servicing Fee (including any unpaid Servicing Fees for past Distribution
Dates) shall (to the extent not previously paid to the Servicer) be paid to
the Servicer;
(ix) the amount by which the Specified Reserve Amount for the
next Distribution Date exceeds the amount on deposit in the Reserve Account
shall be deposited into the Reserve Account; and
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(x) the balance, if any, remaining after the payments in clauses
(i) through (ix) above shall be distributed to the holder of the GP
Interest.
(c) On each Distribution Date, the Indenture Trustee and the Owner
Trustee shall distribute all amounts in the Note Distribution Account and the
Certificate Distribution Account, respectively, to the Noteholders and the
Certificateholders, respectively, as provided in the Indenture and Trust
Agreement respectively.
(d) The Holder of the GP Interest may at any time, without consent of
the Securityholders, sell, transfer, convey or assign in any manner its rights
to receive the distributions to be made pursuant to clause (b)(x) above and/or
distributions to be made to it from the Reserve Account, provided that (i) the
Rating Agency Condition is satisfied, (ii) the Holder of the GP Interest
provides to the Trustees an Opinion of Counsel that such action will not cause
the related Trust to be classified as an association (or publicly traded
partnership) taxable as a corporation for federal income tax purposes and (iii)
such transferee or assignee agrees in writing to take positions for federal
income tax purposes consistent with the federal income tax positions agreed to
be taken by the Holder of the GP Interest in the Basic Documents.
Section 5.06 Reserve Account. (a) On each Distribution Date, the
---------------
Owner Trustee shall deposit or cause to be deposited into the Reserve Account by
wire transfer of immediately available funds any amount it receives pursuant to
Section 5.05(b)(ix) of this Agreement, which amount shall be designated as being
for deposit in the Reserve Account. The Owner Trustee shall have the sole right
to make withdrawals from the Reserve Account. Amounts withdrawn from the
Reserve Account and paid to the Certificateholders, or the holder of the GP
Interest, as provided herein, shall not be required to be reimbursed to the
Reserve Account by the Trustees, the Securityholders, any Paying Agent or any
transferee thereof.
(b) In the event that the sum of the Certificate Interest Distribution
Amount (including any overdue Certificate Interest Distribution Amount),
Principal Liquidation Loss Amount and Principal Distribution Amount to be
distributed to the Certificateholders for any Distribution Date exceeds the
amount deposited in the Certificate Distribution Account pursuant to Sections
5.05(b)(iv), 5.05(b)(v) and 5.05(b)(vi) hereof, respectively, on such
Distribution Date, the Servicer shall instruct the Owner Trustee in writing to
withdraw or cause to be withdrawn from the Reserve Account on or before the
related Deposit Date the lesser of the amount of such excess and the Available
Reserve Amount (the "Draw Amount"). The Owner Trustee shall deposit such
amount, or cause such amount to be deposited, into the Certificate Distribution
Account no later than 12:00 noon, New York City time, on such Deposit Date.
(c) On or before the Deposit Date immediately preceding the
Certificate Final Distribution Date, the Servicer shall instruct the Owner
Trustee to withdraw or cause to be withdrawn from the Reserve Account an amount
(the "Final Draw Amount") equal to the lesser of (i) the Certificate Balance and
the Aggregate Allocated Loss Amount on the Certificate Final Distribution Date,
after giving effect to distributions of the Principal Distribution Amount and
the Aggregate Allocated Loss Amount to Certificateholders on the Certificate
Final Distribution
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Date pursuant to Section 5.05(b)(vi) and (vii) hereof and (ii) the amount on
deposit in the Reserve Account, after giving effect to any withdrawal from the
Reserve Account pursuant to clause (b) of this Section 5.06. The Owner Trustee
shall deposit such amount, or cause such amount to be deposited, into the
Certificate Distribution Account no later than 12:00 noon, New York City time,
on such Deposit Date.
(d) On each Distribution Date, the Owner Trustee shall pay to the
holder of the GP Interest any amounts which remain on deposit in the Reserve
Account after making the payments contemplated by the foregoing subparagraphs
(b) and (c), and which are in excess of the Specified Reserve Amount (as
determined by the Servicer) for the following Distribution Date. On the
Certificate Final Distribution Date, the Owner Trustee shall pay to the holder
of the GP Interest any amounts remaining on deposit in the Reserve Account after
paying the Final Draw Amount to the Certificateholders as contemplated by
subparagraph (c) above.
(e) If at any time the Reserve Account ceases to be maintained as an
Eligible Account as required by Section 5.01(a) hereof, the Owner Trustee 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 Reserve Account
meeting the conditions specified in Section 5.01(a) hereof and shall transfer
any and all cash and investments in the Reserve Account to such new Reserve
Account.
Section 5.07 Net Deposits. As an administrative convenience, the
------------
Servicer shall be permitted to make deposits of collections, Monthly Advances
and the aggregate Purchase Price of Contracts for, or with respect to, a Due
Period net of distributions to be made to the Servicer with respect to such Due
Period (including, without limitation, the Servicing Fee, reimbursement of
Nonrecoverable Advances and amounts to be deducted in the definition of
"Available Amount"). The Servicer, however, shall account to the Trustees and
the Securityholders as if all such deposits and distributions were made on an
aggregate basis for each type of payment or deposit.
Section 5.08 Statements to Securityholders. On each Distribution
-----------------------------
Date, the Servicer shall prepare and provide to the Trustees, to be delivered on
the Distribution Date to each Securityholder, the Monthly Report which shall be
in substantially the form of Exhibit G hereto, setting forth for the related Due
Period the following information (with such additional information as the
Servicer shall elect to include therein):
(i) the amount of collections on the Contracts during the
immediately preceding Due Period;
(ii) the Available Amount for payment of all amounts
distributable in respect of the Securities and the Servicer Payment;
(iii) the amount of the distribution allocable to principal of
each class of the Notes and to the Certificate Balance of the Certificates,
including any overdue principal;
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(iv) the amount of the distribution allocable to interest on or
with respect to each class of Securities, including any overdue interest;
(v) the Pool Balance, the Note Pool Factors and the Certificate
Pool Factor as of the end of the related Due Period;
(vi) the Servicer Payment for such Distribution Date;
(vii) the amount of Monthly Advances, if any, such date;
(viii) the amount, if any, withdrawn from the Reserve Account
and distributed to the Certificateholders with respect to such Distribution
Date;
(ix) the Available Reserve Amount, after giving effect to any
deposit to or withdrawal from the Reserve Account with respect to such
Distribution Date, and such amount expressed as a percentage of the Pool
Balance;
(x) the aggregate principal balance of all Contracts which were
delinquent 30, 60, 90 and 180 days or more as of the last day of the
related Due Period;
(xi) the amount of investment earnings, net of losses and
investment expenses, on amounts on deposit in the Collection Account;
(xii) during the Funding Period, the amount of funds on deposit
in the Pre-Funding Account;
(xiii) during the Funding Period, the number and aggregate
principal balance of Subsequent Contracts;
(xiv) during the Funding Period, the number and aggregate
principal balance of Subsequent Contracts purchased by the Trust on the
related Distribution Date;
(xv) during the Funding Period, the amount, if any, withdrawn
from the Capitalized Interest Account to make payments of interest on the
Securities;
(xvi) during the Funding Period, the amount remaining on deposit
in the Capitalized Interest Account;
(xvii) during the Funding Period, the amount of investment
earnings, net of losses and investment expenses, on amounts on deposit in
the Pre-Funding Account;
(xviii) during the Funding Period, the amount of investment
earnings, net of losses and investment expenses, on amounts on deposit in
the Capitalized Interest Account;
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(xix) on the Distribution Date immediately following the end of
the Funding Period (or if the Funding Period ends on a Distribution Date on
such Distribution Date), the aggregate principal amount and percentage of
each of the class of Notes and Certificates which are being redeemed;
(xx) the aggregate principal balance of all Contracts which
became Liquidated Contracts during the related Due Period;
(xxi) the number and aggregate principal amount of Contracts
which were prepaid, in part or in whole, during the related Due Period;
(xxii) the aggregate outstanding principal balance of each class
of the Notes as of such Distribution Date after giving effect to any
distributions on such Distribution Date;
(xxiii) the Certificate Balance as of such Distribution Date
after giving effect to any distributions thereon and reductions thereto on
such Distribution Date;
(xxiv) the amount, if any, by which the amount due to be
distributed to each class of Noteholders and Certificateholders exceeds the
actual amount distributed on the related Distribution Date to each class of
the Noteholders and Certificateholders, respectively;
(xxv) the Draw Amount, if any, and the Final Draw Amount (if
applicable) with respect to such Distribution Date;
(xxvi) the Specified Reserve Amount; and
(xxvii) the amount of the surplus to be distributed to the
holder of the GP Interest after all payments have been made in respect of
the Securities and the Servicer Payment has been paid.
Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law (where applicable law
specifies such date), the Servicer shall furnish or cause to be furnished to
each Person who at any time during such calendar year was a Securityholder, and
received any payment thereon, a statement containing the relevant amounts
described above for such calendar year. Such obligation shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided to the Securityholders pursuant to any requirements of the Code as from
time to time in force.
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ARTICLE VI
[RESERVED]
----------
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ARTICLE VII
THE COMPANY
-----------
Section 7.01 Representations of Company.
--------------------------
The Company hereby makes the following representations as to itself on
which the Owner Trustee and the Indenture Trustee on behalf of the Trust shall
rely in accepting the Contracts in trust and authenticating the Certificates and
the Notes, respectively. The representations are made as of the execution and
delivery of this Agreement, and shall survive the sale of the Contracts to the
Trust.
(i) Organization and Good Standing. The Company is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Company or on the Certificates or the transactions
contemplated by this Agreement.
(ii) Authorization; Binding Obligations. The Company has the
----------------------------------
power and authority to make, execute, deliver and perform this Agreement
and all of the transactions contemplated under this Agreement, and has
taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(iii) No Consent Required. The Company is not required to
-------------------
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of
which so to obtain would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the Company or
on the Certificates or the transactions contemplated by this Agreement.
(iv) No Violations. The execution, delivery and performance of
-------------
this Agreement by the Company will not violate any provision of any
existing law or regulation or any order or decree of any court or the
Articles of Incorporation or Bylaws of the Company, or constitute a
material breach of any mortgage, indenture, contract or
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other agreement to which the Company is a party or by which the Company may
be bound.
(v) Litigation. No litigation or administrative proceeding of or
----------
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Company have a material
adverse effect on the transactions contemplated by this Agreement.
Section 7.02 Merger or Consolidation of Company.
----------------------------------
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company, shall
be the successor of the Company hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Company shall promptly notify each
Rating Agency of any such merger to which it is a party and such merger shall
satisfy the Rating Agency Condition.
Section 7.03 Limitation on Liability of the Company and Others.
-------------------------------------------------
(a) Neither the Company nor any of the directors, officers, employees
or agents of the Company shall be under any liability to the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; notwithstanding anything herein to
the contrary, no party to this Agreement shall have any recourse against the
Company for any actions taken, or failed to be taken, by the Company.
(b) The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
(c) The Company shall not be under any obligation to appear in,
prosecute or defend any legal action which arises under this Agreement.
Section 7.04 The Company May Own Securities.
------------------------------
The Company and any Person controlling, controlled by, or under common
control with the Company may in its individual or any other capacity become the
owner or pledgee of Notes or Certificates with the same rights as it would have
if it were not the Company or an Affiliate thereof, except as otherwise provided
in the definition of "Noteholder" or "Certificateholder", respectively. Notes
and Certificates so owned by or pledged to the Company or such controlling or
commonly controlled Person shall have an equal and proportionate benefit
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under the provisions of this Agreement, without preference, priority or
distinction as among all of the Notes and Certificates.
Section 7.05 Indebtedness of and Sale of Assets by the Company.
-------------------------------------------------
(a) The Company will not incur any material indebtedness (other than
indebtedness which is contemporaneously repaid upon the issuance of securities
by the Company or by selling any assets in connection therewith to the extent
permitted by its Certificate of Incorporation) nor will it sell all or
substantially all of its assets, if either such action would result in the
downgrading by Moody's of any outstanding securities of the Company or any trust
or other entity of which the Company is the settlor or depositor, which
securities are then rated by Moody's; provided, however, nothing contained in
-------- -------
this Agreement shall prohibit the Company from issuing any securities or acting
as the settlor or depositor of any trust or other entity (or selling any assets
in connection therewith) to the extent permitted by its Certificate of
Incorporation.
(b) Prior to the issuance of any securities by the Company, the
Company shall give at least five days' prior written notice to Moody's with a
copy of the Prospectus or Preliminary Prospectus Supplement and, on the issuance
date, a copy of the agreements pertaining to such securities of the type in the
definition of Basic Documents.
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ARTICLE VIII
THE SERVICER; REPRESENTATIONS AND INDEMNITIES
---------------------------------------------
Section 8.01 Representations of CITSF.
------------------------
CITSF hereby makes the following representations on which the Owner
Trustee and the Indenture Trustee on behalf of the Trust shall rely in accepting
the Contracts in trust and authenticating the Certificates and the Notes,
respectively. The representations are made as of the execution and delivery of
this Agreement, and shall survive the sale of the Contracts to the Trust.
(i) Organization and Good Standing. CITSF is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged.
CITSF is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of CITSF or on the Certificates or the transactions contemplated
by the Agreement.
(ii) Authorization; Binding Obligations. CITSF has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of CITSF
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(iii) No Consent Required. CITSF is not required to obtain the
-------------------
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of
which so to obtain would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of CITSF or on the
Certificates or the transactions contemplated by the Agreement.
(iv) No Violations. The execution, delivery and performance of
-------------
this Agreement by CITSF will not violate any provision of any existing law
or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of CITSF, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which CITSF is a party
or by which CITSF may be bound.
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(v) Litigation. No litigation or administrative proceeding of or
----------
before any court, tribunal or governmental body is currently pending, or to
the knowledge of CITSF threatened, against CITSF or any of its properties
or with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of CITSF have a material adverse effect on
the transactions contemplated by this Agreement.
Section 8.02 Liability of Servicer, Indemnities.
----------------------------------
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Servicer under the Basic
Documents and shall have no other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising (x) out of or resulting from the
negligent use or operation by the Servicer of a Financed Vehicle, to the
extent such loss is not reimbursed pursuant to any Insurance Policy, the
Servicer's Errors and Omission Policy or any fidelity bond or (y) from any
failure by the Servicer to comply with the provisions of this Agreement
relating to Forced Placed Insurance (including any violation by the
Servicer of any applicable law in connection with the force placement of
insurance or the receipt of any commissions related thereto) which
materially and adversely affects the Trust's interest in any Contract.
(ii) Subject to Section 8.04(a) hereof, the Servicer will defend
and indemnify the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from
any negligent action taken, or negligently failed to be taken, by the
Servicer with respect to any Financed Vehicle, to the extent such loss is
not reimbursed pursuant to any Insurance Policy, the Servicer's Errors and
Omission Policy or any fidelity bond.
(iii) The Servicer agrees to pay, and shall indemnify, defend,
and hold harmless the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders from and against, any taxes that may
at any time be asserted with respect to the transfer of the Contracts to
the Trust, including, without limitation, any sales, gross receipts,
personal or real property, privilege or license taxes (but not including
any federal, state or other taxes arising out of the creation of the Trust
and the issuance of the Notes and Certificates or distributions with
respect thereto) and costs, expenses and reasonable counsel fees in
defending against the same.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out
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of, or was imposed upon such Persons, through the willful misfeasance,
negligence, 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.
(v) The Servicer shall indemnify, defend, and hold harmless from
and against, and pay to the Trustees 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 contained in
accordance with the terms and conditions herein and in the Indenture and
the Trust Agreement, as the case may be, except to the extent that such
cost, expense, loss, claim, damage or liability: (a) shall be due to the
willful misfeasance, gross negligence or bad faith of such Trustee; (b)
relates to any tax other than the taxes with respect to which the Company
shall be required to indemnify such Trustee pursuant to this Agreement; (c)
shall arise from such Trustee's breach of any of its representations or
warranties set forth in the Trust Agreement or the Indenture, as
applicable; (d) shall be one as to which the Company is required to
indemnify such Trustee or (e) shall arise out of or be incurred in
connection with the acceptance or performance by such Trustee of the duties
of successor Servicer hereunder.
Indemnification under this Section 8.02 shall include reasonable fees
and expenses of counsel in any litigation appointed by the Servicer and
reasonably satisfactory to the indemnitee, provided that the Servicer shall only
be required to pay the fees and expenses of one counsel in any single litigation
(or related proceedings) for all indemnitees; provided, however, if in the
-------- -------
written opinion of counsel reasonably satisfactory to the Servicer, the
interests of an indemnitee and the Servicer conflict such that the Servicer and
such indemnitee may not both be represented by such counsel, upon ten days prior
written notice to the Servicer, such indemnitee may hire one other counsel and
the indemnification under this Section 8.02 shall also include the reasonable
fees and expenses of such other counsel. If the Servicer shall have made any
indemnity payments pursuant to this Section 8.02 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer without interest. The indemnities under this
Section 8.02 shall survive the resignation or removal of an indemnitee, or the
termination of the Trust Agreement and this Agreement.
Section 8.03 Merger or Consolidation of Servicer.
-----------------------------------
Any person into which the Servicer may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer (which Person assumes the obligations of the
Servicer), shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
--------
however, that the successor or surviving Person to the Servicer shall satisfy
- -------
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify each Rating Agency of any such merger to which it is a
party.
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Section 8.04 Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer, nor any of the shareholders, Affiliates,
directors, officers, employees or agents of the Servicer shall be under any
liability to the Trust or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
-------- -------
shall not protect the Servicer, the Company or any such Person against any
liability which otherwise would be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason or reckless
disregard of obligations and duties hereunder.
(b) The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
(c) Except as arises from its duties as Servicer hereunder, the
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action which arises under this Agreement and which in its opinion may
involve it in any expenses or liability; provided, however, that the Servicer
-------- -------
and the Company may in its discretion undertake any such action which it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust payable from the Collection Account and the Servicer
and the Company shall be entitled to be reimbursed therefor out of the
Collection Account.
Section 8.05 Servicer Not To Resign. The Servicer shall not resign
----------------------
from its obligations and duties under this Agreement except upon determination
that the performance of its duties shall no longer be permissible under
applicable law, compliance with which could not be realized without material
adverse impact on the Servicer's financial condition. Notice of any such
determination permitting the resignation of the Servicer shall be communicated
to the Trustees and the Rating Agencies 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 permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No such resignation shall become effective until the
Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 9.02
hereof.
Section 8.06 Assignment of Servicing.
-----------------------
The Servicer may sell, transfer, assign or convey its rights as
Servicer to any Eligible Servicer, upon written notice to the Trustees and the
Rating Agencies, without the consent of the Securityholders or the Trustees,
provided that the Rating Agency Condition is satisfied.
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ARTICLE IX
EVENTS OF TERMINATION
---------------------
Section 9.01 Events of Termination.
---------------------
"Event of Termination" means the occurrence of any of the following:
--------------------
(a) Any failure by the Servicer to make any deposit into an account
required to be made hereunder which failure continues unremedied for a period of
five Business Days after the Servicer has become aware that such deposit was
required;
(b) Any failure by the Servicer duly to observe or perform in any
material respect any covenant or agreement in this Agreement (other than
pursuant to Section 9.01(a)) hereof, which materially and adversely affects the
rights of the Securityholders and which continues unremedied for 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Indenture Trustee, the
Owner Trustee or the Company or to the Servicer, the Company and the Trustees by
Holders of Notes or Certificates evidencing not less than 25% of the aggregate
outstanding principal amount of the Notes, or the outstanding Certificate
Balance, respectively; provided however, that if any such failure to observe or
-------- -------
perform a term, covenant or agreement relates solely to one or more Contracts
that have become Repurchased Contracts in accordance with Sections 3.02 and
4.07, then such failure to observe or perform shall not give rise to an Event of
Termination hereunder;
(c) Any assignment or delegation by the Servicer of its duties or
rights hereunder except as specifically permitted hereunder, or any attempt to
make such an assignment or delegation;
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
(e) The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
(f) Any disqualification of the Servicer as an Eligible Servicer.
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If an Event of Termination has occurred and is continuing, the
Indenture Trustee (or, if no Notes are outstanding, the Owner Trustee) may, and
at the written direction of Holders of Notes evidencing not less than a majority
of the aggregate outstanding principal amount of the Notes (or, if no Notes are
outstanding, by the Holders of Certificates evidencing not less than a majority
of the Certificate Balance) shall, unless prohibited by applicable law,
terminate all (but not less than all) of the rights and obligations of the
Servicer with respect to the Trust hereunder and in and to the Contracts, and
the proceeds thereof (such termination being herein called a "Service
Transfer"), whereupon (subject to applicable law) all authority and power of the
Servicer under this Agreement, whether with respect to the Contracts, the
Contract Files or otherwise, shall pass to and be vested in the Indenture
Trustee pursuant to and under this Section 9.01 (however, if no Notes are
outstanding, such authority shall pass to and be vested in the Owner Trustee
pursuant to and under this Section 9.01); and, without limitation, such Trustee
is authorized and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
(including, without limitation, documents required to make such Trustee or a
successor Servicer the sole lienholder or legal title holder of record of each
Financed Vehicle), and to do any and all acts or things necessary or appropriate
to effect the purposes of such notice of termination. Each of CITSF and the
Servicer agrees to cooperate with such Trustee in effecting the termination of
the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to such Trustee for administration by it of all cash
amounts which shall at the time be held by the Servicer for deposit, or have
been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts and the execution of any documents required to make
such Trustee or a successor Servicer the sole lienholder or legal title holder
of record in respect of each Financed Vehicle. The Servicer shall be entitled
to receive any other amounts which are payable to the Servicer under this
Agreement (including amounts payable to it with respect to the period ending on
the date of the Service Transfer), at the time of the termination of its
activities as Servicer, to the extent that funds in the Collection Account are
available for the payment thereof without reducing the amount of distributions
that would be made to Holders of the Notes and Certificates (or, if funds are
not sufficient therefor at the time of such termination, on the first
Distribution Date on which funds are sufficient therefor). The Servicer shall
transfer to the successor Servicer (i) the Servicer's records relating to the
Contracts in such electronic form as the successor Servicer may reasonably
request and (ii) the Contracts and any of the Contract Files in the Servicer's
possession.
Section 9.02 Indenture Trustee to Act; Appointment of Successor.
--------------------------------------------------
On and after the time the Servicer receives a notice of termination
pursuant to Section 9.01 hereof or a notice of determination pursuant to Section
8.05 hereof, the Indenture Trustee (or, if no Notes are outstanding, the Owner
Trustee) or any successor Servicer shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such
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Service Transfer; provided, however, that (i) the Indenture Trustee (or, if no
-------- -------
Notes are outstanding, the Owner Trustee) or any successor Servicer will not
assume any obligations of CITSF pursuant to Section 3.02 hereof or be obligated
to deposit any net loss on an investment directed by a predecessor Servicer
pursuant to Section 5.01(c) hereof, and (ii) the Indenture Trustee (or, if no
Notes are outstanding, the Owner Trustee) or any successor Servicer shall not be
liable for any acts or omissions of the Servicer occurring prior to such Service
Transfer or for any breach by CITSF of any of its obligations contained herein
or in any related document or agreement. The Indenture Trustee and any successor
Servicer shall have no responsibility for failure of CITSF and any predecessor
Servicer to deliver to the Indenture Trustee or such successor Servicer any
property or funds belonging to the Trust, including but not limited to the
funds, records, Contracts and Contract Files. As compensation therefor, the
Indenture Trustee shall, except as provided in this Section 9.02, be entitled to
such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, the
Indenture Trustee (or, if no Notes are outstanding, the Owner Trustee) or any
successor Servicer may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, an Eligible Servicer as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Indenture Trustee (or, if
no Notes are outstanding, the Owner Trustee) may make such arrangements for the
compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such compensation shall,
-------- -------
without the written consent of not less than 66-2/3% of the principal amount of
the Notes and Certificate Balance of the Certificates, be in excess of the
Servicing Fee calculated based on a Servicing Fee Rate of 1.00%. The Indenture
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
Section 9.03 Notification to Securityholders.
-------------------------------
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustees, and the
Securityholders at their respective addresses appearing on the Certificate
Register and the Note Register and to each Rating Agency.
(b) Within 10 days following any termination or appointment of a
successor to the Servicer pursuant to this Article IX, the Trustees shall give
written notice thereof to the Certificateholders and Noteholders at their
respective addresses appearing on the Certificate Register and the Note
Register.
(c) The Indenture Trustee shall give written notice to each Rating
Agency at least 30 days prior to the date upon which any Eligible Servicer
(other than the Indenture
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Trustee) is to assume the responsibilities of Servicer pursuant to Section 9.02
hereof, naming such successor Servicer.
Section 9.04 Rights to Direct Trustees and Waiver of Events of
-------------------------------------------------
Termination.
- -----------
Holders of Notes or Certificates evidencing not less than 25% of the
aggregate outstanding principal amount of the Notes or 25% of the Certificate
Balance, respectively, shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Indenture
Trustee or the Owner Trustee, respectively, or exercising any trust or power
conferred on the Trustees; provided, however, that the Trustees shall have the
-------- -------
right to decline to follow any such direction which such Trustee (being advised
by counsel) determines that the action so directed may not lawfully be taken, or
if such Trustee in good faith shall, by a Responsible Officer or Officers of
such Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Noteholders or Certificateholders not parties to such direction; provided
further that nothing in this Agreement shall impair the right of the Trustees to
take any action deemed proper by such Trustee and which is not inconsistent with
such direction by the Noteholders or Certificateholders.
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal amount of the Notes (or, if all of the Notes have been
paid in full and the Indenture has been discharged in accordance with its terms,
Certificates evidencing not less than a majority of the Certificate Balance)
may, on behalf of the Noteholders and Certificateholders, waive any past Event
of Termination hereunder and its consequences (except a continuing failure to
make any required deposits to or payments from the Collection Account and the
other accounts contemplated herein in accordance with this Agreement, which
default cannot be waived without the consent of all Securityholders) and, upon
any such waiver, such Event of Termination shall cease to exist and shall be
deemed to have been cured for every purpose of this Agreement; but no such
waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon.
Section 9.05 Effect of Transfer.
------------------
(a) After the Service Transfer, the Indenture Trustee or successor
Servicer may notify the Obligors to make payments directly to the successor
Servicer that are due under the Contracts after the effective date of the
Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the successor Servicer shall have all of such
obligations, except that the replaced Servicer shall remain liable for any
liability of the replaced Servicer hereunder that was already accrued at the
time of the Service Transfer and except that the replaced Servicer will transmit
or cause to be transmitted directly to the successor Servicer for its own
account, promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the
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successor Servicer to collect them) received as payments upon or otherwise in
connection with the Contracts.
(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities and other
agreements of the Servicer and CITSF) other than those relating to the
management, administration, servicing or collection of the Contracts; provided,
--------
however, that a replaced Servicer's indemnities hereunder shall not be
- -------
applicable to actions or omissions by the successor Servicer.
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ARTICLE X
[RESERVED]
----------
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ARTICLE XI
OPTIONAL PURCHASE AND AUCTION SALE
----------------------------------
Section 11.01 Optional Purchase of All Contracts.
----------------------------------
On any Distribution Date on which the Pool Balance as of the last day
of the related Due Period is 10% or less of the Initial Pool Balance, CITSF
shall have the option to purchase the Contracts (including the defaulted
Contracts), any Financed Vehicles in the Trust relating to defaulted Contracts
and all rights relating to the Contracts under all Insurance Policies. To
exercise such option, CITSF shall notify the Trustees and the Depository, if
any, in writing, no later than the Determination Date succeeding such Due
Period; provided, however, that CITSF shall not effect any such purchase if the
-------- -------
long-term unsecured obligations of its parent are rated less than Baa3 by
Moody's or less than BBB by Standard & Poor's, unless the Trustees shall have
received an Opinion of Counsel acceptable to them that payment of the purchase
price to the Securityholders will not constitute a voidable preference or a
fraudulent transfer under the United States Bankruptcy Code. CITSF shall effect
such purchase by depositing, in accordance with Section 5.04 hereof, the
aggregate Purchase Price of the Contracts (less any other amounts deposited, or
to be deposited, by the Servicer in the Collection Account with respect to the
Contract pursuant to Section 5.02 hereof) plus the appraised value of any other
property held by the Trust and purchased by CITSF (less liquidation expenses) in
the Collection Account on the Deposit Date immediately succeeding such Due
Period; provided, however, in no event shall the amount so deposited, when added
-------- -------
to the amounts on deposit in the Collection Account on such date and available
for distribution to Securityholders on the next Distribution Date, be less than
the amount required to pay all accrued and unpaid interest on the Notes, the
remaining principal balance of the Notes, accrued and unpaid interest on the
Certificates and the Certificate Balance, after giving effect to payment of the
Servicer Payment. The effective date of such purchase shall be the last day of
such Due Period.
Section 11.02 Mandatory Sale of all Contracts. In accordance with
-------------------------------
the procedures and schedule set forth in Exhibit H hereto (the "Auction
Procedures"), the Indenture Trustee (or, if the Notes have been paid in full and
the Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall conduct an auction (the "Auction") of the Contracts remaining in
the Trust (such Contracts hereinafter referred to as the "Auction Property") in
order to effect a termination of the Trust pursuant to Section 7.1 of the Trust
Agreement on the second Distribution Date succeeding the related Due Period on
which the Pool Balance is 5% or less of the Initial Pool Balance. Such Auction
shall be conducted within 10 days following the first Distribution Date on which
the Pool Balance as of the last day of the related Due Period is 5% or less of
the Initial Pool Balance. CITSF and the Company may, but shall not be required
to, bid at the Auction. Such Trustee shall sell and transfer the Auction
Property to the highest bidder therefor at the Auction provided that:
(i) the Auction has been conducted in accordance with the Auction
Procedures;
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(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for recreational vehicle retail installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing that
at least two of such bidders (including the winning bidder) are
participants in the market for recreational vehicle retail installment sale
contracts willing and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not
less than the aggregate fair market value of the Auction Property (as
determined by such Trustee in its sole discretion);
(v) any bid submitted by CITSF, the Company or any affiliate of
either of them shall reasonably represent the fair market value of the
Auction Property, as independently verified and represented in writing by a
qualified independent third party evaluator (which may include the Advisor
or an investment banking firm) selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of
the Auction Property which will be at least equal to the sum of (A) the
greater of (1) the aggregate Purchase Price for the Contracts (including
defaulted Contracts), plus the appraised value of any other property held
by the Trust (less liquidation expenses), or (2) an amount that, when added
to amounts on deposit in the Collection Account and available for
distribution to Securityholders on the second Distribution Date following
the consummation of such sale (the "Liquidation Distribution Date"), would
result in proceeds sufficient to distribute to Securityholders the amounts
of interest due to the Securityholders for such Distribution Date and any
unpaid interest payable to the Securityholders with respect to one or more
prior Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the Servicer Payment and, unless the
Servicer agrees to exclude it from the minimum bid requirement, if CITSF or
any affiliate is the Servicer, the Servicing Fee (including any unpaid
Servicing Fees).
Provided that all of the conditions set forth in clauses (i) through
(vi) have been met, such Trustee shall sell and transfer the Auction Property,
without representation, warranty or recourse, to such highest bidder in
accordance with and upon completion of the Auction Procedures. Such Trustee
shall deposit the purchase price for the Auction Property in the Collection
Account at least one Business Day prior to such second succeeding Distribution
Date. In addition, the Auction must stipulate that the Servicer be retained to
service the Contracts on terms substantially similar to those in the Agreement.
In the event that any of such conditions are not met or such highest bidder
fails or refuses to comply with any of the Auction Procedures, such Trustee
shall decline to consummate such sale and transfer. In the event such sale and
transfer is not consummated in accordance with the foregoing, however, such
Trustee may from
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time to time in the future, but shall not under any further obligation to,
solicit bids for sale of the assets of the Trust upon the same terms and
conditions as set forth above.
If any of the foregoing conditions are not met, such Trustee shall
decline to consummate such sale and shall not be under any obligation to solicit
any further bids or otherwise negotiate any further sale of Contracts remaining
in the Trust. In such event, however, such Trustee may from time to time solicit
bids in the future for the purchase of such Contracts pursuant to this Section
11.02.
If applicable, the Indenture Trustee shall provide notice to the Owner
Trustee of the termination of the Trust pursuant to this Section 11.02 as soon
as practicable upon the consummation of the mandatory sale of the Contracts
pursuant to this Section 11.02.
Section 11.03 Contract Repurchase Procedures. Promptly after any
------------------------------
repurchase of a Contract by CITSF referred to in Section 3.02 hereof, or any
purchase of a Contract by CITSF referred to in Section 11.01 hereof, or any
purchase of a Contract by the Servicer pursuant to Section 4.02 or 4.07 hereof,
or any purchase of a Contract by a Person pursuant to Section 11.02 hereof, the
Owner Trustee shall execute such documents as are presented to it by CITSF, the
Servicer or such Person, as applicable (the "Buyer"), and are reasonably
necessary to convey the Repurchased Contract to the Buyer, and transfer all
right, title and interest in the Contract and the Related Contract Assets
(including any payments in respect of the Contract or the related Financed
Vehicle received after the last day of the Due Period immediately preceding the
Deposit Date on which such Buyer paid the Purchase Price for such Contract) to
such Buyer.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
Section 12.01 Amendment. This Agreement may be amended in writing by
---------
the Company, the Servicer and the Owner Trustee (and, in the event such
amendments affect the Indenture Trustee, the Indenture Trustee) without prior
notice to or the consent of any of the Securityholders, and in the case of
clauses (v) and (vi), upon satisfaction of the Rating Agency Condition, (i) to
correct manifest error or cure any ambiguity, (ii) to correct or supplement any
provisions herein or therein which may be inconsistent with any other provisions
herein or therein, as the case may be, (iii) to add or amend any provisions as
requested by Moody's or Standard & Poor's in order to maintain or improve any
rating of the Notes or Certificates (it being understood that, after the Closing
Date, neither the Owner Trustee, the Indenture Trustee, the Company nor CITSF is
obligated to maintain or improve such rating); (iv) to add to the covenants,
restrictions or obligations of the Company, the Servicer, the Owner Trustee or
the Indenture Trustee or to provide for the delivery of or substitution of a
Servicer Letter of Credit; (v) to evidence and provide for the acceptance of the
appointment of a successor trustee with respect to the Owner Trust Estate and
add to or change any provisions as shall be necessary to facilitate the
administration of the trusts under the Trust Agreement by more than one trustee
pursuant to Article VI of the Trust Agreement or (vi) to add, change or
eliminate any other provisions, provided that an amendment pursuant to this
clause (vi), shall not, as evidenced by an Opinion of Counsel for the Servicer
or the Company, adversely affect in any material respect the interests of the
Trust, any Noteholder or any Certificateholder.
This Agreement may also be amended in writing from time to time by the
Company, the Servicer and the Owner Trustee (and, in the event such amendments
affect the Indenture Trustee, the Indenture Trustee), with the consent of
Holders of Certificates evidencing not less than a majority of the Certificate
Balance and the consent of Holders of Notes evidencing not less than a majority
of the aggregate 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
Certificateholders or Noteholders, respectively; provided, however, that no such
-------- -------
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that shall be required to be
made on any Certificate or Note, respectively, the Contract Rate, the Pass-
Through Rate or the Interest Rates or (ii) reduce the aforesaid percentage
requirement to consent to any such amendment, without the consent of the Holders
of all Certificates and Notes then outstanding.
Promptly after the execution of any amendment or consent pursuant to
this Section, the Owner Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and each Noteholder (but
only if such amendment is pursuant to the second paragraph of this Section
12.01) and, in all cases, to each Rating Agency, which notification will be
prepared by the Servicer and delivered to such Trustee.
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<PAGE>
It shall not be necessary for the consent of the Certificateholders or
the Noteholders pursuant to this Section 12.01 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 and
of evidencing the authorization of the execution thereof by Certificateholders
or the Noteholders, as the case may be, shall be subject to such reasonable
requirements as such Trustee may prescribe.
Such Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Trustee's own rights, duties or immunities under
this Agreement or otherwise. However, no such amendment shall be permitted
without the consent of the Trustee whose rights, duties or immunities are being
modified.
In connection with any amendment pursuant to this Section 12.01, each
of the Trustees shall be entitled to receive an Opinion of Counsel to the
Servicer to the effect that such amendment is authorized or permitted by this
Agreement.
Upon the execution of any amendment or consent pursuant to this
Section 12.01, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Holder of Securities theretofore or thereafter issued hereunder shall
be bound thereby.
Section 12.02 Protection of Title to Trust. (a) On or prior to the
----------------------------
Closing Date, the Servicer shall file the following fully executed UCC-1
financing statements to the:
(i) UCC-1 financing statement executed by CITCF-NY as debtor,
naming CITSF as secured party and filed in New Jersey and Oklahoma City to
perfect the sale from CITCF-NY to CITSF;
(ii) UCC-1 financing statement executed by CITSF as debtor,
naming the Company as secured party and filed in New Jersey and Oklahoma
City to perfect the sale from CITSF to the Company;
(iii) UCC-1 financing statement executed by the Company as
debtor, naming the Owner Trustee as secured party and filed in New Jersey
and Oklahoma City to perfect the sale from the Company to the Owner
Trustee; and
(iv) UCC-1 financing statement executed by the Owner Trustee as
debtor, naming the Indenture Trustee as secured party and filed in New
Jersey, Oklahoma City, and Delaware to perfect the security interest
granted in the Collateral by the Indenture.
The Servicer shall cause to be filed all necessary continuation
statements of the UCC-1 financing statements referred to in the previous
sentence on which it is the debtor.
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<PAGE>
From time to time the Servicer shall, subject to the following
sentence, take and cause to be taken such actions and execute such documents as
are necessary to perfect and protect the Noteholders' and Certificateholders'
interests in the Contracts and their proceeds against all other persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title.
The Servicer will maintain the Trust's perfected first priority
security interest in each Financed Vehicle so long as the related Contract is
the property of the Trust; provided, however, that because of the expense and
-------- -------
administrative inconvenience involved, the Servicer will not be required to
amend any certificate of title to name CITSF, the Company or the Trust as the
lienholder, and neither the Servicer nor the Company will be required to deliver
any certificate of title to the Trust or note thereon the Trust's interest.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Noteholders' and Certificateholders' right, title and
interest in and to the Contracts (including, without limitation, the security
interest in the Financed Vehicles granted thereby).
(b) During the term of this Agreement, neither the Company nor CITSF
shall change its name, identity or structure or relocate its chief executive
office without first giving notice thereof to the Trustees and the Servicer. In
addition, following any such change in the name, identity, structure or location
of the chief executive office of the Company or CITSF, the Company or CITSF, as
appropriate, shall give written notice thereof to each Rating Agency.
If any change in the Company's, the Servicer's or CITSF's name,
identity or structure or the relocation of its chief executive office would make
any financing or continuation statement or notice of lien filed under this
Agreement seriously misleading within the meaning of applicable provisions of
the UCC or any title statute or would cause any such financing or continuation
statement or notice of lien to become unperfected (whether immediately or with
lapse of time), the Servicer no later than five days after the effective date of
such change, shall (subject to the proviso in the penultimate paragraph of
Section 12.02(a) hereof) file, or cause to be filed, such amendments or
financing statements as may be required to preserve, perfect and protect the
Noteholders' and Certificateholders' interests in the Contracts and proceeds
thereof and in the Financed Vehicles.
(c) During the term of this Agreement, the Company and CITSF will
maintain their respective chief executive offices in one of the states of the
United States.
(d) The Servicer shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Contract, 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 Contract and the amounts
from time to time deposited in the Collection Account in respect of such
Contract.
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<PAGE>
(e) Each of the Company and the Servicer shall maintain its computer
systems (if any) so that, from and after the time of sale under this Agreement
of the Contracts to the Trust, the master computer records of the Company and
the Servicer (including archives) that shall refer to a Contract indicate
clearly that such Contract is owned by the Trust. Indication of the Trust's
ownership of a Contract shall be deleted from or modified on the Company's and
the Servicer's computer systems when, and only when, the Contract shall have
been paid in full, repurchased or assigned pursuant hereto.
(f) At all times during the term hereof, the Servicer shall afford the
Trust and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trust or its authorized
agents. The examination referred to in this Section 12.02(f) shall be conducted
in a manner which does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination the Trust may make, the Trust or its authorized agents
may, using generally accepted audit procedures, verify the status of each
Contract and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article V hereof and
compliance with the standards represented to exist as to each Contract in this
Agreement. Nothing in this Section 12.02(f) or Section 3.04(b) hereof shall
affect the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 12.02(f) or Section 3.04(b) hereof.
(g) Upon request, the Servicer shall furnish to the Trust, within five
Business Days, a list of all Contracts by contract number and name of Obligor as
of the end of the most recent Due Period held as part of the Trust, together
with a reconciliation of such list to the List of Contracts and to each of the
Servicer Certificates indicating removal of Contracts from the Trust.
At all times during the term hereof, the Servicer shall keep available
a copy of the List of Contracts at its principal executive office for inspection
by Securityholders.
(h) The Servicer shall, to the extent required by applicable law,
cause the Notes and Certificates to be registered with the Securities and
Exchange Commission pursuant to Section 12(b) or Section 12(g) of the Securities
Exchange Act of 1934 within the time periods specified in such sections.
Section 12.03 Limitation on Rights of Securityholders.
---------------------------------------
The death or incapacity of any Securityholder shall not operate to
terminate this Agreement or the Trust, nor entitle the Securityholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
No Securityholder shall have any right to vote (except as provided in
Section 9.04 hereof and this Section 12.03) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the parties to
this Agreement, nor shall anything set forth in this Agreement or contained in
the terms of the Securities, be construed so as to constitute the Holders as
partners or members of an association; nor shall any Securityholder be under any
liability to any third person by reason of any action taken pursuant to any
provision of this Agreement.
-81-
<PAGE>
No Securityholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, except as
provided in Section 9.04 and this Section 12.03; no one or more Holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
provided in this Agreement and for the equal, ratable and common benefit of all
Securityholders. For the protection and enforcement of the provisions of this
Section 12.03, each Securityholder and the Trust shall be entitled to such
relief as can be given either at law or in equity.
Section 12.04 Governing Law. This Agreement shall be governed by,
-------------
and construed and enforced in accordance with, the laws of the State of New
York, without regard to its conflict-of-laws provisions.
Section 12.05 Notices. All communications and notices pursuant
-------
hereto to the Company, the Servicer, Moody's and Standard & Poor's shall be in
writing and delivered or mailed to it at the appropriate following address:
If to the Company:
The CIT Group Securitization Corporation II
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
If to the Servicer:
The CIT Group/Sales Financing, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
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<PAGE>
If to Standard & Poor's:
Standard & Poor's Ratings Service
26 Broadway
New York, New York 10004
Attention: ABS Group/Market Surveillance
If to Moody's:
Moody's Investors Service Inc.
99 Church Street
New York, New York 10007
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
or a Noteholder shall be in writing and delivered or mailed at the address shown
in the Certificate Register or Note Register, respectively.
Copies of all communications and notices required hereunder to be
given to the Owner Trustee shall be sent to Mellon Bank (DE), National
Association at 919 North Market Street, Wilmington, Delaware 19801, Attention:
Robert H. Bell.
Section 12.06 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates and Notes or the rights of the Holders thereof.
Section 12.07 Submission to Jurisdiction; Venue. The parties hereto
---------------------------------
with respect to any action or claim brought against or by the Trust submit to
jurisdiction in the state or federal courts in New York, New York, and agree to
New York, New York as the venue for any such claim or action.
Section 12.08 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 12.09 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
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<PAGE>
Section 12.10 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of August 1, 1996.
THE CIT GROUP/SALES FINANCING, INC.
By: /s/ NORMAN H. ROSEN
________________________________
Name: Norman H. Rosen
Title: Senior Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ RICHARD J. GUGLIADA
________________________________
Name: Richard J. Gugliada
Title: Vice President
CIT RV TRUST 1996-B
By: MELLON BANK (DE), NATIONAL
ASSOCIATION
not in its individual capacity but solely as
Owner Trustee on behalf of the Trust
By: /s/ E.D. RENN
_________________________________
Name: E.D. Renn
Title: Vice President
Acknowledged and Accepted:
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee,
By: /s/ JOSEPH G. ERNST
_______________________________
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
EXHIBIT A
---------
LIST OF INITIAL CONTRACTS
-------------------------
<PAGE>
EXHIBIT B
---------
SUBSEQUENT PURCHASE AGREEMENT
This Subsequent Purchase Agreement dated as of __________ __, 1996
(the "Agreement"), is between THE CIT GROUP SECURITIZATION CORPORATION II, as
purchaser (the "Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller
(the "Seller").
Reference is hereby made to the Purchase Agreement dated as of August
1, 1996 between the parties hereto (the "Purchase Agreement") pursuant to which
the Purchaser purchased from the Seller the recreational vehicle installment
sales contracts set forth on Exhibit A thereto (the "Initial Contracts"). The
Purchaser sold the Initial Contracts to the trust established pursuant to the
Trust Agreement dated as of August 1, 1996 between the Purchaser and Mellon Bank
(DE), National Association, as trustee (the "Owner Trustee").
Pursuant to the Sale and Servicing Agreement dated as of August 1,
1996 between the CIT RV Trust 1996-B (the "Trust"), the Purchaser and the
Seller, the Purchaser agreed to purchase from the Seller and the Seller agreed
to sell to the Purchaser, subject to the terms and conditions set forth in
Section 2.02 of the Sale and Servicing Agreement, Subsequent Contracts for the
fixed purchase price specified in the Sale and Servicing Agreement for delivery
on the date specified herein. The purchase price for any Subsequent Contract
will be funded from money on deposit in the Pre-Funding Account during the
Funding Period. The purchase of any Subsequent Contract by the Purchaser must
be evidenced by the execution and delivery of a Subsequent Purchase Agreement
substantially in the form of Exhibit B to the Sale and Servicing Agreement.
Accordingly, subject to the terms hereof and the Sale and Servicing Agreement,
the Seller agrees to sell, and the Purchaser agrees to purchase, the
recreational vehicle installment sales contracts set forth on Exhibit A hereto
(collectively, the "Subsequent Contracts"), having an aggregate outstanding
principal balance as of ________ __, 1996 (the "Subsequent Cut-Off Date") of
$______________.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Subsequent Contracts and the
servicing and administration of the Subsequent Contracts.
In consideration of the premises and the mutual agreements hereinafter
set forth, the Purchaser and the Seller agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in the Sale and
Servicing Agreement. All references in this Agreement to Articles, Sections,
subsections and exhibits are to the same contained in or attached to this
Agreement unless otherwise specified.
ARTICLE II
SALE AND CONVEYANCE OF SUBSEQUENT CONTRACTS;
CONTRACT FILES
SECTION 2.1. Sale and Conveyance of Contracts. On _________ __, 1996
--------------------------------
(the "Subsequent Transfer Date") subject to the terms and conditions hereof, the
Seller shall sell, transfer, assign absolutely, set over and otherwise convey to
the Purchaser as of the Subsequent Transfer Date (i) all the right, title and
interest of the Company in and to the Subsequent Contracts and all the rights,
benefits, and obligations arising from and in connection with each Subsequent
Contract, (ii) an assignment of the security interests in the Subsequent
Financed Vehicles granted by the Obligors pursuant to the Subsequent Contracts,
(iii) all payments received by the Company on or with respect to the Subsequent
Contracts on or after the Subsequent Cut-off Date (exclusive of payments with
respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest of the
Company in any Subsequent Financed Vehicle (including any right to receive
future Net Liquidation Proceeds) that secures the Subsequent Contracts and that
shall have been repossessed by the Servicer by or on behalf of the Trust; (v)
all rights of the Company to proceeds of Insurance Policies covering the
Obligors and the Subsequent Contracts, (vi) the proceeds from any Servicer's
Errors and Omissions Protection Policy, any fidelity bond and any blanket
physical damage policy, to the extent such proceeds relate to any Subsequent
Financed Vehicle, (vii) all rights of recourse against any cosigner or under any
personal guarantee with respect to the Subsequent Contracts (other than any
right as against a Dealer under a Dealer Agreement), (viii) all proceeds in any
way derived from any of the foregoing items, and (ix) all documents contained or
required to be contained in the Contract Files relating to the Subsequent
Contracts. The parties intend and agree that the conveyance of the Seller's
right, title and interest in and to the Subsequent Contracts (and all rights,
entitlements and amounts listed above) pursuant to this Agreement shall
constitute an absolute sale.
SECTION 2.2. Purchase Price; Payments on the Subsequent Contracts.
----------------------------------------------------
The purchase price for the Subsequent Contracts shall be an amount
equal to $_______________, which is the aggregate outstanding principal balance
of the Subsequent Contracts transferred pursuant to this Agreement as of the
Subsequent Cut-off Date, and the Seller hereby acknowledges receipt of such
amount in respect of the sale of the Subsequent
B-2
<PAGE>
Contracts hereunder. Such purchase price shall be payable in immediately
available funds on the Subsequent Transfer Date from funds on deposit in the
Pre-Funding Account.
The Purchaser shall be entitled to all payments of principal and
interest received on or after the Subsequent Cut-off Date. All payments of
principal and interest received before the Subsequent Cut-off Date shall belong
to the Seller. The Seller shall hold in trust for the Purchaser and shall
promptly remit to the Purchaser, any payments on the Subsequent Contracts
received by the Seller that belong to the Purchaser under the terms of this
Agreement.
SECTION 2.3. Conditions to Sale of Subsequent Contracts. The
------------------------------------------
Purchaser's obligations hereunder are subject to the following conditions:
1. The Purchaser shall have received:
a. the Sale and Servicing Agreement executed by all the parties
thereto,
b. the documents listed in Section 3.01D of the Sale and
Servicing Agreement, and
c. such other opinions and documents as the Purchaser may
reasonably require in connection with the purchase of the
Subsequent Contracts hereunder or the sale of the Notes and
Certificates;
2. The representations and warranties with respect to the Subsequent
Contracts of (i) the Seller and the Servicer made in the Sale and
Servicing Agreement and (ii) the Seller made in the Purchase
Agreement and this Agreement shall be true and correct with
respect to the Subsequent Contracts on the Subsequent Transfer
Date; and
3. The conditions for transfer of the Subsequent Contracts from the
Purchaser to the Trust set forth in Section 3.01D of the Sale and
Servicing Agreement have been fulfilled.
SECTION 2.4. Examination of Files. The Seller will make the Contract
--------------------
Files with respect to the Subsequent Contracts available to the Purchaser or its
agent for examination at the Trust's offices or such other location as otherwise
shall be agreed upon by the Purchaser and the Seller.
SECTION 2.5. Transfer of Subsequent Contracts. Pursuant to the Sale
--------------------------------
and Servicing Agreement, the Purchaser will assign all of its right, title and
interest in and to the Subsequent Contracts to the Trust for the benefit of the
Securityholders. The Purchaser has the right to assign its interest under this
Agreement as may be required to effect the purposes of the
B-3
<PAGE>
Sale and Servicing Agreement, by written notice to the Seller and without the
consent of the Seller, and the assignee shall succeed to the rights and
obligations hereunder of the Purchaser.
B-4
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.1. Representations and Warranties of the Seller.
--------------------------------------------
1. The representations and warranties of the Seller contained in
Article III of the Sale and Servicing Agreement with respect to the Subsequent
Contracts are incorporated herein, and are made to the Purchaser on the
Subsequent Transfer Date, as if set forth herein and as if made to the Purchaser
on the date hereof. The Seller will make such representations and warranties in
the Sale and Servicing Agreement directly to the Trust and will become obligated
in respect of such representations and warranties pursuant to Article III of the
Sale and Servicing Agreement. On the Subsequent Transfer Date, the Seller shall
deliver to the Purchaser an Officers' Certificate, dated the Subsequent Transfer
Date, to the effect that the representations and warranties made in the Sale and
Servicing Agreement with respect to the Subsequent Contracts by the Seller are
true and correct as of the Subsequent Transfer Date.
2. It is understood and agreed that the representations and
warranties incorporated by reference in this Agreement by Section 3.1(1) hereof
shall remain operative and in full force and effect, shall survive the transfer
and conveyance of the Subsequent Contracts by the Seller to the Purchaser and by
the Purchaser to the Trust, and shall inure to the benefit of the Purchaser, the
Trust and their successors and permitted assignees.
3. The Seller shall indemnify the Purchaser and the Servicer and hold
the Purchaser and the Servicer harmless against any loss, penalties, fines,
forfeitures, legal fees and related costs, judgments and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller's representations and
warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.1 to indemnify the Purchaser and the Servicer as provided in this
Section 3.1 constitutes the sole remedy of the Purchaser and the Servicer
respecting a breach of the foregoing representations and warranties. The Trust
shall also have the remedies provided in the Sale and Servicing Agreement.
4. Each indemnified party shall give prompt notice to the Seller of
any action commenced against it with respect to which indemnity may be sought
hereunder but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement, unless the failure to notify materially prejudices the rights and
condition of the Seller. The Seller shall be entitled to participate in any
such action, and to assume the defense thereof, and after notice from the Seller
to an indemnified party of its election to assume the defense thereof, the
Seller will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof.
5. Any cause of action against the Seller or relating to or arising
out of the breach of any representations and warranties made or incorporated by
reference in this Section
B-5
<PAGE>
3.1 shall accrue as to any Subsequent Contract upon discovery of such breach by
the Purchaser or the Servicer or notice thereof by the Seller to the Purchaser
and the Servicer, failure by the Seller to cure such breach and demand upon the
Seller by the Purchaser for all amounts payable in respect of such Subsequent
Contract.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.1. Amendment. This Agreement may be amended from time to
---------
time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.
SECTION 4.2. Counterparts. For the purpose of facilitating the
------------
execution of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 4.3. Termination. The Seller's obligations under this
-----------
Agreement shall survive the sale of the Subsequent Contracts to the Purchaser.
SECTION 4.4. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 4.5. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
mailed by first class mail, postage prepaid, to in the case of the Seller, The
CIT Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: President, or such other address as may hereafter be furnished to
Purchaser in writing by the Seller, or in the case of the Purchaser, The CIT
Group Securitization Corporation II, 650 CIT Drive, Livingston, New Jersey
07039, Attention: President, or such other address as may hereafter be
furnished to the Seller by the Purchaser.
SECTION 4.6. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 4.7. Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the Seller and the Purchaser and their
respective successors and assigns, as may be permitted hereunder.
B-6
<PAGE>
SECTION 4.8. Opinion. The Counsel to the Seller shall deliver to the
-------
Purchaser and the Trustees an opinion in the form of Exhibit B hereto.
B-7
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
THE CIT GROUP SECURITIZATION
CORPORATION II,
as Purchaser
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
THE CIT GROUP/SALES FINANCING, INC.,
as Seller
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
B-8
<PAGE>
EXHIBIT A
List of Subsequent Contracts
B-9
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL
[Date]
The Bank of New York,
solely in its capacity as Indenture Trustee
under the Indenture referred
to herein
101 Barclay Street
New York, NY 10286
Mellon Bank (DE), National Association,
solely in its capacity as Owner Trustee
under the Sale and Servicing Agreement
919 North Market Street
Wilmington, DE 19801
Dear Sirs,
I have acted as counsel to The CIT Group/Sales Financing, Inc.
("CITSF") and The CIT Group Securitization Corporation II, a Delaware
corporation (the "Company"), in connection with the sale of CIT RV Trust 1996-B,
Class A-1 6.00% Asset-Backed Notes, Class A-2 6.40% Asset-Backed Notes and Class
A-3 6.65% Asset-Backed Notes (the "Notes") and 7.10% Asset-Backed Certificates
(the "Certificates" and, collectively with the Notes, the "Securities"). The
Notes represent obligations of, and the Certificates represent interests in, a
trust, the CIT RV Trust 1996-B (the "Trust"), consisting of a pool of
installment sale contracts secured by new and used recreational vehicles
(collectively, the "Contracts") and certain related property. The Company
purchased certain of the Contracts from CITSF (the "Initial Contracts") pursuant
to a Purchase Agreement, dated as of August 1, 1996, by and between CITSF and
the Company. Additional Contracts are being purchased by the Company from CITSF
(the "Subsequent Contracts") pursuant to the Subsequent Purchase Agreement dated
as of ______________ (the "Subsequent Purchase Agreement"). Pursuant to a Sale
and Servicing Agreement, dated as of August 1, 1996 (the "Sale and Servicing
Agreement"), among the Company, CITSF and the Trust, the Company transferred the
Initial Contracts to the Trust. The Company will also transfer, pursuant to the
Sale and Servicing Agreement, the Subsequent Contracts to the Trust, the corpus
of which will consist of each of the Initial Contracts and the Subsequent
Contracts and certain other property transferred by the Company to the Trust.
All capitalized terms used herein and not defined shall have the
meanings assigned to them in the Subsequent Purchase Agreement.
B-10
<PAGE>
In rendering the following opinions, I have examined (i) the
Subsequent Purchase Agreement; (ii) the Sale and Servicing Agreement; (iii) the
Certificate of Incorporation of each of CITSF and the Company; (iv) the By-Laws
of each of CITSF and the Company; (v) copies of certain unanimous consents
adopted by the Board of Directors of the Company authorizing the issuance and
sale of the Securities and the purchase of the Contracts; and (vi) copies of
certain unanimous written consents of the Board of Directors of CITSF. I have
also examined such other documents and made such investigations of law as I have
considered necessary and appropriate for the purposes of the opinions expressed
herein. I have assumed the authenticity of signatures on original documents and
the conformity to the original of all documents submitted to me as certified,
conformed or photostatic copies and have relied as to all matters of fact on
certificates, representations or statements by officers of the Company or CITSF.
In making my examination of agreements, instruments and other
documents and in giving opinions herein, I have assumed that the Trustees have
and had the power and capacity to execute and deliver such agreements,
instruments and other documents and to perform all of their obligations
thereunder and that such agreements, instruments and other documents were duly
authorized by all requisite action by or on behalf of the Trustees were duly
executed, acknowledged, as necessary, and delivered by or on behalf of and are
the legal, valid and binding obligations of, and are enforceable in accordance
with their terms against, the Trustees.
Based upon, and subject to, the foregoing I am of the opinion that:
1. The Subsequent Purchase Agreement has been duly authorized,
executed and delivered by each of CITSF and the Company and constitutes the
legal, valid and binding agreement of each of CITSF and the Company, and is
enforceable against each of CITSF and the Company in accordance with its terms;
the Subsequent Purchase Agreement is effective to transfer all of CITSF's right,
title and interest in and to the Subsequent Contracts and other property
described in Section 2.1 of the Subsequent Purchase Agreement to the Company;
the Sale and Servicing Agreement is effective to transfer all of the Company's
right, title and interest in and to such Subsequent Contracts and other property
to the Trust subject to no prior liens or encumbrances.
2. No consent, approval, authorization or order of, registration or
filing with, or notice to any governmental authority or court is required under
federal laws or the laws of the State of Delaware for the execution, delivery
and performance by the Company of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by the Company,
except for those which have been obtained or except such as may be required
under the Securities Act of 1933, as amended or the regulations promulgated
thereunder or state securities or Blue Sky laws of any jurisdiction.
3. No consent, approval, authorization or order of, registration or
filing with, or notice to, any governmental authority or court is required under
federal laws or the laws of the State of Delaware for the execution, delivery
and performance by CITSF of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by
B-11
<PAGE>
CITSF except for those which have been obtained or except such as may be
required under the Securities Act of 1933, as amended or the regulations
promulgated thereunder or state securities or Blue Sky laws of any jurisdiction.
I am furnishing this opinion to you solely for your benefit. This
opinion is not to be used, circulated, quoted or otherwise referred to or relied
on by any other person or for any other purpose.
The foregoing opinion is given on the express understanding that the
undersigned is an officer of the Company and CITSF and shall in no event incur
any personal liability in connection with the said opinion.
Very truly yours,
B-12
<PAGE>
EXHIBIT C
---------
FORM OF SUBSEQUENT TRANSFER AGREEMENT
-------------------------------------
The CIT Group Securitization Corporation II, as Seller, and the CIT RV
Trust 1996-B (the "Trust"), as Purchaser, pursuant to the Sale and Servicing
Agreement, dated as of August 1, 1996, among the Seller, The CIT Group/Sales
Financing, Inc., as Servicer and the Trust (the "Sale and Servicing Agreement"),
hereby confirm their understanding with respect to the sale by the Seller and
the purchase by the Purchaser of those Recreational Vehicle Contracts listed on
the attached List of Subsequent Contracts (the "Subsequent Contracts").
Conveyance of Subsequent Contracts. The Seller shall sell, transfer,
----------------------------------
assign absolutely, set over and otherwise convey to the Purchaser as of the
Subsequent Transfer Date (i) all the right, title and interest of the Seller in
and to the Subsequent Contracts and all the rights, benefits, and obligations
arising from and in connection with each Subsequent Contract, (ii) an assignment
of the security interests in the Subsequent Financed Vehicles granted by the
Obligors pursuant to the Subsequent Contracts, (iii) all payments received by
the Seller on or with respect to the Subsequent Contracts on or after the
Subsequent Cut-off Date (exclusive of payments with respect to Post Cut-off Date
Insurance Add-Ons), (iv) the interest of the Seller in any Subsequent Financed
Vehicle (including any right to receive future Net Liquidation Proceeds) that
secures the Subsequent Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Seller to proceeds
of Insurance Policies covering the Obligors and the Subsequent Contracts, (vi)
the proceeds from any Servicer's Errors and Omissions Protection Policy, any
fidelity bond and any blanket physical damage policy, to the extent such
proceeds relate to any Subsequent Financed Vehicle, (vii) all rights of recourse
against any cosigner or under any personal guarantee with respect to the
Subsequent Contracts (other than any right as against a Dealer under a Dealer
Agreement), (viii) all proceeds in any way derived from any of the foregoing
items and (ix) all documents contained or required to be contained in the
Contract Files relating to the Subsequent Contracts. The parties intend and
agree that the conveyance of the Seller's right, title and interest in and to
the Subsequent Contracts (and all rights, entitlements and amounts listed above)
pursuant to this Agreement shall constitute an absolute sale.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Sale and Servicing Agreement shall be
borne by the Seller.
The Seller hereby affirms the representations and warranties set forth
in the Sale and Servicing Agreement that relate to the Subsequent Contracts as
of the date hereof. The Seller hereby confirms that it has delivered notice of
the sale of the Subsequent Contracts pursuant to the Sale and Servicing
Agreement and that each of the conditions relating to the transfer of the
Subsequent Contracts, set forth in the Sale and Servicing Agreement, have been
satisfied as of the date hereof.
All terms and conditions of the Sale and Servicing Agreement are
hereby ratified, confirmed and incorporated herein, provided that in the event
--------
of any conflict the provisions of
<PAGE>
this Subsequent Transfer Agreement shall control over the conflicting provisions
of the Sale and Servicing Agreement.
Terms capitalized herein and not defined herein shall have their
respective meanings as set forth in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Subsequent
Transfer Agreement to be duly executed as of this ____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II, as Seller
By:
----------------------------
Name:
Title:
THE CIT RV TRUST 1996-B
By:
----------------------------,
as Owner Trustee
By:
----------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT D
---------
FORM OF ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement")
dated as of August 1, 1996, among The CIT Group/Sales Financing, Inc. ("CITSF"),
The CIT Group Securitization Corporation II (the "Company"), and the CIT RV
Trust 1996-B (the "Trust"), the Company does hereby sell, transfer, assign, set
over and otherwise convey to the Trust created by the Trust Agreement, (i) all
right, title and interest of the Company in and to the Initial Contracts and all
the rights, benefits and obligations arising from and in connection with each
Initial Contract, (ii) an assignment of the security interests in the Initial
Financed Vehicles granted by the Obligors pursuant to the Initial Contracts,
(iii) all payments received by the Company on or with respect to the Initial
Contracts on or after the Initial Cut-off Date (exclusive of payments with
respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest of the
Company in any Initial Financed Vehicle (including any right to receive future
Net Liquidation Proceeds) that secures the Initial Contracts and that shall have
been repossessed by the Servicer by or on behalf of the Trust; (v) all rights of
the Company to proceeds of Insurance Policies covering the Obligors and the
Initial Contracts, (vi) the proceeds from any Servicer's Errors and Omissions
Protection Policy, any fidelity bond and any blanket physical damage policy, to
the extent such proceeds relate to any Initial Financed Vehicle, (vii) all
rights of recourse against any cosigner or under any personal guarantee with
respect to the Initial Contracts (other than any right as against a Dealer under
a Dealer Agreement), (viii) all amounts held for the Trust in the Collection
Account, (ix) all amounts held for the Trust in the Pre-Funding Account, (x) all
amounts held for the Trust in the Capitalized Interest Account, (xi) all
proceeds in any way derived from any of the foregoing items and (xii) all
documents contained or required to be contained in the Contract Files relating
to the Initial Contracts. The parties intend and agree that the conveyance of
the Company's right, title and interest in and to the Initial Contracts (and all
rights, entitlements and amounts listed above) pursuant to this Agreement shall
constitute an absolute sale.
All capitalized terms used herein without definition have the meanings
ascribed to such terms in the Agreement. This Assignment is made pursuant to
the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ___ day of ________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II
By:
-------------------------
Name:
Title:
<PAGE>
FORM OF ASSIGNMENT OF SUBSEQUENT CONTRACTS
For good and valuable consideration in the amount of $______________
paid by the CIT RV Trust 1996-B (the "Purchaser"), to The CIT Group
Securitization Corporation II (the "Seller"), the Seller does hereby sell,
transfer, assign absolutely, set over and otherwise convey to the Purchaser as
of the Subsequent Transfer Date (i) all the right, title and interest of the
Seller in and to the Subsequent Contracts and all the rights, benefits, and
obligations arising from and in connection with each Subsequent Contract, (ii)
an assignment of the security interests in the Subsequent Financed Vehicles
granted by the Obligors pursuant to the Subsequent Contracts, (iii) all payments
received by the Seller on or with respect to the Subsequent Contracts on or
after the Subsequent Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Seller in any
Subsequent Financed Vehicle (including any right to receive future Net
Liquidation Proceeds) that secures the Subsequent Contracts and that shall have
been repossessed by the Servicer by or on behalf of the Trust; (v) all rights of
the Seller to proceeds of Insurance Policies covering the Obligors and the
Subsequent Contracts, (vi) the proceeds from any Servicer's Errors and Omissions
Protection Policy, any fidelity bond and any blanket physical damage policy, to
the extent such proceeds relate to any Subsequent Financed Vehicle, (vii) all
rights of recourse against any cosigner or under any personal guarantee with
respect to the Subsequent Contracts (other than any right as against a Dealer
under a Dealer Agreement), (viii) all proceeds in any way derived from any of
the foregoing items, and (ix) all documents contained or required to be
contained in the Contract Files relating to the Subsequent Contracts. The
parties intend and agree that the conveyance of the Seller's right, title and
interest in and to the Subsequent Contracts (and all rights, entitlements and
amounts listed above) pursuant to this Agreement shall constitute an absolute
sale. Certain capitalized terms used in this Assignment shall have the
respective meanings assigned to them in the Sale and Servicing Agreement, dated
as of August 1, 1996, among The CIT Group Securitization Corporation II, CITSF
and the CIT RV Trust 1996-B.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this _____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II
By:
-------------------------
Name:
D-2
<PAGE>
EXHIBIT E
---------
FORM OF OWNER TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
Mellon Bank (DE), National Association, a national banking association
formed under the laws of the United States, acting as Owner Trustee (the "Owner
Trustee") of the Trust created pursuant to the Trust Agreement, dated as of
August 1, 1996, between The CIT Group Securitization Corporation II (the
"Company") and the Owner Trustee, to the best of its knowledge acknowledges
pursuant to the Sale and Servicing Agreement dated as of August 1, 1996 among
the Company, The CIT Group/Sales Financing, Inc. and the Owner Trustee (the
"Agreement"), that the Owner Trustee has received, and holds in trust thereunder
the following through the Servicer as custodian: (i) all the right, title and
interest of the Company in and to the [Initial] [Subsequent] Contracts and all
the rights, benefits, and obligations arising from and in connection with each
[Initial] [Subsequent] Contract, (ii) an assignment of the security interests in
the [Initial] [Subsequent] Financed Vehicles granted by the Obligors pursuant to
the [Initial] [Subsequent] Contracts, (iii) all payments received by the Company
on or with respect to the [Initial] [Subsequent] Contracts on or after the
[Initial] [Subsequent] Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any
[Initial] [Subsequent] Financed Vehicle (including any right to receive future
Net Liquidation Proceeds) that secures the [Initial] [Subsequent] Contracts and
that shall have been repossessed by the Servicer by or on behalf of the Trust;
(v) all rights of the Company to proceeds of Insurance Policies covering the
Obligors and the [Initial] [Subsequent] Contracts, (vi) the proceeds from any
Servicer's Errors and Omissions Protection Policy, any fidelity bond and any
blanket physical damage policy, to the extent such proceeds relate to any
[Initial] [Subsequent] Financed Vehicle, (vii) all rights of recourse against
any cosigner or under any personal guarantee with respect to the [Initial]
[Subsequent] Contracts (other than any right as against a Dealer under a Dealer
Agreement), (viii) all proceeds in any way derived from any of the foregoing
items, (ix) all documents contained or required to be contained in the Contract
Files relating to the [Initial] [Subsequent] Contracts, (x) the Collection
Account, (xi) the Pre-Funding Account, and (xii) the Capitalized Interest
Account. [The Owner Trustee shall issue to, or upon the written order of, the
Company Certificates representing ownership of a beneficial interest in 100% of
the Trust and Notes representing obligations of the Trust.] Capitalized terms
used herein have the meanings given them in the Agreement.
<PAGE>
IN WITNESS WHEREOF, Mellon Bank (DE), National Association, as Owner
Trustee, has caused this acknowledgment to be executed by its duly authorized
officer as of this ___ day of ________, 1996.
Mellon Bank (DE), National Association, not in its
individual capacity but solely
as Owner Trustee
By:
----------------------------
Name:
Title:
E-2
<PAGE>
EXHIBIT F
---------
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of The CIT
Group/Sales Financing, Inc., a corporation organized under the laws of Delaware
("CITSF"), and that as such he is duly authorized to execute and deliver this
certificate on behalf of CITSF pursuant to Section 4.09 of the Sale and
Servicing Agreement, dated as of August 1, 1996 (the "Agreement"), among CITSF,
The CIT Group Securitization Corporation II and Mellon Bank (DE), National
Association, as Owner Trustee (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
1. The Monthly Report for the period from _________ to _______
attached to this certificate is complete and accurate in accordance with the
requirements of Sections 4.09 and 5.08 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred. [If an Event of Termination has occurred, such Event of Termination
shall be specified and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ____
day of _____, 199_.
THE CIT GROUP/SALES FINANCING, INC.
By:
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT G
---------
THE CIT RV TRUST 1996-B
CLASS A-1 6.00% ASSET-BACKED NOTES
CLASS A-2 6.40% ASSET-BACKED NOTES
CLASS A-3 6.65% ASSET-BACKED NOTES
7.10% ASSET-BACKED CERTIFICATES
MONTHLY REPORT
<TABLE>
<CAPTION>
DISTRIBUTION DATE: __________, 199_
<S> <C> <C>
Available Amount $_____________
Amount of collections on Contracts $_____________
Distribution Amounts
- --------------------
1. Aggregate Note distribution $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
2. Aggregate Certificate distribution $_____________
Interest
- --------
3. Aggregate amount of Interest
a. Notes $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
b. Certificates $_____________
4. Total distribution in respect of interest
a. Notes $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
b. Certificates $_____________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal
- ---------
<S> <C> <C> <C>
5. Principal Distribution Amount $_____________
6. Distribution made in respect of Principal
a. Notes $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
b. Certificates $_____________
7. Outstanding Principal Amount of Notes: $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
8. Certificate Balance $_____________
Contract Pool
- -------------
9. Pool Balance $_____________
10. Note Pool Factor $_____________
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
11. Certificate Pool Factor $_____________
Delinquency Information
- -----------------------
Aggregate Principal
Number Balance
------------------------------
12. Delinquent Contracts
a. 30-59 days ______ $_________________
b. 60-89 days ______ $_________________
c. 90-179 days ______ $_________________
d. 180 days or more ______ $_________________
13. Repossessed Contracts ______ $_________________
14. Repossessed Contracts
Remaining in Inventory ______ $_________________
</TABLE>
G-2
<PAGE>
<TABLE>
<CAPTION>
Miscellaneous
- -------------
<S> <C> <C>
15. Monthly Servicing Fee $_____________
16. Amount of Servicer Fee Paid $_____________
17. Amount withdrawn from the Reserve $_____________
Account and Delivered to Certificateholders
18. Available Reserve Amount after _____________%
any withdrawal or deposit to the Cash
Collateral Account divided by the Pool
Balance
19. Specified Reserve Amount $_____________
20. Amount of Investment Earnings (net of losses $_____________
and investment expenses) on amounts on deposit
in the Collection Account
21. Amount of Funds on deposit in the $_____________
Pre-Funding Account
22. Amount of Investment Earnings (net of losses $_____________
and investment expenses) on amounts on deposit
in the Pre-Funding Account
23. Amount of Funds on deposit in the $_____________
Capitalized Interest Account
24. Amount of Investment Earnings (net of losses $_____________
and investment expenses) on amounts on deposit
in the Capitalized Interest Account
25. Weighted average Contract Rate of all _____________%
outstanding Contracts
26. Number of Subsequent Contracts _____________
27. Aggregate principal balance of $_____________
Subsequent Contracts
28. Number of Subsequent Contracts Purchased _____________
since the preceding Distribution Date
</TABLE>
G-3
<PAGE>
<TABLE>
<C> <S> <C>
29. Aggregate Stated Principal Balance of the $_____________
Subsequent Contracts purchased
since the preceding Distribution Date
30. Amount of funds withdrawn from the $_____________
Capitalized Interest Account to make payments
of interest in respect of the Securities
31. Amount of Monthly Advances by Servicer $_____________
32. Amount by which the amount due to be $_____________
distributed to Class A-1 Noteholders exceeds
the actual amount distributed to Class A-1
Noteholders
33. Amount by which the amount due to be $_____________
distributed to Class A-2 Noteholders exceeds
the actual amount distributed to Class A-2
Noteholders
34. Amount by which the amount due to be $_____________
distributed to Class A-3 Noteholders exceeds
the actual amount distributed to Class A-3
Noteholders
35. Amount by which the amount due to be $_____________
distributed to Certificateholders exceeds
the actual amount distributed to
Certificateholders
36. Number of Contracts which were prepaid, _____________
in part or in whole
37. Aggregate principal amount of $_____________
Contracts which were prepaid, in part or
in whole
38. Amount to be distributed to the holder of the $_____________
GP Interest
</TABLE>
G-4
<PAGE>
EXHIBIT H
---------
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 11.02 of the Sale and
Servicing Agreement (the "Agreement"), dated as of August 1, 1996, between The
CIT Group Securitization Corporation II, the CIT Group/Sales Financing, Inc. and
Mellon Bank (DE), National Association, as Owner Trustee. Capitalized terms
used herein that are not otherwise defined shall have the meanings described
thereto in the Agreement. All references herein to "Trustee" shall be
references to The Bank of New York, as Indenture Trustee, pursuant to an
Indenture, dated as of August 1, 1996, between the Owner Trustee and the
Indenture Trustee. However, if the Notes have been paid in full, and the
Indenture has been discharged in accordance with its terms, all references
herein to "Trustee" shall be references to the Owner Trustee.
I. Pre-Auction Process
-------------------
(a) Upon receiving notice of the Auction Date, the Advisor will initiate
its general Auction procedures consisting of the following: (i) with
the assistance of the Servicer, prepare a general solicitation package
along with a confidentiality agreement; (ii) derive a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the Trustee; and (vi) notify the
Servicer of all potential bidders and anticipated timetable.
(b) The general solicitation package will include: (i) the prospectus from
the public offering of the Notes and Certificates; (ii) a copy of all
monthly servicing reports or a copy of all annual servicing reports
and the prior year's monthly servicing reports; (iii) a form of a
Purchase Agreement and Sale and Servicing Agreement; (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 11.02 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Scheduled Principal Balance
as of the related Distribution Date reflecting the same data
attributes used to create the Initial Cut-off Date tables for the
prospectus supplement dated August 14, 1996 and the accompanying
prospectus dated July 24, 1996 relating to the public offering of the
Notes and Certificates.
(c) The Trustee, with the assistance of the Servicer and the Advisor, will
maintain an auction package beginning at the time of closing of the
transaction, which will contain terms (i)-(iii) listed in the
preceding paragraph. If the Advisor is unable to perform its role as
advisor to the Trustee, the Servicer acting in its capacity under the
Agreement will select a successor Advisor and inform the Trustee of
its actions.
<PAGE>
(d) The Advisor will send solicitation packages to all bidders at least 15
business days before the Auction Date. Bidders will be required to
submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 business days
before the Auction Date. The Servicer and the Advisor will be
required to satisfy all relevant questions at least five Business Days
prior to the Auction Date and distribute the questions and answers to
all bidders.
II. Auction Process
---------------
(a) ______________________, in its role as Advisor to the Trustee, will be
allowed to bid in the Auction, but will not be required to do so.
(b) The Servicer will also be allowed to bid in the Auction if it deems
appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the offices
of the Trustee by 1:00 p.m. New York City time, with the winning
bidder to be notified by 2:00 p.m. New York City time. All acceptable
bids (as described in Section 11.02 of the Agreement) will be due on a
conforming basis on the bid sheet contained in the solicitation
package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for recreational vehicle retail installment
sale contract willing and able to purchase the Auction Property, the
Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Balance will be required to be wired to
the Trustee upon acceptance of the bid. This deposit, along with any
interest income attributable to it, will be credited to the purchase
price but will not be refundable. The Trustee will establish a
separate account for the acceptance of the good faith deposit, until
such time as the account is fully funded and all monies are
transferred into the Collection Account, such time not to exceed one
Business Day before the related Distribution Date (as described
above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Purchase Agreement, Sale and Servicing Agreement and Servicer's
Representations and Warranties (which shall be substantially identical
to the representations and warranties set forth in Section 8.01 of the
Agreement).
(g) ____________, in its capacity as Advisor to the Trustee, will provide
to the Trustee a letter concluding whether or not the winning bid is a
fair market value bid. _________________ will also provide such
letter if it is the winning bidder. In the case where __________ or
the Servicer is the winning bidder it will in its letter provide for
market comparable and valuations.
H-2
<PAGE>
(h) The Auction will stipulate that the Servicer be retained to service
the Contracts sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
H-3
<PAGE>
EXHIBIT I
---------
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF OFFICER
The undersigned certifies that the undersigned is the
____________________ of The CIT Group/Sales Financing, Inc., a corporation
organized under the laws of Delaware ("CITSF"), and that as such is duly
authorized to execute and deliver this certificate on behalf of CITSF in
connection with the Sale and Servicing Agreement, dated as of August 1, 1996
(the "Agreement"), among CITSF, The CIT Group Securitization Corporation II and
the CIT RV Trust 1996-B (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further
certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of
the Articles of Incorporation of CITSF, together with all amendments
thereto as in effect on the date hereof;
(ii) attached hereto as Exhibit II is a true and correct copy of
the By-Laws of CITSF, as amended, as in effect on the date hereof;
(iii) the representations and warranties of CITSF contained in
Sections 8.01 and 3.01C of the Agreement are true and correct on and as of
the date hereof and, to the best of his knowledge, the representations and
warranties of CITSF contained in Sections 3.01A and 3.01B of the Agreement
are true and correct on and as of the date hereof;
(iv) no event with respect to CITSF has occurred and is
continuing which would constitute an Event of Termination or an event that,
with notice or lapse of time or both, would become an Event of Termination
under the Agreement; and
(v) each of the agreements and conditions of CITSF to be
performed on or before the date hereof pursuant to the Agreement have been
performed in all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this __ day
of _______________, 1996.
___________________
Name:
Title:
<PAGE>
EXHIBIT 10.1
PURCHASE AGREEMENT
This Purchase Agreement dated as of August 1, 1996 (the "Agreement"),
is between THE CIT GROUP SECURITIZATION CORPORATION II, as purchaser (the
"Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller (the "Seller").
Subject to the terms hereof, the Seller agrees to sell, and the
Purchaser agrees to purchase, the recreational vehicle installment sales
contracts set forth on Exhibit A (collectively, the "Initial Contracts"), having
an aggregate outstanding principal balance as of August 1, 1996 (the "Initial
Cut-off Date") of approximately $164,276,094.
It is the intention of the Seller and the Purchaser that the Purchaser
shall sell the Initial Contracts to the CIT RV Trust 1996-B and shall enter into
a Sale and Servicing Agreement, dated as of the date hereof, with the CIT RV
Trust 1996-B and the Seller, pursuant to which 7.10% Asset-Backed Certificates
(the "Certificates"), evidencing ownership interests in the Initial Contracts
and Class A-1 6.00% Asset-Backed Notes, Class A-2 6.40% Asset-Backed Notes and
Class A-3 6.65% Asset-Backed Notes (the "Notes") secured by the Initial
Contracts, will be issued.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Initial Contracts and the
servicing and administration of the Initial Contracts.
In consideration of the premises and the mutual agreements hereinafter
set forth, the Purchaser and the Seller agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in the Sale and
Servicing Agreement. All references in this Purchase Agreement to Articles,
Sections, subsections and exhibits are to the same contained in or attached to
this Purchase Agreement unless otherwise specified.
<PAGE>
ARTICLE II
SALE AND CONVEYANCE OF INITIAL CONTRACTS;
CONTRACT FILES
SECTION 2.01. Sale and Conveyance of Initial Contracts. On the
----------------------------------------
Closing Date, subject to the terms and conditions hereof, the Seller shall sell,
transfer, assign absolutely, set over and otherwise convey to the Purchaser (i)
all the right, title and interest of the Seller in and to the Initial Contracts
and all the rights, benefits, and obligations arising from and in connection
with each Initial Contract, (ii) assignments of the security interests in the
Initial Financed Vehicles granted by the Obligors pursuant to the Initial
Contracts, (iii) all payments received by the Seller on or with respect to the
Initial Contracts on or after the Initial Cut-off Date (exclusive of payments
with respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest of the
Seller in any Initial Financed Vehicle (including any right to receive future
Net Liquidation Proceeds) that secures the Initial Contracts and that shall have
been repossessed by the Servicer by or on behalf of the Trust; (v) all rights of
the Seller to proceeds of Insurance Policies covering the Obligors and the
Initial Contracts, (vi) the proceeds from any Servicer's Errors and Omissions
Protection Policy, any fidelity bond and any blanket physical damage policy, to
the extent such proceeds relate to any Initial Financed Vehicle, (vii) all
rights of recourse against any cosigner or under any personal guarantee with
respect to the Initial Contracts (other than any right as against a Dealer under
a Dealer Agreement), (viii) all amounts held for the Trust in the Collection
Account, (ix) all amounts held for the Trust in the Pre-Funding Account, (x) all
amounts held for the Trust in the Capitalized Interest Account, (xi) all
proceeds in any way derived from any of the foregoing items, and (xii) all
documents contained or required to be contained in the Contract Files relating
to the Initial Contracts. The parties intend and agree that the conveyance of
the Seller's right, title and interest in and to the Initial Contracts pursuant
to this Agreement shall constitute an absolute sale.
The Seller hereby declares and covenants that it shall at no time have
any legal, equitable or beneficial interest in, or any right, including without
limitation any reversionary or offset right, to the Collection Account, the Pre-
Funding Account, the Capitalized Interest Account and the Reserve Account, and
that, in the event it receives any of the same, it shall hold same in trust for
the benefit of the Trust on behalf of the Securityholders and shall immediately
endorse over to the Trust any such amount it receives.
SECTION 2.02. Purchase Price; Payments on the Initial Contracts.
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(a) The purchase price for the Initial Contracts shall be an amount
equal to $164,276,094. Such purchase price shall be payable in immediately
available funds on the Closing Date.
(b) The Purchaser shall be entitled to all payments of principal and
interest received on or after the Initial Cut-off Date. All payments of
principal and interest received before the Initial Cut-off Date shall belong to
the Seller. The Seller shall hold in trust for the Purchaser and
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shall promptly remit to the Purchaser, any payments on the Initial Contracts
received by the Seller that belong to the Purchaser under the terms of this
Agreement.
SECTION 2.03. Conditions to Sale of Initial Contracts. The
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Purchaser's obligations hereunder are subject to the following conditions:
(a) The Purchaser shall have received (i) the Sale and Servicing
Agreement executed by all the parties thereto, (ii) all documents required by
the Sale and Servicing Agreement and (iii) such other opinions and documents as
the Purchaser may reasonably require in connection with the purchase of the
Initial Contracts hereunder or the sale of the Notes and the Certificates;
(b) The representations and warranties of the Seller and the Servicer
made in the Sale and Servicing Agreement shall be true and correct on the
Closing Date; and
(c) The Purchaser shall have received from counsel to the Seller a
letter stating that the Purchaser may rely on such counsel's opinion delivered
pursuant to the Sale and Servicing Agreement and such counsel's opinions to
Moody's Investors Service, Inc. and Standard and Poor's Ratings Service in
respect of the sale of the Initial Contracts to the Purchaser by the Seller, or
such opinions may be addressed and delivered to the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the
--------------------
Contract Files with respect to the Initial Contracts available to the Purchaser
or its agent for examination at the Trust's offices or such other location as
otherwise shall be agreed upon by the Purchaser and the Seller.
SECTION 2.05. Transfer of Initial Contracts. Pursuant to the Sale
-----------------------------
and Servicing Agreement, the Purchaser will assign all of its right, title and
interest in and to the Initial Contracts to the Trust for the benefit of the
Securityholders. The Purchaser has the right to assign its interest under this
Agreement as may be required to effect the purposes of the Sale and Servicing
Agreement, by written notice to the Seller and without the consent of the
Seller, and the assignee shall succeed to the rights and obligations hereunder
of the Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE OF INITIAL CONTRACTS
SECTION 3.01. Representations and Warranties of the Seller.
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(a) The representations and warranties of the Seller contained in the
Sale and Servicing Agreement are incorporated herein, and are made to the
Purchaser on the date hereof, as if set forth herein and as if made to the
Purchaser on the date hereof. The Seller will make such representations and
warranties in the Sale and Servicing Agreement directly to the Trust and
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will become obligated in respect of such representations and warranties pursuant
to the Sale and Servicing Agreement. On the Closing Date, the Seller shall
deliver to the Purchaser an Officers' Certificate, dated the Closing Date, to
the effect that the representations and warranties made in the Sale and
Servicing Agreement by the Seller are true and correct as of the Closing Date.
(b) It is understood and agreed that the representations and
warranties incorporated by reference in this Agreement by Section 3.01(a) hereof
shall remain operative and in full force and effect, shall survive the transfer
and conveyance of the Initial Contracts by the Seller to the Purchaser and by
the Purchaser to the Trust, and shall inure to the benefit of the Purchaser, the
Trust and their successors and permitted assignees.
(c) The Seller shall indemnify the Purchaser and the Servicer and hold
the Purchaser and the Servicer harmless against any loss, penalties, fines,
forfeitures, legal fees and related costs, judgments and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller's representations and
warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.01 to indemnify the Purchaser and the Servicer as provided in this
Section 3.01 constitutes the sole remedy of the Purchaser and the Servicer
respecting a breach of the foregoing representations and warranties. The Trust
shall also have the remedies provided in the Sale and Servicing Agreement.
(d) Each indemnified party shall give prompt notice to the Seller of
any action commenced against it with respect to which indemnity may be sought
hereunder but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement, unless the failure to notify materially prejudices the rights and
condition of the Seller. The Seller shall be entitled to participate in any
such action, and to assume the defense thereof, and after notice from the Seller
to an indemnified party of its election to assume the defense thereof, the
Seller will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof.
(e) Any cause of action against the Seller or relating to or arising
out of the breach of any representations and warranties made or incorporated by
reference in this Section 3.01 shall accrue as to any Initial Contract upon (i)
discovery of such breach by the Purchaser or the Servicer or notice thereof by
the Seller to the Purchaser and the Servicer, (ii) failure by the Seller to cure
such breach and (iii) demand upon the Seller by the Purchaser for all amounts
payable in respect of such Initial Contract.
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ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.01. Amendment. This Agreement may be amended from time to
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time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.
SECTION 4.02. Counterparts. For the purpose of facilitating the
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execution of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 4.03. Termination. The Seller's obligations under this
-----------
Agreement shall survive the sale of the Initial Contracts to the Purchaser.
SECTION 4.04. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 4.05. Notices. All demands, notices and communications
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hereunder shall be in writing and shall be deemed to have been duly given if
mailed by first class mail, postage prepaid, to (i) in the case of the Seller,
The CIT Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey
07039, Attention: President, or such other address as may hereafter be
furnished to Purchaser in writing by the Seller or (ii) in the case of the
Purchaser, The CIT Group Securitization Corporation II, 650 CIT Drive,
Livingston, New Jersey 07039, Attention: President, or such other address as
may hereafter be furnished to the Seller by the Purchaser.
SECTION 4.06. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 4.07. Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and be binding upon the Seller and the Purchaser and their
respective successors and assigns, as may be permitted hereunder.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
THE CIT GROUP SECURITIZATION
CORPORATION II,
as Purchaser
By:
________________________________
Name:
Title:
THE CIT GROUP/SALES FINANCING, INC.,
as Seller
By:
________________________________
Name:
Title:
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EXHIBIT A
List of Initial Contracts
