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): July 23, 1997
CIT Home Equity Loan Trust 1997-1
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
000-22959 13-3960888
(Commission File Number) (IRS Employer Identification No.)
c/o The Bank of New York
101 Barclay Street
New York, New York 10286
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (212) 815-2297
N/A
(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On July 23, 1997, The CIT Group Securitization Corporation III (the
"Company") sold $500,000,000 aggregate principal amount of Home Equity Loan
Asset Backed Certificates, Series 1997-1. The Offered Certificates were offered
for sale to the public pursuant to a prospectus supplement dated July 16, 1997
to the prospectus dated April 8, 1997 (the "Prospectus"). The Class B-2
Certificates were sold privately.
The Certificates represent an ownership interest in the CIT Home Equity
Loan Trust 1997-1 (the "Trust"). The Trust was created, and the Certificates
were issued, pursuant to a Pooling and Servicing Agreement annexed hereto as
Exhibit 4.1 (the "Agreement").
The property of the Trust primarily consists of a pool of home equity
mortgage loans (the "Mortgage Loans") and certain other property described in
the Prospectus.
All of the Mortgage Loans were acquired by the Company from The CIT
Group/Consumer Finance, Inc. ("CITCF") 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 Agreement. Some of the Mortgage Loans were originally acquired
by CITCF from The CIT Group/Sales Financing, Inc. pursuant to the terms of a
Purchase Agreement annexed hereto as Exhibit 10.2 and some of the Mortgage Loans
were originally acquired by CITCF from The CIT Group/Consumer Finance, Inc. (NY)
pursuant to a Purchase Agreement annexed hereto as Exhibit 10.3.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the 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 III, The CIT Group/Consumer Finance, Inc., The CIT
Group Holdings, Inc. and Morgan Stanley & Co. Incorporated on
behalf of itself and as representative of the several
underwriters dated July 16, 1997.
4.1 Pooling and Servicing Agreement between The CIT Group
Securitization Corporation III, The CIT Group/Consumer Finance,
Inc. and The Bank of New York, as Trustee, dated as of July 1,
1997.
4.2 Subservicing Agreement between The CIT Group/Consumer Finance,
Inc. and The CIT Group/Sales Financing, Inc., dated as of July 1,
1997.
10.1 Purchase Agreement between The CIT Group/Consumer Finance, Inc.
and The CIT Group Securitization Corporation III, dated as of
July 1, 1997.
10.2 Purchase Agreement between The CIT Group/Consumer Finance, Inc.
and The CIT Group/Sales Financing, Inc., dated as of July 1,
1997.
10.3 Purchase Agreement between The CIT Group/Consumer Finance, Inc.
and The CIT Group/Consumer Finance, Inc. (NY), dated as of July
1, 1997.
SIGNATURE
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 Home Equity Loan Trust 1997-1
By: The Bank of New York, as Trustee
By:/s/ FRANKLIN B. AUSTIN
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Name: Franklin B. Austin
Title: Assistant Vice President
Dated: July 28, 1997
HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 1997-1
THE CIT GROUP SECURITIZATION CORPORATION III
(DEPOSITOR)
July 16, 1997
UNDERWRITING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED,
as Representative of the
Several Underwriters (the "Representative"),
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
1. Introductory. The CIT Group Securitization Corporation III,
a Delaware corporation (the "Depositor") 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 $1,000,000,000 of home equity
loan asset backed certificates, all or a portion of which may be supported by a
limited guarantee of CIT. Each of such certificates and the limited guarantee of
CIT are registered under the registration statement referred to in Section 2(a)
(collectively, the "Registered Securities") and the Depositor has authorized the
issuance and sale to the Underwriters of the Home Equity Loan Asset Backed
Certificates, Series 1997-1 listed on Schedule I hereto (the "Offered
Certificates," and, together with the Class B-2 Certificates, the
"Certificates") evidencing interests in a pool (the "Mortgage Loan Pool") of
certain home equity loans (the "Mortgage Loans"). The Mortgage Pool will consist
of two groups of Mortgage Loans. The Certificates will be issued under a Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement") to be dated as
of July 1, 1997 among the Depositor, The CIT Group/Consumer Finance, Inc.
("CITCF" or "Master Servicer") a Delaware corporation and a wholly-owned
subsidiary of CIT and The Bank of New York, as trustee (the "Trustee"). The
Certificates will evidence specified interests in the Mortgage Loans and certain
other property held in trust with respect to such Certificates. The Mortgage
Loans and certain other assets of a Trust (the "Trust") will be sold by CITCF to
the Depositor pursuant to a Purchase Agreement (the "Purchase Agreement") to be
dated as of July 1, 1997 between CITCF and the Depositor and, in turn, by the
Depositor to the Trust pursuant to the Pooling and Servicing Agreement. Certain
of the Mortgage Loans and other property sold by CITCF to the Depositor will
first be purchased by CITCF from (i) The CIT Group/Consumer Finance, Inc. (NY)
("CITCF-NY") pursuant to a Purchase Agreement to be dated as of July 1, 1997
(the "CITCF-NY Sale Agreement") between CITCF-NY and CITCF and (ii) The CIT
Group/Sales Financing, Inc. ("CITSF") pursuant to a Purchase Agreement to be
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dated as of July 1, 1997 (the "CITSF Sale Agreement") between CITSF and CITCF.
CITCF will enter into a subservicing agreement with CITSF (the "Sub-Servicer")
dated as of July 1, 1997 (the "Subservicing Agreement") pursuant to which CITSF
will perform all of the servicing responsibilities of the Master Servicer under
the Pooling and Servicing Agreement (except as described in the Pooling and
Servicing Agreement and in the Subservicing Agreement). The Trustee will be an
intended third-party beneficiary of the Subservicing Agreement and will have the
right to enforce such Subservicing Agreement as if it were a party thereto
The firm or firms listed on the attached Schedule I hereto
which agreed to purchase the Offered Certificates are hereinafter referred to as
the Underwriters (the "Underwriters") of such Offered Certificates, and the
representative of the Underwriters to whom this Underwriting Agreement (the
"Agreement") is addressed is hereinafter referred to as the Representative (the
"Representative").
Capitalized terms used herein and not otherwise defined shall
have the meanings given them in the Pooling and Servicing Agreement.
2. Representations and Warranties of the Depositor, CITCF and
CIT. Each of the Depositor, and CITCF, 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 Offered Certificates pursuant to Section 3 hereof (the "Closing
Date") that:
(a) A registration statement on Form S-3 (No. 333-22283),
including a prospectus, relating to the Registered 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 Offered Certificates 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, as amended ("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 Offered Certificates 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 Registered Securities, such registration statement conformed in
all respects to the requirements of the Act and the rules and regulations of the
Commission promulgated under the Act ("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 and the
Rules and Regulations, and neither of such documents include,
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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 Depositor 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 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 Depositor and CITCF 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 Depositor 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) Each of the Depositor, CITCF and CITSF 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 Depositor, CITCF, CITSF and CITCF-NY have corporate power and
authority to own, lease and operate their respective properties and conduct
their respective businesses as described or incorporated 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 Depositor, CITCF,
CITSF and CITCF-NY 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 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).
"Basic Documents" means this Agreement, the Pooling and Servicing Agreement, the
Subservicing Agreement, the Purchase Agreement, the CITCF-NY Sale Agreement, the
CITSF Sale Agreement and the Certificate Depository Agreement.
(f) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement,
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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
Depositor 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) None of CITCF, CITSF or 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 any
of CITCF, 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 the Depositor on the Closing
Date of the Basic Documents to which it is a party and the performance of its
obligations thereunder will be within the corporate power of the Depositor and
duly authorized by all necessary corporate action on the part of the Depositor
on and as of the Closing Date; and neither the issuance and sale of the Offered
Certificates to the Underwriters, nor the execution and delivery by the
Depositor of the Basic Documents to which it is a party, nor the consummation by
the Depositor of the transactions therein contemplated, nor compliance by the
Depositor with the provisions hereof or thereof, 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 Depositor or its properties or the certificate of
incorporation or by-laws of the Depositor or any of the provisions of any
indenture, mortgage, contract or other instrument to which the Depositor is a
party or by which the Depositor 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.
(i) The execution and delivery by each of CITCF, 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 CITCF, CITSF and CITCF-NY and duly authorized by all
necessary corporate action on the part of each of CITCF, CITSF and CITCF-NY on
and as of the Closing Date; and neither the issuance and sale of the Offered
Certificates to the Underwriters, nor the execution and delivery by CITCF, CITSF
and CITCF-NY of any of the Basic Documents to which it is a party, nor the
consummation by CITCF, CITSF and CITCF-NY of the transactions therein
contemplated, nor compliance by CITCF, CITSF and CITCF-NY with the provisions
hereof or thereof, 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 CITCF, CITSF
or CITCF-NY or their respective properties or the certificate of incorporation
or by-laws of CITCF, CITSF or CITCF-NY, or any of the provisions of any
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material indenture, mortgage, contract or other instrument to which CITCF, CITSF
or CITCF-NY is a party or by which CITCF, 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 Depositor and CITCF, and it constitutes a legal, valid
and binding instrument enforceable against each of the Depositor and CITCF 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.
(k) The Pooling and Servicing Agreement, the Subservicing
Agreement and the Purchase Agreement when executed and delivered on the Closing
Date and, in the case of the Pooling and Servicing Agreement when executed and
delivered by the Trustee, will be duly authorized, executed and delivered by
each of the Depositor, CITCF and CITSF, and each will constitute a legal, valid
and binding instrument enforceable against each of the Depositor, CITCF 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 Offered Certificates, when duly and validly authorized
by the Depositor, and, when executed and authenticated as specified in the
Pooling and Servicing Agreement, will be validly issued and outstanding and will
be entitled to the benefits of the Pooling and Servicing Agreement.
(m) 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 Depositor, CITCF, CITSF
and CITCF-NY 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.
(n) The Depositor, CITCF, CITSF and CITCF-NY 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
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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 Certificateholders under the Pooling and Servicing
Agreement and neither the Depositor, CITCF, CITSF nor CITCF-NY 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 Depositor, CITCF, CITSF or CITCF-NY or their ability to
perform their respective obligations under any of the Basic Documents to which
it is a party.
(o) As of the Closing Date, the Mortgage Loans and related
property will have been duly and validly assigned to the Trustee in accordance
with the Basic Documents; and when such assignment is effected, a duly and
validly perfected transfer of all such Mortgage Loans will have occurred,
subject to no prior lien, mortgage, security interest, pledge, charge or other
encumbrance created by the Depositor, CITCF, CITSF or CITCF-NY.
(p) As of the Closing Date, each of the Mortgage Loans will
meet the eligibility criteria described in the Prospectus.
(q) The chief executive office of each of the Depositor,
CITCF, 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.
(r) 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.
(s) Neither the Depositor, nor CITCF nor the Trust Fund
created by the Pooling and Servicing Agreement will be subject to registration
as an "investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(t) In connection with the offering of the Offered
Certificates in the State of Florida, the Depositor hereby certifies that they
have complied with all provisions of Section 5.17.075 of the Florida Securities
and Investor Protection Act.
(u) As of the Closing Date, each of the respective
representations and warranties of the Depositor, CITCF, CITSF and CITCF-NY 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.
(v) The Depositor has filed the preliminary prospectus
supplement relating to the Offered Certificates pursuant to and in accordance
with Rule 424(b).
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3. Purchase, Sale and Delivery of Offered Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Depositor agrees to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Depositor, the aggregate principal amounts of the Class of
Offered Certificates set forth opposite the name of such Underwriters in
Schedule I hereto at a purchase price equal to the "Price $" specified for such
Class of Offered Certificates opposite the name of such Underwriter on Schedule
I hereto with respect to such Class of Offered Certificates plus accrued
interest, if any, at the Pass Through Rate for such Class of Offered
Certificates calculated from (and including) July 23, 1997, to (but excluding)
the Closing Date.
Against payment of the purchase price by wire transfer of
immediately available funds to the Depositor, or to such bank as may be
designated by the Depositor, the Depositor will deliver the Offered Certificates
to the Representative, for the account of the Underwriters, at the office of
Schulte Roth & Zabel LLP, 900 Third Avenue, New York, New York 10022 on July 23,
1997 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 Depositor
determine, such time being herein referred to as the "Closing Date." The Offered
Certificates to be so delivered will be initially represented by one or more
Offered Certificates registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Offered Certificates will be represented by book entries on the records of DTC
and participating members thereof. Definitive Certificates will be available
only under the limited circumstances set forth in the Pooling and Servicing
Agreement. The certificates evidencing the Offered Certificates will be made
available for checking and packaging at the offices of Schulte Roth & Zabel LLP
at least 24 hours prior to the Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Certificates for sale to the public as
set forth in the Prospectus.
5. Covenants of the Depositor and CITCF. Each of the Depositor
and CITCF, jointly and severally, covenants and agrees with the several
Underwriters that:
(a) The Depositor 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 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 Depositor
will advise the Representative promptly of any such filing pursuant to Rule
424(b).
(b) The Depositor 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 Depositor will also advise the Representative promptly of any amendment
or supplementation of the Registration Statement or the Prospectus and of the
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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 Depositor will arrange for the qualification of the
Offered Certificates 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 Offered Certificates, provided that
in connection therewith the Depositor 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 Offered
Certificates 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
Depositor 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 Depositor will timely prepare and file all periodic
reports required to be filed pursuant to Section 15(d) of the 1934 Act as
interpreted by the Commission through certain No-Action Letters, on behalf of
the Trust, with the Commission until no longer required to do so as permitted by
Section 15(d) of the 1934 Act.
(f) The Depositor 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 Offered Certificates are
outstanding, the Depositor or CITCF, 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 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 Registrants with the Commission pursuant to the 1934 Act and
(ii) such additional information concerning the Depositor or CITCF (relating to
the Mortgage Loans, the servicing thereof, the ability of CITCF to act as Master
Servicer or the ability of CITSF to act as Sub-
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Servicer), the Offered 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, the Depositor and CITCF will pay or cause to be paid
all costs and expenses incident to the performance of their respective
obligations hereunder, including (i) the preparation, issuance and delivery of
the Offered Certificates, (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 Offered Certificates, (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 Depositor, and
CITCF and the independent public accountants of the Depositor, (v) the fees and
disbursements of the Trustee and its counsel, (vi) the fees of DTC in connection
with the book-entry registration of the Offered Certificates, (vii) the
reasonable expenses of the Representative including the reasonable fees and
disbursements of its counsel, in connection with the initial qualification of
the Offered Certificates 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 (viii) the
printing and delivery to the Underwriters, in such quantities as 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 Offered Certificates 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 Depositor, CITCF, CITSF
and CITCF-NY shall cause each of their respective books and records (including
any computer records) relating to the Mortgage Loans to be marked to show the
Trust's absolute ownership of the Mortgage Loans, and from and after the Closing
Date neither the Depositor, CITCF, as Master Servicer, nor CITSF, as
Sub-Servicer, shall take any action inconsistent with the Trust's ownership of
such Mortgage Loans, other than as permitted by the Pooling and Servicing
Agreement.
(j) Until the retirement of the Offered Certificates, or until
such time as the Underwriters shall cease to maintain a secondary market in the
Offered Certificates, whichever occurs first, the Depositor or CITCF will
deliver to the Representative the certified public accountants' annual
statements of compliance furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements are furnished to the Trustee.
(k) To the extent, if any, that either of the ratings provided
with respect to the Offered Certificates by either Rating Agency is conditional
upon the furnishing of documents or
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the taking of any other actions by the Depositor, CITCF, CITSF or CITCF-NY, as
the case may be, shall furnish such documents and take any such other actions as
may be required to satisfy such conditions. A copy of such document shall be
provided to the Representative at the time it is delivered to the Rating
Agencies.
(l) The Depositor will prepare, or cause to be prepared, and
file, or cause to be filed, a timely election to treat the Mortgage Loan Pool as
a "real estate mortgage investment conduit" ("REMIC") as such terms defined in
the Internal Revenue Code of 1986, as amended (the "Code"), for Federal income
tax purposes.
(m) Provided that the Depositor has received the letter from
KPMG Peat Marwick LLP, described in Section 7(a) relating to the Computational
Materials, the Depositor will cause such Computational Materials (as defined in
Section 7 below) with respect to the Offered Certificates which are delivered to
the Depositor 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 Offered Certificates is available
for distribution to investors.
9. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Offered
Certificates will be subject to the accuracy of the representations and
warranties on the part of the Depositor, CITCF, CIT and CITSF, and contained or
incorporated herein, to the accuracy of the statements of officers of the
Depositor, CITCF, CIT and CITSF made pursuant to the provisions hereof, to the
performance by the Depositor, CITCF, 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 Depositor 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 Depositor and CITCF 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 Depositor and CITCF 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.
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(c) The Representative shall have received an officer's
certificate, dated the Closing Date, executed by any two of the President, any
Vice President, the principal financial or the principal accounting officer of
(i) the Depositor 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 Depositor in this Agreement and the other
Basic Documents to which it is a party are true and correct, that the Depositor
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 the 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, (iii) CITCF in which such officers shall state that, to the best
of each such officer's knowledge after reasonable investigation, the
representations and warranties of CITCF in this Agreement and the other Basic
Documents to which it is a party are true and correct and that CITCF 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 (iv) 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) 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 Depositor, CITCF, CITSF or CITCF-NY which, in the
judgment of the Representative, materially impairs the investment quality of the
Offered Certificates or makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Offered Certificates; (ii) any
downgrading in the rating of any debt securities of CIT, CITCF 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
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 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 Offered Certificates.
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(e) The Representative shall have received a written opinion
of in-house General Counsel of the Depositor, CITCF, 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 Depositor, CITCF 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 Depositor, CITCF, 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 Depositor, CITCF, CITSF and CITCF-NY 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 Depositor, CITCF, 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 adverse effect on the business,
properties, assets, or condition (financial or other) of the
Depositor, CITCF, 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 Depositor and CITCF, and is a valid and
binding obligation of each of the Depositor and CITCF enforceable
against each of the Depositor and CITCF 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 Depositor,
CITCF, CITSF or CITCF-NY is a party has been duly authorized,
executed and delivered by each of the Depositor, CITCF, CITSF and
CITCF-NY, and each constitutes a valid and binding obligation of,
each of the Depositor, CITCF, CITSF and CITCF-NY, enforceable
against each of the Depositor, CITCF, 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
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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 Depositor,
CITCF, 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
Depositor are within the corporate power of the Depositor, CITCF,
CITSF and CITCF-NY, as applicable, and have been duly authorized
by all necessary corporate action on the part of the Depositor,
CITCF, CITSF and CITCF-NY, as applicable; and neither the issue
and sale of the Offered Certificates, nor the consummation of the
transactions contemplated by the Basic Documents nor the
fulfillment of the terms thereof will, to the best of such
counsel's actual 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 the
Depositor, CITCF, CITSF or CITCF-NY pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument, if any, to which the Depositor, CITCF, CITSF or
CITCF-NY is a party or by which either may be bound or to which
the property or assets of the Depositor, CITCF, CITSF or CITCF-NY
are subject (but only as to contracts, indentures, mortgages,
loan agreements, notes, leases and other such instruments which
have been identified by the Depositor, CITCF, 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 Depositor, CITCF, CITSF or CITCF-NY or, to the best of such
counsel's actual 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 Depositor, CITCF, CITSF or CITCF-NY.
(vii) The Depositor has duly authorized and executed the
written order to the Trustee to execute and deliver the Offered
Certificates.
(viii) To the best of such counsel's actual 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 Depositor, CITCF, 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.
(ix) There are no legal or governmental proceedings pending
to which the Depositor, CITCF, CITSF or CITCF-NY is a party or of
which any property of the Depositor, CITCF, 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 of all or part of any of the
Basic Documents, (2) seeking to prevent the issuance of the
Offered Certificates, (3) that
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could materially and adversely affect the Depositor's, CITCF'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 Offered Certificates.
(x) Such counsel is familiar with CITCF's, CITSF's and
CITCF-NY's standard operating procedures relating to CITCF's,
CITSF's and CITCF-NY's acquisition of a duly recorded mortgage,
deed of trust or similar interest (a "mortgage") against homes
financed by CITCF, CITSF and CITCF-NY pursuant to home equity
loans in the ordinary course of CITCF's, CITSF's and CITCF-NY's
business. Assuming that CITCF's standard procedures are followed
with respect to the acquisition and recording of mortgages in the
homes securing the Mortgage Loans (the "Mortgaged Homes") (and
such counsel has no reason to believe that any of CITCF, CITSF or
CITCF-NY has not or will not continue to follow its standard
procedures in connection with the acquisition and recording of
mortgages in the Mortgaged Homes), CITCF, CITSF and CITCF-NY have
recorded or will record a mortgage against the applicable
Mortgaged Homes.
(xi) The CITCF-NY Sale Agreement is sufficient in form and
substance to convey to CITCF all of CITCF-NY's right, title and
interest in and to the related Mortgage Loans. When the CITCF-NY
Sale Agreement has been duly executed and delivered by all
parties thereto, and the purchase price has been paid to CITCF-NY
by CITCF in the manner specified in the CITCF-NY Sale Agreement,
all of CITCF-NY's right, title and interest in and to the related
Mortgage Loans will have been conveyed to CITCF, except as such
interest in the related Mortgaged Homes may be limited by the
absence of a duly recorded mortgage assignment.
(xii) The CITSF Sale Agreement is sufficient in form and
substance to convey to CITCF all of CITSF's right, title and
interest in and to the related Mortgage Loans. When the CITSF
Sale Agreement has been duly executed and delivered by all
parties thereto, and the purchase price has been paid to CITSF by
CITCF in the manner specified in the CITSF Sale Agreement, all of
CITSF's right, title and interest in and to the related Mortgage
Loans will have been conveyed to CITCF, except as such interest
in the related Mortgaged Homes may be limited by the absence of a
duly recorded mortgage assignment.
(xiii) The Purchase Agreement is sufficient in form and
substance to convey to the Depositor all of CITCF's right, title
and interest in and to the Mortgage Loans. When the Purchase
Agreement has been duly executed and delivered by all parties
thereto, and the purchase price has been paid to CITCF by the
Depositor in the manner specified in the Purchase Agreement, all
of CITCF's right, title and interest in and to the Mortgage Loans
will have been conveyed to the Depositor, except as such interest
in the related Mortgaged Homes may be limited by the absence of a
duly recorded mortgage assignment.
(xiv) The Pooling and Servicing Agreement is sufficient in
form and substance to convey to the Trustee all of the
Depositor's right, title and interest in and to the
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Mortgage Loans. When the Basic Documents have each been duly
executed and delivered by all parties thereto, the purchase price
therefor has been paid to the Depositor by the Trust in the
manner specified in the Pooling and Servicing Agreement, and the
Offered Certificates have been duly executed and duly
authenticated and delivered by the Trustee to or upon the order
of the Depositor in accordance with the Pooling and Servicing
Agreement, all of the Depositor's right, title and interest in
and to the Mortgage Loans will have been conveyed to the Trust
and the Trust will be the holder of a valid and binding interest
in the Mortgage Loans against the Depositor, except that, until
such time as assignments of mortgages are recorded in the name of
the Trustee, on behalf of the Trust, in the appropriate
jurisdictions (x) the Trustee may not, in certain jurisdictions,
be independently able to enforce the mortgage against the related
Mortgaged Homes or the related mortgagor, (y) CITCF-NY, CITSF or
CITCF, as the case may be, could record an assignment of a
mortgage in the name of a third party or record a discharge and
satisfaction of a mortgage, and (z) any notice given to the
holder of record of a mortgage would be given to CITCF-NY, CITSF
or CITCF, as the case may be.
(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.
Said counsel may state that they are admitted to practice only
in the States of New York and New Jersey, as applicable, that they are not
admitted to the Bar in any other State, that they do not express an opinion as
to the laws of any jurisdiction other than the laws of the States of New York
and New Jersey, as applicable, the General Corporate Law of the State of
Delaware and the laws of the United States of America.
(f) 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).
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(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 (but only as to material contracts,
indentures, mortgages, loan agreements, notes, leases and other
such instruments which 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 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.
Said counsel may state that they are admitted to practice only
in the States of New York and New Jersey, as applicable, that they are not
admitted to the Bar in any other State, that they do not express an opinion as
to the laws of any jurisdiction other than the laws of the States of New York
and New Jersey, as applicable, the General Corporate Law of the State of
Delaware and the laws of the United States of America.
(g) The Representative shall have received a written opinion
of Schulte Roth & Zabel LLP, special counsel to the Depositor, CITCF, 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) The Offered Certificates have been duly authorized
and, when executed and authenticated by the Trustee as
specified in the Pooling and Servicing Agreement and issued
and delivered and paid for as contemplated by this
Agreement, will be validly issued, outstanding and entitled
to the benefits of the Pooling and Servicing Agreement.
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(ii) The Registration Statement became effective under
the Act as of April 11, 1997 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.
(iii) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of
1939, as amended.
(iv) The Trust is not, and will not as a result of the
offer and sale of the Offered Certificates as contemplated
in the Prospectus and in this Agreement become, required to
register as an "investment company" under the Investment
Company Act of 1940, as amended.
(v) The statements in the prospectus supplement
relating to the Offered Certificates, dated July16, 1997,
under the caption "Description of the Certificates," insofar
as such statements purport to summarize certain terms of the
Offered Certificates and the Basic Documents, present a fair
summary of such documents.
(vi) To the best of such counsel's knowledge, there are
no contracts or documents of the Depositor 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.
333-22283) relating to the Registered 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 or
information on the economic condition or financial condition
of the portfolio information included in or incorporated by
reference into the registration statement on Form S-3 (No.
333-22283) relating to the Registered Securities, the
Registration Statement, the Prospectus or any amendment or
supplement thereto.
Such counsel shall state that it has participated in
conferences with officers and representatives of the Depositor, CITCF, CIT,
CITSF, counsel to CIT, CITCF, the Depositor, 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
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Form S-3 (No. 333-22283) relating to the Registered Securities, the Registration
Statement or Prospectus (except as stated in Sections 6(h)(v) and 6(h)(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 Depositor, CIT, CITSF and CITCF), no facts have come to
their attention that leads such counsel to believe that the registration
statement on Form S-3 (No. 333-22283) relating to the Registered 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 the
economic condition 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.
(h) The Representative shall have received an opinion of
Stroock & Stroock & Lavan LLP, counsel for the Underwriters, dated the Closing
Date, with respect to the validity of the Offered Certificates and such other
related matters as the Representative shall require and the Depositor 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.
(i) The Representative shall have received an opinion of
Emmet, Marvin & Martin LLP, counsel to the Trustee, dated the Closing Date, in
form and in substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Pooling and Servicing Agreement, assuming due
authorization, execution and delivery of such document by all
other parties thereto, constitutes the legal, valid and binding
agreement of the Trustee, 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 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 Trustee, and the application of general
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or law).
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(ii) The Offered Certificates have been duly executed,
authenticated and delivered by the Trustee in accordance with the
terms of the Pooling & Servicing Agreement.
(j) The Representative shall have received an opinion of
in-house counsel to the Trustee, dated the Closing Date, in form and in
substance satisfactory to the Representative and counsel for the Underwriters,
to the effect that:
(i) The Trustee is a New York banking corporation validly
existing under the laws of the State of New York and has the full
power and authority to enter into, and to take all action
required of it, under the Pooling and Servicing Agreement.
(ii) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee.
(iii) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened
against the Trustee under the Pooling and Servicing Agreement
before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Pooling and Servicing Agreement
or the Offered Certificates, or (B) seeking to prevent the
issuance of the Offered Certificates or consummation of any of
the transactions contemplated by the Pooling and Servicing
Agreement or the Offered Certificates, or (C) that might
materially or adversely affect the performance by the Trustee of
its obligations under, or the validity or enforceability of the
Pooling and Servicing Agreement and the Offered Certificates.
(iv) The execution and delivery of the Pooling and Servicing
Agreement by the Trustee and the performance by the Trustee of
its terms do not conflict with or result in a violation of (a)
any law or regulation of the United States of America or the
State of New York governing the banking or trust powers of the
Trustee, or (b) the articles of association and by-laws of the
Trustee.
(v) No consent, approval or authorization of, filing or
registration with, or notice to, any court or governmental agency
or regulatory authority is required for the Trustee in connection
with the execution and delivery of, performance under, or
compliance with, the Pooling and Servicing Agreement or the
Offered Certificates.
(k) The Class A Certificates shall all have been rated "Aaa"
by Moody's and "AAA" by S&P, the Class M-1 Certificates shall have been rated
"Aa2" by Moody's and "AA" by S&P, the Class M-2 Certificates shall have been
rated "A2" by Moody's and "A-" by S&P and , and the Class B-1 Certificates shall
have been rated "Baa2" by Moody's and "BBB-" by S&P.
(l) 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
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<PAGE>
the Closing Date, to the effect that each Underwriter may rely on each such
opinion to the same extent as though such opinion was addressed to each as of
its date.
(m) 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 Offered Certificates 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 Depositor in connection with the issuance and
sale of the Offered Certificates 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 Offered
Certificates is required to be filed by the Depositor with the Commission
pursuant to Section 5(m) hereof, each Underwriter shall deliver to the Depositor
five complete copies of all materials, if any, provided by such Underwriter to
prospective investors in such Offered Certificates 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 Depositor pursuant to this
paragraph (a) shall be effected by delivering four copies of such materials to
counsel for the Depositor on behalf of the Depositor and one copy of such
materials to the Depositor. The Computational Materials so delivered shall be
accompanied by a letter from KPMG Peat Marwick LLP, addressed to the Depositor
and the Representative, in form and substance reasonably satisfactory to the
Depositor 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 Depositor, as of date hereof and
as of the Closing Date, that:
(i) on the date any such Computational Materials with
respect to the Offered Certificates were last furnished to each
prospective investor by such Underwriter and on the date of
delivery thereof to the Depositor pursuant to Section 7(a), any
Underwriter Derived Information (defined below), assuming the
accuracy of the related Depositor Provided Information, 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
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<PAGE>
supplement relating to the Offered Certificates, 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 Depositor.
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 Depositor 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 Depositor Provided Information.
"Depositor Provided Information" means any computer tape furnished to the
Underwriters by the Depositor 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 Depositor
that if any Underwriter Derived Information required to be provided to
the Depositor 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 Depositor or filed by
the Depositor with the Commission) shall promptly prepare and deliver to the
Depositor and each prospective investor which received such Underwriter Derived
Information corrected Underwriter Derived Information. All information provided
to the Depositor 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) and if no Computational
Materials have been previously approved, 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 Offered 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
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<PAGE>
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) CITCF 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) CITCF 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 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 Depositor or
CITCF 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 Offered Certificates 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 "Underwriting" (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 "Depositor Error") in the Depositor
Provided Information other than a Depositor Error which is corrected by
information subsequently furnished by the Depositor in writing or by electronic
transmission to such Underwriter prior to the time such Computational Materials
are furnished to the Depositor 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 Offered
Certificates 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 Offered Certificates 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)
CITCF 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
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<PAGE>
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 Depositor and CITCF against any losses, claims,
damages or liabilities to which the Depositor or CITCF 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 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 Depositor or CITCF by such Underwriter through the Representative
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Depositor or CITCF 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 Depositor 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 Depositor Error other than a
Depositor Error which is corrected by information subsequently furnished by the
Depositor in writing or by electronic transmission to such Underwriter prior to
the time such Computational Materials are furnished to the Depositor 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 Depositor and CITCF, 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 acceptance by the indemnified party of counsel, except
as provided in the next following paragraph, the indemnifying party will not be
liable to such indemnified party under this Section
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<PAGE>
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.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; or (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however that the indemnifying party 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 (in addition to one local counsel per
jurisdiction) at any time for all such indemnified parties, which firm shall be
designated in writing by the related Underwriter, if the indemnified parties
under this Section 8 consist of one or more Underwriters or any of its or their
controlling persons, or the Depositor, if the indemnified parties under this
Section 8 consist of the Depositor or any of the Depositor's directors, officers
or controlling persons.
(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, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Depositor and CITCF on the one hand and the Underwriters on the other
from the offering of the Offered Certificates or (ii) if the allocation provided
in clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Depositor and CITCF 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
Depositor and CITCF 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 Offered Certificates (before deducting expenses) received by the
Depositor and CITCF 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 Depositor, CITCF or by the Underwriters
and the
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<PAGE>
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 Offered Certificates 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 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 CITCF under this Section shall be in
addition to any liability which the Depositor or CITCF 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 Depositor or CITCF, to each
officer of the Depositor or CITCF who has signed the Registration Statement and
to each person, if any, who controls the Depositor or CITCF within the meaning
of the Act.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Depositor, and CITCF 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 Depositor, CITCF, CITSF or
any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Offered
Certificates. If this Agreement is terminated pursuant to Section 10 or if for
any reason the purchase of the Offered Certificates by the Underwriters is not
consummated, the Depositor, CITCF, 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 Depositor, CITCF, CITSF and the Underwriters
pursuant to Section 8 hereof shall remain in effect. If the purchase of the
Offered Certificates 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(d) hereof, the Depositor, and CITCF 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 Offered
Certificates.
10. Failure to Purchase the Offered Certificates. If any
Underwriter or Underwriters default in their obligations to purchase the
principal amount of the Class or Classes
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<PAGE>
of Offered Certificates opposite such Underwriter's name on Schedule I hereto
and the aggregate principal amount of such Class or Classes of Offered
Certificates that such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10% of the total principal amount of the Offered
Certificates, the Representative may make arrangements satisfactory to the
Depositor, and CITCF for the purchase of such Offered 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 Offered Certificates that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of the Class or Classes of Offered Certificates with respect to
such default or defaults exceeds 10% of the total principal amount of the
Offered Certificates and arrangements satisfactory to the Representative, the
Depositor, and CITSF for the purchase of such Offered 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
Depositor, or CITCF, 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 it at Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:
Murray C. Stoltz (facsimile number (212) 761-0782); with a copy to its General
Counsel office (facsimile number (212) 761-8519), if sent to the Depositor, will
be mailed, delivered or sent by facsimile transmission and confirmed to it at
The CIT Group Securitization Corporation III, 650 CIT Drive, Livingston, New
Jersey 07039, Attention: Thomas B. Hallman, 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 CITCF, 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 Depositor or by a trust for which the Depositor was the
depositor 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 Depositor 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 Depositor, CIT and CITCF 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.
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<PAGE>
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. 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.
16. Counterparts. This Agreement may be executed by each of
the parties hereto in any number of counterparts, and by each of the parties
hereto on separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<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 the Depositor, CIT,
CITCF and the several Underwriters in accordance with its terms.
Very truly yours,
THE CIT GROUP SECURITIZATION CORPORATION III
By: /s/ FRANK GARCIA
--------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP/CONSUMER FINANCE, INC.
By: /s/ FRANK GARCIA
--------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP HOLDINGS, INC.
By: /s/ JOSEPH M. LEONE
--------------------------------
Name: Joseph M. Leone
Title: Executive Vice President
and Chief Financial Officer
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<PAGE>
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ MURRAY C. STOLTZ
----------------------------
Name: Murray C. Stoltz
Title: Principal
Acting on behalf of itself
and as the Representative
of the several Underwriters.
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<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Pass
Original Principal Through
Class Balance $ Price % Price $ Rate %
----- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Morgan Stanley & Co. Incorporated A-1 22,500,000 99.87450 22,471,762.50 5.93
First Chicago Capital Markets, Inc. A-1 22,500,000 99.87450 22,471,762.50 5.93
Lehman Brothers Inc. A-1 22,500,000 99.87450 22,471,762.50 5.93
Salomon Brothers Inc A-1 22,500,000 99.87450 22,471,762.50 5.93
Morgan Stanley & Co. Incorporated A-2 9,000,000 99.85000 8,986,500.00 6.17
First Chicago Capital Markets, Inc. A-2 9,000,000 99.85000 8,986,500.00 6.17
Lehman Brothers Inc. A-2 9,000,000 99.85000 8,986,500.00 6.17
Salomon Brothers Inc A-2 9,000,000 99.85000 8,986,500.00 6.17
Morgan Stanley & Co. Incorporated A-3 20,333,333.33 99.784375 20,289,489.58 6.25
First Chicago Capital Markets, Inc. A-3 20,333,333.33 99.784375 20,289,489.58 6.25
Lehman Brothers Inc. A-3 20,333,333.33 99.784375 20,289,489.58 6.25
Salomon Brothers Inc A-3 20,333,333.33 99.784375 20,289,489.58 6.25
Morgan Stanley & Co. Incorporated A-4 10,000,000 99.643750 9,964,375.00 6.37
First Chicago Capital Markets, Inc. A-4 10,000,000 99.643750 9,964,375.00 6.37
Lehman Brothers Inc. A-4 10,000,000 99.643750 9,964,375.00 6.37
Salomon Brothers Inc A-4 10,000,000 99.643750 9,964,375.00 6.37
</TABLE>
-30-
<PAGE>
<TABLE>
<CAPTION>
Pass
Original Principal Through
Class Balance $ Price % Price $ Rate %
----- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Morgan Stanley & Co. Incorporated A-5 3,750,000 99.53125 3,732,421.88 6.55
First Chicago Capital Markets, Inc. A-5 3,750,000 99.53125 3,732,421.88 6.55
Lehman Brothers Inc. A-5 3,750,000 99.53125 3,732,421.88 6.55
Salomon Brothers Inc A-5 3,750,000 99.53125 3,732,421.88 6.55
Morgan Stanley & Co. Incorporated A-6 3,750,000 99.506250 3,731,484.38 6.67
First Chicago Capital Markets, Inc. A-6 3,750,000 99.506250 3,731,484.38 6.67
Lehman Brothers Inc. A-6 3,750,000 99.506250 3,731,484.38 6.67
Salomon Brothers Inc A-6 3,750,000 99.506250 3,731,484.38 6.67
Morgan Stanley & Co. Incorporated A-7 8,250,000 99.456250 8,205,140.63 6.95
First Chicago Capital Markets, Inc. A-7 8,250,000 99.456250 8,205,140.63 6.95
Lehman Brothers Inc. A-7 8,250,000 99.456250 8,205,140.63 6.95
Salomon Brothers Inc A-7 8,250,000 99.456250 8,205,140.63 6.95
</TABLE>
-31-
<PAGE>
<TABLE>
<CAPTION>
Pass
Original Principal Through
Class Balance $ Price % Price $ Rate %
----- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Morgan Stanley & Co. Incorporated A-8 7,500,000 99.56875 7,467,656.25 6.65
First Chicago Capital Markets, Inc. A-8 7,500,000 99.56875 7,467,656.25 6.65
Lehman Brothers Inc. A-8 7,500,000 99.56875 7,467,656.25 6.65
Salomon Brothers Inc A-8 7,500,000 99.56875 7,467,656.25 6.65
Morgan Stanley & Co. Incorporated A-9 22,500,000 99.70000 22,432,500.00 Var
First Chicago Capital Markets, Inc. A-9 22,500,000 99.70000 22,432,500.00 Var
Lehman Brothers Inc. A-9 22,500,000 99.70000 22,432,500.00 Var
Salomon Brothers Inc A-9 22,500,000 99.70000 22,432,500.00 Var
Morgan Stanley & Co. Incorporated M-1 7,500,000 99.48750 7,461,562.50 6.85
First Chicago Capital Markets, Inc. M-1 7,500,000 99.48750 7,461,562.50 6.85
Lehman Brothers Inc. M-1 7,500,000 99.48750 7,461,562.50 6.85
Salomon Brothers Inc M-1 7,500,000 99.48750 7,461,562.50 6.85
</TABLE>
-32-
<PAGE>
<TABLE>
<CAPTION>
Pass
Original Principal Through
Class Balance $ Price % Price $ Rate %
----- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Morgan Stanley & Co. Incorporated M-2 8,125,000 99.49875 8,084,273.44 7.10
First Chicago Capital Markets, Inc. M-2 8,125,000 99.49875 8,084,273.44 7.10
Lehman Brothers Inc. M-2 8,125,000 99.49875 8,084,273.44 7.10
Salomon Brothers Inc M-2 8,125,000 99.49875 8,084,273.44 7.10
Morgan Stanley & Co. Incorporated B-1 5,625,000 99.38750 5,590,546.88 7.45
First Chicago Capital Markets, Inc. B-1 5,625,000 99.38750 5,590,546.88 7.45
Lehman Brothers Inc. B-1 5,625,000 99.38750 5,590,546.88 7.45
Salomon Brothers Inc B-1 5,625,000 99.38750 5,590,546.88 7.45
Total Price to Public: $494,366,874.90
Total Price to Depositor: $492,881,675.90
Underwriting Discounts
and Commissions: $ 1,485,195.00
</TABLE>
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<PAGE>
SCHEDULE II
Locations of Chief Executive Offices and Principal Places of Business
The CIT Group Securitization
Corporation III 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/ Consumer Finance, Inc. 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, 650 CIT Drive
Inc. (NY) Livingston, NJ 07039-0491
- --------------------------------------------------------------------------------
Home Equity Loan Asset Backed
Certificates
Series 1997-1
POOLING AND SERVICING AGREEMENT
among
THE CIT GROUP SECURITIZATION CORPORATION III
as Depositor,
THE CIT GROUP/CONSUMER FINANCE, INC.
as Seller and Master Servicer,
and
THE BANK OF NEW YORK,
not in its individual capacity but solely as Trustee
dated as of July 1, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.......................................................1
SECTION 1.01. General.....................................................1
SECTION 1.02. Specific Terms..............................................1
ARTICLE II ESTABLISHMENT OF THE TRUST; TRANSFER OF MORTGAGE LOANS..........29
SECTION 2.01. Establishment of the Trust.................................29
SECTION 2.02. Conveyance of the Mortgage Loans...........................29
SECTION 2.03. Conditions of Closing for the Mortgage Loans...............29
SECTION 2.04. [Reserved].................................................31
SECTION 2.05. [Reserved].................................................31
SECTION 2.06. Acceptance by Trustee......................................31
SECTION 2.07. REMIC Designations.........................................31
SECTION 2.08. REMIC Tax Matters..........................................31
SECTION 2.09. REMIC Certificate Maturity Date............................32
SECTION 2.10. Other Tax Matters..........................................32
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................33
SECTION 3.01. Representations and Warranties Regarding
CIT Consumer Finance.....................................33
SECTION 3.02. Representations and Warranties Regarding
Each Mortgage Loan.......................................34
SECTION 3.03. Representations and Warranties Regarding the
Mortgage Loans in the Aggregate..........................38
SECTION 3.04. Representations and Warranties Regarding the Files.........38
SECTION 3.05. Repurchase of Mortgage Loans or Substitution
of Mortgage Loans for Breach of Representations
and Warranties...........................................39
DELIVER OF MORTGAGE DOCUMENTS; CUSTODY OF MORTGAGE LOANS;
RECORDATION OF MORTGAGES....................................................42
SECTION 4.01. Delivery of Mortgage Documents; Custody of
Mortgage Loans...........................................42
SECTION 4.02. Recordation of Mortgages...................................43
SECTION 4.03. Review of Mortgage Documents...............................44
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<PAGE>
ARTICLE V SERVICING OF MORTGAGE LOANS......................................47
SECTION 5.01. Responsibility for Mortgage Loan Administration............47
SECTION 5.02. Standard of Care...........................................47
SECTION 5.03. Records....................................................47
SECTION 5.04. Inspection; Computer Tape..................................48
SECTION 5.05. Certificate Account........................................48
SECTION 5.06. Enforcement................................................50
SECTION 5.07. Trustee to Cooperate.......................................52
SECTION 5.08. Costs and Expenses.........................................52
SECTION 5.09. Maintenance of Insurance...................................53
SECTION 5.10. REMIC Compliance...........................................55
SECTION 5.11. Sub-Servicer...............................................56
SECTION 5.12. Calculation of One-month LIBOR.............................58
SECTION 5.13. Applied Realized Loss Amounts...............................58
ARTICLE VI REPORTS.........................................................59
SECTION 6.01. Monthly Reports to the Trustee.............................59
SECTION 6.02. Certificate of Servicing Officer...........................60
SECTION 6.03. Other Data.................................................61
SECTION 6.04. Annual Report of Accountants...............................61
SECTION 6.05. Statements to Certificateholders...........................61
ARTICLE VII SERVICE TRANSFER...............................................63
SECTION 7.01. Event of Termination.......................................63
SECTION 7.02. Transfer...................................................64
SECTION 7.03. Trustee to Act; Appointment of Successor...................65
SECTION 7.04. Notification to Certificateholders
and to Rating Agencies...................................65
SECTION 7.05. Effect of Transfer.........................................66
SECTION 7.06. Transfer of Accounts.......................................66
ARTICLE VIII DISTRIBUTIONS AND WITHDRAWALS FROM CERTIFICATE ACCOUNT........67
SECTION 8.01. Monthly Distributions......................................67
SECTION 8.02. Permitted Withdrawals from the Certificate Account.........73
SECTION 8.03. Repurchase Option and Auction Sale.........................74
SECTION 8.04. Monthly Advances by the Master Servicer....................76
ARTICLE IX THE CERTIFICATES................................................77
SECTION 9.01. The Certificates...........................................77
SECTION 9.02. Registration of Transfer and Exchange of Certificates......78
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<PAGE>
SECTION 9.03. No Charge; Disposition of Void Certificates................83
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates..........84
SECTION 9.05. Persons Deemed Owners......................................84
SECTION 9.06. Access to List of Certificateholders'
Names and Addresses......................................84
SECTION 9.07. Authenticating Agents......................................85
ARTICLE X INDEMNITIES......................................................86
SECTION 10.01. Liabilities to Mortgagors.................................86
SECTION 10.02. Tax Indemnification.......................................86
SECTION 10.03. Master Servicer's Indemnities.............................86
SECTION 10.04. Operation of Indemnities..................................87
ARTICLE XI THE TRUSTEE.....................................................88
SECTION 11.01. Duties of Trustee.........................................88
SECTION 11.02. Certain Matters Affecting the Trustee.....................89
SECTION 11.03. Trustee Not Liable for Certificates
or Mortgage Loans.......................................90
SECTION 11.04. Rights of Certificateholders to Direct Trustee
and to Waive Events of Termination......................90
SECTION 11.05. Master Servicer to Pay Trustee's Fees and Expenses........91
SECTION 11.06. Eligibility Requirements for Trustee......................91
SECTION 11.07. Resignation or Removal of Trustee.........................92
SECTION 11.08. Successor Trustee.........................................92
SECTION 11.09. Merger or Consolidation of Trustee........................93
SECTION 11.10. Reserved..................................................93
SECTION 11.11. Separate Trustees and Co-Trustees.........................93
SECTION 11.12. Trustee May Own Certificates..............................94
SECTION 11.13. Agents of Trustee.........................................94
ARTICLE XII MISCELLANEOUS..................................................95
SECTION 12.01. Master Servicer Not To Resign.............................95
SECTION 12.02. Maintenance of Office or Agency...........................95
SECTION 12.03. Termination...............................................95
SECTION 12.04. Acts of Certificateholders................................97
SECTION 12.05. Calculations..............................................98
SECTION 12.06. Assignment or Delegation by the Master Servicer;
Merger or Consolidation of the Company, CIT
Consumer Finance or the Master Servicer................98
SECTION 12.07. Amendment.................................................99
SECTION 12.08. Contribution of Assets...................................101
SECTION 12.09. Notices..................................................101
SECTION 12.10. Merger and Integration...................................102
SECTION 12.11. Reliance on Credit.......................................102
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<PAGE>
SECTION 12.12. No Bankruptcy Petition...................................103
SECTION 12.13. Headings.................................................103
SECTION 12.14. Governing Law............................................103
SECTION 12.15. Counterparts.............................................103
ARTICLE XIII THE COMPANY..................................................104
Section 13.01 Representations of Company.................................104
Section 13.02 Merger or Consolidation of Company.........................105
Section 13.03 Limitation on Liability of the Company and Others..........105
Section 13.04 The Company May Own Securities.............................105
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<PAGE>
EXHIBITS
EXHIBIT A-1. - FORM OF CLASS A-1 CERTIFICATES
EXHIBIT A-2. - FORM OF CLASS A-2 CERTIFICATES
EXHIBIT A-3. - FORM OF CLASS A-3 CERTIFICATES
EXHIBIT A-4. - FORM OF CLASS A-4 CERTIFICATES
EXHIBIT A-5. - FORM OF CLASS A-5 CERTIFICATES
EXHIBIT A-6. - FORM OF CLASS A-6 CERTIFICATES
EXHIBIT A-7. - FORM OF CLASS A-7 CERTIFICATES
EXHIBIT A-8. - FORM OF CLASS A-8 CERTIFICATES
EXHIBIT A-9. - FORM OF CLASS A-9 CERTIFICATES
EXHIBIT B-1. - FORM OF CLASS B-1 CERTIFICATE
EXHIBIT B-2. - FORM OF CLASS B-2 CERTIFICATE
EXHIBIT C. - FORM OF CLASS R CERTIFICATE
EXHIBIT D-1. - FORM OF CLASS M-1 CERTIFICATE
EXHIBIT D-2. - FORM OF CLASS M-2 CERTIFICATE
EXHIBIT E. - CERTIFICATE OF OFFICERS OF CIT CONSUMER FINANCE
EXHIBIT F. - FORM OF OPINION OF COUNSEL FOR CIT CONSUMER FINANCE
EXHIBIT G. - FORM OF TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
EXHIBIT H. - CERTIFICATE OF SERVICING OFFICERS
EXHIBIT I-1. - CERTIFICATE REGARDING REPURCHASED MORTGAGE LOANS
EXHIBIT I-2. - CERTIFICATE REGARDING SUBSTITUTED MORTGAGE LOANS
EXHIBIT J. - LIST OF MORTGAGE LOANS
EXHIBIT K. - FORM OF MONTHLY REPORT TO CERTIFICATEHOLDERS
EXHIBIT L. - FORM OF TRANSFER AFFIDAVIT
EXHIBIT M. - AUCTION PROCEDURES
EXHIBIT N. - FORM OF POWER OF ATTORNEY
EXHIBIT O. - CLASS B-2 CERTIFICATE TRANSFEREE LETTER
-v-
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of July 1, 1997,
among The CIT Group Securitization Corporation III, as depositor (together with
its permitted successors and assigns, the "Company"), The CIT Group/Consumer
Finance, Inc., a corporation organized and existing under the laws of the State
of Delaware, as Seller and Master Servicer (in its individual capacity, "CIT
Consumer Finance," or, together with its permitted successors and assigns, the
"Master Servicer"), and The Bank of New York, a banking corporation organized
and existing under the laws of the State of New York, not in its individual
capacity but solely as Trustee (together with its permitted successors and
assigns, the "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.
"Accrual Period" means, the period for which interest on the
outstanding principal balance of each Class of Offered Certificates and the
Class B-2 Certificates is payable. Such period shall be the period from the
preceding Distribution Date to and including the date prior to the current
Distribution Date (or, in the case of the initial Distribution Date, from the
Closing Date to and including the date prior to the initial Distribution Date).
"Adjustable Rate Group" means the Mortgage Loan Group
consisting of Adjustable Rate Mortgage Loans.
"Adjustable Rate Group Available Funds Cap Rate" means as of
any Distribution Date, an amount, expressed as a per annum rate, equal to (x)
the sum of (i)(a) the amount of interest due and collected (or advanced) on all
of the Mortgage Loans in the Adjustable Rate Group for the related Due Period,
minus (b) the product of (A) 1/12 of the weighted average interest rate on all
of the Mortgage Loans in the Adjustable Rate Group as of the first day of the
related Due Period and (B) the Principal Balance of the fractional Mortgage
Loans in the Adjustable Rate Group described in clause (i)(B) of the definition
of the Fixed Rate Group Available Funds Cap Rate determined as of such
Distribution Date, plus (ii) the excess, if any, of the amount of interest due
and collected (or advanced) on all of the Mortgage Loans in the Fixed
<PAGE>
Rate Group for the related Due Period and on the fractional Mortgage Loans for
such Due Period described in clause (i)(B) above over the amount of interest due
on the Fixed Rate Certificates on such Distribution Date, minus (iii) the Master
Servicing Fee payable on such Distribution Date, minus (iv) the Weighted Carve
Out Adjustable Amount, divided by (y) the Certificate Balance of the Class A-9
Certificates as of the first day of the related Due Period, multiplied by (z)
twelve.
"Adjustable Rate Group Extra Principal Distribution Amount"
means an amount equal to the sum of (x) the greater of (i) zero or (ii) the
lesser of (I) the Extra Principal Distribution Amount or (II) the product of (1)
an amount equal to (A) the Realized Losses for the Adjustable Rate Group in the
preceding Due Period divided by the aggregate Principal Balance of the Mortgage
Loans in the Adjustable Rate Group minus (B) the Realized Losses for the Fixed
Rate Group in the preceding Due Period divided by the aggregate Principal
Balance of the Mortgage Loans in the Fixed Rate Group and (2) the aggregate
Principal Balance of the Mortgage Loans in the Adjustable Rate Group and (y) a
pro-rata portion, based on the aggregate Principal Balance of the Mortgage Loans
in the related Mortgage Loan Group, of any Extra Principal Distribution Amount
remaining after taking into account clause (x) of this definition and clause (x)
of the definition of the Fixed Rate Group Extra Principal Distribution Amount.
"Adjustable Rate Group Overcollateralization Release Amount"
means an amount equal to the sum of (x) the greater of (i) zero or (ii) the
lesser of (I) the Overcollateralization Release Amount or (II) the product of
(1) an amount equal to (A) the Realized Losses for the Fixed Rate Group in the
preceding Due Period divided by the aggregate Principal Balance of the Mortgage
Loans in the Fixed Rate Group minus (B) the Realized Losses for the Adjustable
Rate Group in the preceding Due Period divided by the aggregate Principal
Balance of the Mortgage Loans in the Adjustable Rate Group and (2) the aggregate
Principal Balance of the Mortgage Loans in the Adjustable Rate Group and (y) a
pro-rata portion, based on the aggregate Principal Balance of the Mortgage Loans
in the related Mortgage Loan Group, of any Overcollateralization Release Amount
remaining after taking into account clause (x) of this definition and clause (x)
of the definition of the Fixed Rate Group Overcollateralization Release Amount.
"Adjustable Rate Mortgage Loans" means Mortgage Loans having
an adjustable Mortgage Rate.
"Advisor" has the meaning assigned in Section 8.03.
"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.
"Agreement" means this Pooling and Servicing Agreement.
"Aggregate Certificate Balance" means, as of any date of
determination, the sum of the Certificate Balance of all Classes of the Offered
Certificates and the Class B-2 Certificates.
2
<PAGE>
"Applicants" has the meaning assigned in Section 9.06.
"Auction" has the meaning assigned in Section 8.03.
"Auction Procedures" has the meaning assigned in Section 8.03.
"Auction Property" has the meaning assigned in Section 8.03.
"Authenticating Agent" means any authenticating agent
appointed pursuant to Section 9.07.
"Balloon Loan" means a Mortgage Loan the terms of which
require payment of a substantial portion of the original principal balance of
such Mortgage Loan to be due at maturity.
"Book-Entry Certificate" means any Offered Certificate
registered in the name of the Depository or its nominee, ownership of which is
reflected on the books of the Depository or on the books of a person maintaining
an account with such Depository (directly or as an indirect participant in
accordance with the rules of such Depository).
"Business Day" means any day other than (a) a Saturday or a
Sunday or (b) another day on which banking institutions or trust companies in
the State of Oklahoma, the State of New Jersey or the State of New York are
authorized by law, regulation or executive order to be closed.
"Call Loan" means a Mortgage Loan which permits the mortgagee
to require the Mortgagor to pay the full principal balance of the Mortgage Loan
on a specified date prior to the maturity of the Mortgage Loan.
"Certificate" means a Home Equity Loan Asset Backed
Certificate Series 1997-1 executed and delivered by the Trustee substantially in
the form of Exhibits A-D.
"Certificate Account" means a separate trust account
maintained in the name of the Trust as an Eligible Account.
"Certificate Balance" means any of the Class A-1 Certificate
Balance, Class A-2 Certificate Balance, Class A-3 Certificate Balance, Class A-4
Certificate Balance, Class A-5 Certificate Balance, Class A-6 Certificate
Balance, Class A-7 Certificate Balance, Class A-8 Certificate Balance, Class A-9
Certificate Balance, Class M-1 Certificate Balance, Class M-2 Certificate
Balance, Class B-1 Certificate Balance and Class B-2 Certificate Balance, as
applicable.
"Certificateholder" or "Holder" means the person who is the
beneficial owner of a Book-Entry Certificate or the person in whose name a
Certificate is registered on the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Certificate registered in the name of the Seller, the Master
Servicer or any Affiliate of the Seller or the Master Servicer shall be deemed
not to be outstanding, and the Percentage Interest evidenced thereby shall not
be taken into account in
3
<PAGE>
determining whether the requisite Percentage Interest necessary to effect any
such consent, request, waiver or demand has been obtained unless all the
Certificates are held by such Persons; provided, however, that in determining
whether the Trustee shall be protected in relying upon any such consent, waiver,
request or demand only Certificates which the Trustee knows to be so owned shall
be so disregarded.
"Certificate Register" means the register maintained pursuant
to Section 9.02.
"Certificate Registrar" means the registrar appointed pursuant
to Section 9.02.
"CIT Purchase Agreements" means the CITCF-NY Purchase
Agreement, the CITSF Purchase Agreement and the Purchase Agreement.
"CITCF-NY" means The CIT Group/Consumer Finance, Inc. (NY), a
wholly-owned subsidiary of Holdings.
"CITCF-NY Purchase Agreement" means the Purchase Agreement,
dated as of July 1, 1997, between CITCF-NY and CIT Consumer Finance, providing
for the sale of Mortgage Loans from CITCF-NY to CIT Consumer Finance.
"CIT Consumer Finance" means The CIT Group/Consumer Finance,
Inc., and its successors in interest as permitted hereunder.
"CITSF" means The CIT Group/Sales Financing Inc., and its
successors in interest as permitted hereunder.
"CITSF Purchase Agreement" means the Purchase Agreement, dated
as of July 1, 1997, between CITSF and CIT Consumer Finance, providing for the
sale of Mortgage Loans from CITSF to CIT Consumer Finance.
"Class" means any Class of the Class A Certificates, any Class
of the Mezzanine Certificates, any Class of the Class B Certificates or the
Class R Certificates.
"Class A Certificate" means any one of the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7
Certificates, Class A-8 Certificates or Class A-9 Certificates.
"Class A Current Interest" means with respect to each Class of
Class A Certificates and with respect to any Distribution Date, the aggregate
amount of interest accrued during the related Accrual Period on the Certificate
Balance of the related Class of Class A Certificates at the applicable
Pass-Through Rate for such Class A Certificate.
"Class A Interest Carry Forward Amount" means with respect to
any Class of the Class A Certificates for any Distribution Date, the sum of (x)
the amount, if any, by which (i) the sum of (A) the Class A Current Interest as
of the immediately preceding Distribution Date and (B) the Class A Interest
Carry Forward Amount from the immediately preceding Distribution Date exceeds
(ii) the amount of the actual distribution of the Interest Remittance Amount
made
4
<PAGE>
to the Holders of the Class A Certificates on such immediately preceding
Distribution Date and (y) 30 days' interest on such amount at the applicable
Pass-Through Rate for such Class A Certificate.
"Class A Principal Distribution Amount" means as of any
Distribution Date (a) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect, 100% of the sum of (A) the Fixed Rate
Principal Distribution Amount and (B) the Variable Rate Principal Distribution
Amount and (b) on or after the Stepdown Date and as long as a Trigger Event is
not in effect, the greater of (I) the lesser of (a) the Class A-9 Certificate
Balance and (b) the Variable Rate Principal Distribution Amount and (II) the
excess of (x) the aggregate Certificate Balance of the Class A Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 59.3% and (ii) the outstanding Principal Balance of the Mortgage
Loans as of the last day of the related Due Period and (B) the outstanding
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period minus $2,500,000.
"Class A Variable Allocation Amount" has the meaning assigned
in Section 8.01(e).
"Class A-1 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-1 hereto.
"Class A-1 Certificate Balance" means, as to any Distribution
Date, the Original Class A-1 Certificate Balance less all amounts previously
distributed to Holders of Class A-1 Certificates on account of principal
pursuant to Section 8.01.
"Class A-1 Pass-Through Rate" means 5.93% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-2 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-2 hereto.
"Class A-2 Certificate Balance" means, as to any Distribution
Date, the Original Class A-2 Certificate Balance less all amounts previously
distributed to Holders of Class A-2 Certificates on account of principal
pursuant to Section 8.01.
"Class A-2 Pass-Through Rate" means 6.17% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-3 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-3 hereto.
5
<PAGE>
"Class A-3 Certificate Balance" means, as to any Distribution
Date, the Original Class A-3 Certificate Balance less all amounts previously
distributed to Holders of Class A-3 Certificates on account of principal
pursuant to Section 8.01.
"Class A-3 Pass-Through Rate" means 6.25% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-4 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-4 hereto.
"Class A-4 Certificate Balance" means, as to any Distribution
Date, the Original Class A-4 Certificate Balance less all amounts previously
distributed to Holders of Class A-4 Certificates on account of principal
pursuant to Section 8.01.
"Class A-4 Pass-Through Rate" means 6.37% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-5 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-5 hereto.
"Class A-5 Certificate Balance" means, as to any Distribution
Date, the Original Class A-5 Certificate Balance less all amounts previously
distributed to Holders of Class A-5 Certificates on account of principal
pursuant to Section 8.01.
"Class A-5 Pass-Through Rate" means 6.55% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-6 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-6 hereto.
"Class A-6 Certificate Balance" means, as to any Distribution
Date, the Original Class A-6 Certificate Balance less all amounts previously
distributed to Holders of Class A-6 Certificates on account of principal
pursuant to Section 8.01.
"Class A-6 Pass-Through Rate" means 6.67% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
6
<PAGE>
"Class A-7 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-7 hereto.
"Class A-7 Certificate Balance" means, as to any Distribution
Date, the Original Class A-7 Certificate Balance less all amounts previously
distributed to Holders of Class A-7 Certificates on account of principal
pursuant to Section 8.01.
"Class A-7 Pass-Through Rate" means 6.95% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-8 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-8 hereto.
"Class A-8 Certificate Balance" means, as to any Distribution
Date, the Original Class A-8 Certificate Balance less all amounts previously
distributed to Holders of Class A-8 Certificates on account of principal
pursuant to Section 8.01.
"Class A-8 Lockout Distribution Amount" means, for any
Distribution Date, the product of (i) the applicable Class A-8 Lockout
Percentage for such Distribution Date and (ii) the Class A-8 Lockout Pro Rata
Distribution Amount for such Distribution Date; provided, however, that in no
event shall the Class A-8 Lockout Distribution Amount for a Distribution Date
exceed the Fixed Rate Principal Distribution Amount for such Distribution Date.
"Class A-8 Lockout Percentage" means, for each Distribution
Date, the following:
Distribution Dates Lockout Percentage
------------------ ------------------
August 1997 - July 2000 0%
August 2000 - July 2002 45%
August 2002 - July 2003 80%
August 2003 - July 2004 100%
August 2004 and thereafter 300%
"Class A-8 Lockout Pro Rata Distribution Amount", means, for
any Distribution Date, an amount equal to the product of (x) a fraction, the
numerator of which is the Certificate Balance of the Class A-8 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Certificate Balance of all Classes of the Class A Certificates (other
than the Class A-9 Certificates) immediately prior to such Distribution Date and
(y) the Class A Principal Distribution Amount minus the Class A Variable
Allocation Amount for such Distribution Date.
7
<PAGE>
"Class A-8 Pass-Through Rate" means 6.65% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class A-9 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit A-9 hereto.
"Class A-9 Certificate Balance" means, as to any Distribution
Date, the Original Class A-9 Certificate Balance less all amounts previously
distributed to Holders of Class A-9 Certificates on account of principal
pursuant to Section 8.01.
"Class A-9 Pass-Through Rate" means an amount equal to the
least of (x) with respect to any Distribution Date which occurs on or prior to
the Clean-up Call Date, One-month LIBOR plus 0.19% per annum and for any
Distribution Date thereafter, One-month LIBOR plus 0.50% per annum, (y) the
Adjustable Rate Group Available Funds Cap Rate applicable to such Distribution
Date and (z) the Maximum Variable Rate, computed on the basis of the actual
number of days elapsed in the related Accrual Period and a 360-day year.
"Class B Certificates" means the Class B-1 Certificates and
the Class B-2 Certificates.
"Class B-1 Applied Realized Loss Amount" means, as to the
Class B-1 Certificates and as of any Distribution Date, the lesser of (x) the
Class B-1 Certificate Balance (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class B-1 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the Class B-2 Applied Realized Loss Amount
as of such Distribution Date.
"Class B-1 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit B-1 hereto.
"Class B-1 Certificate Balance" means, as to the Class B-1
Certificates and as of any date of determination, the Original Class B-1
Certificate Balance as reduced by the sum of (x) all amounts actually
distributed to the Holders of the Class B-1 Certificates on all prior
Distribution Dates on account of principal pursuant to Section 8.01 and (y) the
aggregate cumulative amount of Class B-1 Applied Realized Loss Amounts on all
prior Distribution Dates.
"Class B-1 Current Interest" means with respect to any
Distribution Date, the aggregate amount of interest accrued during the related
Accrual Period on the Class B-1 Certificate Balance at the Class B-1
Pass-Through Rate.
"Class B-1 Interest Carry Forward Amount" means with respect
to any Distribution Date, the sum of (x) the amount, if any, by which (i) the
sum of (A) the Class B-1
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Current Interest as of the immediately preceding Distribution Date and (B) the
Class B-1 Interest Carry Forward Amount from the immediately preceding
Distribution Date exceeds (ii) the amount of the actual distribution of the
Interest Remittance Amount made to the Holders of the Class B-1 Certificates on
such immediately preceding Distribution Date and (y) 30 days' interest on such
amount at the Class B-1 Pass-Through Rate.
"Class B-1 Pass-Through Rate" means 7.45% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class B-1 Principal Distribution Amount" means as of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Class M-1 Certificate Balance (after taking into account the payment of the
Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the
Class M-2 Certificate Balance (after taking into account the payment of the
Class M-2 Principal Distribution Amount on such Distribution Date) and (iv) the
Class B-1 Certificate Balance immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 93.3% and (ii) the outstanding
aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the outstanding Principal Balance of the Mortgage
Loans as of the last day of the related Due Period minus $2,500,000.
"Class B-1 Realized Loss Amortization Amount" means, as to the
Class B-1 Certificates and as of any Distribution Date, the lesser of (x) the
Class B-1 Unpaid Realized Loss Amount as of such Distribution Date and (y) the
excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the Extra
Principal Distribution Amount, the Class M-1 Realized Loss Amortization Amount,
the Class M-2 Realized Loss Amortization Amount, the Class M-1 Interest Carry
Forward Amount, the Class M-2 Interest Carry Forward Amount and the Class B-1
Interest Carry Forward Amount, in each case for such Distribution Date.
"Class B-1 Unpaid Realized Loss Amount" means as of any
Distribution Date, the excess of (x) the aggregate cumulative amount of Class
B-1 Applied Realized Loss Amounts for all prior Distribution Dates over (y) the
aggregate cumulative amount of Class B-1 Realized Loss Amortization Amounts for
all prior Distribution Dates.
"Class B-2 Applied Realized Loss Amount" means, as to the
Class B-2 Certificates and as of any Distribution Date, the lesser of (x) the
Class B-2 Certificate Balance (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class B-2 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the Applied Realized Loss Amount as of such
Distribution Date.
"Class B-2 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit B-2 hereto.
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"Class B-2 Certificate Balance" means, as to the Class B-2
Certificates and as of any date of determination, the Original Class B-2
Certificate Balance as reduced by the sum of (x) all amounts actually
distributed to the Holders of the Class B-2 Certificates on all prior
Distribution Dates on account of principal pursuant to Section 8.01 and (y) the
aggregate cumulative amount of Class B-2 Applied Realized Loss Amounts on all
prior Distribution Dates.
"Class B-2 Current Interest" means with respect to any
Distribution Date, the aggregate amount of interest accrued during the related
Accrual Period on the Class B-2 Certificate Balance at the Class B-2
Pass-Through Rate.
"Class B-2 Interest Carry Forward Amount" means with respect
to any Distribution Date, the sum of (x) the amount, if any, by which (i) the
sum of (A) the Class B-2 Current Interest as of the immediately preceding
Distribution Date and (B) the Class B-2 Interest Carry Forward Amount from the
immediately preceding Distribution Date exceeds (ii) the amount of the actual
distribution of the Interest Remittance Amount made to the Holders of the Class
B-2 Certificates on such immediately preceding Distribution Date and (y) 30
days' interest on such amount at the Class B-2 Pass-Through Rate.
"Class B-2 Pass-Through Rate" means 8.78% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class B-2 Principal Distribution Amount" means as of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Class M-1 Certificate Balance (after taking into account the payment of the
Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the
Class M-2 Certificate Balance (after taking into account the payment of the
Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the
Class B-1 Certificate Balance (after taking into account the payment of the
Class M-2 Principal Distribution Amount on such Distribution Date) and (v) the
Class B-2 Certificate Balance immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 95.3% and (ii) the outstanding
aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the outstanding Principal Balance of the Mortgage
Loans as of the last day of the related Due Period minus $2,500,000.
"Class B-2 Realized Loss Amortization Amount" means, as to the
Class B-2 Certificates and as of any Distribution Date, the lesser of (x) the
Class B-2 Unpaid Realized Loss Amount as of such Distribution Date and (y) the
excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the Extra
Principal Distribution Amount, the Class B-1 Realized Loss Amortization Amount,
the Class M-1 Realized Loss Amortization Amount, the Class M-2 Realized Loss
Amortization Amount, the Class M-1 Interest Carry Forward Amount, the Class M-2
Interest Carry Forward Amount, the Class B-1 Interest Carry Forward Amount and
the Class B-2 Interest Carry Forward Amount, in each case for such Distribution
Date.
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"Class B-2 Unpaid Realized Loss Amount" means as of any
Distribution Date, the excess of (x) the aggregate cumulative amount of Class
B-2 Applied Realized Loss Amounts for all prior Distribution Dates over (y) the
aggregate cumulative amount of Class B-2 Realized Loss Amortization Amounts for
all prior Distribution Dates.
"Class M-1 Applied Realized Loss Amount" means, as to the
Class M-1 Certificates and as of any Distribution Date, the lesser of (x) the
Class M-1 Certificate Balance (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-1 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class M-2 Applied Realized
Loss Amount, the Class B-1 Applied Realized Loss Amount and the Class B-2
Applied Realized Loss Amount, in each case as of such Distribution Date.
"Class M-1 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit D-1 hereto.
"Class M-1 Certificate Balance" means, as to the Class M-1
Certificates and as of any date of determination, the Original Class M-1
Certificate Balance of such Class as reduced by the sum of (x) all amounts
actually distributed to the Holders of the Class M-1 Certificates on all prior
Distribution Dates on account of principal pursuant to Section 8.01 and (y) the
aggregate cumulative amount of Class M-1 Applied Realized Loss Amounts on all
prior Distribution Dates.
"Class M-1 Current Interest" means with respect to any
Distribution Date, the aggregate amount of interest accrued during the related
Accrual Period on the Class M-1 Certificate Balance at the Class M-1
Pass-Through Rate.
"Class M-1 Interest Carry Forward Amount" means with respect
to any Distribution Date, the sum of (x) the amount, if any, by which (i) the
sum of (A) the Class M-1 Current Interest as of the immediately preceding
Distribution Date and (B) the Class M-1 Interest Carry Forward Amount from the
immediately preceding Distribution Date exceeds (ii) the amount of the actual
distribution of the Interest Remittance Amount made to the Holders of the Class
M-1 Certificates on such immediately preceding Distribution Date and (y) 30
days' interest on such amount at the Class M-1 Pass-Through Rate.
"Class M-1 Pass-Through Rate" means 6.85% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class M-1 Principal Distribution Amount" means as of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date) and (ii)
the Class M-1 Certificate Balance immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) 71.3% and (ii) the outstanding
Principal Balance of the Mortgage Loans as
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of the last day of the related Due Period and (B) the outstanding Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus
$2,500,000.
"Class M-1 Realized Loss Amortization Amount" means, as to the
Class M-1 Certificates of any Distribution Date, the lesser of (x) the Class M-1
Unpaid Realized Loss Amount as of such Distribution Date and (y) the excess of
(i) the Monthly Excess Cashflow Amount over (ii) the sum of the Extra Principal
Distribution Amount and the Class M-1 Interest Carry Forward Amount, in each
case for such Distribution Date.
"Class M-1 Unpaid Realized Loss Amount" means as of any
Distribution Date, the excess of (x) the aggregate cumulative amount of Class
M-1 Applied Realized Loss Amounts for all prior Distribution Dates over (y) the
aggregate cumulative amount of Class M-1 Realized Loss Amortization Amounts for
all prior Distribution Dates.
"Class M-2 Applied Realized Loss Amount" means, as to the
Class M-2 Certificates and as of any Distribution Date, the lesser of (x) the
Class M-2 Certificate Balance (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date, but prior to the
application of the Class M-2 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class B-1 Applied Realized
Loss Amount and the Class B-2 Applied Realized Loss Amount, as of such
Distribution Date.
"Class M-2 Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit D-2 hereto.
"Class M-2 Certificate Balance" means, as to the Class M-2
Certificates and as of any date of determination, the Original Class M-2
Certificate Balance of such Class as reduced by the sum of (x) all amounts
actually distributed to the Holders of the Class M-2 Certificates on all prior
Distribution Dates on account of principal pursuant to Section 8.01 and (y) the
aggregate cumulative amount of Class M-2 Applied Realized Loss Amounts on all
prior Distribution Dates.
"Class M-2 Current Interest" means with respect to any
Distribution Date, the aggregate amount of interest accrued during the related
Accrual Period on the Class M-2 Certificate Balance at the Class M-2
Pass-Through Rate.
"Class M-2 Interest Carry Forward Amount" means with respect
to any Distribution Date, the sum of (x) the amount, if any, by which (i) the
sum of (A) the Class M-2 Current Interest as of the immediately preceding
Distribution Date and (B) the Class M-2 Interest Carry Forward Amount from the
immediately preceding Distribution Date exceeds (ii) the amount of the actual
distribution of the Interest Remittance Amount made to the Holders of the Class
M-2 Certificates on such immediately preceding Distribution Date and (y) 30
days' interest on such amount at the Class M-2 Pass-Through Rate.
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"Class M-2 Pass-Through Rate" means 7.10% per annum, computed
on the basis of a 360-day year assumed to consist of twelve 30-day months,
subject to the Fixed Rate Group Available Funds Cap Rate.
"Class M-2 Principal Distribution Amount" means as of any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
is not in effect, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Class M-1 Certificate Balance (after taking into account the payment of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (iii) the
Class M-2 Certificate Balance immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 84.3% and (ii) the outstanding
aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the outstanding Principal Balance of the Mortgage
Loans as of the last day of the related Due Period minus $2,500,000.
"Class M-2 Realized Loss Amortization Amount" means, as to the
Class M-2 Certificates and as of any Distribution Date, the lesser of (x) the
Class M-2 Unpaid Realized Loss Amount as of such Distribution Date and (y) the
excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the Extra
Principal Distribution Amount, the Class M-1 Realized Loss Amortization Amount,
the Class M-1 Interest Carry Forward Amount and the Class M-2 Interest Carry
Forward Amount, in each case for such Distribution Date.
"Class M-2 Unpaid Realized Loss Amount" means as of any
Distribution Date, the excess of (x) the aggregate cumulative amount of Class
M-2 Applied Realized Loss Amounts for all prior Distribution Dates over (y) the
aggregate cumulative amount of Class M-2 Realized Loss Amortization Amounts for
all prior Distribution Dates.
"Class R Certificate" means any one of the Certificates
executed by the Trustee and authenticated by the Authenticating Agent
substantially in the form set forth in Exhibit C hereto and evidencing an
interest designated as a "residual interest" in the Trust REMIC for purposes of
the REMIC Provisions.
"Class R Certificateholder" means the person in whose name a
Class R Certificate is registered on the Certificate Register.
"Clean-up Call Date" has the meaning assigned in Section 8.03.
"Closing Date" means July 23, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Loan-to-Value Ratio" means, with respect to any
Mortgage Loan at any given time, the ratio, expressed as a percentage,
determined by dividing (x) the sum of the original Principal Balance of the
Mortgage Loan plus the then-current Principal Balance of any loan or loans
secured by a senior lien on the Mortgaged Property by (y) the value of the
related
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Mortgaged Property, based upon the appraisal or other valuation made at the time
of origination of the Mortgage Loan.
"Company" means The CIT Group Securitization Corporation III
and its permitted successors in interest.
"Compensating Interest" means has the meaning assigned in
Section 8.04.
"Computer Tape" means the computer tape generated by the
Master Servicer which provides information relating to the Mortgage Loans, and
includes the master file and the history file.
"Cumulative Realized Loss Termination Event": A Cumulative
Realized Loss Termination Event occurs on any Distribution Date if the amount of
Cumulative Realized Losses as of the last day of the related Due Period
expressed as a percentage of the Cut-off Date Pool Principal Balance equals or
exceed 6.625%.
"Cumulative Realized Loss Trigger Event": A Cumulative
Realized Loss Trigger Event occurs on any Distribution Date if the amount of
Cumulative Realized Losses as of the last day of the related Due Period
expressed as a percentage of the Cut-off Date Pool Principal Balance equals or
exceeds the percentage for such date set out below:
Date Percentage
---- ----------
August 1997-July 1998 0.700%
August 1998-July 1999 1.550%
August 1999-July 2000 2.650%
August 2000-July 2001 3.000%
August 2001-July 2002 3.750%
August 2002-July 2003 4.250%
August 2003-July 2004 4.375%
August 2004 and thereafter 4.375%
"Cumulative Realized Losses" means as of any date of
determination, the aggregate amount of Realized Losses (net of any subsequent
recoveries) with respect to the Mortgage Loans.
"Confirmatory Note" has the meaning assigned in Section
4.01(a).
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 12.09.
"Current Interest" means, with respect to any Distribution
Date, the sum of the Class A Current Interest for all of the Class A
Certificates, the Class M-1 Current Interest, the Class M-2 Current Interest,
the Class B-1 Current Interest and the Class B-2 Current Interest.
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"Cut-off Date Pool Principal Balance" means the aggregate of
the Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance" means, as to any Mortgage
Loan, the Principal Balance thereof at the Cut-off Date.
"Cut-off Date" means July 1, 1997.
"Definitive Certificates" has the meaning assigned in Section
9.02(g).
"Deleted Mortgage Loan" has the meaning assigned in Section
4.03.
"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 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.
"Determination Date" means the third Business Day prior to
each Distribution Date.
"Distribution Date" means the 15th day of each calendar month
during the term of this Agreement, or if such day is not a Business Day, the
next succeeding Business Day, commencing on August 15, 1997.
"Due Date" means, as to any Mortgage Loan, the date of the
month on which the monthly payment for such Mortgage Loan is due.
"Due Period" means, as to any Distribution Date, the calendar
month immediately preceding the month of such Distribution Date.
"Electronic Ledger" means the electronic master record of
mortgage loans of the Master 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
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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 account that will not cause any Rating
Agency to downgrade or withdraw its then-current rating assigned to the
Certificates, as confirmed in writing by each Rating Agency.
"Eligible Institution" means the Trustee or any depository
institution or trust company (which may be the Trustee or an Affiliate of the
Trustee) 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 (presently administered by the Federal Deposit Insurance
Corporation), which is subject to supervision and examination by federal or
state authorities and whose short-term deposits have been rated P-1 or higher by
Moody's and A-1 or higher by Standard & Poor's, or in one of the two highest
rating categories by Moody's and Standard & Poor's in the case of unsecured
long-term debt.
"Eligible Investments" has the meaning assigned in Section
5.05(b).
"Eligible Servicer" means (A) any Person which, together with
its Affiliates (i) is qualified to act as Master Servicer of the Mortgage Loans
under applicable federal and state laws and regulations and (ii) services not
less than $100,000,000 in outstanding principal amount of residential mortgage
loans, (B) CIT Consumer Finance and (C) CITSF.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Errors and Omissions Protection Policy" means the errors and
omissions policy maintained by the Master Servicer or any similar replacement
policy, if any, pursuant to Section 5.09(d).
"Event of Termination" has the meaning assigned in Section
7.01.
"Extra Principal Distribution Amount" means, as of any
Distribution Date, the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date and (y) the Overcollateralization Deficiency for such
Distribution Date.
"File" means, as to each Mortgage Loan (a) the original Note
(b) the original Mortgage with evidence of recording indicated thereon, (c) any
riders or modifications of such Note and Mortgage, (d) any title insurance
policies with respect to the Mortgages and (e) any assumption or modification
agreement.
"Final Distribution Date" means the Distribution Date on which
the final distribution in respect of Certificates is made pursuant to Section
12.03.
"Fixed Rate Certificates" means the Offered Certificates
(other than the Class A-9 Certificates) and the Class B-2 Certificates.
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"Fixed Rate Group" means the Mortgage Loan Group consisting of
Fixed Rate Mortgage Loans.
"Fixed Rate Group Available Funds Cap Rate" means as of any
Distribution Date, an amount, expressed as a per annum rate (calculated on the
basis of a 360 day year assumed to consist of twelve 30-day months), equal to
(i) the weighted average interest rate on (A) all of the Mortgage Loans in the
Fixed Rate Group as of the first day of the related Due Period and (B) a portion
of each Mortgage Loan in the Adjustable Rate Group based on a fraction (which
shall in no event be greater than one), the numerator of which is an amount
equal to the excess of the Certificate Balance of the Fixed Rate Certificates as
of the first day of the related Due Period over the aggregate Principal Balance
of the Mortgage Loans in the Fixed Rate Group as of the first day of the related
Due Period and the denominator of which is equal to the aggregate Principal
Balance of the Mortgage Loans in the Adjustable Rate Group as of the first day
of the related Due Period, minus (ii) the Master Servicing Fee, expressed as a
per annum rate, minus (iii) the Weighted Carve Out Fixed Rate.
"Fixed Rate Group Extra Principal Distribution Amount" means,
an amount equal to the sum of (x) the greater of (i) zero or (ii) the lesser of
(I) the Extra Principal Distribution Amount or (II) the product of (1) an amount
equal to (A) the Realized Losses for the Fixed Rate Group in the preceding Due
Period divided by the aggregate Principal Balance of the Mortgage Loans in the
Fixed Rate Group minus (B) the Realized Losses for the Adjustable Rate Group in
the preceding Due Period divided by the aggregate Principal Balance of the
Mortgage Loans in the Adjustable Rate Group and (2) the aggregate Principal
Balance of the Mortgage Loans in the Fixed Rate Group and (y) a pro-rata
portion, based on the aggregate Principal Balance of the Mortgage Loans in the
related Mortgage Loan Group, of any Extra Principal Distribution Amount
remaining after taking into account clause (x) of this definition and clause (x)
of the definition of the Adjustable Rate Group Extra Principal Distribution
Amount.
"Fixed Rate Group Overcollateralization Release Amount" means
an amount equal to the sum of (x) the greater of (i) zero or (ii) the lesser of
(I) the Overcollateralization Release Amount or (II) the product of (1) an
amount equal to (A) the Realized Losses for the Adjustable Rate Group in the
preceding Due Period divided by the aggregate Principal Balance of the Mortgage
Loans in the Adjustable Rate Group minus (B) the Realized Losses for the Fixed
Rate Group in the preceding Due Period divided by the aggregate Principal
Balance of the Mortgage Loans in the Fixed Rate Group and (2) the aggregate
Principal Balance of the Mortgage Loans in the Fixed Rate Group and (y) a
pro-rata portion, based on the aggregate Principal Balance of the Mortgage Loans
in the related Mortgage Loan Group, of any Overcollateralization Release Amount
remaining after taking into account clause (x) of this definition and clause (x)
of the definition of the Adjustable Rate Group Overcollateralization Release
Amount.
"Fixed Rate Mortgage Loans" means Mortgage Loans having fixed
Mortgage Rates.
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"Fixed Rate Principal Distribution Amount" means, as of any
Distribution Date, the sum of (i) the Principal Remittance Amount with respect
to the Fixed Rate Group, minus, for Distribution Dates occurring on and after
the related Stepdown Date, the Fixed Rate Group Overcollateralization Release
Amount and (ii) the Fixed Rate Group Extra Principal Distribution Amount.
"Hazard Insurance Policy" means, with respect to each Mortgage
Loan, the policy of fire and extended coverage insurance (and federal flood
insurance, if the related Mortgaged Property was, at the time of origination
thereof, and continues to be, located in a federally designated special flood
hazard area) required to be maintained for the related Mortgaged Property, as
provided in Section 5.09, and which, as provided in said Section 5.09, may be a
blanket policy maintained by the Master Servicer in accordance with the terms
and conditions of said Section 5.09.
"Holder" has the same meaning as "Certificateholder".
"Holdings" means The CIT Group Holdings, Inc., a Delaware
corporation.
"Independent" means, with respect to any specified Person, any
person or firm rendering an opinion on the Closing Date or any Person who (a) is
in fact independent of the specified Person, (b) does not have any direct
financial interest or any material indirect financial interest in the specified
Person or any Affiliate of the specified Person (other than acting as outside
counsel for the specified Person or such Affiliate), and (c) is not connected
with the specified Person as an officer, employee, promoter, underwriter,
trustee, partner, director (other than a law firm a member of which is a
director) or person performing similar functions. Except with respect to any
person or firm rendering an opinion on the Closing Date, whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to the Trustee, such person shall be approved by the Trustee and such opinion or
certificate shall state that the signer has read this definition and that the
signer is independent within the meaning hereof.
"Insurance Proceeds" means proceeds paid by any insurer
pursuant to any insurance policy or contract relating to a Mortgage Loan.
"Interest Determination Date" has the meaning assigned in
Section 5.12.
"Interest Remittance Amount" means, as of any Distribution
Date, the sum of (i) all interest collected or advanced by the Master Servicer
during the related Due Period on the Mortgage Loans, including any late fees,
prepayment fees and other similar fees on the Mortgage Loans (less the Master
Servicing Fee if CIT Consumer Finance or one of its affiliates is not the Master
Servicer), (ii) all Compensating Interest paid by the Master Servicer with
respect to such Due Period; (iii) the portion of any Substitution Adjustment
relating to interest delivered by the Seller in connection with a substitution
of a Mortgage Loan with respect to the related Due Period, (iv) the interest
portion of any Purchase Price with respect to each Mortgage Loan that was
repurchased from the Trust during the related Due Period, (v) all Liquidation
Proceeds actually collected by the Master Servicer during the related Due Period
(to the extent such
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Liquidation Proceeds related to interest) and (vi) any subsequent recoveries on
Liquidated Mortgages.
"Liquidated Mortgage" means any Mortgage Loan as to which the
Master Servicer has determined that all amounts (including Liquidation Proceeds
and Insurance Proceeds) which it expects to recover from or on account of such
Mortgage Loan have been recovered; provided that any Mortgage Loan in respect of
which the related Mortgaged Property has been realized upon and disposed of and
the proceeds of such disposition have been received, shall be deemed to be a
Liquidated Mortgage; provided, however, that a Liquidated Mortgage which has
been repurchased pursuant to Section 3.05(a), or as to which a Qualified
Substitute Mortgage Loan has been substituted pursuant to Section 3.05(b) or
4.03(b), in either case on or before the Business Day immediately preceding the
Distribution Date following the Due Period in which such Mortgage Loan becomes a
Liquidated Mortgage, shall be deemed not to have become a Liquidated Mortgage
during such Due Period. The Principal Balance of any Liquidated Mortgage is
zero.
"Liquidation Expenses" means out-of-pocket expenses (exclusive
of any overhead expenses) which are incurred by the Master Servicer in
connection with the Liquidated Mortgages, including, without limitation, legal
fees and expenses, and any related and unreimbursed expenditures for property
taxes, property preservation or restoration of the property to marketable
condition.
"Liquidation Proceeds" means cash (including Insurance
Proceeds) received and retained in connection with Liquidated Mortgages, by
foreclosure sale or otherwise, net of Liquidation Expenses and net of any
insurance premiums paid by the Master Servicer pursuant to Section 5.09(a).
"List of Mortgage Loans" means the list attached hereto as
Exhibit J identifying each Mortgage Loan constituting part of the corpus of the
Trust.
"Master Servicer" means CIT Consumer Finance until any Service
Transfer hereunder, and thereafter means the new servicer appointed pursuant to
Article VII.
"Master Servicing Fee" means, as to any Distribution Date, the
sum of (a) the Monthly Servicing Fee for such Distribution Date, and (b) any net
investment earnings due to the Master Servicer as of such Distribution Date.
"Maximum Variable Rate" means 20.0% per annum.
"Mezzanine Certificates" means the Class M-1 Certificates and
the Class M-2 Certificates.
"Monthly Advance" has the meaning assigned in Section 8.04.
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"Monthly Excess Interest Amount" means, as to any Distribution
Date, the excess, if any, of (i) the Interest Remittance Amount for the related
Due Period over (ii) the Current Interest on such Distribution Date.
"Monthly Excess Cashflow Amount" has the meaning assigned in
Section 8.01.
"Monthly Report" has the meaning assigned in Section 6.05. The
form of the Monthly Report for the Certificates is attached as Exhibit K hereto.
"Monthly Servicing Fee" means, as to any Distribution Date,
one-twelfth of the product of 0.50% and the Pool Principal Balance as of the
first day of the related Due Period (or, in the case of the first Distribution
Date, the Cut-off Date).
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means the mortgage, deed of trust or similar
instrument creating a lien on an estate in fee simple in the real property
securing a Mortgage Loan.
"Mortgage Document" has the meaning assigned in Section
4.01(a).
"Mortgaged Property" means the property subject to a Mortgage.
"Mortgage Loan Group" means the Fixed Rate Group or the
Adjustable Rate Group.
"Mortgage Loan(s)" means one or more of the mortgage loans
described in the List of Mortgage Loans, and which Mortgage Loans are to be
assigned by the Company to the Trustee on the Closing Date; including, without
limitation, the Mortgage, collateral, liens, insurance policies and guarantees
of the obligations of the related Mortgage (other than guarantees, if any, by
the related broker) and any and all payments which are received pursuant thereto
on and after the Cut-off Date, but excluding any payments which are received
pursuant thereto prior to the Cut-off Date.
"Mortgage Pool" means the pool of Mortgage Loans assigned by
the Company to the Trustee on the Closing Date.
"Mortgage Rate" means, with respect to any particular Mortgage
Loan, the rate of interest specified in that Mortgage Loan.
"Mortgagor" means each Person who is indebted under a Mortgage
Loan.
"Nonrecoverable Advance" means any advance made or proposed to
be made pursuant to Section 8.04, which the Master Servicer believes, in its
good faith judgment, is not, or if made would not be, ultimately recoverable
from future payments and collections of the related Mortgage Loan.
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"Note" means the promissory note evidencing the indebtedness
of a Mortgagor under a Mortgage Loan.
"NRSRO" means any nationally recognized statistical rating
organization.
"Offered Certificates" means the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class A-7 Certificates. Class A-8
Certificates, Class A-9 Certificates, Class M-1 Certificates, Class M-2
Certificates, and Class B-1 Certificates, collectively.
"Officer's Certificate" means a certificate signed by the
chairman of the board, president or any vice president of the Servicer and
delivered to the Trustee.
"One-Month LIBOR" has the meaning assigned in Section 5.12.
"Opinion of Counsel" means a written opinion of counsel
(internal or external) who may be counsel for the Master Servicer, except that
any opinion of counsel relating to the qualification of the Trust as a REMIC or
compliance with the REMIC Provisions must be an opinion of counsel Independent
with respect to the Company and the Master Servicer.
"Original Class A-1 Certificate Balance" means $90,000,000.
"Original Class A-2 Certificate Balance" means $36,000,000.
"Original Class A-3 Certificate Balance" means $61,000,000.
"Original Class A-4 Certificate Balance" means $40,000,000.
"Original Class A-5 Certificate Balance" means $15,000,000.
"Original Class A-6 Certificate Balance" means $15,000,000.
"Original Class A-7 Certificate Balance" means $33,000,000.
"Original Class A-8 Certificate Balance" means $30,000,000.
"Original Class A-9 Certificate Balance" means $90,000,000.
"Original Class B-1 Certificate Balance" means $22,500,000.
"Original Class B-2 Certificate Balance" means $5,000,000.
"Original Class M-1 Certificate Balance" means $30,000,000.
"Original Class M-2 Certificate Balance" means $32,500,000.
"Outstanding Mortgage Loan" means, as to any Due Period, a
Mortgage Loan which was not the subject of a Principal Prepayment or was not
fully paid prior to or during such
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Due Period, which did not become a Liquidated Mortgage prior to or during such
Due Period, and which was not purchased (and did not become a Deleted Mortgage
Loan or a Replaced Mortgage Loan) prior to or with respect of such Due Period
pursuant to Section 3.05 or Section 4.03.
"Overcollateralization Amount" means as of any Distribution
Date the excess, if any, of (x) the Principal Balance of the Mortgage Loans as
of the last day of the immediately preceding Due Period over (y) the Aggregate
Certificate Balance on such Distribution Date (after taking into account all
distributions of principal on such Distribution Date).
"Overcollateralization Deficiency" means, as of any
Distribution Date, the excess, if any, of (x) the Targeted Overcollateralization
Amount for such Distribution Date over (y) the Overcollateralization Amount for
such Distribution Date, calculated for this purpose after taking into account
the reduction on such Distribution Date of the Certificate Balance of all
Classes of the Offered Certificates and the Class B-2 Certificates resulting
from the distribution of the Principal Remittance Amount on such Distribution
Date, but prior to taking into account any Realized Loss with respect to the
related Due Period.
"Overcollateralization Release Amount" means as of any
Distribution Date, the lesser of (x) the related Principal Remittance Amount for
such Distribution Date and (y) the excess of (i) the Overcollateralization
Amount for such Distribution Date, assuming that 100% of the Principal
Remittance Amount is applied on such Distribution Date to the payment of
principal on the Offered Certificates and the Class B-2 Certificates, and (ii)
the Targeted Overcollateralization Amount for such Distribution Date.
"Ownership Interest" means, with respect to any Certificate,
any ownership or security interest in such Certificate, including any interest
in such Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial.
"Paying Agent" has the meaning assigned in Section 8.01(i).
"Percentage Interest" means, as to any Certificate, the
percentage interest evidenced thereby in distributions made on the related
Class, such percentage interest being equal to, (a) in the case of the Class A
Certificates, the percentage (carried to eight places) obtained from dividing
the Certificate Balance of such Certificate by the Certificate Balance of all
Class A Certificates, (b) in the case of the Class M-1 Certificates, the
percentage (carried to eight places) obtained by dividing the Certificate
Balance of such Certificate by the Certificate Balance of all Class M-1
Certificates, (c) in the case of the Class M-2 Certificates, the percentage
(carried to eight places) obtained from dividing the Certificate Balance of such
certificate by the Certificate Balance of all Class M-2 Certificates, (d) in the
case of the Class B-1 Certificates, the percentage (carried to eight places)
obtained by dividing the Certificate Balance of such Certificate by the
Certificate Balance of all Class B-1 Certificates, (e) in the case of the Class
B-2 Certificates, the percentage (carried to eight places) obtained by dividing
the Certificate Balance of such Certificates by the Certificate Balance of all
Class B-2 Certificates, and (f) in the case of the Class R Certificates, being
equal to the percentage specified on the face of such Certificate. The aggregate
Percentage Interests for each Class of Certificates shall equal 100%.
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"Permitted Transferee" means, as to any Class R
Certificateholder or any other prospective transferee of a Class R Certificate,
any Person other than (a) the United States, a State or any political
subdivision thereof, any possession of the United States, a foreign government,
an international organization, or any agency or instrumentality of any of the
foregoing, (b) an organization (other than a cooperative described in Section
521 of the Code) which would not be subject to tax under the Code (including the
tax on unrelated business taxable income, as defined in Section 512(a)(1) of the
Code) on any excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to any Class R Certificate, (c) an organization which is engaged in
furnishing electrical energy, or providing telephone service, to persons in
rural areas (as described in Section 1381(a)(2)(C) of the Code), or (d) a
Non-United States Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Code Section 7701 or any
successor provision. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof, if all of
the activities are subject to tax, and, with the exception of the Federal Home
Loan Mortgage Corporation, a majority of its board of directors is not selected
by such governmental unit.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Plan" shall have the meaning assigned pursuant to Section
9.02.
"Pool Principal Balance" means, as to any Distribution Date,
the aggregate of the Principal Balance of each Mortgage Loan that was an
Outstanding Mortgage Loan as of the last day of the related Due Period.
"Principal Balance" means the unpaid principal balance of a
Mortgage Loan.
"Principal Prepayment" means any prepayment of the entire
Principal Balance of a Mortgage Loan.
"Principal Remittance Amount" means for a Mortgage Loan Group
and as of any Distribution Date, the sum of (i) the principal actually collected
by the Master Servicer on the Mortgage Loans in such Mortgage Loan Group during
the related Due Period, (ii) the Principal Balance of each Mortgage Loan in such
Mortgage Loan Group that was repurchased from the Trust with respect to the
related Due Period, (iii) the portion of any Substitution Adjustment relating to
principal delivered by the Seller in connection with a substitution of a
Mortgage Loan in such Mortgage Loan Group with respect to the related Due
Period, and (iv) all Liquidation Proceeds actually collected by the Master
Servicer during the related Due Period with respect to Mortgage Loans in such
Mortgage Loan Group (to the extent such Liquidation Proceeds related to
principal).
"Purchase Agreement" means the Purchase Agreement, dated as of
July 1, 1997, between CIT Consumer Finance and the Company, providing for the
sale of the Mortgage Loans from CIT Consumer Finance to the Company.
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"Purchase Price" means, with respect to a Mortgage Loan to be
repurchased hereunder, an amount equal to 100% of the outstanding Principal
Balance thereof as of the date of repurchase plus accrued and unpaid interest
thereon to the first day of the month in which the Purchase Price is to be
distributed at its Mortgage Rate plus unreimbursed Servicing Advances with
respect to such Mortgage Loan.
"Qualified Institutional Buyer" shall have the meaning
specified in Rule 144A.
"Qualified Substitute Mortgage Loan" means, as to any Deleted
Mortgage Loan or Replaced Mortgage Loan for which such Qualified Substitute
Mortgage Loan is being substituted pursuant to Section 3.05(b) or Section
4.03(b), a Mortgage Loan that (a) as of the date of its substitution, satisfies
all of the representations and warranties (which, except when expressly stated
to be as of origination, shall be deemed to be determined as of the date of its
substitution rather than as of the Cut-off Date or the Closing Date) in Section
3.02 and does not cause any of the representations and warranties in Section
3.03, to the extent previously applicable to the Deleted Mortgage Loan or
Replaced Mortgage Loan, and after giving effect to such substitution, to be
incorrect, (b) has a Principal Balance not in excess of the Principal Balance of
the Deleted Mortgage Loan or Replaced Mortgage Loan, (c) in the case of an
Adjustable Rate Mortgage Loan, has a Maximum Rate not less than (and not more
than two percentage points greater than) the Maximum Rate of the Deleted
Mortgage Loan or Replaced Mortgage Loan, and has the same index and Periodic
Rate Cap as the Deleted Mortgage Loan or Replaced Mortgage Loan and a Gross
Margin not less than that of the Deleted Mortgage Loan or Replaced Mortgage
Loan, (d) in the case of a Fixed Rate Mortgage Loan, has a Mortgage Rate not
more than 1% per annum lower than, and not more than 1% per annum higher than,
that of the Deleted Mortgage Loan or Replaced Mortgage Loan, (e) has a Combined
Loan-to-Value Ratio not higher than that of the Deleted Mortgage Loan or
Replaced Mortgage Loan, (f) has a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan or
Replaced Mortgage Loan, (g) is of the same or better credit risk category under
the Seller's underwriting guidelines, (h) has the same type of Mortgage Rate
(i.e., a Fixed Rate Mortgage Loan or an Adjustable Rate Mortgage Loan) and (i)
in the case of a Call Loan or Balloon Loan, is a Call Loan or Balloon Loan, as
the case may be. Notwithstanding the foregoing, in the event that on any date
more than one Qualified Substitute Mortgage Loan is substituted for one or more
Deleted Mortgage Loans or Replaced Mortgage Loans, the requirement set forth in
clause (b) above with respect to the Principal Balance may be satisfied if the
aggregate of the Principal Balances of such Qualified Substitute Mortgage Loans
is not greater than the aggregate of the Principal Balances of such Qualified
Mortgage Loans, the requirement set forth in clause (d) above with respect to
the Mortgage Rate may be satisfied if the weighted average Mortgage Rate of such
Qualified Substitute Mortgage Loans is at least equal to the weighted average
Mortgage Rate of such Qualified Mortgage Loans; and the requirement set forth in
clause (f) above with respect to remaining term to stated maturity may be
satisfied if the weighted average remaining term to stated maturity of such
Qualified Substitute Mortgage Loans is not greater than the weighted average
remaining term to stated maturity of such Deleted Mortgage Loans or Replaced
Mortgage Loans.
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"Rating Agencies" means Moody's and Standard & Poor's, or any
successors thereto; provided that if Moody's and Standard & Poor's no longer
have a rating outstanding on any Class of the Certificates, then references
herein to Moody's and Standard & Poor's shall be deemed to refer to the NRSRO
then rating any Class of the Certificates (or, if more than one such NRSRO is
then rating any Class of the Certificates, to each such NRSRO as may be
designated by the Servicer), and references herein to ratings by or requirements
of Moody's and Standard & Poor's shall be deemed to have the equivalent meanings
with respect to ratings by or requirements of such NRSRO.
"Rating Agency Condition" with respect to any action means,
the condition that each Rating Agency shall have been given at least 30 days
prior notice of a contemplated action and that each of the Rating Agencies shall
not have notified the Company, the Master Servicer or the Trustee in writing
that such action will not result in a downgrade or withdrawal of the then
current rating of any Class of the Certificates.
"Realized Loss" means as to any Liquidated Mortgage, the
amount, if any, by which the Principal Balance thereof as of the date of
liquidation is in excess of Liquidation Proceeds realized thereon and allocated
to principal.
"Record Date" means the calendar day preceding each
Distribution Date, or, if Definitive Certificates are issued, the last Business
Day of the month preceding the month of the related Distribution Date.
"Reference Banks" means leading banks selected by the Trustee
and engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
"Registrar" means the registry appointed pursuant to Section
9.02.
"REMIC" means a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code.
"REMIC Certificate Maturity Date" means the "latest maturity
date" of the Offered Certificates and the Class B-2 Certificates as that term is
defined in Section 2.09.
"REMIC Provisions" means provisions of the federal income tax
law and the applicable state and local law relating to REMICs and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
"REO Property" has the meaning assigned in Section 5.10.
"Replaced Mortgage Loan" has the meaning assigned in Section
3.05(b).
"Repurchased Mortgage Loan" means any Mortgage Loan
repurchased by CIT Consumer Finance pursuant to Section 3.05(a) and 4.03(a). The
Principal Balance of any Repurchased Mortgage Loan shall be zero as of the last
day of the related Due Period.
"Reserve Interest Rate" has the meaning assigned in Section
5.12.
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"Responsible Officer" means, with respect to the Trustee, any
officer in its Corporate Trust Department, as long as it is the Trustee
hereunder, including every vice president, assistant vice president, the
secretary, every assistant secretary, cashier or any assistant cashier,
controller or assistant controller, the treasurer, every assistant treasurer,
every trust officer, assistant trust officer and every other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by persons who at the time shall be such officers, respectively,
or to whom a corporate trust matter is referred because of knowledge of,
familiarity with, and authority to act with respect to a particular matter.
"Rule 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Seller" means CIT Consumer Finance.
"Senior Enhancement Percentage" means, for any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate
Certificate Balance of the Subordinate Certificates and (ii) the
Overcollateralization Amount, in each case after taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period.
"Senior Specified Enhancement Percentage" means 40.7%.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicing Advance" has the meaning assigned in Section 5.08.
"Servicing Officer" means any officer of the Master Servicer
or the Sub-Servicer, as applicable, involved in, or responsible for, the
administration and servicing of Mortgage Loans whose name appears on a list of
servicing officers appearing in an Officer's Certificate furnished to the
Trustee by the Master Servicer, as the same may be amended from time to time.
"Standard & Poor's" means The Standard and Poor's Structured
Ratings Group, a division of McGraw-Hill, Inc.
"Stepdown Date" means the earlier to occur of (i) the later to
occur of (x) the Distribution Date in August 2000 and (y) the first Distribution
Date on which the Senior Enhancement Percentage (after taking into account
distributions of principal on such Distribution Date) is greater than or equal
to the Senior Specified Enhancement Percentage and (ii) the Distribution Date on
which the Certificate Balance of the Class A Certificates has been reduced to
zero.
"Stepped-Up Enhancement Level": The "Stepped Up Enhancement
Level" has been met, with respect to a Distribution Date, if two times the
percentage obtained by dividing
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(x) the aggregate outstanding Principal Balance of the Outstanding Mortgage
Loans as to which payments aggregating at least $65 are 60 days or more
delinquent by (y) the aggregate outstanding Principal Balance of the Outstanding
Mortgage Loans, in each case as of the last day of the immediately preceding Due
Period, is less than 48% of the Senior Specified Enhancement Percentage.
"Subordinate Certificates" means the Mezzanine Certificates
and the Class B Certificates.
"Sub-Servicer" has the meaning assigned in Section 5.11.
"Sub-Servicing Agreement" means the Sub-Servicing Agreement,
dated as of July 1, 1997, between CIT Consumer Finance and CITSF.
"Substitution Adjustment" has the meaning assigned in Section
3.05(b).
"Targeted Overcollateralization Amount" means, as of any
Distribution Date on which a Cumulative Realized Loss Trigger Event has not
occurred and is not continuing, (x) prior to the Stepdown Date, $11,750,000 and
(y) on and after the Stepdown Date, the greater of (i) 4.7% of the aggregate
outstanding Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (ii) $2,500,000; and, as of any Distribution Date on
which a Cumulative Realized Loss Trigger Event has occurred and is continuing,
$14,000,000.
"Telerate Page 3750" means the display page currently so
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Transfer" means any direct or indirect transfer or sale of
any Ownership Interest in a Certificate.
"Transferee" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Treasury Regulations" means any proposed, temporary or final
regulation promulgated under the Code.
"Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if the percentage obtained by dividing (x) the aggregate
outstanding Principal Balance of the Outstanding Mortgage Loans as to which
payments aggregating at least $65 are 60 days or more delinquent by (y) the
aggregate outstanding Principal Balance of the Outstanding Mortgage Loans, in
each case as of the last day of the immediately preceding Due Period, equals or
exceeds 48.0% of the Senior Specified Enhancement Percentage. Once a Trigger
Event has occurred it will be in effect until the Stepped-Up Enhancement Level
has been met on a succeeding Distribution Date.
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"Trust" means CIT Home Equity Loan Trust 1997-1, the trust
created by this Agreement.
"Trust REMIC" shall mean that portion of the Trust for which
an election is made to be a REMIC in accordance with clause (b) of the first
paragraph of Section 5.10 hereof.
"Trustee" has the meaning given to such term in the preamble
of this Agreement.
"Variable Rate Certificates" means the Class A-9 Certificates.
"Variable Rate Principal Distribution Amount" means as of any
Distribution Date, the sum of (i) the Principal Remittance Amount with respect
to the Adjustable Rate Group, minus, for Distribution Dates occurring on and
after the related Stepdown Date, the Adjustable Rate Group Overcollateralization
Release Amount and (ii) the Adjustable Rate Group Extra Principal Distribution
Amount.
"Weighted Carve Out Adjustable Amount" means, as of any
Distribution Date, an amount equal to (x) the product of (i) 0.50% and (ii) the
Principal Balance of the Mortgage Loans in the Mortgage Pool as of the first day
of the related Due Period, divided by (y) twelve.
"Weighted Carve Out Fixed Rate" means, as of any Distribution
Date, an amount, expressed as a per annum rate, equal to: (I) if the Certificate
Balance of the Fixed Rate Certificates as of the first day of the related Due
Period is less than or equal to the aggregate Principal Balance of the Mortgage
Loans in the Fixed Rate Group as of the first day of the related Due Period,
0.50%; or (II) if the Certificate Balance of the Fixed Rate Certificates as of
the first day of the related Due Period is greater than the aggregate Principal
Balance of the Mortgage Loans in the Fixed Rate Group as of the first day of the
related Due Period, the sum of: (i) the product of (x) a fraction the numerator
of which is the aggregate Principal Balance of the Mortgage Loans in the Fixed
Rate Group as of the first day of the related Due Period and the denominator of
which is an amount equal to the Certificate Balance of the Fixed Rate
Certificates as of the first day of the related Due Period and (y) 0.50%, and
(ii) the product of (x) a fraction the numerator of which is an amount equal to
the aggregate Principal Balance of the fraction of the Mortgage Loans in the
Adjustable Rate Group as described in clause (B) of the definition of Fixed Rate
Group Available Funds Cap Rate and the denominator of which is an amount equal
to the Certificate Balance of the Fixed Rate Certificates as of the first day of
the related Due Period and (y) 0.50%.
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ARTICLE II
ESTABLISHMENT OF THE TRUST; TRANSFER OF MORTGAGE LOANS
SECTION 2.01. Establishment of the Trust.
There is hereby created, by the Company, a separate trust
which shall be known as CIT Home Equity Loan Trust 1997-1. By the execution and
delivery of this Agreement, the Company has agreed that it will elect, or cause
an election to be made, to treat the pool of assets comprising the Trust as a
REMIC. The Trust shall be administered pursuant to the provisions of this
Agreement for the benefit of Certificateholders.
SECTION 2.02. Conveyance of the Mortgage Loans.
In consideration of the purchase price of the Mortgage Loans,
subject to the conditions set forth in Section 2.03, 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 Trustee without
recourse, except for the terms of this Agreement, on behalf of the Trust and the
Trustee on behalf of 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 Mortgage Loans, including, without limitation, any related Mortgages and
Notes, the Seller's interest in any related Mortgaged Property which has been
acquired by foreclosure or deed in lieu of foreclosure, and all payments thereon
and proceeds of the conversion thereof, voluntary or involuntary, and all
interest and principal received by the Company on or with respect to the
Mortgage Loans on and after the Cut-off Date, (ii) all rights under any Hazard
Insurance Policy relating to a Mortgaged Property securing a Mortgage Loan for
the benefit of the creditor of such Mortgage Loan, (iii) the proceeds from any
Errors and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Mortgage Loan or the Mortgaged
Properties related thereto, (iv) all documents contained in the Files with
respect to the Mortgage Loans, (v) all amounts held for the Trust in the
Certificate Account, (vi) all rights under the CIT Purchase Agreements, and
(vii) all proceeds in any way derived from any of the foregoing. The parties
intend that the conveyance of the Company's right, title and interest in and to
the Mortgage Loans pursuant to this Agreement shall constitute an absolute sale.
The "purchase price" for the Mortgage Loans shall be an amount equal to
$500,068,599.83. Such purchase price shall be payable in immediately available
funds on the Closing Date.
SECTION 2.03. Conditions of Closing for the Mortgage Loans.
On or before the Closing Date, the Master Servicer shall
deliver the following documents to the Trustee:
(a) The List of Mortgage Loans.
(b) A certificate of officers of CIT Consumer Finance,
substantially in the form of Exhibit E hereto.
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(c) Opinions of counsel for CIT Consumer Finance and the
Company, substantially in the form of Exhibit F hereto.
(d) Copies of resolutions of the board of directors of CIT
Consumer Finance and the Company approving the execution, delivery and
performance of this Agreement and the transactions contemplated hereunder.
(e) Officially certified recent evidence of due organization
and good standing of CIT Consumer Finance and the Company.
(f) An Officer's Certificate listing the Master Servicer's
Servicing Officers.
(g) An Officer's Certificate stating that the Master Servicer
has reviewed each Mortgage Loan and the File with respect thereto, and
confirming that each Mortgage Loan and the File with respect thereto conforms in
all material respects to the List of Mortgage Loans, that each File with respect
to the Mortgage Loans is complete in all material respects, and that each
Mortgaged Property securing a Mortgage Loan is covered by a Hazard Insurance
Policy as required by Section 3.02(f).
(h) A letter from Moody's confirming that (a) the Class A
Certificates have been assigned a rating of at least "Aaa", (b) the Class M-1
Certificates have been assigned a rating of at least "Aa2", (c) the Class M-2
Certificates have been assigned a rating of at least "A2", (d) the Class B-1
Certificates have been assigned a rating of at least "Baa2" and (e) the Class
B-2 Certificates have been assigned a rating of at least "Ba2".
(i) A letter from Standard & Poor's confirming that (a) the
Class A Certificates have been assigned a rating of at least "AAA", (b) the
Class M-1 Certificates have been assigned a rating of at least "AA", (c) the
Class M-2 Certificates have been assigned a rating of at least "A-", (d) the
Class B-1 Certificates have been assigned a rating of at least "BBB-" and (e)
the Class B-2 Certificates have been assigned a rating of at least "BB".
(j) A letter from KPMG Peat Marwick, LLP, or another
nationally recognized accounting firm that is Independent with respect to CIT
Consumer Finance, stating that such firm has reviewed sample Mortgage Loans
chosen by Morgan Stanley & Co. Incorporated and, based on such sampling,
concluding that the Mortgage Loans conform in all material respects to the List
of Mortgage Loans, specifying those Mortgage Loans which do not so conform.
(k) A power of attorney, substantially in the form of Exhibit
N hereto, executed by CIT Consumer Finance in favor of the Trustee, authorizing
the Trustee to, among other things, prepare, execute and record assignments of
the Mortgages.
(l) Any other documents or certificates that the Trustee may
reasonably request.
SECTION 2.04. [Reserved].
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SECTION 2.05. [Reserved].
SECTION 2.06. Acceptance by Trustee.
On the Closing Date, if the conditions set forth in Section
2.03 have been satisfied, the Trustee shall deliver a certificate to the Company
substantially in the form of Exhibit G hereto acknowledging conveyance of the
Mortgage Loans and the Files with respect thereto pursuant to Section 2.02
hereof to the Trustee on behalf of the Trust and declaring that the Trustee will
hold all Mortgage Loans that have been delivered in trust, upon the trusts
herein set forth, for the use and benefit of all Certificateholders, that the
Trustee will accept delivery of the Files with respect thereto pursuant to
Section 4.01 hereof and will hold such Files as custodian for the benefit of the
Trust as provided herein and shall issue to or upon the written order of the
Company Certificates representing ownership of a beneficial interest in 100% of
the Trust.
SECTION 2.07. REMIC Designations.
The Closing Date is hereby designated as the "start-up day" of
the REMIC within the meaning of Section 860G(a)(9) of the Code. The Company
hereby designates each of the Offered Certificates and the Class B-2
Certificates as a Class of "regular interests", and the Class R Certificates as
the single Class of "residual interests" in the Trust REMIC for purposes of the
REMIC Provisions.
SECTION 2.08. REMIC Tax Matters.
The tax year of the Trust REMIC shall be the calendar year,
and the Trust REMIC shall use the accrual method of reporting income and loss.
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SECTION 2.09. REMIC Certificate Maturity Date
Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii)
of the Treasury Regulations, and based upon certain assumptions described below,
the "latest possible maturity date" of each of the Offered Certificates and the
Class B-2 Certificates is no later than July 8, 2027. The foregoing date
represents the date by which the Certificates would be reduced to zero as
determined under a hypothetical scenario which assumes, among other things, that
(i) no scheduled interest and principal payments on the Mortgage Loans are
received after the respective Due Date, (ii) there are no principal prepayments
and (iii) the Master Servicer will not exercise its option to purchase the
assets of the Trust and there will be no Auction Sale, each pursuant to Section
8.03 of this Agreement, and thereby not cause a termination of the Trust
pursuant to Section 12.03 of this Agreement.
SECTION 2.10. Other Tax Matters.
For federal income tax purposes, the Fixed Rate Certificates
will be treated as variable rate debt instruments which are subject to a fixed
rate cap, and the Variable Rate Certificates will be treated as variable rate
debt instruments subject to a funds-available cap and a fixed rate cap.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties Regarding CIT
Consumer Finance.
CIT Consumer Finance represents and warrants that:
(a) Organization and Good Standing. CIT Consumer Finance 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. CIT
Consumer Finance 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 CIT
Consumer Finance.
(b) Authorization; Binding Obligations. CIT Consumer Finance
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 CIT Consumer Finance 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.
(c) No Consent Required. CIT Consumer Finance 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 CIT Consumer Finance.
(d) No Violations. The execution, delivery and performance of
this Agreement by CIT Consumer Finance will not violate any provision of any
existing law or regulation or any order or decree of any court or the
Certificate of Incorporation or Bylaws of CIT Consumer Finance, or constitute a
material breach of any mortgage, indenture, Mortgage Loan or other agreement to
which CIT Consumer Finance is a party or by which CIT Consumer Finance may be
bound.
(e) Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending, or to
the knowledge of CIT Consumer Finance threatened, against CIT Consumer Finance
or any of its properties or with respect to this Agreement or the Certificates
which, if adversely determined, would in the opinion of CIT
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Consumer Finance have a material adverse effect on the transactions contemplated
by this Agreement.
SECTION 3.02. Representations and Warranties Regarding Each
Mortgage Loan.
The Mortgage Loans have been sold by CIT Consumer Finance to
the Company pursuant to the Purchase Agreement. In connection with such sale,
CIT Consumer Finance has made the representations and warranties in Sections
3.02, 3.03 and 3.04 to the Company and has assumed the obligations in Section
3.05. As a condition of the purchase by the Company of the Mortgage Loans, the
Company has required that CIT Consumer Finance make such representations and
warranties directly to the Trustee and the Certificateholders so that the
Trustee may recover directly against CIT Consumer Finance on such
representations and warranties rather than indirectly through claims by the
Company against CIT Consumer Finance. Consequently, CIT Consumer Finance
represents and warrants to the Trustee and the Certificateholders as to each
Mortgage Loan as of the Closing Date (except as otherwise expressly stated):
(a) List of Mortgage Loans. The information set forth in the
List of Mortgage Loans is true and correct as of its date.
(b) Payments. With respect to each Mortgage Loan, as of the
Cut-off Date, the payment of principal and interest for its Due Date next
preceding the Cut-off Date was made by or on behalf of the Mortgagor (without
any advance from CIT Consumer Finance or any Person acting at the request of CIT
Consumer Finance) or was not delinquent for more than 60 days.
(c) No Waivers. The terms of the Mortgage Loan have not been
waived, altered or modified in any respect, except by instruments or documents
identified in the File with respect thereto.
(d) Binding Obligation. The Mortgage Loan is the legal, valid
and binding obligation of the Mortgagor thereunder and is enforceable in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws from time to time in effect affecting generally the
enforcement of creditors' rights and remedies; and (ii) general principles of
equity, including, without limitation, principles of reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in equity or at
law).
(e) No Defenses. No right of rescission, setoff, counterclaim
or defense, including the defense of usury, has been asserted with respect to
the Mortgage Loan.
(f) Insurance. The related Mortgaged Property is covered by a
Hazard Insurance Policy in the amount required by Section 5.09. All premiums due
as of the Closing Date on such insurance have been paid in full.
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(g) Flood Insurance. If the related Mortgaged Property was
located, at the time of origination of the Mortgage Loan, in a federally
designated special flood hazard area, the related Mortgage Property is covered
by flood insurance in the amount required by Section 5.09. All premiums due as
of the Closing Date on such insurance have been paid in full.
(h) Lawful Assignment. The Mortgage Loan was not originated in
and is not subject to the laws of any jurisdiction whose laws would make the
transfer of the Mortgage Loan to the Company under each of the CIT Purchase
Agreements, the transfer of the Mortgage Loan to the Trustee under this
Agreement, or the ownership of the Mortgage Loan by the Trust, unlawful.
(i) 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 Mortgage Loan have been
complied with and such compliance is not affected by the transfer of the
Mortgage Loan to the Company or to the Trustee or by the Trust's ownership of
the Mortgage Loans, and CIT Consumer Finance shall for at least the period of
this Agreement, maintain in its possession, available for the Trustee's
inspection, and shall deliver to the Trustee upon demand, evidence of compliance
with all such requirements.
(j) Mortgage Loan in Force. The Mortgage Loan has not been
satisfied or rescinded, and the related Mortgaged Property has not been released
from the lien of the Mortgage Loan in whole or in part.
(k) Capacity of Parties. All parties to the Mortgage Loan had
legal capacity to execute the Mortgage Loan.
(l) Good Title. Neither, CITSF, CITCF-NY nor CIT Consumer
Finance has sold, assigned or pledged the Mortgage Loan to any person other than
CIT Consumer Finance, CIT Consumer Finance or the Company, respectively. Prior
to the transfer of the Mortgage Loan by CITSF to CIT Consumer Finance, by
CITCF-NY to CIT Consumer Finance, by CIT Consumer Finance to the Company and by
the Company to the Trust, CITSF, CITCF-NY, CIT Consumer Finance or the Company,
respectively, had good and marketable title thereto free and clear of any
encumbrance, equity, loan, pledge, charge, claim or security interest and was
the sole owner thereof with full right to transfer the Mortgage Loan to CIT
Consumer Finance, CIT Consumer Finance, the Company or the Trust, respectively.
The Company paid fair value to CIT Consumer Finance for the Mortgage Loan.
Immediately upon the transfer thereof, the Trust for the benefit of the
Certificateholders shall acquire good and marketable title to each Mortgage Loan
free and clear of any encumbrance, equity, loan, pledge, charge, claim or
security interest.
(m) No Defaults. As of the Cut-off Date, there was no default,
breach, violation or event permitting acceleration existing under the Mortgage
Loan 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 Mortgage Loan (except payment delinquencies permitted by
clause (b) above). Neither CITSF, CITCF-NY nor CIT Consumer Finance has waived
any such default, breach, violation or event permitting acceleration except
payment delinquencies permitted by clause (b) above.
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(n) No Liens. As of the Closing Date there are, to the best of
CIT Consumer Finance's knowledge, no liens or claims which have been filed for
work, labor or materials affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the Mortgage
Loan (other than a senior Mortgage in the case of a Mortgaged Property secured
by a subordinate Mortgage).
(o) Enforceability. The Mortgage Loan contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the collateral of the benefits of
the security provided thereby, 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.
(p) Qualified Mortgage for REMIC. Each Mortgage Loan is a
"qualified mortgage" under Section 860G(a)(3) of the Code and the Treasury
Regulations thereunder. As of the Cut-off Date, no Mortgage Loan was in
foreclosure nor did CIT Consumer Finance consider acceleration and liquidation
of any particular Mortgage Loan to be reasonably foreseeable. The fair market
value of the interest in real property securing each Mortgage Loan (i) was at
least equal to 80 percent of the adjusted issue price of the obligation at the
time the obligation was originated (or, if later, but before the Closing Date,
the time the obligation was significantly modified, as such term is defined in
Treasury Regulations ss. 1.860G-2.); or (ii) is at least equal to 80 percent of
the adjusted issue price of the obligation on the Closing Date.
For purposes of this Section 3.02(p), the fair market value of
the real property interest must be first reduced by the amount of any lien on
the real property interest that is senior to the obligation being tested, and
must be further reduced by a proportionate amount of any lien that is in parity
with the obligation being tested, in each case before the percentages set forth
in (i) and (ii) above are determined. The adjusted issue price of an obligation
is its issue price plus the amount of accrued original issue discount, if any,
as of the date of determination.
(q) Conventional Mortgage Loans. None of the Mortgage Loans is
insured or guaranteed by any governmental agency.
(r) Lien. Each Mortgage is a valid and subsisting first or
subordinate lien of record on the Mortgaged Property subject to the exceptions
to title set forth in any title insurance policy or attorney's opinion of title
with respect to the related Mortgage Loan, which exceptions are generally
acceptable to banking institutions in connection with their regular mortgage
lending activities, and such other exceptions to which similar properties are
commonly subject and which do not individually, or in the aggregate, materially
and adversely affect the benefits of the security intended to be provided by
such Mortgage.
(s) Recordation. Each original Mortgage was recorded or is in
the process of being recorded, in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of or
purchasers from the Seller delivering the related Mortgage Loan.
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(t) Deed of Trust. With respect to each Mortgage constituting
a deed of trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the Holders or
the Trust to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the related Mortgagor.
(u) Licenses. 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 Mortgage Loan and its exercise of rights under the Mortgage
Loan and this Agreement. The Trust 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 Trust.
(v) Manufactured Housing. In the case of a Mortgage Loan
financing a dwelling which is a manufactured home, (i) the manufactured home is
affixed to the real property in such a manner as to render the manufactured home
real property under the laws of the jurisdiction in which it is located, (ii)
the Mortgage is a lien on the land on which the manufactured home is located as
well as the manufactured home itself, and (iii) the manufactured home (a) has a
minimum of 400 square feet of living space, (b) has a minimum width in excess of
102 inches and (c) is of a kind customarily used at a fixed location.
(w) Underwriting Guidelines. Each Mortgage Loan was
underwritten in accordance with the policies and procedures set forth in the
Prospectus Supplement dated July 16, 1997 and the Prospectus dated April 8, 1997
relating to the Certificates.
(x) Combined Loan-to-Value Ratio. At the time of its
origination (and, in the case of a Mortgage Loan that has been modified, at the
time of origination and at the time such Mortgage Loan was modified), no
Mortgage Loan had a Combined Loan-to-Value Ratio of greater than 100.5%.
(y) Mortgagor Not Subject to Bankruptcy Proceedings. No
Mortgagor is in a bankruptcy proceeding as of the Cut-off Date.
(z) Condition of Mortgaged Property. To the best of its
knowledge, each Mortgaged Property is free of material damage and is in good
repair.
SECTION 3.03. Representations and Warranties Regarding the
Mortgage Loans in the Aggregate.
CIT Consumer Finance represents and warrants to the Trustee
and the Certificateholders as of the Closing Date that:
(a) Characteristics. Each Mortgage Loan individually and the
Mortgage Loans in the aggregate conform in all material respects to the
description thereof in the Prospectus Supplement.
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(c) Computer Tape. As of Closing Date, the Computer Tape made
available by the Master Servicer was complete and accurate as of its date and
includes a description of the same Mortgage Loans that are described in the List
of Mortgage Loans.
(d) Marking Records. By the Closing Date CIT Consumer Finance
has caused the portions of the Electronic Ledger relating to the Mortgage Loans
constituting part of the Trust to be clearly and unambiguously marked to
indicate that such Mortgage Loans 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. Except for the effect of the
representations and warranties made in Sections 3.02 and 3.03 hereof, no adverse
selection procedures have been employed in selecting the Mortgage Loans.
SECTION 3.04. Representations and Warranties Regarding the
Files.
CIT Consumer Finance represents and warrants to the Trustee
and the Certificateholders as of the Closing Date that:
(a) Possession. Immediately prior to the Closing Date CIT
Consumer Finance will have possession of each original Mortgage Loan and the
related File, and there are and there will be no custodial agreements in effect
materially and adversely affecting the right of CIT Consumer Finance to make, or
to cause to be made, delivery of the Files required in connection with the
conveyance of the Mortgage Loans to the Company.
(b) Bulk Transfer Laws. The transfer, assignment and
conveyance of the Mortgage Loans and the Files with respect thereto to the
Company are not subject to the bulk transfer or any similar statutory provisions
in effect in any applicable jurisdiction.
SECTION 3.05. Repurchase of Mortgage Loans or Substitution of
Mortgage Loans for Breach of Representations and Warranties.
(a) Subject to Section 3.05(b), CIT Consumer Finance shall
repurchase a Mortgage Loan, at its Purchase Price, not later than 85 days after
CIT Consumer Finance receives written notice from the Trustee or the Master
Servicer, or not later than 90 days after CIT Consumer Finance otherwise becomes
aware, of a material breach of any representation or warranty of CIT Consumer
Finance set forth in Section 3.02 or 3.03 of this Agreement that materially and
adversely affects the interests of the Certificateholders in such Mortgage Loan
and which breach has not been cured. CIT Consumer Finance shall effect such
repurchase by paying to the Master Servicer for deposit in the Certificate
Account on the Business Day immediately preceding the Distribution Date in the
month following the month in which the loan was repurchased, the aggregate of
the Purchase Price of all Mortgage Loans that are required to be repurchased
pursuant to the preceding sentence. Notwithstanding any other provision of the
Agreement, the obligation of CIT Consumer Finance under this Section shall not
terminate upon a Service Transfer pursuant to Article VII.
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Notwithstanding the provisions of the preceding paragraph, but
subject to Section 3.05(b), CIT Consumer Finance will not be required to
repurchase a Mortgage Loan as a result of a material breach of a representation
or warranty as described in the preceding paragraph unless the Trustee has
received an Opinion of Counsel that such repurchase will not cause the Trust
REMIC to fail to qualify as a REMIC at any time under the then applicable REMIC
Provisions. The cost of obtaining such Opinion of Counsel shall be borne by CIT
Consumer Finance. The Master Servicer shall obtain such Opinion of Counsel. CIT
Consumer Finance shall, subject to this Section 3.05, repurchase such Mortgage
Loan or substitute a Qualified Substitute Mortgage Loan and shall guarantee the
payment of any tax imposed under the REMIC Provisions as a result of such
repurchase or substitution by paying to the Trustee the amount of such tax not
later than five Business Days before such tax shall be due and payable to the
extent that amounts previously paid over to and then held by the Trustee
pursuant to Section 5.10 hereof are insufficient to pay such tax and all other
taxes chargeable under Section 5.10. Pursuant to Section 5.10, the Master
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(i) of the Code or imposed on
"contributions after start up date" under Section 860G(d) of the Code from
amounts otherwise distributable to Class R Certificateholders. The Master
Servicer shall give notice to the Trustee at the time of such repurchase of the
amounts due from CIT Consumer Finance pursuant to the guarantee of CIT Consumer
Finance and notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts
pursuant to this Section other than from moneys provided to it by CIT Consumer
Finance or from moneys held in the funds and accounts created under this
Agreement. The Trustee shall be deemed conclusively to have complied with this
Section if it follows the directions of CIT Consumer Finance.
In the event any tax that is guaranteed by CIT Consumer
Finance is refunded to the Trust or otherwise is determined not to be payable,
CIT Consumer Finance shall be repaid the amount of such refund or that portion
of any guarantee payment made by CIT Consumer Finance that is not applied to the
payment of such tax.
(b) On or prior to the date that is the second anniversary of
the Closing Date, CIT Consumer Finance, at its election, may substitute a
Qualified Substitute Mortgage Loan for a Mortgage Loan that it is obligated to
repurchase pursuant to Section 3.05(a) (such Mortgage Loan being referred to as
the "Replaced Mortgage Loan") upon satisfaction of the following conditions:
(i) CIT Consumer Finance shall have conveyed to the Trustee
the Mortgage Loan to be substituted for the Replaced Mortgage Loan and
the File related to such Mortgage Loan and CIT Consumer Finance shall
have marked the Electronic Ledger indicating that such Mortgage Loan
constitutes part of the Trust;
(ii) the Mortgage Loan to be substituted for the Replaced
Mortgage Loan is a Qualified Substitute Mortgage Loan and CIT Consumer
Finance delivers an Officer's
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Certificate, substantially in the form of Exhibit I-2 hereto, to the
Trustee certifying that such Mortgage Loan is a Qualified Substitute
Mortgage Loan;
(iii) CIT Consumer Finance shall have delivered to the Trustee
an Opinion of Counsel to the effect that the substitution of such
Mortgage Loan for such Replaced Mortgage Loan will not cause the Trust
REMIC to fail to qualify as a REMIC at any time under then applicable
REMIC Provisions or cause any "prohibited transaction" that will result
in the imposition of a tax under such REMIC Provision;
(iv) if the Principal Balance of such Replaced Mortgage Loan
is greater than the Principal Balance of the Mortgage Loan being
substituted, CIT Consumer Finance shall have deposited in the
Certificate Account the amount of such excess, plus accrued and unpaid
interest (the "Substitution Adjustment") and shall have included in the
Officer's Certificate required by clause (ii) above a certification
that such deposit has been made; and
(v) CIT Consumer Finance shall have delivered to the Rating
Agencies prior written notice of such substitution, with a copy of such
notice delivered to the Trustee.
Upon satisfaction of such conditions, the Trustee shall add such Mortgage Loan
to, and delete such Replaced Mortgage Loan from, the List of Mortgage Loans.
Such substitution shall be effected prior to the expiration of the period in
which CIT Consumer Finance is otherwise obligated to repurchase such Replaced
Mortgage Loan pursuant to Section 3.05(a). Promptly after any substitution of a
Mortgage Loan, CIT Consumer Finance shall give written notice of such
substitution to the Rating Agencies.
(c) Promptly after the repurchase referred to in Section
3.05(a) or the substitution referred to in Section 3.05(b), the Trustee shall
execute such documents as are presented to it by CIT Consumer Finance and are
reasonably necessary to reconvey the repurchased Mortgage Loan or Replaced
Mortgage Loan, as the case may be, to CIT Consumer Finance and deliver the
related File to CIT Consumer Finance.
(d) The repurchase obligation of CIT Consumer Finance set
forth in this Section 3.05 shall constitute the sole remedy available to the
Trust and the Certificateholders for a breach of representation and warranty
hereunder with respect to the Mortgage Loans (but not with respect to any other
breach by CIT Consumer Finance of its obligations hereunder, as set forth
herein).
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ARTICLE IV
DELIVERY OF MORTGAGE DOCUMENTS; CUSTODY OF MORTGAGE LOANS;
RECORDATION OF MORTGAGES
SECTION 4.01. Delivery of Mortgage Documents; Custody of
Mortgage Loans.
(a) CIT Consumer Finance shall deliver or cause to be
delivered to the Trustee, within 90 days of the Closing Date, with respect to
each Mortgage Loan, the original Note (and any modification or amendment
thereto), the original Mortgage with evidence of recording indicated thereon
(except for any Mortgage which has been lost or which was not returned from the
public recording office, a copy of which (together with a certificate that the
original of such Mortgage was delivered to such recording office) shall be
delivered initially and the original of which shall be delivered to the Trustee
as soon as the same is available to CIT Consumer Finance), and, if applicable,
any riders or modifications to such Note and Mortgage, any title insurance
policies with respect to such Mortgage and any assumption or modification
agreement (collectively, the "Mortgage DocumentsMortgage Documents").
For certain Mortgage Loans transferred by the Company to the
Trust, CIT Consumer Finance may deliver to the Trustee, in lieu of the original
Note, (i) a new promissory note signed by the borrower confirming its obligation
under the original Note (a "Confirmatory Note"), or (ii) an affidavit of the
Seller certifying that the Seller or the Company was the sole owner of the
indebtedness evidenced by such note and the original thereof has been lost or
destroyed. The Seller hereby indemnifies the Trust against any loss, liability,
damage, claim or expense resulting from CIT Consumer Finance's failure to
deliver to the Trustee the original Note or Confirmatory Note. Such
indemnification shall be terminated if CIT Consumer Finance subsequently
delivers the original Note or a Confirmatory Note. If CIT Consumer Finance
delivers such a lost note affidavit or fails to deliver any assumption and
modification agreement, within 90 days after the Closing Date, it shall deliver
to the Trustee either the original Note or Confirmatory Note and assumption and
modification agreement, as applicable, or an opinion of counsel satisfactory to
the Trustee from counsel admitted to practice in the jurisdiction in which the
related Mortgaged Property is located to the effect that the absence of the
originals of such documents will not preclude the Master Servicer from
initiating or prosecuting to completion any foreclosure proceeding with respect
to such Mortgaged Property. If CIT Consumer Finance does not deliver such
documents or an opinion of counsel within such 90-day period, it shall be
required to use its best reasonable efforts to substitute another Mortgage Loan
or, if it is unable to make such substitution, to repurchase the original
Mortgage Loan at the Purchase Price, in each case in accordance with the
procedures and requirements of Section 3.05(b).
(b) Subject to the terms and conditions of this Section 4.01,
the Trustee shall act as custodian of the Files for the benefit of the
Certificateholders.
(c) The Trustee agrees to maintain the related Files at one of
its offices as the Trustee and the Master Servicer may from time to time agree.
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(d) As custodian, the Trustee shall have and perform the
following powers and duties:
(i) hold the Files on behalf of the Certificateholders,
maintain accurate records pertaining to each Mortgage Loan to enable
the Master Servicer to comply with the terms and conditions of this
Agreement, maintain a current inventory thereof, conduct annual
physical inspections of the Files held by it under this Agreement and
certify in writing to the Master Servicer annually that it continues to
maintain possession of such Files;
(ii) implement policies and procedures in writing and signed
by a Servicing Officer, with respect to persons authorized to have
access to the Files and the receipting for Files taken from their
storage area by an employee of the Master Servicer for purposes of
servicing or any other purposes;
(iii) maintain custody of the Files on behalf of the
Certificateholders; and
(iv) make originals of any document in the Files available to
the Master Servicer to enforce the Mortgage Loans.
(e) In performing its duties under this Section 4.01, the
Trustee agrees to exercise that degree of skill and care, consistent with the
same degree of skill and care that a prudent person would exercise or use under
the circumstances in the conduct of his own affairs with respect to similar
Mortgage Loans. Subject to Section 11.03, no provision of this Agreement shall
be construed to relieve the Trustee in performing its duties under this Section
4.01 from liability for its own negligent action, its own negligent failure to
act or its own misconduct.
SECTION 4.02. Recordation of Mortgages.
(a) The Master Servicer will maintain a recorded first or
subordinate lien, as applicable, on each Mortgaged Property so long as the
related Mortgage Loan is the property of the Trust (except as it may be limited
by the absence of a duly recorded mortgage assignment). Within 90 days of the
Closing Date, the Master Servicer will, submit for recordation, assignments to
the Trustee of the lien on any Mortgaged Property (or, where permitted,
assignments of the liens on any group of Mortgaged Properties), at its sole
expense, unless (i) an opinion(s) of counsel is delivered by the Master Servicer
to the Trustee to the effect that recordation of an assignment is not required
to protect the interests of the Trustee in a Mortgage Loan and the related
Mortgaged Property or in a group of Mortgage Loans (and the related Mortgage
Properties), or (ii) the Rating Agencies shall have notified the Master Servicer
in writing that the failure to record Mortgage assignments pursuant to this
sentence will not result in a downgrade or withdrawal of the then current rating
on the Certificates. If the Master Servicer receives such written notice from
the Rating Agencies, the Master Servicer will not record the assignments to the
Trustee of the lien on any Mortgaged Property (or, where permitted, on
assignments of the liens on any group of Mortgaged Properties) unless (i) CIT
Consumer Finance is no longer a wholly-owned direct or indirect subsidiary of
Holdings, (ii) the long-term
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senior debt rating of Holdings is downgraded below A3 by Moody's or A- by
Standard & Poor's, or (iii) CIT Consumer Finance is no longer the Master
Servicer hereunder, in which case the Master Servicer or the new Master
Servicer, as the case may be, will record such assignments to the Trustee within
sixty (60) days, at CIT Consumer Finance's sole expense, and, CIT Consumer
Finance will deliver to the Trustee all assignments of said Mortgages in
recordable form, unless an opinion of counsel is delivered by CIT Consumer
Finance to the Trustee to the effect that recordation of an assignment is not
required to protect the interests of the Trustee in the Mortgage Loan and the
related Mortgaged Property. The Trustee shall cooperate with CIT Consumer
Finance by executing such instruments as CIT Consumer Finance shall request to
facilitate recordation of the assignments.
If CIT Consumer Finance fails to deliver assignments of
Mortgages in recordable form as provided above, the Trustee shall either (i)
prepare such assignments in recordable form and record such assignments in favor
of the Trustee within sixty (60) days at the expense of CIT Consumer Finance or
(ii) obtain opinions of counsel to the effect that recordation of assignments is
not required to protect the interests of the Trustee in the Mortgage Loans and
the related Mortgaged Property at the expense of CIT Consumer Finance. CIT
Consumer Finance hereby agrees to cooperate in the preparation, execution and
recording of such assignments and agrees to cause CITSF and CITCF-NY to
cooperate in the preparation, execution and recording of such assignments.
(b) From time to time the Master Servicer shall, subject to
the preceding paragraph, take and cause to be taken such actions and execute
such documents as are necessary to perfect and protect the Certificateholders'
interests in the Mortgage Loans and their proceeds and the Mortgaged Properties
against all other persons. The accounting records and computer systems of the
Company and of CIT Consumer Finance will be marked to reflect the sale and
assignments of the Mortgage Loans by CIT Consumer Finance and the Company as
contemplated herein.
SECTION 4.03. Review of Mortgage Documents.
(a) The Trustee, as custodian, shall review each Mortgage
Document within 180 days of delivery of such Mortgage Document and if any such
document is found to be missing or defective in a material respect, is not
properly executed, is unrelated to the Mortgage Loans of the Trust or does not
conform in a material respect to the description thereof provided by or on
behalf of CIT Consumer Finance, the Trustee shall notify the Master Servicer and
the Company, and the Master Servicer will notify the Seller. If the Seller does
not cure such defect within 90 days after notice thereof from the Master
Servicer or knowledge thereof and the defect materially and adversely affects
the interest of the Trust in the related Mortgage Loan, the Seller shall be
obligated to repurchase the related Mortgage Loan from the Trust Fund at the
Purchase Price. The Seller shall effect such repurchase by paying to the Master
Servicer for deposit in the Certificate Account on the Business Day immediately
preceding the Distribution Date in the month following the month in which the
loan was repurchased, the aggregate of the Purchase Price of all Mortgage Loans
that are required to be repurchased pursuant to the preceding sentence.
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Notwithstanding the provisions of the preceding paragraph, but
subject to Section 4.03(b), the Seller will not be required to repurchase a
Mortgage Loan as described in the preceding paragraph unless the Trustee has
received an Opinion of Counsel that such repurchase will not cause the Trust
REMIC to fail to qualify as a REMIC at any time under the then applicable REMIC
Provisions. The cost of obtaining such Opinion of Counsel shall be borne by the
Seller. The Master Servicer shall obtain such Opinion of Counsel. The Seller
shall, subject to this Section 4.03, repurchase such Mortgage Loan or substitute
a Qualified Substitute Mortgage Loan and shall guarantee the payment of any tax
imposed under the REMIC Provisions as a result of such repurchase or
substitution by paying to the Trustee the amount of such tax not later than five
Business Days before such tax shall be due and payable to the extent that
amounts previously paid over to and then held by the Trustee pursuant to Section
5.10 hereof are insufficient to pay such tax and all other taxes chargeable
under Section 5.10. Pursuant to Section 5.10, the Master Servicer is hereby
directed to withhold, and shall withhold and pay over to the Trustee, an amount
sufficient to pay such tax and any other taxes imposed on "prohibited
transactions" under Section 860F(a)(i) of the Code or imposed on "contributions
after start up date" under Section 860G(d) of the Code from amounts otherwise
distributable to Class R Certificateholders. The Master Servicer shall give
notice to the Trustee at the time of such repurchase of the amounts due from the
Seller pursuant to the guarantee of the Seller and notice as to who should
receive such payment.
The Trustee shall have no obligation to pay any such amounts
pursuant to this Section other than from moneys provided to it by the Seller or
from moneys held in the funds and accounts created under this Agreement. The
Trustee shall be deemed conclusively to have complied with this Section if it
follows the directions of the Seller.
In the event any tax that is guaranteed by the Seller is
refunded to the Trust or otherwise is determined not to be payable, the Seller
shall be repaid the amount of such refund or that portion of any guarantee
payment made by the Seller that is not applied to the payment of such tax.
(b) On or prior to the date that is the second anniversary of
the Closing Date, the Seller, at its election, may substitute a Qualified
Substitute Mortgage Loan for a Mortgage Loan that it is obligated to repurchase
pursuant to Section 4.03(a) (such Mortgage Loan being referred to as the
"Deleted Mortgage Loan") upon satisfaction of the following conditions:
(i) the Seller shall have conveyed to the Trustee the Mortgage
Loan to be substituted for the Deleted Mortgage Loan and the File
related to such Mortgage Loan and the Seller shall have marked the
Electronic Ledger indicating that such Mortgage Loan constitutes part
of the Trust;
(ii) the Mortgage Loan to be substituted for the Deleted
Mortgage Loan is a Qualified Substitute Mortgage Loan and the Seller
delivers an Officer's Certificate, substantially in the form of Exhibit
I-2 hereto, to the Trustee certifying that such Mortgage Loan is a
Qualified Substitute Mortgage Loan;
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(iii) the Seller shall have delivered to the Trustee an
Opinion of Counsel to the effect that the substitution of such Mortgage
Loan for such Deleted Mortgage Loan will not cause the Trust REMIC to
fail to qualify as a REMIC at any time under then applicable REMIC
Provisions or cause any "prohibited transaction" that will result in
the imposition of a tax under such REMIC Provision;
(iv) if the Principal Balance of such Deleted Mortgage Loan is
greater than the Principal Balance of the Mortgage Loan being
substituted, the Seller shall have deposited in the Certificate Account
the amount of such excess, plus accrued and unpaid interest (the
"Substitution Adjustment") and shall have included in the Officer's
Certificate required by clause (ii) above a certification that such
deposit has been made; and
(v) the Seller shall have delivered to the Rating Agencies
prior written notice of such substitution.
Upon satisfaction of such conditions, the Trustee shall add such Mortgage Loan
to, and delete such Deleted Mortgage Loan from, the List of Mortgage Loans. Such
substitution shall be effected prior to the expiration of the period in which
the Seller is otherwise obligated to repurchase such Deleted Mortgage Loan
pursuant to Section 4.03(a). Promptly after any substitution of a Mortgage Loan,
CIT Consumer Finance shall give written notice of such substitution to the
Rating Agencies.
(c) Promptly after the repurchase referred to in Section
4.03(a) or the substitution referred to in Section 4.03(b), the Trustee shall
execute such documents as are presented to it by the Seller and are reasonably
necessary to reconvey the repurchased Mortgage Loan or Deleted Mortgage Loan, as
the case may be, to the Seller and deliver the related File to the Seller.
(d) The repurchase obligation of the Seller set forth in this
Section 4.03 shall constitute the sole remedy available to the Trust and the
Certificateholders for a defect in documentation.
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ARTICLE V
SERVICING OF MORTGAGE LOANS
SECTION 5.01. Responsibility for Mortgage Loan Administration.
The Master Servicer shall, and shall cause the Sub-Servicer
to, manage, administer, service and make collections on the Mortgage Loans and
perform or cause to be performed all contractual and customary undertakings of
the holder of the Mortgage Loans to the Mortgagors. The Trustee, at the request
of a Servicing Officer, shall execute any reasonable documents or take any
action reasonably requested, necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties hereunder. CIT
Consumer Finance is hereby appointed the Master Servicer until such time as any
Service Transfer shall be effected under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections
on the Mortgage Loans pursuant to this Agreement, the Master Servicer shall
exercise that degree of skill and care consistent with the same degree of skill
and care that the Master Servicer exercises with respect to similar mortgage
loans serviced by the Master Servicer for its own account. References to CIT
Consumer Finance's servicing practices shall also include CITSF's servicing
practices. Notwithstanding the foregoing, the Master Servicer shall not release
or waive the right to collect the unpaid balance on a Mortgage Loan or grant an
extension of payments due on a Mortgage Loan, unless either (i) such release,
waiver or extension is occasioned by a default or a reasonably foreseeable
default (in the opinion of the Master Servicer) on such Mortgage Loan; or (ii)
such release, waiver or extension is of a type which Counsel has advised has
been identified by the Code or Treasury Regulations which would not be treated
as an exchange of the Mortgage Loan for purposes of Section 1001 of the Code; or
(iii) unless the Master Servicer obtains an Opinion of Counsel to the effect
that such action will not cause the Trust to fail to qualify as a REMIC under
the Code and under the relevant state and local law or result in the imposition
of taxes on the Trust under the REMIC Provisions.
SECTION 5.03. Records.
The Master Servicer shall during the period it is Master
Servicer hereunder, maintain such books of account and other records as will
enable the Trustee to determine the status of each Mortgage Loan.
SECTION 5.04. Inspection; Computer Tape.
(a) At all times during the term hereof, the Master Servicer
shall, and shall cause the Sub-Servicer to, afford the Trustee and its
authorized agents reasonable access during normal business hours to the Master
Servicer's records relating to the Mortgage Loans and will cause its personnel
to assist in any examination of such records by the Trustee or its authorized
agents. The examination referred to in this Section 5.04 will be conducted in a
manner which
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does not unreasonably interfere with the Master Servicer's or the Sub-Servicer's
normal operations or customer or employee relations. Without otherwise limiting
the scope of the examination the Trustee may make, the Trustee or its authorized
agents may, using generally accepted audit procedures, verify the status of each
Mortgage Loan and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Mortgage Loan in this
Agreement.
(b) At all times during the term hereof, the Master Servicer
shall keep available a copy of the List of Mortgage Loans at its principal
executive office for inspection by Certificateholders.
SECTION 5.05. Certificate Account.
(a) Certificate Account. On or before the Closing Date, the
Trustee shall establish the Certificate Account on behalf of the Trust as an
Eligible Account. If, at any time, the Certificate Account ceases to be
maintained as an Eligible Account, the Trustee (or the Master 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 Agencies may consent)
establish a new Certificate Account meeting the condition specified above,
transfer any cash and/or any investments to such new Certificate Account and
from the date such new Certificate Account is established, it shall be the
"Certificate Account". The Certificate Account shall be entitled "The Bank of
New York as trustee for the benefit of Holders of Home Equity Loan Asset Backed
Certificates, Series 1997-1 (The CIT Group/Consumer Finance, Inc., Master
Servicer) Certificate Account." The Master Servicer shall, subject to the second
following sentence, deposit in the Certificate Account, no later than two
Business Days after the Closing Date, any amounts representing payments received
on the Mortgage Loans on and after the Cut-off Date, regardless of when due. The
Master Servicer shall, subject to the following sentence, pay into the
Certificate Account as promptly as practicable (not later than the second
Business Day) following the receipt thereof by the Master Servicer, all amounts
received in respect of the Mortgage Loans, including all payments from
Mortgagors, Liquidation Proceeds, Insurance Proceeds, Monthly Advances and any
Purchase Price (or Substitution Adjustment) paid pursuant to Section 3.05 or
4.03. Notwithstanding anything in this Agreement to the contrary, for so long
as, and only so long as, CIT Consumer Finance shall remain the Master Servicer
hereunder and CIT Consumer Finance remains a wholly-owned direct or indirect
subsidiary of Holdings, if Holdings shall have and maintain a short-term debt
rating of at least A-1 by Standard & Poor's and a short-term debt rating of at
least P-1 by Moody's (notice of the failure to maintain such rating shall be
given to the Trustee by the Master Servicer within ten (10) days of the
occurrence thereof), the Master Servicer may make the deposits to the
Certificate Account specified in the two preceding sentences on a monthly basis,
but not later than the Business Day immediately preceding the Distribution Date
following the last day of the Due Period within which such payments were
processed by the Master Servicer, in an amount equal to the net amount of such
deposits and payments which would have been made to the Certificate Account
during such Due Period but for the provisions of this sentence. The Master
Servicer shall not be required to deposit in the Certificate Account amounts
that are otherwise permitted to be withdrawn
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therefrom pursuant to clauses (c), (d), (e) and (f) of Section 8.02 or amounts
that are payable to the Master Servicer pursuant to Section 8.04; provided,
however, the Master Servicer shall not be required to so deposit the Master
Servicing Fee referred to in Section 8.02(g) unless CIT Consumer Finance is the
Master Servicer (in which case CIT Consumer Finance, as Master Servicer, shall
be required to so deposit the Master Servicing Fee referred to in Section
8.02(g)). All amounts paid into the Certificate Account under this Agreement
shall be held in trust for the Certificateholders (or the Master Servicer, to
the extent the Master Servicer is entitled to receive any such amounts pursuant
to this Agreement) until payment of any such amounts is authorized under this
Agreement.
(b) The Eligible Institution maintaining the Certificate
Account shall, in the name of the Trustee, as trustee, invest the amounts in the
Certificate Account solely in Eligible Investments that mature not later than
one Business Day prior to the next succeeding Distribution Date, in accordance
with instructions provided to the Trustee by the Master Servicer in writing.
Once such funds are invested, such Eligible Institution shall not change the
investment of such funds. All net income and gain from the investment of funds
in the Certificate Account shall be deposited in the Certificate Account. All
income and gain realized from any such investment of funds in the Certificate
Account (to the extent investment of such funds is permitted hereunder) shall be
for the benefit of the Master Servicer and may be withdrawn by the Master
Servicer on each Distribution Date pursuant to subsection 8.02(h). An amount
equal to any net loss on such investments shall be deposited in the Certificate
Account by the Master 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, 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) (A) 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 Trustee or any
Affiliate of the Trustee, acting in its 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 and (B) 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;
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(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 A-1+ from Standard & Poor's;
(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 long-term credit rating of at
least Aa3 or a short-term credit rating of P-1 from Moody's and at
least AAA from Standard & Poor's at the time of such investment;
(v) commercial paper (which may be commercial paper issued by
The CIT Group Holdings, Inc.) having a rating of at least P-1 from
Moody's and A-1 by Standard & Poor's at the time of such investment;
and
(vi) money market funds rated Aaa or P-1 by Moody's and AAAm
or AAAm-G by Standard & Poor's, including, without limitation, any such
fund for which the Trustee or an affiliate of the Trustee serves as an
investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, notwithstanding that (i) the Trustee or an
affiliate of the Trustee charges and collects fees and expenses from
such funds for services rendered, (ii) the 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 Master
Servicer specifically authorize the Trustee or an affiliate of the
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
the Trustee may charge and collect for services rendered pursuant to
this instrument).
The Trustee may trade with itself or with an Affiliate on an
arm's length basis in the purchase or sale of such Eligible Investments. The
Trustee shall not be liable for the selection of or for any investment losses
made at the written direction of the Master Servicer on any Eligible
Investments.
SECTION 5.06. Enforcement.
(a) The Master Servicer shall, consistent with customary
servicing procedures and the terms of this Agreement, act with respect to the
Mortgage Loans in such manner as will maximize the receipt of principal and
interest on the Mortgage Loans and Liquidation Proceeds in respect of Liquidated
Mortgages.
(b) The Master Servicer may sue to enforce or collect upon
Mortgage Loans, including foreclosure of any Mortgaged Property, in its own
name, if possible, or as agent for the Trustee. If the Master Servicer elects to
commence a legal proceeding to enforce a Mortgage Loan, the act of commencement
shall be deemed to be an automatic assignment of the Mortgage Loan to the Master
Servicer for purposes of collection only. If, however, in any enforcement suit
or legal proceeding it is held that the Master Servicer may not enforce a
Mortgage Loan on the ground that it is not a real party in interest or a holder
entitled to enforce the Mortgage Loan, the Trustee on behalf of the Trust shall,
at the Master Servicer's expense, take such steps as the
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Master Servicer deems necessary to enforce the Mortgage Loan, including bringing
suit in its name or the names of the Certificateholders.
(c) The Master Servicer shall exercise any rights of recourse
against third persons that exist with respect to any Mortgage Loan in accordance
with the Master Servicer's usual practice. In exercising recourse rights, the
Master Servicer is authorized on the Trustee's behalf to reassign the Mortgage
Loan or to resell the related Mortgaged Property to the person against whom
recourse exists at the price set forth in the document creating the recourse.
(d) Prior to a Service Transfer the Master Servicer may grant
to the Mortgagor on any Mortgage Loan any rebate, refund or adjustment out of
the Certificate Account that the Master Servicer in good faith believes is
required because of a Principal Prepayment of the Mortgage Loan. The Master
Servicer shall not permit any rescission or cancellation of any Mortgage Loan,
except to the extent, if any, required by law.
(e) Prior to a Service Transfer, the Master Servicer may,
consistent with its customary servicing procedures and in accordance with
Section 5.02, grant to the Mortgagor on any Mortgage Loan an extension of
payments due under such Mortgage Loan, provided that such extension does not
result in any payments coming due on or after July 8, 2027.
(f) The Master Servicer may enforce any due-on-sale clause in
a Mortgage Loan if such enforcement is consistent with its customary servicing
procedures for obligations similar to the Mortgage Loans, provided that such
enforcement is permitted by applicable law and will not adversely affect any
applicable insurance policy. If an assumption and modification of a Mortgage
Loan is permitted by the Master Servicer upon the conveyance of the related
Mortgaged Property, the Master Servicer shall use its best efforts to obtain an
assumption and modification agreement in connection therewith and deliver such
assumption and modification agreement to the Trustee for addition to the related
File.
(g) In the event that applicable state law requires that the
sale of any Mortgaged Property to which the Trustee has acquired title, through
foreclosure or otherwise, be conducted through a licensed real estate broker or
if the Master Servicer otherwise determines that it is prudent, the Master
Servicer shall retain such broker, and the fees payable to such broker in
connection with any such sale shall constitute Liquidation Expenses.
(h) The Master Servicer may call any Call Loan, in accordance
with the provisions of such Call Loan, if it is consistent with its customary
servicing procedures.
SECTION 5.07. Trustee to Cooperate.
Upon payment in full on any Mortgage Loan, the Master Servicer
shall notify the Trustee by certification of a Servicing Officer (which
certification shall include a statement to the effect that such Mortgage Loan
has been paid in full and that all amounts received in connection with such
payments which are required to be deposited in the Certificate Account pursuant
to Section 5.05 have been so deposited). The Master Servicer is authorized to
execute an instrument in satisfaction of such Mortgage Loan and to do such other
acts and execute such
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other documents as the Master Servicer reasonably deems to be necessary to
discharge the Mortgagor thereunder and eliminate the security interest in the
Mortgaged Property related thereto. The Master Servicer shall determine when a
Mortgage Loan has been paid in full. To the extent that insufficient payments
are received on a Mortgage Loan credited by the Master Servicer as prepaid or
paid in full and satisfied, the shortfall shall be paid by the Master Servicer
out of its own funds. From time to time as appropriate for servicing and
foreclosure in connection with any Mortgage Loan, the Trustee shall, upon
written request of a Servicing Officer and delivery to the Trustee, of a receipt
signed by such Servicing Officer, cause the original Mortgage Loan and the
related File to be released to the Master Servicer and shall execute such
documents as the Master Servicer shall deem necessary to the prosecution of any
such proceedings. Such receipt shall obligate the Master Servicer to return the
original Mortgage Loan and the related File to the Trustee when its need by the
Master Servicer has ceased unless the Mortgage Loan shall be liquidated or
repurchased as described in Section 3.05 or 4.03. Upon the request of a
Servicing Officer, the Trustee shall perform such other acts as reasonably
requested by the Master Servicer and otherwise cooperate with the Master
Servicer in enforcement of the Certificateholders' rights and remedies with
respect to the Mortgage Loans.
SECTION 5.08. Costs and Expenses.
(a) All costs and expenses incurred by the Master Servicer in
carrying out its duties hereunder, including all fees and expenses incurred in
connection with the enforcement of Mortgage Loans (including enforcement of
Liquidated Mortgages), shall be paid by the Master Servicer and the Master
Servicer shall not be entitled to reimbursement hereunder, except that the
Master Servicer shall be reimbursed out of the Liquidation Proceeds of a
Liquidated Mortgage for ordinary and necessary Liquidation Expenses incurred by
it directly in connection with realizing upon the related Mortgaged Property.
(b) In addition, the Master Servicer shall pay the cost of (i)
the preservation, restoration and protection of any Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, and (iii) the
management and liquidation of a Mortgaged Property acquired in satisfaction of
the related Mortgage Loan. Such expenditures may include costs of collection
efforts, reappraisals when a Mortgage Loan is past due, legal fees in connection
with foreclosure actions, advancing payments on the related senior mortgages, if
any, acquiring the related senior mortgage(s), if any, advances of delinquent
property taxes, upkeep and maintenance of the Mortgaged Property if it is
acquired through foreclosure and similar types of expenses. Each such
expenditure constitutes a "Servicing Advance." The Master Servicer shall be
obligated to make the Servicing Advances incurred in the performance of its
servicing obligations only if it determines (i) that such actions will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable to it as described in clause (c) of this Section 5.08.
(c) The Master Servicer shall be entitled to recover Servicing
Advances to the extent permitted by the related Mortgage Loan or, if not
theretofore recovered from the Mortgagor on whose behalf such Servicing Advance
was made, from Liquidation Proceeds,
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Insurance Proceeds and such other amounts as may be collected by the Master
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan.
Servicing Advances shall be reimbursable to the Master Servicer from the sources
described above out of the funds on deposit in the Certificate Account pursuant
to Section 8.02(c), such right of reimbursement being prior to the rights of
Certificateholders to receive any related Liquidation Proceeds (including
Insurance Proceeds).
SECTION 5.09. Maintenance of Insurance.
(a) Except as otherwise provided in subsection (b) of this
Section 5.09, the Master Servicer shall cause to be maintained with respect to
each REO Property one or more Hazard Insurance Policies which provide, at a
minimum, the same coverage as a standard form fire and extended coverage
insurance policy that is customary for the type of Mortgaged Property, issued by
a company authorized to issue such policies in the state in which the related
Mortgaged Property is located, and in an amount which is not less than (i) the
maximum insurable value of such Mortgaged Property, (ii) the outstanding
principal balance due from the Mortgagor on the related Mortgage Loan and the
related senior mortgage (if any) or (iii) the minimum amount required to
compensate for damage or loss on a replacement cost basis, whichever is less;
provided, however, that the amount of coverage provided by each Hazard Insurance
Policy shall be sufficient to avoid the application of any co-insurance clause
contained therein; and provided, further, that such Hazard Insurance Policies
may provide for customary deductible amounts. If an REO Property's location is
within a federally designated special flood hazard area, the Master Servicer
shall also cause such flood insurance to be maintained, which coverage shall be
at least equal to the minimum amount specified in the preceding sentence or such
lesser amount as may be available under the federal flood insurance program;
provided, however, that the failure of the Master Servicer to maintain such
flood insurance coverage in the case of a Mortgage Loan for which such flood
insurance coverage was not maintained as of the Cut-off Date shall not give rise
to an Event of Termination under Section 7.01. Each Hazard Insurance Policy
caused to be maintained by the Master Servicer shall contain a standard loss
payee clause in favor of the Master Servicer and its successors and assigns. The
Master Servicer may, but shall not be obligated to, cause to be maintained, with
respect to each Mortgage Loan in which the related Mortgaged Property has not
become an REO Property, one or more Hazard Insurance Policies, which coverage
shall be at least equal to the minimum amount specified above. If any Mortgagor
is in default in the payment of premiums on its Hazard Insurance Policy or
Hazard Insurance Policies, the Master Servicer may, but shall not be obligated
to, in the case of a Mortgage Loan in which the related Mortgaged Property has
not become an REO Property, pay such premiums out of its own funds. If the
Master Servicer elects to pay such premiums out of its own funds, it may
separately add such premium to the Mortgagor's obligation as provided by the
Mortgage Loan, but shall not add such premium to the remaining principal balance
of the Mortgage Loan. The payment by the Mortgagor to the Master Servicer of
such premiums (and interest thereon) shall not be an asset of the Trust and
shall not be deposited by the Master Servicer in the Certificate Account.
(b) The Master Servicer may, in lieu of causing individual
Hazard Insurance Policies to be maintained with respect to each REO Property
pursuant to subsection (a) of this
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Section 5.09, and shall, to the extent that a Mortgage Loan does not require the
Mortgagor to maintain a Hazard Insurance Policy with respect to the related
Mortgaged Property, maintain one or more blanket insurance policies covering
losses on the Mortgagor's interest in the Mortgage Loans resulting from the
absence or insufficiency of individual Hazard Insurance Policies. Any such
blanket policy shall be substantially in the form and in the amount carried by
the Master Servicer at such time. The Master Servicer shall pay the premium for
such policy on the basis described therein. If the insurer under such blanket
insurance policy shall cease to be acceptable to the Master Servicer, the Master
Servicer shall exercise its best reasonable efforts to obtain from another
insurer a replacement policy comparable to such policy. The Master Servicer
shall provide the Rating Agencies with notice of the occurrence of any event
specified in the preceding sentence.
(c) The Master Servicer, or any affiliate of the Master
Servicer, may, to the extent permitted by law (a) enter into agreements with one
or more insurers or other Persons pursuant to which the Master Servicer or such
affiliate will earn commissions and fees in connection with any insurance policy
purchased by a Mortgagor including, without limitation, any hazard insurance
policy (whether or not such hazard insurance policy is force-placed pursuant to
the provisions of any Mortgage Loan), or any other insurance policy whatsoever
and (b) 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 Mortgagors including name, address or
other information) any Mortgagor.
(d) The Master Servicer shall keep in force throughout the
term of this Agreement (i) a policy or policies of insurance covering errors and
omissions for failure to maintain insurance as required by this Agreement, and
(ii) a fidelity bond. Such policy or policies and such fidelity bond shall be in
such form and amount as is generally customary among Persons which service a
portfolio of home equity mortgage loans having an aggregate principal amount of
$500,000,000 or more and which are generally regarded as Master Servicers
acceptable to institutional investors.
SECTION 5.10. REMIC Compliance.
The parties intend that the Trust REMIC formed hereunder shall
constitute, and that the affairs of the Trust REMIC shall be conducted so as to
qualify it as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Master Servicer covenants and agrees that it shall and, with respect to clauses
(d) and (e) in this paragraph, the Trustee covenants and agrees that it shall:
(a) cause to be prepared and filed, all required federal tax returns for the
Trust including, but not limited to, Form 1066 (which must be signed by the
Trustee) and Schedule Q, using a calendar year as the taxable year for the Trust
when and as required by the REMIC Provisions and other applicable federal income
tax laws; (b) cause an election to be made, on behalf of the Trust, to be
treated as a REMIC on the federal information tax return of the Trust for its
first taxable year, in accordance with the REMIC Provisions; (c) prepare and
forward or cause to be prepared and forwarded, to the Certificateholders all
information reports as and when required to be provided to them in accordance
with the REMIC Provisions; (d) conduct the affairs of the Trust at all
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times that any Certificate is outstanding so as to maintain the status of the
Trust REMIC as a REMIC under the REMIC Provisions; and (e) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of the Trust. The Master Servicer covenants and
agrees that it shall, to the extent permitted by law, act as agent (and the
Master Servicer is hereby appointed to act as agent) on behalf of the Trust and
in such capacity it shall: (i) pay the amount of any federal income tax (to the
extent that funds distributable to the Class R Certificateholders are not
available), including prohibited transaction penalty taxes (exclusive of any
such tax charged to CIT Consumer Finance (if CIT Consumer Finance is not the
Master Servicer) pursuant to Section 3.05 and 4.03), imposed on the Trust when
and as the same shall be due and payable (but such obligation shall not prevent
the Master Servicer or any other appropriate Person from contesting any such tax
in appropriate proceedings and shall not prevent the Master Servicer from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (ii) conduct the affairs of the Trust at all times that any
Certificate is outstanding so as to maintain the status of the Trust REMIC as a
REMIC under the REMIC Provisions; and (iii) not knowingly or intentionally take
any action or omit to take any action that would cause the termination of the
REMIC status of the Trust REMIC.
In the event that any tax is imposed on "prohibited
transactions" of the Trust as defined in Section 860F(a)(2) of the Code or on
"contributions after startup date" as defined in Section 860G(d) of the Code,
such tax shall be charged against amounts otherwise distributable to the Holders
of the Class R Certificates in accordance with their Percentage Interests to the
extent hereinafter provided. Notwithstanding anything to the contrary contained
herein, the Master Servicer shall retain from amounts otherwise distributable to
the Holders of the Class R Certificates on any Distribution Date sufficient
funds for the payment of such tax, including without limitation any tax payable
pursuant to Section 3.05 and 4.03, and shall pay such amount to the Trustee or,
if the Master Servicer (other than as a Class R Certificateholder) has paid such
tax, reimburse the Master Servicer therefor (to the extent that the Master
Servicer has not been previously reimbursed or indemnified therefor). The Master
Servicer agrees first to seek indemnification for any such tax payment from any
indemnifying parties before reimbursing itself from amounts otherwise
distributable to the Holders of the Class R Certificates.
In the event that any Mortgaged Property is acquired in a
foreclosure or other realization procedure (an "REO Property"), the Master
Servicer shall sell such REO Property within two years of its acquisition by the
Trust, unless the Master Servicer seeks, and subsequently receives, an Opinion
of Counsel, addressed to the Trustee and the Master Servicer, to the effect that
the holding by the Trust of such REO Property subsequent to two years after its
acquisition will not result in the imposition of taxes on "prohibited
transactions" of the Trust as defined in Section 860F of the Code or cause the
Trust REMIC to fail to qualify as a REMIC at any time that any Offered
Certificates or Class B-2 Certificates are outstanding. The Master Servicer
shall manage, conserve, protect and operate each REO Property such that it will
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) and
will not result in the receipt by the REMIC of any "income from nonpermitted
assets" within the meaning of Section 860F(a)(2)(B) or the Code. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall either itself or
through an agent selected by the Master Servicer protect and conserve such REO
Property in the same manner and to such extent as it is customary in the
locality where such
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REO Property is located and may, incident to its conservation and protection of
the interests of the Certificateholders, rent the same, or any part thereof, as
the Master Servicer deems to be in the best interest of the Master Servicer and
the Certificateholders for the period prior to the sale of such REO Property.
The Master Servicer shall deposit all Liquidation Proceeds in
the Certificate Account in accordance with Section 5.05(a). The Master Servicer
shall include with its Monthly Report to the Trustee a separate report
specifying, with respect to each Mortgage Loan that becomes a Liquidated
Mortgage during the prior Due Period, the unpaid principal balance and the
Liquidation Proceeds for such Mortgage Loan.
SECTION 5.11. Sub-Servicer.
(a) On or before the Closing Date, CIT Consumer Finance, as
Master Servicer, shall enter into the Sub-Servicing Agreement. CIT Consumer
Finance shall not permit CITSF to resign as sub-servicer under the Sub-Servicing
Agreement (the "Sub-Servicer") nor shall CIT Consumer Finance terminate or
replace CITSF as Sub-Servicer under the Sub-Servicing Agreement or materially
reduce the duties of CITSF as Sub-Servicer under the Sub-Servicing Agreement in
connection with collections, lockbox arrangements, payment processing or
foreclosure activities, unless (i) an Event of Termination has occurred and is
continuing, in which event the Trustee may terminate both of CIT Consumer
Finance as Master Servicer and CITSF, as Sub-Servicer under the Sub-Servicing
Agreement, pursuant to Section 7.02 hereof or (ii) the Rating Agency Condition
is satisfied.
(b) The Master Servicer may enter into other subservicing
agreements with one or more subservicers (which shall be Eligible Servicers) for
the servicing and administration of certain of the Mortgage Loans. 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 Master Servicer and the subservicer have agreed. All compensation payable
to a subservicer under a subservicing agreement shall be payable by the Master
Servicer from its servicing compensation or otherwise from its own funds, and
none of the Trust, the Trustee or the Certificateholders will have any liability
to the subservicer with respect thereto.
Notwithstanding any subservicing agreement (including the
Sub-Servicing Agreement) or any of the provisions of this Agreement relating to
agreements or any arrangements between the Master Servicer or a subservicer or
any reference to actions taken through such Persons or otherwise, the Master
Servicer shall remain obligated and liable to the Trust, the Trustee, and the
Certificateholders for the servicing and administering of the Mortgage Loans 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 Mortgage Loans and
the other Trust property involving a subservicer in its capacity as such shall
be deemed to be between the subservicer and the Master Servicer alone, and the
Trustee and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
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subservicer except as set forth in the next succeeding paragraph or as set forth
in such subservicing agreement. The Trustee, on behalf of the
Certificateholders, shall be an express third-party beneficiary of the
Sub-Servicing Agreement.
Other than with respect to the Sub-Servicing Agreement, in the
event the Master Servicer shall for any reason no longer be acting as such, the
successor Master Servicer may, in its discretion, thereupon assume all of the
rights and obligations of the outgoing Master Servicer under a subservicing
agreement. In such event, the successor Master Servicer shall be deemed to have
assumed all of the Master Servicer's interest therein and to have replaced the
outgoing Master Servicer as a party to each such subservicing agreement to the
same extent as if such subservicing agreement had been assigned to the successor
Master Servicer, except that the outgoing Master Servicer shall not thereby be
relieved of any liability or obligations on the part of the outgoing Master
Servicer to the subservicer under such subservicing agreement. The outgoing
Master Servicer shall, upon request of the Trust, but at the expense of the
outgoing Master Servicer, deliver to the successor Master Servicer all documents
and records relating to each such subservicing agreement and the Mortgage Loans
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
Master Servicer. In the event that the successor Master Servicer elects not to
assume a subservicing agreement, the outgoing Master Servicer, at its expense,
shall cause the subservicer to deliver to the successor Master Servicer all
documents and records relating to the Mortgage Loans 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 Mortgage Loans and the other Trust property being serviced by
such subservicer to the successor Master Servicer.
SECTION 5.12. Calculation of One-month LIBOR.
(a) On the second business day preceding each Distribution
Date or, in the case of the first Distribution Date, on the second business day
preceding the Closing Date (each such date, an "Interest Determination Date"),
the Trustee shall determine the London interbank offered rate for one-month U.S.
dollar deposits ("One-month LIBOR") for the next Accrual Period for the Variable
Rate Certificates on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as such rates appear in the Telerate Page 3750,
as of 11:00 a.m. (London time) on such Interest Determination Date. As used in
this section, "business day" means a day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
On each Interest Determination Date, One-month LIBOR for the
related Accrual Period for the Variable Rate Certificates shall be established
by the Trustee as above.
If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-month LIBOR for the related
Accrual Period for the Variable Rate Certificates shall be the higher of (x)
One-month LIBOR as determined on the previous Interest Determination Date and
(y) the Reserve Interest Rate. The "Reserve Interest Rate" shall be the
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rate per annum that the Trustee determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/16%) of the
one-month U.S. dollar lending rates which New York City banks selected by the
Trustee are quoting on the relevant Interest Determination Date to the principal
London offices of leading banks in the London interbank market or (ii) in the
event that the Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Trustee are quoting on such Interest Determination Date to leading European
banks.
(b) The establishment of One-month LIBOR on each Interest
Determination Date by the Trustee and the Trustee's calculation of the rate of
interest applicable to the Variable Rate Certificates for the related Accrual
Period shall (in the absence of manifest error) be final and binding.
SECTION 5.13. Applied Realized Loss Amounts.
On each Distribution Date, the Master Servicer shall determine
the total of the Applied Realized Loss Amounts for such Distribution Date. The
Applied Realized Loss Amount for any Distribution Date shall be applied by
reducing the Certificate Balance of each Class of Subordinate Certificates
beginning with the Class B-2 Certificates, then the Class B-1 Certificates, the
Class M-2 Certificates and then the Class M-1 Certificates, in each case until
the respective Certificate Balance thereof is reduced to zero. Any Applied
Realized Loss Amount allocated to a Class of Certificates shall be allocated
among the Certificates of such Class in proportion to their respective
Percentage Interests.
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ARTICLE VI
REPORTS
SECTION 6.01. Monthly Reports to the Trustee.
On or before the Determination Date, the Master Servicer shall
furnish a report (the "Monthly Report") substantially in the form of Exhibit K,
to the Trustee, any Paying Agent and (if CIT Consumer Finance is not the Master
Servicer) CIT Consumer Finance. The determination by the Master Servicer of the
amount of the distributions to be made to the Certificateholders, and, with
respect to reimbursing the Master Servicer for the Monthly Advances made by it
as provided in Section 8.04, the Master Servicer shall, in the absence of
obvious error, be presumptively deemed to be correct for all purposes hereunder,
and the Trustee shall be protected in relying upon the same without any
independent check or verification.
The Monthly Reports shall contain the following information:
(i) the Interest Remittance Amount, separately identifying
Monthly Advances, Compensating Interest and the portion of any
Substitution Adjustment, Purchase Price and Liquidation Proceeds
relating to interest;
(ii) the Principal Remittance Amount separately identifying
Principal Prepayments, and the portion of any Purchase Price,
Substitution Adjustment and Liquidation Proceeds relating to principal
by Mortgage Loan Group;
(iii) the Fixed Rate Principal Distribution Amount and the
Variable Rate Principal Distribution Amount;
(iv) the Fixed Rate Group Available Funds Cap Rate and the
Adjustable Rate Group Available Funds Cap Rate, if the applicable
Pass-Through Rate is limited by such Cap Rate;
(v) the amount of such distribution allocable to principal on
each Class of Certificates (based on a Certificate in the original
principal amount of $1,000);
(vi) the amount of such distribution allocable to principal on
each Class of Certificates (based on a Certificate in the original
principal amount of $1,000);
(vii) the amount of such distribution allocable to interest on
each Class of Certificates (based on a Certificate in the original
principal amount of $1,000);
(viii) the Interest Carry Forward Amount of each Class;
(ix) the principal amount of each Class of Certificates (based
on a Certificate in the original principal amount of $1,000) which will
be outstanding after giving effect to any payment of principal on such
Distribution Date;
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(x) the aggregate Principal Balance of all Mortgage Loans and
the aggregate Principal Balance of the Mortgage Loans in each Mortgage
Loan Group after giving effect to any payment of principal on such
Distribution Date;
(xi) the weighted average Mortgage Rate and the weighted
average remaining stated term to maturity of the Mortgage Loans in each
Mortgage Loan Group;
(xii) whether a Trigger Event has occurred;
(xiii) whether a Cumulative Realized Loss Trigger Event has
occurred;
(xiv) whether a Cumulative Realized Loss Termination Event has
occurred;
(xv) the Senior Enhancement Percentage;
(xvi) the Overcollateralization Amount, the Targeted
Overcollateralization Amount, the Overcollateralization Release Amount
and the Overcollateralization Deficiency; and
(xvii) the amount of any Applied Realized Loss Amount,
Realized Loss Amortization Amount and Unpaid Realized Loss Amount for
each Class as of the close of such Distribution Date.
In addition, the Monthly Report shall contain the following
information with respect to each Mortgage Loan Group:
(a) the number of the aggregate Principal Balance of Mortgage
Loans (i) 30-59 days delinquent, (ii) 60-89 days delinquent and (iii)
90 or more days delinquent, as of the close of business on the last
business day of the calendar month next preceding the Distribution Date
and the number and aggregate Principal Balances of the Mortgage Loans
and related data (as used herein, "delinquent" means a Mortgage Loan as
to which payments aggregating $65 or more are delinquent);
(b) the number and aggregate Principal Balance of all Mortgage
Loans in foreclosure proceedings as of the close of business on the
last business day of the calendar month preceding such Distribution
Date;
(c) the book value of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure as of the close
of business on the last business day of the calendar month next
preceding the Distribution Date; and
(d) the amount of Cumulative Realized Losses and any
subsequent recoveries on Liquidated Mortgages.
SECTION 6.02. Certificate of Servicing Officer.
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Each Monthly Report pursuant to Section 6.01 shall be
accompanied by a certificate of a Servicing Officer substantially in the form of
Exhibit H, 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.
SECTION 6.03. Other Data.
In addition, the Master Servicer shall, on request of the
Trustee, furnish the Trustee such underlying data as can be generated by the
Master Servicer's existing data processing system without undue modification or
expense.
SECTION 6.04. Annual Report of Accountants.
Within 90 days after the end of each calendar year, commencing
March 31, 1998, the Master 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 deliver to the Trustee a report which opines on,
at a minimum, the servicing entity's compliance with the minimum servicing
standards set forth in the Uniform Single Attestation Program for Mortgage
Bankers. Copies of the annual statement of accountants shall also be provided to
the Rating Agencies.
SECTION 6.05. Statements to Certificateholders.
Concurrently with each distribution charged to the Certificate
Account, the Trustee, so long as it has received the Monthly Report from the
Master Servicer, shall forward or cause to be forwarded by mail to each
Certificateholder (or to the Depository), the Monthly Report.
The Trustee (so long as it has received the Monthly Report
from the Master Servicer) and the Master Servicer shall inform any
Certificateholder inquiring by telephone of the information contained in the
most recent Monthly Report. The Trustee shall be entitled to rely upon the
accuracy of the Monthly Report without independent verification unless it
actually knows that the information contained therein is not accurate.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish or cause to be furnished to each Person
who at any time during the calendar year was a Certificateholder a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year and such other information as the
Master Servicer deems necessary or desirable for Certificateholders to prepare
their tax returns. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time in force.
Copies of all reports provided to the Trustee shall also be
provided by the Master Servicer to the Rating Agencies.
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Event of Termination.
"Event of Termination" means the occurrence of any of the
following:
(a) Any failure by the Master Servicer to make any deposit
into the Certificate Account required to be made hereunder or remit to the
Trustee any payment (other than a Monthly Advance or Servicing Advance required
to be made hereunder) and the continuance of such failure for a period of five
Business Days after the giving of written notice of such failure, requiring the
same to be remedied, to the Master Servicer by the Trustee or the Company or to
the Master Servicer and the Trustee by Certificateholders of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than
51%;
(b) Any failure by the Master Servicer duly to observe or
perform in any material respect any of its covenants or agreements in this
Agreement, which failure continues unremedied for thirty (30) days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Trustee or the Company or to
the Master Servicer and the Trustee by Certificateholders evidencing, as to such
Class, Percentage Interests aggregating not less than 51%;
(c) Any assignment by the Master Servicer of its duties or
rights hereunder except as specifically permitted hereunder;
(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 Master 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 Master Servicer, as the case may be, or for any
substantial liquidation of its affairs, and such order remains undischarged and
unstayed for at least sixty (60) days;
(e) The Master 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 Master
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;
(f) Any failure of the Master Servicer to make a Monthly
Advance or Servicing Advance as required hereunder, to the extent such failure
materially or adversely affects the interests of the Certificateholders, which
failure continues unremedied for a period of
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five Business Days after the date on which notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by Trustee;
(g) The failure of the Master Servicer to be an Eligible
Servicer; or
(h) Provided that Standard & Poor's shall not have notified
the Depositor, the Master Servicer or the Trustee that the Cumulative Realized
Loss Termination Event no longer constitutes an Event of Termination, upon the
occurrence and during the continuance of a Cumulative Realized Loss Termination
Event, and after the giving of written notice, to the effect that such
Certificateholders desire to cause an Event of Termination, to the Trustee by
Certificateholders evidencing Percentage Interests aggregating not less than 51%
of the Certificates.
SECTION 7.02. Transfer.
If an Event of Termination has occurred and is continuing, the
Company or the Trustee may, or at the written direction of Certificateholders
with aggregate Percentage Interests evidencing not less than 51% of the Offered
Certificates and the Class B-2 Certificates shall, unless prohibited by
applicable law, terminate all (but not less than all) of the rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
(such termination being herein called a "Service Transfer"). Any such
termination shall also terminate all (but not less than all) of the rights and
obligations of the Sub-Servicer under the Sub-Servicing Agreement. On receipt of
such notice (or, if later, on a date designated therein), all authority and
power of the Master Servicer under this Agreement, whether with respect to the
Mortgage Loans, the Files or otherwise (except with respect to the Certificate
Account, the transfer of which shall be governed by Section 7.06), shall pass to
and be vested in the Trustee pursuant to and under this Section 7.02 (subject to
applicable law regarding the Trustee's ability to make advances), unless
prohibited by applicable law; and, without limitation, the Trustee is authorized
and empowered to execute and deliver on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
(including, without limitation, documents required to make the Trustee or a
successor Master Servicer the sole assignee of the Mortgagee's position in, or
legal title holder of record of, each Mortgaged Property), and to do any and all
acts or things necessary or appropriate to effect the purposes of such notice of
termination. Each of CIT Consumer Finance and the Master Servicer agrees to
cooperate with the Trustee (and each agrees to cause the Sub-Servicer to
cooperate with the Trustee) in effecting the termination of the responsibilities
and rights of the Master Servicer hereunder, including, without limitation, the
transfer to the Trustee for administration by it of all cash amounts which shall
at the time be held by the Master Servicer for deposit, or have been deposited
by the Master Servicer, in the Certificate Account, or for its own account in
connection with its services hereafter or thereafter received with respect to
the Mortgage Loans and the execution of any documents required to make the
Trustee or a successor Master Servicer the sole assignee of the Mortgagee's
position in, or legal title holder of record of, each Mortgaged Property. The
Master Servicer shall be entitled to receive any other amounts which are payable
to the Master Servicer under this Agreement, at the time of the termination of
its activities as Master Servicer, to the extent that funds in the Certificate
Account are available for the payment thereof without
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reducing the amount of distributions that would be made to Holders of the
Offered Certificates or Class B-2 Certificates. The Master Servicer shall
transfer (and shall cause the Sub-Servicer to transfer) to the new Master
Servicer (i) the Master Servicer's records relating to the Mortgage Loans in
such electronic form as the new Master Servicer may reasonably request and (ii)
the Mortgage Loans and the Files in the Master Servicer's or the Sub-Servicer's
possession. Upon termination of the authority and power of the Master Servicer
hereunder, the authority and power of the Sub-Servicer shall be terminated under
the Sub-Servicing Agreement on the same date.
SECTION 7.03. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.02, the Trustee shall be the successor in all
respects to the Master Servicer in its capacity as Master 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 Master Servicer by the terms and provisions hereof, and the Master
Servicer shall be relieved of such responsibilities, duties and liabilities
arising after such Service Transfer; provided, however, that (i) the Trustee
will not assume any obligations of CIT Consumer Finance pursuant to Section 3.05
and (ii) the Trustee shall not be liable for any acts or omissions of the Master
Servicer occurring prior to such Service Transfer or for any breach by CIT
Consumer Finance of any of its representations and warranties contained herein
or in any related document or agreement. As compensation therefor, the Trustee
shall, except as provided in Section 7.02 and in this Section 7.03, be entitled
to such compensation as the Master Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, the Trustee 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 Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, unless the Trustee is prohibited by
law from so acting, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall, without the written consent of 100% of the
Certificateholders, be in excess of the Master Servicing Fee. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
SECTION 7.04. Notification to Certificateholders and to Rating
Agencies.
(a) Promptly following the occurrence of any Event of
Termination, the Master Servicer shall give written notice thereof to the
Trustee, Certificateholders at their respective addresses appearing on the
Certificate Register and to the Rating Agencies.
(b) Within ten (10) days following any termination or
appointment of a successor to the Master Servicer pursuant to this Article VII,
the Trustee shall give written notice thereof to Certificateholders at their
respective addresses appearing on the Certificate Register.
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(c) The Trustee shall give written notice to the Rating
Agencies at least thirty (30) days prior to the date upon which any Eligible
Servicer (other than the Trustee) is to assume the responsibilities of Master
Servicer pursuant to Section 7.03, naming such successor Master Servicer.
SECTION 7.05. Effect of Transfer.
(a) After the Service Transfer, the Trustee or new Master
Servicer may notify the Mortgagors to make payments directly to the new Master
Servicer that are due under the Mortgage Loans after the effective date of the
Service Transfer.
(b) After the Service Transfer, the replaced Master Servicer
shall have no further obligations with respect to the management,
administration, servicing or collection of the Mortgage Loans and the new Master
Servicer shall have all of such obligations, except that the replaced Master
Servicer shall remain liable for any liability of the replaced Master Servicer
hereunder that was already accrued at the time of the Service Transfer and
except that the replaced Master Servicer will transmit or cause to be
transmitted directly to the new Master Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Master Servicer to collect them) received as payments
upon or otherwise in connection with the Mortgage Loans.
(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 Master Servicer and CIT Consumer Finance pursuant to Article X
and Sections 3.05, 4.03, 11.05 and 11.10(f)) other than those relating to the
management, administration, servicing or collection of the Mortgage Loans.
SECTION 7.06. Transfer of Accounts.
Notwithstanding the provisions of Section 7.02, if the
Certificate Account shall be maintained with the Master Servicer and an Event of
Termination shall occur and be continuing, the Master Servicer shall, promptly
after receipt of a notice of termination, if any, pursuant to Section 7.02,
establish, or cooperate with the Trustee to establish, new accounts in trust for
the Certificateholders conforming with the requirements of this Agreement with
an Eligible Institution other than the Master Servicer and promptly transfer, or
cooperate with the Trustee to transfer, all funds in the Certificate Account to
such new accounts, which shall thereafter be deemed the Certificate Account for
the purposes hereof.
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ARTICLE VIII
DISTRIBUTIONS AND WITHDRAWALS FROM
CERTIFICATE ACCOUNT
SECTION 8.01. Monthly Distributions.
(a) Distributions on the Certificates shall be made from funds
in the Certificate Account. Each Certificateholder as of a Record Date shall be
paid on the next succeeding Distribution Date by check mailed to such
Certificateholder at the address for such Certificateholder appearing on the
Certificate Register (or, if a Holder of the Offered Certificate holds an
aggregate Percentage Interest of at least 5% of the Offered Certificates and the
Class B-2 Certificates or, a Holder of a Class B-2 Certificate holds a
Certificate with an Original Class B-2 Certificate Balance of at least
$1,000,000, and if such Certificateholder so requests, by wire transfer of
immediately available funds pursuant to written instructions delivered to the
Trustee at least ten (10) days prior to such Distribution Date, which
instructions, until revised, shall remain operative for all Distribution Dates
thereafter), such Certificateholder's Percentage Interest of the amount to be
distributed. Final payment on any Certificate shall be made only upon
presentation of such Certificate at the office or agency of the Paying Agent.
(b) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, which shall credit the amount of such
distribution to the accounts of its Depository Participants in accordance with
its normal procedures. Each Depository Participant shall be responsible for
disbursing such distribution to the Certificateholder that it represents and to
each indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificateholder that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the Book-Entry Certificates and the Depository's rules.
Neither the Trustee, the Certificate Registrar, the Seller, the Company nor the
Master Servicer shall have any responsibility therefor except as otherwise
provided by applicable law. To the extent applicable and, in the case of the
Offered Certificates not contrary to the rules of the Depository, the Trustee
shall comply with the provisions of the forms of the Offered Certificates and
the Class B-2 Certificates as set forth in Exhibits A-D hereto.
(c) On each Distribution Date, the Interest Remittance Amount
shall be distributed by the Trustee in the following order of priority:
(i) first, to the Holders of the Class A
Certificates, the Class A Current Interest plus the Class A Interest
Carry Forward Amount with respect to each such Class of Class A
Certificates without any priority among such Class A Certificates;
provided, that if the Interest Remittance Amount is not sufficient to
make a full distribution of interest with respect to all Classes of the
Class A Certificates, the Interest Remittance Amount shall be
distributed among the outstanding Classes of Class A Certificates pro
rata based on the aggregate amount of interest due on each such Class,
and the amount of the
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shortfall will be carried forward with accrued interest at the
applicable Pass-Through Rate;
(ii) second, to the extent of the Interest Remittance
Amount then remaining, to the Holders of the Class M-1 Certificates,
the Class M-1 Current Interest;
(iii) third, to the extent of the Interest Remittance
Amount then remaining, to the Holders of the Class M-2 Certificates,
the Class M-2 Current Interest;
(iv) fourth, to the extent of the Interest Remittance
Amount then remaining, to the Holders of the Class B-1 Certificates,
the Class B-1 Current Interest;
(v) fifth, to the extent of the Interest Remittance
Amount then remaining, to the Holders of the Class B-2 Certificates,
the Class B-2 Current Interest; and
(vi) sixth, the sum of (x) the amount, if any, of the
Interest Remittance Amount remaining in the Certificate Account after
application with respect to the priorities set forth in clause (i)-(v)
above plus (y) the amount of any Overcollateralization Release Amount
for such Distribution Date (such amounts, the "Monthly Excess Cashflow
Amount" for a Distribution Date) shall be applied, first, to pay the
Master Servicing Fee to the Master Servicer if CIT Consumer Finance or
one of its affiliates is the Master Servicer and, second, as provided
in subsection (f) of this Section 8.01.
(d) On each Distribution Date (a) before the Stepdown Date or
(b) on or after the Stepdown Date if a Trigger Event is in effect, the Trustee
shall make the following disbursements:
(I) the Holders of the Class A Certificates shall be
entitled to receive payment of an amount equal to 100% of the Variable
Rate Principal Distribution Amount (as defined herein) for such
Distribution Date in the following amounts and priorities:
(i) first, to the Holders of the Class A-9
Certificates until the Class A-9 Certificate Balance has been reduced
to zero;
(ii) second, to the Holders of the Class A-8
Certificates, in an amount equal to the Class A-8 Lockout Distribution
Amount;
(iii) third, to the Holders of the Class A
Certificates (other than the Class A-8 Certificates and the Class A-9
Certificates) in sequential order until the Certificate Balance of each
such Class of Class A Certificates has been reduced to zero; and
(iv) fourth, to the Holders of the Class A-8
Certificates until the Class A-8 Certificate Balance has been reduced
to zero; and
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(II) the Holders of the Class A Certificates shall be
entitled to receive payment of an amount equal to 100% of the Fixed
Rate Principal Distribution Amount (as defined herein) for such
Distribution Date in the following amounts and priorities:
(i) first, to the extent not previously distributed
pursuant to clause (d)(I) above, to the Holders of the Class A-8
Certificates in an amount equal to the Class A-8 Lockout Distribution
Amount;
(ii) second, to the Holders of the Class A
Certificates (other than the Class A-8 Certificates and the Class A-9
Certificates) in sequential order until the Certificate Balance of each
such Class of Class A Certificates has been reduced to zero;
(iii) third, to the Holders of the Class A-8
Certificates until the Class A-8 Certificate Balance has been reduced
to zero; and
(iv) fourth, to the Holders of the Class A-9
Certificates until the Class A-9 Certificate Balance is reduced to
zero.
Notwithstanding the foregoing, on any Distribution Date on
which the sum of the Certificate Balance of the Subordinate
Certificates and the Overcollateralization Amount is zero, any amounts
of principal payable to the Holders of the Class A Certificates on such
Distribution Date shall be distributed pro rata.
(e) On each Distribution Date on or after the Stepdown Date as
long as a Trigger Event is not in effect, the Trustee shall make the following
disbursements:
(i) first, an amount equal to (I) the lesser of (x)
the Variable Rate Principal Distribution Amount and (y) the Class A
Principal Distribution Amount, shall be distributed in the following
amounts and priorities:
(1) first, to the Holders of the Class
A-9 Certificates until the Class A-9
Certificate Balance has been reduced
to zero (such distribution amount,
the "Class A Variable Allocation
Amount");
(2) second, to the Holders of the Class
A-8 Certificates, in an amount
equal to the Class A-8 Lockout
Distribution Amount;
(3) third, to the Holders of the Class A
Certificates (other than the Class
A-8 Certificates and the Class A-9
Certificates) in sequential order
until the Certificate Balance of
each such Class of Class A
Certificates has been reduced to
zero; and
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(4) fourth, to the Holders of the Class
A-8 Certificates until the Class
A-8 Certificate Balance has been
reduced to zero; and
an amount equal to (II) the lesser of (x) the Fixed
Rate Principal Distribution Amount and (y) the Class A
Principal Distribution Amount minus the amount distributed in
clause (i) (I) above, shall be distributed in the following
amounts and priorities:
(1) first, to the extent not previously
distributed pursuant to clause
(e)(i)(I) above, to the Holders of
the Class A-8 Certificates, in an
amount equal to the Class A-8
Lockout Distribution Amount;
(2) second, to the Holders of the Class
A Certificates (other than the Class
A-8 Certificates and the Class A-9
Certificates) in sequential order
until the Certificate Balance of
each such Class of Class A
Certificates has been reduced to
zero;
(3) third, to the Holders of the Class
A-8 Certificates until the Class
A-8 Certificate Balance has been
reduced to zero; and
(4) fourth, to the Holders of the Class
A-9 Certificates until the Class
A-9 Certificate Balance is reduced
to zero;
(ii) second, the lesser of (x) the excess, if any, of
(i) the sum of (A) the Fixed Rate Principal Distribution Amount and (B)
the Variable Rate Principal Distribution Amount over (ii) the amount
distributed to the Holders of the Class A Certificates in clause (e)(i)
above, and (y) the Class M-1 Principal Distribution Amount, shall be
distributed to the Holders of the Class M-1 Certificates, until the
Class M-1 Certificate Balance has been reduced to zero;
(iii) third, the lesser of (x) the excess, if any, of
(i) the sum of (A) the Fixed Rate Principal Distribution Amount and (B)
the Variable Rate Principal Distribution Amount over (ii) the sum of
the amount distributed to the Holders of the Class A Certificates in
clause (e)(i) above and the amount distributed to the Holders of the
Class M-1 Certificates in clause (e)(ii) above, and (y) the
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Class M-2 Principal Distribution Amount, shall be distributed to the
Holders of the Class M-2 Certificates, until the Class M-2 Certificate
Balance has been reduced to zero;
(iv) fourth, the lesser of (x) the excess, if any, of
(i) the sum of (A) the Fixed Rate Principal Distribution Amount and (B)
the Variable Rate Principal Distribution Amount over (ii) the sum of
the amount distributed to the Holders of the Class A Certificates
pursuant to clause (e)(i) above, the amount distributed to the Holders
of the Class M-1 Certificates pursuant to clause (e)(ii) above and the
amount distributed to the Holders of the Class M-2 Certificates
pursuant to clause (e)(iii) above, and (y) the Class B-1 Principal
Distribution Amount, shall be distributed to the Holders of the Class
B-1 Certificates, until the Class B-1 Certificate Balance has been
reduced to zero;
(v) fifth, the lesser of (x) the excess, if any, of
(i) the sum of (A) the Fixed Rate Principal Distribution Amount and (B)
the Variable Rate Principal Distribution Amount over (ii) the sum of
the amount distributed to the Holders of the Class A Certificates
pursuant to clause (e)(i) above, the amount distributed to the Holders
of the Class M-1 Certificates pursuant to clause (e)(ii) above, the
amount distributed to the Holders of the Class M-2 Certificates
pursuant to clause (e)(iii) above and the amount distributed to the
Holders of the Class B-1 Certificates pursuant to clause (e)(iv) above
and (y) the Class B-2 Principal Distribution Amount, shall be
distributed to the Holders of the Class B-2 Certificates, until the
Class B-2 Certificate Balance has been reduced to zero; and
(vi) sixth, any portion of the Principal Distribution
Amount remaining after making all of the distributions in clauses
(e)(i)-(e)(v) above shall be a part of the Monthly Excess Cashflow
Amount and shall be applied as provided in subsection (f) of this
Section 8.01.
Notwithstanding the foregoing, on any Distribution Date on
which the sum of the Certificate Balance of the Subordinate Certificates and the
Overcollateralization Amount is zero, any amounts of principal payable to the
Holders of the Class A Certificates on such Distribution Date shall be
distributed pro rata.
Notwithstanding the foregoing, in the event that the
Certificate Balance of all of the Class A Certificates has been reduced to zero,
all amounts of principal that would have been distributed to such Class A
Certificates shall be distributed to the Subordinate Certificates sequentially
in the following order: first, to the Class M-1 Certificates, second, to the
Class M-2 Certificates, third, to the Class B-1 Certificates and, fourth, to the
Class B-2 Certificates. If the Certificate Balance of the Class M-1 Certificates
has been reduced to zero, all amounts of principal that would have been
distributed to such Class M-1 Certificates shall be distributed sequentially to
the Class M-2, Class B-1 and Class B-2 Certificates in that order. If the
Certificate Balance of the Class M-2 Certificates has been reduced to zero, all
amounts of principal that would have been distributed sequentially to such Class
M-2 Certificates shall be distributed to the Class B-1 and Class B-2
Certificates in that order. If the Certificate Balance of the Class B-1
Certificates has been reduced to zero, all amounts of principal that would have
been distributed to such Class B-1 Certificates shall be distributed to the
Class B-2 Certificates.
(f) On any Distribution Date, the Monthly Excess Cashflow
Amount shall be applied by the Trustee in the following order of priority on
such Distribution Date:
(1) to fund the Fixed Rate Group Extra Principal
Distribution Amount and the Adjustable Rate
Group Extra Principal Distribution Amount
for such Distribution Date;
(2) to fund the Class M-1 Interest Carry Forward
Amount, if any;
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(3) to fund the Class M-1 Realized Loss
Amortization Amount for such Distribution
Date;
(4) to fund the Class M-2 Interest Carry Forward
Amount, if any;
(5) to fund the Class M-2 Realized Loss
Amortization Amount for such Distribution
Date;
(6) to fund the Class B-1 Interest Carry Forward
Amount, if any;
(7) to fund the Class B-1 Realized Loss
Amortization Amount for such Distribution
Date;
(8) to fund the Class B-2 Interest Carry Forward
Amount, if any;
(9) to fund the Class B-2 Realized Loss
Amortization Amount for such Distribution
Date;
(10) to the Master Servicer to the extent of any
unreimbursed Monthly Advances; and
(11) to the Holders of the Class R Certificates.
(g) Notwithstanding the foregoing, amounts otherwise
distributable to a Certificateholder pursuant to such paragraph which are
required to be withheld and remitted to a taxing authority shall be withheld and
remitted to such taxing authority, and such amounts shall be treated as actually
distributed to such Certificateholder for all purposes of this Agreement.
(h) The Master Servicer may direct the Trustee to pay to the
Master Servicer an amount equal to unreimbursed Servicing Advances (without
interest) with respect to each Mortgage Loan for which the Master Servicer has
made a Servicing Advance, to the extent not netted from deposits to the
Certificate Account pursuant to Section 5.05, by wire transfer of immediately
available funds, from subsequent collections with respect to interest on or with
respect to such Mortgage Loan, Liquidation Proceeds and Insurance Proceeds or
the Purchase Price of such Mortgage Loan.
(i) The Trustee shall appoint an Eligible Institution to be
the paying agent (the "Paying Agent") and cause it to make the payments to the
Certificateholders required hereunder. The Trustee initially appoints itself,
with its office at 101 Barclay Street, New York, New York 10286, Attention:
Mortgage Backed Securities, as such Paying Agent. The Trustee shall require the
Paying Agent (if other than the Trustee) to agree in writing that all amounts
held by it for payment hereunder will be held in trust for the benefit of the
Certificateholders and that it will notify the Trustee of any failure by the
Master Servicer to make funds available to the Paying Agent for the payment of
amounts due on the Certificates. In respect of each Distribution Date, the
Trustee shall withdraw from the Certificate Account and deposit in an account
established by the Paying Agent for the purpose of this Section funds sufficient
to make the
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distribution to Certificateholders pursuant to this Section. Such
funds shall be available to the Paying Agent by 11:00 A.M. on each Distribution
Date.
SECTION 8.02. Permitted Withdrawals from the Certificate
AccountSECTION 8.02. Permitted Withdrawals from the Certificate Account.
The Trustee shall at the written direction of the Master
Servicer, from time to time as provided herein, make withdrawals from the
Certificate Account of amounts deposited in said account pursuant to Section
5.05 that are attributable to the Mortgage Loans for the following purposes:
(a) to make payments to Certificateholders and the Master
Servicer in the amounts and in the manner provided for in Section 8.01;
(b) to pay to CIT Consumer Finance with respect to each
Mortgage Loan or property acquired in respect thereof that has been
purchased pursuant to Section 3.05 or 4.03, all amounts received
thereon and not required to be distributed to Certificateholders as of
the date on which the related Principal Balance or Purchase Price is
determined;
(c) to make payments to the Master Servicer in the amounts and
in the manner provided for in Section 8.01(h);
(d) to reimburse the Master Servicer out of Liquidation
Proceeds for Liquidation Expenses and taxes incurred by it, to the
extent such reimbursement is permitted pursuant to Section 5.08;
(e) to reimburse the Master Servicer for the payment of taxes
as permitted by Section 5.10;
(f) to withdraw any amount deposited in the Certificate
Account that was not required to be deposited therein; and
(g) to pay to the Master Servicer (if CIT Consumer Finance or
one of its Affiliates is not the Master Servicer) the Master Servicing
Fees for such Distribution Date and the Master Servicing Fees from any
prior Distribution Date previously unpaid.
(h) to pay to the Master Servicer net investment earnings from
funds on deposit in the Certificate Account due to the Master Servicer
pursuant to Section 5.05(b).
Since, in connection with withdrawals pursuant to clause (b)
of the preceding paragraph, CIT Consumer Finance's entitlement thereto is
limited to collections or other recoveries on the related Mortgage Loan, the
Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such clause. The Master Servicer shall keep and
maintain an accounting for the purpose of justifying any withdrawal from the
Certificate Account pursuant to clause (f).
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SECTION 8.03. Repurchase Option and Auction Sale.
(a) The Trust created hereby and the respective obligations
and responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the responsibility of the Trustee to make any final
distributions to Certificateholders as set forth below) shall terminate upon the
earlier of the Distribution Date following the later of the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust or the termination of the Trust pursuant to Section
12.03, or the sale by the Trustee of all the Mortgage Loans and all the property
acquired in respect of any Mortgage Loan remaining in the Trust pursuant to
subsections (i) and (ii) below.
(i) The Master Servicer, at its option, may purchase
all of the Mortgage Loans and all REO Property acquired in respect of any
Mortgage Loan remaining in the Trust on any Distribution Date on which the Pool
Principal Balance is 10% or less of the Cut-off Date Pool Principal Balance (the
first such Distribution Date, the "Clean-up Call Date") at a purchase price
equal to the greatest of (A) the sum of (1) 100% of the Principal Balance of
each Mortgage Loan (other than any Mortgage Loan as to which title to the
underlying property has been acquired and whose fair market value is included
pursuant to clause (2) below as of the Final Distribution Date) and (2) the fair
market value of such acquired property (as determined by the Master Servicer as
of the close of business on the third Business Day next preceding the date upon
which notice of any such termination is furnished to Certificateholders pursuant
to Section 12.03), (B) the aggregate fair market value (as determined by the
Master Servicer as of the close of business on such third Business Day) of all
of the assets of the Trust, and (C) an amount that when added to amounts on
deposit in the Certificate Account available for distribution to
Certificateholders for such Distribution Date would result in proceeds
sufficient to distribute the Aggregate Certificate Balance and interest for such
Distribution Date and any unpaid interest with respect to one or more prior
Distribution Dates. The Master Servicer shall effect such purchase by depositing
such purchase price in the Certificate Account on the Business Day immediately
preceding such Distribution Date. Promptly after such purchase, the Trustee
shall execute such documents as are presented to it by the Master Servicer and
are reasonably necessary to convey the Mortgage Loans and REO Property to the
Master Servicer and deliver the Files to the Master Servicer.
(ii) In accordance with the procedures and schedule
set forth in Exhibit M hereto (the "Auction Procedures"), the Trustee shall
conduct an auction (the "Auction") of the Mortgage Loans and all REO Property
acquired in respect of any Mortgage Loan remaining in the Trust (such Mortgage
Loans hereinafter referred to as the "Auction Property") in order to effect a
termination of the Trust, on the second Distribution Date succeeding the related
Due Period on which the Pool Principal Balance is 5% or less of the Cut-off Date
Pool Principal Balance; provided however, that that Trustee will not conduct
such Auction if the Master Servicer has exercised the repurchase option
described in clause (i) above prior to such date. Such Auction shall be
conducted within 10 days following the first Distribution Date on which the Pool
Principal Balance is 5% or less of the Cut-off Date Principal Balance. CIT
Consumer Finance and the Company may, but shall not be required to, bid at the
Auction. The Trustee
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shall sell and transfer the Auction Property to the highest bidder therefor at
the Auction provided that:
(1) the Auction has been conducted in
accordance with the Auction Procedures;
(2) the Trustee has received bids for the
Auction Property from at least two prospective purchasers;
(3) a financial advisor, as advisor to the
Trustee (in such capacity, the "Advisor"), shall have advised
the Trustee in writing that at least two of such bidders
(including the winning bidder) are competitive participants in
the market for home equity mortgage loans willing and able to
purchase the Auction Property;
(4) 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 the Advisor in
its sole discretion);
(5) any bid submitted by CIT Consumer
Finance, the Company or any affiliate of either of them shall
be 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 the
Trustee and may only be considered if such evaluator
determines the bid to reasonably represent the fair market
value of the Auction Property;
(6) the highest bid must be equal to or
greater than the sum of (i) the greater of (a) the aggregate
Purchase Price for the Mortgage Loans (including Liquidated
Mortgages) plus the appraised value of any other property held
by the Trust (less Liquidation Expenses), or (b) an amount
that when added to amounts on deposit in the Certificate
Account available for distribution to Certificateholders for
such second succeeding Distribution Date would result in
proceeds sufficient to distribute the Aggregate Certificate
Balance and interest for such Distribution Date and any unpaid
interest with respect to one or more prior Distribution Dates,
and (ii) the sum of (a) an amount sufficient to reimburse the
Master Servicer for any unreimbursed Monthly Advances for
which it is entitled to reimbursement, (b) the Master
Servicing Fee payable on such final Distribution Date,
including any unpaid Master Servicing Fees with respect to one
or more prior Due Periods and (c) the expenses of such
Auction;
(7) such sale and consequent termination of
the Trust must constitute a "qualified liquidation" of the
Trust under Section 860F of the Internal Revenue Code of 1986,
as amended, including without limitation, the requirement that
such qualified liquidation takes place over a period not to
exceed 90 days (the Trustee may, in its discretion, require
that the purchaser of such Auction Property provide an Opinion
of Counsel to that effect); and
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(8) the terms of the Auction must be made
available to all bidders and must stipulate that CIT Consumer
Finance (if at such time it is the Master Servicer) be
retained to service the Mortgage Loans on terms substantially
similar to those in the Agreement.
Provided that all of the conditions set forth in clauses (1) through (8) have
been met, the Trustee shall sell and transfer the Auction Property, without
representation, warranty or recourse of any kind whatsoever, to such highest
bidder in accordance with and upon completion of the Auction Procedures. The
Trustee shall deposit the purchase price for the Auction Property in the
Certificate Account at least one Business Day prior to such second succeeding
Distribution Date. 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,
the Trustee shall decline to consummate such sale and transfer.
SECTION 8.04. Monthly Advances by the Master Servicer.
(a) By the close of business on the day prior to each
Distribution Date, the Master Servicer shall pay to the Trust, but only to the
extent of the Master Servicing Fee for such month, with respect to each Mortgage
Loan as to which the Master Servicer received a Principal Prepayment during the
related Due Period an amount ("Compensating Interest") equal to the excess of
(i) 30 days' interest on the Principal Balance of each such Mortgage Loan as of
the beginning of the related Due Period at the Mortgage Rate over, (ii) the
amount of interest actually received on the related Mortgage Loan during such
Due Period.
(b) The Master Servicer shall be required to make an advance
of its own funds no later than the day prior to the Distribution Date and in no
event earlier than the seventh Business Day of such month, in the amount, if
any, by which 30 days' interest at the Mortgage Rate on the then outstanding
Principal Balance of a Mortgage Loan exceeds the amount received by the Master
Servicer in respect of interest on the Mortgage Loan during the related Due
Period (any such advance, a "Monthly Advance"), subject to limitations set forth
in subsection (c) below.
(c) The Master Servicer shall not be obligated to make a
Monthly Advance if it determines that such Monthly Advance is a Nonrecoverable
Advance. The determination by the Master Servicer that any advance is, or if
made would constitute, a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Master Servicer delivered to the Trustee and
stating the reasons for such determination.
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ARTICLE IX
THE CERTIFICATES
SECTION 9.01. The Certificates.
The Offered Certificates and the Class B-2 Certificates shall
be substantially in the forms set forth in Exhibits A-D, and shall, on original
issue, be executed by manual or facsimile signature of the Trustee, on behalf of
the Trust, by a duly authorized Responsible Officer or authorized signatory and
authenticated by the Trustee to or upon the order of the Company upon receipt.
The Offered Certificates shall be evidenced by (i) one or more Class A-1
Certificates representing $90,000,000 initial aggregate principal balance, (ii)
one or more Class A-2 Certificates representing $36,000,000 initial aggregate
principal balance, (iii) one or more Class A-3 Certificates representing
$61,000,000 initial aggregate principal balance, (iv) one or more Class A-4
Certificates representing $40,000,000 initial aggregate principal balance, (v)
one or more Class A-5 Certificates representing $15,000,000 initial aggregate
principal balance, (vi) one or more Class A-6 Certificates representing
$15,000,000 initial aggregate principal balance, (vii) one or more Class A-7
Certificates representing $33,000,000 initial aggregate principal balance,
(viii) one or more Class A-8 Certificates representing $30,000,000 initial
aggregate principal balance, (ix) one or more Class A-9 Certificates
representing $90,000,000 initial aggregate principal balance, (xi) one or more
Class M-1 Certificates representing $30,000,000 initial aggregate principal
balance, (xii) one or more Class M-2 Certificates representing $32,500,000
initial aggregate principal balance and (xiii) one or more Class B-1
Certificates representing $22,500,000 initial aggregate principal balance,
beneficial ownership of such Certificates to be held through Book-Entry
Certificates in minimum dollar denominations of $1,000 and integral dollar
multiples of $1,000 in excess thereof. The Class B-2 Certificates shall be
evidenced by one or more definitive physical Class B-2 Certificates representing
$5,000,000 initial principal balance. Each Class B-2 Certificate shall be in a
minimum denomination of $500,000 principal balance and integral dollar multiples
of $1,000 in excess thereof. One Class B-2 Certificate may be issued in another
denomination (in excess of the minimum denomination) to accommodate the
remainder of the Original Class B-2 Certificate Balance. The Class R
Certificates shall be issuable in Percentage Interests.
The Certificates shall be authenticated by manual signature on
behalf of the Trustee by a duly authorized Responsible Officer or authorized
signatory at the written request of the Company. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless such Certificate has been authenticated by manual signature in accordance
with this Section, and such signature upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication, except for those Certificates authenticated on the
Closing Date, which shall be dated the Closing Date.
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SECTION 9.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall keep at the office or agency to be
maintained in accordance with Section 12.02 a "Certificate Register" in which
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. Promptly after the Closing Date the Trustee will give the Master
Servicer, in writing, the names of all Class R Certificateholders and the
Trustee will give the Master Servicer, prompt written notice of any change in
the Class R Certificateholders. The Trustee will give prompt written notice to
Certificateholders and the Master Servicer of any change in the Certificate
Registrar.
(b) No transfer, sale, pledge or other disposition of any
Class R Certificate or Class B-2 Certificate or any interest therein (including
any transfer by a Certificateholder of any interest in a Book-Entry Certificate)
shall be made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws or is made in a transaction that does not
require such registration or qualification. Until such time as the Class R
Certificates or the Class B-2 Certificates shall be registered pursuant to a
registration statement filed under the Securities Act, the Class R Certificates
and the Class B-2 Certificates, respectively, shall bear a legend to the effect
set forth in the preceding sentence.
In the event that registration of a transfer of a Class R
Certificate or Class B-2 Certificate or any interest therein (including any
transfer by a Certificateholder of any interest in a Book-Entry Certificate) is
to be made in reliance upon the exemption from registration under the Securities
Act contained in Rule 144A, such transfer shall be made only to a Qualified
Institutional Buyer which is aware that the transfer of such Certificate is
being made in reliance on Rule 144A and is acquiring such Certificate for its
own account or for the account of a Qualified Institutional Buyer, as the case
may be, and such transferee shall be deemed to have represented that the
foregoing is true and correct and that such transferee understands that such
Certificates have not been and will not be registered under the Securities Act
and may not be reoffered, resold, pledged or otherwise transferred except (A) to
a person who such transferee reasonably believes is a Qualified Institutional
Buyer in a transaction meeting the requirements of Rule 144A and (B) in
accordance with all applicable securities laws of the states of the United
States.
In the event that registration of a transfer of a Class R
Certificate or Class B-2 Certificate or any interest therein (including any
transfer by a Certificateholder of any interest in a Book-Entry Certificate) is
to be made in reliance upon an exemption from registration under the Securities
Act (other than the exemption from registration contained in Rule 144A) and
applicable state securities laws in order to assure compliance with the
Securities Act, the transferor or the transferee shall deliver to the Trustee,
the Company and the Master Servicer an Opinion of Counsel (which may be internal
counsel) that such transfer may be made pursuant to an exemption from the
Securities Act (other than the exemption from registration contained in Section
3(a)(2) thereof).
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The Holder of a Class R Certificate or a Class B-2 Certificate
desiring to effect a transfer of such Certificate shall, and does hereby agree
to, indemnify the Trustee, the Company and the Master Servicer against any
liability that may result if such transfer is not so exempt or is not made in
accordance with such federal and state laws.
Neither the Master Servicer, the Company, the Certificate
Registrar, the Paying Agent, the Seller nor the Trustee is obligated to register
the Class R Certificates or the Class B-2 Certificates under the Securities Act
or under any state securities laws.
Prospective transferors of Class R Certificates or Class B-2
Certificates (or Book-Entry Certificates), and prospective transferees of
Certificates (or Book-Entry Certificates) that are Qualified Institutional
Buyers buying Certificates in reliance upon Rule 144A may request from the
Master Servicer information regarding the Trust and the Trust assets. Within
five (5) Business Days of any such request, the Master Servicer shall deliver to
any such prospective transferor or transferee (i) a copy of each Monthly Report
delivered to Certificateholders since the first Distribution Date pursuant to
Section 6.05, (ii) information relating to the Seller, the Master Servicer, the
Mortgage Loans and this Agreement substantially in the form of the Prospectus
dated April 8, 1997 and the Prospectus Supplement relating to the Certificates,
dated July 16, 1997 and (iii) such other information as may be required to
comply with Rule 144A and any interpretation thereof.
(c) As a condition to the registration of any Transfer of any
Class B-2 Certificate, the prospective transferee shall deliver to the
Certificate Registrar and the Trustee a certificate substantially in the form
attached hereto as Exhibit O (a "Class B-2 Certificate Transferee Letter") or
shall supply other evidence to the same effect satisfactory to the Master
Servicer.
(d) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably appointed the Master Servicer as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (vi) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Class R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Master Servicer of any change or impending change
in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate may be
Transferred without the express written consent of the Master Servicer,
and the Trustee shall not register the Transfer of any Class R
Certificate without such consent with respect to any proposed Transfer.
In connection with any proposed Transfer of any Ownership Interest in a
Class R Certificate, the Master Servicer shall, as a condition to such
consent, require delivery to it, form and substance satisfactory to it,
and the proposed Transferee shall deliver to the Master Servicer, the
following:
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(A) an affidavit (a "Transfer Affidavit") of the
proposed Transferee, in the form attached as Exhibit L hereto,
that it is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Code, and that the
proposed Transferee is not acquiring its Ownership Interest in
the Class R Certificate as a nominee, trustee or agent for, or
for the benefit of, any Person who is not a Permitted
Transferee; and
(B) an express agreement by the proposed Transferee
to be bound by and to abide by the provisions of this Section
and the restrictions noted on the face of the Class R
Certificates.
(iii) Notwithstanding the delivery of a Transfer Affidavit by
a proposed Transferee under clause (ii) above, if the Master Servicer
has actual knowledge that the Transfer Affidavit is false, no Transfer
of an Ownership Interest in a Class R Certificate to such proposed
Transferee shall be effected.
(iv) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (A) to require a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class R Certificate and (B) not to
Transfer its Ownership Interest in a Class R Certificate or to cause
the Transfer of an Ownership Interest in a Class R Certificate to any
other Person if it has actual knowledge that such Transfer Affidavit is
false.
(v) Any attempted or purported Transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported Transferee. If any purported Transferee shall become a
Holder of a Class R Certificate in violation of the provisions of this
Section, then, upon discovery by or due notification of the Trustee
that the registration of Transfer of such Class R Certificate was not
in fact permitted by this Section, the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of transfer of a Class R Certificate that is in fact
not permitted by this Section or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Transfer was registered with the express prior written consent
of the Master Servicer. The Trustee shall be entitled but not obligated
to recover from any Holder of a Class R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(vi) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section,
then the Master Servicer shall have the right
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without notice to the Holder or any prior Holder of such Class R
Certificate, to sell such Class R Certificate to a purchaser selected
by the Master Servicer on such terms as the Master Servicer may choose.
Such purchaser may be the Master Servicer itself or any Affiliate of
the Master Servicer. The proceeds of such sale, net of commissions
(which may include commissions payable to the Master Servicer or its
Affiliates), expenses and taxes due, if any, will be remitted by the
Master Servicer to the last preceding Permitted Transferee of such
Class R Certificate, except that in the event that the Master Servicer
determines that the Holder or any prior Holder of such Class R
Certificate may be liable for any amount due under this Section or any
other provision of this Agreement, the Master Servicer may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (vi) shall be
determined in the sole discretion of the Master Servicer, and it shall
not be liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
Upon notice to the Master Servicer that any legal or
beneficial interest in any portion of a Class R Certificate has been
transferred, either directly or indirectly to any person that is not a Permitted
Transferee or an agent (including a broker, nominee, or middleman) of such
Transferee in contravention of the foregoing restrictions, the Master Servicer
agrees to furnish to the Internal Revenue Service and to the transferor of such
Class R Certificate or such agent such information necessary to the application
of Section 860E(e) of the Code as may be required by the Code or any regulations
or administrative pronouncements thereunder, including but not limited to the
present value of the total anticipated excess inclusions with respect to such
Class R Certificate (or portion thereof) for periods after such transfer. At the
election of the Master Servicer, the Master Servicer may charge a reasonable fee
for computing and furnishing such information to the transferor or to such agent
referred to above; however, the Master Servicer shall in no event be excused
from furnishing such information to the Internal Revenue Service. The foregoing
restrictions on transfer contained in this Section 9.02(d) shall cease to apply
to Transfers occurring on or after the date on which there shall have been
delivered to the Trustee, the Company and the Master Servicer, in form and
substance satisfactory to the Master Servicer, an Opinion of Counsel that
eliminating such restrictions will not cause the Trust REMIC to fail to qualify
as a REMIC at any time while the Certificates are outstanding.
(e) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class of authorized denominations
of the same aggregate denomination, upon surrender of the Certificates to be
exchanged at such office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver, and the Trustee shall
authenticate, the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for transfer
or exchange shall be duly endorsed by, or shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder thereof or his or her attorney duly
authorized in writing.
(f) Except as provided in paragraph (g) below the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times:
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(i) registration of the Offered Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificateholders and with respect to
ownership and transfers of such Offered Certificates; (iii) ownership and
transfers of registration of the Offered Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificateholders of the Offered Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificateholders; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificateholders.
All transfers by Certificateholders of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificateholder. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificates Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
(g) If (x)(i) the Company or the Depository advises the
Trustee in writing that the Depository is no longer willing or able properly to
discharge its responsibilities as Depository, and (ii) the Trustee or the
Company is unable to locate a qualified successor, or (y) the Company at its
sole option advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository, the Trustee shall notify all
Certificateholders, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully registered Offered Certificates
(the "Definitive Certificates") to Certificateholders requesting the same. Upon
surrender to the Trustee of the Offered Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the Definitive Certificates. Neither the Company nor the
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 all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(h) On or prior to the Closing Date, there shall be delivered
to the Depository one Class A-1 Certificate, one Class A-2 Certificate, one
Class A-3 Certificate, one Class A-4 Certificate, one Class A-5 Certificate, one
Class A-6 Certificate, one Class A-7 Certificate, one Class A-8 Certificate, one
Class A-9 Certificate, one Class M-1 Certificate, one Class M-2 Certificate, and
one Class B-1 Certificate, each in registered form registered in the name of the
Depository's nominee, Cede & Co., the total face amount of which represents 100%
of the Original Class A-1 Certificate Balance, the Original Class A-2
Certificate Balance, the Original
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Class A-3 Certificate Balance, the Original Class A-4 Certificate Balance, the
Original Class A-5 Certificate Balance, the Original Class A-6 Certificate
Balance, the Original Class A-7 Certificate Balance, the Original Class A-8
Certificate Balance, the Original Class A-9 Certificate Balance, the Original
Class M-1 Certificate Balance, the Original Class M-2 Certificate Balance, and
the Original Class B-1 Principal Balance, respectively. If, however, the
aggregate principal amount of a Class of Offered Certificates exceeds
$200,000,000, one Offered Certificate will be issued with respect to each
$200,000,000 of principal amount and an additional Certificate of such Class or
Classes will be issued with respect to any remaining principal amount. Each such
Offered Certificate registered in the name of the Depository's nominee shall
bear the following legend:
"Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of the Depository Trust Company), 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."
(i) No Subordinate Certificate or any interest therein may 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 ERISA or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (other than an insurance company purchasing such Certificates for its
general account) (each a "Plan"). By accepting and holding a Subordinate
Certificate (other than a Class B-2 Certificate), the Holder thereof and the
Subordinate Certificateholder shall be deemed to have represented and warranted
that it is not a Plan and not subject to the foregoing limitation. No transfer
of a Class B-2 Certificate may be made unless the Certificate Registrar shall
have received from the prospective transferee of such Class B-2 Certificate a
representation that such transferee is not a Plan; provided, however, if such
prospective transferee is an insurance company, the sole representation shall be
that the source of the funds is an "insurance company general account," as
defined in Section V(e) of Prohibited Transaction Exemption ("PTE") 95-60 and,
in accordance with Section I(a) of PTE 95-60, there is no plan, treating as a
single plan all plans maintained by the same employer or employee organization,
with respect to which the amount of the reserves and liabilities for all general
account contracts held by or on behalf of such plan exceed ten percent (10%) of
the total reserves and liabilities of such general account (exclusive of
separate account liabilities) plus surplus.
SECTION 9.03. No Charge; Disposition of Void Certificates.
No service charge shall be made to a Certificateholder for any
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for transfer and exchange shall be disposed of in a
manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) 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 (b) there
is delivered to the Certificate Registrar and the Trustee such security or
indemnity as may be required by each to save each of them harmless, then in the
absence of notice to the Certificate Registrar or the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
authenticate, and the Company shall execute and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
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Certificate of the same Class and same denomination. Upon the issuance of any
new Certificate under this Section 9.04, the Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. Any
duplicate Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest
evidenced thereby, as if originally issued, whether or not the destroyed, lost
or stolen Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Master Servicer, the Company, the Trustee, the Paying Agent and
the Certificate Registrar may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
remittances pursuant to Section 8.01 and for all other purposes whatsoever, and
none of the Master Servicer, the Company, the Trustee, the Certificate
Registrar, the Paying Agent or any agent of the Master Servicer, the Company,
the Trustee, the Paying Agent or the Certificate Registrar shall be affected by
notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' Names and
Addresses.
The Certificate Registrar will furnish to the Trustee, the
Master Servicer and the Company within five Business Days after receipt by the
Certificate Registrar of a request therefor from the Trustee, the Master
Servicer or the Company, in writing, a list, in such form as the Trustee, the
Master Servicer or the Company may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If
Holders of Certificates evidencing, as to any Class, Percentage Interests
aggregating 25% or more (hereinafter referred to as "Applicants") apply in
writing to the 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 is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, afford such
Applicants access during normal business hours to the most recent list of
Certificateholders held by the Trustee. If such list is as of a date more than
ninety (90) days prior to the date of receipt of such Applicants' request, the
Trustee shall promptly request from the Certificate Registrar a current list as
provided above, and shall afford such Applicants access to such list promptly
upon receipt. Every Certificateholder, by receiving and holding a Certificate,
agrees with the Certificate Registrar and the Trustee that none of the Company,
the Master Servicer, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 9.07. Authenticating Agents.
The Trustee may appoint one or more Authenticating Agents with
power to act on its behalf and subject to its direction in the authentication of
the Certificates. For all purposes of this Agreement, the authentication of
Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the authentication of Certificates "by the Trustee".
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ARTICLE X
INDEMNITIES
SECTION 10.01. Liabilities to Mortgagors.
No liability to any Mortgagor under any of the Mortgage Loans
arising out of any act or omission to act of the Master Servicer in servicing
the Mortgage Loans prior to the Closing Date is intended to be assumed by the
Company, the Trust, the Trustee or the Certificateholders under or as a result
of this Agreement and the transactions contemplated hereby and, to the maximum
extent permitted and valid under mandatory provisions of law, the Company, the
Trust, the Trustee and the Certificateholders expressly disclaim such
assumption.
SECTION 10.02. Tax Indemnification.
CIT Consumer Finance will pay, and shall indemnify, defend,
and hold harmless the Trustee, the Trust, and the Certificateholders from and
against, any taxes that may at any time be asserted with respect to, and as of
the date of, the transfer of the Mortgage Loans 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 Certificates or
distributions with respect thereto) and costs, expenses and reasonable counsel
fees in defending against the same.
SECTION 10.03. Master Servicer's Indemnities.
The Master Servicer will indemnify, defend, and hold harmless
the Trustee, the custodian, the Paying Agent, the Trust, and the
Certificateholders 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 of, or was imposed upon such Persons, through the
willful misfeasance, negligence, or bad faith of the Master Servicer in the
performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties under this Agreement.
The Master Servicer will indemnify, defend, and hold harmless
from and against, and pay to the Trustee 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 contained in this Agreement
in accordance with the terms and conditions therein, 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 the Trustee; (b) relates
to any tax other than the taxes with respect to which the Master Servicer shall
be required to indemnify the Trustee pursuant to this Agreement; (c) shall arise
from the Trustee's breach of any of its representations or warranties set forth
in this Agreement; (d) shall be one as to which the Company is required to
indemnify the Trustee or (e) shall arise out of or be incurred in connection
with the acceptance or performance by the Trustee of the duties of successor
Master Servicer hereunder.
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SECTION 10.04. Operation of Indemnities.
The indemnification provided under this Article shall include
reasonable fees and expenses of counsel, provided that the Master Servicer shall
only be required to pay the fees and expenses of one counsel, appointed by the
Master Servicer and reasonably satisfactory to the indemnitee, in any single
litigation (or related proceedings) for all indemnitees; provided, however, if
in the written opinion of counsel reasonably satisfactory to the Master
Servicer, the interests of the Master Servicer and the Trustee conflict such
that the Master Servicer and the Trustee may not both be represented by such
counsel, upon ten days prior written notice to the Master Servicer, the Trustee
may hire one other counsel, and the indemnification herein shall also include
the reasonable fees and expenses of such other counsel. If the Master Servicer
or the Company shall have made any indemnity payments pursuant to this Agreement
and the recipient thereafter collects any of such amounts from others, the
recipient will promptly repay such amounts to the Master Servicer and/or the
Company, without interest. The indemnities under this Agreement shall survive
the resignation or removal of the Trustee, or the termination of this Agreement.
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ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of
Termination and after the curing of all Events of Termination which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, 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 his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
(a) Prior to the occurrence of an Event of Termination, and
after the curing of all such Events of Termination which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;
(b) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of 25% or more of the Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement; and
(d) The Trustee shall not be charged with knowledge of any
event referred to in Section 7.01 unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such event or fact or the
Trustee receives written notice of such event or fact from the Master Servicer
or the Holders of 25% or more of the Certificates.
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The Trustee shall not be required 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 there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. None
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of CIT Consumer Finance, the Company or the Master Servicer
under this Agreement, except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of a Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) The Trustee may consult with counsel and any opinion of
any counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such opinion of counsel;
(c) The 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 hereunder or in relation hereto, at the request, order
or direction of any of the Certificateholders, pursuant to the provisions of
this Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing so to do by Holders of 25% or more of the
Certificates; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding. The reasonable expense of
every such examination shall be paid
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by the Master Servicer or, if paid by the Trustee, shall be reimbursed by the
Master Servicer upon demand; and
(e) The Trustee may execute any of the trusts or powers
hereunder or perform by duties hereunder either directly or by or through agents
or attorneys and shall not be liable for any acts or omissions of such agents or
attorneys if appointed by its with due care hereunder.
SECTION 11.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The Trustee assumes no responsibility for the correctness of
the recitals contained herein or in the Certificates (other than the Trustee's
authentication thereof). The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than its
authentication or execution thereof) or of any Mortgage Loan, File or related
document. The Trustee shall not be accountable for the use or application by the
Master Servicer or the Company of funds paid to CIT Consumer Finance in
consideration of conveyance of the Mortgage Loans to the Company by CIT Consumer
Finance or deposited in or withdrawn from the Certificate Account by the Master
Servicer.
SECTION 11.04. Rights of Certificateholders to Direct Trustee
and to Waive Events of Termination.
Holders of the Offered Certificates and Class B-2 Certificates
evidencing Percentage Interests aggregating 25% or more shall have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that, subject to Section 11.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; provided further
that nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders; and provided further that the Trustee shall
instead follow the directions of the Holders of the Offered Certificates and
Class B-2 Certificates evidencing Percentage Interests aggregating 51% or more
whenever it receives conflicting directions from the Certificateholders. Holders
of the Offered Certificates and Class B-2 Certificates evidencing Percentage
Interests aggregating 51% or more may on behalf of Certificateholders waive any
past Event of Termination hereunder and its consequences, except a default in
respect of a covenant or provision hereof which under Section 12.07 cannot be
modified or amended without the consent of all Certificateholders, 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.
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SECTION 11.05. Master Servicer to Pay Trustee's Fees and
Expenses.
The Master Servicer agrees:
(a) that the Master Servicer shall pay to the Trustee
reasonable compensation on each Distribution Date for all services
rendered by it hereunder (which compensation is set forth in a prior
agreement between the Master Servicer and the Trustee which shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, that the
Master Servicer shall reimburse the Trustee on each Distribution Date,
to the extent requested by the Trustee, for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of it agents
and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the Trust and its duties hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of the Trustee's powers or duties
hereunder.
The covenants in this Section 11.05 shall be for the benefit
of the Trustee in its capacities as Trustee, Paying Agent, custodian and
Certificate Registrar hereunder, and shall survive the termination of this
Agreement.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a
national banking association having its principal office in a state and city
acceptable to the Company and organized and doing business under the laws of the
United States of America or any State, authorized under such laws to exercise
corporate trust powers, and shall have a combined capital and surplus of at
least $50,000,000 or shall be a member of a bank holding system the aggregate
combined capital and surplus of which is $50,000,000 and the Trustee shall be
subject to supervision and examination by a federal or state authority having
jurisdiction over depositary institutions. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of a
supervising or examining authority, then for the purposes of this Section 11.06,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In addition, the Trustee shall at all times have a long-term
deposit rating of at least Baa3 and BBB, by Moody's and Standard & Poor's,
respectively, or a short-term debt rating of at least P-3 and A-
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3 by Moody's and Standard & Poor's, respectively, or as such Rating Agency shall
otherwise deem acceptable. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.07.
SECTION 11.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Master Servicer,
the Company and the Rating Agencies. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to each of the Master
Servicer and the Company and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed and shall have accepted appointment within
thirty (30) days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
If, at any time, the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to resign after
written request therefor by the Company, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Company may remove the Trustee. If the Company shall have removed the Trustee
under the authority of the immediately preceding sentence, the Company shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee. Upon appointment of any successor Trustee, the
Trustee being replaced shall change the name of the Certificate Account to the
name of such successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.08.
SECTION 11.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 11.07
shall execute, acknowledge and deliver to the Master Servicer, the Company and
to its predecessor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Master Servicer, the Company and the predecessor 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 Trustee all such rights, powers, duties and obligations.
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No successor Trustee shall accept appointment as provided in
this Section 11.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 11.08, the Master Servicer shall cause notice of the
succession of such Trustee hereunder to be mailed to each Certificateholder at
their addresses as shown in the Certificate Register. If the Master Servicer
fails to mail such notice within ten days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Master Servicer.
SECTION 11.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trustee business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Person shall be eligible under
the provisions of Section 11.06, 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.
SECTION 11.10. [Reserved].
SECTION 11.11. Separate Trustees and Co-Trustees.
The Company shall have the power from time to time to appoint
one or more persons or corporations to act either as co-trustees jointly with
the Trustee, or as separate trustees, or as custodians, for the purpose of
conforming to any legal requirement, restriction or condition (i) with respect
to the holding of the Mortgage Loans or the Files or (ii) with respect to the
enforcement of a Mortgage Loan in any state in which a Mortgaged Property is
located or in any state in which any portion of the Trust is located. The
separate trustees, co-trustees, or custodians so appointed shall be trustees or
custodians for the benefit of all Certificateholders and shall, subject to the
provisions of the following paragraph, have such power, rights and remedies as
shall be specified in the instrument of appointment; provided, however, that no
such appointment shall, or shall be deemed to, constitute the appointee an agent
of the Trustee.
Every separate trustee, co-trustee and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(a) all powers, duties, obligations and rights conferred upon
the Trustee in respect of the receipt, custody and payment of moneys
shall be exercised solely by the Trustee;
(b) all other rights, powers, duties and obligations conferred
or imposed upon the Trustee, to the extent also imposed upon such
separate trustees, co-trustees or custodians, shall be conferred or
imposed upon and exercised or performed by the Trustee
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and such separate trustee, co-trustee, or custodian jointly, except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including holding of the
Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee, co-trustee, or
custodian;
(c) no separate trustee, co-trustee or custodian hereunder
shall be personally liable by reason of any act or omission of any
other separate trustee, co-trustee or custodian hereunder; and
(d) the Company may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so appointed by
it.
If any separate trustee, co-trustee or custodian 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
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or custodian. The reasonable fees and expenses of any such
separate trustee, co-trustee or custodian shall be treated as additional fees
and expenses of the Trustee subject to Section 11.05 and payable by the Master
Servicer if and only to the extent the Master Servicer shall have consented in
writing to his or its appointment, which consent shall not be unnecessarily
withheld.
SECTION 11.12. Trustee May Own Certificates.
The Trustee in its individual or other capacity may become the
owner or pledgee of Certificates representing less than all the beneficial
interest in the Trust with the same rights as it would have if it were not
Trustee.
SECTION 11.13. Agents of Trustee.
To the extent not prohibited by law and not inconsistent with
the terms of this Agreement (including, without limitation, Section 11.11), the
Trustee may, with the prior consent of the Company, appoint one or more agents
to carry out ministerial matters on behalf of the Trustee under this Agreement.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Master Servicer Not To Resign.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that the performance of
its duties hereunder is no longer permissible under this Agreement or applicable
law. Any such determination permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel for the Master Servicer to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor Master Servicer shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.03.
SECTION 12.02. Maintenance of Office or Agency.
The Trustee will maintain, at its own expense, an office in
New York City. Such offices are currently located at 101 Barclay Street, New
York, NY 10286. The Trustee will give prompt written notice to
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
SECTION 12.03. Termination.
(a) Subject to the other provisions of this Section, the
respective obligations and responsibilities of the Company, the Master Servicer
and the Trustee created hereby (other than the obligation of the Trustee to make
certain payments after the Final Distribution Date to Certificateholders and the
obligation of the Master Servicer to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Distribution Date pursuant to this Section 12.03 following the earlier
of: (i) the purchase by the Company or the Master Servicer on any Distribution
Date of all Mortgage Loans and all property acquired in respect of any Mortgage
Loan remaining in the Trust pursuant to Section 8.03(a)(i), (ii) the sale by the
Trustee on any Distribution Date of all Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining in the Trustee pursuant to Section
8.03(a)(ii) or (iii) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan remaining in the Trust or the
disposition of all property acquired upon repossession of any Mortgaged
Property; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James, living on the date hereof.
(b) Notice of any termination, specifying the Final
Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Master Servicer (if the Company or the Master Servicer is
exercising its right to purchase the assets of the Trust) or by the Trustee (in
any other case) by letter to Certificateholders mailed out not earlier than the
15th day and not later than the
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25th day of the month (or, in the case of final payment of liquidation of the
last Mortgage Loan remaining in the Trust, as promptly as practicable after
receipt of such final payment or liquidation) next preceding the month of such
final distribution specifying (i) the Final Distribution Date upon which final
payment of the Certificates will be made upon presentation and surrender of the
Certificates at the office or agency of the Trustee 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 or agency of
the Trustee herein specified. Such notice shall provide that, in addition to any
other office or agency of the Trustee designated therein, the presentation and
surrender of Certificates as aforesaid may occur at an office or agency of the
Trustee in New York City specified therein. If the Master Servicer is obligated
to give notice to Certificateholders as aforesaid, it shall give such notice to
the Trustee, the Certificate Registrar and to the Rating Agencies at the time
such notice is given to Certificateholders. In the event such notice is given by
the Master Servicer, the Company or the Master Servicer shall deposit in the
Certificate Account on or before the Final Distribution Date in immediately
available funds an amount equal to the purchase price for the assets of the
Trust computed as above provided.
(c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed, in accordance with written instructions
from the Master Servicer, in the following order of priority, to
Certificateholders on the final Distribution Date in proportion to their
respective Percentage Interests an amount equal to (i) as to the Class A
Certificates, the Class A Certificate Balance, together with any unpaid interest
at the related Pass-Through Rate and interest for the related Accrual Period at
the related Pass-Through Rate, (ii) as to the Class M-1 Certificates, the Class
M-1 Certificate Balance, together with any unpaid interest at the related
Pass-Through Rate and interest for the related Accrual Period at the related
Pass-Through Rate, (iii) as to the Class M-2 Certificates, the Class M-2
Certificate Balance, together with any unpaid interest at the related
Pass-Through Rate and interest for the related Accrual Period at the related
Pass-Through Rate, (iv) as to the Class B-1 Certificates, the Class B-1
Certificate Balance, together with any unpaid interest at the related
Pass-Through Rate and interest for the related Accrual Period at the related
Pass-Through Rate, (v) as to the Class B-2 Certificates, the Class B-2
Certificate Balance, together with any unpaid interest at the related
Pass-Through Rate and interest for the related Accrual Period at the related
Pass-Through Rate and (vi) as to the Class R Certificates, the amount which
remains on deposit in the Certificate Account (other than amounts retained to
meet claims) after application pursuant to clauses (i)-(v) above.
(d) In the event that all of the Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before the
Final Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if the Company or the Master
Servicer exercised its right to purchase the assets of the Trust) or the Trustee
(in any other case) 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 Trustee may take appropriate steps, or may appoint an agent to
take
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appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds on deposit in such escrow account.
(e) Upon any termination pursuant to this Section, the Trust
shall be terminated in accordance with the following additional requirements,
unless the Trustee has received an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section will not
(i) result in the imposition of taxes on "prohibited transactions" of the Trust
as described in Section 860F of the Code, or (ii) cause the Trust REMIC to fail
to qualify as a REMIC at any time that any Senior Certificates, Class A-5
Certificates or Class B Certificates are outstanding:
(i) Within ninety (90) days prior to the Final Distribution
Date set forth in the notice given by the Master Servicer or the
Trustee under this Section, the Holders of 100% of the aggregate
Percentage Interests evidenced by the Class R Certificates shall adopt
a plan of complete liquidation of the Trust; and
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the Final Distribution Date,
the Master Servicer as agent of the Trustee shall sell all of the
assets of the Trust to the Company or the Master Servicer as the case
may be, for cash.
By their acceptance of the Class R Certificates, the Holders
thereof hereby agree to adopt such a plan of complete liquidation upon the
written request of the Master Servicer or the Company and to take such other
action in connection therewith as may be reasonably requested by CIT Consumer
Finance.
SECTION 12.04. Acts of Certificateholders.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where required, to the Master
Servicer. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
(subject to Section 11.01) conclusive in favor of the Trustee, the Master
Servicer and the Company if made in the manner provided in this Section.
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(c) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
(d) The ownership of Certificates shall be proved by the
Certificate Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every Holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted to
be done by the Trustee, the Master Servicer or the Company in reliance thereon,
whether or not notation of such action is made upon such security.
(f) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 12.05. Calculations.
Except as otherwise provided in this Agreement, all interest
rate and basis point calculations under this Agreement will be made on the basis
of a 360-day year consisting of twelve thirty-day months and will be carried out
to at least three decimal places.
SECTION 12.06. Assignment or Delegation by the Master
Servicer; Merger or Consolidation of the Company, CIT Consumer Finance or the
Master Servicer.
Except as specifically authorized hereunder, and except for
its obligations as Master Servicer, in respect of which a transfer thereof is
dealt with under Article VII, the Master Servicer may not assign or delegate any
of its rights or obligations hereunder, except its right to receive any fees
pursuant to this Agreement, absent the prior written consent of Holders of
Certificates of each Class evidencing, as to each such Class, Percentage
Interests aggregating 66-1/2% or more, and any attempt to do so without such
consent shall be void. Notwithstanding the foregoing, CIT Consumer Finance may
not delegate its obligation to repurchase Mortgage Loans under Section 3.05 or
4.03.
Notwithstanding the foregoing, any person into which the
Company, CIT Consumer Finance or the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Company, CIT Consumer Finance or the Master Servicer shall be a party,
or any Person succeeding to the business of the Company, CIT Consumer Finance or
the Master Servicer, shall be the successor of the Company, CIT Consumer Finance
or the Master 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 Master Servicer shall satisfy the criteria set forth in the
definition of an Eligible Master Servicer. Each of CIT Consumer Finance, the
Company and the Master Servicer shall promptly notify the Rating Agencies of any
such merger to which it is a party.
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Neither the Company nor the Master Servicer, nor any of the
directors, officers, employees or agents of the Company or the Master Servicer,
shall be under any liability to the Trustee or the Certificateholders 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 Company, the Master Servicer or any such
person against any breach of warranties or representations made herein, or
failure to perform its or his obligations in compliance with any standard of
care set forth in this Agreement, or any liability which otherwise would be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Company, the Master Servicer 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. Neither the Company nor the Master Servicer shall 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 Company or the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable to
in respect of this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders thereunder and the interests of the
Certificateholders thereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Certificate Account and the Company and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account.
SECTION 12.07. Amendment.
(a) This Agreement may be amended from time to time by
agreement of the Trustee, the Company, and the Master Servicer at any time,
without the consent of any of the Certificateholders, (i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, (iii) to add to the duties of a Seller,
Trustee or the Master Servicer, (iv) to make such changes as are necessary to
maintain the status of the Trust as a REMIC; provided that the Trustee has
received an Opinion of Counsel to the effect that such action is necessary or
helpful to maintain such qualification, (v) to add or amend any provisions as
required by Moody's, Standard & Poor's or any other NRSRO in order to maintain
or improve any rating of the Certificates (it being understood that, after the
rating required by Section 2.02 hereof has been obtained, neither the Trustee,
the Company nor CIT Consumer Finance is obligated to maintain or improve such
rating), or (vi) to add any other provisions or make any other revisions not
inconsistent with any other provision herein upon receipt of an Opinion of
Counsel to the Master Servicer addressed to the Trustee that such amendment will
not adversely affect in any material respect the interests of any
Certificateholder (including, without limitation, the maintenance of the status
of the Trust as a REMIC under the Code and under relevant state and local law).
(b) This Agreement may also be amended from time to time by
the Company, the Master Servicer and the Trustee, with the consent of Holders of
Certificates of each Class affected thereby evidencing, as to each such Class,
Percentage Interests aggregating 51% or more, 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
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Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments on any Certificate
without the consent of the Holder of each Certificate affected thereby, (ii)
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all Certificates then outstanding, (iii)
result in the disqualification of the Trust REMIC as a REMIC under the Code,
(iv) adversely affect the status of the Trust as a REMIC or the status of the
Certificates as "regular interests" therein, (v) cause any tax (other than any
tax imposed on "net income from foreclosure property" under Section 860G(c)(1)
of the Code that would be imposed without regard to such amendment) to be
imposed on the Trust, including, without limitation, any tax imposed on
"prohibited transactions" under Section 860G(d)(1) of the Code, or (vi)
adversely affect in any material respect the interest of the Class R
Certificateholders without the unanimous consent of the Class R
Certificateholders.
(c) This Agreement may also be amended from time to time,
without the consent of any of the Certificateholders, by the Company, the Master
Servicer and the Trustee to modify, eliminate or add to the provisions of this
Agreement to such extent as shall be necessary to (i) maintain the qualification
of the Trust REMIC as a REMIC under the Code and under relevant state and local
law or avoid, or reduce the risk of, the imposition of any tax on the Trust
under the Code that would be a claim against the Trust assets, provided that (A)
there shall have been delivered an Opinion of Counsel addressed to the Trustee
to the effect that such action is necessary to maintain such qualification or
avoid any such tax or reduce the risk of its imposition and (B) such amendment
shall not have any of the effects described in the proviso to Section 12.07(a),
or (ii) prevent the Trust from entering into any "prohibited transaction" as
defined in Section 860F of the Code, provided that such amendment shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder (including, without limitation, the
maintenance of the Trust REMIC as a REMIC under the Code and under relevant
state and local law).
(d) This Agreement shall not be amended under this section
without the consent of all of the Certificateholders if such amendment would
result in the disqualification of the Trust REMIC as a REMIC under the Code or
relevant state and local law.
(e) Promptly after the execution of any amendment or consent
pursuant to this Section, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder (but only if such
amendment is pursuant to Section 12.07(b) and affects the Class of Certificates
held by such Certificateholder) and, in all cases, to the Rating Agencies (which
shall be furnished no later than 5 days after the execution and delivery
thereof), which notification will be prepared by the Master Servicer and
delivered to the Trustee.
(f) It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, 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 shall be subject to
such reasonable requirements as the Trustee may prescribe.
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(g) The Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.
(h) In connection with any amendment pursuant to this Section,
the Trustee shall be entitled to receive an Opinion of Counsel to the Master
Servicer to the effect that such amendment is authorized or permitted by the
Agreement.
(i) Upon the execution of any amendment or consent pursuant to
this Section, 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 Certificates theretofore or thereafter issued hereunder shall be
bound thereby.
SECTION 12.08. Contribution of Assets.
Following the Closing Date, the Trustee shall not accept any
contribution of additional assets to the Trust unless the Trustee has received
an Opinion of Counsel addressed to the Trustee to the effect that (i) the
contribution of such assets into the Trust will not cause the Trust REMIC to
fail to qualify as a REMIC under the Code and under the relevant state and local
law and (ii) such contribution will not cause the imposition of a tax on
"prohibited transactions" (as defined in Section 860F of the Code or under
similar provisions under the relevant state and local law) or on contributions
to the Trust after the "start-up day" (as defined in Section 860G of the Code or
under similar provisions under the relevant state and local law) with respect
thereto.
SECTION 12.09. Notices.
All communications, instructions, directions and notices
pursuant hereto to the Company, the Master Servicer and the Trustee and the
Rating Agencies shall be in writing and delivered or mailed to it at the
appropriate following address:
If to the Company:
The CIT Group Securitization Corporation III
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
If to the Master Servicer:
The CIT Group/Consumer Finance, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
98
<PAGE>
If to the Trustee or the Paying Agent:
The Bank of New York
101 Barclay Street, 12 East
New York, New York 10286
Attention: Mortgage Backed Securities
If to Moody's:
Moody's Investors Service, Inc.
95 Church Street
New York, New York 10007
Attention:
If to Standard & Poor's:
Standard and Poor's Structured Ratings Group
25 Broadway
New York, New York 10004
Attention ABS Group/Market Surveillance
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 shall be in writing and delivered or mailed at the address
shown in the Certificate Register.
SECTION 12.10. 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.
SECTION 12.11. Reliance on Credit.
The parties hereto acknowledge that, with respect to receiving
payments on the Certificates, the Certificateholders are relying on the
Mortgagors to make payments on the Mortgage Loans and not on the
creditworthiness of the Company, CIT Consumer Finance, Holdings or any of their
respective affiliates. The parties hereto further acknowledge that the transfer
of any Mortgage Loans by CIT Consumer Finance to the Company or by the Company
to the Trust is intended to be a true sale of such Mortgage Loans, and not a
financing, such that creditors of CIT Consumer Finance and the Company are
intended to have no further claim to the Mortgage Loans or any payments made
thereon as a source of repayment of any indebtedness of CIT Consumer Finance or
the Company to such creditors.
99
<PAGE>
SECTION 12.12. No Bankruptcy Petition.
Each of CIT Consumer Finance, the Trustee and the Master
Servicer agrees that, prior to the date which is one year and one day after the
payment in full of the Offered Certificates and Class B-2 Certificates it will
not institute against, or join any other person in instituting against, the
Company or the Trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any Federal or state
bankruptcy or similar law.
SECTION 12.13. Headings.
The headings herein are for purposes of reference only and
shall not otherwise affect the meaning or interpretation of any provision
hereof.
SECTION 12.14. 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 12.15. 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.
100
<PAGE>
ARTICLE XIII
THE COMPANY
Section 13.01 Representations of Company.
The Company hereby makes the following representations as to
itself on which the Trustee on behalf of the Trust shall rely in accepting the
Mortgage Loans in trust and authenticating the Certificates. The representations
are made as of the execution and delivery of this Agreement, and shall survive
the sale of the Mortgage Loans 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
101
<PAGE>
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 13.02 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 13.03 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 Trustee
or the Certificateholders 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 13.04 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 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 "Certificateholder". Certificates so
owned by or pledged to the Company or such controlling or commonly controlled
Person shall have an equal and proportionate benefit under the provisions of
this Agreement, without preference, priority or distinction as among all of the
Certificates.
102
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of July 1, 1997.
THE CIT GROUP/CONSUMER FINANCE, INC.
By: /s/ FRANK GARCIA
--------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION III
By: /s/ FRANK GARCIA
--------------------------------
Name: Frank Garcia
Title: Vice President
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Trustee
By: /s/ FRANKLIN B. AUSTIN
--------------------------------
Name: Franklin B. Austin
Title: Assistant Vice President
103
<PAGE>
Exhibit A-1
[FORM OF CLASS A-1 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-1 No. A-1-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 5.93%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$90,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance
of All Class A-1
Certificates: $90,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AA 9
Finance, Inc.
A-1-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-1 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-1 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-1-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-1-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-1-5
<PAGE>
Exhibit A-2
[FORM OF CLASS A-2 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-2 No. A-2-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.17%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$36,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-2
Certificates: $36,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AB 7
Finance, Inc.
A-2-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997- CLASS A-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-2 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-2 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-2-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-2-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-2-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-2-5
<PAGE>
Exhibit A-3
[FORM OF CLASS A-3 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-3 No. A-3-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.25%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$61,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-3
Certificates: $61,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AC 5
Finance, Inc.
A-3-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-3
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-3 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-3 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-3-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-3-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-3-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-3-5
<PAGE>
Exhibit A-4
[FORM OF CLASS A-4 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-4 No. A-4-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.37%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$40,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-4
Certificates: $40,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AD 3
Finance, Inc.
A-4-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-4
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-4 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-4 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-4-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-4-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-4-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-4-5
<PAGE>
Exhibit A-5
[FORM OF CLASS A-5 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-5 No. A-5-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.55%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$15,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance
of All Class A-5
Certificates: $15,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AE 1
Finance, Inc.
A-5-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-5
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-5 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-5 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-5-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-5-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-5-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-5-5
<PAGE>
Exhibit A-6
[FORM OF CLASS A-6 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-6 No. A-6-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.67%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$15,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-6
Certificates: $15,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AF 8
Finance, Inc.
A-6-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-6
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-6 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-6 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-6-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-6-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-6-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-6-5
<PAGE>
Exhibit A-7
[FORM OF CLASS A-7 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-7 No. A-7-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.95%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$33,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-7
Certificates: $33,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AG 6
Finance, Inc.
A-7-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-7
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-7 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-7 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-7-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-7-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-7-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-7-5
<PAGE>
Exhibit A-8
[FORM OF CLASS A-8 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-8 No. A-8-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: 6.65%,
of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap Rate
Original Certificate Balance:
$30,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-8
Certificates: $30,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AH 4
Finance, Inc.
A-8-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-8
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-8 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-8 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-8-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-8-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-8-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-8-5
<PAGE>
Exhibit A-9
[FORM OF CLASS A-9 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
Class A-9 No. A-9-1
Date of Pooling and Servicing Agreement: As Pass-Through Rate: On or prior
of July 1, 1997 to the Clean-up Call Date,
One-month LIBOR plus 0.19% and
thereafter, One-month LIBOR
plus 0.50%, subject to the
Adjustable Rate Group
Available Funds Cap Rate and
not to exceed 20.00%.
Original Certificate Balance:
$90,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class A-9
Certificates: $90,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AJ 0
Finance, Inc.
A-9-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES
SERIES 1997-1 CLASS A-9
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
which are received pursuant thereto on or after July 1, 1997) sold by The CIT
Group Securitization Corporation III (the "Company"), which home equity mortgage
loans were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate, the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-9 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class A-9 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
A-9-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
A-9-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
A-9-4
<PAGE>
ASSIGNMENT
FOR VALUED 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-9-5
<PAGE>
Exhibit B-1
[FORM OF CLASS B-1 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS
A-2, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7, CLASS A-8, CLASS
A-9, CLASS M-1 AND CLASS M-2 CERTIFICATES TO THE EXTENT SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO 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 ERISA) THAT IS SUBJECT TO
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. 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.
Class B-1
No. B-1-1
Date of Pooling and Servicing Agreement: Pass-Through Rate: 7.45%,
As of July 1, 1997 subject to the Fixed Rate Group
Available Funds Cap Rate
Original Certificate Balance:
$22,500,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance of
All Class B-1 Certificates:
$22,500,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AM 3
Finance, Inc.
B-1-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES,
SERIES 1997-1, CLASS B-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
received pursuant thereto on or after July 1, 1997) sold by The CIT Group
Securitization Corporation III (the "Company"), which home equity mortgage loans
were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bond by the Agreement. To the extent not defined herein, all capitalized
terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-1 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class B-1 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
B-1-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
B-1-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
B-1-4
<PAGE>
ASSIGNMENT
FOR VALUED 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.
B-1-5
<PAGE>
Exhibit B-2
[FORM OF CLASS B-2 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS
A-2, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7, CLASS A-8, CLASS
A-9, CLASS M-1, CLASS M-2 AND CLASS B-1 CERTIFICATES TO THE EXTENT SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR
"BLUE SKY" LAWS IN RELIANCE UPON EXEMPTIONS PROVIDED BY SUCH ACTS AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, AND PROVIDED SUCH SALE, PLEDGE OR TRANSFER IS MADE IN
ACCORDANCE WITH SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN AND (B) IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE CERTIFICATE REGISTRAR
WILL HAVE RECEIVED FROM THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE A
REPRESENTATION THAT SUCH TRANSFEREE EITHER (i) IS NOT ACQUIRING SUCH
CERTIFICATE, DIRECTLY OR INDIRECTLY, FOR OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA,
A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE CODE, OR ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY (INCLUDING AN INSURANCE COMPANY GENERAL ACCOUNT), OR (ii) IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN PROHIBITED TRANSACTION
EXEMPTION 95-60, 60 FED. REG. 35925 (JULY 12, 1995) AND NEITHER THE INSURANCE
COMPANY NOR AN AFFILIATE THEREOF IS AN INSURER OR SERVICER WITH RESPECT TO THE
TRUST.
B-2-1
<PAGE>
Exhibit B-2
Class B-2 No. B-2-1
Date of Pooling and Servicing Agreement: Pass-Through Rate: 8.78%,
As of July 1, 1997 subject to the Fixed Rate Group
Available Funds Cap Rate
Original Certificate Balance:
$5,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance
of All Class B-2 Certificates:
$5,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer
Finance, Inc.
B-2-2
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES,
SERIES 1997-1, CLASS B-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that___________ is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
received pursuant thereto on or after July 1, 1997) sold by The CIT Group
Securitization Corporation III (the "Company"), which home equity mortgage loans
were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bond by the Agreement. To the extent not defined herein, all capitalized
terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-2 Certificates with an aggregate Certificate
Balance of at least $1,000,000 and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such
Distribution Date) to the registered Certificateholder at the address appearing
on the Certificate Register as of the last Business Day of the immediately
preceding calendar month, in an amount equal to the Certificateholder's
Percentage Interest of the interest and principal to be distributed to the Class
B-2 Certificateholders pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
B-2-3
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
No transfer, sale, pledge or other disposition of any
Certificate or any interest therein shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act and
effective registration or qualification under applicable state securities laws
or is made in a transaction that does not require such registration or
qualification.
In the event that a transfer of this Certificate or any
interest herein is to be made in reliance upon the exemption from registration
under the Securities Act contained in Rule 144A, such transfer shall be made
only to a Qualified Institutional Buyer which is aware that the transfer of this
Certificate is being made in reliance on Rule 144A and is acquiring this
Certificate for its own account or for the account of a Qualified Institutional
Buyer, as the case may be, and such transferee shall be deemed to have
represented that the foregoing is true and correct and that such transferee
understands that this Certificate has not been and will not be registered under
the Securities Act and may not be reoffered, resold, pledged or otherwise
transferred except (A) to a person who such transferee reasonably believes is a
Qualified Institutional Buyer in a transaction meeting the requirements of Rule
144A and (B) in accordance with all applicable securities laws of the states of
the United States.
In the event that registration of a transfer of this
Certificate or any interest herein is to be made in reliance upon an exemption
from registration under the Securities Act (other than the exemption from
registration contained in Rule 144A) and applicable state securities laws, the
Company shall require, in order to assure compliance with the Securities Act,
the transferee or the transferor of this Certificate to deliver to the Company
and the Trustee an Opinion of Counsel that such transfer may be made pursuant to
an exemption from the Securities Act (other than the exemption from registration
contained in Section 3(a)(2) thereof). The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Master
Servicer and the Company against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
Neither this Certificate nor any beneficial interest herein
may be directly or indirectly assigned, sold, pledged, hypothecated or otherwise
transferred except upon satisfaction
B-2-4
<PAGE>
of the conditions set forth in Section 9.02 of the Agreement pursuant to which
this Certificate was issued. Any attempted transfer in violation of such
restrictions shall be null and void and shall vest no rights in any purported
transferee, and shall subject the Holder hereof to liability for any tax imposed
(and related expenses, if any) with respect to such attempted transfer.
No service charge will be made for any such registration of
transfer of exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
B-2-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
B-2-6
<PAGE>
ASSIGNMENT
FOR VALUED 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.
B-2-7
<PAGE>
Exhibit C
[FORM OF CLASS R CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE (AS DEFINED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH TRANSFER
MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH POOLING AND
SERVICING AGREEMENT.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS
A-2, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7, CLASS A-8, CLASS
A-9, CLASS M-1, CLASS M-2, CLASS B-1 AND CLASS B-2 CERTIFICATES TO THE EXTENT
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR
"BLUE SKY" LAWS IN RELIANCE UPON EXEMPTIONS PROVIDED BY SUCH ACTS AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, AND PROVIDED SUCH SALE, PLEDGE OR TRANSFER IS MADE IN
ACCORDANCE WITH SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN AND (B) IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES.
C-1
<PAGE>
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE CERTIFICATE REGISTRAR
WILL HAVE RECEIVED FROM THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE A
REPRESENTATION THAT SUCH TRANSFEREE EITHER (i) IS NOT ACQUIRING SUCH
CERTIFICATE, DIRECTLY OR INDIRECTLY, FOR OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO TITLE I OF ERISA,
A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE CODE, OR ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY (INCLUDING AN INSURANCE COMPANY GENERAL ACCOUNT), OR (ii) IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN PROHIBITED TRANSACTION
EXEMPTION 95-60, 60 FED. REG. 35925 (JULY 12, 1995) AND NEITHER THE INSURANCE
COMPANY NOR AN AFFILIATE THEREOF IS AN INSURER OR SERVICER WITH RESPECT TO THE
TRUST.
Class R No. R-1
Date of Pooling and Servicing Agreement: As
of July 1, 1997
Cut-off Date: July 1, 1997 Percentage Interest: 100%
Master Servicer: The CIT Group/Consumer
Finance, Inc.
C-2
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES, SERIES 1997-1
This certifies that The CIT Group Securitization Corporation
III is the registered owner of the undivided Percentage Interest stated above in
the Residual Interest in the Trust referred to herein, and entitled to certain
distributions with respect to such Trust, which Trust consists of a pool of home
equity mortgage loans (including, without limitation, all related mortgages and
notes and any and all rights to payments received pursuant thereto on or after
July 1, 1997) sold by The CIT Group Securitization Corporation III (the
"Company"), which home equity mortgage loans were originated or acquired by The
CIT Group/Consumer Finance, Inc. ("CIT Consumer Finance"). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of July 1, 1997, among the Company, as depositor, CIT Consumer Finance, as
Master Servicer, and The Bank of New York, as Trustee of the Trust (the
"Trustee"). This Class R Certificate is one of the Class R Certificates
described in the Agreement and is issued pursuant and subject to the Agreement.
By acceptance of this Class R Certificate the holder assents to and becomes
bound by the Agreement. To the extend not defined herein, all capitalized terms
have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15,
1997, so long as the Agreement has not been terminated, by check to the
registered Class R Certificateholder at the address appearing on the Certificate
Register as of the last Business Day of the immediately preceding calendar
month, in an amount determined in accordance with the Agreement.
The Class R Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class R
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class R
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class R Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class R
Certificateholder free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Class R Certificate is registrable in
the Certificate Register of the Certificate Registrar upon surrender of this
Class R Certificate for registration of transfer at the office or agency
maintained by the Trustee in the City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the
C-3
<PAGE>
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Class R Certificates evidencing the same aggregate Percentage
Interest of Class R Certificates will be issued to the designated transferee or
transferees.
As provided in the Agreement and subject to certain
limitations therein set forth, this Class R Certificate is exchangeable for new
Class R Certificates of authorized denominations evidencing the same aggregate
Percentage Interest as requested by the holder surrendering the same.
No transfer, sale, pledge or other disposition of any
Certificate or any interest therein shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act and
effective registration or qualification under applicable state securities laws
or is made in a transaction that does not require such registration or
qualification.
In the event that a transfer of this Certificate or any
interest herein is to be made in reliance upon the exemption from registration
under the Securities Act contained in Rule 144A, such transfer shall be made
only to a Qualified Institutional Buyer which is aware that the transfer of this
Certificate is being made in reliance on Rule 144A and is acquiring this
Certificate for its own account or for the account of a Qualified Institutional
Buyer, as the case may be, and such transferee shall be deemed to have
represented that the foregoing is true and correct and that such transferee
understands that this Certificate has not been and will not be registered under
the Securities Act and may not be reoffered, resold, pledged or otherwise
transferred except (A) to a person who such transferee reasonably believes is a
Qualified Institutional Buyer in a transaction meeting the requirements of Rule
144A and (B) in accordance with all applicable securities laws of the states of
the United States.
In the event that registration of a transfer of this
Certificate or any interest herein is to be made in reliance upon an exemption
from registration under the Securities Act (other than the exemption from
registration contained in Rule 144A) and applicable state securities laws, the
Company shall require, in order to assure compliance with the Securities Act,
the transferee or the transferor of this Certificate to deliver to the Company
and the Trustee an Opinion of Counsel that such transfer may be made pursuant to
an exemption from the Securities Act (other than the exemption from registration
contained in Section 3(a)(2) thereof). The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Master
Servicer and the Company against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
Neither this Certificate nor any beneficial interest herein
may be directly or indirectly assigned, sold, pledged, hypothecated or otherwise
transferred except upon satisfaction of the conditions set forth in Section 9.02
of the Agreement pursuant to which this Certificate was issued. Any attempted
transfer in violation of such restrictions shall be null and void and shall vest
no rights in any purported transferee, and shall subject the Holder hereof to
liability for any tax imposed (and related expenses, if any) with respect to
such attempted transfer.
C-4
<PAGE>
No service charge will be made for any such registration of
transfer of exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Company, the Master Servicer, the
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
Company, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The holder of this Class R Certificate, by acceptance hereof,
agrees that, in accordance with the requirements of Section 860(D)(b)(1) of the
Code, the federal tax return of the Trust for its first taxable year shall
provide that the Trust elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class M-1, Class M-2, Class B-1
and Class B-2 Certificates shall be "regular interests" in the REMIC and the
Class R Certificates shall be the "residual interest" in the REMIC.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purposes.
THIS CERTIFICATE 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.
C-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997
CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
C-6
<PAGE>
ASSIGNMENT
FOR VALUED 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.
C-7
<PAGE>
Exhibit D-1
[FORM OF CLASS M-1 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS
A-2, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7, CLASS A-8, AND CLASS
A-9 CERTIFICATES TO THE EXTENT SET FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO 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 ERISA) THAT IS SUBJECT TO
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. 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.
Class M-1 No. M-1-1
Date of Pooling and Servicing Agreement: Pass-Through Rate: 6.85%,
As of July 1, 1997 subject to the Fixed Rate Group
Available Funds Cap Rate
Original Certificate Balance:
$30,000,000
Cut-off Date: July 1, 1997 Aggregate Certificate Balance
of All Class M-1 Certificates:
$30,000,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AK 7
Finance, Inc.
D-1-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES,
SERIES 1997-1, CLASS M-1
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
received pursuant thereto on or after July 1, 1997) sold by The CIT Group
Securitization Corporation III (the "Company"), which home equity mortgage loans
were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bond by the Agreement. To the extent not defined herein, all capitalized
terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class M-1 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class M-1 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
D-1-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
D-1-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
D-1-4
<PAGE>
ASSIGNMENT
FOR VALUED 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.
D-1-5
<PAGE>
Exhibit D-2
[FORM OF CLASS M-2 CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS
A-2, CLASS A-3, CLASS A-4, CLASS A-5, CLASS A-6, CLASS A-7, CLASS A-8, CLASS A-9
AND CLASS M-1 CERTIFICATES TO THE EXTENT SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO 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 ERISA) THAT IS SUBJECT TO
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. 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.
Class M-2 No. M-2-1
Date of Pooling and Servicing Agreement: Pass-Through Rate: 7.10%,
As of July 1, 1997 subject to the Fixed Rate
Group Available Funds Cap
Rate
Original Certificate
Balance: $32,500,000
Cut-off Date: July 1, 1997 Aggregate Certificate
Balance of All Class M-2
Certificates: $32,500,000
First Distribution Date: Percentage Interest: 100%
August 15, 1997
Master Servicer: The CIT Group/Consumer CUSIP: 125589 AL 5
Finance, Inc.
D-2-1
<PAGE>
HOME EQUITY LOAN
ASSET BACKED CERTIFICATES,
SERIES 1997-1, CLASS M-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN
INTEREST IN THE CIT GROUP SECURITIZATION CORPORATION III, THE CIT GROUP/CONSUMER
FINANCE, INC., THE CIT GROUP HOLDINGS, INC. OR ANY AFFILIATE THEREOF.
This certifies that Cede & Co. is the registered owner of the
undivided Percentage Interest represented by the original certificate balance
specified above in certain monthly distributions with respect to a Trust
consisting of a pool of home equity mortgage loans (including, without
limitation, all related mortgages and notes and any and all rights to payments
received pursuant thereto on or after July 1, 1997) sold by The CIT Group
Securitization Corporation III (the "Company"), which home equity mortgage loans
were originated or acquired by The CIT Group/Consumer Finance, Inc. ("CIT
Consumer Finance"). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of July 1, 1997, among the
Company, as depositor, CIT Consumer Finance, as Master Servicer, and The Bank of
New York, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bond by the Agreement. To the extent not defined herein, all capitalized
terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on
the 15th day (or if such day is not a Business Day, the next succeeding Business
Day) (the "Distribution Date") of each calendar month commencing August 15, 1997
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class M-2 Certificates with an aggregate Percentage
Interest of at least 5% of the Offered Certificates and the Class B Certificates
and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Distribution Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day of the immediately preceding calendar month, in an amount
equal to the Certificateholder's Percentage Interest of the interest and
principal to be distributed to the Class M-2 Certificateholders pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Certificateholder as provided in the
Agreement, for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Certificateholder for any amounts payable under
this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
D-2-2
<PAGE>
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
the Trustee in the City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company to the Trustee or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of The Depository Trust Company, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
The Company, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar and any agent of the Company, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
Unless this Certificate has been authenticated by the Trustee
or its Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
THIS CERTIFICATE 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.
D-2-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed.
Dated: July 23, 1997 CIT HOME EQUITY LOAN TRUST 1997-1
By: The Bank of New York, as Trustee
By:__________________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK, as Trustee
By:_________________________________
Authorized Signatory
Dated: July 23, 1997
D-2-4
<PAGE>
ASSIGNMENT
FOR VALUED 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.
D-2-5
<PAGE>
Exhibit E
THE CIT GROUP/CONSUMER FINANCE, INC.
CERTIFICATE OF OFFICER
The undersigned certifies that he is the Vice President of The
CIT Group/Consumer Finance, Inc., a corporation organized under the laws of
Delaware ("CIT Consumer Finance"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of CIT Consumer Finance in
connection with the Pooling and Servicing Agreement, dated as of July 1, 1997
(the "Agreement"), among CIT Consumer Finance, The CIT Group Securitization
Corporation III ("CIT Securitization") and The Bank of New York, as Trustee (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. Attached hereto as Exhibit I is a true and correct copy of
the Certificate of Incorporation of CIT Consumer Finance, together with all
amendments thereto, as in effect on the date hereof.
2. CIT Consumer Finance is in good standing (including the
payment of all franchise taxes and the filing of required reports) under the
laws of the State of Delaware and is duly qualified to do business in the State
of New Jersey and the State of Oklahoma.
3. No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of CIT Consumer Finance are pending or contemplated.
4. Attached hereto as Exhibit II is a true and correct copy of
the By-Laws of CIT Consumer Finance, as amended, as in effect on the date
hereof.
5. The representations and warranties of CIT Consumer Finance
contained in Sections 3.01, 3.02, 3.03 and 3.04 of the Agreement are true and
correct on and as of the date hereof.
6. No event with respect to CIT Consumer Finance 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.
7. Each of the agreements and conditions of CIT Consumer
Finance to be performed on or before the date hereof pursuant to the Agreement
have been performed in all material respects.
8. Attached hereto as Exhibit III are true and correct copies
of resolutions (the "Resolutions") duly authorized and adopted by the Board of
Directors of CIT Consumer Finance by unanimous consent pursuant to the By-Laws
of CIT Consumer Finance as of July 1, 1997 pertaining to the sale of home equity
mortgage loans from CIT
E-1
<PAGE>
Consumer Finance to CIT Securitization pursuant to a purchase agreement (the
"Purchase Agreement"), dated as of July 1, 1997, by and between CIT Consumer
Finance and CIT Securitization; said Resolutions have not been amended,
modified, annulled or revoked and are in full force and effect; and the
instruments referred to in said Resolutions were executed pursuant thereto and
in compliance therewith.
9. The Agreement and the Purchase Agreement have been executed
by CIT Consumer Finance pursuant to and in compliance with the Resolutions.
10. Each person, who, as a director or officer of CIT Consumer
Finance or attorney-in-fact of such director or officer, or pursuant to a valid
power of attorney, signed (a) the Agreement, (b) the Purchase Agreement, and (c)
any other document delivered prior hereto or on the date hereof in connection
with the transactions described in the Purchase Agreement and the Agreement, at
the respective times of such signing and delivery, was duly elected or
appointed, qualified and acting as such director or officer or duly appointed
and acting as such attorney-in-fact or acting pursuant to a valid power of
attorney, and the signatures of such persons appearing on such documents are
their genuine signatures.
11. The execution and delivery by CIT Consumer Finance of the
Purchase Agreement and the Agreement are within the corporate power of CIT
Consumer Finance and have been duly authorized by all necessary corporate action
on the part of the CIT Consumer Finance; neither the execution and delivery by
CIT Consumer Finance of the Purchase Agreement or the Agreement nor the
consummation by CIT Consumer Finance of the transactions therein contemplated,
nor compliance by CIT Consumer Finance with the provisions thereof, 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 CIT Consumer Finance or its
properties or the certificate of incorporation or by-laws of CIT Consumer
Finance, or any of the provisions of any indenture, mortgage, contract or other
instrument to which CIT Consumer Finance is a party or by which it 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.
12. The Purchase Agreement and the Agreement have been duly
authorized, executed and delivered by CIT Consumer Finance, and will constitute
when so executed and delivered, legal, valid and binding instruments enforceable
against CIT Consumer Finance in accordance with their terms, except that such
enforceability thereof may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (b) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
E-2
<PAGE>
13. There are no actions, proceedings or investigations now
pending against CIT Consumer Finance or, to the knowledge of CIT Consumer
Finance, threatened against CIT Consumer Finance, before any court,
administrative agency or other tribunal which might materially and adversely
affect the performance by CIT Consumer Finance of its obligations under, or the
validity or enforceability of, the Purchase Agreement or the Agreement.
Certified this 23rd day of July, 1997.
_____________________________
Name: Frank Garcia
Title: Vice President
E-3
<PAGE>
Exhibit F
July 23, 1997
The Bank of New York
101 Barclay Street
New York, New York 10286
Morgan Stanley & Co. Incorporated, as Representative
of the several Underwriters
1585 Broadway
New York, New York 10036
Standard & Poor's Ratings Group
25 Broadway
New York, New York 10014
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Ladies and Gentlemen:
I have acted as counsel to The CIT Group/Consumer Finance,
Inc. ("CITCF"), a Delaware Corporation, The CIT Group/Consumer Finance, Inc.
(NY)("CITCF-NY"), a New York Corporation, and The CIT Group Securitization
Corporation III, a Delaware corporation ("Company"), in connection with the sale
of Home Equity Loan Asset Backed Certificates, Series 1997-1 (the
"Certificates"). The Certificates represent beneficial interests in a trust, the
CIT Home Equity Loan Trust 1997-1 (the "Trust"), the corpus of which will
consist of, among other things, a pool of home equity mortgage loans
(collectively, the "Mortgage Loans"). The Mortgage Loans were originated by
either CITCF (including Mortgage Loans acquired from correspondents by CITCF),
The CIT Group/Consumer Finance, Inc. (NY) ("CITCF-NY") (including Mortgage Loans
acquired from correspondents by CITCF-NY) and transferred to CITCF or The CIT
Group/Sales Financing, Inc. ("CITSF") (including Mortgage Loans acquired from
correspondents by CITSF) and transferred to CITCF. CITCF purchased certain of
the Mortgage Loans from CITCF-NY pursuant to a Purchase Agreement, dated as of
July 1, 1997 by and between CITCF and CITCF-NY (the "CITCF-NY Purchase
Agreement"). The Company purchased the Mortgage Loans from CITCF pursuant to a
Purchase Agreement, dated as of July 1, 1997 (the "Purchase Agreement"), by and
between CITCF and the Company. Pursuant to the
F-1
<PAGE>
Pooling and Servicing Agreement dated as of July 1, 1997, among the Company,
CITCF and The Bank of New York, as trustee (the "Trustee"), the Company will
transfer the Mortgage Loans to the Trustee and the Trust will issue the
Certificates. Each of the Company, CITCF-NY and CITCF is a wholly-owned, direct
subsidiary of The CIT Group Holdings, Inc. ("Holdings").
All capitalized terms used herein and not herein defined shall
have the meanings assigned to them in the Underwriting Agreement.
In rendering the following opinions, I have examined (i) the
Purchase Agreement; (ii) the Pooling and Servicing Agreement; (iii) Certificates
of Incorporation of CITCF, CITCF-NY and the Company; (iv) the By-Laws of the
Company, CITCF-NY and CITCF; (v) copies of certain unanimous written consents of
the Board of Directors of the Company, CITCF-NY and CITCF authorizing the
issuance and sale of the Certificates and the purchase of the Mortgage Loans;
(vi) the forms of the Certificates; (vii) the Registration Statement on Form S-3
and Exhibits thereto filed by the Company and Holdings with the Securities and
Exchange Commission on February 24, 1997, and Amendment No. 1 to the
Registration Statement on Form S-3 and Exhibits thereto filed by the Company
with the Securities and Exchange Commission on April 2, 1997 and Amendment No. 2
filed by the Company with the Securities and Exchange Commission on April 8,
1997 (collectively, the "Registration Statement"); (viii) the Preliminary
Prospectus dated July 10, 1997 and the Final Prospectus dated July 16, 1997
(collectively, the "Prospectus"); (ix) the Underwriting Agreement, dated July
16, 1997, (the "Underwriting Agreement") among the Company, CITCF, The CIT Group
Holdings, Inc. and Morgan Stanley & Co. Incorporated, as representative of the
several underwriters (the "Underwriters"), (x) the Purchase Agreement, "), (xi)
the CITCF-NY Purchase Agreement, (xii) the Subservicing Agreement dated as of
July 1, 1997, by and between CITCF and CITSF, and (xiii) the Placement Agency
Agreement among CITCF, the Company and Morgan Stanley & Co. Incorporated (the
"Placement Agency Agreement"). 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 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, CITCF,
CITCF-NY, the Underwriters or the Trustees. Insofar as the opinions below relate
to performance after the date hereof pursuant to documents referred to herein, I
have assumed that each party to such documents (other than the Company, CITCF,
and CITCF-NY) will perform its obligations under such documents in accordance
with their terms and that all authorizations, laws, regulations and other
circumstances related to such performance are the same as in effect on the date
hereof.
In making my examination of agreements, instruments and other
documents described above and in giving opinions herein, I have assumed that the
Trustee, the Underwriters and the parties to the documents described above
(other than the Company, CITCF, and CITCF-NY) have and had the power and
capacity to execute and deliver such agreements, instruments and other documents
and to perform all of their respective obligations thereunder and that such
agreements, instruments and other documents were duly authorized by all
requisite action by or on behalf of the Trustee, the Underwriters, and/or third
parties, were duly executed,
F-2
<PAGE>
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 Trustee, the Underwriters and the other parties thereto
(other than the Company, CITCF, and CITCF-NY).
Based upon, and subject to, the foregoing I am of the opinion
that:
1. Each of the Company and CITCF has each been duly
organized and is validly existing as a corporation 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.
2. Each of the Company, CITCF, and CITCF-NY has the
corporate power and corporate authority to carry on
its respective businesses as described in the
Prospectus and to own and operate its properties in
connection therewith.
3. Each of the Company, CITCF, and CITCF-NY has the
corporate power to own its assets and to transact the
businesses in which it is currently engaged and to
perform its respective obligations under each of the
Basic Documents to which it is a party. Each of the
Company, CITCF, and CITCF-NY, is 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
adverse effect on the business, properties, assets,
or condition (financial or other) of the Company,
CITCF, or CITCF-NY, as the case may be, or on its
ability to perform its respective obligations under
the Basic Documents to which it is a party.
4. The Underwriting Agreement has been duly authorized,
executed and delivered by each of the Company and
CITCF and is a valid and binding obligation of each
of the Company and CITCF enforceable against each of
the Company and CITCF 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.
5. The Placement Agency Agreement has been duly
authorized, executed and delivered by each of the
Company and CITCF and is a valid and binding
obligation of each of the Company and CITCF
enforceable against each of
F-3
<PAGE>
the Company and CITCF 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.
6. Each of the Basic Documents to which the Company,
CITCF or CITCF-NY is a party has been duly
authorized, executed and delivered by each of the
Company, CITCF and CITCF-NY, as applicable, and each
is a valid and binding obligation of each of the
Company, CITCF and CITCF-NY enforceable against each
of the Company, CITCF and CITCF-NY in accordance with
the terms of each, 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), and (C) the enforceability as to rights to
indemnify thereunder may be limited under applicable
law.
7. The execution and delivery by the Company, CITCF, and
CITCF-NY of each of the Basic Documents to which each
is a party, the performance of the respective
obligations of each thereunder are within the
corporate power of the Company, CITCF, and CITCF-NY,
as applicable, and have been duly authorized by all
necessary corporate action on the part of the
Company, CITCF, and CITCF-NY, as applicable, and
neither the issue and sale of the Offered
Certificates, nor the consummation of the
transactions contemplated by the Basic Documents nor
the fulfillment of the terms thereof will, to the
best of my actual knowledge, conflict with or
constitute a breach of, or a default under, or result
in the creation or imposition of any lien, charge or
encumbrance upon any property or asset of the
Company, CITCF, or CITCF-NY pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument, if any, to which the Company,
CITCF, or CITCF-NY is a party or by which any may be
bound or to which the property or assets of the
Company, CITCF, or CITCF-NY are subject (but only as
to contracts, indentures, mortgages, loan agreements,
notes, leases and other such instruments, which have
been identified by the Company, CITCF, or CITCF-NY to
me), nor will such action result in any violation of
the provisions of the certificates of incorporation
or by-laws of the Company, CITCF or CITCF-NY, nor to
the best of my actual 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 or the Company, CITCF, or
CITCF-NY.
F-4
<PAGE>
8. The Company has duly authorized and executed the
written order to the Trustee to execute and deliver
the Certificates.
9. To the best of my actual 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 Company or CITCF
of the transactions contemplated by the Underwriting
Agreement and the Placement Agency 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.
10. There are no legal or governmental proceedings
pending to which the Company, CITCF, or CITCF-NY is a
party or of which any property of the Company, CITCF,
or CITCF-NY is the subject, and no such proceedings
are known by me 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 any of the
Basic Documents, (2) seeking to prevent the issuance
of the Offered Certificates, (3) that could
materially and adversely affect the Company's, CITCF
'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 Offered
Certificates.
11. I am familiar with CITCF's and CITCF-NY's standard
operating procedures relating to CITCF's and
CITCF-NY's acquisition of a duly recorded mortgage
against homes financed by CITCF or CITCF-NY pursuant
to home equity loans in the ordinary course of
CITCF's or CITCF-NY's business. Assuming that CITCF's
or CITCF-NY's standard procedures are followed with
respect to the acquisition of a recorded mortgage in
the Mortgaged Homes (and I have no reason to believe
that CITCF or CITCF-NY has not or will not continue
to follow its standard procedures in connection with
the acquisition of a recorded mortgage in the
Mortgaged Homes), CITCF and CITCF-NY have recorded or
will record a mortgage against the Mortgaged Homes.
12. The CITCF-NY Purchase Agreement is sufficient in form
and substance to convey to CITCF all of CITCF-NY's
right, title and interest in and to the related
Mortgage Loans. When the CITCF-NY Purchase Agreement
has been duly executed and delivered by all parties
thereto, and the purchase price has been paid to
CITCF-NY by CITCF in the manner specified in the
CITCF-NY Purchase Agreement, all of CITCF-NY's right,
title and interest in and to the related Mortgage
Loans will have been conveyed to
F-5
<PAGE>
CITCF, except as such interest in the related
Mortgaged Homes may be limited by the absence of a
duly recorded mortgage assignment.
13. The Purchase Agreement is sufficient in form and
substance to convey to the Company all of CITCF's
right, title and interest in and to the Mortgage
Loans and any security interests securing the
Mortgage Loans. When the Purchase Agreement has been
duly executed and delivered by each of the parties
thereto, and the purchase price has been paid to
CITCF by the Company in the manner specified in the
Purchase Agreement, all of CITCF's right, title and
interest in and to the Mortgage Loans will have been
conveyed to the Company, except as such interest in
the related Mortgaged Homes may be limited by the
absence of a duly recorded mortgage assignment.
14. The Pooling and Servicing Agreement is sufficient in
form and substance to convey to the Trustee all of
the Company's right, title and interest in and to the
Mortgage Loans. When the Basic Documents have each
been duly executed and delivered by each of the
parties thereto, the purchase price therefor has been
paid to the Company by the Trust in the manner
specified in the Pooling and Servicing Agreement, and
the Offered Certificates have been duly executed and
duly authenticated and delivered by the Trustee to or
upon the order of the Company in accordance with the
Pooling and Servicing Agreement, all of the Company's
right, title and interest in and to the Mortgage
Loans will have been conveyed to the Trust and the
Trust will be the owner of the Mortgage Loans, except
as such interest in the related Mortgaged Homes may
be limited by the absence of a duly recorded mortgage
assignment.
15. 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 I express no opinion with
respect to the financial statements and other
financial and statistical data included therein.
The foregoing opinion is given on the express understanding
that the undersigned is an officer and director of each of the Company, CITCF,
and CITCF-NY and shall in no event incur any personal liability in connection
with the said opinion.
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.
I am admitted to practice only in the State of New York. I am
not admitted to the Bar in any other State and I do not express an opinion as to
the laws of any jurisdiction other
F-6
<PAGE>
than the laws of the State of New York, the General Corporate Law of the State
of Delaware and the laws of the United States of America.
Very truly yours,
Martin B. Schwam
F-7
<PAGE>
Exhibit G
TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
The Bank of New York, the trustee (the "Trustee") of the Trust
created pursuant to the Pooling and Servicing Agreement, dated as of July 1,
1997, among The CIT Group Securitization Corporation III (the "Company"), The
CIT Group/Consumer Finance, Inc. and the Trustee (the "Agreement"), (I)
acknowledges that the Trustee has received, and holds in trust thereunder the
following: (i) all the right, title and interest of the Company in and to the
Mortgage Loans, including, without limitation, any related Mortgages and Notes,
the Seller's interest in any related Mortgaged Property which has been acquired
by foreclosure or deed in lieu of foreclosure, and all payments thereon and
proceeds of the conversion thereof, voluntary or involuntary, and all interest
and principal received by the Company on or with respect to the Mortgage Loans
on and after the Cut-off Date, (ii) all rights under any Hazard Insurance Policy
relating to a Mortgaged Property securing a Mortgage Loan for the benefit of the
creditor of such Mortgage Loan, (iii) the proceeds from any Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Mortgage Loan or the Mortgaged Properties related
thereto, (iv) all amounts held for the Trust in the Certificate Account, (v) all
rights under the CIT Purchase Agreements, and (vi) all proceeds in any way
derived from any of the foregoing and (II) certifies that it has accepted
delivery of the Mortgage Loans and the Files with respect thereto pursuant to
Section 2.02 of the Agreement and will accept delivery of the Files with respect
thereto pursuant to Section 4.01 of the Agreement and will hold such Files as
custodian for the benefit of the Trust as provided in the Agreement.
Capitalized terms used herein have the meanings given them in
the Agreement.
IN WITNESS WHEREOF, The Bank of New York, as Trustee, has
caused this acknowledgment to be executed by its duly authorized officer as of
July 1, 1997.
THE BANK OF NEW YORK
as Trustee
By:_____________________________
Name:
Title:
G-1
<PAGE>
Exhibit H
THE CIT GROUP/CONSUMER FINANCE, INC.
July 23, 1997
The Bank of New York
101 Barclay Street
12 East
New York, New York 10286
Re: The CIT Group Securitization Corporation III, as depositor,
Home Equity Loan Asset Backed Certificates, Series 1997-1
Gentlemen:
This is to advise you that the officers listed on the attached
schedule are Servicing Officers as defined in Article I of the Pooling and
Servicing Agreement, dated as of July 1, 1997 (the "Agreement"), by and among
The CIT Group Securitization Corporation III, The CIT Group/Consumer Finance,
Inc. and you, as Trustee, relating to the above-referenced Certificates, and
such officers are authorized to take all action and sign all documents described
in said Agreement. The list of Servicing Officers may be amended from time to
time by delivery to you of an amended schedule.
Very truly yours,
THE CIT GROUP/CONSUMER
FINANCE, INC.
By:___________________________
Name: Frank Garcia
Title: Vice President
H-1
<PAGE>
Schedule of Servicing Officers
Name Title
- ---- -----
Richard W. Bauerband Executive Vice President
John R. Alkire Senior Vice President
Fred E. Eddy Vice President
Frank Garcia Vice President
Christine Reilly Vice President, Treasurer and Controller
Daniel A. Andriola Vice President and Controller
Ron G. Arrington Vice President
Richard J. Gugliada Vice President
William B. Schumm Senior Vice President
Tyrone Miller Vice President
Denise Thompson Vice President
H-2
<PAGE>
Exhibit I-1
THE CIT GROUP/CONSUMER FINANCE, INC.
CERTIFICATE REGARDING REPURCHASED MORTGAGE LOANS
The undersigned certify that they are [title] and [title],
respectively of The CIT Group/Consumer Finance, Inc., a corporation organized
under the laws of Delaware ("CITCF"), and that as such they are duly authorized
to execute and deliver this certificate on behalf of CITCF pursuant to[ Section
3.05(a)] [Section 4.03(a)] of the Pooling and Servicing Agreement, dated as of
July 1, 1997 (the "Agreement"), among CITCF, The CIT Group Securitization
Corporation III and The Bank of New York, as Trustee (all capitalized terms used
herein without definition having the respective meanings specified in the
Agreement), and further certify that :
1. The Mortgage Loans on the attached schedule are to be
repurchased on the date hereof pursuant to Section 3.05 of the Agreement.
2. Upon deposit of the Purchase Price for such Mortgage Loans,
such Mortgage Loans may be assigned by the Trustee to CITCF.
IN WITNESS WHEREOF, we have affixed hereunto our signatures
this ____ day of ______, 199_.
THE CIT GROUP/CONSUMER FINANCE, INC.
By:_______________________________
[Name]
[Title]
By:_______________________________
[Name]
[Title]
I-1-1
<PAGE>
Exhibit I-2
THE CIT GROUP/CONSUMER FINANCE, INC.
CERTIFICATE REGARDING SUBSTITUTED MORTGAGE LOANS
The undersigned certify that they are [title] and [title],
respectively of The CIT Group/Consumer Finance, Inc., a corporation organized
under the laws of Delaware ("CITCF"), and that as such they are duly authorized
to execute and deliver this certificate on behalf of CITCF pursuant to [Section
3.05(b)] [Section 4.03(b)] of the Pooling and Servicing Agreement, dated as of
July 1, 1997 (the "Agreement"), among CITCF, The CIT Group Securitization
Corporation III and The Bank of New York, as Trustee (all capitalized terms used
herein without definition having the respective meanings specified in the
Agreement), and further certify that:
1. The Mortgage Loan and File for each such Qualified
Substitute Mortgage Loan [are being held by CITCF, as Master Servicer] [have
been delivered to ______, the successor Master Servicer] and CITCF has marked
the Electronic Ledger indicating that such Mortgage Loan constitutes part of the
Trust.
2. The Mortgage Loans on the attached schedule are to be
substituted on the date hereof pursuant to Section 3.05(b) of the Agreement and
each such Mortgage Loan is a Qualified Substitute Mortgage Loan [description, as
to each Mortgage Loan, as to how it satisfies the definition of "Qualified
Substitute Mortgage Loan"].
[3. There has been deposited in the Certificate Account the
amounts listed on the schedule attached hereto as the amount by which the
Principal Balance of each [Replaced] [Deleted] Mortgage Loan exceeds the
Principal Balance of each Mortgage Loan being substituted therefor.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures
this ____ day of ______, 199_.
THE CIT GROUP/CONSUMER FINANCE, INC.
By:_______________________________
[Name]
[Title]
By:_______________________________
[Name]
[Title]
I-2-1
<PAGE>
Exhibit J
List of Mortgage Loans
J-1
<PAGE>
Exhibit K
Monthly Report
K-1
<PAGE>
CIT Home Equity Loan Trust 1997-1
Home Equity Loan Asset Backed Certificates, Series 1997-1
Master Servicer's Certificate
[ILLEGIBLE]
Record Date
Determination Date
Distribution Date
I Available in Certificate Account
Principal collected on Mortgage Loans
Interest collected on Mortgage Loans
All Liquidation Proceeds with respect to Principal
All Liquidation Proceeds with respect to Interest
Recoveries on previously Liquidated Mortgages
Principal portion of Purchase Price on Repurchased Mortgage Loans
Interest portion of Purchase Price on Repurchased Mortgage Loans
Master Servicer Monthly Advances (net of Compensating Interest)
Reimbursement of prior months Servicer Advances
Compensating Interest
Investment Earnings on Certificate Account
Total available in the Certificate Account
II Distributions
Per $1,000 Amount
---------- ------
1. Aggregate Class A-1 Distribution
2. Aggregate Class A-2 Distribution
3. Aggregate Class A-3 Distribution
4. Aggregate Class A-4 Distribution
5. Aggregate Class A-5 Distribution
6. Aggregate Class A-6 Distribution
7. Aggregate Class A-7 Distribution
8. Aggregate Class A-8 Distribution
9. Aggregate Class A-9 Distribution
10. Aggregate Class M-1 Distribution
11. Aggregate Class M-2 Distribution
12. Aggregate Class B-1 Distribution
13. Aggregate Class B-2 Distribution
14. Aggregate Master Servicer Distribution
15. Aggregate Class R Distribution
Total Distributions=
III Certificate Class Balances
Factor % Amount
-------- ------
Opening Class A Certificate Balances
as reported in prior Monthly Master
Servicer Report:
(a) Class A-1
(b) Class A-2
(c) Class A-3
(d) Class A-4
(e) Class A-5
Page 1 of 6
<PAGE>
(f) Class A-6
(g) Class A-7
(h) Class A-8
(i) Class A-9
Opening Class M Certificate Balances as
reported in prior Monthly Master
Servicer Report:
(a) Class M-1
(b) Class M-2
Opening Class B Certificate Balances as
reported in prior Monthly Master
Servicer Report:
(a) Class B-1
(b) Class B-2
Principal Distribution Formula
1(a). Fixed Rate Principal Distribution Amount
No. Amount
--- ------
(a) Stated principal collected
(b) Principal Prepayments
(c) Liquidation Proceeds
(d) Repurchased Mortgage Loans
1(b). Add: Fixed Rate Group Extra Principal
Distribution Amount
1(c). Less: Fixed Rate Group Overcollateralization
Release Amount
Total Fixed Rate Group principal distribution
2(a). Variable Rate Principal Distribution Amount
(a) Stated principal collected
(b) Principal Prepayments
(c) Liquidation Proceeds
(d) Repurchased Contracts
2(b). Add: Adjustable Rate Group Extra Principal
Distribution Amount
2(c). Less: Adjustable Rate Group Overcollateralization
Release Amount
Total Variable Rate Group principal distribution
3(a). Class A Principal Distribution Amount
Par $1,000
----------
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class A-5
6. Class A-6
7. Class A-7
9. Class A-8
(a) Class A-8 Lockout Percentage
(b) Class A-8 Lockout Distribution Amount
10.Class A-9
3(b). Class M Principal Distribution Amount
1. Class M-1
2. Class M-2
3(c). Class B Principal Distribution Amount
1. Class B-1
2. Class B-2
Page 2 of 6
<PAGE>
Factor % Amount
-------- ------
Ending Class A Certificate Balances
after distributions of principal in
this Monthly Master Servicer Report:
(a) Class A-1
(b) Class A-2
(c) Class A-3
(d) Class A-4
(e) Class A-5
(f) Class A-6
(g) Class A-7
(h) Class A-8
(i) Class A-9
Ending Class M Certificate Balances
after distributions of principal in
this Monthly Master Servicer Report:
(a) Class M-1
(b) Class M-2
Ending Class B Certificate Balances
after distributions of principal in
this Monthly Master Servicer Report:
(a) Class B-1
(b) Class B-2
IV Interest Distribution Formula
Fixed Rate Group
(a) Fixed Rate Group Available
Funds Cap Rate
(b) Fixed Rate Group applicable
Pass-Through Rate
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class A-5
6. Class A-6
7. Class A-7
8. Class A-8
9. Class M-1
10. Class M-2
11. Class B-1
12. Class B-2
Variable Rate Group
(a) Adjustable Rate Group
Available Funds Cap Rate
(b) LIBOR Rate
(c) Maximum Variable Rate
(d) Variable Rate Group (Class A-9)
applicable Pass-Through Rate
Current Interest Requirement
Fixed Rate Group
1. Class A-1 @ applicable Pass-Through Rate
2. Class A-2 @ applicable Pass-Through Rate
3. Class A-3 @ applicable Pass-Through Rate
4. Class A-4 @ applicable Pass-Through Rate
Page 3 of 6
<PAGE>
5. Class A-5 @ applicable Pass-Through Rate
6. Class A-6 @ applicable Pass-Through Rate
7. Class A-7 @ applicable Pass-Through Rate
8. Class A-8 @ applicable Pass-Through Rate
9. Class M-1 @ applicable Pass-Through Rate
10. Class M-2 @ applicable Pass-Through Rate
11. Class B-1 @ applicable Pass-Through Rate
12. Class B-2 @ applicable Pass-Through Rate
Fixed Rate Group Interest Distribution Amount
Par $1,000
----------
1. Class A-1
2. Class A-2
3. Class A-3
4. Class A-4
5. Class A-5
6. Class A-6
7. Class A-7
8. Class A-8
9. Class M-1
10. Class M-2
11. Class B-1
12. Class B-2
Variable Rate Group
1. Class A-9 @ applicable rate
Variable Rate Group Interest Carry Forward Amount
1. Class A-9
Variable Rate Group Interest Distribution Amount
Par $1,000
----------
1. Class A-9
V Monthly Excess Cashflow
(a) Monthly Excess Interest Amount
(b) Overcollateralization Release Amount
Total Monthly Excess Cashflow Amount
VI Credit Enhancement Information
(a) Senior Enhancement Percentage
Page 4 of 6
<PAGE>
(b) Specified Senior Enhancement Percentage
(c) Overcollateralization Amount:
1. Opening Overcollateralization Amount
2. Ending Overcollateralization Amount
3. Targeted Overcollateralization Amount
4. Overcollateralization Deficiency Amount
5. Overcollateralization Release Amount
VII Trigger Information
1. (a) Delinquency Trigger percentage
(b) Delinquency Trigger in effect?
2. (a) Cummulative Realized Loss Trigger Event in effect?
VII Pool Information
No. Amount
--- ------
(a) Closing Mortgage Loan Principal Balance:
1. Fixed Rate Group
2. Variable Rate Group
(b) Weighted Average Mortgage Rate:
1. Fixed Rate Group
2. Variable Rate Group
(c) Weighted Average Remaining Maturity:
1. Fixed Rate Group
2. Variable Rate Group
IX Delinquency Information
No. Amount
--- ------
(a) Delinquent Contracts:
1. 31-59 Day Accounts
2. 60-89 Day Accounts
3. 90-119 Day Accounts
4. 120+ Day Accounts
(b) Mortgage Loans - In Foreclosure
(c) REO Property Accounts
X Realized Losses
No. Amount
--- ------
1. (a) Gross Realized Losses during the period
(b) Net Realized Losses during the period
(c) Cummulative Gross Realized Losses
(d) Cummulative Net Realized Losses
(e) Applied Realized Loss Amount
2. (a) Class M-1 Realized Loss Amortization Amount
(b) Class M-1 Unpaid Realized Loss Amount
Page 5 of 6
<PAGE>
3. (a) Class M-2 Realized Loss Amortization Amount
(b) Class M-2 Unpaid Realized Loss Amount
4. (a) Class B-1 Realized Loss Amortization Amount
(b) Class B-1 Unpaid Realized Loss Amount
5. (a) Class M-2 Realized Loss Amortization Amount
(b) Class M-2 Unpaid Realized Loss Amount
XI Miscellaneous Information
1. (a) Monthly Master Servicer Fee
(b) Amount of prior unpaid Master Servicing
Fees paid with this distribution
(c) Total Master Servicing Fees paid with
this distribution
(d) Amount of unpaid Master Servicing Fees
as of this distribution
2. (a) Weighted Carve Out Fixed Rate
(b) Weighted Carve Out Adjustable Amount
3. (a) Opening Master Servicer Advance Balance
(b) Current Advance (exclusive of Compensating
Interest)
(c) Compensating Interest
Total Master Servicer Advance for the period=
(d) Reimbursement of prior Master Servicer Adjustment
(e) Ending Master Servicer Advance Balance
4. (a) Stepdown Date in effect?
Page 6 of 6
<PAGE>
EXHIBIT L
FORM OF TRANSFER AFFIDAVIT
DATE OF )
: ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of __________, the proposed
Transferee of an Ownership Interest in the Class R Certificate of the Home
Equity Loan Asset Backed Certificates, Series 1997-1, issued pursuant to the
Pooling and Servicing Agreement, dated as of July 1, 1997 (the "Agreement"),
among The CIT Group Securitization Corporation III, The CIT Group/Consumer
Finance, Inc. and The Bank of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to take this affidavit
on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as
of the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Class R Certificate either (i) for its own account
or (ii) as nominee, trustee or agent for another person and has attached hereto
an Affidavit from such person in substantially the same form as this Affidavit.
The Transferee has no knowledge that any such Affidavit is false.
3. The Transferee has been advised and understands that (i) a
tax shall be imposed on Transfers of Ownership Interests in the Class R
Certificate to persons that are not permitted Transferees; (ii) such tax would
be imposed on the transferor, or, if such Transfer is through an agent (which
includes a broker, nominee or middleman) for a person that is not a permitted
Transferee, on such agent; and (iii) the person otherwise liable for the tax
shall be relieved of liability for the tax if the subsequent Transferee
furnishes to such person an affidavit that such subsequent Transferee is a
Permitted Transferee and, at the time of Transfer, such person does not have
actual knowledge that the affidavit is false.
4. The Transferee has been advised and understands that a tax
shall be imposed on a "pass-through entity" holding Ownership Interest in the
Class R Certificate if at any time during the taxable year of the pass-through
entity a person that is not a Permitted Transferee is the record holder of an
interest in such entity. The Transferee understands that no tax will be imposed
for any period for which the record holder furnishes to the pass-through entity
an affidavit stating that the record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass-through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a partnership,
trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)
L-1
<PAGE>
5. The Transferee has reviewed the provisions of Section 9.02
of the Agreement (attached hereto as Exhibit 1 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Class R Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfers and mandatory sales. The Transferee expressly agrees to be bound by
and abide by the provisions of Section 9.02 of the Agreement and the
restrictions noted on the face of the Class R Certificate. The Transferee
understands and agrees that any breach of any of the representations included
herein shall render the attempted Transfer null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any person to whom the Transferee attempts to Transfer its Ownership Interest in
the Class R Certificate, and in connection with any Transfer by a person for
whom the Transferee is acting as nominee, trustee or agent. The Transferee
agrees to not Transfer its Ownership Interest or cause any Ownership Interest to
be Transferred to any person that the Transferee knows is not a Permitted
Transferee.
7. The Transferee represents and warrants that (i) no purpose
of its purchase of an Ownership Interest in the Class R Certificates is or will
be to impede the assessment or collection of any tax, and (ii) it has no present
knowledge or expectation that it will become insolvent or subject to a
bankruptcy proceeding for so long as it holds the Class R Certificate.
8. The Transferee's taxpayer identification number is
___________.
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer this ___ day of __________.
[NAME OF TRANSFEREE]
By: _____________________
Name:
Title:
L-2
<PAGE>
EXHIBIT M
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed
in connection with a sale effected pursuant to Section 8.03(a)(ii) of the
Pooling and Servicing Agreement (the "Agreement"), dated as of July 1, 1997,
between The CIT Group Securitization Corporation III, The CIT Group/Consumer
Finance, Inc. and The Bank of New York as Trustee. Capitalized terms used herein
that are not otherwise defined shall have the meanings described thereto in the
Agreement.
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 Master 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 Master Servicer of all
potential bidders and anticipated timetable.
(b) The general solicitation package will include: (i) the
prospectus supplement and prospectus from the public offering
of the Offered 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 Pooling 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 8.03(a)(ii) of the Agreement; (v) a formal bidsheet;
(vi) a detailed timetable; and (vii) a preliminary data tape
of the Pool Principal Balance as of the related Distribution
Date reflecting the same data attributes used to create the
Cut-off Date tables for the prospectus supplement dated July
16, 1997 and the accompanying prospectus dated April 8, 1997
relating to the public offering of the Offered Certificates.
(c) The Trustee, with the assistance of the Master 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
Master Servicer acting in its capacity under the Agreement
will select a successor Advisor and inform the Trustee of its
actions.
(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
M-1
<PAGE>
questions in writing to the Advisor for determination of their
relevancy, no later than 10 business days before the Auction
Date. The Master 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 Master 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 8.03 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 home equity mortgage loans
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 Principal 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 Certificate 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, Pooling and Servicing Agreement
and Master Servicer's Representations and Warranties (which
shall be substantially identical to the representations and
warranties set forth in Section 3.01 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 Master Servicer is the winning
bidder it will in its letter provide for market comparable and
valuations.
M-2
<PAGE>
(h) The Auction will stipulate that the Master Servicer be
retained to service the Mortgage Loans sold pursuant to the
terms of the Purchase Agreement and Pooling and Servicing
Agreement.
(i) The Auction will stipulate that such sale and consequent
termination of the Trust must constitute a "qualified
liquidation" of the Trust under Section 860F of the Internal
Revenue Code of 1986, as amended, including without
limitation, the requirement that such liquidation take place
over a period not to exceed 90 days. The Trustee may, in its
discretion, require that the purchase of the Auction Property
provide the Trustee with an Opinion of Counsel to that effect.
M-3
<PAGE>
Exhibit N
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENT, WHICH ARE INTENDED TO
CONSTITUTE A POWER OF ATTORNEY, THAT The CIT Group/Consumer Finance, Inc.
("CITCF") as seller under the Purchase Agreement, dated as of July 1, 1997,
between CITCF and The CIT Group Securitization Corporation III ("CIT"), does
hereby irrevocably constitute and appoint The Bank of New York (the "Trustee"),
as trustee under the Pooling and Servicing Agreement (the "Agreement"), dated as
July 1, 1997, among CITCF, CIT and the Trustee, by which CIT sold its interest
in the mortgage loans purchased from CITCF to the Trustee, its true and lawful
attorney-in-fact and agent, in its name, place and stead in any way which it
itself could do, if it were personally present, to prepare, execute,
acknowledge, verify, swear to, deliver, record and file, in its name, place and
stead, all instruments, documents and certificates which may from time to time
be required in connection with the Agreement, including, without limitation, any
and all assignments of mortgages and other documents required to be executed or
recorded by the Trustee pursuant to Section 4.02 of the Agreement.
To induce any third party to act hereunder, the undersigned
hereby agrees that any third party receiving a duly executed copy or facsimile
of this instrument may act hereunder, and that revocation or termination hereof
shall be ineffective as to such third party unless and until actual notice or
knowledge of such revocation or termination shall have been received by such
third party, and the undersigned for itself and for its legal representatives
and assigns, hereby agrees to indemnify and hold harmless any such third party
from and against any and all claims that may arise against such third party by
reason of such third party having relied on the provisions of this instrument.
THE CIT GROUP/CONSUMER FINANCE, INC.
By:______________________________________
Name: Frank Garcia
Title: Vice President
STATE OF NEW YORK COUNTY OF NEW YORK ss.:
On July __, 1997 before me personally came Frank Garcia to me
known, and known to me to be the individual described in, and who executed the
foregoing instrument, and he acknowledged to me that he executed the same.
_______________________
N-1
<PAGE>
EXHIBIT O
FORM OF CLASS B-2 CERTIFICATE TRANSFEREE LETTER
The Bank of New York, as Certificate Registrar and Trustee
101 Barclay Street
New York, NY 10286
Re: Transfer of Home Equity Loan Asset Backed Certificates, Series 1997-1,
Class B-2
Ladies and Gentlemen:
This letter is delivered pursuant to Section 9.02 of the Pooling and Servicing
Agreement, dated as of July 1, 1997 (the "Agreement"), among The CIT Group
Securitization Corporation III, as depositor, The CIT Group/Consumer Finance,
Inc., as Seller and Master Servicer, and The Bank of New York, as Trustee, in
connection with the transfer by [ ] (the "Transferor") to the undersigned (the
"Transferee") of $ Original Class B-2 Certificate Balance, in certificated,
fully registered form (such registered interest being the "Certificates"). Terms
used but not defined herein shall have the meanings ascribed thereto in the
Agreement.
In connection with such transfer, the undersigned hereby certifies to the
Trustee and the Certificate Registrar as follows:
1. The Transferee is a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act")), as
follows:
It owned and/or invested on a discretionary basis eligible
securities (excluding affiliate's securities, bank deposit notes and
CD's, loan participations, repurchase agreements, securities owned but
subject to a repurchase agreement and currency, interest rate and
commodity swaps), as described below:
Date: , 19 (must be on or after the close of its most recent fiscal year)
Amount: $ and
The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one
of the following entities:
(1) |_| an insurance company as defined in Section
2(13) of the Securities Act; or 1(1)
- -------------
(1) A purchase by an insurance company for one or more of its separate
accounts, as defined by Section 2(a)(37) of the Investment Company Act
of 1940, which are neither registered under Section 8 of the
O-1
<PAGE>
(2) |_| an investment company registered under the
Investment Company Act of 1940 or any business
development company as defined in Section 2(a)(48) of
the Investment Company Act of 1940; or
(3) |_| a small business investment company licensed
by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business
Investment Act of 1958; or
(4) |_| a plan (i) established and maintained by a
state, its political subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, the laws of which permit the purchase
of securities of this type, for the benefit of its
employees and (ii) the governing investment
guidelines of which permit the purchase of securities
of this type; or
(5) |_| a business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940; or
(6) |_| a corporation (other than a U.S. bank,
savings and loan association or equivalent foreign
institution), partnership, Massachusetts or similar
business trust, or an organization described in
Section 501(c)(3) of the Internal Revenue Code; or
(7) |_| a bank (as defined in Section 3(a)(2) of the
Securities Act), savings and loan association (as
defined in Section 3(a)(5)(A) of the Securities Act)
or any foreign bank or savings and loan association
or equivalent institution, which has an audited net
worth of at least $25 million as demonstrated in its
latest annual financial statements, as of a date not
more than 16 months preceding the date of sale under
the rule in the case of a U.S. bank or savings and
loan association, and not more than 18 months
preceding such date of sale for a foreign bank or
savings and loan association or equivalent
institution; or
(8) |_| an investment adviser registered under the
Investment Advisers Act of 1940; or
b. |_| equal to or greater than $10 million, and the
undersigned is a broker-dealer registered with the
SEC; or
- --------------------------------------------------------------------------------
Investment Company Act of 1940 nor required to be registered thereunder, shall
be deemed to be a purchase for the account of such insurance company.
O-2
<PAGE>
c. |_| less than $10 million, and the undersigned is a
broker-dealer registered with the SEC and will only
purchase Rule 144A securities in transactions in
which it acts as a riskless principal (as defined in
Rule 144A); or
d. |_| less than $100 million, and the undersigned is an
investment company registered under the Investment
Company Act of 1940, which, together with one or more
registered investment companies having the same or an
affiliated investment adviser, owns at least $100
million of eligible securities; or
e. |_| less than $100 million, and the undersigned is an
entity, all the equity owners of which are qualified
institutional buyers.
The undersigned further certifies that it is purchasing the Certificate(s) for
its own account or for the account of others that independently qualify as
"Qualified Institutional Buyers" as defined in Rule 144A. It is aware that the
sale of the Certificates is being made in reliance on its continued compliance
with Rule 144A. It is aware that the transferor may rely on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A. The
undersigned understands that the Certificates may be resold, pledged or
transferred only to a person reasonably believed to be a Qualified Institutional
Buyer that purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance in Rule 144A.
The undersigned agrees that if at some future time it wishes to dispose of or
exchange any of the Certificates, it will not transfer or exchange any of the
Certificates to a Qualified Institutional Buyer without first obtaining a Class
B-2 Certificate Transferee Letter in the form hereof from the transferee and
delivering such certificate to the addressees hereof.
o The Transferee either (i) is not acquiring such Certificate, directly or
indirectly, for or on behalf of, an employee benefit plan (as defined in Section
3(3) of ERISA) that is subject to Title I of ERISA or a plan (including an
individual retirement account) as described in Section 4975(e)(1) of the Code or
any entity (including an insurance company general account) whose underlying
assets include plan assets by reason of a plan or account investing in such
entity, or a person acting on behalf of any such plan, or (ii) is an "insurance
company general account" as defined in Prohibited Transaction Exemption 95-60,
60 Fed. Reg. 35925 (July 12, 1995) and neither the insurance company nor an
affiliate thereof is an insurer or servicer with respect to the Trust.
o(2) The Transferee is a person involved in the organization or operation of the
issuer of the Certificates or an "affiliate" of such person, as defined in Rule
405 of the Securities Act.
- -----------
(2) For Affiliated Persons only.
O-3
<PAGE>
o(3) The Transferee certifies that if it is a corporation purchasing the
Certificates in the State of California, it has a net worth of at least
$14,000,000 according to its most recent audited financial statements.
o The Transferee certifies that its intention is to acquire the Certificates (a)
for investment for the Transferee's own account or (b) for resale to "qualified
institutional buyers" in transactions under Rule 144A, subject in the case of
this clause (b) to the receipt by the Trustee of a letter substantially in the
form hereof.
o The Transferee acknowledges that the Certificates (and any Certificates issued
on transfer or exchange thereof) have not been registered or qualified under the
Securities Act or the securities laws of any State or any other jurisdiction,
and that the Certificates cannot be resold unless registered or qualified
thereunder or unless an exemption from such registration or qualification is
available.
o The Transferee acknowledges that if a transfer is to be made in reliance upon
an exemption from the Securities Act, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the transfer and the transferor
will be required to deliver to the Trustee at the expense of the transferor an
opinion of counsel that such transfer may be made pursuant to an exemption from
the Securities Act and such state securities laws.
[For Non-U.S. Persons only.]
o(4) The Transferee is not a "U.S. Person." Under applicable law in effect on
the date hereof, no federal income taxes will be required to be withheld by the
Trustee (or its agent) with respect to distributions to be made on the
Certificates if the Transferee has attached hereto a duly executed IRS Form W-8
(or successor form), which identifies the Transferee as the beneficial owner of
the Certificates, and states that such Transferee is not a U.S. Person. Under
applicable law in effect on the date hereof, no federal income taxes will be
required to be withheld by the Trustee (or its agent) with respect to
Distributions to be made on the Certificates if duly executed copies of IRS Form
4224 (or successor form), which identify such Transferee as the beneficial owner
of the Certificates, state that interest and original issue discount on the
Certificates and Eligible Investments is, or is expected to be, effectively
connected with a U.S. trade or business. The Transferee agrees to provide to the
Trustee updated IRS Forms W-8 or IRS Forms 4224, as the case may be, any
applicable successor IRS forms or such other certificates as the Trustee may
reasonably request, on or before the date that any such IRS form or certificate
expires or becomes obsolete, or promptly after the occurrence of any event
requiring a change in the most recent IRS form of certification furnished by it
to the Transferee.
- -----------------
(3) Include only if applicable.
(4) For Non-U.S. Persons only.
O-4
<PAGE>
For purposes hereof, "U.S. Person" means a citizen or resident of the United
States for U.S. federal income tax purposes, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any of
its political subdivisions, or an estate or trust the income of which is subject
to U.S. federal income taxation regardless of its source.
o The Transferee:
|_| has a U.S. Employer Identification Number and such number is
or
|_| does not have a U.S. employer identification number.
o Please make all payments due on the Certificates:
(5) (a) by wire transfer to the following account at a bank or other entity in
the United States, having appropriate facilities therefor:
Account Number ______________________ Institution
(b) by mailing a check to the following address:
________________________________
________________________________
________________________________
________________________________
Very truly yours,
[Name of Transferee]
By: ____________________________
Name:
Title:(6)
- -----------------
(5) Payment by wire transfer only available to holders of Certificates owning
Certificates which have an Original Class B-2 Certificate Balance of at
least $1 million.
(6) Must be President, Chief Financial Officer or other executive officer.
O-5
SUBSERVICING AGREEMENT
THIS SUBSERVICING AGREEMENT ("Agreement"), entered into this 1st day of
July, 1997 between The CIT Group/Consumer Finance, Inc., having an office and
place of business at 650 CIT Drive, Livingston, New Jersey (hereinafter referred
to as "Master Servicer"), and The CIT Group/Sales Financing, Inc. having an
office and place of business at 650 CIT Drive, Livingston, New Jersey,
(hereinafter referred to as "Subservicer").
W I T N E S S E T H :
WHEREAS, Master Servicer originated or purchased certain mortgage
loans, and has sold such mortgage loans to an affiliate, which in turn sold such
Mortgage Loans to a trust, which issued certain securities known as Home Equity
Loan Asset Backed Certificates, Series 1997-1;
WHEREAS, Master Servicer is obligated to service such mortgage loans;
WHEREAS, Subservicer desires to subservice such mortgage loans in
accordance with the terms and conditions set forth herein, and Master Servicer
desires to retain Subservicer for such purpose;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, it is agreed by and between Master Servicer and
Subservicer, as follows;
Article I. Meaning of Terms.
Unless otherwise defined herein, all capitalized terms in this
Agreement have the meanings given to them in the Pooling and Servicing Agreement
dated as of July 1, 1997.
Article II. Subservicer's Subservicing Obligations.
The Master Servicer hereby delegates to the Subservicer and the
Subservicer agrees to perform all of the Master Servicer's servicing obligations
with respect to the Mortgage Loans, as set forth in the Pooling and Servicing
Agreement, except that Master Servicer shall, and Subservicer shall not be
obligated to: (1) confirm that Mortgages have been recorded, (2) confirm that
title policies have been issued on Mortgage Loans for which Master Servicer has
requested title insurance, (3) record mortgage releases and similar documents,
and (4) maintain loan files. Subservicer shall exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to accepted mortgage servicing
practices of prudent lending institutions.
<PAGE>
Article III. Subservicer Cannot Resign.
Subservicer agrees that it cannot resign as Subservicer under this
Agreement or under the Pooling and Servicing Agreement.
Article IV. Master Servicer's Modification of Subservicer's Obligations or
Termination of Subservicer's Responsibilities.
In addition to those services Master Servicer will perform as set forth
above, the Master Servicer may elect, subject to the provisions of this Article
IV, to relieve Subservicer of certain other servicing obligations required by
the Pooling and Servicing Agreement. Subject to the provisions of this Article
IV, Master Servicer may also terminate all of Subservicer's obligations under
this Agreement. The Master Servicer cannot materially decrease Subservicer's
obligations in connection with collections, lockbox arrangements, payment
processing, or foreclosure activities, or terminate all of Subservicer's
obligations, unless the Rating Agency Condition is satisfied. In addition, if a
Termination Event has occurred and is continuing, the Trustee may terminate the
Master Servicer under the Pooling and Servicing Agreement and the Subservicer
under this Agreement.
Article V. Trustee is Intended Third Party Beneficiary.
Subservicer agrees that the Trustee is the intended third party
beneficiary of this Agreement, and that Trustee has the right to enforce this
Agreement as if it were a party to the Agreement.
Article VI. Subservicer's Fee for Subservicing.
Master Servicer shall pay a fee to Subservicer for each Mortgage Loan
serviced hereunder in an amount as may be mutually agreed to by Master Servicer
and Subservicer.
Article VII. Governing Law.
This Agreement shall be interpreted and construed in accordance with
the laws of the State of New Jersey, without regard to its internal conflict of
laws rules.
Article VII. Miscellaneous.
The parties shall, at their own expense, execute all other documents
and take all other steps requested by each other from time to time to perform
the covenants and obligations herein and effectuate the intent hereof. The
provisions of this Agreement cannot be waived or modified except in a writing
signed by the Subservicer, Master Servicer, and the Trustee.
Subservicer's representations and warranties shall survive the
termination of this Agreement. This Agreement may be executed in counterparts,
all of which taken together shall
2
<PAGE>
constitute one and the same instrument. Headings and titles are for convenience
only and shall not influence the construction or interpretation of this
Agreement. When used herein, the term "include" or "including" shall mean
without limitation by reason of enumeration.
IN WITNESS WHEREOF, Master Servicer and Subservicer have had their authorized
officers sign below.
THE CIT GROUP/CONSUMER FINANCE, INC.
(Master Servicer)
By: Ron G. Arrington
-------------------------------------
Its: Vice President
THE CIT GROUP/SALES FINANCING, INC.
(Subservicer)
By: /s/ RICHARD BAUERBAND
--------------------------------------
Its: Executive Vice President
3
PURCHASE AGREEMENT
This Purchase Agreement dated as of July 1, 1997 (the
"Agreement"), is between THE CIT GROUP/CONSUMER FINANCE, INC., as seller (the
"Seller"), and THE CIT GROUP/SECURITIZATION CORPORATION III, as purchaser (the
"Purchaser ").
Subject to the terms hereof, the Seller agrees to sell, and
the Purchaser agrees to purchase, the home equity mortgage loans set forth on
Exhibit A (collectively, the "Mortgage Loans"), having an aggregate outstanding
principal balance as of July 1, 1997(the "Cut-off Date") of approximately
$500,068,599.83.
It is the intention of the Seller and the Purchaser that the
Purchaser shall sell the Mortgage Loans to The Bank of New York, as trustee (the
"Trustee"), and shall enter into a Pooling and Servicing Agreement, dated as of
the date hereof (the "Pooling and Servicing Agreement"), with The CIT
Group/Consumer Finance, Inc., as seller and master servicer and the Trustee,
pursuant to which Home Equity Loan Asset Backed Certificates, Series 1997-1(the
"Certificates"), evidencing ownership interests in the Mortgage Loans, will be
issued.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Mortgage Loans.
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
Pooling 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.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
SECTION 2.01. Sale and Conveyance of Mortgage Loans. On the
Closing Date, subject to the terms and conditions hereof, the Seller shall, and
by execution of this Agreement hereby does, sell, transfer, assign absolutely,
set over and otherwise convey to the Purchaser without recourse, except for the
terms of this Agreement, and the Purchaser shall, and by execution of this
Agreement hereby does, purchase (i) all the right, title and interest of the
Seller in and to the Mortgage Loans, including, without limitation, the security
interests
<PAGE>
in the related Mortgaged Properties and any related Mortgages and Notes, the
Seller's interest in any related Mortgaged Property which has been acquired by
foreclosure or deed in lieu of foreclosure, and all payments thereon and
proceeds of the conversion thereof, voluntary or involuntary, and all interest
and principal received by the Seller on or with respect to the Mortgage Loans on
and after the Cut-off Date, (ii) all rights under any Hazard Insurance Policy
relating to a Mortgaged Property securing a Mortgage Loan for the benefit of the
creditor of such Mortgage Loan, (iii) the proceeds from any Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Mortgage Loan or the Mortgaged Properties related
thereto, (iv) all documents contained in the Files with respect to the Mortgage
Loans, (v) all rights under the CITCF-NY Purchase Agreement and the CITSF
Purchase Agreement and (vi) all proceeds in any way derived from any of the
foregoing. The parties intend and agree that the conveyance of the Seller's
right, title and interest in and to the Mortgage Loans 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
Certificate 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
Certificateholders and shall immediately endorse over to the Trust any such
amount it receives.
SECTION 2.02. Purchase Price; Payments on the Mortgage Loans.
(a) The purchase price for the Mortgage Loans shall be an
amount equal to $500,068,599.83. 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 Cut-off Date. All payments of
principal and interest received before the 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 Mortgage Loans received by the
Seller that belong to the Purchaser under the terms of this Agreement.
SECTION 2.03. Transfer of Mortgage Loans. Pursuant to the
Pooling and Servicing Agreement, the Purchaser will assign all of its right,
title and interest in and to the Mortgage Loans to the Trustee for the benefit
of the Certificateholders. The Purchaser shall assign its interest under this
Agreement to the Trustee under and pursuant to the Pooling and Servicing
Agreement and the Trustee shall succeed to the rights and obligations hereunder
of the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the
Files with respect to the Mortgage Loans available to the Purchaser, its agent
and its assignees and their agents for examination at the Trust's offices or
such other location as otherwise shall be agreed upon by the Purchaser and the
Seller.
2
<PAGE>
SECTION 2.05 Conditions to Sale of Mortgage Loans. The
Purchaser's obligations hereunder are subject to the following conditions:
(a) The Purchaser shall have received (i) the Pooling and
Servicing Agreement executed by all the parties thereto, (ii) all documents
required by the Pooling and Servicing Agreement and (iii) such other opinions
and documents as the Purchaser may reasonably require in connection with the
purchase of the Mortgage Loans hereunder or the sale of the Certificates;
(b) The representations and warranties of the Seller and the
Master Servicer made in the Pooling 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 Pooling 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 Mortgage Loans to the Purchaser by the
Seller, or such opinions may be addressed and delivered to the Purchaser.
SECTION 2.06 Recordation of Mortgages. Upon request of the
Trustee or the Master Servicer under the Pooling and Servicing Agreement, at the
Seller's expense, the Seller shall use its best efforts and cooperate in the
preparation, execution and recording of assignments of Mortgages related to the
Mortgage Loans required to protect the interests of the Trustee in the Mortgage
Loans and the Mortgaged Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE OF MORTGAGE LOANS
SECTION 3.01 Representations and Warranties of the Seller.
(a) The representations and warranties of the Seller contained
in the Pooling 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 Pooling and Servicing Agreement directly to the Trust and will
be obligated in respect of such representations and warranties pursuant to the
Pooling and Servicing Agreement. On the Closing Date, the Seller shall deliver
to the Purchaser an Officer's Certificate, dated the Closing Date, to the effect
that the representations and warranties made in the Pooling 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 Mortgage Loans 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
<PAGE>
(c) The Seller shall indemnify the Purchaser and the Master
Servicer and hold the Purchaser and Master Servicer harmless against any loss,
penalties, fines, forfeitures, legal fees and related costs, judgments and other
costs and expenses resulting form 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 Master Servicer as provided in
this Section 3.01 constitutes the sole remedy of the Purchaser and the Master
Servicer respecting a breach of the foregoing representations and warranties.
The Trust shall also have the remedies provided in the Pooling 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 form the
Seller to an 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 Mortgage
Loan upon (i) discovery of such breach by the Purchaser or the Master Servicer
or notice thereof by the Seller to the Purchaser and the Master 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 Mortgage Loan.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.01. Amendment. This Agreement may be amended from
time to time by the Seller and the Purchaser by written agreement signed by the
Seller, the Purchaser and the Trustee.
SECTION 4.02. 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 4.03. Termination. The Seller's obligations under this
Agreement shall survive the sale of the Mortgage Loans 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.
4
<PAGE>
SECTION 4.05. 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 (i) in the case of the
Purchaser, The CIT Group/Consumer Finance, Inc., 650 CIT Drive, Livingston, New
Jersey 07039, Attention: President, or such other address as may hereafter be
furnished to Seller in writing by the Purchaser or (ii) in the case of the
Seller, The CIT Group/Consumer Finance, Inc. (NY), 650 CIT Drive, Livingston,
New Jersey 07039, Attention: President, or such other address as may hereafter
be furnished to the Purchaser by the Seller.
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. The
Seller and the Purchaser agree that the Trustee is an intended third party
beneficiary of this Agreement, and that the Trustee has the right to enforce
this Agreement as if it were a party to this Agreement.
5
<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/CONSUMER FINANCE, INC.,
as Seller
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION III,
as Purchaser
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
6
<PAGE>
EXHIBIT A
List of Mortgage Loans
PURCHASE AGREEMENT
This Purchase Agreement dated as of July 1, 1997 (the
"Agreement"), is between THE CIT GROUP/CONSUMER FINANCE, INC., 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 home equity mortgage loans set forth on
Exhibit A (collectively, the "Mortgage Loans"), having an aggregate outstanding
principal balance as of July 1, 1997(the "Cut-off Date") of approximately
$1,704,517.94.
It is the intention of the Seller and the Purchaser that the
Purchaser shall sell the Mortgage Loans to The CIT Group Securitization
Corporation III (the "Company") and the Company will sell the Mortgage Loans to
The Bank of New York, as trustee (the "Trustee"), and shall enter into a Pooling
and Servicing Agreement, dated as of the date hereof (the "Pooling and Servicing
Agreement"), with The CIT Group/Consumer Finance, Inc., as seller and master
servicer and the Trustee, pursuant to which Home Equity Loan Asset Backed
Certificates, Series 1997-1(the "Certificates"), evidencing ownership interests
in the Mortgage Loans, will be issued.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Mortgage Loans.
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
Pooling 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.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
SECTION 2.01. Sale and Conveyance of Mortgage Loans. On the
Closing Date, subject to the terms and conditions hereof, the Seller shall, and
by execution of this Agreement hereby does, sell, transfer, assign absolutely,
set over and otherwise convey to the Purchaser without recourse, except for the
terms of this Agreement, and the Purchaser shall, and by execution of this
Agreement hereby does, purchase (i) all the right, title and interest of the
Seller in and to the Mortgage Loans, including, without limitation, the security
interests in the related Mortgaged Properties and any related Mortgages and
Notes, the Seller's interest in any related Mortgaged Property which has been
acquired by foreclosure or deed in lieu of foreclosure, and all payments thereon
and proceeds of the conversion thereof, voluntary or
<PAGE>
involuntary, and all interest and principal received by the Seller on or with
respect to the Mortgage Loans on and after the Cut-off Date, (ii) all rights
under any Hazard Insurance Policy relating to a Mortgaged Property securing a
Mortgage Loan for the benefit of the creditor of such Mortgage Loan, (iii) the
proceeds from any Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the Mortgage
Loan or the Mortgaged Properties related thereto, (iv) all documents contained
in the Files with respect to the Mortgage Loans, and (v) all proceeds in any way
derived from any of the foregoing. The parties intend and agree that the
conveyance of the Seller's right, title and interest in and to the Mortgage
Loans 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
Certificate 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
Certificateholders and shall immediately endorse over to the Trust any such
amount it receives.
SECTION 2.02. Purchase Price; Payments on the Mortgage Loans.
(a) The purchase price for the Mortgage Loans shall be an
amount equal to $1,704,517.94. 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 Cut-off Date. All payments of
principal and interest received before the 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 Mortgage Loans received by the
Seller that belong to the Purchaser under the terms of this Agreement.
SECTION 2.03. Transfer of Mortgage Loans. Pursuant to a
Purchase Agreement between the Company and the Purchaser, the Purchaser shall
transfer all of its right, title and interest to the Mortgage Loans to the
Company and pursuant to the Pooling and Servicing Agreement, the Company will
assign all of its right, title and interest in and to the Mortgage Loans to the
Trustee for the benefit of the Certificateholders. The Purchaser shall assign
its interest under this Agreement to the Company under and pursuant to a
purchase agreement and the Company shall assign its interest under this
Agreement to the Trustee under and pursuant to the Pooling and Servicing
Agreement and the Company and the Trustee shall succeed to the rights and
obligations hereunder of the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the
Files with respect to the Mortgage Loans available to the Purchaser, its agent
and its assignees and their agents for examination at the Trust's offices or
such other location as otherwise shall be agreed upon by the Purchaser and the
Seller.
2
<PAGE>
SECTION 2.05 Recordation of Mortgages. Upon request of the
Trustee or the Master Servicer under the Pooling and Servicing Agreement, at the
Seller's expense, the Seller shall use its best efforts and cooperate in the
preparation, execution and recording of assignments of Mortgages related to the
Mortgage Loans required to protect the interests of the Trustee in the Mortgage
Loans and the Mortgaged Property.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.01. 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 and the Trustee.
SECTION 3.02. 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 3.03. Termination. The Seller's obligations under this
Agreement shall survive the sale of the Mortgage Loans to the Purchaser.
SECTION 3.04. 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 3.05. 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 (i) in the case of the
Purchaser, The CIT Group/Consumer Finance, Inc., 650 CIT Drive, Livingston, New
Jersey 07039, Attention: President, or such other address as may hereafter be
furnished to Seller in writing by the Purchaser or (ii) 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 the Purchaser by the Seller.
SECTION 3.06. 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 3.07. 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. The
Seller and the Purchaser agree that the Trustee is an intended third party
beneficiary of this Agreement, and that the Trustee has the right to enforce
this Agreement as if it were a party to this Agreement.
3
<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/CONSUMER FINANCE, INC.,
as Purchaser
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.,
as Seller
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
4
<PAGE>
EXHIBIT A
List of Mortgage Loans
PURCHASE AGREEMENT
This Purchase Agreement dated as of July 1, 1997 (the
"Agreement"), is between THE CIT GROUP/CONSUMER FINANCE, INC., as purchaser (the
"Purchaser"), and THE CIT GROUP/CONSUMER FINANCE, INC. (NY), as seller (the
"Seller").
Subject to the terms hereof, the Seller agrees to sell, and
the Purchaser agrees to purchase, the home equity mortgage loans set forth on
Exhibit A (collectively, the "Mortgage Loans"), having an aggregate outstanding
principal balance as of July 1, 1997 (the "Cut-off Date") of approximately
$23,917,769.60.
It is the intention of the Seller and the Purchaser that the
Purchaser shall sell the Mortgage Loans to The CIT Group Securitization
Corporation III (the "Company") and the Company will sell the Mortgage Loans to
The Bank of New York, as trustee (the "Trustee"), and shall enter into a Pooling
and Servicing Agreement, dated as of the date hereof (the "Pooling and Servicing
Agreement"), with The CIT Group/Consumer Finance, Inc., as seller and master
servicer and the Trustee, pursuant to which Home Equity Loan Asset Backed
Certificates, Series 1997-1 (the "Certificates"), evidencing ownership interests
in the Mortgage Loans, will be issued.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Mortgage Loans.
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
Pooling 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.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
SECTION 2.01. Sale and Conveyance of Mortgage Loans. On the
Closing Date, subject to the terms and conditions hereof, the Seller shall, and
by execution of this Agreement hereby does, sell, transfer, assign absolutely,
set over and otherwise convey to the Purchaser without recourse, except for the
terms of this Agreement, and the Purchaser shall, and by execution of this
Agreement hereby does, purchase (i) all the right, title and interest of the
Seller in and to the Mortgage Loans, including, without limitation, the security
interests in the related Mortgaged Properties and any related Mortgages and
Notes, the Seller's interest in any related Mortgaged Property which has been
acquired by foreclosure or deed in lieu of foreclosure, and all payments thereon
and proceeds of the conversion thereof, voluntary or involuntary, and all
interest and principal received by the Seller on or with respect to the
<PAGE>
Mortgage Loans on and after the Cut-off Date, (ii) all rights under any Hazard
Insurance Policy relating to a Mortgaged Property securing a Mortgage Loan for
the benefit of the creditor of such Mortgage Loan, (iii) the proceeds from any
Errors and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Mortgage Loan or the Mortgaged
Properties related thereto, (iv) all documents contained in the Files with
respect to the Mortgage Loans, and (v) all proceeds in any way derived from any
of the foregoing. The parties intend and agree that the conveyance of the
Seller's right, title and interest in and to the Mortgage Loans 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
Certificate 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
Certificateholders and shall immediately endorse over to the Trust any such
amount it receives.
SECTION 2.02. Purchase Price; Payments on the Mortgage Loans.
(a) The purchase price for the Mortgage Loans shall be an
amount equal to $23,917,769.60. 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 Cut-off Date. All payments of
principal and interest received before the 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 Mortgage Loans received by the
Seller that belong to the Purchaser under the terms of this Agreement.
SECTION 2.03. Transfer of Mortgage Loans. Pursuant to a
Purchase Agreement between the Company and the Purchaser, the Purchaser shall
transfer all of its right, title and interest to the Mortgage Loans to the
Company and pursuant to the Pooling and Servicing Agreement, the Company will
assign all of its right, title and interest in and to the Mortgage Loans to the
Trustee for the benefit of the Certificateholders. The Purchaser shall assign
its interest under this Agreement to the Company under and pursuant to a
purchase agreement and the Company shall assign its interest under this
Agreement to the Trustee under and pursuant to the Pooling and Servicing
Agreement and the Company and the Trustee shall succeed to the rights and
obligations hereunder of the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the
Files with respect to the Mortgage Loans available to the Purchaser, its agent
and its assignees and their agents 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 Recordation of Mortgages. Upon request of the
Trustee or the Master Servicer under the Pooling and Servicing Agreement, at the
Seller's expense, the Seller shall use its best efforts and cooperate in the
preparation, execution and recording of
2
<PAGE>
assignments of Mortgages related to the Mortgage Loans required to protect the
interests of the Trustee in the Mortgage Loans and the Mortgaged Property.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.01. Amendment. This Agreement may be amended from
time to time by the Seller and the Purchaser by written agreement signed by the
Seller, the Purchaser and the Trustee.
SECTION 3.02. 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 3.03. Termination. The Seller's obligations under this
Agreement shall survive the sale of the Mortgage Loans to the Purchaser.
SECTION 3.04. 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 3.05. 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 (i) in the case of the
Purchaser, The CIT Group/Consumer Finance, Inc., 650 CIT Drive, Livingston, New
Jersey 07039, Attention: President, or such other address as may hereafter be
furnished to Seller in writing by the Purchaser or (ii) in the case of the
Seller, The CIT Group/Consumer Finance, Inc. (NY), 650 CIT Drive, Livingston,
New Jersey 07039, Attention: President, or such other address as may hereafter
be furnished to the Purchaser by the Seller.
SECTION 3.06. 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 3.07. 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,
including to the benefit of the Company and the Trustee. The Seller and the
Purchaser agree that the Trustee is an intended third party beneficiary of this
Agreement, and that the Trustee has the right to enforce this Agreement as if it
were a party to this Agreement.
3
<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/CONSUMER FINANCE, INC.,
as Purchaser
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP/CONSUMER FINANCE, INC. (NY),
as Seller
By: /s/ FRANK GARCIA
--------------------------------------
Name: Frank Garcia
Title: Vice President
4
<PAGE>
EXHIBIT A
List of Mortgage Loans
