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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
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): December 2, 1997
CIT RV Trust 1997-A
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
000-23507 Applied for
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(Commission File Number) (IRS Employer Identification No.)
c/o First Omni Bank, N.A.
499 Mitchell Street
Mail Stop 101-591
Millsboro, Delaware 19966
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (410) 244-4238
N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
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On December 2, 1997 The CIT Group Securitization Corporation II (the
"Company") sold $40,300,000 aggregate principal amount of Class A-1 5.80% Asset-
Backed Notes, $32,000,000 aggregate principal amount of Class A-2 5.985% Asset-
Backed Notes, $89,000,000 aggregate principal amount of Class A-3 6.018% Asset-
Backed Notes, $128,000,000 aggregate principal amount of Class A-4 6.200%
Asset-Backed Notes, $74,000,000 aggregate principal amount of Class A-5 6.250%
Asset-Backed Notes, $106,000,000 aggregate principal amount of Class A-6 6.350%
Asset-Backed Notes, $49,700,000 aggregate principal amount of Class A-7 6.400%
Asset-Backed Notes, $31,000,000 aggregate principal amount of Class B 6.450%
Asset-Backed Notes (the "Notes") and $14,122,864 aggregate principal amount of
6.800% Asset-Backed Certificates (the "Certificates"). The Notes and the
Certificates have the benefit of certain funds deposited in a reserve account
established pursuant to a Sale and Servicing Agreement annexed hereto as Exhibit
4.3 (the "Sale and Servicing Agreement"). The Notes and Certificates were
offered for sale to the public pursuant to a prospectus supplement dated
November 20, 1997 to the prospectus dated October 29, 1997 (the "Prospectus").
The Certificates represent an ownership interest in the CIT RV Trust
1997-A (the "Trust") and the Notes represent obligations of the Trust. The
Trust was created, and the Certificates were issued, pursuant to a Trust
Agreement annexed hereto as Exhibit 4.2 (the "Trust Agreement"). The Notes were
issued pursuant to an Indenture annexed hereto as Exhibit 4.1.
The property of the Trust primarily consists of a pool of simple
interest retail installment sale contracts and direct loans secured by the new
and used recreational vehicles financed thereby (the "Contracts") and certain
other property described in the Prospectus, including, without limitation,
$11,282,457 which was deposited in the reserve account from the proceeds of loan
made by The CIT Group/Sales Financing, Inc. pursuant to a Loan Agreement annexed
hereto as Exhibit 10.2.
All of the Contracts were acquired by the Company from The CIT
Group/Sales Financing, Inc. pursuant to the terms of a Purchase Agreement
annexed hereto as Exhibit 10.1, and sold by the Company to the Trust pursuant to
the Sale and Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Sale and Servicing Agreement.
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Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
The following are filed herewith. The exhibit numbers correspond with
Item 601(b) of Regulation S-K.
Exhibit No. Description
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1.1 Underwriting Agreement among The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc., The CIT Group,
Inc. and Credit Suisse First Boston Corporation on behalf of itself
and as representative of the several underwriters dated November
20, 1997.
4.1 Indenture between the CIT RV Trust 1997-A and Harris Trust and
Savings Bank, as Indenture Trustee, dated as of November 1, 1997.
4.2 Trust Agreement between The CIT Group Securitization Corporation II
and First Omni Bank, N.A., as Owner Trustee, dated as of November
1, 1997.
4.3 Sale and Servicing Agreement between The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc. and the CIT RV
Trust 1997-A, dated as of November 1, 1997.
10.1 Purchase Agreement between The CIT Group/Sales Financing, Inc. and
The CIT Group Securitization Corporation II, dated as of November
1, 1997.
10.2 Loan Agreement among CIT RV Trust 1997-A, Harris Trust and Savings
Bank, as Indenture Trustee and The CIT Group/Sales Financing, Inc.,
as Servicer and Lender.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIT RV TRUST 1997-A
By: First Omni Bank, N.A., as Owner Trustee
/s/ DAVID L. WILLIAMS
By: _____________________________
Name: David L. Williams
Title: Vice President
Dated: December 16, 1997
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EXHIBIT 1.1
CIT RV TRUST 1997-A
$40,300,000 CLASS A-1 5.80% ASSET-BACKED NOTES
$32,000,000 CLASS A-2 5.985% ASSET-BACKED NOTES
$89,000,000 CLASS A-3 6.018% ASSET-BACKED NOTES
$128,000,000 CLASS A-4 6.20% ASSET-BACKED NOTES
$74,000,000 CLASS A-5 6.25% ASSET-BACKED NOTES
$106,000,000 CLASS A-6 6.35% ASSET-BACKED NOTES
$49,700,000 CLASS A-7 6.40% ASSET-BACKED NOTES
$31,000,000 CLASS B 6.45% ASSET-BACKED NOTES
$14,122,864 6.80% ASSET-BACKED CERTIFICATES
THE CIT GROUP SECURITIZATION CORPORATION II
(SELLER)
November 20, 1997
UNDERWRITING AGREEMENT
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CREDIT SUISSE FIRST BOSTON CORPORATION
as Representative of
the Several Underwriters (the "Representative"),
11 Madison Avenue
New York, New York 10010
Dear Sirs:
1. Introductory. The CIT Group Securitization Corporation II, a
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Delaware corporation (the "Seller") and a wholly-owned limited-purpose finance
subsidiary of The CIT Group, Inc., a Delaware corporation ("CIT"), and CIT
(collectively, the "Registrants") have previously filed a registration statement
with the Securities and Exchange Commission relating
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to the issuance and sale from time to time of up to $1,400,000,000 of recreation
vehicle backed notes or certificates. The Seller proposes to cause CIT RV Owner
Trust 1997-A (the "Trust") to issue and sell $40,300,000 principal amount of its
Class A-1 5.80% Asset-Backed Notes (the "Class A-1 Notes"), $32,000,000
principal amount of its Class A-2 5.985% Asset-Backed Notes (the "Class A-2
Notes"), $89,000,000 principal amount of its Class A-3 6.018% Asset-Backed Notes
(the "Class A-3 Notes"), $128,000,000 principal amount of its Class A-4 6.20%
Asset-Backed Notes (the "Class A-4 Notes") $74,000,000 principal amount of its
Class A-5 6.25% Asset-Backed Notes (the "Class A-5 Notes"), $106,000,000
principal amount of its Class A-6 6.35% Asset-Backed Notes (the "Class A-6
Notes"), $49,700,000 principal amount of its Class A-7 6.40% Asset-Backed Notes
(the "Class A-7 Notes," and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes and the
Class A-6 Notes, the "Class A Notes"), $31,000,000 principal amount of its Class
B 6.45% Asset-Backed Notes (the "Class B Notes," and, together with the Class A
Notes, the "Notes") and $14,122,864 principal amount of its 6.80% Asset-Backed
Certificates (the "Certificates," and, together with the Notes, the
"Securities"). The Securities are registered under the registration statement
referred to in Section 2(a). The assets of the Trust include, among other
things, a pool of simple interest retail installment sale contracts and direct
loans (the "Contracts") secured by new and used recreation vehicles financed
thereby (the "Financed Vehicles"), and certain monies received thereunder on or
after November 1, 1997, conveyed to the Trust pursuant to the Sale and Servicing
Agreement to be dated as of November 1, 1997 (the "Sale and Servicing
Agreement") among the Trust, the Seller, and The CIT Group/Sales Financing,
Inc., a wholly-owned subsidiary of CIT, as servicer ("CITSF" or the "Servicer").
The Contracts and certain other assets of the Trust will be sold by CITSF to the
Seller pursuant to a Purchase Agreement to be dated as of November 1, 1997 (the
"Purchase Agreement") between CITSF and the Seller, and finally by the Seller to
the Trust pursuant to the Sale and Servicing Agreement. Certain of the Contracts
and certain other property sold by CITSF to the Seller will first be purchased
by CITSF from The CIT Group/Consumer Finance, Inc. (NY) ("CITCF-NY") pursuant to
a Purchase Agreement to be dated as of November 1, 1997 (the "CITCF-NY Sale
Agreement") between CITCF-NY and CITSF. The Servicer will service the Contracts
on behalf of the Trust pursuant to the Sale and Servicing Agreement. The Notes
will be issued pursuant to the Indenture to be dated as of November 1, 1997 (as
amended and supplemented from time to time, the "Indenture"), between the Trust
and Harris Trust and Savings Bank, as indenture trustee (the "Indenture
Trustee"). Pursuant to the Sale and Servicing Agreement, the Servicer will agree
to perform certain administrative tasks imposed on the Trust under the
Indenture. The Certificates, each representing a fractional undivided interest
in the Trust, will be issued pursuant to a Trust Agreement to be dated as of
November 1, 1997 (the "Trust Agreement"), between the Seller and First Omni
Bank, N.A., as owner trustee (the "Owner Trustee"). On the date of issuance of
the Securities a reserve fund (the "Reserve Fund") will be established with the
Indenture Trustee as credit enhancement for the Securities. The Reserve Fund
will be funded by CITSF (the "Lender") pursuant to the terms of the Loan
Agreement to be dated as of November 1, 1997 (the "Loan Agreement") among the
Trust, Indenture Trustee, the Servicer and the Lender.
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Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Sale and Servicing Agreement and the Indenture.
The Seller and CITSF hereby agree with the several Underwriters named
in Schedule I hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Seller, CITSF and CIT. Each
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of the Seller and CITSF, jointly and severally, and CIT with respect to the
representations and warranties appearing in clauses (a), (b), (c)(i), (d),
(e)(ii) and (j)(ii) below represents and warrants to, and agrees with, the
Underwriters, as of the date hereof and as of the date of the purchase and sale
of the Securities pursuant to Section 3 hereof (the "Closing Date") that:
(a) A registration statement on Form S-3 No. 333-36061-01, including a
prospectus, relating to the Securities has been filed with the Securities and
Exchange Commission ("Commission") and, as amended, has become effective. Such
registration statement, as amended as of the date of this Agreement, is
hereinafter referred to as the "Registration Statement," and the prospectus
included in such Registration Statement, as supplemented to reflect the terms of
the Securities as first filed with the Commission after the date of this
Agreement pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Securities Act of 1933 ("Act"), including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus." A
"preliminary prospectus" means any form of prospectus, including any prospectus
supplement, relating to the Securities used prior to the date of this Agreement
that is subject to completion.
(b) On the effective date of the registration statement relating to the
Securities, such registration statement conformed in all respects to the
requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission promulgated
under the Act and the Trust Indenture Act (the "Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, on the date of this Agreement, the Registration
Statement and the preliminary prospectus conform, and at the time of the filing
of the Prospectus in accordance with Rule 424(b), the Registration Statement and
the Prospectus will conform, in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such documents
include, or will include, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, except that the foregoing does
not apply to statements in or omissions from any of such documents based upon
(i) written information furnished to the Seller by any Underwriter through the
Representative specifically for use therein, it being understood that the only
such information consists of the Underwriters' Information (as defined in
Section 8(a) or (ii) the Underwriter Derived Information (as defined in 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
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thereof or supplement thereto). The Seller and CITSF acknowledge that any
information furnished by any of the Underwriters specifically for use in the
Registration Statement, any preliminary prospectus or the Prospectus is the
Underwriters' Information (as defined in Section 8(a)).
(c) (i) CIT meets the requirements for use of Form S-3 under the Act
and (ii) the Seller meets the requirements for use of Form S-3 under the Act.
(d) The documents incorporated by reference in the Registration
Statement and Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations of the Commission thereunder.
(e) (i) Each of the Seller, CITSF and The CIT GP Corporation III ("CIT
GP") have been duly organized and are validly existing as corporations in good
standing under the laws of the State of Delaware. CITCF-NY has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of New York. Each of the Seller, CITSF, CITCF-NY and CIT GP
have corporate power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the
Prospectus and to enter into and perform their obligations under each of the
Basic Documents (as defined below) to which it is a party; and each of the
Seller, CITSF, CITCF-NY and CIT GP is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a material
adverse effect on its respective business, properties, assets, or condition
(financial or other) or on its ability to perform its obligations under any of
the Basic Documents to which it is a party. "Basic Documents" means this
Agreement, the Sale and Servicing Agreement, the Trust Agreement, the Indenture,
the CITCF-NY Sale Agreement, the Purchase Agreement, the Loan Agreement, the
Note Depository Agreement and the Certificate Depository Agreement and (ii) CIT
has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on its respective
business, properties, assets, or condition (financial or other).
(f) Neither the Seller nor CIT GP is in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it or its properties may be bound, which default might
result in any material adverse change in the financial condition, earnings,
affairs or business of the Seller or CIT GP, as the case may be, or which might
materially and adversely affect the properties or assets thereof or the ability
to perform its obligations under any of the Basic Documents to which it is a
party.
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(g) Neither CITSF nor CITCF-NY is in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which it is a party or by which it or its respective properties may be bound,
which default might result in any material adverse change in the financial
condition, earnings, affairs or business of either of CITSF or CITCF-NY or which
might materially and adversely affect the properties or assets thereof or their
ability to perform its obligations under any of the Basic Documents to which it
is a party.
(h) The execution and delivery by each of the Seller and CIT GP on the
Closing Date of the Basic Documents to which it is a party and the performance
of its obligations thereunder will be within its corporate power of the Seller
and CIT GP and duly authorized by all necessary corporate action on the part of
the Seller and CIT GP on and as of the Closing Date; and neither the issuance
and sale of the Securities to the Underwriters, nor the execution and delivery
by each of the Seller and CIT GP of the Basic Documents to which it is a party,
nor the consummation by the Seller or CIT GP of the transactions therein
contemplated, nor compliance by the Seller or CIT GP with the provisions hereof
or thereof, nor the grant of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, will materially conflict with or
result in a material breach of, or constitute a material default under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Seller or CIT GP or its properties or the certificate of
incorporation or by-laws of the Seller or CIT GP or any of the provisions of any
indenture, mortgage, contract or other instrument to which the Seller or CIT GP
is a party or by which the Seller or CIT GP is bound or result in the creation
or imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, contract or other
instrument.
(i) The execution and delivery by each of CITSF and CITCF-NY on and as
of the Closing Date of any of the Basic Documents to which it is a party and the
performance of its obligations thereunder, will be within the corporate power of
each of CITSF and CITCF-NY and duly authorized by all necessary corporate action
on the part of each of CITSF and CITCF-NY on and as of the Closing Date; and
neither the issuance and sale of the Securities to the Underwriters, nor the
execution and delivery by CITSF and CITCF-NY of any of the Basic Documents to
which it is a party, nor the consummation by CITSF and CITSF-NY of the
transactions therein contemplated, nor compliance by CITSF and CITCF-NY with the
provisions hereof or thereof, nor the grant of the security interest in the
Collateral to the Indenture Trustee pursuant to the Indenture, will materially
conflict with or result in a material breach of, or constitute a material
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on CITSF or CITCF-NY or their respective
properties or the certificate of incorporation or by-laws of CITSF or CITCF-NY,
or any of the provisions of any material indenture, mortgage, contract or other
instrument to which CITSF or CITCF-NY is a party or by which CITSF or CITCF-NY
is bound or result in the creation or imposition of any lien, charge or
encumbrance upon any of their respective property pursuant to the terms of any
such material indenture, mortgage, contract or other instrument.
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(j) (i) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CITSF, and it constitutes a legal, valid and binding
instrument enforceable against each of the Seller and CITSF in accordance with
its terms, subject (x) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally, (y) as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (z) as to
enforceability with respect to rights of indemnity thereunder, to limitations of
public policy under applicable securities laws and (ii) this Agreement has been
duly authorized, executed and delivered by CIT, and it constitutes a legal,
valid and binding instrument enforceable against CIT in accordance with its
terms, subject (x) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally, (y) as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (z) as to
enforceability with respect to rights of indemnity thereunder, to limitations of
public policy under applicable securities laws and.
(k) The Sale and Servicing Agreement when executed and delivered on the
Closing Date will be duly authorized, executed and delivered by each of the
Seller and CITSF, and will constitute a legal, valid and binding instrument
enforceable against each of the Seller and CITSF in accordance with its terms,
subject (i) to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(l) The Trust Agreement when executed and delivered on the Closing Date
will be duly authorized, executed and delivered by each of the Seller and CIT
GP, and will constitute a legal, valid and binding instrument enforceable
against each of the Seller and CIT GP in accordance with its terms, subject (i)
to applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(m) The Loan Agreement when executed and delivered on the Closing Date
will be duly authorized, executed and delivered by CITSF, and will constitute a
legal, valid and binding instrument enforceable against 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).
(n) The Certificates, when duly and validly executed by the Owner
Trustee or an agent thereof on behalf of the Trust, authenticated and delivered
in accordance with the Trust Agreement, and delivered to and paid for pursuant
hereto will be validly issued and outstanding and entitled to the benefits of
the Trust Agreement.
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(o) The Notes, when duly and validly executed by the Owner Trustee or
an agent thereof on behalf of the Trust, authenticated and delivered in
accordance with the Indenture, and delivered and paid for pursuant hereto will
be validly issued and outstanding and entitled to the benefits of the Indenture.
(p) No filing or registration with, notice to or consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by any of the Seller, CITSF and CIT GP of the
transactions contemplated by any of the Basic Documents to which it is a party,
except such as may be required under the Act, the Rules and Regulations, or
state securities or Blue Sky laws or such other filings, registrations, notices,
consents, approvals, authorizations, orders or permits as have been obtained.
(q) The Seller, CITSF, CITCF-NY and CIT GP each possess all material
licenses, certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
businesses now operated by them and as described in the Prospectus, other than
such licenses, certificates, authorities or permits the failure of which to
possess would not have a material adverse effect on the interests of the
Certificateholders or the Noteholders under the Basic Documents, and neither the
Seller, CITSF, CITCF-NY nor CIT GP have received any notice of proceedings
relating to the revocation or modification of any such license, certificate,
authority or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the conduct of the business, operations, financial condition or income of any of
the Seller, CITSF, CITCF-NY or CIT GP or their ability to perform their
respective obligations under any of the Basic Documents to which it is a party.
(r) As of the Closing Date, the Contracts and related property will
have been duly and validly assigned to the Owner Trustee in accordance with the
Basic Documents; and when such assignment is effected, a duly and validly
perfected transfer of all such Contracts subject to no prior lien, mortgage,
security interest, pledge, charge or other encumbrance created by the Seller,
CITSF, CITCF-NY or CIT GP will have occurred. As of the Closing Date, the
Trust's grant of a security interest in the Collateral to the Indenture Trustee
pursuant to the Indenture will vest in the Indenture Trustee, for the benefit of
the Noteholders, a first priority perfected security interest therein, subject
to no prior lien, mortgage, security interest, pledge, charge or other
encumbrance created by the Seller, CITSF, CITCF-NY or CIT GP.
(s) As of the Closing Date, each of the Contracts will meet the
eligibility criteria described in the Prospectus.
(t) The financial statements of CIT included or incorporated in the
Registration Statement and Prospectus present fairly the financial position of
CIT and its consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with generally accepted accounting principles
in the United States applied on a consistent basis; and
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any schedules included in the Registration Statement present fairly the
information required to be stated therein.
(u) The chief executive office of each of the Seller, CITSF and CITCF-
NY is listed opposite its name on Schedule II hereto, which office is the place
where it is "located" for the purposes of Section 9-103(3)(d) of the Uniform
Commercial Code as in effect in the State of New York, and the offices of each
of the Seller, CITSF and CITCF-NY where it keeps its respective records
concerning the Contracts are also listed in said Schedule opposite its name and
there have been no other such locations during the four months preceding the
Closing Date.
(v) 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.
(w) Neither the Seller, CITSF, CIT GP nor the Trust Fund created by the
Sale and Servicing Agreement will be subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(x) In connection with the offering of the Securities in the State of
Florida, the Seller hereby certifies that they have complied with all provisions
of Section 5.17.075 of the Florida Securities and Investor Protection Act.
(y) As of the Closing Date, each of the respective representations and
warranties of the Seller, CITSF, CITCF-NY and CIT GP set forth in the Basic
Documents will be true and correct, and the Underwriters may rely on such
representations and warranties as if they were set forth herein in full.
(z) The Seller has filed the preliminary prospectus supplement relating
to the Securities pursuant to and in accordance with Rule 424(b).
3. Purchase, Sale and Delivery of Securities. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Seller agrees to cause the Trust to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Trust, the principal amount of the Class of Notes set forth
opposite the name of such Underwriter in Schedule I hereto at a purchase price
equal to the Total Price to Seller specified in Schedule III hereto plus accrued
interest, if any, at the applicable Class Rate from December 2, 1997 to (but
excluding) the Closing Date, and the principal balance of the Certificates set
forth opposite the name of such Underwriter in Schedule I hereto at a purchase
price equal to the Total Price to Seller specified in Schedule IV hereto plus
accrued interest, if any, at the Pass-Through Rate from December 2, 1997 to (but
excluding) the Closing Date.
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The Seller will deliver the Securities (except for one Certificate in
the principal amount of $142,864) to the Representative, for the account of the
Underwriters, against payment of the purchase price by wire transfer of
immediately available funds to the Seller, or to such bank as may be designated
by the Seller, at the office of Schulte Roth & Zabel LLP 900 Third Avenue, New
York, New York 10022 on December 2, 1997 10:00 a.m., New York City time, or at
such other time not later than seven full business days thereafter as the
Representative and the Seller determine, such time being herein referred to as
the "Closing Date." The Notes to be so delivered will be initially represented
by one or more Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes, Class A-5 Notes, Class A-6 Notes, Class A-7 Notes and one or more Class B
Notes registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof. The Certificates to be so delivered will be represented by one or more
Certificates issued in fully registered certificated form, registered in the
name(s) requested by the Representative two (2) Business Days prior to the
Closing Date. One Certificate in definitive form in the principal amount of
$142,864 will be retained by the Seller and registered in the name of CIT GP
(the "GP Certificate"). Definitive Notes will be available only under the
limited circumstances set forth in the Indenture and Trust Agreement. The notes
and certificates evidencing the Notes and Certificates will be made available
for checking and packaging at the offices of Schulte Roth & Zabel LLP at least
24 hours prior to the Closing Date.
4. Offering by Underwriters. It is understood that, after the
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Registration Statement becomes effective, the Underwriters propose to offer the
Securities for sale to the public (which may include selected dealers), on the
terms set forth in the Prospectus.
5. Covenants of the Seller and CITSF. Each of the Seller and CITSF,
---------------------------------
jointly and severally, covenants and agrees with the several Underwriters that:
(a) The Seller will file the Prospectus, properly completed, with the
Commission pursuant to and in accordance with subparagraph (2) (or, if
applicable and if consented to by the Representative which consent shall not be
unreasonably withheld, subparagraph (5)) of Rule 424(b) no later than the second
business day following the earlier of the date of the determination of the
offering price or the date it is first used. The Seller will advise the
Representative promptly of any such filing pursuant to Rule 424(b).
(b) The Seller will advise the Representative promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus, and will
not effect any such amendment or supplementation without the Representative's
consent which consent shall not be unreasonably withheld; and the Seller will
also advise the Representative promptly of any amendment or supplementation of
the Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
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(c) The Seller will arrange for the qualification of the Securities for
offering and sale under the securities laws of such jurisdictions in the United
States as the Representative may reasonably designate and will continue such
qualifications in effect so long as necessary under such laws for the
distribution of such Securities, provided that in connection therewith the
Seller shall not be required to qualify as a foreign corporation to do business
nor become subject to service of process generally, but only to the extent
required for such qualification, in any jurisdiction in which it is not
currently so qualified.
(d) If, at any time when a prospectus relating to the Securities is
required to be delivered by law in connection with sales by any Underwriter or
dealer, either (i) any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or (ii) for any other reason it shall be necessary to
amend or supplement the Prospectus to comply with the Act, the Seller will
promptly notify the Representative and will promptly prepare and file with the
Commission, at their own expense, an amendment or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance. Neither
the consent of the Representative to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6 hereof.
(e) The Seller will timely prepare and file all periodic reports, on
behalf of the Trust, with the Commission referred to in its No-Action Letter to
the Commission dated January 23, 1996 until no longer required to do so as
permitted by Section 15(d) of the 1934 Act.
(f) The Seller will furnish to each of the Underwriters copies of the
Registration Statement, each related preliminary prospectus, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representative may from time to time
reasonably request.
(g) So long as any of the Securities are outstanding, the Seller or
CITSF, as the case may be, will furnish to the Representative copies of all
written reports or other written communications (financial or otherwise)
furnished or made available to Noteholders and/or Certificateholders, and
deliver to the Representative during such same period, (i) as soon as they are
available, copies of any reports and financial statements filed by or on behalf
of the Trust by the Seller with the Commission pursuant to the 1934 Act, and
(ii) such additional information concerning the Seller or CITSF (relating to the
Contracts, the servicing thereof or the ability of CITSF to act as Servicer),
the Notes, the Certificates or the Trust as the Representative may reasonably
request from time to time.
(h) Whether or not the transactions contemplated by this Agreement are
consummated CITSF will pay or cause to be paid all costs and expenses incident
to the performance of CITSF's, the Seller's and CIT GP's respective obligations
hereunder, including (i)
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the preparation, issuance and delivery of the Securities, (ii) any fees charged
by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Structured
Ratings Service, a Division of The McGraw-Hill Companies, Inc. ("S&P" and,
together with Moody's, the "Rating Agencies"), for the rating of the Securities,
(iii) the expenses incurred in printing, reproducing and distributing the
registration statement as filed, the Registration Statement, preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto required pursuant to Section 5(d) hereof), (iv) the fees and
disbursements of counsel to the Seller, CITSF, CIT and CIT GP and the
independent public accountants of the Seller, (v) the fees and disbursements of
the Indenture Trustee and its counsel, (vi) the fees and disbursement of the
Owner Trustee and its counsel, (vii) the fees of DTC in connection with the
book-entry registration of the Securities, (viii) the reasonable expenses of the
Representative including the reasonable fees and disbursements of its counsel,
in connection with the initial qualification of the Securities for sale in the
jurisdictions that the Representative may designate pursuant to Section 5(c)
hereof and in connection with the preparation of any blue sky survey and legal
investment survey and (ix) the printing and delivery to the Underwriters, in
such quantities as the Underwriters may reasonably request, of copies of the
Basic Documents. Subject to Section 9 hereof, the Underwriters shall be
responsible for their own costs and expenses, including the fees and expenses of
their counsel (other than the reasonable expenses of the Representative
including the reasonable fees and disbursements of its counsel, in connection
with the initial qualification of the Securities for sale in the jurisdictions
that the Representative may designate pursuant to Section 5(c) hereof and in
connection with the preparation of any blue sky survey and legal investment
survey).
(i) On or before the Closing Date, the Seller, CITSF and CITCF-NY shall
cause each of their respective books and records (including any computer
records) relating to the Contracts to be marked to show the absolute ownership
by the Owner Trustee in accordance with Section 3.01B(d) of the Sale and
Servicing Agreement, on behalf of the Trust, of the Contracts, and from and
after the Closing Date neither the Seller, CITSF, as Servicer, nor CITCF-NY
shall take any action inconsistent with the ownership by the Owner Trustee on
behalf of the Trust of the Contracts, other than as permitted by the Basic
Documents.
(j) Until the retirement of the Securities, or until such time as the
Underwriters shall cease to maintain a secondary market in the Securities,
whichever occurs first, the Seller or CITSF will deliver to the Representative
the certified public accountants' annual statements of compliance furnished to
the Indenture Trustee or the Owner Trustee pursuant to Section 4.11 of the Sale
and Servicing Agreement, as soon as such statements are furnished to the
Indenture Trustee or the Owner Trustee.
(k) To the extent, if any, that either of the ratings provided with
respect to the Securities by either Rating Agency is conditional upon the
furnishing of documents or the taking of any other actions by the Seller, CITSF,
CITCF-NY or CIT GP, the Seller, CITSF, CITCF-NY or CIT GP, as
the case may be, shall furnish such documents and take any such other actions as
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may be required to satisfy such conditions. A copy of any such document shall be
provided to the Representative at the time it is delivered to the Rating
Agencies.
(l) Provided that the Seller has received the letter from KPMG Peat
Marwick LLP, described in Section 7(a) relating to the Computational Materials,
the Seller will cause such Computational Materials (as defined in Section 7
below) with respect to the Securities which are delivered to the Seller as
provided in Section 7 below to be filed with the Commission on a Current Report
on Form 8-K (the "Current Report") not later than the date on which a final
prospectus supplement relating to the Securities is available for distribution
to investors.
6. Conditions of the Obligations of the Underwriters. The obligations
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of the several Underwriters to purchase and pay for the Securities will be
subject to the accuracy of the representations and warranties on the part of the
Seller, CIT and CITSF, and contained or incorporated herein, to the accuracy of
the statements of officers of the Seller, CIT and CITSF made pursuant to the
provisions hereof, to the performance by the Seller, CIT and CITSF of its
obligations hereunder and to the following additional conditions precedent: (a)
(i) On the date of this Agreement, the Representative and the Seller shall have
received a draft of a letter, dated the date of delivery thereof, of KPMG Peat
Marwick LLP confirming that they are independent public accountants with respect
to the Seller and CITSF within the meaning of the Act and the Rules and
Regulations, substantially in the form of the draft to which the Representative
has previously agreed and otherwise in form and substance satisfactory to the
Representative and counsel for the Underwriters and (ii) on the Closing Date, a
letter, dated the date of delivery thereof, of KPMG Peat Marwick LLP confirming
that they are independent public accountants with respect to the Seller and
CITSF within the meaning of the Act and the Rules and Regulations, consistent
with the letter delivered pursuant to clause (i) above and otherwise in form and
substance satisfactory to the Representative and counsel for the Underwriters.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) hereof. On or prior
to the Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Registrants, shall be contemplated
by the Commission.
(c) The Representative shall have received a certificate, dated the
Closing Date, executed by any two of the President, any Vice President, the
principal financial officer or the principal accounting officer of (i) the
Seller representing and warranting that, as of the Closing Date, to the best of
each such officer's knowledge after reasonable investigation, the
representations and warranties of the Seller in this Agreement and the other
Basic Documents to which it is a party are true and correct, that the Seller has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder or thereunder at or prior to the Closing Date,
that no stop order suspending the effectiveness of the Registration Statement
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has been issued and no proceedings for that purpose have been instituted or, to
the best of their knowledge, are contemplated by the Commission, (ii) CITSF in
which such officers shall state that, to the best of each such officer's
knowledge after reasonable investigation, the representations and warranties of
CITSF in this Agreement and the other Basic Documents to which it is a party are
true and correct and that CITSF has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder or thereunder
at or prior to the Closing Date, and (iii) CIT representing and warranting that,
as of the Closing Date, to the best of each such officer's knowledge after
reasonable investigation, the representations and warranties of CIT in this
Agreement are true and correct.
(d) The Representative shall have received a certificate, dated the
Closing Date, executed by any two of the President, any Vice President, the
principal financial officer or the principal accounting officer of CIT GP in
which such officers shall state that, to the best of each such officer's
knowledge after reasonable investigation, (i) the representations and warranties
of CIT GP in the Trust Agreement are true and correct and (ii) that CIT GP has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied under the Trust Agreement at or prior to the Closing
Date. Such certificate shall have attached thereto a true and correct photocopy
of the demand note furnished to CIT GP by CIT.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, the Seller, CITSF, CITCF-NY or CIT GP which, in the judgment of a
majority in interest of the Underwriters (including the Representative),
materially impairs the investment quality of the Securities or makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities; (ii) any downgrading in the rating of any debt securities of
CIT or CITSF or any of their direct or indirect subsidiaries by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any such debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange or
any setting of minimum prices for trading on such exchange; (iv) any banking
moratorium declared by Federal, New Jersey or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters (including the Representative), the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities.
(f) The Representative shall have received a written opinion of in-
house General Counsel of the Seller, CITSF and CITCF-NY, or other counsel
satisfactory to the Representative in its reasonable judgment, dated the Closing
Date, in substantially the form set
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forth below, with such changes therein as the Representative and counsel for the
Underwriters shall reasonably agree:
(i) The Seller and CITSF have each been duly organized and are
validly existing as corporations in good standing under the laws of the
State of Delaware. CITCF-NY has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of New York.
(ii) The Seller, CITSF and CITCF-NY each have the corporate power and
corporate authority to carry on their respective businesses as described in
the Prospectus and to own and operate their respective properties in
connection therewith.
(iii) Each of the Seller, CITSF and CITCF-NY has the corporate power to
own its assets and to transact the business in which it is currently engaged
and to perform their respective obligations under each of the Basic
Documents to which it is a party. The Seller, CITSF and CITCF-NY are each
qualified to do business as a foreign corporation and each is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Seller, CITSF or CITCF-NY, respectively or on their ability
to perform their respective obligations under the Basic Documents.
(iv) This Agreement has been duly authorized, executed and delivered
by each of the Seller and CITSF, and is a valid and binding obligation of
each of the Seller and CITSF enforceable against each of the Seller and
CITSF in accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (B) such enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (C) the enforceability as to rights to indemnity
thereunder may be limited under applicable law.
(v) Each of the Basic Documents to which the Seller, CITSF or CITCF-
NY is a party have been duly authorized, executed and delivered by each of
the Seller, CITSF and CITCF-NY, and each constitutes a valid and binding
obligation of, each of the Seller, CITSF and CITCF-NY, enforceable against
each of the Seller, CITSF and CITCF-NY in accordance with its terms, except
that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) such enforcement may be
limited by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
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(vi) The execution and delivery by each of the Seller, CITSF and
CITCF-NY of each of the Basic Documents to which it is a party, the
performance of their respective obligations thereunder and the signing of
the Registration Statement by the Seller are within the corporate power of
the Seller, CITSF and CITCF-NY, as applicable, and have been duly authorized
by all necessary corporate action on the part of the Seller, CITSF and
CITCF-NY, as applicable; and neither the issue and sale of the Securities,
nor the consummation of the transactions contemplated by the Basic Documents
nor the fulfillment of the terms thereof, nor the grant of the security
interest in the Collateral to the Indenture Trustee pursuant to the
Indenture will, to the best of such counsel's knowledge, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or asset of
the Seller, CITSF or CITCF-NY pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument, if any, to which
the Seller, CITSF or CITCF-NY is a party or by which either may be bound or
to which the property or assets of the Seller, CITSF or CITCF-NY are subject
(which contracts, indentures, mortgages, loan agreements, notes, leases and
other such instruments, if any, have been identified by the Seller, CITSF or
CITCF-NY to such counsel), nor will such action result in any violation of
the provisions of the certificate of incorporation or by-laws of the Seller,
CITSF or CITCF-NY or, to the best of such counsel's knowledge, any law,
administrative regulation or administrative or court decree of any state or
federal courts, regulatory bodies, other body, governmental entity or
arbitrator having jurisdiction over the Seller, CITSF or CITCF-NY.
(vii) The Seller has duly authorized and executed the written order to
the Owner Trustee to execute and deliver the Issuer Order to the Indenture
Trustee.
(viii) The Seller has duly authorized and executed the written order to
the Owner Trustee to execute and deliver the Certificates.
(ix) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or order
of any New Jersey, New York or federal court or governmental authority or
agency is required for the consummation by the Seller, CITSF or CITCF-NY of
the transactions contemplated by this Agreement, except such as may be
required under the Act or the Rules and Regulations, or state securities or
Blue Sky laws or such other filings, registrations, notices, consents,
approvals, authorizations, orders or permits as have been obtained.
(x) There are no legal or governmental proceedings pending to which
the Seller, CITSF or CITCF-NY is a party or of which any property of the
Seller, CITSF or CITCF-NY is the subject, and no such proceedings are known
by such counsel to be threatened or contemplated by governmental authorities
or threatened by others, (A) that are required to be disclosed in the
Registration Statement and are not disclosed therein or (B)(1) asserting the
invalidity of all or part of any of the Basic Documents, (2) seeking to
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prevent the issuance of the Notes or the Certificates, (3) that could materially
and adversely affect the Seller's, CITSF's or CITCF-NY's obligations under any
of the Basic Documents or (4) seeking to affect adversely the federal or state
income tax attributes of the Securities.
(xi) Such counsel is familiar with CITSF's and CITCF-NY's standard
operating procedures relating to CITSF's and CITCF-NY's acquisition of a
perfected first priority security interest in the vehicles financed by CITSF and
CITCF-NY's pursuant to motor vehicle retail installment sale contracts and motor
vehicle installment loan contracts in the ordinary course of CITSF's and CITCF-
NY's business. Other than with respect to mechanic's and materialmen's liens,
assuming that CITSF's standard procedures are followed with respect to the
perfection of security interests in the Financed Vehicles (and such counsel has
no reason to believe that either CITSF or CITCF-NY has not or will not continue
to follow its standard procedures in connection with the perfection of security
interests in the Financed Vehicles), CITSF and CITCF-NY have acquired or will
acquire a perfected first priority security interest in the Financed Vehicles.
(xii) The Contracts are chattel paper, as defined in the UCC in the
State of New Jersey.
(xiii) The form of assignment to be executed and delivered by CITSF to
the Seller pursuant to the Purchase Agreement is sufficient in form and
substance to convey to the Seller all of CITSF's right, title and interest in
and to the Contracts and any security interests securing the Contracts. When the
Purchase Agreement has been duly executed and delivered by all parties thereto,
the assignment described in the Purchase Agreement has been duly executed and
delivered to the Seller by CITSF, and the purchase price has been paid to CITSF
by the Seller in the manner specified in the Purchase Agreement, all of CITSF's
right, title and interest in and to the Contracts and any security interests
securing the Contracts will have been conveyed to the Seller and the Seller will
be the holder of a valid, binding and enforceable security interest in the
Contracts against CITSF.
(xiv) The form of assignment to be executed and delivered by the
Seller to the Owner Trustee pursuant to the Sale and Servicing Agreement is
sufficient in form and substance to convey to the Owner Trustee all of the
Seller's right, title and interest in and to the Contracts and any security
interests securing the Contracts. When the Basic Documents have each been duly
executed and delivered by all parties thereto, the assignment described in the
Sale and Servicing Agreement has been duly executed and delivered to the Trust
by the Seller, the purchase price therefor has been paid to the Seller by the
Trust in the manner specified in the Sale and Servicing Agreement, and the Notes
and the Certificates have been duly executed and duly authenticated and
delivered by the Owner Trustee or the Indenture Trustee, as applicable, to or
upon the order of the Seller in accordance with the Sale and Servicing
Agreement, the Indenture and the Trust
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Agreement, all of the Seller's right, title and interest in and to the
Contracts and any security interests securing the Contracts will have been
conveyed to the Trust and the Trust will be the holder of a valid and
binding security interest in the Contracts against the Seller.
(xv) The documents incorporated by reference in the Registration
Statement and Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the Rules and Regulations, except as to the
financial statements and other financial and statistical data included
therein, to which such counsel need not express any opinion.
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 in-
house General Counsel to CIT GP, dated the Closing Date, in substantially the
form set forth below, with such changes therein as counsel for the Underwriters
shall reasonably agree:
(i) CIT GP is duly qualified and licensed and in good standing in
each jurisdiction where its business requires such qualification or
licensing.
(ii) The performance by CIT GP of its obligations under the Trust
Agreement will not, to the best of such counsel's knowledge, conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or asset of
CIT GP pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which CIT GP is a party or by
which it may be bound or to which the property or assets of CIT GP are
subject (which material contracts, indentures, mortgages, loan agreements,
notes, leases and other such instruments have been identified by CIT GP to
such counsel), nor will such action result in any violation of the
provisions of the certificate of incorporation or by-laws of CIT GP or, to
the best of such counsel's knowledge, any law, administrative regulation or
administrative or court decree of any state or federal courts, regulatory
bodies, other body, governmental entity or arbitrator having jurisdiction
over CIT GP.
(iii) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or order
of any Delaware or federal court or governmental authority or agency is
required for the consummation by CIT GP of the transactions contemplated by
the Trust Agreement, except such as may be required under the Act or the
Rules and Regulations, or state securities or Blue Sky laws or such
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other filings, registrations, notices, consents, approvals, authorizations,
orders or permits as have been obtained.
(iv) There are no legal or governmental proceedings pending to which
CIT GP is a party or of which any property of CIT GP is the subject, and no
such proceedings are known by such counsel to be threatened or contemplated
by governmental authorities or threatened by others, (A) that are required
to be disclosed in the Registration Statement and are not disclosed therein
or (B)(1) asserting the invalidity of all or part of the Trust Agreement,
(2) that could materially and adversely affect CIT GP's obligations under
the Trust Agreement or (3) seeking to affect adversely the federal or state
income tax attributes of the Securities.
(v) CIT GP has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
the corporate power and corporate authority to perform its obligations under
the Trust Agreement.
(vi) The Trust Agreement has been duly authorized, executed and
delivered by CIT GP.
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.
(h) The Representative shall have received an opinion of in-house
General Counsel of CIT or other counsel satisfactory to the Representative in
its reasonable judgment, dated the Closing Date, in substantially the form set
forth below, with such changes therein as the Representative and counsel for the
Underwriters shall reasonably agree:
(i) CIT has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) This Agreement has been duly authorized, executed and delivered
by CIT and is a valid and binding obligation of CIT enforceable against CIT
in accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (B) such enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(iii) The signing of the Registration Statement by CIT is within the
corporate power of CIT and has been duly authorized by all necessary
corporate action on the part of CIT; the consummation of the transactions
contemplated herein and the
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fulfillment of the terms hereof will not, to the best of such counsel's
knowledge, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or asset of CIT pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which CIT is a
party or by which it may be bound or to which the property or assets of CIT
are subject (which material contracts, indentures, mortgages, loan
agreements, notes, leases and other such instruments have been identified by
CIT to such counsel), nor will such action result in any violation of the
provisions of the certificate of incorporation or by-laws of CIT or, to the
best of such counsel's knowledge, any law, administrative regulation or
administrative or court decree of any state or federal courts, regulatory
bodies, other body, governmental entity or arbitrator having jurisdiction
over CIT. (iv) The documents with respect to CIT incorporated by reference
in the Registration Statement and Prospectus, at the time they were or
hereafter are filed with the Commission, complied and 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.
(i) The Representative shall have received a written opinion of
Lowenstein, Sandler, Kohl, Fisher and Boylan, special local New Jersey counsel
for the Seller and CITSF, dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriters, to the
effect that:
(i) (A) If the transfer of the Contracts is deemed to be the grant
of a security interest, and not a true sale, (1) to the extent that the
Uniform Commercial Code as in effect in the State of New Jersey (the "New
Jersey UCC") applies to the perfection of the Seller's security interests
in the Contracts and the proceeds thereof under Section 9-103 of the New
Jersey UCC, when the financing statements executed by CITSF as debtor (the
"First Step Financing Statements") have been duly executed and delivered
and filed or recorded, as appropriate, in the office of the Secretary of
State of New Jersey, such
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security interests will be perfected and (2) to the extent that the New
Jersey UCC applies to the perfection of the Trust's security interests in
the Contracts and the proceeds thereof under Section 9-103 of the New
Jersey UCC, when the First Step Financing Statements and the financing
statements executed by the Seller as "debtor" ("Second Step Financing
Statements") have been duly executed and delivered and filed or recorded,
as appropriate, in the office of the Secretary of State of New Jersey, such
security interests will be perfected and (B) based solely on such counsel's
review of those Financing Statements, officer certificates and specified
New Jersey UCC search reports, the security interests of the Trust in the
Contracts are subject to no equal or prior security interest under the New
Jersey UCC; provided, however that (1) for purposes of its opinions in this
paragraph, such counsel may assume that: (a) the Seller is the holder of
valid, binding and enforceable security interests in the Contracts and the
Trust is the holder of valid, binding and enforceable security interests in
the Contracts; (b) the Contracts constitute "chattel paper," as such term
is defined in Section 9-105 of the New Jersey UCC; (c) the New Jersey UCC
governs the perfection of the security interest in the Contracts, the
priority of those security interests and the classification of the
Contracts; (d) the chief executive office of each of the Company and the
Seller is, and during the past four months has been, in the State of New
Jersey; (e) neither CITSF, the Seller nor the Trust has assigned, nor will
assign, any Contract to a buyer who takes possession of it in the ordinary
course of its business and who acts without knowledge that such Contract is
subject to a security interest; (f) the Contracts exist and each of CITSF
and the Seller, respectively, has rights in the Contracts; (g) (i) no lien
creditor has executed on or attached to the Contracts prior to the
perfection of the security interests of the Seller or the Trust in the
Contracts and the proceeds thereof; and (ii) the Contracts are not subject
to the rights of the holder of a perfected "purchase money security
interest" (as such term is defined in Section 9-107 of the New Jersey UCC);
(h) no Contract, or the proceeds thereof, constitutes proceeds of any
property subject to the security interest of a third party; (i) none of the
proceeds of the Contracts which constitute "securities" under Article 8 of
the New Jersey UCC are transferred to a bona fide purchaser (other than the
Indenture Trustee) under Section 8-302 of the New Jersey UCC; (j) the
Seller, the Indenture Trustee and the Owner Trustee have and will maintain
a list describing the Contracts for inspection during normal business hours
by interested parties; (k) the underlying facts in the officer certificates
to be received by such counsel are correct; (l) all financing statements or
other notice of liens, other than the financing statements, in which CITSF,
the Seller or the Trust is named as debtor were properly filed and indexed,
that the New Jersey UCC search reports have revealed all recorded liens
against CITSF and the Seller and that no filings or notices covering CITSF
or the Seller were made between the dates last searched and reported on in
the New Jersey UCC search reports and the time of such financing
statements, and (m) from and after the date hereof CITSF, acting in a
capacity as servicer and custodian for the Trustee, will have taken, and
will maintain, exclusive possession of the Contracts; and (2) such counsel
need express no opinion: (a) regarding perfection as to any government or
governmental agency (including without limitation the United
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States of America or any State thereof or any agency or department of the
United States of America or any State thereof) of any security interest in
any Contracts with respect to which such government or agency is obligated;
(b) on the perfection of any security interests in the collateral described
in the Contracts; (c) as to the priority of any perfected security
interests under the New Jersey UCC of any liens, claims or other interests
that do not require filing or similar action to attach or that arise by
operation of law against any claim or lien in favor of the United States or
any State or any agency or instrumentality of the United States or any
State (including, without limitation, liens arising under the federal tax
laws or the Employment Retirement Income Security Act of 1974, as amended)
or against the rights of a "lien creditor" (as defined in the New Jersey
UCC); and (d) as to the effect of the laws of any other state that may
govern the perfection or priority of the security interest in the Contracts
by possession or other than by filing a financing statement under the UCC;
(3) such opinions may be subject to the effect of (i) the limitations on
the existence and perfection of security interests in proceeds resulting
from the operation of Section 9-306 of the New Jersey UCC; (ii) the
limitations with respect to documents and instruments imposed by Section 9-
309 of the New Jersey UCC; (iii) bankers' liens, rights of set-off and
other rights of persons in possession of money, instruments and proceeds
constituting certificated or uncertificated securities; (iv) the priority
of any security interests perfected by possession; (v) the priority of
security interests which may be perfected by any means other than by filing
a financing statement under the New Jersey UCC and (and such counsel may
note that CITSF, the Seller and the Trust have respectively represented
that no such security interests exist) and (vi) Section 552 of the
Bankruptcy Code with respect to any Contracts acquired by the Seller or the
Trust subsequent to the commencement of a case by or against CITSF, the
Seller or the Trust under the Bankruptcy Code; and (4) such counsel's
opinion may be further subject to the effect of general principles of
equity, regardless of whether such principles are considered in a
proceeding in equity or at law, as the same may be applied in a proceeding
seeking to enforce any obligation.
(ii) Solely insofar as the present laws of the State of New Jersey and
the Federal law of the United States of America are concerned, in a properly
presented and decided case, a court would conclude that the transfer of the
Contracts and the proceeds thereof by CITSF to the Seller constitute true
sales of such Contracts and, assuming a court reached that conclusion, in
such a case a court would conclude that the Contracts and the proceeds would
not be considered property of the estate of CITSF pursuant to Section 541 of
the Bankruptcy Code, and the Contracts and the proceeds thereof would not be
subject to the automatic stay pursuant to Section 362 of the Bankruptcy
Code; provided, however, such counsel need express no opinion (A) with
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respect to how long the Seller could be denied possession of the Contracts
before the issues discussed in this paragraph are finally decided on appeal
or other review and (B) with respect to the availability of a preliminary
injunction or temporary restraining order pursuant to the broad equitable
powers granted to a bankruptcy court.
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(iii) Solely insofar as the present laws of the State of New Jersey and
the Federal law of the United States of America are concerned, in a properly
presented and decided case, a court would conclude that the transfer of the
Contracts and the proceeds thereof by the Seller to the Trust constitute
true sales of such Contracts and, assuming a court reached that conclusion,
in such a case a court would conclude that the Contracts and the proceeds
would not be considered property of the estate of the Seller pursuant to
Section 541 of the Bankruptcy Code, and the Contracts and the proceeds
thereof would not be subject to the automatic stay pursuant to Section 362
of the Bankruptcy Code; provided, however, such counsel need express
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no opinion (A) with respect to how long the Trust could be denied
possession of the Contracts before the issues discussed in this paragraph
are finally decided on appeal or other review and (B) with respect to the
availability of a preliminary injunction or temporary restraining order
pursuant to the broad equitable powers granted to a bankruptcy court.
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are reasonably
acceptable to counsel to the Underwriters. In rendering such opinion, such
counsel may state that they express no opinion as to the laws of any
jurisdiction other than the Federal law of the United States of America and the
laws of the State of New Jersey.
(j) The Representative shall have received a written opinion of Schulte
Roth & Zabel LLP, special counsel to the Seller, CITSF and CITCF-NY, dated the
Closing Date, in substantially the form set forth below, with such changes
therein as the Representative and counsel for the Underwriters shall reasonably
agree:
(i) When the Notes have been duly executed, delivered and authenticated
in accordance with the Indenture and delivered and paid for pursuant to
this Agreement, the Notes will be validly issued, outstanding and entitled
to the benefits of the Indenture, except that (A) enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (B) enforcement may be limited by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(ii) The Registration Statement became effective under the Act as of
October 31, 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 form of the Indenture has been qualified under the Trust
Indenture Act.
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(iv) Neither the Trust Agreement nor the Sale and Servicing Agreement
need to be qualified under the Trust Indenture Act. The Trust is not, and
will not as a result of the offer and sale of the Securities as
contemplated in the Prospectus and in this Agreement become, required to
register as an "investment company" under the Investment Company Act.
(v) The statements in the prospectus supplement relating to the
Securities dated the date hereof, under the caption "The Notes," "The
Certificates" and "The Purchase Agreements and The Trust Documents" insofar
as such statements purport to summarize certain terms of the Notes, the
Certificates and the Basic Documents, present a fair summary of the terms
of such documents.
(vi) To the best of such counsel's knowledge, there are no contracts or
documents of the Seller which are required to be filed as exhibits to the
Registration Statement pursuant to the Act or the Rules or Regulations
which have not been so filed.
(vii) The statements in the Prospectus under the headings "Certain
Federal Income Tax Consequences" and "ERISA Considerations," to the extent
that they constitute matters of law or legal conclusions with respect
thereto are correct in all material respects.
(viii) The registration statement on Form S-3 No. 333-36061-01 relating
to the Securities as of its effective date, the Registration Statement and
the Prospectus as of the date of this Agreement, and any amendment or
supplement thereto, as of its date, complied as to form in all material
respects with the requirements of the Act and the applicable Rules and
Regulations. Such counsel need express no opinion with respect to the
financial statements, the exhibits, annexes and other financial,
statistical, numerical or portfolio data, economic conditions or financial
condition of the portfolio information included in or incorporated by
reference into the registration statement on Form S-3 No. 333-36061-01
relating to the 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 Seller, CITSF, Counsel to CITSF and officers
and representatives of the Underwriters, at which conferences certain of the
contents of the Registration Statement and the Prospectus were discussed and,
although such counsel is not passing upon and does not assume any responsibility
whatsoever for, the factual accuracy, completeness or fairness of the statements
contained in the registration statement on Form S-3 No. 333-36061-01 relating to
the Securities, the Registration Statement or Prospectus (except as stated in
Sections 6(j)(v) and 6(j)(vii) above) and has made no independent check or
verification thereof for the purpose of rendering this opinion, on the basis of
the foregoing (relying as to materiality to a large extent upon the certificates
of officers and other representatives of the Seller, CITSF and CIT GP), no facts
have come to their attention that leads such counsel to believe that the
registration statement
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on Form S-3 No. 333-36061-01 relating to the Securities, as of its effective
date, the Registration Statement, as of the date of this Agreement, or any
amendment thereto, as of its date when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus on its date contained or on the Closing Date contains, any
untrue statement of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no view with respect to the
financial statements, tables, schedules, exhibits, annexes and other financial,
statistical, numerical or portfolio data, or information on economic conditions
or financial condition of the portfolio included in or incorporated by reference
into, the Registration Statement or Prospectus.
Said counsel may state that they are admitted to practice only in the
State of New York, that they are not admitted to the Bar in any other State and
are not experts in the law of any other State and to the extent that the
foregoing opinions concern the laws of any other State such counsel may rely
upon the opinion of counsel satisfactory to the Underwriters and admitted to
practice in such jurisdiction. Any opinions relied upon by such counsel as
aforesaid shall be addressed to the Underwriters and shall be delivered together
with the opinion of such counsel, which shall state that such counsel believes
that their reliance thereon is justified.
(k) The Representative shall have received, in form and substance
satisfactory to the Representative and counsel for the Underwriters an opinion
of Schulte Roth & Zabel LLP, special counsel to the Trust, dated the Closing
Date, regarding the creation of a security interest in the Collateral in favor
of the Indenture Trustee on behalf of the Noteholders to the extent that a
security interest in such Collateral can be created under Article 9 of the UCC
as currently in effect in the State of New York. Such opinion may contain such
assumptions, qualifications and limitations as are customary in opinions of this
type and as are reasonably acceptable to counsel to the Underwriters. In
rendering such opinion, such counsel may state that they express no opinion as
to the laws of any jurisdiction other than the Federal law of the United States
of America and the laws of the State of New York.
(l) The Representative shall have received an opinion of Stroock &
Stroock & Lavan LLP, counsel for the Underwriters, dated the Closing Date, with
respect to the validity of the Securities and such other related matters as the
Representative shall require and the Seller shall have furnished or caused to be
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(m) The Representative shall have received opinions of Seward & Kissel
and in-house General Counsel to the Indenture Trustee, dated the Closing Date,
in form and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Indenture constitutes a legal, valid and binding agreement of
the Indenture Trustee, enforceable against the Indenture Trustee in
accordance with its
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terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, liquidation, reorganization, moratorium or other similar laws
affecting the enforcement of rights of creditors against the Indenture
Trustee generally, as such laws would apply in the event of bankruptcy,
insolvency, liquidation, receivership, or reorganization or any moratorium
or similar occurrence affecting the Indenture Trustee, and the application
of general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or law).
(ii) The Notes have been duly authenticated and delivered by the
Indenture Trustee in accordance with the terms of the Indenture.
(iii) The Indenture Trustee is a banking corporation validly existing
under the laws of the state of Illinois and has full power and authority to
enter into, and to take all action required of it, under the Indenture.
(iv) The Indenture has been duly authorized, executed and delivered by
the Indenture Trustee.
(n) The Representative shall have received an opinion of in-house
General Counsel to the Owner Trustee, dated the Closing Date, in form and
substance satisfactory to the Representative and counsel for the Underwriters,
to the effect that:
(i) The Owner Trustee is duly incorporated and validly existing as a
national banking association under the laws of the United States of America
and has the power and authority to execute and deliver the Trust Agreement.
(ii) The execution and delivery of the Trust Agreement by the Owner
Trustee and the performance by the Owner Trustee of its obligations under
the Trust Agreement have been duly authorized by all necessary action of
the Owner Trustee and the Trust Agreement has been duly executed and
delivered by the Owner Trustee.
(iii) The Trust Agreement constitutes valid and binding obligations of
the Owner Trustee enforceable against the Owner Trustee in accordance with
its terms, except as the enforceability thereof may be (a) limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or other
similar laws affecting the rights of creditors generally, and (b) subject
to general principals of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(iv) The execution and delivery by the Owner Trustee of the Trust
Agreement and the transactions contemplated thereby do not require any
consent, approval or authorization of, or any registration or filing with,
any applicable governmental authority of the State of Delaware which has
not been obtained or done.
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(v) Neither the consummation by the Owner Trustee of the transactions
contemplated in the Trust Agreement, nor the fulfillment of the terms
thereof by the Owner Trustee will conflict with, result in a breach or
violation of, or constitute a default under the charter or the other
organizational documents of the Owner Trustee.
(vi) The Trust has duly executed the Trust Agreement, the Indenture,
the Sale and Servicing Agreement, the Notes and the Certificates.
(vii) The Notes have been executed, authorized and delivered by the
Owner Trustee upon the order of the Seller in accordance with the Trust
Agreement and the Indenture.
(viii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture and the Sale and
Servicing Agreement do not require any consent, approval or authorization
of, or any registration or filing with, any Federal governmental authority.
(ix) Neither the consummation by the Owner Trustee of the transactions
contemplated by the Trust Agreement or, on behalf of the Trust, the
transactions contemplated by the Trust Agreement, Indenture and the Sale
and Servicing Agreement nor the fulfillment of the terms thereof by the
Owner Trustee will conflict with or result in a breach or violation of any
federal law.
(o) The Representative shall have received an opinion of Richards,
Layton & Finger special Delaware counsel for the Trust, dated the Closing Date,
in form and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Trust Agreement is the legal, valid and binding agreement of
the Owner Trustee, CIT GP and the Seller, enforceable against the Owner
Trustee, CIT GP and the Seller in accordance with its terms subject to (i)
applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent conveyance and similar laws relating to and
affecting the rights and remedies of creditors generally, (ii) principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
(ii) The Certificate of Trust has been duly filed with the Secretary
of State of the State of Delaware. The Trust has been duly formed and is
validly existing as a business trust under the Delaware Business Trust Act.
(iii) The Trust has the power and authority under the Trust Agreement
and the Delaware Business Trust Act to execute, deliver and perform its
obligations under the Trust Agreement, the Indenture, the Sale and
Servicing Agreement, the Notes and the Certificates, and to issue the Notes
and the Certificates.
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(iv) The Trust has duly authorized the Trust Agreement, the
Indenture, the Sale and Servicing Agreement, the Notes and the
Certificates.
(v) The Trust has the power under the Trust Agreement and the
Delaware Business Trust Act to pledge the Trust Estate to the Indenture
Trustee as security for the Notes.
(vi) When the Certificates have been executed, authenticated and
delivered by the Owner Trustee upon the order of the Seller in accordance
with the Trust Agreement and when delivered to and paid for pursuant to
this Agreement, the Certificates will be validly issued and outstanding,
and the holder of record of any such Certificates will be entitled to the
benefits accorded by the Trust Agreement subject to (i) applicable
bankruptcy, insolvency, moratorium, receivership, reorganization,
fraudulent conveyance and similar laws relating to and affecting the rights
and remedies of creditors generally, (ii) principles of equity (regardless
of whether considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
(vii) To the extent that Article 9 of the Uniform Commercial Code as
in effect in the State of Delaware (the "Delaware UCC") is applicable
(without regard to conflicts of laws principles), and assuming that the
security interest created by the Indenture in the Collateral has been duly
created and has attached, upon the filing of a UCC-1 financing statement
with the Secretary of State of the State of Delaware, the Indenture Trustee
will have a perfected security interest in such Collateral and the proceeds
thereof; and such security interest will be prior to any other security
interest granted by the Trust that is perfected solely by the filing of
financing statements under the Delaware UCC, excluding purchase money
security interests under (S) 9-312 of the Delaware UCC and temporarily
perfected security interests in proceeds under (S) 9-306 of the Delaware
UCC.
(viii) No re-filing or other action is necessary under the Delaware UCC
in the State of Delaware in order to maintain the perfection of the
security interest referenced above except for the filing of continuation
statements at five-year intervals.
(ix) Under (S) 3805(b) of the Delaware Business Trust Act, no
creditor of any Certificateholder shall have any right to obtain possession
of, or otherwise exercise legal or equitable remedies with respect to, the
property of the Trust except in accordance with the terms of the Trust
Agreement subject to (i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
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(x) Under (S) 3805(c) of the Delaware Business Trust Act, and
assuming that the Sale and Servicing Agreement conveys good title to the
Contracts to the Trust as a true sale and not as a security arrangement,
the Trust, rather than the Certificateholders, is the owner of the
Contracts subject to (i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(p) The Class A-1 Notes shall have been rated at least "P-1" by Moody's and
"A-1+" by S&P, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
the Class A-5 Notes, the Class A-6 Notes and the Class A-7 Notes shall each have
been rated at least "Aaa" by Moody's and "AAA" by S&P, the Class B Notes shall
have been rated at least "A2" by Moody's and "A" by S&P and the Certificates
shall have been rated at least "Baa2" by Moody's and "BBB" by S&P.
(q) The Representative shall have received copies of each opinion of
counsel delivered to either Rating Agency, together with a letter addressed to
the Representative, dated the Closing Date, to the effect that each Underwriter
may rely on each such opinion to the same extent as though such opinion was
addressed to each as of its date.
(r) The Representative shall have received evidence satisfactory to it and
counsel for the Underwriters that, on or before the Closing Date, UCC-1
financing statements shall have been submitted to the Trustee for filing in the
appropriate filing offices reflecting (1) the transfer of the interest in the
Contracts and the proceeds thereof (A) from CITCF-NY to CITSF, to the extent
such Contracts have been transferred to CITSF from CITCF-NY, (B) from CITSF to
the Seller, (C) from the Seller to the Owner Trustee, on behalf of the Trust, or
the Trust, as the case may be, and (2) the grant of the security interest by the
Trust in the Contracts and the proceeds thereof to the Indenture Trustee.
(s) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Seller in connection with the issuance and sale of
the Securities as herein contemplated shall be in form and substance
satisfactory to the Representative and counsel for the Underwriters.
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7. Computational Materials.
-----------------------
(a) Not later than 10:30 a.m. New York time, on the business day before the
date on which the Current Report relating to the Securities is required to be
filed by the Seller with the Commission pursuant to Section 5(m) hereof, each
Underwriter shall deliver to the Seller five complete copies of all materials,
if any, provided by such Underwriter to prospective investors in such Securities
which constitute "Computational Materials" within the meaning of the no-action
letter dated May 20, 1994 issued by the Division of Corporation Finance of the
Commission to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated, and Kidder Structured Asset Corporation, the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association and the no-action letter of
February 17, 1995 issued by the Commission to the Public Securities Association
(collectively, the "Kidder/PSA Letters") and the filing of which is a condition
of the relief granted in such letters (such materials being the "Computational
Materials"). Each delivery of Computational Materials to the Seller pursuant to
this paragraph (a) shall be effected by delivering four copies of such materials
to counsel for the Seller on behalf of the Seller and one copy of such materials
to the Seller. The Computational Materials so delivered shall be accompanied by
a letter from KPMG Peat Marwick LLP, addressed to the Seller and the
Representative, in form and substance reasonably satisfactory to the Seller and
the Representative, to the effect that KPMG Peat Marwick LLP have performed
certain agreed upon procedures with respect to such Computational Materials as a
result of which they have determined that such Computational Materials are
mathematically correct.
(b) Each Underwriter that so delivers Computational Materials represents
and warrants to and agrees with the Seller, as of date hereof and as of the
Closing Date, that:
(i) on the date any such Computational Materials with respect to the
Securities were last furnished to each prospective investor by such
Underwriter and on the date of delivery thereof to the Seller pursuant to
Section 7(a), any Underwriter Derived Information (defined below) included
therein did not and will not include any untrue statement of a material
fact, or, when read in conjunction with the Prospectus and a prospectus
supplement relating to the Securities, did not and will not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(ii) the Computational Materials contain customary legends and are in
substantially the same form as previously furnished to the Seller.
Notwithstanding the foregoing, no Underwriter makes any representation or
warranty as to any information other than the Underwriter Derived Information
provided by such Underwriter. "Underwriter Derived Information" means such
portion, if any, of the information delivered to the Seller pursuant to Section
5(m) for filing with the Commission on Form 8-K as: (i) is not contained in the
Prospectus without taking into account information incorporated therein by
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reference and (ii) does not constitute Seller Provided Information. "Seller
Provided Information" means any computer tape furnished to the Underwriters by
the Seller concerning the assets comprising the Trust upon which the
mathematical calculations reflected in the Underwriter Derived Information of
any Underwriter are based.
(c) Each Underwriter severally covenants with the Seller that if any
Underwriter Derived Information required to be provided to the Seller pursuant
to this Section 7 is determined to contain any information that is inaccurate or
misleading, such Underwriter (whether or not such Underwriter Derived
Information was provided to the Seller or filed by the Seller with the
Commission) shall promptly prepare and deliver to the Seller and each
prospective investor which received such Underwriter Derived Information
corrected Underwriter Derived Information. All information provided to the
Seller pursuant to this Section 7(c) shall be provided within the time periods
set forth in Section 7(a).
(d) Each Underwriter shall comply with all applicable laws and regulations
in connection with the use of Computational Materials including the Kidder/PSA
Letters.
(e) Each Underwriter shall provide the Company with representative forms of
all Computational Materials prior to their first use, to the extent such forms
have not previously been approved by the Company for use by such Underwriter.
(f) If an Underwriter does not provide any Computational Materials to the
Company pursuant to Section 7(e), such Underwriter shall be deemed to have
represented, as of the Closing Date, that it did not provide any prospective
investors with any information in written or electronic form in connection with
the offering of the Certificates that is required to be filed with the
Commission in accordance with the Kidder/PSA Letters.
(g) In the event of any delay in the delivery by any Underwriter to the
Company of all Computational Materials required to be delivered in accordance
with Section 7(a), the Company shall have the right to delay the release of the
Prospectus to investors or to any Underwriter, to delay the Closing Date and to
take other appropriate actions in each case as necessary in order to allow the
Company to comply with its agreement set forth in Section 5(m) to file the
Computational Materials by the time specified therein.
8. Indemnification and Contribution.
--------------------------------
(a) CITSF will indemnify and hold each Underwriter harmless against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse
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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,
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that (i) CITSF will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents (x) in reliance upon and in conformity with written
information furnished to the Seller or CITSF by any Underwriter through the
Representative specifically for use therein it being understood and agreed that
the only such information furnished by any Underwriter consists of the following
information contained in the prospectus supplement relating to the Securities
dated the date hereof: (a) the last paragraph at the bottom of the cover page
concerning the terms of the offering by the Underwriters, (b) the legend
concerning over-allotments and (c) the information contained under the caption
"Plan of Distribution" (the "Underwriters' Information") or (y) with respect to
Underwriter Derived Information included in any Current Report or any amendment
or supplement thereof, except to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from an error
(a "Seller Error") in the Seller Provided Information other than a Seller Error
which is corrected by information subsequently furnished by the Seller in
writing or by electronic transmission to such Underwriter prior to the time such
Computational Materials are furnished to the Seller pursuant to Section 7(a),
(ii) such indemnity with regard to any related preliminary prospectus shall not
inure to the benefit of each Underwriter (or any person controlling each
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such person
did not receive a copy of the Prospectus (or, in the event it is amended or
supplemented, such Prospectus as amended or supplemented) at or prior to the
confirmation of the sale of such Securities to such person if such Prospectus
(or, in the event it is amended or supplemented, such Prospectus as amended or
supplemented) was timely forwarded to each Underwriter as required by this
Agreement and the untrue statement or omission of a material fact contained in
such related preliminary prospectus was corrected in the Prospectus (or, in the
event it is amended or supplemented, such Prospectus as amended or supplemented)
and (iii) CITSF shall not, in connection with any one such action or separate
but substantially similar or related transactions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for all
such Underwriters, which firm shall be designated in accordance with Section
8(c) hereof.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Seller and CITSF against any losses, claims, damages or liabilities
to which the Seller or CITSF may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact 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
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<PAGE>
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Seller or CITSF by such Underwriter through the Representative
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Seller or CITSF in connection with investigating or
defending any such action or claim as such expenses are incurred, it being
understood and agreed that (i) the only such information furnished by any
Underwriter consists of (x) the Underwriters' Information and (y) in any
Underwriter Derived Information (or amendments or supplements thereof) furnished
to the Seller by such Underwriter pursuant to Section 7 (except that no such
indemnity shall be available for any losses, claims, damages or liabilities (or
actions in respect thereof) resulting from a Seller Error other than a Seller
Error which is corrected by information subsequently furnished by the Seller in
writing or by electronic transmission to such Underwriter prior to the time such
Computational Materials are furnished to the Seller pursuant to Section 7(a),
and (ii) the Underwriters shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for
each of the Seller and CITSF, which firm shall be designated in accordance with
Section 8(c) hereof.
(c) Promptly after receipt by an indemnified party under this Section of
written notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and after acceptance by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
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
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<PAGE>
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 Seller, if the indemnified parties under this
Section 8 consist of the Seller or any of the Seller'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 not only the relative benefits received by the
Seller and CITSF on the one hand and the Underwriters on the other from the
offering of the Securities 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 Seller and CITSF on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Seller
and CITSF on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Securities (before deducting expenses) received by the Seller and CITSF bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Seller, CITSF or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such 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
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<PAGE>
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of CITSF under this Section shall be in addition to any
liability which the Seller or CITSF may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller or CITSF, to each officer of the
Seller or CITSF who has signed the Registration Statement and to each person, if
any, who controls the Seller or CITSF within the meaning of the Act.
9. Survival of Certain Representations and Obligations. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Seller and CITSF or their respective officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation or statement as to the results thereof, made by
or on behalf of any Underwriter, the Seller, CITSF or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 10 or if for any reason the purchase of the
Securities by the Underwriters is not consummated, the Seller, CITSF and CITCF-
NY shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 hereof and the respective obligations of the Seller, CITSF
and the Underwriters pursuant to Section 8 hereof shall remain in effect. If
the purchase of the Securities by the Underwriters is not consummated for any
reason other than solely because of the termination of this Agreement pursuant
to Section 10 or the occurrence of any event specified in clauses (iii), (iv) or
(v) of Section 6(e) hereof, the Seller and CITSF will reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Securities.
10. Failure to Purchase the Securities. If any Underwriter or
----------------------------------
Underwriters default in their obligations to purchase the principal amount of
the Class or Classes of Notes and/or the Certificates opposite such
Underwriter's name on Schedule I hereto and the aggregate principal amount of
the Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total principal amount of the
Securities, the Representative may make arrangements satisfactory to the Seller
and CITSF for the purchase of such Notes or Certificates by other persons,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Class or
Classes of Notes and/or the Certificates that such defaulting Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters so default
and the aggregate principal amount of the Notes and/or the Certificates with
respect to such default or defaults exceeds 10% of the total principal amount of
the Securities and arrangements satisfactory to the Representative, the Seller
and CITSF for the purchase of such Notes and/or Certificates by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Seller
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<PAGE>
or CITSF, except as provided in Section 9. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter or Underwriters
from liability for its default.
11. Notices. All communications hereunder will be in writing and, if sent
-------
to the Representative or the Underwriters, will be mailed, delivered or sent by
facsimile transmission and confirmed to the Representative at 11 Madison Avenue,
New York, NY 10010, Attention: Asset Finance Department (facsimile number (212)
325-8261); if sent to the Seller, will be mailed, delivered or sent by facsimile
transmission and confirmed to it at The CIT Group Securitization Corporation II,
650 CIT Drive, Livingston, New Jersey 07039, Attention: James J. Egan, Jr.,
President (facsimile number (201) 740-5410); if sent to CIT, will be mailed,
delivered or sent by facsimile transmission and confirmed to it by The CIT Group
Holdings, Inc., 1211 Avenue of the Americas, New York, New York 10036,
Attention: Joseph M. Leone, Executive Vice President and Chief Financial Officer
(facsimile number (212) 536-1971); and if sent to CITSF, will be mailed,
delivered or sent by facsimile transmission and confirmed to it at The CIT
Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: James J. Egan, Jr., President (facsimile number (201) 740-5410).
12. No Bankruptcy Petition. Each Underwriter agrees that, prior to the
----------------------
date which is one year and one day after the payment in full of all securities
issued by the Seller or by a trust for which the Seller was the depositor or by
the Trust, which securities were rated by any nationally recognized statistical
rating organization, it will not institute against, or join any other person in
instituting against, the Seller, the Trust or CIT GP any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any Federal or state bankruptcy or similar law.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the Underwriters, the Seller, CIT and CITSF and their respective
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligations hereunder.
14. Representation of Underwriters. The Representative will act for the
------------------------------
several Underwriters in connection with the transactions described in this
Agreement, and any action taken by Representative under this Agreement will be
binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
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<PAGE>
16. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
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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 CIT, the Seller, CITSF and the several
Underwriters in accordance with its terms.
Very truly yours,
THE CIT GROUP, INC.
By: /s/ Joseph M. Leone
------------------------------
Name: Joseph M. Leone
Title: Executive Vice President and CFO
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Frank Garcia
------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.
By: /s/ Frank Garcia
------------------------------
Name: Frank Garcia
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Philip Weingord
------------------------------
Name: Philip Weingord
Title: Managing Director
Acting on behalf of itself
and as the Representative
of the several Underwriters.
<PAGE>
SCHEDULE I
Principal
Amount of
Underwriter Class A-1 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 10,075,000
BancAmerica Robertson Stephens 10,075,000
Chase Securities Inc. 10,075,000
Salomon Brothers Inc. 10,075,000
---------------
Total $ 40,300,000
Principal
Amount of
Underwriter Class A-2 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 8,000,000
BancAmerica Robertson Stephens 8,000,000
Chase Securities Inc. 8,000,000
Salomon Brothers Inc. 8,000,000
---------------
Total $ 32,000,000
Principal
Amount of
Underwriter Class A-3 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 22,250,000
BancAmerica Robertson Stephens 22,250,000
Chase Securities Inc. 22,250,000
Salomon Brothers Inc. 22,250,000
---------------
Total $ 89,000,000
<PAGE>
Principal
Amount of
Underwriter Class A-4 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 32,000,000
BancAmerica Robertson Stephens 32,000,000
Chase Securities Inc. 32,000,000
Salomon Brothers Inc. 32,000,000
---------------
Total $128,000,000
Principal
Amount of
Underwriter Class A-5 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 18,500,000
BancAmerica Robertson Stephens 18,500,000
Chase Securities Inc. $ 18,500,000
Salomon Brothers Inc. 18,500,000
---------------
Total $ 74,000,000
Principal
Amount of
Underwriter Class A-6 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation 26,500,000
BancAmerica Robertson Stephens 26,500,000
Chase Securities Inc. 26,500,000
Salomon Brothers Inc. 26,500,000
---------------
Total $106,000,000
Principal
Amount of
Underwriter Class A-7 Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 12,425,000
BancAmerica Robertson Stephens 12,425,000
Chase Securities Inc. 12,425,000
Salomon Brothers Inc. 12,425,000
---------------
Total $ 49,700,000
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<PAGE>
Principal
Amount of
Underwriter Class B Notes
- ----------- ---------------
Credit Suisse First Boston Corporation $ 7,750,000
BancAmerica Robertson Stephens 7,750,000
Chase Securities Inc. 7,750,000
Salomon Brothers Inc. 7,750,000
---------------
Total $ 31,000,000
Principal
Amount of
Underwriter Certificates
- ----------- ---------------
Credit Suisse First Boston Corporation $ 3,530,716
BancAmerica Robertson Stephens 3,530,716
Chase Securities Inc. 3,530,716
Salomon Brothers Inc. 3,530,716
---------------
Total $ 14,122,864
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<PAGE>
SCHEDULE II
Locations of Chief Executive Offices and Principal Places of Business
---------------------------------------------------------------------
The CIT Group Securitization
Corporation II 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Sales Financing, Inc. 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Consumer Finance,
Inc. (NY) 650 CIT Drive
Livingston, NJ 07039-0491
<PAGE>
SCHEDULE III
Original
Principal Class A
Security Amount $ Price % Price $ Rate %
- -------- --------- ------- ------- ------
Class A-1 Notes 40,300,000 99.90000000 40,259,700.00 5.800
Class A-2 Notes 32,000,000 99.8250000 31, 944,000.00 5.9850
Class A-3 Notes 89,000,000 99.7250000 88.755,250.00 6.0180
Class A-4 Notes 128,000,000 99.6593750 127,564,000.00 6.2000
Class A-5 Notes 74,000,000 99.6500000 73,741,000.00 6.2500
Class A-6 Notes 106,000,000 99.5312500 105,503,125.00 6.3500
Class A-7 Notes 49,700,000 99.4328125 49,418,107.81 6.4000
Class B Notes 31,000,000 99.4328125 30,824,171.88 6.4500
Total Price to Public: $549,786,055
Total Price to Seller: 548,009,354
Underwriting Discounts
and Commissions: 1,776,700
<PAGE>
SCHEDULE IV
Original Pass-
Principal Through
Security Balance $ Price % Price $ Rate%
- -------- --------- ------- ------- -----
Certificates 14,122,864 99.3296875 14,112,934 6.8000
Total Price to Public: $14,112,934
Total Price to Seller: 14,028,196
Underwriting Discounts
and Commissions: 84,737
<PAGE>
EXHIBIT 4.1
===============================================================================
THE CIT RV TRUST 1997-A
Class A-1 5.800 % Asset-Backed Notes
Class A-2 5.985% Asset-Backed Notes
Class A-3 6.018% Asset-Backed Notes
Class A-4 6.200% Asset-Backed Notes
Class A-5 % 6.250 Asset-Backed Notes
Class A-6 6.350% Asset-Backed Notes
Class A-7 6.400% Asset-Backed Notes
Class B 6.450% Asset-Backed Notes
____________________________________
INDENTURE
Dated as of November 1, 1997
____________________________________
HARRIS TRUST AND SAVINGS BANK,
Indenture Trustee
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE
================================================================================
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- -------
<S> <C>
310(a)(1).................................................. 6.11
(a)(2).................................................. 6.11
(a)(3).................................................. 6.10
(a)(4).................................................. 6.14
(b).................................................. 6.11
(c).................................................. N.A.
311(a).................................................. 6.12
(b).................................................. 6.12
(c).................................................. N.A.
312(a).................................................. 7.1, 7.2
(b).................................................. 7.2
(c).................................................. 7.2
313(a).................................................. 7.4(a), 7-4(b)
(b)(l).................................................. 7.4(a)
(b)(2).................................................. 7.4(a)
(c).................................................. 7.4(a)
(d).................................................. 7.4(a)
314(a).................................................. 7.3(a), 3.9
(b).................................................. 3.6
(c)(l).................................................. 2.2, 2.9, 4.1. 11.1
(c)(2).................................................. 11.1 (a)
(c)(3).................................................. 11.1 (a)
(d).................................................. 2.9, 11.1 (b)
(e).................................................. 11.1 (a)
(f).................................................. 11.l(a)
315(a).................................................. 6.1(b)
(b).................................................. 6.5
(c).................................................. 6.1 (a)
(d).................................................. 6.2, 6.1 (c)
(e).................................................. 5.13
316(a)last..................................................
sentence.................................................. 1.1
(a)(l)(A).................................................. 5.11
(a)(l)(B).................................................. 5.12
(a)(2).................................................. Omitted
316(b),(c).................................................. 5.7
317(a)(l).................................................. 5.3(b)
(a)(2).................................................. 5.3(d)
(b).................................................. 3.3
318(a).................................................. 11.7
</TABLE>
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture.
N.A. means Not Applicable
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................................... 2
SECTION 1.1 Definitions.............................................................. 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........................ 2
ARTICLE II THE NOTES...................................................................... 3
SECTION 2.1 Form..................................................................... 3
SECTION 2.2 Execution, Authentication and Delivery................................... 3
SECTION 2.3 Temporary Notes.......................................................... 4
SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes............. 4
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes............................... 6
SECTION 2.6 Persons Deemed Noteholders............................................... 7
SECTION 2.7 Payment of Principal and Interest........................................ 7
SECTION 2.8 Cancellation of Notes.................................................... 8
SECTION 2.9 Release of Collateral.................................................... 9
SECTION 2.10 Book-Entry Notes......................................................... 9
SECTION 2.11 Notices to Depository.................................................... 10
SECTION 2.12 Definitive Notes......................................................... 10
SECTION 2.13 Seller as Noteholder..................................................... 10
SECTION 2.14 Tax Treatment............................................................ 10
ARTICLE III COVENANTS...................................................................... 11
SECTION 3.1 Payment of Principal and Interest........................................ 11
SECTION 3.2 Maintenance of Agency Office............................................. 11
SECTION 3.3 Money for Payments To Be Held in Trust................................... 11
SECTION 3.4 Existence................................................................ 13
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge..................... 13
SECTION 3.6 Opinions as to Trust Estate.............................................. 13
SECTION 3.7 Performance of Obligations; Servicing of Contracts....................... 14
SECTION 3.8 Negative Covenants....................................................... 15
SECTION 3.9 Annual Statement as to Compliance........................................ 16
SECTION 3.10 Consolidation, Merger, etc. of Issuer; Disposition of Trust Assets....... 16
SECTION 3.12 No Other Business........................................................ 18
SECTION 3.13 No Borrowing............................................................. 18
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities........................ 18
SECTION 3.15 Servicer's Obligations................................................... 19
SECTION 3.16 Capital Expenditures..................................................... 19
SECTION 3.17 Removal of Servicer...................................................... 19
SECTION 3.18 Restricted Payments...................................................... 19
SECTION 3.19 Notice of Events of Default.............................................. 19
SECTION 3.20 Further Instruments and Acts............................................. 20
SECTION 3.21 Representations and Warranties by the Issuer to the Indenture Trustee.... 20
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE IV SATISFACTION AND DISCHARGE..................................................... 21
SECTION 4.1 Satisfaction and Discharge of Indenture.................................. 21
SECTION 4.2 Application of Trust Money............................................... 22
SECTION 4.3 Repayment of Monies Held by Paying Agent................................. 22
SECTION 4.4 Duration of Position of Indenture Trustee................................ 22
ARTICLE V DEFAULT AND REMEDIES........................................................... 23
SECTION 5.1 Events of Default........................................................ 23
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment....................... 24
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee 25
SECTION 5.4 Remedies; Priorities..................................................... 27
SECTION 5.5 Optional Preservation of the Contracts................................... 29
SECTION 5.6 Limitation of Suits...................................................... 29
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest.... 30
SECTION 5.8 Restoration of Rights and Remedies....................................... 30
SECTION 5.9 Rights and Remedies Cumulative........................................... 30
SECTION 5.10 Delay or Omission Not a Waiver........................................... 30
SECTION 5.11 Control by Noteholders................................................... 31
SECTION 5.12 Waiver of Past Defaults.................................................. 31
SECTION 5.13 Undertaking for Costs.................................................... 32
SECTION 5.14 Waiver of Stay or Extension Laws......................................... 32
SECTION 5.15 Action on Notes.......................................................... 32
SECTION 5.16 Performance and Enforcement of Certain Obligations....................... 32
ARTICLE VI THE INDENTURE TRUSTEE.......................................................... 34
SECTION 6.1 Duties of Indenture Trustee.............................................. 34
SECTION 6.2 Rights of Indenture Trustee.............................................. 35
SECTION 6.3 Indenture Trustee May Own Notes.......................................... 36
SECTION 6.4 Indenture Trustee's Disclaimer........................................... 36
SECTION 6.5 Notice of Defaults....................................................... 36
SECTION 6.6 Reports by Indenture Trustee to Holders.................................. 36
SECTION 6.7 Compensation; Indemnity.................................................. 37
SECTION 6.8 Replacement of Indenture Trustee......................................... 37
SECTION 6.9 Merger or Consolidation of Indenture Trustee............................. 38
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee........ 39
SECTION 6.11 Eligibility; Disqualification............................................ 40
SECTION 6.12 Preferential Collection of Claims Against Issuer......................... 41
SECTION 6.13 Representations and Warranties of Indenture Trustee...................... 41
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of Notes......... 42
SECTION 6.15 Suit for Enforcement..................................................... 42
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee........................ 42
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS................................................. 44
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders... 44
SECTION 7.2 Preservation of Information, Communications to Noteholders............... 44
</TABLE>
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<TABLE>
<S> <C>
SECTION 7.3 Reports by Issuer........................................................ 44
SECTION 7.4 Reports by Trustee....................................................... 45
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.......................................... 46
SECTION 8.1 Collection of Money...................................................... 46
SECTION 8.2 Designated Accounts; Payments............................................ 46
SECTION 8.3 General Provisions Regarding Accounts.................................... 47
SECTION 8.4 Release of Trust Estate.................................................. 48
SECTION 8.5 Opinion of Counsel....................................................... 48
ARTICLE IX SUPPLEMENTAL INDENTURES........................................................ 50
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders................... 50
SECTION 9.2 Supplemental Indentures With Consent of Noteholders...................... 50
SECTION 9.3 Execution of Supplemental Indentures..................................... 52
SECTION 9.4 Effect of Supplemental Indenture......................................... 52
SECTION 9.5 Conformity with Trust Indenture Act...................................... 52
SECTION 9.6 Reference in Notes to Supplemental Indentures............................ 52
ARTICLE X REDEMPTION OF NOTES............................................................ 54
SECTION 10.1 Redemption............................................................... 54
SECTION 10.2 Form of Redemption Notice................................................ 54
SECTION 10.3 Notes Payable on Redemption Date......................................... 54
ARTICLE XI MISCELLANEOUS.................................................................. 56
SECTION 11.1 Compliance Certificates and Opinions, etc................................ 56
SECTION 11.2 Form of Documents Delivered to Indenture Trustee......................... 57
SECTION 11.3 Acts of Noteholders...................................................... 58
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.......... 59
SECTION 11.5 Notices to Noteholders; Waiver........................................... 60
SECTION 11.6 Alternate Payment and Notice Provisions.................................. 60
SECTION 11.7 Conflict with Trust Indenture Act........................................ 60
SECTION 11.8 Effect of Headings and Table of Contents................................. 61
SECTION 11.9 Successors and Assigns................................................... 61
SECTION 11.10 Separability............................................................. 61
SECTION 11.11 Benefits of Indenture.................................................... 61
SECTION 11.12 Legal Holidays........................................................... 61
SECTION 11.13 Governing Law............................................................ 61
SECTION 11.14 Counterparts............................................................. 62
SECTION 11.15 Recording of Indenture................................................... 62
SECTION 11.16 No Recourse.............................................................. 62
SECTION 11.17 No Petition.............................................................. 62
SECTION 11.18 Inspection............................................................... 63
SECTION 11.19 Indemnification by and Reimbursement of the Servicer..................... 63
SECTION 11.20 Subordination............................................................ 64
</TABLE>
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<PAGE>
Exhibit A-1 Form of Class A-1 Asset-Backed Notes
Exhibit A-2 Form of Class A-2 Asset-Backed Notes
Exhibit A-3 Form of Class A-3 Asset-Backed Notes
Exhibit A-4 Form of Class A-4 Asset-Backed Notes
Exhibit A-5 Form of Class A-5 Asset-Backed Notes
Exhibit A-6 Form of Class A-6 Asset Backed Notes
Exhibit A-7 Form of Class A-7 Asset Backed Notes
Exhibit B Form of Class B Asset-Backed Notes
- iv -
<PAGE>
INDENTURE, dated as of November 1, 1997, between THE CIT RV TRUST 1997-A, a
Delaware business trust (the "Issuer"), and HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Notes:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders, all of the Issuer's right, title and
interest in and to (i) the Contracts (except, to the extent provided in the Sale
and Servicing Agreement, any Post Cut-off Date Insurance Add-Ons); (ii) all
monies received under the Contracts on or after the Cut-off Date; (iii) such
amounts as from time to time may be held in one or more accounts (other than the
Excluded Assets), including the Collection Account, Note Distribution Account
and Reserve Account, established and maintained by the Servicer pursuant to the
Sale and Servicing Agreement (including all investments in such accounts and all
income from the funds therein (other than the Reserve Account) and all proceeds
thereof); (iv) an assignment of the security interests in the Financed Vehicles
granted by the Obligors and any accessions thereto and any other interest of the
Issuer in the Financed Vehicles; (v) the right to proceeds from physical damage,
credit life and disability insurance policies, if any, covering individual
Financed Vehicles or Obligors, as the case may be; (vi) the rights of the Issuer
under the Sale and Servicing Agreement (but excluding all rights of the Issuer
to the Excluded Assets); and (vii) all present and future claims, demands,
causes and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid property, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of any and all proceeds of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture.
<PAGE>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Indenture and not otherwise defined herein shall have the respective meanings
assigned them in the Sale and Servicing Agreement (the "Sale and Servicing
Agreement") dated as of November 1, 1997, among, the Issuer, The CIT Group
Securitization Corporation II (the "Company" or the "Seller") and The CIT
Group/Sales Financing, Inc., as Servicer ("CITSF"), as hereafter supplemented
and amended. All references in this Indenture to Articles, Sections, subsections
and exhibits are to the same contained in or attached to this Indenture unless
otherwise specified. All terms defined in this Indenture shall have the defined
meanings when used in any certificate, notice, Note or other document made or
delivered pursuant hereto unless otherwise defined therein.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture securityholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a Commission
rule have the respective meanings assigned to them by such definitions.
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<PAGE>
ARTICLE II
THE NOTES
SECTION 2.1 Form.
----
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes, the
Class A-7 Notes and the Class B Notes, in each case, together with the
Indenture Trustee's certificate of authentication, shall be substantially
in the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-
4, Exhibit A-5, Exhibit A-6, Exhibit A-7 and Exhibit B, respectively, with
such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods
(with or without steel engraved borders), all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
(c) The terms of the Notes as provided for in Exhibit A-1,
Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit A-5, Exhibit A-6, Exhibit A-
7 and Exhibit B hereto are part of the terms of this Indenture.
SECTION 2.2 Execution, Authentication and Delivery.
--------------------------------------
(a) Each Note shall be dated the date of its authentication, and
shall be issuable as a registered Note in the minimum denomination of
$1,000 and in integral multiples thereof (except for one Note of each class
which may be issued in a denomination other than an integral multiple of
$1,000).
(b) The Notes shall be executed on behalf of the Issuer by any
of its Authorized Officers. The signature of any such Authorized Officer on
the Notes may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature of
individuals who were Authorized Officers of the Issuer at the time such
signatures were affixed shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such office prior to the
authentication and delivery of such Notes or did not hold such office at
the date of such Notes.
(d) The Indenture Trustee, in exchange for the Grant of the
Contracts and the other components of the Trust, and simultaneously with
the constructive delivery to the Indenture Trustee of the Contract Files
with respect to the Contracts and the other components and assets of the
Trust, shall cause to be authenticated and delivered to or upon the order
of the
- 3 -
<PAGE>
Issuer, the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes, the
Class A-7 Notes and the Class B Notes for original issue in aggregate
principal amount of $40,300,000 $32,000,000, $89,000,000, $128,000,000,
$74,000,000, $106,000,000, $49,700,000 and $31,000,000, respectively. The
aggregate principal amount of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6
Notes, the Class A-7 Notes and the Class B Notes outstanding at any time
may not exceed $40,300,000, $32,000,000, $89,000,000, $128,000,000,
$74,000,000, $106,000,000, $49,700,000 and $31,000,000, respectively,
except as provided in Section 2.5.
(e) No Notes shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears
on such Note a certificate of authentication substantially in the form set
forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit A-5,
Exhibit A-6, Exhibit A-7 and Exhibit B as applicable, executed by the
Indenture Trustee by the manual signature of one of its Authorized
Officers, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 Temporary Notes.
---------------
(a) Pending the preparation of Definitive Notes, if any, the
Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, such Temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of
the tenor of the Definitive Notes in lieu of which they are issued and with
such variations as are consistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their
execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the Temporary Notes shall be exchangeable
for Definitive Notes upon surrender of the Temporary Notes at the Agency
Office of the Issuer to be maintained as provided in Section 3.2, without
charge to the Noteholder. Upon surrender for cancellation of any one or
more Temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and deliver in exchange therefor a like principal amount
of Definitive Notes of authorized denominations. Until so delivered in
exchange, the Temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange
---------------------------------------------------
of Notes.
--------
(a) The Issuer shall cause to be kept the Note Register, in
which, subject to such reasonable regulations as the Issuer may prescribe,
the Issuer shall provide for the registration of the Notes and the
registration of transfers and exchanges of the Notes. The Indenture Trustee
shall initially be the Note Registrar for the purpose of registering the
Notes and transfers of the Notes as herein provided. Upon any resignation
of any Note Registrar, the Issuer shall promptly appoint a successor Note
Registrar or, if it elects not to make such an appointment, assume the
duties of the Note Registrar.
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<PAGE>
(b) If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer will give the Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register. The
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof. The Indenture Trustee shall
have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of
the Noteholders and the principal amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at
the Corporate Trust Office of the Indenture Trustee or the Agency Office of
the Issuer (and following the delivery, in the former case, of such Notes
to the Issuer by the Indenture Trustee), the Issuer shall execute, the
Indenture Trustee shall authenticate and the Noteholder shall obtain from
the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same class in any authorized
denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes of the same class in any authorized denominations, of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at
the Corporate Trust Office of the Indenture Trustee or the Agency Office of
the Issuer (and following the delivery, in the former case, of such Notes
to the Issuer by the Indenture Trustee), the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from
the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
(e) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture, as
the Notes surrendered upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Indenture
Trustee, (i) duly executed by the Holder thereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar which
requirements include membership or participation in Securities Transfer
Agents Medallion Program ("Stamp") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, Stamp, all in accordance with the Exchange Act, and (ii)
accompanied by such other documents as the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or Indenture
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Notes, other than exchanges pursuant to Sections
2.3 or 9.6 not involving any transfer.
- 5 -
<PAGE>
(h) The preceding provisions of this Section 2.4
notwithstanding, the Issuer shall not be required to transfer or make
exchanges, and the Note Registrar need not register transfers or exchanges,
of Notes that: (i) have been selected for redemption pursuant to Article X,
if applicable; or (ii) are due for repayment within 15 days of submission
to the Corporate Trust Office or the Agency Office.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.
------------------------------------------
(a) If (i) any mutilated Note is surrendered to the Indenture
Trustee, or the Indenture Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Note, and (ii) there is delivered to
the Indenture Trustee such security or indemnity as may be required by it
to hold the Issuer and the Indenture Trustee harmless, then, in the absence
of notice to the Issuer, the Note Registrar or the Indenture Trustee that
such Note has been acquired by a bona fide purchaser, the Issuer shall
execute and upon the Issuer's request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of a like class and
aggregate principal amount; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within
seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may make
payment to the Holder of such destroyed, lost or stolen Note when so due or
payable or upon the Redemption Date, if applicable, without surrender
thereof.
(b) If, after the delivery of a replacement Note or payment in
respect of a destroyed, lost or stolen Note pursuant to subsection (a), a
bona fide purchaser of the original Note in lieu of which such replacement
Note was issued presents for payment such original Note, the Issuer and the
Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from (i) any Person to whom it was delivered, (ii) the Person
taking such replacement Note from the Person to whom such replacement Note
was delivered; or (iii) any assignee of such Person, except a bona fide
purchaser, and the Issuer and the Indenture Trustee shall be entitled to
recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
(c) In connection with the issuance of any replacement Note
under this Section 2.5, the Issuer may require the payment by the Holder of
such Note of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable expenses
(including all fees and expenses of the Indenture Trustee) connected
therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost or stolen Note shall be found
at any time or be enforced by any Person, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
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<PAGE>
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
SECTION 2.6 Persons Deemed Noteholders. Prior to due presentment
--------------------------
for registration of transfer of any Note, the Issuer, the Indenture Trustee
and any agent of the Issuer or the Indenture Trustee may treat the Person
in whose name any Note is registered (as of the day of determination) as
the Noteholder for the purpose of receiving payments of principal of and
interest on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and neither the Issuer, the Indenture Trustee nor any
agent of the Issuer or the Indenture Trustee shall be affected by notice to
the contrary.
SECTION 2.7 Payment of Principal and Interest.
---------------------------------
(a) Interest on the Notes shall accrue in the manner set forth
in the form of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-
3, Exhibit A-4, Exhibit A-5, Exhibit A-6, Exhibit A-7 and Exhibit B, as
applicable, at the respective Interest Rate for each class of Note, and
such interest shall be payable on each Distribution Date as specified in
the form of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3,
Exhibit A-4, Exhibit A-5, Exhibit A-6, Exhibit A-7 and Exhibit B, as
applicable. Any interest payable on any Note shall be punctually paid or
duly provided for by a deposit by or at the direction of the Issuer into
the Note Distribution Account on the applicable Distribution Date and shall
be paid to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the applicable Record Date, by check mailed first-
class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date; provided, however, that, unless and until
Definitive Notes have been issued pursuant to Section 2.12, with respect to
Notes registered on the applicable Record Date in the name of the
Depository (initially, Cede & Co.), payment shall be made by wire transfer
in immediately available funds to the account designated by the Depository.
(b) Prior to the occurrence of an Event of Default and a
declaration in accordance with Section 5.2 that the Notes have become
immediately due and payable, the outstanding principal of each class of the
Notes shall be payable in full on the Note Final Scheduled Distribution
Date for such class and, to the extent of funds available therefor, in
installments on the Distribution Dates (if any) preceding the applicable
Note Final Scheduled Distribution Date, in accordance with Section 8.2(c).
Any principal payable on any Note shall be punctually paid or duly provided
for by a deposit by or at the direction of the Issuer into the Note
Distribution Account on the applicable Distribution Date and shall be paid
to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date, by check mailed first-class,
postage prepaid to such Person's address as it appears on the Note Register
on such Record Date; provided, however, that, unless and until Definitive
-------- -------
Notes have been issued pursuant to Section 2.12, with respect to Notes
registered on the Record Date in the name of the Depository (initially,
Cede & Co.), payment shall be made by wire transfer in immediately
available funds to the account designated by the Depository, except for:
(i) the final installment of principal on any Note; and (ii) the Redemption
Price (as hereinafter defined) for any Notes, if so called, which, in each
case, shall be payable as provided herein. The funds
- 7 -
<PAGE>
represented by any such checks in respect of interest or principal returned
undelivered shall be held in accordance with Section 3.3.
(c) The entire unpaid principal amount of each class of the
Notes shall be due and payable, if not previously paid, if:
(i) an Event of Default shall have occurred and be
continuing; and
(ii) the Indenture Trustee or the Noteholders representing
not less than 66 2/3% of the aggregate outstanding principal amount of
the Controlling Notes have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2.
(d) If the Issuer defaults in a payment of interest on any of
the Notes, the Issuer shall pay such defaulted interest in any lawful
manner. The Issuer may pay such defaulted interest to the Persons who are
Noteholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Issuer shall fix or
cause to be fixed any such special record date and payment date, and, at
least 15 days before any such special record date, the Issuer shall mail to
each Noteholder and the Trustee a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
(e) With respect to any Distribution Date on which the final
installment of principal and interest on a class of the Notes is to be
paid, the Indenture Trustee shall notify each Noteholder of record for such
class as of the Record Date for such Distribution Date of the fact that the
final installment of principal of and interest on such Note is to be paid
on such Distribution Date. Such notice shall be sent (i) on such Record
Date by facsimile, if Book-Entry Notes are outstanding; or (ii) not later
than three Business Days after such Record Date in accordance with Section
11.5(a) if Definitive Notes are outstanding, and shall specify that such
final installment shall be payable only upon presentation and surrender of
such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Notes shall be mailed to Noteholders as provided in Section
10.2.
SECTION 2.8 Cancellation of Notes. All Notes surrendered for
---------------------
payment, redemption, exchange or registration of transfer shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section 2.8, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided, however, that
such Issuer Order is timely and the Notes have not been previously disposed of
by the Indenture Trustee.
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<PAGE>
SECTION 2.9 Release of Collateral. Subject to Section 11.1, the
---------------------
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officers' Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA
(S)(S)314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.
SECTION 2.10 Book-Entry Notes. The Notes, upon original
----------------
issuance, shall be issued in the form of a typewritten Note or Notes
representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Depository by or on behalf of the Issuer. Such Note or
Notes shall be registered on the Note Register in the name of the Depository,
and no Note Owner shall receive a Definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.12. Unless and until the
Definitive Notes have been issued to Note Owners pursuant to Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force
and effect;
(b) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of the
Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(d) the rights of the Note Owners shall be exercised only
through the Depository and shall be limited to those established by law and
agreements between such Note Owners and the Depository and/or the
Depository Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Depository shall make book-entry
transfers between the Depository Participants and receive and transmit
payments of principal of and interest on the Notes to such Depository
Participants, pursuant to the Depository Agreement; and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the aggregate outstanding principal amount of the
Notes, the Depository shall be deemed to represent such percentage only to
the extent that it has (i) received written instructions to such effect
from Note Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes; and (ii) has delivered such written instructions to the Indenture
Trustee.
SECTION 2.11 Notices to Depository. Whenever a notice or other
---------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Depository and shall have no
obligation to the Note Owners.
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<PAGE>
SECTION 2.12 Definitive Notes.
----------------
If (i) the Servicer advises the Indenture Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Issuer is unable to locate a
qualified successor; (ii) the Servicer, at its option, advises the Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Depository; or (iii) after the occurrence of an Event of Default or an Event of
Termination, Note Owners representing beneficial interests aggregating at least
a majority of the aggregate outstanding principal amount of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Note Owners, then the
Depository shall notify all Note Owners and the Indenture Trustee of the
occurrence of any such event and the Depository shall, after being informed by
the Indenture Trustee, notify the Note Owners of the availability of Definitive
Notes to Note Owners requesting the same. Upon surrender to the Indenture
Trustee of the typewritten Note or Notes representing the Book-Entry Notes by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Depository. None of the Issuer, the
Servicer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
SECTION 2.13 Seller as Noteholder. The Seller in its individual
--------------------
or any other capacity may become the owner or pledgee of the Notes and may
otherwise deal with the Issuer or its affiliates with the same rights it would
have if it were not the Seller.
SECTION 2.14 Tax Treatment. The Issuer and the Indenture
-------------
Trustee, by entering into this Indenture, and the Noteholders, by acquiring any
Note or interest therein, (i) express their intention that the Notes qualify
under applicable tax law as indebtedness secured by the Contracts, and (ii)
unless otherwise required by appropriate taxing authorities, agree to treat the
Notes as indebtedness secured by the Contracts for the purpose of federal income
taxes, state and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
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<PAGE>
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall
---------------------------------
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. On each Distribution Date and on
the Redemption Date (if applicable), the Issuer shall cause amounts on deposit
in the Note Distribution Account to be distributed to the Noteholders in
accordance with Sections 2.7 and 8.2, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or
principal. Any amounts so withheld shall be considered as having been paid by
the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the
----------------------------
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "Agency Office"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such office or
agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Indenture Trustee, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
--------------------------------------
(a) As provided in Sections 8.2(a) and (b), all payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Note Distribution Account pursuant to Section
8.2(c) shall be made on behalf of the Issuer by the Indenture Trustee or by
another Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section 3.3.
(b) On or before each Distribution Date or the Redemption Date
(if applicable), the Issuer shall deposit or cause to be deposited in the
Note Distribution Account an aggregate sum sufficient to pay the amounts
then becoming due with respect to the Notes, such sum to be held in trust
for the benefit of the Persons entitled thereto and (unless the Paying
Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee
of its action or failure so to act.
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section 3.3, that such Paying
Agent shall:
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<PAGE>
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee written notice of any
default by the Issuer (or any other obligor upon the Notes) of which it
has actual knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent in effect at the time of determination; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for
the payment of any amount due with respect to any Note and remaining
unclaimed for one year after such amount has become due and payable shall
be discharged from such trust and be paid to the Issuer on Issuer Request;
and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, may at
the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business
Day and of general circulation in the City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining shall be repaid to the
Issuer. The Indenture Trustee may also adopt and employ, at the expense of
the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been
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<PAGE>
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4 Existence. Subject to Section 3.10, the Issuer shall
---------
keep in full effect its existence, rights and franchises as a business trust
under the laws of the State of Delaware and shall obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Collateral and each other instrument or agreement
included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate; Acknowledgment of
---------------------------------------------
Pledge.
------
The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any rights under this Indenture against the
Collateral; or
preserve and defend title to the Trust Estate and the rights of the Indenture
Trustee and the Noteholders in such Trust Estate against the claims of all
persons and parties, and the Issuer hereby designates the Indenture Trustee its
agent and attorney-in-fact to execute any financing statement, continuation
statement or other instrument required by the Indenture Trustee pursuant to this
Section 3.5.
SECTION 3.6 Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the recording
and filing of this Indenture, any indentures supplemental hereto and any
other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statements as are necessary to
perfect and make effective the lien and security interest of this Indenture
and reciting the details of such action, or stating that, in the opinion of
such counsel, no such action is necessary to make such lien and security
interest effective.
(b) On or before April 15 in each calendar year, beginning April
15, 1998, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action
has been taken with respect to the recording, filing,
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<PAGE>
re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements as is
necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain the lien
and security interest created by this Indenture. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
April 15 in the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Contracts.
--------------------------------------------------
(a) The Issuer shall not take any action and shall use its
reasonable efforts not to permit any action to be taken by others that
would release any Person from any of such Person's material covenants or
obligations under any instrument or agreement included in the Trust Estate
or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of,
any such instrument or agreement, except as otherwise expressly provided in
this Indenture, the Sale and Servicing Agreement or such other instrument
or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in the Basic
Documents or an Officers' Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate,
including but not limited to filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by
the terms of this Indenture, the Sale and Servicing Agreement and the
Purchase Agreement in accordance with and within the time periods provided
for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of an
Event of Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee and the Rating Agencies
thereof, and shall specify in such notice the response or action, if any,
the Issuer has taken or is taking with respect to such default. If an Event
of Termination shall arise from the failure of the Servicer to perform any
of its duties or obligations under the Sale and Servicing Agreement with
respect to the Contracts, the Issuer and the Indenture Trustee shall take
all reasonable steps available to them pursuant to the Sale and Servicing
Agreement to remedy such failure or to effect a Service Transfer pursuant
to the Sale and Servicing Agreement.
(e) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the
rights of the Indenture Trustee hereunder, the
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<PAGE>
Issuer agrees that it shall not, without the prior written consent of the
Indenture Trustee or the Holders of at least a majority in aggregate
outstanding principal amount of the Notes, as applicable in accordance with
the terms thereof, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any of the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement or the Purchase Agreement. If
any such amendment, modification, supplement or waiver shall be so
consented to by the Indenture Trustee or such Holders, as applicable, the
Issuer agrees, promptly following a request by the Indenture Trustee to do
so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture
Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are
------------------
outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except the Issuer may (i) collect,
liquidate, sell or otherwise dispose of Contracts (including Repurchased
Contracts and Liquidated Contracts) and Financed Vehicles, (ii) make cash
payments out of the Designated Accounts and (iii) take other actions, in
each case as contemplated by the Basic Documents;
(b) claim any credit on or, make any deduction from, the
principal or interest payable in respect of the Notes (other than amounts
properly withheld from such payments under the Code or applicable state
law) or assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon any part of the Trust
Estate;
(c) voluntarily commence any insolvency, readjustment of debt,
marshalling of assets and liabilities or other proceeding, or apply for an
order by a court or agency or supervisory authority for the winding-up or
liquidation of its affairs or any other event specified in Section 5.1(e)
or 5.1(f); or
(d) either (i) permit the validity or effectiveness of this
Indenture to be impaired, or permit the Lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted hereby,
(ii) permit any Lien or other encumbrance (other than the Lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden
the Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other liens
that arise by operation of law, in each case on a Financed Vehicle and
arising solely as a result of an action or omission of the related Obligor)
or (iii) permit the Lien of this Indenture not to constitute a valid first
priority security interest in the Trust Estate (other than with respect to
any such tax, mechanics' or other Lien).
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
---------------------------------
deliver to the Indenture Trustee, on or before April 15 of each year, beginning
April 15, 1998, and otherwise in compliance with Section 314(a)(4) of the TIA,
an Officer's Certificate signed by an
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Authorized Officer, dated as of April 15 of such year, stating that a review of
the activities of the Issuer during such fiscal year and of performance under
this Indenture has been made and, to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has fulfilled all of its obligations
under this Indenture throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such Authorized Officer and the nature and status thereof. A copy of such
certificate may be obtained by any Noteholder by a request in writing to the
Issuer addressed to the Corporate Trust Office of the Indenture Trustee.
SECTION 3.10 Consolidation, Merger, etc. of Issuer; Disposition
--------------------------------------------------
of Trust Assets.
- ---------------
(a) The Issuer shall not consolidate or merge with or into any
other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form satisfactory to the Indenture Trustee, the due and timely payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such merger or
consolidation, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and such Person;
(iv) any action as is necessary to maintain the Lien created
by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating:
(A) that such consolidation or merger and such
supplemental indenture comply with this Section 3.10;
(B) that such consolidation or merger and such
supplemental indenture shall have no material adverse tax consequence to
the Trust or any Noteholder or Certificateholder; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any filing
required by the Exchange Act.
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<PAGE>
(b) Except as otherwise expressly permitted by this Indenture or
the other Basic Documents, the Issuer shall not sell, convey, exchange,
transfer or otherwise dispose of any of its properties or assets (other
than the Excluded Assets), including those included in the Trust Estate, to
any Person unless:
(i) the Person that acquires such properties or assets of
the Issuer (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State or the
District of Columbia and (B) by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee:
(1) expressly assumes the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein;
(2) expressly agrees that all right, title and interest
so sold, conveyed, exchanged, transferred or otherwise disposed of shall be
subject and subordinate to the rights of Noteholders;
(3) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act
in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction and such Person;
(iv) any action as is necessary to maintain the Lien created
by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating that:
(A) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture comply with this Section 3.10;
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(B) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture has no material adverse tax
consequence to the Trust or to any Noteholders or Certificateholders; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any filing
required by the Exchange Act.
SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation
or merger (if other than the Issuer) shall succeed to, and be substituted
for, and may exercise every right and power of, the Issuer under this
Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a sale, conveyance, exchange, transfer or disposition
of all the assets and properties of the Issuer pursuant to Section 3.10(b),
the Trust shall be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with
respect to the Notes immediately upon the delivery of written notice to the
Indenture Trustee from the Person acquiring such assets and properties
stating that the Trust is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in
-----------------
any business or activity other than acquiring, holding and managing the
Contracts, the other assets of the Trust Estate, and the Excluded Assets and the
proceeds therefrom in the manner contemplated by the Basic Documents, issuing
the Notes and the Certificates, making payments on the Notes and the
Certificates and engaging in such other activities that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto, as set
forth in Section 2.3 of the Trust Agreement.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
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<PAGE>
SECTION 3.15 Servicer's Obligations. The Issuer shall use its
----------------------
best efforts to cause the Servicer to comply with its obligations under the Sale
and Servicing Agreement.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (whether by long-term or operating lease or otherwise) for capital
assets (either real, personal or intangible property) other than the purchase of
the Contracts and other property and rights from the Seller pursuant to the
Basic Documents.
SECTION 3.17 Removal of Servicer. So long as any Notes are
-------------------
outstanding, the Issuer shall not remove the Servicer without cause unless the
Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18 Restricted Payments. Except for payments of
-------------------
principal of or interest on or redemption of the Notes and except as expressly
provided in the Basic Documents, so long as any Notes are outstanding, the
Issuer shall not, directly or indirectly:
(a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial
interest in the Issuer or otherwise, in each case with respect to any
ownership or equity interest or similar security in or of the Issuer or to
the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or similar security; or
(c) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
- -------- -------
to the Servicer, the Owner Trustee, the Lender, the holder of the AO Interest
and the Certificateholders as permitted by, and to the extent funds are
available for such purpose under, the Sale and Servicing Agreement or the Trust
Agreement. The Issuer shall not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with the Basic
Documents.
SECTION 3.19 Notice of Events of Default. The Issuer agrees to
---------------------------
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each Event of Termination, and each default on the
part of the Seller or the Servicer of their obligations under the Basic
Documents.
SECTION 3.20 Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.21 Representations and Warranties by the Issuer to the
---------------------------------------------------
Indenture Trustee. The Issuer hereby represents and warrants to the Indenture
- -----------------
Trustee as follows:
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(a) Good Title. No Contract has been sold, transferred, assigned
----------
or pledged by the Trust to any Person other than the Indenture Trustee;
immediately prior to the conveyance of the Contracts pursuant to this
Indenture, the Trust had good and marketable title thereto, free of any
Lien; and, upon execution and delivery of this Indenture by the Trust, the
Indenture Trustee shall have all of the right, title and interest of the
Trust in, to and under the Contracts, the unpaid indebtedness evidenced
thereby and the collateral security therefor, free of any Lien; and
(b) All Filings Made. All filings (including, without
----------------
limitation, UCC filings) necessary in any jurisdiction to give the
Indenture Trustee a first perfected ownership interest in the Contracts
shall have been made.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
---------------------------------------
Indenture shall cease to be of further effect with respect to the Notes except
as to: (i) rights of registration of transfer and exchange; (ii) substitution of
mutilated, destroyed, lost or stolen Notes; (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon; (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.19 and 3.21; (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Sections 4.2 and 4.4); and (vi) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on demand of and at
the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and delivered (other
than (A) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.5 and (B) Notes for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on their respective Note
Final Scheduled Distribution Date within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer,
and the Issuer, in the case of (A), (B) or (C) of subsection 4.1(a)(2) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire unpaid principal of and accrued interest on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due on
their respective Note Final Scheduled Distribution Dates for such Notes or the
Redemption Date for such Notes (if such Notes have been called for redemption
pursuant to Section 10);
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(b) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
11.1(a) and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
SECTION 4.2 Application of Trust Money. All monies deposited
--------------------------
with the Indenture Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3 Repayment of Monies Held by Paying Agent. In
----------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes shall,
upon demand of the Issuer, be paid to the Indenture Trustee to be held and
applied according to Section 3.3 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
SECTION 4.4 Duration of Position of Indenture Trustee.
-----------------------------------------
Notwithstanding the earlier payment in full of all principal and interest due to
the Noteholders under the terms of the Notes and the cancellation of the Notes
pursuant to Section 4.1, the Indenture Trustee shall continue to act in the
capacity as Indenture Trustee hereunder and, for the benefit of the
Certificateholders, shall comply with its obligations under the Basic Documents,
as appropriate, until such time as all payments in respect of Certificate
Balance and interest due to the Certificateholders have been paid in
full.
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<PAGE>
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. For the purposes of this
-----------------
Indenture, "Event of Default" wherever used herein, means any one of the
following events:
(a) failure to pay any interest on any Note as and when the same
becomes due and payable which failure continues unremedied for a period of
five (5) days; or
(b) except as set forth in Section 5.1(c), failure to pay any
installment of the principal of any Note as and when the same becomes due
and payable, and such failure continues unremedied for a period of thirty
(30) days after there shall have been given, by registered or certified
mail, written notice thereof to the Servicer by the Indenture Trustee or to
the Servicer and the Indenture Trustee by the Holders of not less than 25%
of the aggregate outstanding principal amount of the Controlling Notes; or
(c) failure to pay in full the outstanding principal balance of
each class of the Notes on or prior to the Note Final Scheduled
Distribution Date for such class; or
(d) default in the observance or performance in any material
respect of any covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement for payment of principal or interest)
which failure materially and adversely affects the rights of the
Noteholders, and such default shall continue or not be cured, for a period
of 30 days after there shall have been given, by registered or certified
mail, to the Issuer and the Seller (or the Servicer, as applicable) by the
Indenture Trustee or to the Issuer and the Seller (or the Servicer, as
applicable) and the Indenture Trustee by the Holders of at least 25% of the
aggregate outstanding principal amount of the Controlling Notes, a written
notice specifying such default and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
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<PAGE>
The Issuer shall deliver to the Indenture Trustee, within five Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under Section 5.1(c), its status and
what action the Issuer is taking or proposes to take with respect thereto. The
Indenture Trustee shall, upon becoming aware of an Event of Default, promptly
notify the Rating Agencies of such Event of Default.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default should occur and be continuing, then
and in every such case, unless the principal amount of the Notes shall have
already become due and payable, either the Indenture Trustee or the Holders
of Notes representing not less than 66 2/3% of the aggregate outstanding
principal amount of the Controlling Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to
the Indenture Trustee if given by the Noteholders) setting forth the Event
or Events of Default, and upon any such declaration the unpaid principal
amount of such Notes, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable.
The Indenture Trustee shall, upon the declaration that all the Notes are to
be immediately due and payable, promptly notify the Rating Agencies.
(b) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Holders of Notes representing not less than
66 2/3% of the aggregate outstanding principal amount of the Controlling
Notes, by written notice to the Issuer and the Indenture Trustee, may waive
all Defaults set forth in the notice delivered pursuant to Section 5.2(a),
and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided herein;
provided, that no such rescission and annulment shall extend to or affect any
- --------
subsequent default or impair any right consequent thereto; and provided further,
that if the Indenture Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been
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<PAGE>
discontinued or abandoned because of such rescission and annulment or for any
other reason, or shall have been determined adversely to the Indenture Trustee,
then and in every such case, the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Indenture Trustee, the Issuer and the Noteholders, as the case may be, shall
continue as though no such proceedings had been taken.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Indenture Trustee.
- --------------------
(a) The Issuer covenants that if an Event of Default occurs and
is continuing under Sections 5.1(a), 5.1(b) or 5.1(c) of this Indenture,
then the Issuer shall, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the benefit of the Noteholders in accordance with
their respective outstanding principal amounts, the whole amount then due
and payable on such Notes for principal and interest, with interest upon
the overdue principal at the rate borne by the respective class of the
Notes, and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the monies
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 5.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee
by this Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency
or other similar law, or if a receiver, assignee or trustee in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to
the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Indenture Trustee shall have made any
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<PAGE>
demand pursuant to the provisions of this Section 5.3, shall be entitled
and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
disbursements and advances made, by the Indenture Trustee and each predecessor
trustee, and their respective agents, attorneys and counsel, and any other
amounts due to the Indenture Trustee and each predecessor trustee under Section
6.7 hereof, except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture
Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such
Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an
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<PAGE>
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for
the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing
and the Notes have been accelerated under Section 5.2(a), the Indenture
Trustee may do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by declaration
of acceleration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
- -----------------
liquidate the Trust Estate following an Event of Default, unless (A) the Holders
of all of the aggregate outstanding principal amount of the Notes consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to pay in full the principal of and the accrued
interest on the Notes at the date of such sale or liquidation or (C) the
Indenture Trustee determines that the Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
and when they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of Holders of not less
than 66 2/3% of the aggregate outstanding principal amount of the Controlling
Notes. Prior to a sale or liquidation of the Trust Estate following an Event of
Default, the Indenture Trustee shall notify the Rating Agencies of such sale or
liquidation. In determining such sufficiency or insufficiency with respect to
clauses (B) and (C), the Indenture Trustee may, but need not, obtain and
conclusively rely upon an opinion of an Independent investment banking or
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<PAGE>
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
following order: FIRST: to the Indenture Trustee for amounts due under
Section 6.7;
SECOND: to the Servicer for the Servicer Payment;
THIRD: to the Class A Noteholders for amounts due and unpaid on
the Class A Notes for interest, ratably among all Class A Noteholders, without
preference or priority of any kind, according to the amounts due and payable on
all the Class A Notes for interest;
FOURTH: to the holders of the Class A Notes for amounts due and
unpaid on the Class A Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class A
Notes for principal, until the principal amount of the Class A Notes is reduced
to zero;
FIFTH: to the Class B Noteholders for amounts due and unpaid on
the Class B Notes for interest, ratably among all Class B Noteholders, without
preference or priority of any kind, according to the amounts due and payable on
all the Class B Notes for interest;
SIXTH: to the holders of the Class B Notes for amounts due and
unpaid on the Class B Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Class B
Notes for principal, until the principal amount of the Class B Notes is reduced
to zero;
SEVENTH: to the Certificateholders for amounts due and unpaid on
the Certificates for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Certificates for interest;
EIGHTH: to the Certificateholders for amounts due and unpaid on
the Certificates for the Certificate Balance ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Certificates for the Certificate Balance;
NINTH: if CITSF or one of its affiliates is the Servicer, the
Servicing Fee (including any unpaid Servicing Fees for past Distribution Dates)
shall (to the extent not previously paid to the Servicer) be paid to the
Servicer;
TENTH: to the Lender for payment of outstanding principal and
interest on the Loan; and
ELEVENTH: to the Issuer for distribution to the holder of the AO
Interest.
The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.4. At least 15 days before
such record date, the Indenture
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<PAGE>
Trustee shall mail to each Noteholder and the Indenture Trustee a notice that
states the record date, the payment date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Contracts. If the Notes
--------------------------------------
have been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to take and maintain
possession of the Trust Estate. In determining whether to take and maintain
possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
and conclusively rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall
-------------------
have any right to institute any Proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate
outstanding principal amount of the Controlling Notes have made written
request to the Indenture Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the aggregate outstanding principal amount of the
Controlling Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders of Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Notes. For the protection and enforcement of the provisions of
this Section 5.6, each and every Noteholder shall be entitled to such relief as
can be given either at law or in equity.
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<PAGE>
If the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the aggregate outstanding principal
amount of the Controlling Notes, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive
----------------------------------------------
Principal and Interest. Notwithstanding any other provisions in this Indenture,
- ----------------------
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, if applicable, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or
------------------------------
omission of the Indenture Trustee or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee
or by the Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority
----------------------
of the aggregate outstanding principal amount of the Controlling Notes shall,
subject to provision being made for indemnification against costs, expenses and
liabilities in a form satisfactory to the Indenture Trustee, have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided, however, that:
-------- -------
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<PAGE>
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate
shall be by the Holders of Notes representing not less than 100% of the
aggregate outstanding principal amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to Section 5.5, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the aggregate outstanding principal amount of the
Notes to sell or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
- -------- -------
take any action that it determines might cause it to incur any liability or
might materially adversely affect the rights of any Noteholders not consenting
to such action.
SECTION 5.12 Waiver of Past Defaults.
-----------------------
(a) Prior to the declaration of the acceleration of the maturity
of the Notes as provided in Section 5.2, the Holders of not less than a
majority of the aggregate outstanding principal amount of the Controlling
Notes may waive any past Default or Event of Default and its consequences
except a Default (i) in the payment of principal of or interest on any of
the Notes or (ii) in respect of a covenant or provision hereof which cannot
be modified or amended without the consent of the Holder of each
Controlling Note. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Noteholders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to
have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this
---------------------
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any Proceeding for the enforcement of any right or remedy under this Indenture,
or in any Proceeding against the Indenture Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such
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<PAGE>
Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 5.13
shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate outstanding principal amount of the Notes; or
(c) any Proceeding instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer
--------------------------------
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to
---------------
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer.
SECTION 5.16 Performance and Enforcement of Certain Obligations.
--------------------------------------------------
(a) Promptly following a request from the Indenture Trustee to
do so and at the Servicer's expense, the Issuer agrees to take all such
lawful action as the Indenture Trustee may reasonably request to compel or
secure the performance and observance by CITSF, the Seller and the Servicer
of their respective obligations to the Issuer under or in connection with
the Basic Documents (other than the Excluded Assets) in accordance with the
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Sale and Servicing Agreement to the extent and in the manner reasonably
directed by the Indenture Trustee, including the transmission of notices of
default on the part of the Seller or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by CITSF, the Seller or the Servicer of each of their
obligations under the Basic Documents (other than with respect to the
Excluded Assets).
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<PAGE>
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of not less than 66-2/3% of the aggregate outstanding principal
amount of the Controlling Notes shall, subject to Article VI, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Basic Documents
(other than with respect to the Excluded Assets), including the right or
power to take any action to compel or secure performance or observance by
the Seller or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver thereunder, and any right of the Issuer to take such
action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to
do so and at the Servicer's expense, the Issuer agrees to take all such
lawful action as the Indenture Trustee may reasonably request to compel or
secure the performance and observance by CITSF of each of its obligations
to the Seller under or in connection with the Sale and Servicing Agreement
and the Purchase Agreement in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement and the Purchase Agreement to the extent and in the manner
reasonably directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Seller thereunder and the institution
of legal or administrative actions or proceedings to compel or secure
performance by CITSF of each of its obligations under the Sale and
Servicing Agreement and the Purchase Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of not less than 66-2/3% of the aggregate outstanding principal
amount of the Controlling Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Seller against CITSF under or in
connection with the Sale and Servicing Agreement and the Purchase
Agreement, including the right or power to take any action to compel or
secure performance or observance by CITSF of each of its obligations to the
Seller thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Sale and Servicing Agreement and
the Purchase Agreement, and any right of the Seller to take such action
shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
---------------------------
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this Section 6.1(c) does not limit the effect of Section
6.1(b);
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction properly delivered to it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in
writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the
terms of this Indenture, the Sale and Servicing Agreement or the Trust
Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
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<PAGE>
grounds to believe that repayments of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
(h) The Indenture Trustee shall take the actions required to be
taken by it set forth in Article XI of the Sale and Servicing Agreement in
connection with a sale of the Contracts.
(i) In the event that the Indenture Trustee is also acting as
Authenticating Agent and/or Note Registrar hereunder, the rights and
protections afforded to the Indenture Trustee pursuant to this Article VI
shall also be afforded to such Authenticating Agent and/or Note Registrar.
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the
proper person. The Indenture Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officer's Certificate or Opinion of
Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture
Trustee shall not be responsible for any misconduct or negligence on the
part of, or for the supervision of, any such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; provided, however, that the
Indenture Trustee's conduct does not constitute willful misconduct,
negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, the Indenture
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
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opinion, report, notice, request, consent, order, approval, bond, or other
paper or document, unless requested in writing to do so by Holders of the
Notes evidencing not less than 25% of the principal amount of the Notes;
provided, however, that if the payment within a reasonable time to the
-------- -------
Indenture Trustee of the costs, expenses, or liabilities likely to be
incurred by it in the making of such investigation shall be, in the opinion
of the Indenture Trustee, not reasonably assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such cost,
expense, or liability or payment of such expenses as a condition precedent
to so proceeding. The reasonable expense of every such examination shall be
paid by the Issuer or by the Seller at the direction of the Issuer or, if
paid by the Indenture Trustee, shall be reimbursed by the Issuer or by the
Seller at the direction of the Issuer upon demand. Nothing in this clause
(f) shall affect the obligation of the Issuer or the Seller to observe any
applicable law prohibiting disclosure of information regarding the
Obligors.
SECTION 6.3 Indenture Trustee May Own Notes. The Indenture
-------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer, the Servicer or any of their
respective Affiliates with the same rights it would have if it were not
Indenture Trustee; provided, however, that the Indenture Trustee shall comply
with Sections 6.10 and 6.11. Any Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture
------------------------------
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is actually known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note, the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The
---------------------------------------
Indenture Trustee shall deliver to each Noteholder the information and documents
set forth in Article VII, and, in addition, all such information with respect to
the Notes as may be required to enable such holder to prepare its federal and
state income tax returns.
SECTION 6.7 Compensation; Indemnity.
-----------------------
(a) The Issuer shall cause the Servicer pursuant to the Sale and
Servicing Agreement to pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Issuer shall cause the Servicer pursuant to the
Sale and
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Servicing Agreement to reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall cause the Servicer pursuant to
the Sale and Servicing Agreement to indemnify the Indenture Trustee in
accordance with Section 8.02 of the Sale and Servicing Agreement.
(b) The Issuer's obligations to the Indenture Trustee pursuant
to this Section 6.7 shall survive the discharge of this Indenture or the
earlier resignation or removal of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in
Section 5.1(d) or (e) with respect to the Issuer, the expenses are intended
to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency
or similar law.
SECTION 6.8 Replacement of Indenture Trustee.
--------------------------------
(a) The Indenture Trustee may resign at any time by so notifying
the Issuer. The Holders of a majority in aggregate outstanding principal
amount of the Notes may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. Such
resignation or removal shall become effective in accordance with Section
6.8(c). The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
(b) If the Indenture Trustee resigns or is removed or if a
vacancy exists in the office of Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), the Holders of a majority in aggregate outstanding
principal amount of the Notes may appoint a successor Indenture Trustee,
but until a successor Indenture Trustee shall have been so appointed by the
Holders of the Notes, the Issuer shall appoint a successor Indenture
Trustee, and until the Issuer has appointed such successor the resignation
of the Indenture Trustee shall not become effective. After any such
appointment other than by the holders of the Notes, the person making such
appointment shall forthwith cause notice thereof to be mailed to the
holders of the Notes at their addresses as the same then appear in the
register of the Issuer; but any successor Trustee so appointed shall,
immediately and without further act, be superseded by a successor Trustee
appointed by the holders of the Notes in the manner above prescribed, if
such appointment be made prior to the expiration of one year from the date
of the mailing of such notice by the Issuer, or by such receivers,
trustees, custodians, or assignees. A retiring Indenture Trustee shall not
be liable for any acts or omissions of a successor Indenture Trustee
occurring after the retirement of such retired
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<PAGE>
Indenture Trustee, which retirement was effected pursuant to the terms and
subject to the conditions of this Indenture.
(c) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall
have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
(d) If a successor Indenture Trustee does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the
retiring Trustee, the Issuer or the Holders of a majority of the aggregate
outstanding principal amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture
Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's obligations under Section 6.7
and the Servicer's corresponding obligations under the Sale and Servicing
Agreement shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
--------------------------------------------
(a) Any corporation into which the Indenture Trustee may be
merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Indenture Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Indenture Trustee, shall be the successor of the Indenture Trustee under
this Indenture; provided, however, that such corporation shall be eligible
-------- -------
under the provisions of Section 6.11, without the execution or filing of
any instrument or any further act on the part of any of the parties to this
Indenture, anything in this Indenture to the contrary notwithstanding.
(b) If at the time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or
in the name of the successor to the Indenture Trustee. In all such cases
such certificate of authentication shall have the same full force as is
provided anywhere in the Notes or herein with respect to the certificate of
authentication of the Indenture Trustee.
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<PAGE>
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
-----------------------------------------------
Indenture Trustee.
- -----------------
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust or any Financed Vehicle may at
the time be located, the Indenture Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act
as a co-trustee or co-trustees, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in
such capacity and for the benefit of the Noteholders, such title to the
Trust, or any part hereof, and, subject to the other provisions of this
Section 6.10, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall
be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
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<PAGE>
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Indenture on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor
trustee.
SECTION 6.11 Eligibility; Disqualification. (a) The Indenture
-----------------------------
Trustee shall at all times satisfy the requirements of TIA (S) 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it shall have a long term unsecured debt rating of Baa3 or better by Moody's
and BBB- or better by Standard & Poor's. The Indenture Trustee shall comply with
TIA (S) 310(b); provided, however, that there shall be excluded from the
-------- -------
operation of TIA (S) 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA (S) 310(b)(1) are met.
(b) If an Event of Default occurs, the Indenture Trustee,
within 90 days after ascertaining the occurrence of such Event of Default,
shall resign with respect to the Class A Notes and/or the Class B Notes in
accordance with Section 6.8 of this Indenture, and the Issuer shall appoint
a successor Indenture Trustee for one or both of such classes, as
applicable, so that there will be separate Indenture Trustees for the Class
A Notes and the Class B Notes. In the event the Indenture Trustee fails to
comply with the terms of the preceding sentence, the Indenture Trustee
shall comply with TIA 3.10(b)(ii) and (iii). The appointment hereunder of a
successor Indenture Trustee with respect to any class of Notes shall not
alter the voting rights of the Class A Noteholders and the Class B
Noteholders hereunder and under the Basic Documents. However, so long as
any amounts remain unpaid with respect to the Class A Notes, only the
Indenture Trustee for the Class A Noteholders shall have the right to
exercise remedies under this Indenture and the Basic Documents, to make
deposits to and withdrawals from the Designated Accounts and to make
distributions to Noteholders from the Note Distribution Account.
In the case of the appointment hereunder of a successor
Indenture Trustee with respect to any class of Notes pursuant to this Section
6.11(b), the Issuer, the retiring Indenture Trustee and the successor Indenture
Trustee with respect to such class of Notes shall execute and deliver an
indenture supplemental hereto wherein each successor Indenture Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, the successor
Indenture Trustee all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of the class to which the
appointment of such successor Indenture Trustee relates, (ii) if the retiring
Indenture Trustee is not retiring with respect to all classes of Notes, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all rights, powers, trusts and duties of the retiring Indenture Trustee
with respect to the Notes of each class as to which the retiring Indenture
Trustee is not retiring shall continue to be vested in the Indenture Trustee,
and (iii) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Indenture Trustee, it being understood
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<PAGE>
that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees co-trustees of the same trust and that each such Indenture
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Indenture Trustee;
and upon the removal of the retiring Indenture Trustee shall become effective to
the extent provided therein. The Seller, or if it shall fail to pay, the
Servicer shall be responsible for the compensation, fees and expenses of the
appointment of a separate Indenture Trustee.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
------------------------------------------------
The Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture
-------------------------------------------
Trustee. The Indenture Trustee represents and warrants as of the Closing Date
- -------
that:
(a) the Indenture Trustee is a banking corporation duly
organized, validly existing and in good standing under the laws of the
State of Illinois;
(b) the Indenture Trustee has full power, authority and legal
right to execute, deliver and perform this Indenture, and has taken all
necessary action to authorize the execution, delivery and performance by it
of this Indenture;
(c) the execution, delivery and performance by the Indenture
Trustee of this Indenture (i) shall not violate any provision of any
applicable law or regulation governing the banking and trust powers of the
Indenture Trustee or any order, writ, judgment or decree of any court,
arbitrator, or governmental authority applicable to the Indenture Trustee
or any of its assets, (ii) shall not violate any provision of the corporate
charter or by-laws of the Indenture Trustee, or (iii) shall not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any Lien on any
properties included in the Trust pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or Lien could reasonably be expected
to have a materially adverse effect on the Indenture Trustee's performance
or ability to perform its duties under this Indenture or on the
transactions contemplated in this Indenture;
(d) the execution, delivery and performance by the Indenture
Trustee of this Indenture shall not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or
the taking of any other action in respect of, any governmental authority or
agency regulating the banking and corporate trust activities of the
Indenture Trustee; and
(e) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of
the Indenture Trustee, enforceable in accordance with its terms, 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.
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<PAGE>
SECTION 6.14 Indenture Trustee May Enforce Claims Without
--------------------------------------------
Possession of Notes. All rights of action and claims under this Indenture or the
- -------------------
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Indenture Trustee
shall be brought in its own name as Indenture Trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders in respect of which such judgment has
been obtained.
SECTION 6.15 Suit for Enforcement. If an Event of Default shall
--------------------
occur and be continuing, the Indenture Trustee, in its discretion may, subject
to the provisions of Section 6.1, proceed to protect and enforce its rights and
the rights of the Noteholders under this Indenture by Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee.
-------------------------------------------------
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal amount of the Controlling Notes shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee or exercising any trust or power conferred on
the Indenture Trustee; provided, however, that subject to Section 6.1, the
Indenture Trustee shall have the right to decline to follow any such direction
if the Indenture Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Indenture Trustee in good faith
shall, by a Responsible Officer, determine that the proceedings so directed
would be illegal or subject it to personal liability or be unduly prejudicial to
the rights of Noteholders not parties to such direction; and provided, further,
-------- -------
that nothing in this Indenture shall impair the right of the Indenture Trustee
to take any action deemed proper by the Indenture Trustee and which is not
inconsistent with such direction by the Noteholders.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
---------------------------------------------
Addresses of Noteholders. The Issuer shall furnish or cause to be furnished by
- ------------------------
the Servicer to the Indenture Trustee (a) not more than five days before each
Distribution Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of the close of
business on the Record Date, and (b) at such other times as the Indenture
Trustee may request in writing, within 14 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
-------- -------
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information, Communications to
----------------------------------------------
Noteholders.
- -----------
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of
Notes contained in the most recent list furnished to the Indenture Trustee
as provided in Section 7.1 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with
other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer.
-----------------
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
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<PAGE>
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA (S) 313(c))
such summaries of any information, documents and reports required to be filed by
the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of such year.
SECTION 7.4 Reports by Trustee.
------------------
(a) If required by TIA (S) 313(a), within 60 days after each
June 1, beginning with June 1, 1998, the Indenture Trustee shall mail to each
Noteholder as required by TIA (S) 313(c) a brief report dated as of such date
that complies with TIA (S) 313(a). The Indenture Trustee also shall comply with
TIA (S) 313(b). A copy of any report delivered pursuant to this Section 7.4(a)
shall, at the time of its mailing to Noteholders, be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall
include with each payment to each Noteholder a copy of the statement for the
related Due Period applicable to such Distribution Date as required pursuant to
the Sale and Servicing Agreement.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Designated Accounts; Payments.
-----------------------------
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Indenture Trustee or
Owner Trustee, as appropriate, for the benefit of the Noteholders or the
Certificateholders as appropriate, the accounts as provided in Section 5.01 of
the Sale and Servicing Agreement.
(b) On or before each Distribution Date, all amounts of monies
relating to the preceding Due Period will be deposited by the Servicer into the
Collection Account as provided in Section 5.02 of the Sale and Servicing
Agreement. On each Distribution Date, the Indenture Trustee shall (i) transfer
or cause the transfer of amounts on deposit in the Collection Account to the
Note Distribution Account and the Certificate Distribution Account pursuant to
Section 5.05 of the Sale and Servicing Agreement, (ii) transfer or cause the
transfer of amounts on deposit in the Reserve Account to the Note Distribution
Account and the Certificate Distribution Account pursuant to Section 5.06 of the
Sale and Servicing Agreement and (iii) transfer and distribute, or cause to be
transferred and distributed, amounts on deposit in the Reserve Account to the
Lender and to the holder of the AO Interest, pursuant to Section 5.06 of the
Sale and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution Account
to Noteholders in respect of the Notes to the extent of amounts due and unpaid
on the Notes for principal and interest. Unless an Event of Default shall have
occurred (in which case Section 5.4 shall be applicable), to the extent that the
funds available for distribution in the Note Distribution Account are not
sufficient to pay all amounts of accrued and unpaid principal and interest on
the Notes, such amounts will be distributed first in respect of interest in the
following order of priority: (i) to the Class A Noteholders for amounts due and
unpaid on the Class A Notes for interest, ratably among all Class A Noteholders,
without preference or priority of any kind and (ii) to the Class B Noteholders
for amounts due and unpaid on the Class B Notes for interest, ratably among all
Class B Noteholders, without preference or priority of any kind and then in
respect of principal
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in the following order of priority: (i) to the principal balance of the Class A-
1 Notes, up to the Class A Noteholders' Principal Distribution Amount, until the
principal balance of the Class A-1 Notes is reduced to zero; (ii) to the
principal balance of the Class A-2 Notes, up to the Class A Noteholders'
Principal Distribution Amount, until the principal balance of the Class A-2
Notes is reduced to zero, (iii) to the principal balance of the Class A-3 Notes,
up to the Class A Noteholders' Principal Distribution Amount, until the
principal balance of the Class A-3 Notes is reduced to zero, (iv) to the
principal balance of the Class A-4 Notes, up to the Class A Noteholders'
Principal Distribution Amount, until the principal balance of the Class A-4
Notes is reduced to zero; (v) to the principal balance of the Class A-5 Notes,
up to the Class A Noteholders' Principal Distribution Amount, until the
principal balance of the Class A-5 Notes is reduced to zero; (vi) to the
principal balance of the Class A-6 Notes, up to the Class A Noteholders'
Principal Distribution Amount, until the principal balance of the Class A-6
Notes is reduced to zero; (vii) to the principal balance of the Class A-7 Notes,
up to the Class A Noteholders' Principal Distribution Amount, until the
principal balance of the Class A-7 Notes is reduced to zero; and (viii) to the
principal balance of the Class B Notes, up to the Class B Noteholders' Principal
Distribution Amount, until the principal balance of the Class B Notes is reduced
to zero.
SECTION 8.3 General Provisions Regarding Accounts.
-------------------------------------
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the Designated
Accounts shall be invested in Eligible Investments and, in the case of the
Collection Account, the Reserve Account and the Note Distribution Account,
reinvested by the Indenture Trustee upon Issuer Order, and in the case of the
Certificate Distribution Account, reinvested by the Owner Trustee (or its
designated agent) subject to the provisions of Section 5.01(c) of the Sale and
Servicing Agreement. The Issuer shall not direct the Indenture Trustee to make
any investment of any funds or to sell any investment held in any of the
Collection Account, the Reserve Account and the Note Distribution Account unless
the security interest granted and perfected in such account (to the extent
provided in the Basic Documents) shall continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not
in any way be held liable by reason of any insufficiency in any of the
Designated Accounts resulting from any loss on any Eligible Investment included
therein except for losses attributable to the Indenture Trustee's failure to
make payments on such Eligible Investments issued by the Indenture Trustee, in
its commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Designated Accounts to the Indenture
Trustee by 11:00 a.m., New York City Time (or such other time as may be agreed
by the Servicer and the Indenture Trustee) on any Business Day; or (ii) a
Default or Event of Default shall have occurred and be continuing
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with respect to the Notes but the Notes shall not have been declared due and
payable pursuant to Section 5.2, or, if such Notes shall have been declared due
and payable following an Event of Default, amounts collected or receivable from
the Trust Estate are being applied in accordance with Section 5.5 as if there
had not been such a declaration; then the Indenture Trustee shall, to the
fullest extent practicable, invest and reinvest funds in such Designated
Accounts in Eligible Investments selected by the Indenture Trustee; provided
that the Indenture Trustee will not be liable for the performance of such
investments so long as it invests the funds in such Designated Accounts in
Eligible Investments.
SECTION 8.4 Release of Trust Estate.
-----------------------
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions
of this Indenture shall, execute instruments to release property from the
Lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are consistent with the
provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes outstanding and all sums due to the Indenture Trustee pursuant to
Section 6.7 have been paid, release any remaining portion of the Trust
Estate that secured the Notes from the Lien of this Indenture and release
to the Issuer or any other Person entitled thereto any funds then on
deposit in the Designated Accounts (to the extent such funds were subject
to the Lien of this Indenture). The Indenture Trustee shall release
property from the Lien of this Indenture pursuant to this Section 8.4(b)
only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA (S)(S) 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1 or an Opinion of Counsel in lieu of
such Independent Certificates to the effect that the TIA does not require
any such Independent Certificates.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
------------------
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
shall not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
an opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of
------------------------------------------
Noteholders.
- -----------
Without the consent of the Holders of any Notes but with prior
written notice to the Rating Agencies and, in the case of clause (viii),
satisfaction of the Rating Agency Condition, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of the Collateral or
add additional collateral;
(ii) to provide for the assumption of the Note and the Indenture
obligations by a permitted successor to the Trust;
(iii) to add additional covenants for the benefit of the related
Noteholders, or to surrender any rights or power conferred upon the Trust;
(iv) to convey, transfer, assign mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity or correct or supplement any provision
in the Indenture or any supplemental indenture which may be inconsistent
with any other provision of the Indenture or in any supplemental indenture;
(vi) to provide for the acceptance of the appointment of a
successor Indenture Trustee or to add or change any of the provisions of
the Indenture as shall be necessary and permitted to facilitate the
administration by more than one trustee;
(vii) to modify, eliminate or add to the provisions of the
Indenture in order to comply with the Trust Indenture Act of 1939, as amended;
or
(viii) to add any provisions to, change in any manner or
eliminate any of the provisions of, the Indenture, or modify in any manner the
rights of Noteholders under such Indenture; provided that any action specified
in this clause (viii) shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder unless
Noteholder consent is otherwise obtained as described herein.
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
---------------------------------------------------
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies and with the
consent of the Holders of not less than a majority of the aggregate outstanding
principal amount of the Notes, by Act (as defined in Section 11.3 hereof) of
such Holders delivered to the Issuer and the Indenture Trustee, enter into
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an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, changing in any manner, or eliminating any of the provisions of,
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each outstanding Note affected thereby:
(i) change the due date of any installment of principal of
or interest on any Note or reduce the principal amount thereof, the
interest rate specified thereon or the redemption price with respect
thereto or change any place of payment where or the coin or currency in
which any Note or any interest thereon is payable;
(ii) impair the right to institute suit for the enforcement
of certain provisions of the Indenture regarding payment;
(iii) reduce the percentage of the aggregate principal
amount of the outstanding Notes the consent of the holders of which is
required for any such supplemental indenture or the consent of the holders
of which is required for any waiver of compliance with certain provisions
of the Indenture or of certain defaults thereunder and their consequences
as provided for in the Indenture;
(iv) modify or alter the provisions of the Indenture regarding
the voting of Notes held by the Trust, any other obligor on the Notes, the
Seller or an Affiliate of any of them;
(v) reduce the percentage of the aggregate outstanding amount of
the Notes the consent of the holders of which is required to direct the
Indenture Trustee to sell or liquidate the Contracts if the proceeds of
such sale would be insufficient to pay the principal amount and accrued but
unpaid interest on the outstanding Notes;
(vi) decrease the percentage of the aggregate principal amount
of the Notes required to amend the sections of the Indenture which specify
the applicable percentage of aggregate principal amount of the Notes
necessary to amend the Indenture or certain other related agreements; or
(vii) permit the creation of any Lien ranking prior to or on a
parity with the Lien of the Indenture with respect to any of the collateral
for the Notes or, except as otherwise permitted or contemplated in the
Indenture, terminate the Lien of the Indenture on any such collateral or
deprive the Holder of any Note of the security afforded by the Lien of the
Indenture.
(b) The Indenture Trustee may in its sole and absolute
discretion determine whether or not any Notes would be affected (such that the
consent of each would be required) by any supplemental indenture proposed
pursuant to this Section 9.2 and any such determination shall be conclusive and
binding upon the Holders of all Notes, whether authenticated and delivered
thereunder before or after the date upon which such supplemental indenture
becomes
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effective. The Indenture Trustee shall not be liable for any such determination
made in good faith.
(c) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.
(d) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Noteholders to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing,
------------------------------------
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment
-----------------------------------
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for outstanding Notes of the same class.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
----------
The Notes are subject to redemption upon (i) the exercise by
CITSF of its option to purchase the Contracts pursuant to Section 11.01 of the
Sale and Servicing Agreement or (ii) the mandatory sale of the Contracts
pursuant to Section 11.02 of the Sale and Servicing Agreement. Such redemption
shall occur on any Distribution Date. The purchase price for the Notes shall be
equal to the applicable redemption price as set forth in such Sections (the
"Redemption Price"), provided the Issuer has available funds sufficient to pay
such amount. The Issuer shall furnish the Rating Agencies notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 10.1, the
Issuer shall furnish notice thereof to the Indenture Trustee not later than 25
days prior to the Redemption Date and the Issuer shall deposit into the Note
Distribution Account, on or before the Redemption Date, the aggregate Redemption
Price of the Notes to be redeemed, whereupon all such Notes shall be due and
payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice.
-------------------------
(a) Notice of redemption of any of the Notes under Section 10.1
shall be given by the Indenture Trustee by first class mail, postage prepaid,
mailed not less than five days prior to the applicable Redemption Date to each
affected Noteholder of record at such Noteholder's address appearing in the Note
Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price; and
(iii) the place where Notes are to be surrendered for
payment of the Redemption Price (which shall be the Agency Office of the
Indenture Trustee to be maintained as provided in Section 3.2).
(c) Notice of redemption of any of the Notes shall be given by
the Indenture Trustee in the name and at the expense of the Issuer. Failure to
give notice of redemption, or any defect therein, to any Holder of any Note
shall not impair or affect the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date.
--------------------------------
The Notes subject to redemption shall, following notice of
redemption as required by Section 10.2 (in the case of redemption pursuant to
Section 10.1), on the Redemption Date cease to be outstanding for purposes of
this Indenture and shall thereafter represent only the right to receive the
applicable Redemption Price and (unless the Issuer shall default in the payment
of
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such Redemption Price) no interest shall accrue on such Redemption Price for
any period after the date to which accrued interest is calculated for purposes
of calculating such Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
-----------------------------------------
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee: (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) (if required by
the TIA) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with and (iii) (if
required by the TIA) an Independent Certificate from a firm of certified public
accountants meeting the applicable requirements of this Section 11.1, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(i) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such
signatory, such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with
(b) (i) Prior to the deposit with the Indenture Trustee of
any Collateral or other property or securities that is to be made the basis
for the release of any property or securities subject to the Lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (b)(i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any
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such withdrawal or release since the commencement of the then current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (b)(ii), is 10% or more of the
aggregate outstanding principal amount of the Notes, but such a certificate
need not be furnished with respect to any securities so deposited, if the
fair value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the aggregate
outstanding principal amount of the Notes.
(iii) Other than with respect to the release of any
Repurchased Contracts or Liquidated Contracts, whenever any property or
securities are to be released from the lien of this Indenture, the Issuer
shall also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each Person signing such certificate
as to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signatory thereof as to the matters described in clause
(b)(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than Repurchased
Contracts or Liquidated Contracts, or securities released from the lien of
this Indenture since the commencement of the then current calendar year, as
set forth in the certificates required by clause (b)(iii) above and this
clause (b)(iv), equals 10% or more of the aggregate outstanding principal
amount of the Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then aggregate outstanding principal amount of the
Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Contracts, Financed Vehicles and the Excluded Assets as and to
the extent expressly permitted or required by the Basic Documents, (B) make
cash payments out of the Designated Accounts and the other Excluded Assets
as and to the extent expressly permitted or required by the Basic Documents
and (C) take any other action not inconsistent with the TIA.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
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to some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document as a condition of the granting of
such application, or as evidence of the Issuer's compliance with any term
hereof, it is intended that the truth and accuracy, at the time of the granting
of such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
SECTION 11.3 Acts of Noteholders.
-------------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders or a class of Noteholders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
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(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and
-----------------------------------------------
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
- ---------------
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at its Corporate Trust Office
and, unless otherwise specified in this Indenture, may be sent by electronic
facsimile transmission (with hard copy to follow via first class mail), mailed
by certified mail, return receipt requested, or delivered by hand; or
(b) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and either sent by
electronic facsimile transmission (with hard copy to follow via first class
mail) or mailed, by certified mail, return receipt requested to the Issuer and
the Owner Trustee, care of the Owner Trustee at its Corporate Trust Office or at
any other address previously furnished in writing to the Indenture Trustee by
the Issuer.
The Issuer shall promptly transmit any notice received by it from
the Noteholders to the Indenture Trustee and the Indenture Trustee shall
likewise promptly transmit any notice received by it from the Noteholders to the
Issuer, with a copy to the Owner Trustee at its Corporate Trust Office.
(c) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, sent by electronic facsimile transmission (with hard copy
to follow via first class mail) or mailed by certified mail, return receipt
requested to: (i) in the case of Moody's Investors Service, Inc., at the
following address: Moody's Investors Service, Inc., ABS Monitoring Department,
99 Church Street, New York, New York 10007; and (ii) in the case of Standard &
Poor's Ratings Service, at the following address: Standard & Poor's Ratings
Service, 26 Broadway (15th Floor), New York, New York 10004, Attn: Asset-Backed
Surveillance Department or as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver.
------------------------------
(a) Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if it is in writing and mailed, first-class, postage prepaid
to each Noteholder affected by such event, at such
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<PAGE>
Person's address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. If notice to Noteholders is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any particular Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given regardless of whether such notice is in fact
actually received.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
an Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the
Notes to the contrary, the Issuer may enter into any agreement with any Holder
of a Note providing for a method of payment, or notice by the Indenture Trustee
or any Paying Agent to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices. The Issuer shall furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
shall cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control. (b) The
provisions of TIA (S)(S) 310 through 317 that impose duties on any Person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
- 57 -
<PAGE>
SECTION 11.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
----------------------
(a) All covenants and agreements in this Indenture and the Notes
by the Issuer shall bind its successors and assigns, whether so expressed or
not.
(b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability.
------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, and any other party secured hereunder, and any
other Person with an ownership interest in any part of the Trust Estate, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays.
--------------
If the date on which any payment is due shall not be a Business
Day, then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
SECTION 11.13 Governing Law.
-------------
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts.
------------
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
- 58 -
<PAGE>
SECTION 11.15 Recording of Indenture.
----------------------
If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16 No Recourse.
-----------
No recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against:
(i) the Indenture Trustee or the Owner Trustee in its
individual capacity;
(ii) any owner of a beneficial interest in the Issuer; or
(iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of any holder of a beneficial interest in the Issuer
or of the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of the Trust Agreement.
SECTION 11.17 No Petition.
-----------
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note issued hereunder, hereby covenant and agree that
they shall not, prior to the date which is one year and one day after the
termination of this Indenture with respect to the Trust pursuant to Section 4.1,
acquiesce, petition or otherwise invoke or cause the Seller or the Trust to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Seller or the Trust under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or the Trust or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Seller or the Trust.
SECTION 11.18 Inspection.
----------
The Issuer agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Issuer's normal
business hours, to examine all
- 59 -
<PAGE>
the books of account, records, reports, and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Indenture Trustee from
sources other than the Servicer or the Seller or any of their affiliates, (ii)
disclosure of any and all information (A) if required to do so by any applicable
statute, law, rule or regulation, (B) to any government agency or regulatory
body having authority to regulate or oversee any respects of the Indenture
Trustee's business, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Indenture Trustee is a party, (D) to any independent or
internal auditor, agent, employee or attorney of the Indenture Trustee
reasonably having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed and such recipient agrees to keep the same confidential in accordance
with the terms hereof, or (iii) any other disclosure authorized by the Servicer
or the Seller; provided, however, the Indenture Trustee shall give the Servicer
prior notice of any such disclosure.
SECTION 11.19 Indemnification by and Reimbursement of the
-------------------------------------------
Servicer.
- --------
The Indenture Trustee further acknowledges and accepts the
Servicer's obligation to indemnify, defend and hold the Indenture Trustee
harmless as set forth in the Sale and Servicing Agreement and the conditions and
limitations thereon in the Sale and Servicing Agreement.
SECTION 11.20 Subordination. The Issuer and the Noteholders
-------------
agree that the Class B Notes are subordinated to the Class A Notes in the manner
set forth in this Indenture and in the Sale and Servicing Agreement.
* * * * *
- 60 -
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized, all as of the day and year first above written.
CIT RV TRUST 1997-A
BY:FIRST OMNI BANK, N.A.,
not in its individual capacity but
solely as Owner Trustee,
By: /s/ David L. Williams
_______________________________
Name: David L. Williams
Title: Vice President
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but
solely as Indenture Trustee,
By: /s/ E. Kay Liederman
_______________________________
Name: E. Kay Liederman
Title: Vice President
- 61 -
<PAGE>
EXHIBIT A-1
FORM OF ASSET-BACKED NOTES
REGISTERED $40,300,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-1 5.800% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of FORTY MILLION THREE HUNDRED THOUSAND DOLLARS ($40,300,000)
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date to the extent of amounts available therefor in an amount equal
to the Class A Noteholders' Principal Distribution Amount; provided, however,
-------- -------
that the outstanding principal balance of this Note shall be due and payable on
the earlier of the December 1998 Distribution Date (the "Class A-1 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum shown above with respect to the related
Interest Accrual Period.
A-1-1
<PAGE>
Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-1-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
-------------------------------
Name:
Title:
A-1-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-1 5.800% Asset-Backed Notes (herein called the "Class A-1
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-2 5.985% Asset-
Backed Notes (the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes
(the "Class A-3 Notes"), the Class A-4 6.200% Asset-Backed Notes (the "Class A-4
Notes), the Class A-5 6.250% Asset Backed Notes (the "Class A-5 Notes"), the
Class A-6 6.350% Asset-Backed Notes (the "Class A-6 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-1 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-1 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-1 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-1 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-1 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-1 Notes shall be made pro rata
to the Holders of the Class A-1 Notes.
A-1-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-1-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-1-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-1-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________1
Signature Guaranteed:
_____________________________
- -------------------------
1 NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatsoever.
A-1-8
<PAGE>
EXHIBIT A-2
FORM OF ASSET-BACKED NOTES
REGISTERED $32,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-2 5.985% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of THIRTY-TWO MILLION DOLLARS ($32,000,000) payable in accordance
with the Indenture, prior to the occurrence of an Event of Default and a
declaration that the Notes are due and payable, on each Distribution Date to the
extent of amounts available therefor in an amount equal to the Class A
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the November 2000 Distribution Date (the "Class A-2 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum shown
A-2-1
<PAGE>
above with respect to the related Interest Accrual Period. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-----------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
-----------------------------
Name:
Title:
A-2-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-2 5.985% Asset-Backed Notes (herein called the "Class A-2
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-3 6.018% Asset-Backed Notes
(the "Class A-3 Notes"), the Class A-4 6.200% Asset-Backed Notes (the "Class A-4
Notes), the Class A-5 6.250% Asset Backed Notes (the "Class A-5 Notes"), the
Class A-6 6.350% Asset-Backed Notes (the "Class A-6 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-2 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-2 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-2 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-2 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-2 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-2 Notes shall be made pro rata
to the Holders of the Class A-2 Notes.
A-2-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-2-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-2-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-2-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________2
Signature Guaranteed:
_____________________________
- ------------------------
2 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-2-8
<PAGE>
EXHIBIT A-3
FORM OF ASSET-BACKED NOTES
REGISTERED $89,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-3 6.018% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of EIGHTY-NINE MILLION DOLLARS ($89,000,000) payable in accordance
with the Indenture, prior to the occurrence of an Event of Default and a
declaration that the Notes are due and payable, on each Distribution Date to the
extent of amounts available therefor in an amount equal to the Class A
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the August 2003 Distribution Date (the "Class A-3 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum shown
A-3-1
<PAGE>
above with respect to the related Interest Accrual Period. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-3-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
-------------------------------
Name:
Title:
A-3-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-3 6.018% Asset-Backed Notes (herein called the "Class A-3
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-4 6.200% Asset-Backed Notes (the "Class A-4
Notes), the Class A-5 6.250% Asset Backed Notes (the "Class A-5 Notes"), the
Class A-6 6.350% Asset-Backed Notes (the "Class A-6 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-3 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-3 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-3 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-3 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-3 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-3 Notes shall be made pro rata
to the Holders of the Class A-3 Notes.
A-3-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-3-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-3-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-3-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________3
Signature Guaranteed:
_____________________________
- -------------------------
3 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-3-8
<PAGE>
EXHIBIT A-4
FORM OF ASSET-BACKED NOTES
REGISTERED $128,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-4 6.200% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED TWENTY-EIGHT MILLION DOLLARS ($128,000,000) payable
in accordance with the Indenture, prior to the occurrence of an Event of Default
and a declaration that the Notes are due and payable, on each Distribution Date
to the extent of amounts available therefor in an amount equal to the Class A
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the October 2006 Distribution Date (the "Class A-4 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum
A-4-1
<PAGE>
shown above with respect to the related Interest Accrual Period. Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-4-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
----------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
----------------------------
Name:
Title:
A-4-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-4 6.200% Asset-Backed Notes (herein called the "Class A-4
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes (the "Class A-3
Notes), the Class A-5 6.250% Asset Backed Notes (the "Class A-5 Notes"), the
Class A-6 6.350% Asset-Backed Notes (the "Class A-6 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.500% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-4 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-4 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-4 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-4 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-4 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-4 Notes shall be made pro rata
to the Holders of the Class A-4 Notes.
A-4-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-4-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-4-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-4-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________4
Signature Guaranteed:
_____________________________
- -------------------------
4 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-4-8
<PAGE>
EXHIBIT A-5
FORM OF ASSET-BACKED NOTES
REGISTERED $74,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-5 6.250% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of SEVENTY-FOUR MILLION DOLLARS ($74,000,000) payable in
accordance with the Indenture, prior to the occurrence of an Event of Default
and a declaration that the Notes are due and payable, on each Distribution Date
to the extent of amounts available therefor in an amount equal to the Class A
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the November 2008 Distribution Date (the "Class A-5 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum shown
A-5-1
<PAGE>
above with respect to the related Interest Accrual Period. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-5-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
------------------------------
Name:
Title:
A-5-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-5 6.250% Asset-Backed Notes (herein called the "Class A-5
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes (the "Class A-3
Notes), the Class A-4 6.200% Asset Backed Notes (the "Class A-4 Notes"), the
Class A-6 6.350% Asset-Backed Notes (the "Class A-6 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-5 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-5 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-5 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-5 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-5 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-5 Notes shall be made pro rata
to the Holders of the Class A-5 Notes.
A-5-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-5-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-5-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-5-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________5
Signature Guaranteed:
_____________________________
- -------------------------
5 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-5-8
<PAGE>
EXHIBIT A-6
FORM OF ASSET-BACKED NOTES
REGISTERED $106,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-6 6.350% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED SIX MILLION DOLLARS ($106,000,000) payable in
accordance with the Indenture, prior to the occurrence of an Event of Default
and a declaration that the Notes are due and payable, on each Distribution Date
to the extent of amounts available therefor in an amount equal to the Class A
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the April 2011 Distribution Date (the "Class A-6 Note Final Scheduled
Distribution Date") and the Redemption Date with respect to a redemption of
Notes, if any, pursuant to Section 10.1 of the Indenture. On each Distribution
Date until the principal of this Note is paid or made available for payment,
interest on the outstanding principal amount of this Note shall be due and
payable at the rate per annum shown
A-6-1
<PAGE>
above with respect to the related Interest Accrual Period. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-6-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
----------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
-----------------------------
Name:
Title:
A-6-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-6 6.350% Asset-Backed Notes (herein called the "Class A-6
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes (the "Class A-3
Notes), the Class A-4 6.200% Asset Backed Notes (the "Class A-4 Notes"), the
Class A-5 6.250% Asset-Backed Notes (the "Class A-5 Notes"), the Class A-7
6.400% Asset Backed Notes (the "Class A-7 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-6 Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-6 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-6 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-6 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-6 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-6 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-6 Notes shall be made pro rata
to the Holders of the Class A-6 Notes.
A-6-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-6-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-6-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-6-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________6
Signature Guaranteed:
_____________________________
- -------------------------
6 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-6-8
<PAGE>
EXHIBIT A-7
FORM OF ASSET-BACKED NOTES
REGISTERED $49,700,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV TRUST 1997-A
CLASS A-7 6.400% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of FORTY-NINE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($49,700,000)
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date to the extent of amounts available therefor in an amount equal
to the Class A Noteholders' Principal Distribution Amount; provided, however,
-------- -------
that the outstanding principal balance of this Note shall be due and payable on
the earlier of the August 2013 Distribution Date (the "Class A-7 Note Final
Scheduled Distribution Date") and the Redemption Date with respect to a
redemption of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at
A-7-1
<PAGE>
the rate per annum shown above with respect to the related Interest Accrual
Period. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
A-7-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
-------------------------------
Name:
Title:
A-7-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A-7 6.400% Asset-Backed Notes (herein called the "Class A-7
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class A-1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes (the "Class A-3
Notes), the Class A-4 6.200% Asset Backed Notes (the "Class A-4 Notes"), the
Class A-5 6.250% Asset-Backed Notes (the "Class A-5 Notes"), the Class A-6
6.350% Asset Backed Notes (the "Class A-6 Notes" and, together with the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-7, Notes, the "Class A Notes") and the Class B 6.450% Asset-Backed Notes
(the "Class B Notes" and, together with the Class A Notes, the Notes"). The
Class A-7 Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class A-7 Notes and all other Notes issued pursuant to the
Indenture are and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
A-7 Notes shall be payable in full on the earlier of the Distribution Date which
is the Class A-7 Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class A-7 Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class A-7 Notes shall be made pro rata
to the Holders of the Class A-7 Notes.
A-7-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
A-7-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
A-7-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-7-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________7
Signature Guaranteed:
_____________________________
- -------------------------
7 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-7-8
<PAGE>
EXHIBIT B
FORM OF ASSET-BACKED NOTES
REGISTERED $31,000,000
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A NOTES TO
THE EXTENT SET FORTH IN THE SALE AND SERVICING AGREEMENT AND THE INDENTURE.
CIT RV TRUST 1997-A
CLASS B 6.450% ASSET-BACKED NOTES
CIT RV TRUST 1997-A, a business trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of THIRTY-ONE MILLION DOLLARS ($31,000,000) payable in accordance
with the Indenture, prior to the occurrence of an Event of Default and a
declaration that the Notes are due and payable, on each Distribution Date to the
extent of amounts available therefor in an amount equal to the Class B
Noteholders' Principal Distribution Amount; provided, however, that the
-------- -------
outstanding principal balance of this Note shall be due and payable on the
earlier of the June 2018 Distribution Date (the "Class B Note Final Scheduled
Distribution Date") and the Redemption Date with respect to a redemption
B-1
<PAGE>
of Notes, if any, pursuant to Section 10.1 of the Indenture. On each
Distribution Date until the principal of this Note is paid or made available for
payment, interest on the outstanding principal amount of this Note shall be due
and payable at the rate per annum shown above with respect to the related
Interest Accrual Period. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
B-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: December 2, 1997 CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
---------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but solely
as Indenture Trustee
By:
---------------------------------
Name:
Title:
B-3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class B 6.450% Asset-Backed Notes (herein called the "Class B
Notes"), issued under an Indenture, dated as of November 1, 1997 (such
Indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Harris Trust and Savings Bank, an Illinois banking
corporation, as trustee (the "Indenture Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. Also issued under the Indenture, are the Class 1 5.800% Asset-
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.985% Asset-Backed Notes
(the "Class A-2 Notes"), the Class A-3 6.018% Asset-Backed Notes (the "Class A-3
Notes), the Class A-4 6.200% Asset Backed Notes (the "Class A-4 Notes"), the
Class A-5 6.250% Asset-Backed Notes (the "Class A-5 Notes"), the Class A-6
6.350% Asset Backed Notes (the "Class A-6 Notes") and the Class A-7 6.400% Asset
Backed Notes (the "Class A-7 Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and Class A-6
Notes, the "Class A Notes" and, together with the Class B Notes, the "Notes").
The Class B Notes are subject to all terms of the Indenture. All terms used and
not otherwise defined in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture.
The Class B Notes and all other Notes issued pursuant to the Indenture
are and will be secured by the Collateral pledged as security therefor as
provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class
B Notes shall be payable in full on the earlier of the Distribution Date which
is the Class B Note Final Scheduled Distribution Date set forth above and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. In
addition, principal on the Class B Notes will be payable in installments on
earlier Distribution Dates to the extent of amounts available therefor, in the
amounts and in the priorities set forth in Section 8.2(c) of the Indenture.
"Distribution Date," with respect to the Notes means the fifteenth day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing December 15, 1997.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than 66 2/3% of the
aggregate outstanding principal amount of the Controlling Notes have declared
the Notes to be immediately due and payable in the manner provided in Section
5.2 of the Indenture. In such event, the Holders of all Notes shall be entitled
to receive repayment of principal in proportion to their respective unpaid
principal balances in the order of priority provided in Section 5.4 of the
Indenture.
All principal payments on the Class B Notes shall be made pro rata to
the Holders of the Class B Notes.
B-4
<PAGE>
Payments of interest on this Note shall be due and payable on each
Distribution Date. Interest on this Note for any Distribution Date due but not
paid on such Distribution Date will be due on the next Distribution Date in
addition to an amount equal to interest on such amount at the rate per annum
shown on the face of this Note (to the extent lawful). Payments of interest on
this Note, together with the installment of principal, if any, if not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. The Record Date, with respect to any Distribution Date,
means the Business Day immediately preceding such Distribution Date, or if
Definitive Notes are issued, the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs. Any reduction in
the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who is the Registered Holder hereof as of
the Record Date preceding such Distribution Date by notice sent in accordance
with Section 2.7(e) of the Indenture, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's principal Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the City of New York.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of the same
class of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken,
B-5
<PAGE>
directly or indirectly, with respect to the obligations of the Issuer, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the holder of a beneficial
interest in the Issuer or of the Owner Trustee or the Indenture Trustee or of
any successor or assign of the Indenture Trustee or the Owner Trustee in their
individual capacities, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Contracts for the purpose of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
aggregate outstanding principal amount of all the Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the aggregate outstanding principal amount of the Controlling
Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof
B-6
<PAGE>
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the Holder of
the AO Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
-------- -------
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
B-7
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________, as attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _______________________8
Signature Guaranteed:
_____________________________
- -------------------------
8 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
B-8
<PAGE>
EXHIBIT 4.2
================================================================================
TRUST AGREEMENT
BETWEEN
THE CIT GROUP SECURITIZATION CORPORATION II
SELLER
AND
FIRST OMNI BANK, N.A.
OWNER TRUSTEE
DATED AS OF NOVEMBER 1, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................................... 1
SECTION 1.1 Definitions................................................................................. 1
ARTICLE II ORGANIZATION....................................................................................... 1
SECTION 2.1 Name...................................................................................... 1
SECTION 2.2 Office ................................................................................... 1
SECTION 2.3 Purposes and Powers....................................................................... 1
SECTION 2.4 Appointment of Owner Trustee.............................................................. 2
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate........................................ 2
SECTION 2.6 Declaration of Trust...................................................................... 2
SECTION 2.7 Transfer of Interest to The CIT GP Corporation III........................................ 2
SECTION 2.8 Title to Trust Property................................................................... 3
SECTION 2.9 Situs of Trust............................................................................ 3
SECTION 2.10 Representations and Warranties of the Seller.............................................. 3
SECTION 2.11 Representations and Warranties of the Holder of the AO Interest........................... 4
SECTION 2.12 Tax Treatment............................................................................. 4
ARTICLE III THE CERTIFICATES................................................................................. 7
SECTION 3.1 Initial Certificate Ownership............................................................. 7
SECTION 3.2 Form of the Certificates.................................................................. 7
SECTION 3.3 Execution, Authentication and Delivery.................................................... 7
SECTION 3.4 Registration; Registration of Transfer and Exchange of Certificates....................... 8
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates......................................... 9
SECTION 3.6 Persons Deemed Certificateholders......................................................... 9
SECTION 3.7 Access to List of Certificateholders' Names and Addresses................................. 10
SECTION 3.8 Maintenance of Corporate Trust Office..................................................... 10
SECTION 3.9 Appointment of Paying Agent............................................................... 10
SECTION 3.10 Seller as Certificateholder............................................................... 11
ARTICLE IV ACTIONS BY OWNER TRUSTEE......................................................................... 12
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain Matters........................ 12
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters.............................. 12
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy................................... 13
SECTION 4.4 Restrictions on Certificateholders' Power................................................. 13
SECTION 4.5 Majority Control.......................................................................... 13
</TABLE>
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ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES........................................................... 14
SECTION 5.1 Establishment of Accounts................................................................. 14
SECTION 5.2 Application of Trust Funds................................................................ 14
SECTION 5.3 Method of Payment......................................................................... 15
SECTION 5.4 Accounting and Reports to the Certificateholders. The Internal Revenue Service and Others 15
SECTION 5.5 Signature on Returns; Tax Matters Partner................................................. 15
ARTICLE VI THE OWNER TRUSTEE................................................................................... 17
SECTION 6.1 Duties of Owner Trustee................................................................... 17
SECTION 6.2 Rights of Owner Trustee................................................................... 18
SECTION 6.3 Acceptance of Trusts and Duties........................................................... 18
SECTION 6.4 Action Upon Instruction by Certificateholders............................................. 20
SECTION 6.5 Furnishing of Documents................................................................... 20
SECTION 6.6 Representations and Warranties of Owner Trustee........................................... 20
SECTION 6.7 Reliance; Advice of Counsel............................................................... 21
SECTION 6.8 Owner Trustee May Own Certificates and Notes.............................................. 22
SECTION 6.9 Compensation and Indemnity................................................................ 22
SECTION 6.10 Replacement of Owner Trustee.............................................................. 22
SECTION 6.11 Merger or Consolidation of Owner Trustee.................................................. 23
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee............................................. 23
SECTION 6.13 Eligibility Requirements for Owner Trustee................................................ 25
ARTICLE VII TERMINATION OF TRUST AGREEMENT..................................................................... 26
SECTION 7.1 Termination of Trust Agreement............................................................ 26
ARTICLE VIII AMENDMENTS....................................................................................... 28
SECTION 8.1 Amendments Without Consent of Certificateholders or Noteholders........................... 28
SECTION 8.2 Amendments With Consent of Certificateholders and Noteholders............................. 28
SECTION 8.3 Form of Amendments........................................................................ 29
ARTICLE IX MISCELLANEOUS.................................................................................... 30
SECTION 9.1 No Legal Title to Owner Trust Estate...................................................... 30
SECTION 9.2 Limitations on Rights of Others........................................................... 30
SECTION 9.3 Notices................................................................................... 30
SECTION 9.4 Severability.............................................................................. 30
SECTION 9.5 Counterparts.............................................................................. 31
SECTION 9.6 Successors and Assigns.................................................................... 31
SECTION 9.7 No Petition Covenant...................................................................... 31
SECTION 9.8 No Recourse............................................................................... 31
SECTION 9.9 Headings.................................................................................. 31
</TABLE>
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SECTION 9.10 Governing Law............................................................................. 31
SECTION 9.11 Certificate Transfer Restrictions......................................................... 32
SECTION 9.12 Indemnification by the Servicer........................................................... 32
</TABLE>
Exhibit A 6.800% Asset-Backed Certificate
Exhibit B Certificate of Trust
Exhibit C Certificate Transferee Letter
iii
<PAGE>
TRUST AGREEMENT, dated as of November 1, 1997, between THE CIT GROUP
SECURITIZATION CORPORATION II, a Delaware corporation, as Seller, and FIRST OMNI
BANK, N.A., a national banking association formed under the laws of the United
States with its principal place of business in the State of Delaware, as Owner
Trustee.
The Seller and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in the Sale and
Servicing Agreement of even date herewith, among the Seller, the Servicer and
the Trust (the "Sale and Servicing Agreement"). All references herein to "the
Agreement" or "this Agreement" are to the Trust Agreement, and all references
herein to Articles, Sections and subsections are to Articles, Sections and
subsections of this Agreement unless otherwise specified.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust created hereby shall be known as "CIT RV
----
Trust 1997-A" in which name the Owner Trustee may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued on behalf of the Trust.
SECTION 2.2 Office. The office of the Trust shall be in care of the
------
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Seller.
SECTION 2.3 Purposes and Powers. The purpose of the Trust is to
-------------------
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement, and to sell, transfer or exchange the Notes
and the Certificates;
(ii) with the proceeds of the sale of the Notes and the Certificates to pay
the organizational, start-up and transactional expenses of the Trust and
to pay the balance of the proceeds to the Seller pursuant to the Sale and
Servicing Agreement;
(iii) to acquire, manage and hold the Contracts;
(iv) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate
pursuant to the terms of the Indenture and to hold, manage and distribute
to the Certificateholders pursuant to the terms of this Agreement and the
Sale and Servicing
<PAGE>
Agreement any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations and exercise its rights
under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith;
(vii) to hold and administer the Certificate Distribution Account and
apply the proceeds thereof as provided in the Sale and Servicing
Agreement; and
(viii) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities and
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby appoints the
----------------------------
Owner Trustee as trustee of the Trust effective as of the date hereof, to have
all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The
--------------------------------------------------
Seller hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares that
--------------------
it shall hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
purposes of federal income taxes, state and local income and franchise taxes and
any other taxes imposed upon, measured by, or based upon gross or net income,
the Trust shall be treated as a partnership. The parties agree that, unless
otherwise required by appropriate tax authorities, the Trust shall file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.7 Transfer of Interest to The CIT GP Corporation III
--------------------------------------------------
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<PAGE>
(a) On the Closing Date, the Seller shall and does hereby transfer and
assign its entire interest in the Trust (including the AO Interest but excluding
the Certificates sold on the Closing Date to the underwriters) to CIT through
the issuance of a dividend and The CIT GP Corporation III acknowledges receipt
of such interest in the Trust (including the AO Interest) from CIT as a capital
contribution. The holder of the AO Interest shall pay organizational expenses of
the Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee. The obligations of the holder of the AO Interest under this subsection
2.7(a) shall be evidenced by the Certificates issued to the holder of the AO
Interest, which for purposes of the Business Trust Statute shall be deemed to be
a separate class of Certificates from all other Certificates issued by the
Trust.
(b) No Certificateholder, other than to the extent set forth in
subsection 2.7(a) with respect to the holder of the AO Interest, shall have any
personal liability for any liability or obligation of the Trust.
(c) No Certificateholder, including the holder of the AO Interest,
shall have the right to exercise any control of the Trust other than to the
extent of its percentage ownership of the Certificates as provided herein.
SECTION 2.8 Title to Trust Property. Legal title to all the Owner Trust
-----------------------
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be, for the benefit of the Trust.
SECTION 2.9 Situs of Trust. The Trust shall be located in the State of
--------------
Delaware.
SECTION 2.10 Representations and Warranties of the Seller. The Seller
--------------------------------------------
hereby represents and warrants to the Owner Trustee, as of the Closing Date,
that:
(a) The Seller has been organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted and had at all
relevant times, and now has, power, authority and legal right to acquire and own
the Contracts.
(b) The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property or
the conduct of its business requires such qualifications.
(c) The Seller has the power and authority to execute and deliver this
Agreement and to carry out its terms, the Seller has full power and authority to
sell and assign the property to be sold and assigned to and deposited with, as
part of, the Trust and the Seller has duly authorized such sale and assignment
to the Trust by all necessary corporate action; and the
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<PAGE>
execution, delivery and performance of this Agreement have been duly authorized
by the Seller by all necessary corporate action.
(d) The consummation of the transactions contemplated by this Agreement
and the fulfillment of the terms of this Agreement do not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice or lapse of time) a default under its certificate of
incorporation or by-laws of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to or as contemplated by the Basic Documents), or violate any law or,
to the best of its knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Seller
or any of its properties.
SECTION 2.11 Representations and Warranties of the Holder of the AO
------------------------------------------------------
Interest. The CIT GP Corporation III, as intended holder of the AO Interest,
- --------
hereby represents and warrants to the Owner Trustee, as of the Closing Date,
that:
(a) It has been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such properties
are presently owned and such business is presently conducted.
(b) It is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business requires such qualifications.
(c) It has the power and authority to execute and deliver this
Agreement and to carry out its terms and the execution, delivery and performance
of this Agreement has been duly authorized by all necessary corporate action.
(d) The consummation of the transactions contemplated by this Agreement
and the fulfillment of the terms of this Agreement do not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice or lapse of time) a default under its certificate of
incorporation or by-laws, or any indenture, agreement or other instrument to
which it is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to or as
contemplated by the Basic Documents), or violate any law or, to the best of its
knowledge, any order, rule or regulation applicable to the Seller of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the it or any of its
properties.
SECTION 2.12 Tax Treatment.
-------------
(a) The Trust shall maintain capital accounts ("Capital Accounts") for
each Certificateholder and allocations of income, gain, loss or deduction as
provided herein shall be
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<PAGE>
credited or debited, as the case may be, to such Capital Accounts. Contributions
to, and distributions from, the Trust shall be credited or debited, as the case
may be, to such Capital Accounts.
(b) Net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated as determined by the
Servicer as follows:
(i) to the extent of available net income, among the Certificateholders
as of the first Record Date following the end of such month, in proportion to
their ownership of principal amount of Certificates on such date, an amount of
net income up to the sum of (x) the amount of any interest that accrues on the
Certificates for such month based on the Pass-Through Rate, (y) an amount
equivalent to any overdue interest on the Certificates that accrued during a
prior month (to the extent that no allocation of taxable income has been
previously made for such amount under clause (x)), and (z) any Trust income
attributable to discount on the Contracts that corresponds to any excess of the
principal amount of the Certificates over initial issue price; and
(ii) to the holder of the AO Interest, to the extent of any remaining
net income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (b) (i) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
clause (b) (ii). Net losses of the Trust, if any, for any month as determined
for Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated to the
holder of the AO Interest to the extent the holder of the AO Interest is
reasonably expected, as determined by the Servicer, to bear the economic burden
of such net losses, then net losses shall be allocated among the
Certificateholders as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of Certificates on such
Record Date until the principal balance of the Certificates is reduced to zero.
The holder of the AO Interest is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the holder of
the AO Interest, the Certificateholders, or as otherwise required by the Code.
(c) Notwithstanding anything in this Section 2.12 to the contrary, (i)
items of net loss and deduction attributable to nonrecourse debt of the Trust
and to "partner nonrecourse debt" (as defined in the Section 704(b) Regulations)
shall be allocated as provided in the Section 704(b) Regulations; (ii) if in any
period, there is a net decrease in the amount of "minimum gain" (as defined in
the Section 704(b) Regulations) of the Trust, or in the amount of "minimum gain"
attributable to "partner nonrecourse debt", then the Certificateholders shall be
allocated items of income or gain for such period and subsequent periods to the
extent and in the manner provided in Treasury Regulations Sections 1.704-2(f)
and 1.704-(2)(i)(4) as a "minimum gain chargeback" (as defined in the Section
704(b) Regulations); (iii) allocations of income of the Trust shall be made in a
manner necessary to satisfy a "qualified income offset" provision as described
in Treasury
-5-
<PAGE>
Regulation Section 1.704-1(b)(2)(ii)(d); and (iv) in no event shall net losses
or deductions be allocated to a Certificateholder to the extent that such
allocation would result in such Certificateholder having a negative balance in
its Capital Account which exceeds the sum of its share of "minimum gain" of the
Trust and "minimum gain" attributable to "partner nonrecourse debt" and the
amount such Certificateholder is obligated (or deemed obligated) to contribute
to the Trust upon liquidation of the Trust.
(d) For purposes of Treasury Regulations Section 1.752-3(a)(3), "excess
nonrecourse liabilities" shall be allocated among the Certificateholders in
accordance with the manner in which it is reasonably expected that the
deductions attributable to those nonrecourse liabilities will be allocated.
-6-
<PAGE>
ARTICLE III
THE CERTIFICATES
SECTION 3.1 Initial Certificate Ownership. Upon the formation of the
-----------------------------
Trust by the contribution by the Seller pursuant to Section 2.5 and until the
issuance of the Certificates, the Seller shall be the sole beneficiary of the
Trust.
SECTION 3.2 Form of the Certificates.
(a) The Certificates shall be substantially in the form set forth in
Exhibit A and shall be issued in minimum denominations of $20,000 and in
integral multiples of $1,000 in excess thereof; provided, however, that (a)
Certificates shall be issued to the holder of the AO Interest pursuant to
Section 2.7 in such denominations as to represent at least 1% of the initial
Certificate Balance and (b) one Certificate may be issued in a denomination
other than an integral multiple of $1,000. The Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of a Responsible Officer of
the Owner Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
(b) The Certificates shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders) all as determined by the officers executing such Certifi
cates, as evidenced by their execution of such Certificates.
(c) The terms of the Certificates set forth in Exhibit A shall form
part of this Agreement.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently with
--------------------------------------
the sale of the Contracts to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates in an aggregate
principal amount equal to the initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Seller, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Seller, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee, or by the Owner Trustee's
authenticating agent, by manual signature. Such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
-7-
<PAGE>
SECTION 3.4 Registration; Registration of Transfer and Exchange of
------------------------------------------------------
Certificates.
- ------------
(a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as provided herein; provided, however, that no
Certificate may be subdivided upon transfer or exchange such that the
denomination of any resulting Certificate is less than $20,000. First Omni Bank,
N.A. shall be the initial Certificate Registrar. Upon any resignation of a
Certificate Registrar, the Owner Trustee shall promptly appoint a successor or,
if it elects not to make such an appointment, assume the duties of Certificate
Registrar.
(b) Upon surrender for registration or transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute on behalf of the Trust, authenticate and deliver (or shall cause its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by the
Owner Trustee or any authenticating agent.
(c) At the option of a Holder of Certificates, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
principal amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office maintained pursuant to Section 3.8. Whenever any
Certificates are so surrendered for exchange, the Owner Trustee shall execute on
behalf of the Trust, authenticate and deliver (or shall cause its authenticating
agent to authenticate and deliver) one or more Certificates dated the date of
authentication by the Owner Trustee or any authenticating agent. Such
Certificates shall be delivered to the Holder making the exchange.
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or his attorney duly authorized in writing with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently destroyed by the
Owner Trustee or Certificate Registrar in accordance with its customary
practice.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
-8-
<PAGE>
SECTION 3.5 Mutilated; Destroyed; Lost or Stolen Certificates. (a) If
-------------------------------------------------
(i) any mutilated Certificate is surrendered to the Certificate Registrar, or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Certificate Registrar, the Owner Trustee and the Trust such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to the Certificate Registrar or the Owner Trustee that such
Certificate has been acquired by a bona fide purchaser, the Owner Trustee shall
execute on behalf of the Trust and the Owner Trustee shall authenticate and
deliver (or shall cause its authenticating agent to authenticate and deliver),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a replacement Certificate of a like aggregate principal amount;
provided, however, that if any such destroyed, lost or stolen Certificate, but
- -------- -------
not a mutilated Certificate, shall have become or within seven days shall be due
and payable, then instead of issuing a replacement Certificate the Owner Trustee
may pay such destroyed, lost or stolen Certificate when so due or payable.
(b) If, after the delivery of a replacement Certificate or payment in
respect of a destroyed, lost or stolen Certificate pursuant to subsection
3.5(a), a bona fide purchaser of the original Certificate in lieu of which such
replacement Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such replacement
Certificate (or such payment) from the Person to whom it was delivered or any
Person taking such replacement Certificate from such Person to whom such
replacement Certificate was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Owner Trustee in connection therewith.
(c) In connection with the issuance of any replacement Certificate
under this Section 3.5, the Owner Trustee may require the payment by the Holder
of such Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Owner Trustee and the Certificate
Registrar) connected therewith.
(d) Any duplicate Certificate issued pursuant to this Section 3.5 in
replacement of any mutilated, destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the Trust, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be found at
any time or be enforced by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Certificates
duly issued hereunder.
(e) The provisions of this Section 3.5 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.6 Persons Deemed Certificateholders. Prior to due
---------------------------------
presentation of a Certificate for registration of transfer, the Owner Trustee or
the Certificate Registrar may treat the Person in whose name any Certificate
shall be registered in the Certificate Register as the Certificateholder of such
Certificate for the purpose of receiving distributions pursuant to Article V
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<PAGE>
and for all other purposes whatsoever, and neither the Owner Trustee nor the
Certificate Registrar shall be affected by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
The Owner Trustee shall furnish or cause to be furnished to the Servicer, the
Seller and the holder of the AO Interest, within 15 days after receipt by the
Owner Trustee of a request therefor from the Servicer, the Seller or the holder
of the AO Interest in writing, a list, in such form as the Servicer, the Seller
or the holder of the AO Interest may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date. If three
or more Holders of Certificates or one or more Holder of Certificates evidencing
not less than 25% of the Certificate Balance apply in writing to the Owner
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Certificateholders. Each Holder, by receiving and holding a Certificate, shall
be deemed to have agreed not to hold the Seller, the holder of the AO Interest
or the Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.8 Maintenance of Corporate Trust Office. The Owner Trustee
-------------------------------------
shall maintain in the Borough of Manhattan, the City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee initially designates the offices of The Bank of New
York, 101 Barclay Street - 21 West, New York, NY 10286, Attention: Fred Clark,
VP Corporate Trust Administrator, Tel. 212-815-5735, fax 212-815-5915 as its
principal office for such purposes. The Owner Trustee shall give prompt written
notice to the Seller and to the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall make
---------------------------
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.2 and amounts, if any, to be paid to the holder of the AO
Interest, in each case pursuant to the Sale and Servicing Agreement, and the
Paying Agent shall report the amounts of such distributions and withdrawals to
the Owner Trustee and the Servicer. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be First Omni Bank, N.A., and any co-paying agent chosen by the
Owner Trustee, and acceptable to the Servicer. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. If First Omni Bank, N.A. shall no longer be the Paying Agent, the
Owner Trustee shall appoint a successor to act as Paying Agent (which shall be
an Eligible Institution). The Owner Trustee shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Owner Trustee to execute
and deliver to the Owner Trustee an
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instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Owner Trustee that as Paying Agent, such successor Paying Agent
or additional Paying Agent shall hold all sums, if any, held by it for payment
to the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 6.3, 6.6, 6.7 and
6.9 shall apply to the Owner Trustee also in its role as Paying Agent (if the
Owner Trustee shall also act as Paying Agent), for so long as the Owner Trustee
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
SECTION 3.10 Seller as Certificateholder. The Seller in its individual
or any other capacity may become the owner or pledgee of Certificates and may
otherwise deal with the Owner Trustee or its Affiliates as if it were not the
Seller.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Certificateholders with Respect to Certain
----------------------------------------------------------
Matters. The Owner Trustee shall not take action with respect to the following
- -------
matters, unless (i) the Owner Trustee shall have notified the Certificateholders
in writing of the proposed action at least 30 days before the taking of such
action, and (ii) the Certificateholders shall not have notified the Owner
Trustee in writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuit brought in connection with the collection of payments
due on the Contracts) and the compromise of any material action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of payments due on the
Contracts);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
(e) the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholders or in circumstances in which the Sale and Servicing
Agreement expressly provides that the consent of the Certificateholders is not
required; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.2 Action by Certificateholders with Respect to Certain
-----------------------------------------------------
Matters. The Owner Trustee shall not have the power, except upon the written
- -------
direction of the Certificateholders evidencing not less than a majority of the
Certificate Balance, to (a) remove the Servicer under the Sale and Servicing
Agreement pursuant to Section 9.01 thereof, (b) appoint a successor Servicer
pursuant to Section 9.02 of the Sale and Servicing Agreement, or (c) except as
expressly provided in the Basic Documents, sell the Contracts or any interest
therein after the termination of the Indenture.
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SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.
-------------------------------------------------------
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Holders of Certificates (including the holder of the AO Interest) and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent .
SECTION 4.4 Restrictions on Certificateholders' Power. The
-----------------------------------------
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein, any
----------------
action that may be taken or consent that may be given or withheld by the
Certificateholders under this Agreement may be taken, given or withheld by the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by Holders of Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Accounts.
-------------------------
(a) On or prior to the Closing Date, the Trust shall cause the Servicer
to establish and maintain, in the name of the Indenture Trustee or the Owner
Trustee, as appropriate, for the benefit of the Noteholders and
Certificateholders the accounts as provided in Section 5.01 of the Sale and
Servicing Agreement.
(b) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. Except as otherwise provided herein or in
the Sale and Servicing Agreement, the Certificate Distribution Account shall be
under the sole dominion and control of the Owner Trustee for the benefit of the
Certificateholders. If, at any time, the Certificate Distribution Account ceases
to be held as an Eligible Account, the Owner Trustee (or the Servicer on behalf
of the Owner Trustee, if the Certificate Distribution Account is not then held
by the Owner Trustee or an Affiliate thereof) shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Certificate Distribution Account as an
Eligible Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.
SECTION 5.2 Application of Trust Funds.
--------------------------
(a) On each Distribution Date, the Owner Trustee shall distribute to
the Certificateholders, on a pro rata basis, amounts deposited in the
Certificate Distribution Account pursuant to the Sale and Servicing Agreement on
or prior to such Distribution Date first in respect of interest and then in
respect of principal.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.08 of the Sale and Servicing Agreement on such
Distribution Date setting forth, among other things, the amount of the
distribution allocable to principal and to interest, the Certificate Balance
after giving effect to such distribution and the Servicer Payment with respect
to such Distribution Date.
(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this Section
5.2. The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Certificateholders sufficient funds for the
payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to
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a distribution (such as a distribution to a non-U.S. Certificateholder), the
Owner Trustee may in its sole discretion withhold such amounts in accordance
with this subsection 5.2(c). If a Certificateholder wishes to apply for a refund
of any such withholding tax, the Owner Trustee shall reasonably cooperate with
such Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse the Owner Trustee for any out-of-pocket expenses incurred.
(d) If the Indenture Trustee holds escheated funds for payment to the
Trust pursuant to Section 3.3(e) of the Indenture, the Owner Trustee shall, upon
notice from the Indenture Trustee that such funds exist, submit on behalf of the
Trust an Issuer Order to the Indenture Trustee pursuant to Section 3.3(e) of the
Indenture instructing the Indenture Trustee to pay such funds to or at the order
of the Seller.
SECTION 5.3 Method of Payment. Subject to subsection 7.1(c),
-----------------
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the immediately preceding
Record Date either by wire transfer, in immediately available funds, to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if (i) such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Record Date and such Holder's Certificates in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) such Certificateholder is the
holder of the AO Interest, or an Affiliate thereof, or, if not, by check mailed
to such Certificateholder at the address of such holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of the Certificates (whether on the Certificate Final Distribution Date
or otherwise) will be payable only upon presentation and surrender of such
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.4 Accounting and Reports to the Certificateholders. The
-----------------------------------------------------
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
- -----------------------------------
cause to be maintained) the books of the Trust on a calendar year basis on the
accrual method of accounting, (b) deliver to each Certificateholder, as may be
required by the Code and applicable Treasury Regulations or otherwise, such
information as may be required to enable each Certificateholder to prepare its
federal and state income tax returns, (c) file or cause to be filed such tax
returns relating to the Trust and make or cause to be made such elections as may
from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a partnership for federal income tax purposes, (d) cause
such tax returns to be signed in the manner required by law and (e) collect or
cause to be collected any withholding tax as described in and in accordance with
subsection 5.2(c) with respect to income or distributions to Certificateholders.
SECTION 5.5 Signature on Returns; Tax Matters Partner. The Owner
Trustee shall sign on behalf of the Trust any and all tax returns of the Trust,
unless applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the holder of the AO Interest. To
the extent one may be required, the holder of the AO Interest shall be the "tax
matters partner" of the Trust pursuant to the Code.
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ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 Duties of Owner Trustee
-----------------------
(a) The Owner Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Agreement and the other Basic
Documents to which the Trust is a party, including the administration of the
Trust in the interest of the Certificateholders, subject to the Basic Documents
and in accordance with the provisions of this Agreement and the Basic Documents
to which the Trust is a party. No implied covenants or obligations shall be read
into this Agreement.
The Owner Trustee is authorized from time to time to take such action as
the Servicer directs in writing with respect to the Basic Documents and shall,
upon the written direction of the Servicer, execute and deliver any amendments
to this Agreement or any of the Basic Documents.
(b) Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer to carry out its obligations under
the Sale and Servicing Agreement.
(c) In the absence of bad faith on its part, the Owner Trustee may
conclusively rely upon certificates or opinions furnished to the Owner Trustee
and conforming to the requirements of this Agreement in determining the truth of
the statements and the correctness of the opinions contained therein; provided,
however, that the Owner Trustee shall have examined such certificates or
opinions so as to determine compliance of the same with the requirements of this
Agreement.
(d) The Owner Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection 6.1(d) shall not limit the effect of subsection
6.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the Owner
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Owner Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 4.1, 4.2 or 6.4.
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(e) Subject to Sections 5.1 and 5.2, monies received by the Owner
Trustee hereunder need not be segregated in any manner except to the extent
required by law or the Sale and Servicing Agreement and may be deposited under
such general conditions as may be prescribed by law, and the Owner Trustee shall
not be liable for any interest thereon.
(f) The Owner Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3 or (ii)
would, to the actual knowledge of a Responsible Officer of the Owner Trustee,
result in the Trust's becoming taxable as a corporation for federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.1 and any such
direction shall be null and void.
SECTION 6.2 Rights of Owner Trustee. The Owner Trustee is authorized
-----------------------
and directed to execute and deliver the Basic Documents and each certificate or
other document attached as an exhibit to or contemplated by the Basic Documents
to which the Trust is to be a party, in such form as the Seller shall approve as
evidenced conclusively by the Owner Trustee's execution thereof. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as the
Servicer recommends with respect to the Basic Documents.
SECTION 6.3 Acceptance of Trusts and Duties. Except as otherwise
-------------------------------
provided in this Article VI, in accepting the trusts hereby created First Omni
Bank, N.A. acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be liable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own negligent action, its own negligent failure to act or its
own willful misconduct or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.6 and expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any Financed Vehicle or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Financed Vehicle; the existence and enforceability of any insurance thereon; the
existence and contents of any Contract on any computer or other record thereof;
the validity of the assignment of any Contract to the Trust or of any
intervening assignment; the completeness of any Contract; the performance or
enforcement of any Contract; the compliance by
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the Seller or the Servicer with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation or any action of the Servicer, the Trustee or the Servicer or
any subservicer taken in the name of the Owner Trustee.
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Servicer or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or under
any Basic Document, if the Owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes or the Certificate Balance of and
interest on the Certificates;
(e) the Owner Trustee shall not be responsible for or in respect of and
makes no representation as to the validity or sufficiency of any provision of
this Agreement or for the due execution hereof by the Seller or for the form,
character, genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, the Notes, the Certificates (other than the certificate of
authentication on the Certificates) or of any Contracts or any related
documents, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to any Noteholder or to any Certificateholder,
other than as expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct
of the Servicer, the Indenture Trustee, the Seller or the Servicer under any of
the Basic Documents or otherwise and the Owner Trustee shall have no obligation
or liability to perform the obligations of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Servicer under the Sale
and Servicing Agreement or the Indenture Trustee under the Indenture; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of any of
the Certificateholders, unless such Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act.
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SECTION 6.4 Action Upon Instruction by Certificateholders.
---------------------------------------------
(a) Subject to Section 4.4, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Section 4.5.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, or is unsure as to the application, intent, interpretation or
meaning of any provision of this Agreement or the Basic Documents, the Owner
Trustee shall promptly give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders requesting instruction as to the
course of action to be adopted, and, to the extent the Owner Trustee acts in
good faith in accordance with any such instruction received, the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instructions within ten days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action which is consistent,
in its view, with this Agreement or the Basic Documents, and as it shall deem to
be in the best interests of the Certificateholders, and the Owner Trustee shall
have no liability to any Person for any such action or inaction.
SECTION 6.5 Furnishing of Documents. The Owner Trustee shall furnish
-----------------------
(a) to the Certificateholders, promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents and (b) to the Noteholders, promptly
upon receipt of a written request therefor, copies of the Purchase Agreement,
the Sale and Servicing Agreement and this Agreement.
SECTION 6.6 Representations and Warranties of Owner Trustee. The Owner
-----------------------------------------------
Trustee hereby represents and warrants to the Seller, for the benefit of the
Certificateholders, that:
(a) It is a national banking association duly organized, validly
existing and in good standing under the laws of the United States with its
principal place of business in the State of Delaware.
(b) It has full power, authority and legal right to execute, deliver
and perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(c) The execution, delivery and performance by it of this Agreement (i)
shall not violate any provision of any law or regulation governing the banking
and trust powers of the
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Owner Trustee or any order, writ, judgment or decree of any court, arbitrator or
governmental authority applicable to the Owner Trustee or any of its assets,
(ii) shall not violate any provision of the corporate charter or by-laws of the
Owner Trustee, or (iii) shall not violate any provision of, or constitute, with
or without notice or lapse of time, a default under, or result in the creation
or imposition of any lien on any properties included in the Trust pursuant to
the provisions of any mortgage, indenture, contract, agreement or other
undertaking to which it is a party, which violation, default or lien could
reasonably be expected to have a materially adverse effect on the Owner
Trustee's performance or ability to perform its duties as Owner Trustee under
this Agreement or on the transactions contemplated in this Agreement.
(d) The execution, delivery and performance by the Owner Trustee of
this Agreement shall not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of banks or trust companies in the
jurisdiction in which the Trust was formed.
(e) This Agreement has been duly executed and delivered by the Owner
Trustee and constitutes the legal, valid and binding agreement of the Owner
Trustee, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
SECTION 6.7 Reliance; Advice of Counsel.
---------------------------
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties and
need not investigate any fact or matter in any such document. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee: (i) may act directly or through its agents,
attorneys, custodians or nominees pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or misconduct
of such agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Owner Trustee with
reasonable care; and (ii) may consult with counsel, accountants and other
skilled professionals to be selected with
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reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such Persons and not
contrary to this Agreement or any Basic Document.
SECTION 6.8 Owner Trustee May Own Certificates and Notes. The Owner
--------------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Seller, the Indenture Trustee and
the Servicer in transactions in the same manner as it would have if it were not
the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. The Owner Trustee shall receive
--------------------------
as compensation for its services hereunder such fees as have been separately
agreed upon before the date hereof between the Seller, or any person
representing the Seller, and the Owner Trustee, and the Owner Trustee shall be
entitled to be reimbursed by the Servicer for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, custodians, nominees, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder. If the Seller shall fail to compensate the
Owner Trustee, the Servicer shall pay to the Owner Trustee such compensation.
The Servicer shall indemnify the Owner Trustee and its successors, assigns,
agents and servants in accordance with the provisions of Section 8.02 of the
Sale and Servicing Agreement. The indemnities contained in this Section 6.9
shall survive the resignation, removal or termination of the Owner Trustee or
the termination of this Agreement. Any amounts paid to the Owner Trustee
pursuant to this Article VI shall be deemed not to be a part of the Owner Trust
Estate immediately after such payment.
SECTION 6.10 Replacement of Owner Trustee.
----------------------------
(a) The Owner Trustee may resign at any time and be discharged from the
trusts hereby created by giving 30 days' prior written notice thereof to the
Servicer, provided that such resignation shall not become effective until a
successor Owner Trustee has been appointed. The Servicer may appoint a successor
Owner Trustee by delivering a written instrument pursuant to Section 6.10(b). If
no successor Owner Trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee. The Servicer shall remove the Owner
Trustee if:
(i) the Owner Trustee shall cease to be eligible in accordance with
the provisions of Section 6.13 and shall fail to resign after written
request therefor by the Servicer;
(ii) the Owner Trustee shall be adjudged bankrupt or insolvent;
(iii) a receiver or other public officer shall be appointed or take
charge or control of the Owner Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
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(b) If the Owner Trustee resigns or is removed or if a vacancy exists
in the office of Owner Trustee for any reason the Servicer shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate (one copy
of which instrument shall be delivered to the outgoing Owner Trustee so removed
and one copy to the successor Owner Trustee) and shall pay all fees owed to the
outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment of
a successor Owner Trustee pursuant to any of the provisions of this Section 6.10
shall not become effective until a written acceptance of appointment is
delivered by the successor Owner Trustee to the outgoing Owner Trustee and the
Servicer and all fees and expenses due to the outgoing Owner Trustee are paid.
Any successor Owner Trustee appointed pursuant to this Section 6.10 shall be
eligible to act in such capacity in accordance with Section 6.13 and, following
compliance with the preceding sentence, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor under this Agreement,
with like effect as if originally named as Owner Trustee. The Servicer shall
provide notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.
(d) The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement. The Servicer and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
(e) Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 6.10, the Servicer shall mail notice of the successor
of such Owner Trustee to all Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies.
SECTION 6.11 Merger or Consolidation of Owner Trustee. Any corporation
----------------------------------------
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 6.13, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; provided, however, that the Owner Trustee shall mail notice
of such merger, conversion or consolidation to the Rating Agencies.
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust Estate or any Financed Vehicle may at the time
be located, the Servicer and the Owner Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee to act as co-trustee, jointly with the
Owner Trustee, or as separate trustee or trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other
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provisions of this Section 6.12, such powers, duties, obligations, rights and
trusts as the Servicer and the Owner Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Owner Trustee alone
shall have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 6.13 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 6.10.
(b) Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
jointly by the Owner Trustee and such separate trustee or co-trustee (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.
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SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner
------------------------------------------
Trustee shall at all times: (a) be authorized to exercise corporate trust
powers; (b) have a combined capital and surplus of at least $40,000,000 and be
subject to supervision or examination by federal or state authorities; and (c)
have (or have a parent which has) a long-term unsecured debt rating of at least
"BBB" by Standard & Poor's and have a long-term unsecured debt rating of at
least "Baa3" by Moody's; provided, however, that if the Owner Trustee does not
meet the requirements of clause (b), the Owner Trustee may provide a guaranty
from its parent (which meets the requirements of clause (b)), acceptable to the
Servicer, of its liabilities and obligations under the Basic Documents;. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 6.13, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.13, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10. At all times at least one of the
Owner Trustee or the Co-trustee appointed pursuant hereto shall be a person that
satisfies the provisions of Section 3807(a) of the Business Trust Statute (the
"Delaware Trustee").
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ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
------------------------------
(a) This Agreement has been entered into in part to induce the
Indenture Trustee and the Certificateholders from time to time to participate in
the transactions contemplated hereby, and each of the Owner Trustee, the holder
of the AO Interest and the Seller agree that the Indenture Trustee (so long as
the Indenture shall not have been terminated in accordance with its terms) and
the Certificateholders from time to time are third party beneficiaries hereof,
and shall be entitled to enforce the terms of this Agreement to the same extent
as if they were signatories hereto, subject, however, to Article IV hereof and
to the applicable provisions of the Indenture. So long as the Indenture shall
not have been terminated in accordance with its terms, this Agreement and the
Trust created hereby are irrevocable by the Owner Trustee and the Seller, unless
the Indenture Trustee and the Certificateholders consent in writing to such
termination. This Agreement (other than Section 6.9) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i) the final
distribution by the Owner Trustee of all monies or other property or proceeds of
the Owner Trust Estate in accordance with the terms of the Indenture, the Sale
and Servicing Agreement (including the exercise by CITSF of its option to
purchase the Contracts pursuant to Section 11.01 of the Sale and Servicing
Agreement or resulting from the mandatory sale of all Contracts pursuant to
Section 11.02 of the Sale and Servicing Agreement) and Article V or (ii) twenty-
one years less one day after the death of the last survivor of all of the
descendants of the grandparents of David C. Rockefeller living on the date of
the earliest execution of this Agreement by any party hereto, but if this
Agreement and the Trust created hereby shall be or become authorized under
applicable law to be valid for a period commencing on the twenty-first
anniversary of the death of such last survivor (or, without limiting the
generality of the foregoing, if legislation shall become effective providing for
the validity of this Agreement and the Trust created hereby for a period in
gross exceeding the period for which this Agreement and the Trust created hereby
are hereinabove stated to extend and be valid), then this Agreement and the
Trust created hereby shall not terminate under this subsection (ii), but shall
extend to and continue in effect, but only if such non-termination and extension
shall then be valid under applicable law, until the day proceeding such date as
the same shall, under applicable law, cease to be valid. Upon such termination,
all monies or other property or proceeds constituting part of the Owner Trust
Estate shall be distributed in accordance with the terms of the Agreement. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder, including the holder of the AO Interest, shall not (x)
operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or the Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto. The bankruptcy,
liquidation or dissolution of the Owner Trustee (or any other beneficiary
herewith) will not terminate this Agreement or the Trust, nor entitle such
person's legal representatives or heirs, as appropriate, to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of the Trust or Owner Trust Estate, nor otherwise affect the rights, obligations
and liabilities of the parties hereto. No creditor of any Certificateholder
shall obtain legal title to or exercise legal or equitable remedies with respect
to the Owner Trust Estate as a result of such Certificateholder's holding of the
Certificate. No transfer, by
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<PAGE>
operation of law or otherwise, of any right, title and interest of any
Certificateholder in and to its undivided beneficial interest in the Owner Trust
Estate shall operate to terminate this Agreement or the Trust created hereby.
(b) Except as provided in Section 7.1(a), neither the Seller nor the
holder of the AO Interest nor any Certificateholder shall be entitled to revoke
or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from CITSF given pursuant
to Section 11.01 of the Sale and Servicing Agreement, or within five Business
Days of the Owner Trustee receiving notice of such termination from the
Indenture Trustee pursuant to Section 11.02 of the Sale and Servicing Agreement,
stating: (i) the Distribution Date upon or with respect to which final payment
of the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Paying Agent therein designated; (ii) the
amount of any such final payment; and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Paying
Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2.
(d) If all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Owner Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Owner Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Subject to applicable laws with respect to escheat of
funds, any funds remaining in the Trust after exhaustion of such remedies in the
preceding sentence shall be deemed property of the holder of the AO Interest and
distributed by the Owner Trustee to the holder of the AO Interest.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State of the State of Delaware
in accordance with the provisions of Section 3810 of the Business Trust Statute.
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ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or
---------------------------------------------------
Noteholders. This Agreement may be amended by the Seller and the Owner Trustee
- -----------
without the consent of any of the Noteholders or the Certificateholders (but
with prior written notice to each of the Rating Agencies and, in the case of
clauses (iii) and (vi), satisfaction of the Rating Agency Condition), to (i)
correct manifest error or cure any ambiguity, (ii) correct or supplement any
provision in this Agreement that may be inconsistent with any other provision in
this Agreement, (iii) add or amend any provision as requested by Moody's or
Standard & Poor's to maintain or improve the rating of the Notes or
Certificates, (iv) add to the covenants, restrictions or obligations of the
Seller, the holder of the AO Interest, the Owner Trustee or the Indenture
Trustee, (v) evidence and provide for the acceptance of the appointment of a
successor trustee with respect to the Owner Trust Estate and add to or change
any provisions as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee pursuant to Article VI and (vi) add,
change or eliminate any other provision of this Agreement provided that an
amendment pursuant to this clause (vi), as evidenced by an Opinion of Counsel,
does not adversely affect in any material respect the interests of the
Noteholders or the Certificateholders.
SECTION 8.2 Amendments With Consent of Certificateholders and
-------------------------------------------------
Noteholders. This Agreement may be amended from time to time by the Seller and
- -----------
the Owner Trustee with the consent of Noteholders whose Notes evidence not less
than a majority of the aggregate outstanding principal amount of the Notes as of
the close of the preceding Distribution Date and the consent of
Certificateholders whose Certificates evidence not less than a majority of the
Certificate Balance as of the close of the preceding Distribution Date (which
consent, whether given pursuant to this Section 8.2 or pursuant to any other
provision of this Agreement, shall be conclusive and binding on such Person and
on all future Holders of such Notes or Certificates and of any Notes or
Certificates issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Notes or
Certificates) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement, or of modifying
in any manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall increase or reduce in any manner the
amount of, or accelerate or delay the timing of, distributions that shall be
required to be made on any Note or Certificate, the Pass Through Rate or any
Interest Rate. The Owner Trustee shall furnish notice to each of the Rating
Agencies prior to obtaining consent to any proposed amendment under this Section
8.2.
SECTION 8.3 Form of Amendments.
------------------
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Section 8.1 or 8.2, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(b) It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to Section 8.2 to approve the
particular form of any
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<PAGE>
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders provided for in this Agreement or in any
other Basic Document) and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable requirements
as the Owner Trustee may prescribe.
(c) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.
(d) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
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<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 No Legal Title to Owner Trust Estate. The
------------------------------------
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and VII. No transfer, by operation of law or otherwise, of any right,
title, and interest of the Certificateholders to and in their ownership interest
in the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Owner Trust Estate.
SECTION 9.2 Limitations on Rights of Others. Except as expressly
-------------------------------
provided herein, the provisions of this Agreement are solely for the benefit of
the Owner Trustee, the Seller, the Certificateholders, the Servicer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 9.3 Notices.
-------
(a) All demands, notices and communications upon or to the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or the Rating Agencies under
this Agreement shall be in writing personally delivered, sent by electronic
facsimile (with hard copy to follow via first class mail), provided, however,
receipt of such is acknowledged by return facsimile or otherwise in writing, or
mailed by certified mail-return receipt requested, and shall be deemed to have
been duly given upon receipt (a) in the case of the Seller, at the following
address: 650 CIT Drive, Livingston, N.J. 07039, (b) in the case of the Servicer,
at the following address: 650 CIT Drive, Livingston, N.J. 07039, (c) in the case
of the Indenture Trustee, at its Corporate Trust Office, (d) in the case of the
Trust or the Owner Trustee, to the Owner Trustee at its Corporate Trust Office,
(e) in the case of Moody's Investors Service, Inc., to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007 and (f) in the case of Standard & Poor's Ratings Service, to Standard &
Poor's Ratings Service, 26 Broadway (15th Floor), New York, New York 10004,
Attention: Asset-Backed Surveillance Department, or at such other address as
shall be designated by such Person in a written notice to the other parties to
this Agreement.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 9.4 Severability. If any one or more of the covenants,
------------
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such 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
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<PAGE>
validity or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
SECTION 9.5 Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
SECTION 9.6 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall be binding upon, and inure to the benefit of, the Seller,
the Owner Trustee and each Certificateholder and their respective successors and
permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall bind
the successors and assigns of such Certificateholder.
SECTION 9.7 No Petition Covenant. Notwithstanding any prior termination
--------------------
of this Agreement, the Trust (or the Owner Trustee on behalf of the Trust), the
Owner Trustee, each Certificateholder, the Indenture Trustee and each Noteholder
or Note Owner shall not, prior to the date which is one year and one day after
the termination of this Agreement with respect to the Seller or the Trust,
acquiesce, petition or otherwise invoke or cause the Seller or the Trust to
invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Seller or the Trust under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or the Trust or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Seller or the Trust.
SECTION 9.8 No Recourse. Each Certificateholder by accepting a
-----------
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Seller, the holder of the AO Interest, the Servicer, the
Owner Trustee, the Indenture Trustee or any Affiliate thereof and no recourse
may be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificates or the Basic
Documents.
SECTION 9.9 Headings. The headings of the various Articles and Sections
--------
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 9.10 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.11 Certificate Transfer Restrictions.
---------------------------------
The Certificates may not be acquired by or for the account of (i) a non-
United States person as defined in (S)7701(a) of the Code, (ii) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (iii) a plan described in Section
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<PAGE>
4975(e)(1) of the Code or (iv) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (each, a "Benefit Plan").
No transfer of a Certificate may be made unless the Certificate Registrar shall
have received from the prospective transferee of such Certificate a
representation letter substantially in the form of Exhibit C, that such
transferee is not subject to the foregoing limitation.
SECTION 9.12 Indemnification by the Servicer. The Owner Trustee further
-------------------------------
acknowledges and accepts the conditions and limitations with respect to the
Servicer's obligation to indemnify, defend and hold the Owner Trustee harmless
as set forth in Section 8.02 of the Sale and Servicing Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
FIRST OMNI BANK, N.A.,
as Owner Trustee
By: /s/ David L. Williams
___________________________
Name: David L. Williams
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Frank Garcia
___________________________
Name: Frank Garcia
Title: Vice President
Accepted and Agreed
with respect to the
provisions relating to
the intended holder of
the AO Interest:
THE CIT GP CORPORATION III
By: /s/ Frank Garcia
___________________________
Name: Frank Garcia
Title: Vice President
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<PAGE>
EXHIBIT A
NUMBER ______ ORIGINAL CERTIFICATE BALANCE $ _________________
FRACTIONAL UNDIVIDED INTEREST: ___%
SEE REVERSE FOR CERTAIN DEFINITIONS
NO INTEREST IN THIS CERTIFICATE MAY BE ACQUIRED BY OR FOR THE ACCOUNT OF
(i) A NON-UNITED STATES PERSON, AS DEFINED IN SECTION 7701(A) OF THE CODE, (ii)
AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA")) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OF ERISA, (iii) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT
LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS), OR (iv) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY.
CIT RV TRUST 1997-A
6.800% ASSET-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used recreation vehicles and sold to the Trust by The CIT Group
Securitization Corporation II (This Certificate does not represent an interest
in or obligation of The CIT Group Securitization Corporation II, The CIT
Group/Sales Financing, Inc. or The CIT Group, Inc. or any of their respective
affiliates.)
THIS CERTIFIES THAT _____________________________________________ is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in CIT RV Trust 1997-A (the "Trust") formed by The CIT Group Securitization
Corporation II, a Delaware corporation, represented by the Original Certificate
Balance specified above.
The Trust was created pursuant to a Trust Agreement, dated as of
November 1, 1997 (as amended and supplemented from time to time, the "Trust
Agreement"), between the Seller and, First Omni Bank, N.A. as owner trustee (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as 6.800% Asset-Backed Certificates (the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property of
the Trust includes a pool of simple interest retail installment sale contracts
(the "Contracts") secured by the new and used recreation vehicles financed
thereby (the "Financed
<PAGE>
Vehicles"), certain monies received under the Contracts on and after November 1,
1997 (the "Cut-off Date"), the Collection Account, the Reserve Account, the Note
Distribution Account and the Certificate Distribution Account, in each case
together with the proceeds thereof, the proceeds from claims under certain
insurance policies in respect of individual Financed Vehicles or the related
Obligors and certain rights under the Sale and Servicing Agreement. The rights
of the holders of the Certificates are subordinated to the rights of the holders
of the Notes, as set forth in the Sale and Servicing Agreement.
Under the Trust Agreement, there shall be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day,
commencing December 15, 1997 (each, a "Distribution Date"), to the person in
whose name this Certificate is registered on the related Record Date (as defined
below), such Certificateholder's fractional undivided interest as set forth
above in the amount of interest and principal to be distributed to
Certificateholders on such Distribution Date. Interest in respect of a
Distribution Date will accrue at the Pass-Through Rate shown above during the
related Interest Accrual Period. On each Distribution Date accrued interest at
the Pass-Through Rate on the outstanding Certificate Balance of this Certificate
shall be distributed, to the extent of the Available Amount remaining after
payment of the Servicer Payment and interest and principal due on the Notes on
such Distribution Date. To the extent the remaining Available Amount on a
Distribution Date is insufficient to pay Certificateholders the entire amount of
interest due on such Distribution Date, such shortfall will be funded from the
Reserve Account, subject to the Available Amount remaining after any withdrawal
from the Reserve Account to make payments of interest and principal due on the
Notes on such Distribution Date, as more specifically set forth in the Sale and
Servicing Agreement. Interest on this Certificate for any Distribution Date due
but not paid on such Distribution Date will be due on the next Distribution Date
in addition to an amount equal to interest on such amount at the Pass-Through
Rate (to the extent lawful). Interest on this Certificate will be calculated on
the basis of a 360-day year consisting of twelve 30-day months. The "Record
Date," with respect to any Distribution Date, means the last Business Day of the
month immediately preceding the month in which such Distribution Date occurs.
On each Distribution Date prior to the Distribution Date on which the
Notes have been paid in full (the "Cross-over Date"), the Holder of this
Certificate will not be entitled to any payments of principal.
On each Distribution Date on or after the Cross-over Date, principal of
this Certificate will be payable, subject to the remaining Available Amount and
the remaining Available Reserve Amount, in an amount equal to the
Certificateholders' Principal Distribution Amount with respect to such
Distribution Date. Such principal payments will be funded to the extent of the
Available Amount remaining after payment of the Servicer Payment, payment of
interest and principal in respect of the Notes on the Cross-over Date, and
payment of interest due on the Certificates on such Distribution Date. To the
extent the remaining Available Amount on a Distribution Date is insufficient to
fund the entire Certificateholders' Principal Distribution Amount due on such
Distribution Date, such shortfall will be funded from the Reserve Account,
subject to the Available Reserve Amount remaining after any withdrawals from the
Reserve Account to make
A-2
<PAGE>
payments of interest and principal due on the Notes and interest due on the
Certificates on such Distribution Date, as more specifically set forth in the
Sale and Servicing Agreement.
The distributions in respect of Certificate Balance and interest on this
Certificate are payable in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. All payments made by the Trust with respect to this Certificate shall be
applied, to the extent of the remaining Available Amount and the remaining
Available Reserve Amount, first to interest due and payable on this Certificate
as provided above and then to the unpaid distributions in respect of Certificate
Balance on this Certificate.
The holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as and to the extent described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Seller, the Servicer and the Certificateholders
that, for purposes of federal income, state and local income and franchise taxes
and any other taxes imposed upon, measured by or based upon gross or net income,
the Trust shall be treated as a partnership. Except as otherwise required by
appropriate taxing authorities, the Seller and the other Certificateholders by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as interests in
such partnership.
Each Certificateholder by its acceptance of a Certificate covenants and
agrees that such Certificateholder shall not, prior to the date which is one
year and one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Seller or the Issuer to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against the Seller or the Issuer under any federal or state
bankruptcy, insolvency, reorganization or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or the Issuer or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Seller or the Issuer.
Distributions on this Certificate shall be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate shall be made after due notice by the
Owner Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the office maintained for such purpose by
the Owner Trustee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee by manual signature, this
Certificate shall not entitle the
A-3
<PAGE>
holder hereof to any benefit under the Trust Agreement or the Sale and Servicing
Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-4
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
CIT RV TRUST 1997-A
BY: FIRST OMNI BANK, N.A.
not in its individual capacity,
but solely as Owner Trustee
By: ________________________
Name:
Title:
Dated: _____________________
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
FIRST OMNI BANK, N.A.
not in its individual
capacity but solely
as Owner Trustee
By: ____________________________
First Omni Bank, N.A., as
authenticating agent
A-5
<PAGE>
REVERSE OF CERTIFICATE
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, The CIT Group, Inc., the holder of the AO Interest,
the Indenture Trustee, the Owner Trustee or any affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement or the
Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections and recoveries with respect to the Contracts (and certain
other amounts), all as more specifically set forth herein and in the Trust
Agreement and the Sale and Servicing Agreement. A copy of each of the Sale and
Servicing Agreement and the Trust Agreement may be examined during normal
business hours at the principal office of the Seller, and at such other places,
if any, designated by the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the Holders of the
Notes evidencing not less than a majority of the aggregate outstanding principal
amount of the Notes as of the close of the preceding Distribution Date and the
consent of Certificateholders whose Certificates evidence not less than a
majority of the Certificate Balance as of the close of the preceding
Distribution Date. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates or the Notes.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee for such purposes, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is First Omni Bank, N.A.
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 9.11
of the Trust 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.
A-6
<PAGE>
The Certificates are issuable only as registered Certificates without
coupons in denominations of $20,000 or integral multiples of $1,000 in excess
thereof; provided, however, that one Certificate may be issued in a denomination
other than an integral multiple of $1,000 such that the holder of the AO
Interest may own at least 1% of the Certificate Balance (as described in the
Trust Agreement). As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same; provided,
however, that no Certificate may be subdivided such that the denomination of any
resulting Certificate is less than $20,000. No service charge shall be made for
any such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Owner Trustee, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Sale and Servicing Agreement and the disposition of all property held as
part of the Trust. CITSF may at its option purchase the Contracts at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Contracts shall effect early retirement of the Certificates; provided, however,
-------- -------
that such right of purchase is exercisable on any Distribution Date as of which
the Pool Balance as of the last day of the related Due Period is 10% or less of
the Initial Pool Balance. In addition, within ten days following the first
Distribution Date as of which the Pool Balance as of the last day of the related
Due Period is 5% or less of the Initial Pool Balance an auction sale of the
remaining Contracts may be conducted (in each case, as described in the Sale and
Servicing Agreement) and such auction may effect early retirement of the
Certificates.
A-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:______________ _____________________*
Signature Guaranteed: _____________________
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
A-8
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
CIT RV TRUST 1997-A
-------------------
THIS Certificate of Trust of CIT RV Trust 1997-A (the "Trust"), dated as of
November 1, 1997, is being duly executed and filed by First Omni Bank, N.A., a
national banking association, as trustee, to form a business trust under the
Delaware Business Trust Act (12 Del. C. 3801 et seq.).
--- - -- ---
1. Name. The name of the business trust formed hereby is CIT RV Trust
----
1997-A.
2. Delaware Trustee. The name and business address of the Trustee
resident in the State of Delaware is First Omni Bank, N.A., 499 Mitchell Street,
Millsboro, DE 19966.
3. This Certificate of Trust shall be effective as of November __,
1997. IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
executed this Certificate of Trust as of the date first-above written.
First Omni Bank, N.A., not in its individual capacity but solely as
Owner Trustee under a Trust Agreement dated as of November 1, 1997
By: ________________________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF CIT RV TRUST 1997-A CERTIFICATE TRANSFEREE LETTER
First Omni Bank, N.A., as Certificate Registrar and Owner Trustee
Re: $564,122,864 CIT RV Trust 1997-A
Ladies and Gentlemen:
This letter is delivered pursuant to Section 9.11 of the Trust Agreement, dated
as of November 1, 1997 (the "Agreement"), between The CIT Group Securitization
Corporation II, as seller and First Omni Bank, N.A., as Owner Trustee, in
connection with the transfer by [________________] to the undersigned (the
"Transferee") of $ Original 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.
______
(Initial)
I. The Transferee 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.
II. Non-Foreign Status:
For Individuals
_____
(Initial)
(1) The Transferee hereby certifies under penalties of perjury that it is not a
nonresident alien for purposes of income taxation (as such term is defined
in the Code and Income Tax Regulations).
For Entities
______
(Initial)
(2) The Transferee hereby certifies under penalties of perjury that it is not a
foreign corporation, foreign partnership, foreign trust or foreign estate
(as those terms are defined in the Code and Income Tax Regulations).
<PAGE>
General - for All Investors
______
(Initial)
(3) The Transferee understands that the information contained in this Item II
may be disclosed to the Internal Revenue Service by the Trust and that any
false statement contained in this Item II could be punished by fine,
imprisonment or both.
III. Transferee's U.S. Employer Identification Number is
[_____________].
IV. Please make all payments due on the Certificates:
(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:
C-2
<PAGE>
EXHIBIT 4.3
==============================================================================
THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
CIT RV TRUST 1997-A
as Issuer
_______________________________
SALE AND SERVICING AGREEMENT
Dated as of November 1, 1997
________________________________
$564,122,864
CIT RV Trust 1997-A
Class A-1 5.800% Asset-Backed Notes
Class A-2 5.985% Asset-Backed Notes
Class A-3 6.018% Asset-Backed Notes
Class A-4 6.200% Asset-Backed Notes
Class A-5 6.250% Asset-Backed Notes
Class A-6 6.350% Asset-Backed Notes
Class A-7 6.400% Asset-Backed Notes
Class B 6.450% Asset-Backed Notes
6.800% Asset-Backed Certificates
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I Definitions............................................... 1
Section 1.01 General................................................ 1
Section 1.02 Specific Terms......................................... 1
ARTICLE II Conveyance of Contracts; Acceptance by Trustee............ 25
Section 2.01 Conveyance of the Contracts........................... 25
Section 2.02 Acceptance by Owner Trustee........................... 25
ARTICLE III Representations and Warranties; The Contracts............ 27
Section 3.01A Representations and Warranties Regarding Each
Contract........................................... 27
Section 3.01B Representations and Warranties Regarding the
Contracts in the Aggregate......................... 30
Section 3.01C Representations and Warranties Regarding the
Contract Files..................................... 32
Section 3.02 Repurchase of Contracts for Breach of Representations
and Warranties..................................... 32
Section 3.03 Custody of Contract Files............................. 33
Section 3.04 Duties of Servicer as Custodian....................... 33
Section 3.05 Instructions; Authority to Act........................ 34
Section 3.06 Effective Period and Termination...................... 35
ARTICLE IV Administration and Servicing of Contracts................. 36
Section 4.01 Duties of Servicer.................................... 36
Section 4.02 Collection of Contract Payments....................... 37
Section 4.03 Realization Upon Contracts............................ 38
Section 4.04 Physical Damage Insurance............................. 39
Section 4.05 Maintenance of Security Interests in Financed
Vehicles; Retitling................................ 41
Section 4.06 Covenants of Servicer................................. 42
Section 4.07 Purchase of Contracts Upon Breach..................... 42
Section 4.08 Servicing Fee......................................... 43
Section 4.09 Monthly Report........................................ 43
Section 4.10 Annual Statement as to Compliance..................... 44
Section 4.11 Annual Report of Accountants.......................... 44
Section 4.12 Duties of Owner Trustee............................... 44
Section 4.13 Reports to Securityholders and the Rating Agencies.... 45
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
Policy............................................. 45
Section 4.15 Satisfaction of Contract.............................. 45
Section 4.16 Costs and Expenses.................................... 45
ARTICLE V Accounts; Distributions; Statements to Certificateholders.. 47
Section 5.01 Collection Account and Reserve Account................ 47
Section 5.02 Collections; Applications............................. 49
Section 5.03 Monthly Advances...................................... 51
-i-
<PAGE>
Page
----
Section 5.04 Additional Deposits................................... 51
Section 5.05 Distributions......................................... 52
Section 5.06 Reserve Account....................................... 53
Section 5.07 Net Deposits.......................................... 55
Section 5.08 Statements to Securityholders......................... 55
ARTICLE VI [Reserved]................................................ 58
ARTICLE VII The Company............................................... 59
Section 7.01 Representations of Company............................ 59
Section 7.02 Merger or Consolidation of Company.................... 60
Section 7.03 Limitation on Liability of the Company and Others..... 60
Section 7.04 The Company May Own Securities........................ 60
Section 7.05 Indebtedness of and Sale of Assets by the Company..... 61
ARTICLE VIII The Servicer; Representations and Indemnities........... 62
Section 8.01 Representations of CITSF.............................. 62
Section 8.02 Liability of Servicer, Indemnities.................... 63
Section 8.03 Merger or Consolidation of Servicer................... 64
Section 8.04 Limitation on Liability of Servicer and Others........ 65
Section 8.05 Servicer Not To Resign................................ 65
Section 8.06 Assignment of Servicing............................... 65
ARTICLE IX Events of Termination..................................... 66
Section 9.01 Events of Termination................................. 66
Section 9.02 Indenture Trustee to Act; Appointment of Successor.... 67
Section 9.03 Notification to Securityholders....................... 68
Section 9.04 Rights to Direct Trustees and Waiver of Events of
Termination........................................ 69
Section 9.05 Effect of Transfer.................................... 69
ARTICLE X [Reserved] 71
ARTICLE XI Optional Purchase and Auction Sale........................ 72
Section 11.01 Optional Purchase of All Contracts................... 72
Section 11.02 Mandatory Sale of all Contracts...................... 72
Section 11.03 Contract Repurchase Procedures....................... 74
ARTICLE XII Miscellaneous Provisions................................. 75
Section 12.01 Amendment............................................ 75
Section 12.02 Protection of Title to Trust......................... 76
Section 12.03 Limitation on Rights of Securityholders.............. 78
Section 12.04 Governing Law........................................ 79
Section 12.05 Notices.............................................. 79
Section 12.06 Severability of Provisions........................... 80
Section 12.07 Submission to Jurisdiction; Venue.................... 80
Section 12.08 Counterparts......................................... 80
-ii-
<PAGE>
Page
----
Section 12.09 Merger and Integration............................... 80
Section 12.10 Headings............................................. 80
EXHIBITS
Exhibit A List of Contracts
Exhibit B Form of Owner Trustee's Acknowledgment and Certification
Exhibit C Form of Servicer's Certificate
Exhibit D Form of Monthly Report
Exhibit E Termination - Auction Procedures
Exhibit F Form of Officers' Certificate
-iii-
<PAGE>
This Sale and Servicing Agreement, dated as of November 1, 1997, (the
"Agreement") is made among The CIT Group Securitization Corporation II, as
seller (together with its permitted successors and assigns, the "Company" or the
"Seller"), The CIT Group/Sales Financing, Inc., a corporation organized and
existing under the laws of the State of Delaware, as Servicer (in its individual
capacity, "CITSF," or, together with its permitted successors and assigns, the
"Servicer"), and CIT RV Trust 1997-A (the "Issuer" and the "Trust"), for which
First Omni Bank, N.A., a national banking association formed under the laws of
the United States with its principal place of business in the State of Delaware,
acts not in its individual capacity but solely as Owner Trustee (together with
permitted successors and assigns, the "Owner Trustee").
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereto agree as provided herein:
ARTICLE I
DEFINITIONS
-----------
Section 1.01 General.
-------
For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Section references refer to Sections of this Agreement.
Section 1.02 Specific Terms.
--------------
"Affiliate" of any specified Person means any other Person controlling
---------
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agency Office" means the office of the Trust maintained pursuant to
-------------
Section 3.2 of the Indenture.
"AO Interest" means the Certificates which shall be held by The CIT GP
-----------
Corporation III, as described in Section 2.7 of the Trust Agreement.
"Authorized Officer" means with respect to the Trust, any officer of
------------------
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Trust and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).
<PAGE>
"Available Amount" means for any Distribution Date, an amount equal to
----------------
the excess of (A) the sum of (i) all amounts on deposit in the Collection
Account attributable to collections or deposits made in respect of the Contracts
(including any Late Fees) in the related Due Period and (ii) the Purchase Price
for any Repurchased Contracts and any Monthly Advances made by the Servicer if
such Purchase Price or Monthly Advance is paid on the Deposit Date immediately
preceding such Distribution Date over (B) the sum of the following amounts (to
the extent that the Servicer has not already withheld such amounts from
collections on the Contracts): (i) any repossession profits on Liquidated
Contracts, any Liquidation Expenses incurred and taxes and insurance advanced by
the Servicer in respect of Financed Vehicles that are reimbursable to the
Servicer hereunder, (ii) any amounts incorrectly deposited in the Collection
Account, (iii) net investment earnings on the funds in the Collection Account
due to the Servicer hereunder, and (iv) any other amounts permitted to be
withdrawn from the Collection Account by the Servicer (or to be retained by the
Servicer from collections on the Contracts) hereunder.
"Available Reserve Amount" means, as of any Distribution Date, the
------------------------
lesser of (i) the Specified Reserve Amount and (ii) the amount on deposit in the
Reserve Account, exclusive of Investment Earnings thereon, and before giving
effect to any deposit to be made to the Reserve Account on such Distribution
Date.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
---------------
the Sale and Servicing Agreement, the Indenture, the Loan Agreement and the
Purchase Agreement.
"Benefit Plan" means a benefit plan as described in Section 9.11 of
------------
the Trust Agreement.
"Book-Entry Notes" means the Notes, ownership and transfers of which
----------------
shall be made through book entries by a Depository as described in Section 2.10
of the Indenture.
"Business Day" means any day other than a Saturday, Sunday or any day
------------
on which banking institutions or trust companies in the States of New York,
Delaware, Illinois or Oklahoma are authorized or required by law, regulation or
executive order to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
----------------------
Code, 12 Del. Code (S) 3801 et seq., as the same may be amended from time to
--------- -------
time.
"Buyer" has the meaning assigned in Section 11.03 hereof.
-----
"Certificate" means any one of the 6.800% Asset-Backed Certificates
-----------
executed by the Owner Trustee and authenticated by the Owner Trustee in
substantially the form set forth in Exhibit A to the Trust Agreement.
"Certificate Balance" initially means, as of the Closing Date,
-------------------
$14,122,864 and, on any Distribution Date thereafter, the initial Certificate
Balance reduced by all distributions in respect of principal actually made to
the Certificateholders.
-2-
<PAGE>
"Certificate Distribution Account" means the account designated as
--------------------------------
such, established and maintained pursuant to Section 5.1 of the Trust Agreement.
"Certificated Securities" means a "certificated security" within the
-----------------------
meaning of the Relevant UCC.
"Certificate Final Distribution Date" means the June 2018 Distribution
-----------------------------------
Date.
"Certificateholder" means the holder of record of a Certificate
-----------------
(including the holder of the AO Interest) pursuant to the terms of the Trust
Agreement.
"Certificateholders' Distribution Amount" means, for any Distribution
---------------------------------------
Date, the sum of the Certificateholders' Principal Distribution Amount and the
Certificateholders' Interest Distribution Amount.
"Certificateholders' Interest Carryover Shortfall" means, for any
------------------------------------------------
Distribution Date, the excess of the Certificateholders' Interest Distribution
Amount for the preceding Distribution Date over the amount in respect of
interest at the Pass-Through Rate that was actually deposited into the
Certificate Distribution Account on such preceding Distribution Date, plus
interest on such excess, to the extent permitted by law, at the Pass-Through
Rate from and including such preceding Distribution Date to but excluding the
current Distribution Date.
"Certificateholders' Interest Distribution Amount" means, for any
------------------------------------------------
Distribution Date, the sum of the Certificateholders' Monthly Interest Amount
for such Distribution Date and the Certificateholders' Interest Carryover
Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Amount" means, for any
-------------------------------------------
Distribution Date, an amount equal to the product of (x) one-twelfth (or, in the
case of the first Distribution Date, a fraction the numerator of which is 13 and
the denominator of which is 360), (y) the Pass-Through Rate and (z) the
Certificate Balance on such Distribution Date (or, in the case of the first
Distribution Date, the Original Certificate Balance), before giving effect to
all distributions of principal to the Certificateholders on such Distribution
Date.
"Certificateholders' Monthly Principal Amount" means, for any
--------------------------------------------
Distribution Date prior to the Cross-over Date, zero; and for any Distribution
Date commencing on and after the Cross-over Date, 100% of the Principal
Distribution Amount (less the portion of the Principal Distribution Amount
required on the first such Distribution Date to pay the Notes in full).
"Certificateholders' Principal Carryover Shortfall" means, for any
-------------------------------------------------
Distribution Date, (a) the excess of (i) the Certificateholders' Principal
Distribution Amount for the preceding Distribution Date, over (ii) the amount in
respect of principal that was actually deposited into the Certificate
Distribution Account on such Distribution Date.
"Certificateholders' Principal Distribution Amount" means, for any
-------------------------------------------------
Distribution Date, the sum of (i) the Certificateholders' Monthly Principal
Amount for such Distribution Date and (ii) the Certificateholders' Principal
Carryover Shortfall for such Distribution Date; provided,
-3-
<PAGE>
that the Certificateholders' Principal Distribution Amount shall not exceed the
Certificate Balance. In addition, on the Certificate Final Scheduled
Distribution Date, the amount required to be distributed to Certificateholders
will be the lesser of (a) any payments of principal due and remaining unpaid on
each Contract owned by the Trust as of the last day of the immediately preceding
Due Period plus the Available Reserve Amount, or (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Distribution Date and allocable to
principal) to reduce the Certificate Balance to zero.
"Certificate of Trust" means the certificate of trust of the Issuer
--------------------
substantially in the form of Exhibit B to the Trust Agreement to be filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Pool Factor" means a seven-digit decimal which the
-----------------------
Servicer will compute each month indicating the remaining Certificate Balance as
of the Distribution Date, as a fraction of the initial Certificate Balance. The
Certificate Pool Factor will be 1.0000000 as of the Cut-off Date, and thereafter
will decline to reflect reductions in the outstanding principal balance of the
Certificates. A Certificateholder's portion of the aggregate outstanding
Certificate Balance is the product of (i) the original denomination of the
Certificateholder's Certificate and (ii) the Certificate Pool Factor.
"Certificate Register" means the register of Certificates specified in
--------------------
Section 3.4 of the Trust Agreement.
"Certificate Registrar" means the registrar at any time of the
---------------------
Certificate Register, appointed pursuant to Section 3.4 of the Trust Agreement.
"CIT" means The CIT Group, Inc.
---
"CITCF-NY" means The CIT Group/Consumer Finance, Inc. (NY).
--------
"CITSF" means The CIT Group/Sales Financing, Inc., and its successors
-----
in interest as permitted under the related agreement.
"Class A Noteholders' Interest Carryover Shortfall" means, for any
-------------------------------------------------
Distribution Date for each class of Class A Notes (other than the first
Distribution Date), the excess of (i) the Class A Noteholders' Interest
Distribution Amount for the preceding Distribution Date for such class of Class
A Notes, over (ii) the amount in respect of interest that was actually deposited
into the Note Distribution Account in respect of such class of Class A Notes on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid to the Class A Noteholders of such class on the preceding
Distribution Date, to the extent permitted by law, at the applicable Interest
Rate borne by such class of Class A Notes.
"Class A Noteholders' Interest Distribution Amount" means, for any
-------------------------------------------------
Distribution Date for any class of Class A Notes, the sum of (x) the Class A
Noteholders' Monthly Interest Amount for such Distribution Date for such class
of Class A Notes and (y) the Class A
-4-
<PAGE>
Noteholders' Interest Carryover Shortfall for such Distribution Date for such
class of Class A Notes.
"Class A Noteholders' Monthly Interest Amount" means, for any
--------------------------------------------
Distribution Date for any class of Class A Notes, an amount equal to the product
of (x) the applicable Interest Rate, (y) the outstanding principal balance of
such class of Class A Notes on such Distribution Date (or, in the case of the
first Distribution Date, on the Closing Date) before giving effect to all
distributions of principal to the Class A Noteholders on such Distribution Date
and (z) in the case of the Class A-1 Notes, a fraction, the numerator of which
equals the number of days elapsed in the related Interest Accrual Period and the
denominator of which is 360 and (ii) in the case of each other class of Class A
Notes, one-twelfth (or, in the case of the first Distribution Date, a fraction,
the numerator of which is 13 and the denominator of which is 360).
"Class A Noteholders' Monthly Principal Amount" means, for any
---------------------------------------------
Distribution Date, (i) prior to the Stepdown Date, an amount equal to 100% of
the Principal Distribution Amount and (ii) on and after the Stepdown Date, an
amount equal to the sum of (x) the aggregate principal amount of the Class A-1
Notes (before giving effect to all distributions of principal to the Class A-1
Noteholders on such Distribution Date) and (y) the excess, if any, of (A) the
outstanding principal amount of the Class A Notes and the Certificate Balance of
the Certificates on such Distribution Date (after giving effect to all
distributions of principal to the Class A-1 Noteholders on such Distribution
Date but before giving effect to any distributions of principal to each other
class of Class A Noteholders on such Distribution Date) over (B) 94.5% of the
Pool Balance as of the last day of the related Due Period; provided, however,
that after the Distribution Date on which the outstanding principal amount of
the Class B Notes (after giving effect to all distributions on such Distribution
Date) equals 5.5% of the Pool Balance as of the last day of the related Due
Period, the "Class A Noteholders' Monthly Principal Amount" means an amount
equal to 94.5% of the Principal Distribution Amount for such Distribution Date.
"Class A Noteholders' Principal Carryover Shortfall" means, for any
--------------------------------------------------
Distribution Date, the excess of (x) the Class A Noteholders' Principal
Distribution Amount for the preceding Distribution Date over (y) the amount in
respect of principal that was actually deposited into the Note Distribution
Account for the Class A Notes on such preceding Distribution Date.
"Class A Noteholders' Principal Distribution Amount" means, for any
--------------------------------------------------
Distribution Date, the sum of (i) the Class A Noteholders' Monthly Principal
Amount for such Distribution Date and (ii) the Class A Noteholders' Principal
Carryover Shortfall for such Distribution Date; provided, that the Class A
Noteholders' Principal Distribution Amount shall not exceed the outstanding
principal balance of the Class A Notes. In addition, on the Note Final
Scheduled Distribution Date of each class of Class A Notes, the principal
required to be deposited in the Note Distribution Account will include the
amount necessary (after giving effect to other amounts to be deposited in the
Note Distribution Account on such Distribution Date and allocable to principal)
to reduce the outstanding principal balance of the related class of Class A
Notes to zero.
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<PAGE>
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the
-------------
Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes
and the Class A-7 Notes.
"Class A-1 Interest Rate" means 5.800% per annum.
-----------------------
"Class A-2 Interest Rate" means 5.985% per annum.
-----------------------
"Class A-3 Interest Rate" means 6.018% per annum.
-----------------------
"Class A-4 Interest Rate" means 6.200% per annum.
-----------------------
"Class A-5 Interest Rate" means 6.250% per annum.
-----------------------
"Class A-6 Interest Rate" means 6.350% per annum.
-----------------------
"Class A-7 Interest Rate" means 6.400% per annum.
-----------------------
"Class A-1 Note" means any one of the Class A-1 5.80% Asset-Backed
--------------
Notes in the aggregate principal amount of $40,300,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-1 to the Indenture.
"Class A-2 Note" means any one of the Class A-2 5.985% Asset-Backed
--------------
Notes in the aggregate principal amount of $32,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-2 to the Indenture.
"Class A-3 Note" means any one of the Class A-3 6.018% Asset-Backed
--------------
Notes in the aggregate principal amount of $89,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-3 to the Indenture.
"Class A-4 Note" means any one of the Class A-4 6.200% Asset-Backed
--------------
Notes in the aggregate principal amount of $128,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-4 to the Indenture.
"Class A-5 Note" means any one of the Class A-5 6.250% Asset-Backed
--------------
Notes in the aggregate principal amount of $74,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-5 to the Indenture.
"Class A-6 Note" means any one of the Class A-6 6.350% Asset-Backed
--------------
Notes in the aggregate principal amount of $106,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-6 to the Indenture.
"Class A-7 Note" means any one of the Class A-7 6.400% Asset-Backed
--------------
Notes in the aggregate principal amount of $49,700,000 issued pursuant to the
Indenture and substantially in the form of Exhibit A-7 to the Indenture.
"Class A-1 Note Final Scheduled Distribution Date" means the December
------------------------------------------------
1998 Distribution Date.
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<PAGE>
"Class A-2 Note Final Scheduled Distribution Date" means the November
------------------------------------------------
2000 Distribution Date.
"Class A-3 Note Final Scheduled Distribution Date" means the August
------------------------------------------------
2003 Distribution Date.
"Class A-4 Note Final Scheduled Distribution Date" means the October
------------------------------------------------
2006 Distribution Date.
"Class A-5 Note Final Scheduled Distribution Date" means the November
------------------------------------------------
2008 Distribution Date.
"Class A-6 Note Final Scheduled Distribution Date" means the April
------------------------------------------------
2011 Distribution Date.
"Class A-7 Note Final Scheduled Distribution Date" means the August
------------------------------------------------
2013 Distribution Date.
"Class B Interest Rate" means 6.450% per annum.
---------------------
"Class B Note" means any one of the Class B 6.450% Asset-Backed Notes
------------
in the aggregate principal amount of $31,000,000 issued pursuant to the
Indenture and substantially in the form of Exhibit B to the Indenture.
"Class B Note Final Scheduled Distribution Date" means the June 2018
----------------------------------------------
Distribution Date.
"Class B Noteholders' Interest Carryover Shortfall" means, for any
-------------------------------------------------
Distribution Date for the Class B Notes (other than the initial Distribution
Date), the excess of (i) the Class B Noteholders' Interest Distribution Amount
for the preceding Distribution Date for the Class B Notes, over (ii) the amount
in respect of interest that was actually deposited into the Note Distribution
Account in respect of such Class B Notes on such preceding Distribution Date,
plus interest on the amount of interest due but not paid to the Class B
Noteholders on the preceding Distribution Date, to the extent permitted by law,
at the Class B Interest Rate.
"Class B Noteholders' Interest Distribution Amount" means, for any
-------------------------------------------------
Distribution Date for the Class B Notes, the sum of (x) the Class B Noteholders'
Monthly Interest Amount for such Distribution Date and (y) the Class B
Noteholders' Interest Carryover Shortfall for such Distribution Date.
"Class B Noteholders' Monthly Interest Amount" means, for any
--------------------------------------------
Distribution Date for the Class B Notes, an amount equal to the product of (x)
the applicable Interest Rate, (y) the outstanding principal balance of the Class
B Notes on such Distribution Date (or, in the case of the first Distribution
Date, on the Closing Date) before giving effect to all distributions of
principal to the Class B Noteholders on such Distribution Date and (z) one-
twelfth (or, in the
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<PAGE>
case of the first Distribution Date, a fraction, the numerator of which is 13
and the denominator of which is 360).
"Class B Noteholders' Monthly Principal Amount" means, for any
---------------------------------------------
Distribution Date, (i) prior to the Stepdown Date, zero, (ii) on and after the
Stepdown Date, an amount equal to the lesser of (x) the Principal Distribution
Amount minus all distributions of principal to the Class A-1 Noteholders on such
Distribution Date and (y) the excess, if any, of (A) the outstanding principal
amount of the Class B Notes on such Distribution Date (before giving effect to
all distributions of principal to the Class B Noteholders on such Distribution
Date) over (B) 5.5% of the Pool Balance as of the last day of the related Due
Period; provided, however, that after the Distribution Date on which the
outstanding principal amount of the Class B Notes (after giving effect to all
distributions on such Distribution Date) equals 5.5% of the Pool Balance as of
the last day of the related Due Period, the "Class B Noteholders' Monthly
Principal Amount" means an amount equal to 5.5% of the Principal Distribution
Amount for such Distribution Date, and (iii) on and after the Distribution Date
on which the Class A Notes have been paid in full, 100% of the Principal
Distribution amount (less the portion of the Principal Distribution Amount
required on the first such Distribution Date to pay the Class A Notes in full).
"Class B Noteholders' Principal Carryover Shortfall" means, for any
--------------------------------------------------
Distribution Date, the excess of (x) the Class B Noteholders' Principal
Distribution Amount for the preceding Distribution Date over (y) the amount in
respect of principal that was actually deposited into the Note Distribution
Account for the Class B Notes on such preceding Distribution Date.
"Class B Noteholders' Principal Distribution Amount" means, for any
--------------------------------------------------
Distribution Date, the sum of (i) the Class B Noteholders' Monthly Principal
Amount for such Distribution Date and (ii) the Class B Noteholders' Principal
Carryover Shortfall for such Distribution Date; provided, that the Class B
Noteholders' Principal Distribution Amount shall not exceed the outstanding
principal balance of the Class B Notes. In addition, on the Class B Note Final
Scheduled Distribution Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect to
other amounts to be deposited in the Note Distribution Account on such
Distribution Date and allocable to principal) to reduce the outstanding
principal balance of the Class B Notes to zero.
"Closing Date" means December 2, 1997.
------------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, and the Treasury Regulations promulgated thereunder.
"Collateral" means the collateral specified in the Granting Clause of
----------
the Indenture.
"Collection Account" means the account designated as such established
------------------
and maintained pursuant to Section 5.01(a)(i) hereof.
"Company" means The CIT Group Securitization Corporation II, and its
-------
successors in interest as permitted under the related agreement.
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<PAGE>
"Computer Tape" means the computer tape generated by the Servicer
-------------
which provides information relating to the Contracts, and includes the master
file and the history file.
"Contract" means one or more of the fixed-rate simple interest
--------
recreation vehicle retail installment sale contracts and direct loans described
in the List of Contracts.
"Contract File" means, as to each Contract (i) an original copy of the
-------------
Contract, (ii) either (a) the original title document for the related Financed
Vehicle or a duplicate certified by the appropriate governmental authority which
issued the original thereof or the application for such title document, or (b)
if the laws of the jurisdiction in which the related Financed Vehicle is located
do not provide for the issuance to the lender of title documents for recreation
vehicles, other evidence of ownership of the related Financed Vehicle which is
customarily relied upon in such jurisdiction as evidence of title to a
recreation vehicle; (iii) evidence of one or more of the following types of
perfection of the security interest in the related Financed Vehicle granted by
such Contract, as appropriate: (a) notation of such security interest on the
title document, (b) a financing statement meeting the requirements of the UCC,
with evidence of recording indicated thereon, or (c) such other evidence of
perfection of a security interest in a recreation vehicle as is customarily
relied upon in the jurisdiction in which the related Financed Vehicle is
located; (iv) an assignment of the Contract evidencing the chain of title of the
Contract from the Dealer which is the originator thereof to CITSF or CITCF-NY;
and (v) any extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the
-------------
rate of interest specified in that Contract.
"Control" means (a) with respect to a Security Entitlement if the
-------
Indenture Trustee
(i) is identified on the records of the Securities Intermediary for
such Security Entitlement as the person having such a Security Entitlement
against the Securities Intermediary, or
(ii) has obtained the agreement, in writing, of the Securities
Intermediary for such Security Entitlement that it will comply with orders of
the Indenture Trustee regarding the transfer or redemption of the Security
Entitlement without further consent of any other person, and
(b) with respect to a United States Security Entitlement if:
(i) (A) the Indenture Trustee is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting as fiscal agent
for the issuer of such United Sates Security Entitlement; and
(B) such Federal Reserve Bank has indicated by book entry that such United
States Security Entitlement has been credited to the Indenture
Trustee's securities account in such book entry system; or
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<PAGE>
(ii) (A) the Indenture Trustee
(1) is identified in the records of a Securities
Intermediary for such United States Security Entitlement as
the Person having such Security Entitlement against the
Securities Intermediary; or
(2) has obtained the agreement, in writing, of the
Securities Intermediary for such Security Entitlement that
it will comply with orders of the Indenture Trustee
regarding the transfer or redemption of the Security
Entitlement without further consent of any other person; and
(B) the Securities Intermediary for such United States Security Entitlement
is a participant in the book entry system maintained by the Federal Reserve Bank
that is acting as fiscal agent for the issuer of such United States Security
Entitlement; and
(C) such Federal Reserve Bank has indicated by book entry that such United
States Security Entitlement has been credited to such Securities Intermediary's
securities account in such book entry system.
"Controlling Notes" means (i) all classes of Class A Notes voting
-----------------
together as a single class until the Class A Notes have been paid in full and
(ii) from and after the payment in full of the Class A Notes, the Class B Notes.
"Corporate Trust Office" means with respect to the Indenture Trustee
----------------------
or the Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or the Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 311 West Monroe Street, 12th
Floor, Chicago, IL 60606, Attention: Indenture Trust Administration, and in the
case of the Owner Trustee, at 499 Mitchell Street, Millsboro, DE 19966,
Attention: Corporate Trust Department.
"Cross-over Date" means the Distribution Date on which all classes of
---------------
the Notes have been paid in full.
"Cut-off Date" means November 1, 1997.
------------
"Cut-off Date Principal Balance" means the aggregate unpaid principal
------------------------------
balance of all of the Contracts as of the Cut-off Date.
"Dealer" means the Recreation Vehicle dealer which sold a Financed
------
Vehicle and which originated and assigned the Contract relating to such Financed
Vehicle to CITSF or CITCF-NY under a Dealer Agreement.
-10-
<PAGE>
"Dealer Agreement" means the agreement, if any, under which Contracts
----------------
were originated by a Dealer and sold to CITSF or CITCF-NY, and all documents and
instruments relating thereto.
"Default" means any occurrence that is, or with notice or the lapse of
-------
time or both would become, an Event of Default.
"Definitive Notes" means the Notes specified in Section 2.12 of the
----------------
Indenture.
"Delivery" when used with respect to Reserve Account Property means:
--------
(a) with respect to any Physical Property (that is not either a United
States Security Entitlement or a Security Entitlement), physical delivery
thereof to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank by an effective endorsement; and
(b) with respect to any Uncertificated Security (i) if the issuer of
the Uncertificated Security is organized under the laws of an Old Article 8
Jurisdiction, registration on the books and records of the issuer thereof in the
name of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian;
and (ii) if the issuer of the Uncertificated Security is organized under the
laws of a jurisdiction that has adopted Revised Article 8, (A) the issuer
registers the Indenture Trustee as the registered owner thereof or (B) the
Indenture Trustee otherwise satisfies the requirements of Section 8-106(c) of
Revised Article 8.
"Deposit Date" means, with respect to any Distribution Date, the
------------
Business Day immediately preceding such related Distribution Date.
"Depository" means the initial Depository, The Depository Trust
----------
Company, the nominee of which is CEDE & CO., and any permitted successor
depository. The Depository shall at all times be a "clearing corporation"
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York.
"Depository Agreement" means an agreement, if any, among the Trust,
--------------------
the Servicer, the Indenture Trustee and the Depository, relating to the Notes,
as the same may be amended and supplemented from time to time.
"Depository Participant" means a broker, dealer, bank or other
----------------------
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Designated Accounts" means the Collection Account, the Note
-------------------
Distribution Account, the Certificate Distribution Account and the Reserve
Account.
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<PAGE>
"Determination Date" means the third Business Day prior to each
------------------
Distribution Date.
"Distribution Date" means the date on which payments of interest and
-----------------
principal on the Securities will be made. Such Distribution Dates will be on
the fifteenth day of each month or, if any such day is not a Business Day, on
the next succeeding Business Day, commencing December 15, 1997.
"Draw Amount" has the meaning specified in Section 5.06(b) hereof.
-----------
"Due Date" means, with respect to each payment under each Contract,
--------
the day set forth in such Contract as the date on which such payment under such
Contract is scheduled to be made.
"Due Period" means, with respect to any Distribution Date, the period
----------
during which principal, interest and other amounts will be collected on the
Contracts for application towards the payment of principal and interest to the
Securityholders, the payment of fees on such Distribution Date, and other
purposes specified in this Agreement. The "Due Period" will be the calendar
----------
month immediately preceding the Distribution Date. The first Due Period will
commence on and include the Cut-off Date and will end on and include November
30, 1997.
"Electronic Ledger" means the electronic master record of installment
-----------------
sale contracts of the Servicer.
"Eligible Account" means any account which is (i) an account
----------------
maintained with an Eligible Institution; (ii) an account or accounts the
deposits in which are fully insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC; (iii) a "segregated trust
account" maintained with the corporate trust department of a federal or state
chartered depository institution or trust company with trust powers and acting
in its fiduciary capacity for the benefit of a Trustee, which depository
institution or trust company has capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the capital and surplus of the bank holding company) of not less than
$50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and such
depository institution's securities are not rated, the securities of the bank
holding company) have a credit rating from each Rating Agency in one of its
generic credit rating categories which signifies investment grade; or (iv) an
account that will not cause any Rating Agency to downgrade or withdraw its then-
current rating assigned to the Securities, as confirmed in writing by each
Rating Agency.
"Eligible Institution" means any depository institution organized
--------------------
under the laws of the United States or any state, the deposits of which are
insured to the full extent permitted by law by the Bank Insurance Fund
(currently administered by the Federal Deposit Insurance Corporation) whose
short-term deposits have been rated in one of the two highest rating categories
or such other rating category as will not adversely affect the ratings assigned
to the Certificates and/or the Notes.
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<PAGE>
"Eligible Investments" means, at any time, any one or more of the
--------------------
obligations and securities described in Section 5.01(b) hereof.
"Eligible Servicer" means CITSF, the Trustees or any other Person
-----------------
qualified to act as Servicer of the Contracts under applicable federal and state
laws and regulations, which Person services not less than $100,000,000 in
outstanding principal amount of recreation vehicle or motor vehicle installment
sale contracts.
"ERISA" means The Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" means an event as described in Section 5.1 of the
----------------
Indenture.
"Event of Termination" means an event specified in Section 9.01
--------------------
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Excluded Assets" means any amounts on deposit in the Certificate
---------------
Distribution Account and any Investment Earnings thereon.
"Farm Credit Entitlement" means a "Security Entitlement" as defined in
-----------------------
12 C.F.R. (S) 615.5450.
"FHLBank Entitlement" means a "Security Entitlement" as defined in 12
-------------------
C.F.R. (S) 912.1.
"Final Draw Amount" has the meaning set forth in Section 5.06(c)
-----------------
hereof.
"Financed Vehicle" with respect to a Contract means the new or used
----------------
Recreation Vehicle, together with all accessions thereto, securing an Obligor's
indebtedness under such Contract.
"Force-Placed Insurance" means insurance described in Section 4.04(a)
----------------------
hereof.
"Force-Placed Insurance Premium" means any premium for theft and
------------------------------
physical damage insurance purchased by CITSF or CITCF-NY or a successor Servicer
on behalf of an Obligor who has failed to obtain required insurance coverage(s).
"Funding Corporation Entitlement" means a "Security Entitlement" as
-------------------------------
defined in 12 C.F.R. (S) 1511.1.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
-----
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments
-13-
<PAGE>
in respect of, the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Holder" means the Person in whose name a Note or Certificate is
------
registered on the Note Register or the Certificate Register, as applicable.
"HUD Entitlement" means a "Security Entitlement" as defined in 24
---------------
C.F.R. (S) 81.2.
"Indenture" means the indenture, dated as of November 1, 1997, between
---------
the Issuer and the Indenture Trustee, as amended and supplemented from time to
time.
"Indenture Trustee" means Harris Trust and Savings Bank, not in its
-----------------
individual capacity but solely as trustee under the Indenture, or any successor
trustee under the Indenture.
"Independent" when used with respect to any specified Person, means
-----------
that the Person (i) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliates of any of the foregoing Persons, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
-----------------------
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Indirect Participant" means a broker, dealer, bank or other financial
--------------------
institution for whom a Depository Participant may, from time to time, effect
book-entry transfers through a Depository.
"Initial Pool Balance" means the Pool Balance as of the Cut-off Date.
--------------------
"Initial Reserve Amount" means $11,282,457.
----------------------
"Insurance Advances" has the meaning set forth in Section 4.04(d)
------------------
hereof.
"Insurance Policy" means, with respect to each Contract, the policy of
----------------
physical damage and all other insurance covering the Financed Vehicles or the
Obligors, as provided in
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<PAGE>
Section 4.04(a) hereof, and which, as provided therein, may be a blanket policy
maintained by the Servicer in accordance with the terms and conditions of such
Section 4.04(b) hereof.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to
------------------
any Insurance Policy.
"Interest Accrual Period" means, with respect to a Distribution Date,
-----------------------
the period from and including the Closing Date (in the case of the first
Distribution Date) or from and including the preceding Distribution Date, to but
excluding such Distribution Date.
"Interest Rates" means collectively the Class A-1 Interest Rate, the
--------------
Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest
Rate, the Class A-5 Interest Rate, the Class A-6 Interest Rate, the Class A-7
Interest Rate and the Class B Interest Rate.
"Investment Earnings" means investment earnings (including, without
-------------------
limitation, interest and dividends) on amounts on deposit in a Designated
Account net of losses and investment expenses, if any.
"Issuer" means the Trust until a successor replaces it and,
------
thereafter, means the successor and, for purposes of any provision contained in
the Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
------------ --------------
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Late Fees" means any late fees, prepayment charges, extension fees or
---------
other administrative fees or similar charges allowed by applicable law with
respect to the Contracts.
"Lender" means CITSF, in its capacity as a party to the Loan Agreement
------
which will make a loan to the Trust on the Closing Date (the proceeds of which
will be deposited in the Reserve Account on the Closing Date), and its
successors and assigns under the Loan Agreement.
"Lien" means any security interest, charge, pledge, equity or
----
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach by operation of law.
"Liquidated Contract" means any defaulted Contract as to which the
-------------------
Servicer has recovered all amounts that it expects to recover either by sale or
disposition of the related Financed Vehicle or otherwise, but in any event a
Contract shall be deemed to become a Liquidated Contract no later than the date
on which the Servicer has received proceeds from the sale or disposition of such
Financed Vehicle.
"Liquidation Expenses" means all reasonable fees of third parties and
--------------------
other expenses incurred by the Servicer in the course of converting any
defaulted Contract or Financed Vehicle into cash proceeds (including, without
limitation, expenses relating to recovery, repossession and sale of such
Financed Vehicle).
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<PAGE>
"List of Contracts" means the list attached hereto as Exhibit A
-----------------
identifying each Contract constituting part of the corpus of the Trust.
"Loan Agreement" means the Loan Agreement, dated as of November 1,
--------------
1997, among the Lender, the Trust, the Servicer and the Indenture Trustee.
"Military Reservist Relief Act" means the California Military
-----------------------------
Reservist Relief Act of 1991.
"Monthly Advance" means, with respect to any Distribution Date, any
---------------
payment made by the Servicer pursuant to Section 5.03 hereof.
"Monthly Report" has the meaning assigned in Section 4.09 hereof. The
--------------
form of Monthly Report is attached as Exhibit D hereto.
"Moody's" means Moody's Investors Service, Inc. and its successors in
-------
interest.
"Net Liquidation Proceeds" means the monies collected (from whatever
------------------------
source including, without limitation, from settlement proceeds) during a Due
Period on a Liquidated Contract (except such amounts as are allocable to Post
Cut-off Date Insurance Add-Ons in accordance with Section 4.04 hereof), net of
the sum of (a) Liquidation Expenses, plus (b) any payments required by law to be
remitted to any creditor of, or to the Obligor.
"Nonrecoverable Advance" means any advance made or proposed to be made
----------------------
pursuant to Section 5.03 hereof in respect of a Contract, which the Servicer
believes, in its good faith judgment, is not, or if made would not be,
ultimately recoverable from subsequent collections in respect of interest on
such Contract made by or on behalf of the Obligor thereunder, or from Net
Liquidation Proceeds or Insurance Proceeds in respect of such Contract. In
determining whether an advance is or will be nonrecoverable, the Servicer need
not take into account that it might receive any amounts in a deficiency
judgment. The determination by the Servicer that any advance is, or if made
would constitute, a Nonrecoverable Advance, shall be evidenced by an officer's
certificate of the Servicer delivered to the Trustees and stating the reasons
for such determination.
"Note Distribution Account" means the account designated as such,
-------------------------
established and maintained pursuant to Section 5.01(a)(ii) hereof.
"Note Final Scheduled Distribution Date" means the Class A-1 Note
--------------------------------------
Final Scheduled Distribution Date, the Class A-2 Note Final Scheduled
Distribution Date, the Class A-3 Note Final Scheduled Distribution Date, the
Class A-4 Note Final Scheduled Distribution Date, the Class A-5 Note Final
Scheduled Distribution Date, the Class A-6 Note Final Scheduled Distribution
Date, the Class A-7 Note Final Scheduled Distribution Date or the Class B Note
Final Scheduled Distribution Date, as applicable.
"Noteholder" means the holder of record of a Note pursuant to the
----------
Indenture.
-16-
<PAGE>
"Noteholders' Distribution Amount" means, for any Distribution Date,
--------------------------------
the sum of the Class A Noteholders' Principal Distribution Amount, the Class B
Noteholders' Principal Distribution Amount, the Class A Noteholders' Interest
Distribution Amount and the Class B Noteholders' Interest Distribution Amount.
"Note Owners" with respect to a Book-Entry Note, means the Person who
-----------
is the owner of beneficial interests in such Book-Entry Note, as reflected on
the books of the Depository, or on the books of a Person maintaining an account
with such Depository (directly as a Depository Participant or as an Indirect
Participant, in each case in accordance with the rules of such Depository).
"Note Pool Factor" means, with respect to a class of Notes, a seven-
----------------
digit decimal which the Servicer will compute each month indicating the
remaining outstanding principal balance of each class of the Notes as of the
Distribution Date, as a fraction of the initial outstanding principal balance of
such class of the Notes. The Note Pool Factor will be 1.0000000 as of the Cut-
off Date, and thereafter will decline to reflect reductions in the outstanding
principal balance of the applicable class of the Notes. A Noteholder's portion
of the aggregate outstanding principal balance of the related class of Notes is
the product of (i) the original denomination of the Noteholder's Note and (ii)
the applicable Note Pool Factor.
"Note Register" means the register of the Notes as specified in
-------------
Section 2.4 of the Indenture.
"Note Registrar" means the registrar at any time of the Note Register,
--------------
appointed pursuant to Section 2.4 of the Indenture.
"Notes" means the Class A Notes and the Class B Notes.
-----
"Obligor" means each Person who is indebted under a Contract.
-------
"Officers' Certificate" means a certificate signed by any Authorized
---------------------
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an officer's certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Old Article 8 Jurisdiction" means any jurisdiction that has not
--------------------------
adopted Revised Article 8 of the Relevant UCC.
"Opinion of Counsel" means a written opinion of counsel who may,
------------------
except as otherwise expressly provided herein, in the Trust Agreement or in the
Indenture, be counsel (internal or external) for the Seller or Servicer. In
addition, for the purposes of the Indenture: (i) the opinion shall be addressed
to the Indenture Trustee as Indenture Trustee and (ii) the opinion shall comply
with any applicable requirements of Section 11.1 of the Indenture and shall be
in form and substance satisfactory to the Indenture Trustee.
-17-
<PAGE>
"Original Certificate Balance" means $14,122,864.
----------------------------
"Owner Trust Estate" means all right, title and interest of the Trust
------------------
in and to the property and rights assigned to the Trust pursuant to Article II
hereof, all funds deposited from time to time in the Designated Accounts (except
the Note Distribution Account) and all other property of the Trust from time to
time, including any rights of the Owner Trustee and the Trust pursuant to the
Basic Documents.
"Owner Trustee" means First Omni Bank, N.A., a national banking
-------------
association, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, or any successor trustee under the Trust Agreement.
"Pass-Through Rate" means 6.800% per annum.
-----------------
"Paying Agent" with respect to the Indenture means the Indenture
------------
Trustee or any other Person that meets the eligibility standards for the
Indenture Trustee specified in Section 6.11 of the Indenture and is authorized
by the Issuer to make the payments to and distributions from the Collection
Account, Reserve Account and the Note Distribution Account, including payment of
principal and interest on the Notes on behalf of the Issuer. "Paying Agent"
------------
with respect to the Trust Agreement means any paying agent or co-paying agent
appointed pursuant to Section 3.9 of the Trust Agreement that meets the
eligibility requirements of Section 6.13 of the Trust Agreement.
"Payment Shortfall" means with respect to any Contract and any
-----------------
Distribution Date, the excess of (x) the product of (i) one-twelfth of the
Contract Rate of such Contract and (ii) the outstanding principal amount of such
Contract as of the last day of the second preceding Due Period (or, in the case
of the first Due Period ending after the Contract was acquired by the Trust, as
of the Cut-off Date) over (y) the amount of interest, if any, collected on such
Contract during the related Due Period.
"Person" means any legal person, including 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.
"Physical Property" means banker's acceptances, commercial paper,
-----------------
negotiable certificates of deposits and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the Relevant UCC and
are susceptible to physical delivery and Certificated Securities.
"Pool Balance" means the aggregate outstanding principal balance of
------------
the Contracts; provided that a Liquidated Contract and a Repurchased Contract
shall cease to be included in the Pool Balance as of the last day of the Due
Period in which such Contract became a Liquidated Contract or a Repurchased
Contract, as the case may be.
-18-
<PAGE>
"Post Cut-off Date Insurance Add-Ons" means Force-Placed Insurance
-----------------------------------
Premiums added to the Contracts on or after the Cut-off Date, which amounts are
to be repaid to an account separate from the Collection Account over the
remaining life of such Contract.
"Predecessor Notes" with respect to any particular Note means every
-----------------
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for purposes of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Principal Distribution Amount" means, on each Distribution Date, the
-----------------------------
sum of the following amounts with respect to the related Due Period, in each
case calculated in accordance with the method specified in each Contract: (i)
all payments of principal (including all Principal Prepayments applied during
the related Due Period) made on each Contract during the related Due Period,
(ii) the Stated Principal Balance of each Contract which, as of the related
Deposit Date, was purchased by CITSF or the Servicer hereunder, and (iii) the
Stated Principal Balance of each Contract which became a Liquidated Contract
during the related Due Period; provided, however, that (x) payments of principal
(including Principal Prepayments) with respect to a Liquidated Contract or a
Repurchased Contract received after the last day of the Due Period in which the
Contract became a Liquidated Contract or a Repurchased Contract shall not be
included in the Principal Distribution Amount, and (y) if a Liquidated Contract
is purchased by CITSF or the Servicer hereunder on the Deposit Date immediately
following the Due Period in which it became a Liquidated Contract, no amount
will be included with respect to such Contract in the Principal Distribution
Amount pursuant to clause (iii) above. The Principal Distribution Amount on the
Note Final Scheduled Distribution Date of a class will equal the outstanding
principal amount of such class of Notes as of such date, and the Principal
Distribution Amount on the Certificate Final Distribution Date will equal the
Certificate Balance on such date. The Principal Distribution Amount will not
exceed the outstanding principal balance of the Notes or, after the Cross-over
Date, the Certificate Balance (or, on the Cross-over Date, the sum of the
principal balance of the Notes and the Certificate Balance).
"Principal Prepayment" means a payment or other recovery of principal
--------------------
on a Contract (including Insurance Proceeds and Net Liquidation Proceeds applied
to principal on a Contract) which is received in advance of its Due Date and
applied upon receipt (or, in the case of a partial Principal Prepayment, upon
the next scheduled payment date on such Contract) to reduce the outstanding
principal amount of such Contract prior to the date or dates on which such
principal amount is scheduled to be paid.
"Principal Prepayment in Full" means any Principal Prepayment of the
----------------------------
entire principal balance of a Contract.
"Proceeding" means any suit in equity, action at law or other judicial
----------
or administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of November
------------------
1, 1997, between the Seller and CITSF, as amended and supplemented from time to
time.
-19-
<PAGE>
"Purchase Price" means, with respect to a Contract to be purchased
--------------
hereunder, an amount equal to the remaining principal amount outstanding on such
Contract on the date of purchase, plus 30 days' interest thereon at the Contract
Rate, plus the reimbursement then due to the Servicer for outstanding Monthly
Advances on such Contract.
"Rating Agencies" as of any date means the nationally recognized
---------------
statistical rating organizations requested by the Seller to provide ratings of
the Notes and the Certificates which are rating the Notes and Certificates on
such date.
"Rating Agency Condition" with respect to any action means, the
-----------------------
condition that each Rating Agency shall have notified the Seller, the Servicer
and the Issuer in writing that such action shall not result in a downgrade or
withdrawal of the then current rating of the Notes or Certificates.
"Record Date" with respect to any Distribution Date means (i) with
-----------
respect to the Notes, the Business Day immediately preceding the related
Distribution Date or, in the event Definitive Notes have been issued, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs and (ii) with respect to the Certificates, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Recreation Vehicle" means new or used motor homes, travel trailers
------------------
and other types of recreation vehicles.
"Redemption Date" means the Distribution Date specified by the
---------------
Servicer or the Issuer pursuant to Section 10.1 of the Indenture, as applicable.
"Related Contract Assets" has the meaning assigned in Section 2.01
-----------------------
hereof.
"Relevant UCC" means the Uniform Commercial Code as in effect in the
------------
applicable jurisdiction.
"Relief Act Reduction" shall mean the reduction of the rate of
--------------------
interest payable on any Contract to a rate below the Contract Rate pursuant to
the Soldiers' and Sailors' Civil Relief Act or the Military Reservist Relief
Act.
"Repurchased Contract" means a Contract which (i) CITSF purchased
--------------------
pursuant to Section 3.02 or (ii) the Servicer purchased pursuant to Section 4.02
or 4.07 hereof. The purchase of a Repurchased Contract shall be deemed
effective as of the last day of the Due Period preceding the Deposit Date on
which the Purchase Price therefor was paid, and it shall cease to be included in
the Pool Balance as of such last day of the Due Period.
"Reserve Account" means the deposit account established and maintained
---------------
pursuant to Section 5.01(a)(iv) hereof.
-20-
<PAGE>
"Reserve Account Property" means all amounts and investments held from
------------------------
time to time in the Reserve Account (whether in the form of deposit accounts,
Physical Property, Security Entitlements, Uncertificated Securities or
otherwise).
"Reserve Account Surplus" means, as of any Distribution Date, the
-----------------------
amount, if any, by which the Available Reserve Amount, after taking into account
any deposits to the Reserve Account pursuant to Section 5.06(a) on such
Distribution Date and any withdrawals from the Reserve Account pursuant to
Sections 5.06(b) and (c) on such Distribution Date, exceeds the Specified
Reserve Amount for the next Distribution Date.
"Responsible Officer" with respect to the Indenture Trustee or the
-------------------
Owner Trustee means, any officer within the Corporate Trust Office including any
Vice President, Managing Director, Assistant Vice President, Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject, and, with respect to the
Servicer, the President, any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer or assistant officer of such
Person customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Revised Article 8" means Revised Article 8 (1994 Version) (and
-----------------
corresponding amendments to Article 9) of the Relevant UCC.
"Sale and Servicing Agreement" means this Agreement, as amended and
----------------------------
supplemented from time to time.
"Sallie Mae Entitlement" means a "Security Entitlement" as defined in
----------------------
31 C.F.R. (S) 354.1.
"Securities" means the Notes and the Certificates.
----------
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations thereunder.
"Securities Intermediary" means a "securities intermediary" within the
-----------------------
meaning of Section 8-102(a)(14) of Revised Article 8.
"Security Certificate" means a "securities certificate" within the
--------------------
meaning of Section 8-102(a)(16) of Revised Article 8.
"Security Entitlement" means a "securities entitlement" within the
--------------------
meaning of Section 8-102(a)(17) of Revised Article 8.
-21-
<PAGE>
"Securityholders" means the Person in whose name a Note or Certificate
---------------
is registered on the Note Register or the Certificate Register, as applicable.
"Seller" means the Person executing this Agreement as the Seller, or
------
any successor in interest to the Seller pursuant to the terms hereof.
"Service Transfer" has the meaning assigned in Section 9.01 hereof.
----------------
"Servicer" means the Person executing this Agreement as the Servicer,
--------
or any successor Servicer pursuant to a Service Transfer hereunder.
"Servicer Payment" means, with respect to a Distribution Date, the sum
----------------
of the reimbursement then due to the Servicer for outstanding Monthly Advances,
the Servicing Fee for such Distribution Date and the aggregate unpaid Servicing
Fees for past Distribution Dates; provided, however, that if CITSF or one of its
affiliates is the Servicer, the Servicing Fee (including any unpaid Servicing
Fees for past Distribution Dates) shall not be included in the Servicer Payment
but instead shall be payable to the Servicer on each Distribution Date only from
the Available Amount, if any, remaining after the principal and interest payable
on the Securities on such Distribution Date have been paid.
"Servicer's Certificate" means a certificate, substantially in the
----------------------
form of Exhibit C to the Sale and Servicing Agreement, completed by and executed
on behalf of the Servicer by a Servicing Officer in accordance with Section 4.09
hereof.
"Servicer's Errors and Omissions Protection Policy" means the errors
-------------------------------------------------
and omissions policy maintained by the Servicer or any similar replacement
policy, if any, pursuant to Section 4.14 hereof.
"Servicing Fee" means, as to any Distribution Date, the sum of (i)
-------------
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Cut-off Date) and (ii) any Investment Earnings on
amounts on deposit in the Collection Account, the Note Distribution Account and
the Certificate Distribution Account.
"Servicing Fee Rate" means 0.50%; provided, however, if CITSF or an
------------------ -------- -------
affiliate is not the Servicer, the Servicing Fee Rate shall be a rate determined
at the time of the appointment of a Servicer but not to exceed 1.00%.
"Servicing Officer" means any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officers' Certificate
furnished to the Trust by the Servicer, as the same may be amended from time to
time.
"Simple Interest Contract" means a Contract as to which interest is
------------------------
calculated each day on the basis of the actual principal balance outstanding on
such day.
-22-
<PAGE>
"Soldiers' and Sailors' Civil Relief Act" means the Soldiers' and
---------------------------------------
Sailors' Civil Relief Act of 1940, as amended.
"Specified Reserve Amount" means 2.0% of the Pool Balance as of the
------------------------
first day of the related Due Period, but in no event less than $5,641,229;
provided, however, that if, with respect to any Distribution Date, (a) the
- -------- -------
average of the principal balance of Contracts 60 days or more delinquent
(including Contracts relating to Financed Vehicles that have been repossessed)
as a percentage of the Pool Balance for the three preceding Due Periods exceeds
1.75% or (b) the average of the principal balances of all Contracts which became
Liquidated Contracts in the three preceding Due Periods, less any Net
Liquidation Proceeds on Liquidated Contracts, expressed as an annualized
percentage of the average outstanding Pool Balance of the three preceding Due
Periods exceeds 1.75%, then the Specified Reserve Amount with respect to such
Distribution Date shall be 6.00% of the Pool Balance as of the first day of the
related Due Period, but in no event (i) less than $5,641,229 or (ii) greater
than $11,282,457; provided, further, however, that the Specified Reserve Amount
-------- ------- -------
shall never be greater than the sum of the aggregate principal amount of the
Notes and the outstanding Certificate Balance and may be reduced from time to
time (to amounts less than the Specified Reserve Amount calculated above) if the
Rating Agencies shall have given prior written notice to the Seller, the
Servicer and the Issuer that such reduction will not result in a downgrade or
withdrawal of the then current rating of the Notes or the Certificates.
"Standard & Poor's" means Standard & Poor's Ratings Service, a
-----------------
division of The McGraw-Hill Companies, Inc., and its successors in interest.
"Stated Principal Balance" means, with respect to any Contract for any
------------------------
Due Period, its unpaid principal balance at the end of the related Due Period,
but without giving effect to any adjustments due to bankruptcy or similar
proceedings.
"Stepdown Date" means the Distribution Date on which the Class A-1
-------------
Noteholders have been paid in full.
"Temporary Notes" means the Notes specified in Section 2.3 of the
---------------
Indenture.
"TIA" or "Trust Indenture Act" means The Trust Indenture Act of 1939
--- -------------------
as in force on the date hereof, unless otherwise specifically provided.
"Treasury Entitlement" means a "Security Entitlement" as defined in 31
--------------------
C.F.R. (S) 357.2.
"Treasury Regulations" means any proposed, temporary or final
--------------------
regulation promulgated under the Code.
"Trust" means CIT RV Trust 1997-A, a Delaware business trust created
-----
by the Trust Agreement.
-23-
<PAGE>
"Trust Agreement" means the Trust Agreement dated as of November 1,
---------------
1997 between the Seller and the Owner Trustee.
"Trust Estate" means all money, instruments, rights and other property
------------
that are subject or intended to be subject to the lien and security interest of
the Indenture for the benefit of the Noteholders (including, without limitation,
all property and interest Granted to the Indenture Trustee), including any
proceeds thereof, but excluding the Excluded Assets.
"Trustees" means both the Indenture Trustee and the Owner Trustee.
--------
"UCC" means the Uniform Commercial Code as in effect in the relevant
---
jurisdiction.
"Uncertificated Security" means an "uncertificated security" within
-----------------------
the meaning of the Relevant UCC.
"United States Securities Entitlement" means a Treasury Entitlement, a
------------------------------------
HUD Entitlement, a FHLBank Entitlement, a Funding Corporation Entitlement, a
Farm Credit Entitlement or a Sallie Mae Entitlement.
-24-
<PAGE>
ARTICLE II
CONVEYANCE OF CONTRACTS;
------------------------
ACCEPTANCE BY TRUSTEE
---------------------
Section 2.01 Conveyance of the Contracts.
---------------------------
In consideration of the purchase price for the Contracts and the
retention of the AO Interest, on the Closing Date, the Company shall, and by
execution of this Agreement hereby does, sell, transfer, assign absolutely, set
over and otherwise convey to the Trust, and the Trust shall, and by execution of
this Agreement hereby does, purchase, (i) all the right, title and interest of
the Company in and to the Contracts and all the rights, benefits, and
obligations arising from and in connection with each Contract, (ii) an
assignment of the security interests in the Financed Vehicles granted by the
Obligors pursuant to the Contracts, (iii) all payments received by the Company
on or with respect to the Contracts on or after the Cut-off Date (exclusive of
payments with respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest
of the Company in any Financed Vehicle (including any right to receive future
Net Liquidation Proceeds) that secures the Contracts and that shall have been
repossessed by the Servicer by or on behalf of the Trust; (v) all rights of the
Company to proceeds of Insurance Policies covering the Obligors and the
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket physical damage policy, to the extent
such proceeds relate to any Financed Vehicle, (vii) all rights of recourse
against any cosigner or under any personal guarantee with respect to the
Contracts (other than any right as against a Dealer under a Dealer Agreement),
(viii) all amounts held for the Trust in the Collection Account, (ix) all
proceeds in any way derived from any of the foregoing items, and (x) all
documents contained in the Contract Files relating to the Contracts (the items
in clauses (ii) through (x) are referred to herein as the "Related Contract
Assets"). The parties intend and agree that the conveyance of the Company's
right, title and interest in and to the Contracts (and all rights, entitlements
and amounts listed above) pursuant to this Agreement shall constitute an
absolute sale. The "purchase price" for the Contracts shall be an amount equal
to $564,122,864. Such purchase price shall be payable in immediately available
funds on the Closing Date.
The Company hereby declares and covenants that it shall at no time
have any legal, equitable or beneficial interest in, or any right, including
without limitation any reversionary or offset right, to the Collection Account
and the Reserve Account, and that, in the event it receives any of the same, it
shall hold same in trust for the benefit of the Trust on behalf of the
Securityholders and shall immediately endorse over to the Trust any such amount
it receives. Neither the Seller nor the Servicer shall have the right to remove
any Contracts from the Trust after the Closing Date.
Section 2.02 Acceptance by Owner Trustee. On the Closing Date, the
---------------------------
Owner Trustee shall deliver a certificate to the Company substantially in the
form of Exhibit B hereto acknowledging to the best of its knowledge conveyance
of the Contracts and Contract Files relating thereto to the Owner Trustee and
declaring that the Owner Trustee, through the Servicer, as custodian, pursuant
to Section 3.03 hereof, will hold all Contracts that have been delivered in
-25-
<PAGE>
trust, upon the trusts herein set forth, for the use and benefit of all
Certificateholders and Noteholders, as their respective interests may appear,
subject to the terms and provisions of this Agreement and the Basic Documents.
-26-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES; THE CONTRACTS
---------------------------------------------
Section 3.01A Representations and Warranties Regarding Each Contract.
------------------------------------------------------
The Contracts have been sold by CITSF to the Company pursuant to the
Purchase Agreement. In connection with such sales, CITSF made the
representations and warranties in Sections 3.01A, 3.01B, 3.01C and 8.01 of this
Agreement to the Company (such representations and warranties being incorporated
in the Purchase Agreement) and assumed the obligations in Section 3.02 of this
Agreement. As a condition of the purchase by the Company, the Company has
required that CITSF make such representations and warranties directly to the
Trust and the Securityholders so that the Trust may recover directly against
CITSF on such representations and warranties rather than indirectly through
claims by the Company against CITSF. Consequently, CITSF represents and
warrants to the Trust and the Securityholders as to each Contract as of the
Closing Date (except as otherwise expressly stated):
(a) List of Contracts. The information set forth in the List of
-----------------
Contracts is true and correct as of its date.
(b) Payments. With respect to a Contract, as of the Cut-off Date, the
--------
payment (if any) of principal and interest for its Due Date next preceding the
Cut-off Date was made by or on behalf of the Obligor (without any advance from
CITSF or any Person acting on behalf of CITSF) or was not delinquent for more
than 29 days.
(c) No Waivers. The terms of the Contract have not been waived,
----------
altered, amended or modified in any respect, except by instruments or documents
identified in the Contract File with respect thereto, and no waiver, alteration,
amendment or modification has caused such Contract to fail to meet any of the
other representations and warranties made by CITSF with respect thereto.
(d) Binding Obligation. The Contract is the legal, valid and binding
------------------
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally and equitable remedies.
(e) No Defenses. No Contract is or will be subject to any right of
-----------
rescission, set-off, counterclaim or defense, including the defense of usury,
and, to the knowledge of CITSF, no such right has been asserted with respect to
any Contract.
(f) Insurance. The Obligor on the Contract is required to maintain
---------
physical damage insurance covering the related Financed Vehicle in accordance
with CITSF's normal requirements or, if the related Financed Vehicle is not so
covered by an Obligor's insurance, it is covered by a blanket insurance policy
maintained by CITSF or the Servicer. As of the Cut-off Date, neither CITSF nor
the Servicer has obtained Force-Placed Insurance with respect to any Contract.
-27-
<PAGE>
(g) Lawful Assignment. The Contract was not originated in and is not
-----------------
subject to the laws of any jurisdiction whose laws would prohibit the transfer
of the Contract to the Company under the Purchase Agreement, the transfer of the
Contract to the Trust under this Agreement, or pursuant to transfers of
Securities, or the ownership of the Contracts by the Trust.
(h) Compliance with Law. All requirements of any federal, state or
-------------------
local law, including, without limitation, usury, truth in lending and equal
credit opportunity laws, applicable to the Contract have been complied with in
all material respects and such compliance is not affected by the Trust's
ownership of the Contracts, and CITSF shall for at least the period of this
Agreement, maintain in its possession, available for the Trust's inspection, and
shall deliver to the Trust upon demand, evidence of compliance with all such
requirements.
(i) Contract in Force. The Contract has not been satisfied or
-----------------
subordinated in whole or in part or rescinded, and the Financed Vehicle securing
the Contract has not been released from the security interest of the Contract in
whole or in part.
(j) Valid Security Interest. The Contract creates a valid and
-----------------------
enforceable perfected first priority security interest in favor of CITSF, CITCF-
NY or the Dealer which originated such Contract in the Financed Vehicle covered
thereby as security for payment of the amounts due under such Contract which
security interest (if in favor of CITCF-NY or the Dealer) has been validly and
effectively assigned to CITSF. CITSF has assigned all of its right, title and
interest in such Contract, including the security interest in the Financed
Vehicle covered thereby, to the Company, and the Company has assigned all of its
right, title and interest in such Contract and such Financed Vehicle to the
Trust.
(k) Notation of Security Interest. CITSF or CITCF-NY has taken all
-----------------------------
necessary action with respect to the Contract to perfect the security interest
in the Financed Vehicle covered thereby in favor of CITSF or CITCF-NY. With
respect to each Contract, if the related Financed Vehicle is located in a state
in which notation of a security interest on the title document is required or
permitted to perfect such security interest, the title document shows, or if a
new or replacement title document with respect to such Financed Vehicle is being
applied for such title document will be issued within 180 days and will show,
CITSF or CITCF-NY as the holder of a first priority security interest in such
Financed Vehicle; if the related Financed Vehicle is located in a state in which
the filing of a financing statement under the UCC is required to perfect a
security interest in a Recreation Vehicle, such filings or recordings have been
duly made and show CITSF or CITCF-NY as secured party.
(l) Capacity of Parties. All parties to the Contract had legal
-------------------
capacity to execute the Contract.
(m) Good Title. CITSF or CITCF-NY purchased the Contract for fair
----------
value and took possession thereof, without knowledge that the Contract was
subject to a security interest in favor of a third party. Neither CITSF, CITCF-
NY nor the Company has sold, assigned or pledged the Contract to any person
other than CITSF, the Company or the Trust, respectively. Prior to the transfer
of the Contract by CITCF-NY to CITSF, CITSF to the Company and by the Company to
the Trust, CITCF-NY, CITSF or the Company, respectively, had good and
-28-
<PAGE>
marketable title thereto free and clear of any lien, encumbrance, equity, loan,
pledge, charge, claim or security interest and was the sole owner thereof with
full right to transfer the Contract to the Company and the Trust, respectively.
The Company paid fair value to CITSF for the Contracts. Immediately upon the
transfer thereof, the Trust for the benefit of the Securityholders shall acquire
good and marketable title to each Contract free and clear of any encumbrance,
equity, loan, pledge, charge, claim or security interest, and the transfer
thereof shall have been perfected under applicable law.
(n) No Defaults. As of the Cut-off Date for each Contract, there was
-----------
no default, breach, violation or event permitting acceleration existing under
the Contract and no event which, with notice and the expiration of any grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration under such Contract (except payment delinquencies
permitted by subsection (b) above). Neither CITCF-NY nor CITSF has waived any
such default, breach, violation or event permitting acceleration except payment
delinquencies permitted by subsection (b) above.
(o) No Liens. As of the Closing Date for each Contract, there are no
--------
liens or claims which have been filed for work, labor or materials affecting the
Financed Vehicle securing the Contract which are or may be liens prior to, or
equal or coordinate with the security interest granted under the Contract.
(p) Equal Installments. The Contract is a Simple Interest Contract
------------------
and provides for level monthly payments which provide interest at the stated
Contract Rate and, if paid in accordance with its schedule, fully amortize the
loan over its original term.
(q) Enforceability. The Contract contains customary and enforceable
--------------
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security, except as enforceability of such provisions may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
(r) Obligor Not a Governmental Entity. The Obligor on the Contract is
---------------------------------
not the United States of America or any state or any agency, department,
instrumentality or political subdivision thereof.
(s) Obligor Not Subject to Bankruptcy Proceedings. The Obligor on the
---------------------------------------------
Contract was not in a bankruptcy proceeding as of the Cut-off Date.
(t) No Repossession. As of the Cut-off Date for each Contract, the
---------------
Financed Vehicle which secured the Contract had not been repossessed without
reinstatement.
(u) Obligor Not a Relief Act Obligor. If (i) the Obligor on the
--------------------------------
Contract is in the military (including an Obligor who is a member of the
National Guard or is in the reserves) and (ii) the Contract is subject to the
Soldiers' and Sailors' Civil Relief Act or the Military Reservist Relief Act,
such Obligor has not made a claim to CITSF that
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(A) the amount of interest on the related Contract should be
limited to 6% pursuant to the Soldiers' and Sailors' Civil Relief Act
during the period of such Obligor's active duty status, or
(B) payments on such Contract should be delayed pursuant to the
Military Reservist Relief Act,
in either case, unless a court has ordered otherwise upon application of CITSF.
(v) Only One Original. There is only one original executed copy of
-----------------
the Contract, which, immediately prior to the execution of this Agreement, was
in the possession of CITSF.
(w) Contract is Chattel Paper. The Contract is "chattel paper" as
-------------------------
defined in the New Jersey UCC.
(x) Selection Criteria. As of the Cut-off Date for each Contract, the
------------------
Contract satisfies the eligibility criteria discussed in the Prospectus
Supplement for the Securities under the heading "The Contract Pool-General."
(y) Valid Transfer. All of the right, title and interest of CITSF,
--------------
the Company and, if applicable, CITCF-NY in the Contract has been validly sold,
transferred and assigned to the Trust and all filings necessary to evidence such
sale, transfer and conveyance have been made in all appropriate jurisdictions.
(z) Trust License. The Trust is in compliance with any and all
-------------
license, permit and other requirements of any Federal or state law applicable to
its ownership of the Contract and its exercise of rights under the Contract and
the Basic Documents.
(aa) Origination. The Contract was originated in the United States of
-----------
America or, in the case of one Contract, Puerto Rico.
Section 3.01B Representations and Warranties Regarding the Contracts
------------------------------------------------------
in the Aggregate.
- ----------------
CITSF represents and warrants to the Trust and the Securityholders,
that:
(a) Amounts. The aggregate principal amounts payable by Obligors
-------
under the Contracts as of the Cut-off Date equal the Cut-off Date Principal
Balance.
(b) Characteristics. The Contracts have the following characteristics
---------------
as of the Cut-off Date:
(i) each Contract is secured by a Financed Vehicle which is a new
or used Recreation Vehicle;
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(ii) each Contract has a fixed Contract Rate, which is equal to
or greater than 7.75%;
(iii) the remaining maturity of each Contract is at least 9
months, but not more than 240 months;
(iv) the original maturity of each Contract was at least 12
months, but not more than 240 months;
(v) the weighted average remaining term to stated maturity of the
Contracts was 158.28 months;
(vi) the weighted average Contract Rate of the Contracts was
10.10%;
(vii) the final scheduled payment dates on the Contracts range
from July 1998 to November 2017;
(viii) the average remaining principal balance of the Contracts
per contract was $28,708.54;
(ix) the outstanding principal balances of the Contracts ranged
from $1,114.24 to $491,910.50;
(x) each of the Contracts was first entered onto the Servicer's
or CITCF-NY's servicing system (which, typically, represents the date on
which CITSF or CITCF-NY funds the purchase of such Contracts from Dealers)
between August 1996 and October 1997;
(xi) not more than 5% of the Obligors under the Contracts by Cut-
off Date Principal Balance had mailing addresses in any one state, as
determined by information provided by Obligors (except Obligors with
mailing addresses in Texas, California, Florida and Washington, which
represent approximately 15.20%, 14.95%, 7.31% and 5.31%, respectively, of
the Cut-off Date Principal Balance); less than 10% of the Obligors under
the Contracts by Cut-off Date Principal Balance had mailing addresses in
Oklahoma;
(xii) at least 64.06% of the Contracts, based on Cut-off Date
Principal Balance, were secured by new Financed Vehicles at origination;
(xiii) approximately 71.48%, 12.56% and 15.96%, based on Cut-off
Date Principal Balance, were secured by motor homes, travel trailers and
other types of Recreation Vehicles, respectively; and
(xiv) the weighted average original term to maturity of the
Contracts was 163.20 months.
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(c) Computer Tape. As of the Closing Date, the Computer Tape made
-------------
available by the Servicer was complete and accurate as of its date and included
a description of the same Contracts that are described in the List of Contracts.
(d) Marking Records. By the Closing Date, CITSF has caused the
---------------
portions of the Electronic Ledger relating to the Contracts constituting part of
the Trust to be clearly and unambiguously marked to indicate that such Contracts
constitute part of the Trust and are owned by the Trust in accordance with the
terms of the trust created hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
--------------------
employed in selecting the Contracts from the recreation vehicle installment sale
contracts and direct loans owned by CITSF which were purchased by CITSF from
CITCF-NY or Dealers, except that CITSF did not select any such contract which
would cause a breach of any representation or warranty of CITSF contained in
this Agreement that would materially adversely affect the Trust's interest in
such Contract.
Section 3.01C Representations and Warranties Regarding the Contract
-----------------------------------------------------
Files.
- -----
CITSF represents and warrants to the Trust and the Securityholders
that:
(a) Possession. Immediately prior to the Closing Date, CITSF will
----------
have possession of each original Contract and the related Contract File, and
there are and there will be no custodial agreements in effect materially and
adversely affecting the right of CITSF to make, or to cause to be made, any
delivery required in connection with the conveyance of the Contracts to the
Company or from the Company to the Trust.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of
------------------
the Contracts and the Contract Files from CITSF to the Company and from the
Company to the Trust are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.
Section 3.02 Repurchase of Contracts for Breach of Representations
-----------------------------------------------------
and Warranties.
- --------------
(a) Subject to Section 3.02(b), CITSF shall repurchase a Contract, at
its Purchase Price, not later than 85 days after CITSF receives written notice
from either of the Trustees or the Servicer, or not later than 90 days after
CITSF otherwise becomes aware, of a breach of any representation or warranty of
CITSF set forth in Section 3.01A or 3.01B of this Agreement that materially and
adversely affects the Trust's interest in such Contract and which breach has not
been cured. The Owner Trustee agrees to cooperate with and to assist the
Servicer in effecting any such cure whenever requested to do so by the Servicer.
CITSF shall effect such repurchase by paying to the Servicer for deposit in the
Collection Account on the Deposit Date immediately following the determination
that such Purchase Price is owed the aggregate of the Purchase Price of all
Contracts that are required to be repurchased pursuant to the preceding
sentence. With respect to any Contract incorrectly described on the List of
Contracts, only with respect to remaining unpaid principal balance, which CITSF
would otherwise be required to
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repurchase pursuant to this Section 3.02, CITSF may, in lieu of repurchasing
such Contract, deposit in the Collection Account cash in an amount sufficient to
cure such deficiency or discrepancy, not later than one Business Day after the
first Determination Date which is more than 90 days after CITSF becomes aware or
receives written notice from the Trustees or the Servicer of such incorrect
description. CITSF shall send written notice of any such cash deposit to the
Rating Agencies as promptly as possible following such deposit. Notwithstanding
any other provision of the Agreement, the obligation of CITSF under this Section
shall not terminate upon a Service Transfer pursuant to Article VII.
(b) The repurchase obligation of CITSF set forth in this Section 3.02
shall constitute the sole remedy available to the Trust and the Securityholders
for a breach of any representation and warranty hereunder with respect to the
Contracts (but not with respect to any other breach by CITSF of its obligations
hereunder, as set forth herein).
Section 3.03 Custody of Contract Files.
-------------------------
To assure uniform quality in servicing the Contracts and to reduce
administrative costs, the Trust, upon the execution and delivery of this
Agreement, revocably appoints the Servicer, and the Servicer accepts such
appointment, to act as the agent of the Trust and as custodian of the Contract
File with respect to each Contract, each of which is hereby constructively
delivered to the Trust.
Section 3.04 Duties of Servicer as Custodian.
-------------------------------
(a) Safekeeping. The Servicer, in its capacity as custodian, shall
-----------
hold the Contract Files on behalf of the Trust for the use and benefit of the
Trust and maintain such accurate and complete accounts, records and computer
systems pertaining to the Contracts as shall enable the Owner Trustee and the
Indenture Trustee to comply with their obligations pursuant to this Agreement
and the other Basic Documents.
As custodian, the Servicer shall have and perform the following powers
and duties:
(i) hold the Contract Files on behalf of the Trust, maintain
accurate records pertaining to each Contract to enable it to comply with
the terms and conditions of this Agreement, maintain a current inventory
thereof, conduct annual physical inspections of Contract Files held by it
under this Agreement and certify to the Trust annually that it continues to
maintain possession of such Contract Files;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract Files on the Servicer's premises, and the receipting for Contract
Files taken from their storage area by an employee of the Servicer for
purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Trust.
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In performing its duties under this Section 3.04, the Servicer agrees
to act with reasonable care, consistent with the same degree of skill and care
that it exercises with respect to similar contracts serviced by it for its own
account. The Servicer shall promptly report to the Trust in writing any
material failure by it to hold the Contract Files as herein provided and shall
promptly take appropriate action to remedy any such failure. In acting as
custodian of the Contract Files, the Servicer agrees further not to assert any
beneficial ownership interests in the Contracts or the Contract Files. The
Servicer agrees to indemnify the Trust, the Certificateholders, the Noteholders,
the Owner Trustee and the Indenture Trustee (and its respective officers,
directors, employees and agents) for any and all liabilities, obligations,
losses, damages, payments, costs, or expense of any kind whatsoever which may be
imposed on, incurred by or asserted against the Trust, the Certificateholders,
the Noteholders, the Owner Trustee and the Indenture Trustee as the result of
any act or omission by the Servicer relating to the maintenance and custody of
the Contract Files; provided, however, that the Servicer will not be liable for
-------- -------
any portion of any such amount resulting from the negligence or willful
misconduct of the Trust, the Certificateholders, the Noteholders, the Owner
Trustee or the Indenture Trustee. Such indemnity shall survive the termination
of this Agreement or the earlier discharge of the Indenture Trustee under the
Indenture.
(b) Maintenance of and Access to Records. The Servicer, in its
------------------------------------
capacity as custodian, agrees to maintain the Contract Files at its office in
the State of Oklahoma, or at such of its offices as shall from time to time be
identified to the Trust by written notice. The Servicer, in its capacity as
custodian, may temporarily move individual Contract Files or any portion thereof
without notice as necessary to conduct collection and other servicing activities
in accordance with its customary practices and procedures, but shall promptly
return such Contract File as soon as practicable after it is no longer needed
for such purpose.
The Servicer, in its capacity as custodian, shall make available to
the Trust, or its duly authorized representatives, attorneys or auditors, the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal business hours as the Trust shall
reasonably instruct which do not unreasonably interfere with the Servicer's
normal operations or customer or employee relations.
(c) Release of Documents. Upon written instruction from the Trust,
--------------------
the Servicer, in its capacity as custodian, shall release or cause to be
released any document in the Contract Files to the Trust, the Trust's agent or
the Trust's designee, as the case may be, at such place or places as the Trust
may designate, as soon as practicable. The Servicer, in its capacity as
custodian, shall not be responsible for any loss occasioned by the failure of
the Trust, its agent or its designee to return any document or any delay in
doing so.
Section 3.05 Instructions; Authority to Act.
------------------------------
The Servicer shall be deemed to have received proper instructions from
either of the Trustees with respect to the Contract Files upon its receipt of
written instructions signed by a Responsible Officer of such Trustee. A
certified copy of a by-law or of a resolution of the Board of Directors of the
Owner Trustee or the Indenture Trustee, as applicable, shall constitute
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conclusive evidence of the authority of any such Responsible Officer to act and
shall be considered in full force and effect until receipt by the Servicer of
written notice to the contrary given by the Trust.
Section 3.06 Effective Period and Termination.
--------------------------------
The Servicer's appointment as custodian shall become effective as
of the Closing Date and shall continue in full force and effect until terminated
pursuant to this Section 3.06 or until this Agreement shall be terminated. The
Servicer may perform its duties as custodian through one or more agents, which
agents may maintain physical possession of Contract Files as agent for the
Servicer acting as custodian. If the Servicer shall resign as Servicer under
Section 8.05 hereof or if all of the rights and obligations of the Servicer
shall have been terminated under Section 9.01 hereof, the appointment of the
Servicer as custodian may be terminated by the Indenture Trustee or by the
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal balance of the Controlling Notes as of the close of the
preceding Distribution Date (or, if the Notes have been paid in full and the
Indenture has been discharged in accordance with its terms, by the Owner Trustee
or by the Holders of Certificates evidencing not less than a majority of the
Certificate Balance as of the close of the preceding Distribution Date), in the
same manner as rights and obligations of the Servicer may be terminated under
Section 9.01 hereof. The Trust may terminate the Servicer's appointment as
custodian at any time with cause upon written notification to the Servicer. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver the Contract Files to the Trust or the Trust's agent at such place
or places as the Trust may reasonably designate. The Servicer shall cooperate
with the Trust in making the transfer and shall bear all of the Servicer's costs
and expenses with respect to such transfer, but the Trust shall bear the actual
costs and expenses of packing and transporting the Contract Files to the
location designated by the Trust. Notwithstanding the termination of the
Servicer as custodian, the Trust agrees that upon any such termination, the
Trust shall provide, or cause its agent to provide, access to the Contract Files
to the Servicer for the purpose of carrying out its duties and responsibilities
with respect to the servicing of the Contracts hereunder.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF CONTRACTS
-----------------------------------------
Section 4.01 Duties of Servicer.
------------------
(a) The Servicer, as agent for the Trust, shall manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Trust, at the request of a Servicing Officer,
shall furnish the Servicer with any reasonable documents or take any action
reasonably requested, necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.
(b) In managing, administering, servicing and making collections on
the Contracts pursuant to this Agreement, the Servicer will exercise the same
degree of skill and care that the Servicer exercises with respect to similar
contracts serviced by the Servicer for its own account.
(c) The Servicer may enter into subservicing agreements with one or
more subservicers (which shall be Eligible Servicers) for the servicing and
administration of any or all of the Contracts. References in this Agreement to
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by the Servicer in servicing the Contracts shall include
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by a subservicer on behalf of the Servicer. Each
subservicing agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and the standard of care set forth herein and
as the Servicer and the subservicer have agreed. All compensation payable to a
subservicer under a subservicing agreement shall be payable by the Servicer from
its servicing compensation or otherwise from its own funds, and none of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders will have any liability to the subservicer with respect thereto.
Notwithstanding any subservicing agreement or any of the provisions of
this Agreement relating to agreements or any arrangements between the Servicer
or a subservicer or any reference to actions taken through such Persons or
otherwise, the Servicer shall remain obligated and liable to the Trust, the
Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders
for the servicing and administering of the Contracts and the other Trust
property in accordance with the provisions of this Agreement without diminution
of such obligation or liability by virtue of such subservicing agreements.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Contracts and the other
Trust property involving a subservicer in its capacity as such shall be deemed
to be between the subservicer and the Servicer alone, and the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the subservicer except as set forth in the next
succeeding paragraph.
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In the event the Servicer shall for any reason no longer be acting as
such, the successor Servicer may, in its discretion, thereupon assume all of the
rights and obligations of the outgoing Servicer under a subservicing agreement.
In such event, the successor Servicer shall be deemed to have assumed all of the
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such subservicing agreement to the same extent as if such
subservicing agreement had been assigned to the successor Servicer, except that
the outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the Trust,
but at the expense of the outgoing Servicer, deliver to the successor Servicer
all documents and records relating to each such subservicing agreement and the
Contracts and other Trust property then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of any subservicing
agreement to the successor Servicer. In the event that the successor Servicer
elects not to assume a subservicing agreement, the outgoing Servicer, at its
expense, shall cause the subservicer to deliver to the successor Servicer all
documents and records relating to the Contracts and the other Trust property
being serviced thereunder and all amounts held (or thereafter received) by such
subservicer (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of servicing
of the Contracts and the other Trust property being serviced by such subservicer
to the successor Servicer.
(d) The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors or by federal, state or local
governmental authorities with respect to the Contracts, investigating
delinquencies, reporting federal income tax information to Obligors, monitoring
the collateral in cases of Obligor default and handling the foreclosure or other
liquidation of Financed Vehicles in appropriate instances (subject to
reimbursement of its expenses incurred in connection with such foreclosure,
liquidation or other realization on the Contracts), administering and enforcing
Insurance Policies in accordance with its customary practices, accounting for
collections, furnishing monthly and annual statements to the Trust with respect
to distributions, and making Monthly Advances pursuant to Section 5.03 hereof.
The Servicer shall be authorized and empowered by the Trust to execute
and deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
or with respect to the Financed Vehicles.
Upon written request of the Servicer and receipt by the Trust of an
Officer's Certificate setting forth the facts underlying such request, the Trust
shall furnish the Servicer with any limited powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder and neither the Trust nor
the Indenture Trustee shall be held liable for such actions of the Servicer
thereunder.
Section 4.02 Collection of Contract Payments. The Servicer shall
-------------------------------
make reasonable efforts, consistent with the customary servicing practices and
procedures employed by
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the Servicer with respect to Contracts owned or serviced by it, to collect all
payments called for under the terms and provisions of the Contracts as and when
the same shall become due, and in connection therewith shall follow such normal
collection practices and procedures as it follows with respect to comparable new
or used Recreation Vehicle installment sale contracts that it services for
itself and others. The Servicer shall not reduce or defer scheduled payments,
extend any Contract or otherwise modify the terms of any Contract; provided,
--------
however, that, consistent with its customary practices and servicing procedures,
- -------
the Servicer may, in its discretion, arrange with an Obligor to, defer,
reschedule, extend or modify the payment schedule of any delinquent Contract for
credit related reasons that would be acceptable to the Servicer with respect to
a comparable Contract secured by a new or used Recreation Vehicle that it
services for itself or others, so long as (a) the maturity of such Contract
would not be extended beyond the 180th day prior to the Certificate Final
Scheduled Distribution Date and (b) the deferral, rescheduling, extension or
other modification of the terms of the Contract would not constitute a
cancellation of such Contract and the creation of a new installment sale
contract or direct loan. If, as a result of deferring, rescheduling or extending
of payments or any other modification, such deferring, rescheduling, extension
or modification breaches any of the terms of the preceding sentence, then the
Servicer shall be obligated to purchase such Contract pursuant to Section 4.07
hereof on the Deposit Date immediately following the date on which it became
aware or received written notice from the Trust of such failure. The Servicer
may, in accordance with its customary servicing practices and procedures, in its
good faith judgment, waive any Late Fees that may be due or payable under any
Contract. Notwithstanding the foregoing, in connection with the settlement by
the Servicer of a defaulted Contract, the Servicer may forgive a portion of such
Contract, if in its discretion it believes that the acceptance of the settlement
proceeds from the related Obligor would result in the Trust's receiving a
greater amount of collections than the Net Liquidation Proceeds that would
result from repossessing and liquidating the related Financed Vehicle.
Section 4.03 Realization Upon Contracts
--------------------------
(a) The Servicer will, consistent with customary servicing practices
and procedures and the terms of this Agreement, act with respect to the
Contracts in such manner as it reasonably believes will maximize the receipt of
principal and interest on the Contracts and Net Liquidation Proceeds in respect
of defaulted Contracts.
In the event that title to any Financed Vehicle is acquired in
foreclosure or by conveyance in lieu of foreclosure, the deed or certificate of
sale shall be issued to the Trust, or, at its election, to its nominee on behalf
of the Trust.
(b) The Servicer shall be entitled to recover all Liquidation Expenses
relating to a defaulted Contract, from the liquidation proceeds with respect to
such Contract or related Financed Vehicle. The Net Liquidation Proceeds
realized in connection with any such action with respect to a Contract shall be
deposited by the Servicer in the Collection Account in the manner specified in
Section 5.02 hereof and shall be applied to reduce (or to satisfy, as the case
may be) the Purchase Price of the Contract, if such Contract is to be purchased
by (i) CITSF pursuant to Section 3.02 hereof, (ii) the Servicer pursuant to
Section 4.07 hereof, or (iii) CITSF
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pursuant to Section 11.01 hereof. The foregoing shall be subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with the repair or the
repossession of such Financed Vehicle unless it shall determine in its sole
discretion that such repair and/or repossession will increase the Net
Liquidation Proceeds of the related Contract.
(c) The Servicer may sue to enforce or collect upon Contracts,
including foreclosure of any security interest in a Financed Vehicle, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract or any Insurance Policy in
respect thereof, the act of commencement shall be deemed to be an automatic
assignment of the Contract to the Servicer for purposes of collection only. If,
however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Contract on the ground that it is not a real party in
interest or a holder entitled to enforce the Contract, the Trust shall, at the
Servicer's expense, take such steps as the Servicer deems necessary to enforce
the Contract, including bringing suit in its name or the names of the
Securityholders.
(d) Prior to a Service Transfer, the Servicer may grant to the Obligor
on any Contract any rebate, refund or adjustment out of the Collection Account
that the Servicer in good faith believes is required because of a Principal
Prepayment or a Principal Prepayment in Full. The Servicer will not permit any
rescission or cancellation of any Contract, except to the extent required by
law.
(e) The Servicer may enforce any due-on-sale clause in a Contract if
such enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
Insurance Policy.
(f) If CITSF, as Servicer, believes that an Obligor is likely to
refinance its Contract, CITSF may in its discretion attempt to retain such
Obligor as its customer by soliciting the Obligor to refinance the Contract with
CITSF.
Section 4.04 Physical Damage Insurance.
-------------------------
(a) The Servicer, in accordance with its customary servicing practices
and procedures, shall use its best efforts to require that each Obligor shall
have obtained and shall maintain physical damage insurance covering the Financed
Vehicle, provided that such insurance shall be in an amount no greater than the
outstanding principal balance of the related Contract or, if such insurance also
covers the interest of the related Obligor in the Financed Vehicle, no greater
than the greater of the outstanding principal balance of the related Contract
and the value of the Financed Vehicle, or such lesser amount permitted by
applicable law. The Servicer may, but shall not be obligated to, verify if such
insurance is being maintained by the Obligors or enforce rights or pursue any
remedies under the Contracts or applicable law to require the Obligors to
maintain physical damage insurance, in accordance with the Servicer's customary
servicing practices and procedures with respect to comparable new or used
recreation vehicles financed by installment sale contracts that it services for
itself or others. If an Obligor fails to
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maintain such insurance, the Servicer may, but shall not be obligated to, obtain
insurance and advance such premiums for such insurance on behalf of such
Obligor. If the Servicer obtains such insurance and advances such premiums for
such insurance, such insurance policy shall name the Servicer as an additional
insured and loss payee, and shall be issued by an insurer having a rating of "A"
or better by A.M. Best (such insurance being referred to herein as "Force-Placed
Insurance"). Such Force-Placed Insurance and any commissions or finance charges
collected by the Servicer in connection therewith shall be, to the extent
permitted by law, in an amount in accordance with customary servicing practices
and procedures, but in no event shall such Force-Placed Insurance be in an
amount greater than the outstanding principal balance of the related Contract
or, if such insurance also covers the interest of the related Obligor in the
Financed Vehicle, no greater than the greater of the outstanding principal
balance of the related Contract and the value of the Financed Vehicle, or such
lesser amount permitted by applicable law. The Servicer shall disclose to the
related Obligor all information with respect to such Force-Placed Insurance,
commissions and finance charges as required by applicable law. The Servicer does
not, under its customary servicing practices and procedures, obtain Force-Placed
Insurance when the principal balance of the related retail installment sale
contract or installment loan falls below the level or levels periodically
established in accordance with such customary servicing practices and
procedures. In accordance with such customary servicing practices and
procedures, the Servicer may periodically readjust such levels, suspend Force-
Placed Insurance or arrange other methods of protection of the Financed Vehicles
that it deems necessary or advisable, provided that the Servicer determines that
such actions do not materially and adversely affect the interests of the
Certificateholders or the Noteholders. Any portion of the principal balance of a
Contract attributable to Insurance Advances or Post Cut-off Date Insurance Add-
Ons will not be owned by the Trust, and amounts allocable thereto will not be
available for distribution in respect of the Securities. Unless otherwise
designated by the Obligor, the Servicer shall not allocate payments by the
Obligor to Insurance Advances or Post Cut-off Date Insurance Add-Ons in respect
of such Contracts if any amount of principal or interest is due but unpaid on
such Contracts. The Servicer shall not deposit payments allocable to Insurance
Advances or Post Cut-off Date Insurance Add-Ons in the Collection Account and
shall instead promptly pay such amounts to an account of the Servicer maintained
for that purpose. In the event that an Obligor under a Contract with respect to
which the Servicer has made Insurance Advances or advanced funds to obtain
Force-Placed Insurance makes scheduled payments under the Contract, but fails to
make scheduled payments of such Insurance Advances or Post Cut-off Date
Insurance Add-Ons as due, and the Servicer has determined that eventual payment
of such amount is unlikely, the Servicer may, but shall not be required to, take
any action available to it, including determining that the related Contract is
in default, taking remedial action and determining that the Contract is a
Liquidated Contract; provided, however, that any Net Liquidation Proceeds with
-------- -------
respect to such Contract shall be applied first to the accrued and unpaid
interest at the Contract Rate, then to the principal amount outstanding, and the
remainder, if any, to repayment of any such Insurance Advances or Post Cut-off
Date Insurance Add-Ons.
(b) The Servicer, or any affiliate of the Servicer, may, to the extent
permitted by law (i) enter into agreements with one or more insurers or other
Persons pursuant to which the Servicer or such affiliate will earn commissions
and fees in connection with any insurance policy purchased by an Obligor
including, without limitation, any physical damage insurance policy
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(whether or not such physical damage insurance policy is force-placed pursuant
to the provisions of any Contract), or any other insurance policy whatsoever,
and (ii) in connection with the foregoing, to solicit, or permit and assist any
insurer or any agent thereof to solicit (including, without limitation,
providing such insurer or agent a list of Obligors including name, address or
other information) any Obligor.
(c) The Servicer may make advances ("Insurance Advances") to an
Obligor to finance insurance premiums related to the Financed Vehicle. Any such
Insurance Advances may be secured by the related Financed Vehicle.
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
-------------------------------------------------------
Retitling.
---------
(a) The Servicer, in accordance with its customary servicing practices
and procedures, shall, at its own expense, take such steps as are necessary to
maintain perfection of the security interest created by each Contract in the
related Financed Vehicle in favor of CITSF or CITCF-NY; provided, however, that
the Servicer shall not be obligated to amend any certificate of title to note
the Trust's interest as the assignee of the secured party on the certificate of
title to such Financed Vehicle even if such notation is required to perfect the
Trust's security interest in such Financed Vehicle. The Servicer hereby agrees
to take, to the extent permitted by law, such steps as are necessary to re-
perfect such security interest in the name of CITSF or CITCF-NY in the event of
the relocation of a Financed Vehicle to a jurisdiction other than the
jurisdiction in which steps had been taken to perfect the security interest in
favor of CITSF or CITCF-NY.
(b) In the event that the assignment of the Contract to the Trust is
insufficient, without a notation on the related Financed Vehicle's certificate
of title, to grant to the Trust a perfected security interest in the related
Financed Vehicle, CITSF or CITCF-NY hereby agrees to serve as the Trust's agent
for the purpose of perfecting the security interest in such Financed Vehicle and
that CITSF's or CITCF-NY's listing as the secured party on the certificate of
title is in the capacity as agent of the Trust.
(c) If, at any time, a Service Transfer has occurred and CITSF is no
longer the Servicer, and the successor Servicer is unable to foreclose upon a
Financed Vehicle because the title document for such Financed Vehicle does not
show such successor Servicer or the Trust as the lienholder, CITSF shall take
all necessary steps to apply for a replacement title document showing the
successor Servicer or the Trust as the secured party.
(d) In order to facilitate the successor Servicer's actions, as
described in subsection 4.05(b) hereof, CITSF will provide the successor
Servicer with any necessary power of attorney permitting it to retitle the
Financed Vehicle. The Company hereby appoints the Trust (acting through the
Owner Trustee or the Servicer) its attorney-in-fact to endorse, as appropriate,
the certificate of title relating to any Financed Vehicle in order to cause a
change in the registration of legal owner of the Financed Vehicle to the Trust
at such time as such certificate of title is endorsed and delivered to the
Department of Motor Vehicles of the State of California (or any other state
department of motor vehicles) with appropriate fees. The Company will provide
the Trust with any necessary power of attorney for such purpose.
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(e) In the event that the successor Servicer seeks to foreclose on a
Financed Vehicle and if the successor Servicer is unable to retitle or otherwise
perfect a security interest in the Financed Vehicle then CITSF, at its expense,
will take all actions necessary to act with the successor Servicer, to the
extent permitted by law, to enable the successor Servicer to foreclose upon the
Financed Vehicle, including, as appropriate, the filing of any UCC-1 or UCC-2
financing statements necessary to perfect the security interest in any Financed
Vehicle.
Section 4.06 Covenants of Servicer. The Servicer shall not:
---------------------
(i) Security Interest to Remain in Force. Release a Financed
------------------------------------
Vehicle securing a Contract from the security interest granted by the
Contract except as contemplated herein or as required by the terms of such
Contract or applicable law;
(ii) No Impairment. Impair the rights of the Trust in the
-------------
Contracts or take any action inconsistent with the Trust's ownership of the
Contracts, except as expressly provided herein;
(iii) Amendments. Increase the number of payments under a
----------
Contract, nor increase the principal amount of such Contract which is used
to finance the purchase price of the related Financed Vehicles, nor extend
or forgive payments on a Contract or extend or modify the payment schedule
or other terms of a Contract, except as provided in Section 4.02 hereof;
(iv) Compliance with Insurance Policies. Fail to comply with the
----------------------------------
provisions of any Insurance Policy, if the failure to comply would impair
the protection or benefit to be afforded by such Insurance Policies; and
(v) Trust License. Fail to obtain and maintain any license,
-------------
permit or other approval required by any Federal or state law in order for
the Trust to own any Contract or to exercise the rights under any Contract
or the Basic Documents.
Section 4.07 Purchase of Contracts Upon Breach.
---------------------------------
The Servicer or the Trustees, as the case may be, shall inform the
other parties promptly, in writing, upon the discovery of any breach by the
Servicer of its covenants under Section 4.02 hereof, Section 4.04 hereof, or
Section 4.06 hereof, which materially and adversely affects the Trust's interest
in any Contract. The Trustees shall not be deemed to have discovered such a
breach until such time as a Responsible Officer of each of the Trustees receives
written notice of such breach. Except as otherwise specified in Section 4.02
hereof, unless the breach shall have been cured, the Servicer shall purchase
such Contract, at its Purchase Price, not later than the first Deposit Date
which is more than 60 days after the Servicer receives written notice from the
Trustees, or not later than 60 days after the Servicer otherwise becomes aware
of, a breach of any of its obligations under Section 4.02 hereof, under Section
4.04 hereof or any covenant of the Servicer in Section 4.06 hereof which
materially and adversely affects the Trust's interest in such Contract. The
Servicer shall effect such purchase by depositing on such Deposit Date, in
accordance with Section 5.04 hereof, the Purchase Price of such Contract (less
any Net
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Liquidation Proceeds deposited, or to be deposited, by the Servicer in
the Collection Account with respect to such Contract pursuant to Section 5.02
hereof) in the Collection Account. The effective date of such purchase shall be
the last day of the Due Period preceding such Deposit Date. The sole remedy of
the Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders against the Servicer with respect to a breach pursuant to
Section 4.02 hereof, Section 4.04 hereof or Section 4.06 hereof shall be to
require the Servicer to purchase Contracts pursuant to this Section 4.07.
Section 4.08 Servicing Fee.
-------------
The Servicing Fee for a Distribution Date shall be equal to the sum of
(i) one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as
of the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Cut-off Date) and (ii) any Investment Earnings (net
of investment expenses and losses) on amounts on deposit in the Collection
Account, the Certificate Distribution Account and the Note Distribution Account.
Section 4.09 Monthly Report.
--------------
On or before each Determination Date, the Servicer shall furnish a
report (the "Monthly Report"), which shall be in substantially the form of
Exhibit D hereto (with such additional information as the Servicer shall elect
to include therein), to the Owner Trustee, the Indenture Trustee, any Paying
Agent (under the Indenture and the Trust Agreement) and (if CITSF is not the
Servicer) CITSF. The determination by the Servicer of the amount of the
distributions to be made pursuant to Section 5.05 hereof shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder, and the Trustees shall be fully protected in relying upon the same
without any independent check or verification. The Servicer shall also specify
in the Monthly Report each Contract which CITSF or the Servicer is required to
repurchase as of the last day of the related Due Period and each Contract which
the Servicer shall have determined to be a Liquidated Contract during such Due
Period. The Trustees shall not be required to recompute, verify or recalculate
information contained in the Servicer's Certificate.
Each Monthly Report shall be accompanied by a certificate of a
Servicing Officer substantially in the form of Exhibit C hereto, certifying the
accuracy of the Monthly Report and that no Event of Termination or event that
with notice or lapse of time or both would become an Event of Termination has
occurred, or if such event has occurred and is continuing, specifying the event
and its status.
In addition, the Servicer shall, on request of the Trustees, furnish
the Trustees such reasonably pertinent underlying data on the Contracts as can
be generated by the Servicer's existing data processing system without undue
modification or expense.
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Section 4.10 Annual Statement as to Compliance.
---------------------------------
(a) The Servicer shall deliver to the Trustees within 90 days after
the end of each calendar year commencing March 31, 1998, a certificate signed by
a Responsible Officer of the Servicer, stating that (i) a review of the
activities of the Servicer during the preceding calendar year of its performance
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such preceding
calendar year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Trustees, promptly after having
obtained knowledge thereof, a certificate of a Responsible Officer of the
Servicer specifying any event which with the giving of notice or lapse of time,
or both, would become an Event of Termination under subsection (a) or (b) of
Section 9.01 hereof.
Section 4.11 Annual Report of Accountants.
----------------------------
On or before March 31 of each year, commencing March 31, 1998, the
Servicer, at its expense, shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement which opines on, at a minimum, the Servicer's compliance
with the minimum servicing standards set forth in [the Uniform Single
Attestation Program for Mortgage Bankers (in accordance with the 1995 revisions
thereto)]. Such examination and report of independent public accountants will
be prepared in accordance with the requirements set forth in [the Uniform Single
Attestation Program for Mortgage Bankers (in accordance with the 1995 revisions
thereto)]. Copies of the annual statement of accountants shall also be provided
to each Rating Agency and to the Trustees.
Section 4.12 Duties of Owner Trustee.
-----------------------
The Servicer shall monitor the performance of the Issuer and the Owner
Trustee and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's or the Owner Trustee's duties under the Indenture and the
Trust Agreement. If the Seller shall fail to compensate the Owner Trustee
pursuant Section 6.9 of the Trust Agreement, the Servicer shall pay to the Owner
Trustee such compensation. The Servicer shall reimburse the Owner Trustee as
provided in Section 6.9 of the Trust Agreement for its reasonable expenses
thereunder. The Servicer agrees to take the actions required to be taken by it
under Section 6.10 of the Trust Agreement.
The Servicer shall prepare for execution by the Issuer or the Owner
Trustee, or shall cause to be prepared by other appropriate persons, all
documents, reports, filings, instruments, certificates and opinions as shall be
required to be prepared, filed or delivered by the Issuer or the Owner Trustee
pursuant to the Indenture or the Trust Agreement.
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In furtherance of the foregoing, the Servicer's duties shall include,
without limitation, compliance with the requirements of Sections 5.4 and 5.5 of
the Trust Agreement and Sections 2.2, 2.4, 2.7(d), 2.7(e), 2.9, 3.3, 3.4, 3.5,
3.6, 3.7(b), 3.7(d), 3.9, 3.10, 3.19, 4.1, 5.4, 6.8, 6.10, 7.1, 7.3, 8.2, 8.3,
8.4, 8.5, 9.1, 9.2, 9.3, 9.6, 10.2, 11.1(a), 11.1(b), 11.4, 11.6 and 11.15 of
the Indenture.
Section 4.13 Reports to Securityholders and the Rating Agencies.
--------------------------------------------------
(a) Concurrently with each distribution charged to the Certificate
Distribution Account and the Note Distribution Account, the Owner Trustee and
the Indenture Trustee, respectively, so long as each has received the Monthly
Report from the Servicer, shall forward or cause to be forwarded by mail to each
Securityholder, such Monthly Report. The Servicer shall furnish to each
Securityholder of record during any calendar year information for tax reporting
purposes not later than the latest date permitted by law.
(b) The Servicer shall forward to each Rating Agency each letter of
the independent certified public accountants' described in Section 4.11 hereof,
each Servicer's Certificate described in Section 4.09 hereof, each annual
statement as to compliance described in Section 4.10 hereof and each statement
to Securityholders described in Section 5.08 hereof.
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
----------------------------------------------------
Policy.
------
The Servicer shall during the term of its service as Servicer maintain
in force (a) a policy or policies of errors and omissions insurance coverage,
and (b) a fidelity bond in respect of its officers, employees and agents. Such
policy or policies and such fidelity bond shall have such deductibles and be in
such form and amount as is generally customary among Persons which service a
portfolio of recreation vehicle installment sale contracts having an aggregate
principal amount of $100,000,000 or more and which are generally regarded as
servicers acceptable to institutional investors.
Section 4.15 Satisfaction of Contract.
------------------------
Upon payment in full on any Contract, the Servicer is authorized to
execute an instrument in satisfaction of such Contract and to do such other acts
and execute such other documents as the Servicer deems necessary to discharge
the Obligor thereunder and eliminate the security interest in the Financed
Vehicle related thereto. The Servicer shall determine when a Contract has been
paid in full. To the extent that insufficient payments are received on a
Contract credited by the Servicer as prepaid or paid in full and satisfied, the
shortfall shall be paid by the Servicer out of its own funds.
Section 4.16 Costs and Expenses.
------------------
Except as provided in Section 4.03 hereof, all costs and expenses
incurred by the Servicer in carrying out its duties hereunder, including all
fees and expenses incurred in connection with the enforcement of Contracts
(including enforcement of defaulted Contracts and
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repossessions of Financed Vehicles securing such Contracts), shall be paid by
the Servicer and the Servicer shall not be entitled to reimbursement hereunder.
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ARTICLE V
ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
---------------------------------------------------------
Section 5.01 Collection Account and Reserve Account.
--------------------------------------
(a) (i) On or before the Closing Date, there shall be established
and maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders and Certificateholders, an Eligible Account (which initially
shall be maintained with the Indenture Trustee) known as the "CIT RV Trust
1997-A Collection Account" (the "Collection Account"), bearing an
additional designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders and Certificateholders and
owned by the Trust.
(ii) On or before the Closing Date, there shall be established
and maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders, an Eligible Account (which initially shall be maintained with
the Indenture Trustee) known as the "CIT RV Trust 1997-A Note Distribution
Account" (the "Note Distribution Account"), bearing an additional
designation clearly indicating that the funds deposited therein are held
for the benefit of the Noteholders and owned by the Trust.
(iii) On or before the Closing Date, pursuant to the Trust
Agreement, there shall be established and maintained in the name of the
Owner Trustee, for the benefit of the Certificateholders, an Eligible
Account (which initially shall be maintained with the Paying Agent of the
Owner Trustee) known as the "CIT RV Trust 1997-A Certificate Distribution
Account" (the "Certificate Distribution Account"), bearing an additional
designation clearly indicating that the funds deposited therein are held
for the benefit of the Certificateholders and owned by the Trust.
(iv) On or before the Closing Date, there shall be established
and maintained in the name of the Indenture Trustee an Eligible Account
(which initially shall be maintained with the Indenture Trustee), known as
the "CIT RV Trust 1997-A Reserve Account (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Lender, the Noteholders and Certificateholders and
owned by the Trust.
(b) The amounts on deposit in the accounts described in Sections
5.01(a) above shall, in the name of the Trust be invested solely in Eligible
Investments (which, in the case of the Reserve Account, may include obligations
of CIT so long as such obligations qualify as Eligible Investments), that mature
not later than one Business Day prior to the next succeeding Distribution Date,
in accordance with instructions provided to the Trustees by the Servicer in
writing (or, in the case of the Reserve Account, in accordance with instructions
provided to the Servicer by the Lender in writing). All Investment Earnings
from the investment of funds in the accounts described in Section 5.01(a) hereof
shall be deposited in the accounts in which such Investment Earnings were
earned; provided, however, Investment Earnings from the investment of funds in
-------- -------
the Reserve Account shall be retained in a separate interest-bearing subaccount
of the
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Reserve Account and investment expenses and realized losses, if any, on amounts
so invested shall be charged against undistributed Investment Earnings from the
Reserve Account. All Investment Earnings realized from any such investment of
funds in the Collection Account, Certificate Distribution Account and Note
Distribution Account (to the extent investment of such funds is permitted
hereunder) shall be for the benefit of the Servicer and may be withdrawn by the
Servicer on each Distribution Date pursuant to subsection 5.02(c)(ii) hereof.
All Investment Earnings realized from any such investment of funds in the
Reserve Account shall be distributed as provided in Section 5.06. An amount
equal to any net loss on investments in any Designated Account (other than the
Reserve Account) shall be deposited in the Collection Account by the Servicer
out of its own funds, without right to reimbursement, immediately as realized.
"Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage Corporation
(if then rated Aaa by Moody's), the Federal National Mortgage Association,
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America and which are non-callable;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustees or any Affiliate of
the Trustees, acting in their commercial capacity) incorporated under the
laws of the United States of America or any state thereof or the District
of Columbia (or any domestic branch or agency of a foreign bank) and
subject to supervision and examination by federal and/or state authorities,
so long as, at the time of such investment or contractual commitment
providing for such investment, the commercial paper or other short-term
debt obligations of such depository institution or trust company have been
rated at least P-1 or higher from Moody's and A-1+ from Standard & Poor's
(or, with respect to the investment of any amounts on deposit in the
Certificate Distribution Account, such Standard & Poor's rating shall be at
least A-1); or any other demand or time deposit or certificate of deposit
which is fully insured by the Federal Deposit Insurance Corporation and
which is rated at least P-1 by Moody's;
(iii) repurchase obligations with respect to any security
described in either clause (i) or (ii) above and entered into with any
institution whose commercial paper is at least rated P-1 from Moody's and
at least A-1+ by Standard & Poor's (or, with respect to the investment of
any amounts on deposit in the Certificate Distribution Account, such
Standard & Poor's rating shall be at least A-1);
(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America
or any State thereof which have a credit rating of at least A2 or P-1 from
Moody's and at least AAA from Standard & Poor's at the time of such
investment (or, with respect to the investment of any amounts on deposit in
the Certificate Distribution Account, such Standard & Poor's rating shall
be at least A);
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(v) commercial paper (which may be issued by CIT) having a rating
of at least P-1 from Moody's and at least A-1+ from Standard & Poor's (or,
with respect to the investment of any amounts on deposit in the Certificate
Distribution Account, such Standard & Poor's rating shall be at least A-1)
at the time of such investment; and
(vi) money market funds which are rated Aaa by Moody's and at
least AAAm or AAAm-G by Standard & Poor's, including funds which meet such
rating requirements for which the Trustees or an affiliate of the Trustees
serves as an investment advisor, administrator, shareholder servicing agent
and/or custodian or subcustodian, notwithstanding that (i) such Trustee or
an affiliate of such Trustee charges and collects fees and expenses from
such funds for services rendered, (ii) such Trustee charges and collects
fees and expenses for services rendered pursuant to this instrument, and
(iii) services performed for such funds and pursuant to this instrument may
converge at any time. (The Seller and the Servicer specifically authorize
such Trustee or an affiliate of such Trustee to charge and collect all fees
and expenses from such funds for services rendered to such funds, in
addition to any fees and expenses such Trustee may charge and collect for
services rendered pursuant to this instrument).
The Trustees may trade with themselves, each other, or with an
Affiliate on an arm's length basis in the purchase or sale of such Eligible
Investments. The Trustees shall not be liable for the selection of or for any
investment losses made at the written direction of the Servicer on any Eligible
Investments.
Section 5.02 Collections; Applications.
-------------------------
(a) Deposits to Collection Account. Subject to subsections 5.02(b)
------------------------------
and (c) hereof, the Servicer shall deposit in the Collection Account, no later
than two Business Days after the Closing Date, any amounts representing payments
received on the Contracts on or after the Cut-off Date through and including the
Closing Date. Subject to subsections 5.02(b) and (c) hereof, the Servicer shall
deposit in the Collection Account as promptly as practicable (not later than the
second Business Day) following the receipt thereof by the Servicer, all amounts
received in respect of the Contracts, including all loan payments from Obligors,
Net Liquidation Proceeds and Insurance Proceeds.
(b) Monthly Deposits to Collection Account. Notwithstanding anything
--------------------------------------
in this Agreement to the contrary, for so long as, and only so long as,
(i) the Servicer or the direct or indirect parent of the Servicer
shall have and maintain a short-term debt rating of at least A-1 by
Standard & Poor's and either a short-term debt rating of P-1 or a long-term
debt rating of at least A2 by Moody's, or
(ii) the Servicer obtains a letter of credit, surety bond or
insurance policy (the "Servicer Letter of Credit") under which demands for
payment may be made to secure timely remittance of monthly collections to
the Collection Account and the Trustees are provided with a letter from
each Rating Agency to the effect that the utilization of such alternative
remittance schedule and any amendment required to be
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made to this Agreement in connection therewith will not result in a
qualification, reduction or withdrawal of its then-current rating of the
Notes or Certificates,
the Servicer may make the deposits to the Collection Account specified in
subsection 5.02(a) hereof on a monthly basis, but not later than the Deposit
Date following the last day of the Due Period within which such payments were
processed by the Servicer, in an amount equal to the net amount of such deposits
and payments which would have been made to the Collection Account during such
Due Period but for the provisions of this subsection 5.02(b). In the event that
the Servicer is permitted to make remittances of collections to the Collection
Account pursuant to Section 5.02(b)(ii) hereof, this Agreement may be modified,
to the extent necessary, without the consent of any Securityholder. The
Servicer shall notify the Trustees if the Servicer no longer complies with the
requirements set forth in clause (i) or (ii) above.
(c) Amounts Not Required to be Deposited. The Servicer shall not be
------------------------------------
required to deposit in the Collection Account amounts relating to the Contracts
attributable to the following:
(i) amounts received with respect to each Contract (or property
acquired in respect thereof) which has been purchased by CITSF or the
Servicer pursuant to this Agreement,
(ii) Investment Earnings on funds deposited in the Collection
Account, the Certificate Distribution Account, the Note Distribution
Account and the Reserve Account,
(iii) amounts received in respect of Post Cut-off Date Insurance
Add-Ons,
(iv) any repossession profits on Liquidated Contracts,
(v) amounts received as liquidation proceeds, to the extent the
Servicer is entitled to reimbursement of Liquidation Expenses relating
thereto pursuant to Section 4.03 hereof, and
(vi) amounts to be reimbursed to the Servicer in respect of
Nonrecoverable Advances.
(d) Permitted Withdrawals from the Collection Account. The Indenture
-------------------------------------------------
Trustee shall, at the written direction of the Servicer, from time to time as
provided herein, make withdrawals from the Collection Account of amounts
deposited in said account pursuant to this Agreement that are attributable to
the Contracts for the following purposes:
(i) to make payments and distributions in the amounts and in the
manner provided for in Section 5.05 hereof;
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(ii) to pay to CITSF or the Servicer with respect to each
Contract or property acquired in respect thereof that has been purchased
pursuant to Section 3.02, 4.02, 4.07 or 11.01 hereof, all amounts received
thereon and not required to be distributed to Noteholders and
Certificateholders;
(iii) to pay to the Buyer with respect to each Contract or
property acquired in respect thereof that has been purchased pursuant to
Section 11.02 hereof, all amounts received thereon and not required to be
distributed to Noteholders and Certificateholders;
(iv) to withdraw any amount deposited in the Collection Account
that was not required to be deposited therein; and
(v) to reimburse the Servicer out of liquidation proceeds for
Liquidation Expenses incurred by it, to the extent such expenses have not
otherwise been reimbursed.
Since, in connection with withdrawals pursuant to clauses (ii), (iii) and (v) of
this subsection 5.02(d), CITSF's entitlement thereto is limited to collections
or other recoveries on the related Contract, the Servicer shall keep and
maintain separate accounting, on a Contract by Contract basis, for the purpose
of justifying any withdrawal from the Collection Account pursuant to such
clauses. The Servicer shall keep and maintain an accounting for the purpose of
justifying any withdrawal from the Collection Account pursuant to clause (iv) of
this subsection 5.02(d).
Section 5.03 Monthly Advances. With respect to each Contract as to
----------------
which there has been a Payment Shortfall during the related Due Period (other
than a Payment Shortfall arising from either (i) a Principal Prepayment in Full
of a Contract or (ii) a Contract which has been subject to a Relief Act
Reduction during such Due Period), the Servicer shall make a Monthly Advance in
the amount of such Payment Shortfall, but only to the extent the Servicer, in
its good faith judgment, expects to recover such Monthly Advance from subsequent
interest collections on such Contract made by or on behalf of the Obligors
thereunder, or from Net Liquidation Proceeds or Insurance Proceeds with respect
to the related Contract. The Servicer shall not be obligated to make any advance
to the Trust in respect of the principal component of scheduled payments on any
Contract which is not paid during the Due Period in which it is due.
The Servicer shall deposit any such Monthly Advance into the
Collection Account in next-day funds or immediately available funds no later
than 12:00 noon, New York time, on the related Deposit Date. The Servicer shall
be reimbursed for any such Monthly Advance from subsequent collections in
respect of interest on such Contract made by or on behalf of the Obligor, or
from Net Liquidation Proceeds or Insurance Proceeds with respect to such
Contract. If an unreimbursed Monthly Advance shall become a Nonrecoverable
Advance, the Servicer shall be reimbursed from collections on all the Contracts
in the Trust in the order of priority set forth in Section 5.05 hereof.
Section 5.04 Additional Deposits.
-------------------
CITSF, the Servicer or the Buyer, as the case may be, shall deposit
into the Collection Account the aggregate Purchase Price pursuant to
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Sections 3.02, 4.02, 4.07, 11.01 and 11.02 hereof, as applicable. All
remittances shall be made to the Collection Account, in next-day funds or
immediately available funds, no later than 12:00 noon, New York time, on the
related Deposit Date.
Section 5.05 Distributions.
-------------
(a) On or before the Determination Date preceding a Distribution Date,
the Servicer shall make a determination and inform the Indenture Trustee and the
Owner Trustee in writing (and the Paying Agent, if any, appointed pursuant to
the Trust Agreement or the Indenture) of the following amounts with respect to
the preceding Due Period: (i) the aggregate amount of collections on the
Contracts; (ii) the aggregate amount of Monthly Advances to be remitted by the
Servicer; (iii) the aggregate Purchase Price of Contracts to be purchased by
CITSF or the Servicer; (iv) the aggregate amount to be distributed as principal
and interest on the Notes on the related Distribution Date; (v) the aggregate
amount to be distributed as principal and interest on the Certificates on the
related Distribution Date; (vi) the Servicer Payment; (vii) the amounts required
to be withdrawn from the Reserve Account for such Distribution Date in
accordance with Sections 5.05(b) and 5.06 hereof; (viii) any amounts to be
deposited into the Reserve Account pursuant to Section 5.05(b)(ix) and 5.06
hereof and (ix) the aggregate amount of unreimbursed Monthly Advances to be
reimbursed to the Servicer.
(b) On each Distribution Date the Indenture Trustee, based on the
written instruction provided by the Servicer in subsection (a) above, shall
withdraw the Available Amount from the Collection Account and the Indenture
Trustee or the Paying Agent on behalf of the Indenture Trustee shall make the
following payments (to the extent sufficient funds are available therefor) in
the following order and priority:
(i) the Servicer Payment (to the extent not previously retained
by the Servicer) shall be paid to the Servicer;
(ii) on and prior to the Cross-over Date, the Class A
Noteholders' Interest Distribution Amount will be deposited into the Note
Distribution Account, for payment to the Class A Noteholders for amounts
due and unpaid on the Class A Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on each class of the Class A Notes for interest on such
Distribution Date;
(iii) on and prior to the Cross-over Date, the Class B
Noteholders' Interest Distribution Amount will be deposited into the Note
Distribution Account, for payment to the Class B Noteholders for amounts
due and unpaid on the Class B Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class B Notes for interest on such Distribution Date;
(iv) on and prior to the Cross-over Date, the Class A
Noteholders' Principal Distribution Amount will be deposited into the Note
Distribution Account, for payment to the Class A Noteholders in the
following order of priority: (a) to the principal balance of the Class A-1
Notes until the principal balance of the Class A-1 Notes is reduced to
zero; (b) to the principal balance of the Class A-2 Notes until the
principal
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balance of the Class A-2 Notes is reduced to zero; (c) to the
principal balance of the Class A-3 Notes until the principal balance of the
Class A-3 Notes is reduced to zero; (d) to the principal balance of the
Class A-4 Notes until the principal balance of the Class A-4 Notes is
reduced to zero; (e) to the principal balance of the Class A-5 Notes until
the principal balance of the Class A-5 Notes is reduced to zero; (e) to the
principal balance of the Class A-6 Notes until the principal balance of the
Class A-6 Notes is reduced to zero; and (f) to the principal balance of the
Class A-7 Notes until the principal balance of the Class A-7 Notes is
reduced to zero;
(v) on and prior to the Cross-over Date, the Class B Noteholders'
Principal Distribution Amount will be deposited into the Note Distribution
Account, for payment to the Class B Noteholders, until the principal
balance of the Class B Notes is reduced to zero;
(vi) the Certificateholders' Interest Distribution Amount will be
deposited into the Certificate Distribution Account, for payment to the
Certificateholders for interest on such Distribution Date;
(vii) on and after the Cross-over Date, the Certificateholders'
Principal Distribution Amount will be deposited into the Certificate
Distribution Account, for payment to the Certificateholders for principal;
(viii) if CITSF or one of its affiliates is the Servicer, the
Servicing Fee (including any unpaid Servicing Fees for past Distribution
Dates) shall (to the extent not previously paid to the Servicer) be paid to
the Servicer; and
(ix) the balance, if any, remaining after the payments on clauses
(i) through (viii) above shall be deposited in the Reserve Account.
(c) On each Distribution Date, the Indenture Trustee and the Owner
Trustee shall distribute all amounts in the Note Distribution Account and the
Certificate Distribution Account, respectively, to the Noteholders and the
Certificateholders, respectively, as provided in the Indenture and Trust
Agreement respectively.
Section 5.06 Reserve Account.
---------------
(a) The Indenture Trustee shall, on the Closing Date, deposit or cause
to be deposited in the Reserve Account by wire transfer of immediately available
funds the Initial Reserve Amount from the proceeds of the loan to be made on the
Closing Date by the Lender under the Loan Agreement. On each Distribution Date,
the Indenture Trustee shall deposit or cause to be deposited into the Reserve
Account by wire transfer of immediately available funds any amount it receives
pursuant to Section 5.05(b)(ix) of this Agreement, which amount shall be
designated as being for deposit in the Reserve Account. The Indenture Trustee
shall have the sole right to make withdrawals from the Reserve Account. Amounts
withdrawn from the Reserve Account and paid to the Securityholders, the Lender,
or the holder of the AO Interest, as provided herein and in the Loan Agreement,
shall not be required to be reimbursed to the
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Reserve Account by the Trustees, the Securityholders, the Lender, any Paying
Agent or any transferee thereof.
(b) In the event that the sum of the Certificateholders' Distribution
Amount and the Noteholders' Distribution Amount to be distributed to the
Securityholders for any Distribution Date exceeds the amount deposited in the
Certificate Distribution Account and Note Distribution Account pursuant to
Sections 5.05(b)(ii), 5.05(b)(iii), 5.05(b)(iv), 5.05(b)(v), 5.05(b)(vi) and
5.05(b)(vii) hereof on such Distribution Date, the Servicer shall instruct the
Indenture Trustee in writing to withdraw or cause to be withdrawn from the
Reserve Account on or before the related Deposit Date the lesser of the amount
of such excess and the Available Reserve Amount (the "Draw Amount"). The
Indenture Trustee shall deposit such amount, or cause such amount to be
deposited first, into the Note Distribution Account and second, to the extent of
any remaining Draw Amount, to the Certificate Distribution Account no later than
12:00 noon, New York City time, on such Deposit Date.
(c) On or before the Deposit Date immediately preceding the
Certificate Final Distribution Date, the Servicer shall instruct the Indenture
Trustee in writing to withdraw or cause to be withdrawn from the Reserve Account
an amount (the "Final Draw Amount") equal to the lesser of (i) the Certificate
Balance and the Certificateholders' Interest Distribution Amount on the
Certificate Final Distribution Date, after giving effect to distributions of the
Principal Distribution Amount to Certificateholders on the Certificate Final
Distribution Date pursuant to Section 5.05(b)(vi) and (vii) hereof and (ii) the
amount on deposit in the Reserve Account, excluding Investment Earnings with
respect thereto, after giving effect to any withdrawal from the Reserve Account
pursuant to clause (b) of this Section 5.06. The Indenture Trustee shall
deposit such amount, or cause such amount to be deposited, into the Certificate
Distribution Account no later than 12:00 noon, New York City time, on such
Deposit Date.
(d) Investment Earnings on deposit in the Reserve Account and the
Reserve Account Surplus on deposit in the Reserve Account shall be distributed
to the Lender to the extent required by Sections 3(a) and (b) of the Loan
Agreement.
(e) On each Distribution Date, the Indenture Trustee shall pay to the
holder of the AO Interest any amounts which remain on deposit in the Reserve
Account after making the payments contemplated by the foregoing subparagraphs
(b) and (d), and which are in excess of the Specified Reserve Amount (as
determined by the Servicer) for the following Distribution Date. On each
Distribution Date on and after the Loan is no longer outstanding, Investment
Earnings on deposit in the Reserve Account (after giving effect to all
distributions to the Lender on such Distribution Date) shall be distributed by
the Indenture Trustee to the holder of the AO Interest. On the Certificate
Final Distribution Date, the Indenture Trustee shall pay to the holder of the AO
Interest any amounts remaining on deposit in the Reserve Account after paying
the Final Draw Amount to the Certificateholders as contemplated by subparagraph
(c) above, and paying the outstanding principal and interest payable to the
Lender pursuant to Section 3 of the Loan Agreement.
(f) If at any time the Reserve Account ceases to be maintained as an
Eligible Account as required by Section 5.01(a) hereof, the Indenture Trustee
shall within 10 Business
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Days (or such longer period not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Reserve Account meeting the
conditions specified in Section 5.01(a) hereof and shall transfer any and all
cash and investments in the Reserve Account to such new Reserve Account.
(g) With respect to the Reserve Account Property:
(i) any Reserve Account Property that constitutes Physical Property
(and that is not either a United States Security Entitlement or a Security
Entitlement) shall be delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held by the Indenture
Trustee, pending maturity or disposition;
(ii) the Indenture Trustee shall maintain Control over any Reserve
Account Property that is a United States Security Entitlement or a Security
Entitlement, pending maturity or disposition; and
(iii) any Reserve Account Property that is an Uncertificated Security
(and that is not a United States Security Entitlement) shall be delivered to the
Indenture Trustee in accordance with paragraph (b) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity or
disposition.
The Indenture Trustee shall, at the expense of the Seller, take such
action as is required to maintain the Indenture Trustee's security interest in
any Reserve Account Property; provided, however, that the Indenture Trustee may
conclusively rely upon the written instructions of the Seller as to the method
by which the security interest of the Indenture Trustee may be perfected. The
Seller shall provide such instructions with respect to the method of perfection
of such security interest.
Section 5.07 Net Deposits. As an administrative convenience, the
------------
Servicer shall be permitted to make deposits of collections, Monthly Advances
and the aggregate Purchase Price of Contracts for, or with respect to, a Due
Period net of distributions to be made to the Servicer with respect to such Due
Period (including, without limitation, the Servicing Fee, reimbursement of
Nonrecoverable Advances and amounts to be deducted in the definition of
"Available Amount"). The Servicer, however, shall account to the Trustees and
the Securityholders as if all such deposits and distributions were made on an
aggregate basis for each type of payment or deposit.
Section 5.08 Statements to Securityholders.
-----------------------------
On each Distribution Date, the Servicer shall prepare and provide
to the Trustees, to be delivered on the Distribution Date to each
Securityholder, the Monthly Report which shall be in substantially the form of
Exhibit D hereto, setting forth for the related Due Period the following
information (with such additional information as the Servicer shall elect to
include therein):
(i) the amount of collections on the Contracts during the
immediately preceding Due Period;
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(ii) the Available Amount for payment of all amounts
distributable in respect of the Securities and the Servicer Payment;
(iii) the amount of the distribution allocable to principal of
each class of the Notes and to the Certificate Balance of the Certificates,
including any overdue principal;
(iv) the amount of the distribution allocable to interest on or
with respect to each class of Securities, including any overdue interest;
(v) the Pool Balance, the Note Pool Factors and the Certificate
Pool Factor as of the end of the related Due Period;
(vi) the Servicer Payment for such Distribution Date;
(vii) the amount of Monthly Advances, if any, during the
immediately preceding Due Period;
(viii) the amount, if any, withdrawn from the Reserve Account
and distributed to the Noteholders and the Certificateholders with respect
to such Distribution Date;
(ix) the Available Reserve Amount, after giving effect to any
deposit to or withdrawal from the Reserve Account with respect to such
Distribution Date, and such amount expressed as a percentage of the Pool
Balance;
(x) the aggregate principal balance of all Contracts which were
delinquent 30, 60, 90 and 180 days or more as of the last day of the
related Due Period;
(xi) the amount of investment earnings, net of losses and
investment expenses, on amounts on deposit in the Collection Account;
(xii) the aggregate principal balance of all Contracts which
became Liquidated Contracts during the related Due Period;
(xiii) the number and aggregate principal amount of Contracts
which were prepaid, in part or in whole, during the related Due Period;
(xiv) the aggregate outstanding principal balance of each class
of the Notes as of such Distribution Date after giving effect to any
distributions on such Distribution Date;
(xv) the Certificate Balance as of such Distribution Date after
giving effect to any distributions thereon and reductions thereto on such
Distribution Date;
(xvi) the amount, if any, by which the amount due to be
distributed to each class of Noteholders and Certificateholders exceeds the
actual amount distributed on
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the related Distribution Date to each class of the Noteholders and
Certificateholders, respectively;
(xvii) the Draw Amount, if any, and the Final Draw Amount (if
applicable) with respect to such Distribution Date;
(xviii) the Specified Reserve Amount; and
(xix) the amount of the surplus to be distributed to the Lender
and to the holder of the AO Interest after all payments have been made in
respect of the Securities and the Servicer Payment has been paid.
Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law (where applicable law
specifies such date), the Servicer shall furnish or cause to be furnished to
each Person who at any time during such calendar year was a Securityholder, and
received any payment thereon, a statement containing the relevant amounts
described above for such calendar year. Such obligation shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided to the Securityholders pursuant to any requirements of the Code as from
time to time in force.
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ARTICLE VI
[RESERVED]
----------
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ARTICLE VII
THE COMPANY
-----------
Section 7.01 Representations of Company.
--------------------------
The Company hereby makes the following representations as to itself on
which the Owner Trustee and the Indenture Trustee on behalf of the Trust shall
rely in accepting the Contracts in trust and authenticating the Certificates and
the Notes, respectively. The representations are made as of the execution and
delivery of this Agreement, and shall survive the sale of the Contracts to the
Trust.
(i) Organization and Good Standing. The Company is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Company or on the Certificates or the transactions
contemplated by this Agreement.
(ii) Authorization; Binding Obligations. The Company has the
----------------------------------
power and authority to make, execute, deliver and perform this Agreement
and all of the transactions contemplated under this Agreement, and has
taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(iii) No Consent Required. The Company is not required to
-------------------
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of
which so to obtain would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the Company or
on the Certificates or the transactions contemplated by this Agreement.
(iv) No Violations. The execution, delivery and performance of
-------------
this Agreement by the Company will not violate any provision of any
existing law or regulation or any order or decree of any court or the
Articles of Incorporation or Bylaws of the Company, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which the Company is a party or by which the Company may be bound.
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(v) Litigation. No litigation or administrative proceeding of or
----------
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Company have a material
adverse effect on the transactions contemplated by this Agreement.
Section 7.02 Merger or Consolidation of Company.
----------------------------------
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company, shall
be the successor of the Company hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Company shall promptly notify each
Rating Agency of any such merger to which it is a party and such merger shall
satisfy the Rating Agency Condition.
Section 7.03 Limitation on Liability of the Company and Others.
-------------------------------------------------
(a) Neither the Company nor any of the directors, officers, employees
or agents of the Company shall be under any liability to the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; notwithstanding anything herein to
the contrary, no party to this Agreement shall have any recourse against the
Company for any actions taken, or failed to be taken, by the Company.
(b) The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
(c) The Company shall not be under any obligation to appear in,
prosecute or defend any legal action which arises under this Agreement.
Section 7.04 The Company May Own Securities.
------------------------------
The Company and any Person controlling, controlled by, or under common
control with the Company may in its individual or any other capacity become the
owner or pledgee of Notes or Certificates with the same rights as it would have
if it were not the Company or an Affiliate thereof, except as otherwise provided
in the definition of "Noteholder" or "Certificateholder", respectively. Notes
and Certificates so owned by or pledged to the Company or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
the provisions of this Agreement, without preference, priority or distinction as
among all of the Notes and Certificates.
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Section 7.05 Indebtedness of and Sale of Assets by the Company.
-------------------------------------------------
(a) The Company will not incur any material indebtedness (other than
indebtedness which is contemporaneously repaid upon the issuance of securities
by the Company or by selling any assets in connection therewith to the extent
permitted by its Certificate of Incorporation) nor will it sell all or
substantially all of its assets, if either such action would result in the
downgrading by Moody's of any outstanding securities of the Company or any trust
or other entity of which the Company is the settlor or depositor, which
securities are then rated by Moody's; provided, however, nothing contained in
-------- -------
this Agreement shall prohibit the Company from issuing any securities or acting
as the settlor or depositor of any trust or other entity (or selling any assets
in connection therewith) to the extent permitted by its Certificate of
Incorporation.
(b) Prior to the issuance of any securities by the Company, the
Company shall give at least five days' prior written notice to Moody's with a
copy of the Prospectus or Preliminary Prospectus Supplement and, on the issuance
date, a copy of the agreements pertaining to such securities of the type in the
definition of Basic Documents.
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ARTICLE VIII
THE SERVICER; REPRESENTATIONS AND INDEMNITIES
---------------------------------------------
Section 8.01 Representations of CITSF.
------------------------
CITSF hereby makes the following representations on which the Owner
Trustee and the Indenture Trustee on behalf of the Trust shall rely in accepting
the Contracts in trust and authenticating the Certificates and the Notes,
respectively. The representations are made as of the execution and delivery of
this Agreement, and shall survive the sale of the Contracts to the Trust.
(i) Organization and Good Standing. CITSF is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged.
CITSF is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of CITSF or on the Certificates or the transactions contemplated
by the Agreement.
(ii) Authorization; Binding Obligations. CITSF has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of CITSF
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(iii) No Consent Required. CITSF is not required to obtain the
-------------------
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of
which so to obtain would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of CITSF or on the
Certificates or the transactions contemplated by this Agreement.
(iv) No Violations. The execution, delivery and performance of
-------------
this Agreement by CITSF will not violate any provision of any existing law
or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of CITSF, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which CITSF is a party
or by which CITSF may be bound.
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(v) Litigation. No litigation or administrative proceeding of or
----------
before any court, tribunal or governmental body is currently pending, or to
the knowledge of CITSF threatened, against CITSF or any of its properties
or with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of CITSF have a material adverse effect on
the transactions contemplated by this Agreement.
Section 8.02 Liability of Servicer, Indemnities.
----------------------------------
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Servicer under the Basic
Documents and shall have no other obligations or liabilities hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising from any failure by the Servicer
to comply with the provisions of this Agreement relating to Forced Placed
Insurance (including any violation by the Servicer of any applicable law in
connection with the force placement of insurance or the receipt of any
commissions related thereto) which materially and adversely affects the
Trust's interest in any Contract; provided, however, that nothing herein
shall be construed to imply that the Servicer is obligated to force place
insurance.
(ii) Subject to Section 8.04(a) hereof, the Servicer will defend
and indemnify the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from
(x) the negligent use or operation by the Servicer of a Financed Vehicle or
(y) any negligent action taken, or negligently failed to be taken, by the
Servicer with respect to any Financed Vehicle, to the extent such loss is
not reimbursed pursuant to any Insurance Policy, the Servicer's Errors and
Omission Policy or any fidelity bond.
(iii) The Servicer agrees to pay, and shall indemnify, defend,
and hold harmless the Owner Trustee, the Indenture Trustee (and its
officers, directors, employees and agents), the Trust, the
Certificateholders and the Noteholders from and against, any taxes that may
at any time be asserted with respect to the transfer of the Contracts to
the Trust, including, without limitation, any sales, gross receipts,
personal or real property, privilege or license taxes (but not including
any federal, state or other taxes arising out of the creation of the Trust
and the issuance of the Notes and Certificates or distributions with
respect thereto) and costs, expenses and reasonable counsel fees in
defending against the same.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Owner Trustee, the Indenture Trustee, the Trust, the Certificateholders and
the Noteholders from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out
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of, or was imposed upon such Persons, through the willful misfeasance,
negligence, or bad faith of the Servicer in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations
and duties under this Agreement.
(v) The Servicer shall indemnify, defend, and hold harmless from
and against, and pay to the Trustees all costs, expenses (including
reasonable legal fees and expenses), losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties herein contained in accordance with
the terms and conditions herein and in the Indenture and the Trust
Agreement, as the case may be, except to the extent that such cost,
expense, loss, claim, damage or liability: (a) shall be due to the willful
misfeasance, negligence or bad faith of such Trustee; (b) relates to any
tax other than the taxes with respect to which the Company shall be
required to indemnify such Trustee pursuant to this Agreement; (c) shall
arise from such Trustee's breach of any of its representations or
warranties set forth in the Trust Agreement or the Indenture, as
applicable; or (d) shall arise out of or be incurred in connection with the
acceptance or performance by such Trustee of the duties of successor
Servicer hereunder.
Indemnification under this Section 8.02 shall include reasonable fees
and expenses of counsel in any litigation appointed by the Servicer and
reasonably satisfactory to the indemnitee, provided that the Servicer shall only
be required to pay the fees and expenses of one counsel in any single litigation
(or related proceedings) for all indemnitees; provided, however, if in the
-------- -------
written opinion of counsel reasonably satisfactory to the Servicer, the
interests of an indemnitee and the Servicer conflict such that the Servicer and
such indemnitee may not both be represented by such counsel, upon ten days prior
written notice to the Servicer, such indemnitee may hire one other counsel and
the indemnification under this Section 8.02 shall also include the reasonable
fees and expenses of such other counsel. If the Servicer shall have made any
indemnity payments pursuant to this Section 8.02 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer without interest. The indemnities under this
Section 8.02 shall survive the resignation or removal of an indemnitee, the
resignation or termination of the Servicer for any costs, claims or expenses
arising prior to the date of such resignation or termination, or the termination
of the Trust Agreement and this Agreement.
Section 8.03 Merger or Consolidation of Servicer.
-----------------------------------
Any person into which the Servicer may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer (which Person assumes the obligations of the
Servicer), shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
--------
however, that the successor or surviving Person to the Servicer shall satisfy
- -------
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify each Rating Agency of any such merger to which it is a
party.
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Section 8.04 Limitation on Liability of Servicer and Others.
----------------------------------------------
(a) Neither the Servicer, nor any of the shareholders, Affiliates,
directors, officers, employees or agents of the Servicer shall be under any
liability to the Trust or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
-------- -------
shall not protect the Servicer, the Company or any such Person against any
liability which otherwise would be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason or reckless
disregard of obligations and duties hereunder.
(b) The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
(c) Except as arises from its duties as Servicer hereunder, the
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action which arises under this Agreement and which in its opinion may
involve it in any expenses or liability; provided, however, that the Servicer
-------- -------
and the Company may in its discretion undertake any such action which it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust payable from the Collection Account and the Servicer
and the Company shall be entitled to be reimbursed therefor out of the
Collection Account.
Section 8.05 Servicer Not To Resign.
----------------------
The Servicer shall not resign from its obligations and duties under
this Agreement except upon determination that the performance of its duties
shall no longer be permissible under applicable law, compliance with which could
not be realized without material adverse impact on the Servicer's financial
condition. Notice of any such determination permitting the resignation of the
Servicer shall be communicated to the Trustees and the Rating Agencies at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Section 9.02 hereof.
Section 8.06 Assignment of Servicing.
-----------------------
The Servicer may sell, transfer, assign or convey its rights as
Servicer to any Eligible Servicer, upon written notice to the Trustees and the
Rating Agencies, without the consent of the Securityholders or the Trustees,
provided that the Rating Agency Condition is satisfied.
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ARTICLE IX
EVENTS OF TERMINATION
---------------------
Section 9.01 Events of Termination.
---------------------
"Event of Termination" means the occurrence of any of the following:
--------------------
(a) Any failure by the Servicer to make any deposit into an account
required to be made hereunder which failure continues unremedied for a period of
five Business Days after the Servicer has become aware that such deposit was
required;
(b) Any failure by the Servicer duly to observe or perform in any
material respect any covenant or agreement in this Agreement (other than
pursuant to Section 9.01(a)) hereof, which materially and adversely affects the
rights of the Securityholders and which continues unremedied for 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Indenture Trustee, the
Owner Trustee or the Company or to the Servicer, the Company and the Trustees by
Holders of Notes or Certificates evidencing not less than 25% of the aggregate
outstanding principal amount of the Controlling Notes, or the outstanding
Certificate Balance, respectively; provided however, that if any such failure to
-------- -------
observe or perform a term, covenant or agreement relates solely to one or more
Contracts that have become Repurchased Contracts in accordance with Sections
3.02 and 4.07, then such failure to observe or perform shall not give rise to an
Event of Termination hereunder;
(c) Any assignment or delegation by the Servicer of its duties or
rights hereunder except as specifically permitted hereunder, or any attempt to
make such an assignment or delegation;
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
(e) The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
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(f) Any disqualification of the Servicer as an Eligible Servicer.
If an Event of Termination has occurred and is continuing, the
Indenture Trustee (or, if no Notes are outstanding, the Owner Trustee) may, and
at the written direction of Holders of Notes evidencing not less than a majority
of the aggregate outstanding principal amount of the Controlling Notes (or, if
no Notes are outstanding, by the Holders of Certificates evidencing not less
than a majority of the Certificate Balance) shall, unless prohibited by
applicable law, terminate all (but not less than all) of the rights and
obligations of the Servicer with respect to the Trust hereunder and in and to
the Contracts, and the proceeds thereof (such termination being herein called a
"Service Transfer"), whereupon (subject to applicable law) all authority and
power of the Servicer under this Agreement, whether with respect to the
Contracts, the Contract Files or otherwise, shall pass to and be vested in the
Indenture Trustee pursuant to and under this Section 9.01 (however, if no Notes
are outstanding, such authority shall pass to and be vested in the Owner Trustee
pursuant to and under this Section 9.01); and, without limitation, such Trustee
is authorized and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments
(including, without limitation, documents required to make such Trustee or a
successor Servicer the sole lienholder or legal title holder of record of each
Financed Vehicle), and to do any and all acts or things necessary or appropriate
to effect the purposes of such notice of termination. Each of CITSF and the
Servicer agrees to cooperate with such Trustee in effecting the termination of
the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to such Trustee for administration by it of all cash
amounts which shall at the time be held by the Servicer for deposit, or have
been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts and the execution of any documents required to make
such Trustee or a successor Servicer the sole lienholder or legal title holder
of record in respect of each Financed Vehicle. The Servicer shall be entitled
to receive any other amounts which are payable to the Servicer under this
Agreement (including amounts payable to it with respect to the period ending on
the date of the Service Transfer), at the time of the termination of its
activities as Servicer, to the extent that funds in the Collection Account are
available for the payment thereof without reducing the amount of distributions
that would be made to Holders of the Notes and Certificates (or, if funds are
not sufficient therefor at the time of such termination, on the first
Distribution Date on which funds are sufficient therefor). The Servicer shall
transfer to the successor Servicer (i) the Servicer's records relating to the
Contracts in such electronic form as the successor Servicer may reasonably
request and (ii) the Contracts and any of the Contract Files in the Servicer's
possession. The Servicer shall be responsible for the costs of such transfer.
Section 9.02 Indenture Trustee to Act; Appointment of Successor.
--------------------------------------------------
On and after the time the Servicer receives a notice of termination
pursuant to Section 9.01 hereof or a notice of determination pursuant to Section
8.05 hereof, the Indenture Trustee (or, if no Notes are outstanding, the Owner
Trustee) or any successor Servicer shall be the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof,
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and the Servicer shall be relieved of such responsibilities, duties and
liabilities arising after such Service Transfer; provided, however, that (i) the
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Indenture Trustee (or, if no Notes are outstanding, the Owner Trustee) or any
successor Servicer will not assume any obligations of CITSF pursuant to Section
3.02 hereof or be obligated to deposit any net loss on an investment directed by
a predecessor Servicer pursuant to Section 5.01(b) hereof, and (ii) the
Indenture Trustee (or, if no Notes are outstanding, the Owner Trustee) or any
successor Servicer shall not be liable for any acts or omissions of the Servicer
occurring prior to such Service Transfer or for any breach by CITSF of any of
its obligations contained herein or in any related document or agreement. The
Indenture Trustee and any successor Servicer shall have no responsibility for
failure of CITSF and any predecessor Servicer to deliver to the Indenture
Trustee or such successor Servicer any property or funds belonging to the Trust,
including but not limited to the funds, records, Contracts and Contract Files.
As compensation therefor, the Indenture Trustee shall, except as provided in
this Section 9.02, be entitled to such compensation as the Servicer would have
been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, the Indenture Trustee (or, if no Notes are
outstanding, the Owner Trustee) or any successor Servicer may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, an Eligible Servicer as
the successor to the Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Servicer hereunder. Pending
appointment of a successor to the Servicer hereunder, unless the Indenture
Trustee is prohibited by law from so acting, the Indenture Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Indenture Trustee (or, if no Notes are outstanding, the Owner
Trustee) may make such arrangements for the compensation of such successor out
of payments on Contracts as it and such successor shall agree; provided,
--------
however, that no such compensation shall, without the written consent of not
- -------
less than 66-2/3% of the principal amount of the Notes and Certificate Balance
of the Certificates, be in excess of the Servicing Fee calculated based on a
Servicing Fee Rate of 1.00%. The Indenture Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.
Section 9.03 Notification to Securityholders.
-------------------------------
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustees, the Lender (so long
as the Loan under the Loan Agreement is still outstanding) and the
Securityholders at their respective addresses appearing on the Certificate
Register and the Note Register and to each Rating Agency.
(b) Within 10 days following any termination or appointment of a
successor to the Servicer pursuant to this Article IX, the Trustees shall give
written notice thereof to the Lender (so long as the Loan under the Loan
Agreement is still outstanding) and the Certificateholders and Noteholders at
their respective addresses appearing on the Certificate Register and the Note
Register.
(c) The Indenture Trustee shall give written notice to each Rating
Agency at least 30 days prior to the date upon which any Eligible Servicer
(other than the Indenture
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Trustee) is to assume the responsibilities of Servicer pursuant to Section 9.02
hereof, naming such successor Servicer.
Section 9.04 Rights to Direct Trustees and Waiver of Events of
-------------------------------------------------
Termination.
-----------
Holders of Notes or Certificates evidencing not less than 25% of the
aggregate outstanding principal amount of the Controlling Notes or 25% of the
Certificate Balance, respectively, shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Indenture Trustee or the Owner Trustee, respectively, or exercising any trust or
power conferred on the Trustees; provided, however, that the Trustees shall have
-------- -------
the right to decline to follow any such direction which such Trustee (being
advised by counsel) determines that the action so directed may not lawfully be
taken, or if such Trustee in good faith shall, by a Responsible Officer or
Officers of such Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Noteholders or Certificateholders not parties to such direction;
provided further that nothing in this Agreement shall impair the right of the
Trustees to take any action deemed proper by such Trustee and which is not
inconsistent with such direction by the Noteholders or Certificateholders.
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal amount of the Controlling Notes (or, if all of the Notes
have been paid in full and the Indenture has been discharged in accordance with
its terms, Certificates evidencing not less than a majority of the Certificate
Balance) may, on behalf of the Noteholders and Certificateholders, waive any
past Event of Termination hereunder and its consequences (except a continuing
failure to make any required deposits to or payments from the Collection Account
and the other accounts contemplated herein in accordance with this Agreement,
which default cannot be waived without the consent of all Securityholders) and,
upon any such waiver, such Event of Termination shall cease to exist and shall
be deemed to have been cured for every purpose of this Agreement; but no such
waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon.
Section 9.05 Effect of Transfer.
------------------
(a) After the Service Transfer, the Indenture Trustee or successor
Servicer may notify the Obligors to make payments directly to the successor
Servicer that are due under the Contracts after the effective date of the
Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the successor Servicer shall have all of such
obligations, except that the replaced Servicer shall remain liable for any
liability of the replaced Servicer hereunder that was already accrued at the
time of the Service Transfer and except that the replaced Servicer will transmit
or cause to be transmitted directly to the successor Servicer for its own
account, promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the successor Servicer to collect them)
received as payments upon or otherwise in connection with the Contracts.
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(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities and other
agreements of the Servicer and CITSF) other than those relating to the
management, administration, servicing or collection of the Contracts; provided,
--------
however, that a replaced Servicer's indemnities hereunder shall not be
- -------
applicable to actions or omissions by the successor Servicer.
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ARTICLE X
[RESERVED]
----------
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ARTICLE XI
OPTIONAL PURCHASE AND AUCTION SALE
----------------------------------
Section 11.01 Optional Purchase of All Contracts.
----------------------------------
On any Distribution Date on which the Pool Balance as of the last day
of the related Due Period is 10% or less of the Initial Pool Balance, CITSF
shall have the option to purchase the Contracts (including the defaulted
Contracts), any Financed Vehicles in the Trust relating to defaulted Contracts
and all rights relating to the Contracts under all Insurance Policies. To
exercise such option, CITSF shall notify the Trustees and the Depository, if
any, in writing, no later than the Determination Date succeeding such Due
Period; provided, however, that CITSF shall not effect any such purchase if the
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long-term unsecured obligations of its parent are rated less than Baa3 by
Moody's or less than BBB by Standard & Poor's, unless the Trustees shall have
received an Opinion of Counsel acceptable to them that payment of the purchase
price to the Securityholders will not constitute a voidable preference or a
fraudulent transfer under the United States Bankruptcy Code. CITSF shall effect
such purchase by depositing, in accordance with Section 5.04 hereof, the
aggregate Purchase Price of the Contracts (less any other amounts deposited, or
to be deposited, by the Servicer in the Collection Account with respect to the
Contract pursuant to Section 5.02 hereof) plus the appraised value of any other
property held by the Trust and purchased by CITSF (less liquidation expenses) in
the Collection Account on the Deposit Date immediately succeeding such Due
Period; provided, however, in no event shall the amount so deposited, when added
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to the amounts on deposit in the Collection Account on such date and available
for distribution to Securityholders on the next Distribution Date, be less than
the amount required to pay all accrued and unpaid interest on the Notes, the
remaining principal balance of the Notes, accrued and unpaid interest on the
Certificates and the Certificate Balance, after giving effect to payment of the
Servicer Payment. The effective date of such purchase shall be the last day of
such Due Period.
Section 11.02 Mandatory Sale of all Contracts. In accordance with the
-------------------------------
procedures and schedule set forth in Exhibit E hereto (the "Auction
Procedures"), the Indenture Trustee (or, if the Notes have been paid in full and
the Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall, at the expense of the Servicer, conduct an auction (the
"Auction") of the Contracts remaining in the Trust (such Contracts hereinafter
referred to as the "Auction Property") in order to effect a termination of the
Trust pursuant to Section 7.1 of the Trust Agreement on the second Distribution
Date succeeding the related Due Period on which the Pool Balance is 5% or less
of the Initial Pool Balance. Such Auction shall be conducted within 10 days
following the first Distribution Date on which the Pool Balance as of the last
day of the related Due Period is 5% or less of the Initial Pool Balance. CITSF
and the Company may, but shall not be required to, bid at the Auction. Such
Trustee, at the expense of the Servicer, may hire an agent to conduct the
Auction. Such Trustee shall sell and transfer the Auction Property to the
highest bidder therefor at the Auction provided that:
(i) the Auction has been conducted in accordance with the Auction
Procedures;
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(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for recreation vehicle retail installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing that
at least two of such bidders (including the winning bidder) are
participants in the market for recreation vehicle retail installment sale
contracts willing and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not
less than the aggregate fair market value of the Auction Property (as
determined by such Trustee in its sole discretion);
(v) any bid submitted by CITSF, the Company or any affiliate of
either of them shall reasonably represent the fair market value of the
Auction Property, as independently verified and represented in writing by a
qualified independent third party evaluator (which may include the Advisor
or an investment banking firm) selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of
the Auction Property which will be at least equal to the sum of (A) the
greater of (1) the aggregate Purchase Price for the Contracts (including
defaulted Contracts), plus the appraised value of any other property held
by the Trust (less liquidation expenses), or (2) an amount that, when added
to amounts on deposit in the Collection Account and available for
distribution to Securityholders on the second Distribution Date following
the consummation of such sale (the "Liquidation Distribution Date"), would
result in proceeds sufficient to distribute to Securityholders the amounts
of interest due to the Securityholders for such Distribution Date and any
unpaid interest payable to the Securityholders with respect to one or more
prior Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the Servicer Payment and, unless the
Servicer agrees to exclude it from the minimum bid requirement, if CITSF or
any affiliate is the Servicer, the Servicing Fee (including any unpaid
Servicing Fees).
Provided that all of the conditions set forth in clauses (i) through
(vi) have been met, such Trustee shall sell and transfer the Auction Property,
without representation, warranty or recourse, to such highest bidder in
accordance with and upon completion of the Auction Procedures. Such Trustee
shall deposit the purchase price for the Auction Property in the Collection
Account at least one Business Day prior to such second succeeding Distribution
Date. In addition, the Auction must stipulate that the Servicer be retained to
service the Contracts on terms substantially similar to those in the Agreement.
In the event that any of such conditions are not met or such highest bidder
fails or refuses to comply with any of the Auction Procedures, such Trustee
shall decline to consummate such sale and transfer. In the event such sale and
transfer is not consummated in accordance with the foregoing, however, such
Trustee may from
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time to time in the future, but shall not under any further obligation to,
solicit bids for sale of the assets of the Trust upon the same terms and
conditions as set forth above.
If any of the foregoing conditions are not met, such Trustee shall
decline to consummate such sale and shall not be under any obligation to solicit
any further bids or otherwise negotiate any further sale of Contracts remaining
in the Trust. In such event, however, such Trustee may from time to time solicit
bids in the future for the purchase of such Contracts pursuant to this Section
11.02.
If applicable, the Indenture Trustee shall provide notice to the Owner
Trustee of the termination of the Trust pursuant to this Section 11.02 as soon
as practicable upon the consummation of the mandatory sale of the Contracts
pursuant to this Section 11.02.
Section 11.03 Contract Repurchase Procedures.
------------------------------
Promptly after any repurchase of a Contract by CITSF referred to in
Section 3.02 hereof, or any purchase of a Contract by CITSF referred to in
Section 11.01 hereof, or any purchase of a Contract by the Servicer pursuant to
Section 4.02 or 4.07 hereof, or any purchase of a Contract by a Person pursuant
to Section 11.02 hereof, the Owner Trustee shall execute such documents as are
presented to it by CITSF, the Servicer or such Person, as applicable (the
"Buyer"), and are reasonably necessary to convey the Repurchased Contract to the
Buyer, and transfer all right, title and interest in the Contract and the
Related Contract Assets (including any payments in respect of the Contract or
the related Financed Vehicle received after the last day of the Due Period
immediately preceding the Deposit Date on which such Buyer paid the Purchase
Price for such Contract) to such Buyer.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
Section 12.01 Amendment. This Agreement may be amended in writing
---------
by the Company, the Servicer and the Owner Trustee and the Indenture Trustee
without prior notice to or the consent of any of the
Securityholders, and in the case of clauses (v) and (vi), upon
satisfaction of the Rating Agency Condition, (i) to correct
manifest error or cure any ambiguity, (ii) to correct or supplement
any provisions herein or therein which may be inconsistent with any
other provisions herein or therein, as the case may be, (iii) to
add or amend any provisions as requested by Moody's or Standard &
Poor's in order to maintain or improve any rating of the Notes or
Certificates (it being understood that, after the Closing Date,
neither the Owner Trustee, the Indenture Trustee, the Company nor
CITSF is obligated to maintain or improve such rating); (iv) to add
to the covenants, restrictions or obligations of the Company, the
Servicer, the Owner Trustee or the Indenture Trustee or to provide
for the delivery of or substitution of a Servicer Letter of Credit;
(v) to evidence and provide for the acceptance of the appointment
of a successor trustee with respect to the Owner Trust Estate and
add to or change any provisions as shall be necessary to facilitate
the administration of the trusts under the Trust Agreement by more
than one trustee pursuant to Article VI of the Trust Agreement (vi)
to add, change or amend any provision to maintain the trust as an
entity not subject to federal income tax; or (vii) to add, change
or eliminate any other provisions, provided that an amendment
pursuant to this clause (vii), shall not, as evidenced by an
Opinion of Counsel for the Servicer or the Company, adversely
affect in any material respect the interests of the Trust, any
Noteholder or any Certificateholder.
This Agreement may also be amended in writing from time to time by the
Company, the Servicer and the Owner Trustee and the Indenture Trustee, with the
consent of Holders of Certificates evidencing not less than a majority of the
Certificate Balance and the consent of Holders of Notes evidencing not less than
a majority of the aggregate outstanding principal amount of the Notes, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Certificateholders or Noteholders, respectively; provided, however, that no
-------- -------
such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that shall be required to be
made on any Certificate or Note, respectively, the Contract Rate, the Pass-
Through Rate or the Interest Rates or (ii) reduce the aforesaid percentage
requirement to consent to any such amendment, without the consent of the Holders
of all Certificates and Notes then outstanding.
Promptly after the execution of any amendment or consent pursuant to
this Section, the Owner Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and each Noteholder (but
only if such amendment is pursuant to the second paragraph of this Section
12.01) and (so long as the Loan under the Loan Agreement is still outstanding)
the Lender and, in all cases, to each Rating Agency, which notification will be
prepared by the Servicer and delivered to such Trustee.
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It shall not be necessary for the consent of the Certificateholders or
the Noteholders pursuant to this Section 12.01 to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Certificateholders
or the Noteholders, as the case may be, shall be subject to such reasonable
requirements as such Trustee may prescribe.
Such Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Trustee's own rights, duties or immunities under
this Agreement or otherwise. However, no such amendment shall be permitted
without the consent of the Trustee whose rights, duties or immunities are being
modified.
In connection with any amendment pursuant to this Section 12.01, each
of the Trustees shall be entitled to receive an Opinion of Counsel to the
Servicer to the effect that such amendment is authorized or permitted by this
Agreement.
Upon the execution of any amendment or consent pursuant to this
Section 12.01, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Holder of Securities theretofore or thereafter issued hereunder shall
be bound thereby.
Section 12.02 Protection of Title to Trust. (a) On or prior to the
----------------------------
Closing Date, the Servicer shall file the following fully executed UCC-1
financing statements:
(i) UCC-1 financing statement executed by CITCF-NY as debtor,
naming CITSF as secured party and filed in New Jersey and Oklahoma City to
perfect the sale from CITCF-NY to CITSF;
(ii) UCC-1 financing statement executed by CITSF as debtor,
naming the Company as secured party and filed in New Jersey and Oklahoma
City to perfect the sale from CITSF to the Company;
(iii) UCC-1 financing statement executed by the Company as
debtor, naming the Owner Trustee as secured party and filed in New Jersey
and Oklahoma City to perfect the sale from the Company to the Owner
Trustee; and
(iv) UCC-1 financing statement executed by the Owner Trustee as
debtor, naming the Indenture Trustee as secured party and filed in New
Jersey, Oklahoma City, and Delaware to perfect the security interest
granted in the Collateral by the Indenture.
The Servicer shall cause to be filed all necessary continuation
statements of the UCC-1 financing statements referred to in the previous
sentence on which it is the debtor.
From time to time the Servicer shall, subject to the following
sentence, take and cause to be taken such actions and execute such documents as
are necessary to perfect and
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protect the Noteholders' and Certificateholders' interests in the Contracts and
their proceeds against all other persons, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title.
The Servicer will maintain the Trust's perfected first priority
security interest in each Financed Vehicle so long as the related Contract is
the property of the Trust; provided, however, that because of the expense and
-------- -------
administrative inconvenience involved, the Servicer will not be required to
amend any certificate of title to name CITSF, the Company or the Trust as the
lienholder, and neither the Servicer nor the Company will be required to deliver
any certificate of title to the Trust or note thereon the Trust's interest.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Noteholders' and Certificateholders' right, title and
interest in and to the Contracts (including, without limitation, the security
interest in the Financed Vehicles granted thereby).
(b) During the term of this Agreement, neither the Company nor CITSF
shall change its name, identity or structure or relocate its chief executive
office without first giving notice thereof to the Trustees and the Servicer. In
addition, following any such change in the name, identity, structure or location
of the chief executive office of the Company or CITSF, the Company or CITSF, as
appropriate, shall give written notice thereof to each Rating Agency.
If any change in the Company's, the Servicer's or CITSF's name,
identity or structure or the relocation of its chief executive office would make
any financing or continuation statement or notice of lien filed under this
Agreement seriously misleading within the meaning of applicable provisions of
the UCC or any title statute or would cause any such financing or continuation
statement or notice of lien to become unperfected (whether immediately or with
lapse of time), the Servicer no later than five days after the effective date of
such change, shall (subject to the proviso in the penultimate paragraph of
Section 12.02(a) hereof) file, or cause to be filed, such amendments or
financing statements as may be required to preserve, perfect and protect the
Noteholders' and Certificateholders' interests in the Contracts and proceeds
thereof and in the Financed Vehicles.
(c) During the term of this Agreement, the Company and CITSF will
maintain their respective chief executive offices in one of the states of the
United States.
(d) The Servicer shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Contract and the amounts
from time to time deposited in the Collection Account in respect of such
Contract.
(e) Each of the Company and the Servicer shall maintain its computer
systems (if any) so that, from and after the time of sale under this Agreement
of the Contracts to the
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Trust, the master computer records of the Company and the Servicer (including
archives) that shall refer to a Contract indicate clearly that such Contract is
owned by the Trust. Indication of the Trust's ownership of a Contract shall be
deleted from or modified on the Company's and the Servicer's computer systems
when, and only when, the Contract shall have been paid in full, repurchased or
assigned pursuant hereto.
(f) At all times during the term hereof, the Servicer shall afford the
Trust and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trust or its authorized
agents. The examination referred to in this Section 12.02(f) shall be conducted
in a manner which does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination the Trust may make, the Trust or its authorized agents
may, using generally accepted audit procedures, verify the status of each
Contract and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article V hereof and
compliance with the standards represented to exist as to each Contract in this
Agreement. Nothing in this Section 12.02(f) or Section 3.04(b) hereof shall
affect the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section 12.02(f) or Section 3.04(b) hereof.
(g) Upon request, the Servicer shall furnish to the Trust, within five
Business Days, a list of all Contracts by contract number and name of Obligor as
of the end of the most recent Due Period held as part of the Trust, together
with a reconciliation of such list to the List of Contracts and to each of the
Servicer Certificates indicating removal of Contracts from the Trust.
At all times during the term hereof, the Servicer shall keep available
a copy of the List of Contracts at its principal executive office for inspection
by Securityholders.
(h) The Servicer shall, to the extent required by applicable law,
cause the Notes and Certificates to be registered with the Securities and
Exchange Commission pursuant to Section 12(b) or Section 12(g) of the Securities
Exchange Act of 1934 within the time periods specified in such sections.
Section 12.03 Limitation on Rights of Securityholders.
---------------------------------------
The death or incapacity of any Securityholder shall not operate to
terminate this Agreement or the Trust, nor entitle the Securityholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
No Securityholder shall have any right to vote (except as provided in
Section 9.04 hereof and this Section 12.03) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the parties to
this Agreement, nor shall anything set forth in
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<PAGE>
this Agreement or contained in the terms of the Securities, be construed so as
to constitute the Holders as partners or members of an association; nor shall
any Securityholder be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement.
No Securityholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action, or proceeding
in equity or at law upon or under or with respect to this Agreement, except as
provided in Section 9.04 and this Section 12.03; no one or more Holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
provided in this Agreement and for the equal, ratable and common benefit of all
Securityholders. For the protection and enforcement of the provisions of this
Section 12.03, each Securityholder and the Trust shall be entitled to such
relief as can be given either at law or in equity.
Section 12.04 Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the laws of the State of New York,
without regard to its conflict-of-laws provisions.
Section 12.05 Notices. All communications and notices pursuant
-------
hereto to the Company, the Servicer, Moody's and Standard & Poor's shall be in
writing and delivered or mailed to it at the appropriate following address:
If to the Company:
The CIT Group Securitization Corporation II
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
If to the Servicer or to the Lender:
The CIT Group/Sales Financing, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
If to Standard & Poor's:
Standard & Poor's Ratings Service
26 Broadway
New York, New York 10004
Attention: ABS Group/Market Surveillance
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<PAGE>
If to Moody's:
Moody's Investors Service Inc.
99 Church Street
New York, New York 10007
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
or a Noteholder shall be in writing and delivered or mailed at the address shown
in the Certificate Register or Note Register, respectively.
All communications and notices required hereunder to be given to the
Owner Trustee shall be sent to First Omni Bank, N.A. at 499 Mitchell Street,
Mail Stop 101-591, Millsboro, DE 19966, Attention: Corporate Trust Department,
and to the Indenture Trustee shall be sent to Harris Trust and Savings Bank, 311
West Monroe Street, 12th Floor, Chicago, IL 60606, Attention: Indenture Trust
Administration.
Section 12.06 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates and Notes or the rights of the Holders thereof.
Section 12.07 Submission to Jurisdiction; Venue. The parties hereto
---------------------------------
with respect to any action or claim brought against or by the Trust submit to
jurisdiction in the state or federal courts in New York, New York, and agree to
New York, New York as the venue for any such claim or action.
Section 12.08 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 12.09 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein .
Section 12.10 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of
November 1, 1997.
THE CIT GROUP/SALES FINANCING, INC.
By: /s/ Frank Garcia
--------------------------------------
Name: Frank Garcia
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Frank Garcia
--------------------------------------
Name: Frank Garcia
Title: Vice President
CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but solely
as Owner Trustee on behalf of the Trust
By: /s/ David L. Williams
--------------------------------------
Name: David L. Williams
Title: Vice President
Acknowledged and Accepted:
HARRIS TRUST AND SAVINGS BANK
not in its individual capacity but
solely as Indenture Trustee,
By: /s/ E. Kay Liederman
--------------------------------------
Name: E. Kay Liederman
Title: Vice President
-81-
<PAGE>
EXHIBIT A
---------
LIST OF CONTRACTS
-----------------
<PAGE>
EXHIBIT B
---------
FORM OF OWNER TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
First Omni Bank, N.A., a national banking association formed under the
laws of the United States, acting as Owner Trustee (the "Owner Trustee") of the
Trust created pursuant to the Trust Agreement, dated as of November 1, 1997,
between The CIT Group Securitization Corporation II (the "Company") and the
Owner Trustee, to the best of its knowledge acknowledges pursuant to the Sale
and Servicing Agreement dated as of November 1, 1997 among the Company, The CIT
Group/Sales Financing, Inc. and the CIT RV Trust 1997-A (the "Agreement"), that
the Owner Trustee has received, and holds in trust thereunder the following
through the Servicer as custodian: (i) all the right, title and interest of the
Company in and to the Contracts and all the rights, benefits, and obligations
arising from and in connection with each Contract, (ii) an assignment of the
security interests in the Financed Vehicles granted by the Obligors pursuant to
the Contracts, (iii) all payments received by the Company on or with respect to
the Contracts on or after the Cut-off Date (exclusive of payments with respect
to Post Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any
Financed Vehicle (including any right to receive future Net Liquidation
Proceeds) that secures the Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Company to proceeds
of Insurance Policies covering the Obligors and the Contracts, (vi) the proceeds
from any Servicer's Errors and Omissions Protection Policy, any fidelity bond
and any blanket physical damage policy, to the extent such proceeds relate to
any Financed Vehicle, (vii) all rights of recourse against any cosigner or under
any personal guarantee with respect to the Contracts (other than any right as
against a Dealer under a Dealer Agreement), (viii) all proceeds in any way
derived from any of the foregoing items, (ix) all documents contained or
required to be contained in the Contract Files relating to the Contracts and (x)
the Collection Account. The Owner Trustee shall issue to, or upon the written
order of, the Company Certificates representing ownership of a beneficial
interest in 100% of the Trust and Notes representing obligations of the Trust.
Capitalized terms used herein have the meanings given them in the Agreement.
<PAGE>
IN WITNESS WHEREOF, First Omni Bank, N.A., as Owner Trustee, has
caused this acknowledgment to be executed by its duly authorized officer as of
this ___ day of ________, 1997.
First Omni Bank, N.A., not in its individual
capacity but solely
as Owner Trustee
By:
--------------------------------------
Name:
Title:
B-2
<PAGE>
EXHIBIT C
---------
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of The CIT
Group/Sales Financing, Inc., a corporation organized under the laws of Delaware
("CITSF"), and that as such he is duly authorized to execute and deliver this
certificate on behalf of CITSF pursuant to Section 4.09 of the Sale and
Servicing Agreement, dated as of November 1, 1997 (the "Agreement"), among
CITSF, The CIT Group Securitization Corporation II and CIT RV Trust 1997-A (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Monthly Report for the period from _________ to _______
attached to this certificate is complete and accurate in accordance with the
requirements of Sections 4.09 and 5.08 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred. [If an Event of Termination has occurred, such Event of Termination
shall be specified and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ____
day of _____, 199_.
THE CIT GROUP/SALES FINANCING, INC.
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT D
---------
MONTHLY REPORT
<PAGE>
EXHIBIT E
---------
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 11.02 of the Sale and
Servicing Agreement (the "Agreement"), dated as of November 1, 1997, between The
CIT Group Securitization Corporation II, the CIT Group/Sales Financing, Inc. and
the CIT RV Trust 1997-A. Capitalized terms used herein that are not otherwise
defined shall have the meanings described thereto in the Agreement. All
references herein to "Trustee" shall be references to Harris Trust and Savings
Bank, as Indenture Trustee, pursuant to an Indenture, dated as of November 1,
1997, between the Owner Trustee and the Indenture Trustee. However, if the
Notes have been paid in full, and the Indenture has been discharged in
accordance with its terms, all references herein to "Trustee" shall be
references to the Owner Trustee.
I. Pre-Auction Process
-------------------
(a) Upon receiving notice of the Auction Date, the Advisor will initiate
its general Auction procedures consisting of the following: (i) with
the assistance of the Servicer, prepare a general solicitation package
along with a confidentiality agreement; (ii) derive a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the Trustee; and (vi) notify the
Servicer of all potential bidders and anticipated timetable.
(b) The general solicitation package will include: (i) the prospectus from
the public offering of the Notes and Certificates; (ii) a copy of all
monthly servicing reports or a copy of all annual servicing reports
and the prior year's monthly servicing reports; (iii) a form of a
Purchase Agreement and Sale and Servicing Agreement; (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 11.02 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Scheduled Principal Balance
as of the related Distribution Date reflecting the same data
attributes used to create the tables for the prospectus supplement
dated November 20, 1997 and the accompanying prospectus dated October
29, 1997 relating to the public offering of the Notes and
Certificates.
(c) The Trustee, with the assistance of the Servicer and the Advisor, will
maintain an auction package beginning at the time of closing of the
transaction, which will contain terms (i)-(iii) listed in the
preceding paragraph. If the Advisor is unable to perform its role as
advisor to the Trustee, the Servicer acting in its capacity under the
Agreement will select a successor Advisor and inform the Trustee of
its actions.
<PAGE>
(d) The Advisor will send solicitation packages to all bidders at least 15
business days before the Auction Date. Bidders will be required to
submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 business days
before the Auction Date. The Servicer and the Advisor will be
required to satisfy all relevant questions at least five Business Days
prior to the Auction Date and distribute the questions and answers to
all bidders.
II. Auction Process
---------------
(a) The Advisor will be allowed to bid in the Auction, but will not be
required to do so.
(b) The Servicer will also be allowed to bid in the Auction if it deems
appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the offices
of the Trustee by 1:00 p.m. New York City time, with the winning
bidder to be notified by 2:00 p.m. New York City time. All acceptable
bids (as described in Section 11.02 of the Agreement) will be due on a
conforming basis on the bid sheet contained in the solicitation
package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for recreation vehicle retail installment
sale contract willing and able to purchase the Auction Property, the
Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Balance will be required to be wired to
the Trustee upon acceptance of the bid. This deposit, along with any
interest income attributable to it, will be credited to the purchase
price but will not be refundable. The Trustee will establish a
separate account for the acceptance of the good faith deposit, until
such time as the account is fully funded and all monies are
transferred into the Collection Account, such time not to exceed one
Business Day before the related Distribution Date (as described
above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Purchase Agreement, Sale and Servicing Agreement and Servicer's
Representations and Warranties (which shall be substantially identical
to the representations and warranties set forth in Section 8.01 of the
Agreement).
(g) The Advisor will provide to the Trustee a letter concluding whether or
not the winning bid is a fair market value bid. The Advisor will also
provide such letter if it is the winning bidder. In the case where
the Advisor or the Servicer is the winning bidder it will in its
letter provide for market comparable and valuations.
E-2
<PAGE>
(h) The Auction will stipulate that the Servicer be retained to service
the Contracts sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
E-3
<PAGE>
EXHIBIT F
---------
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF OFFICER
The undersigned certifies that the undersigned is the
____________________ of The CIT Group/Sales Financing, Inc., a corporation
organized under the laws of Delaware ("CITSF"), and that as such is duly
authorized to execute and deliver this certificate on behalf of CITSF in
connection with the Sale and Servicing Agreement, dated as of November 1, 1997
(the "Agreement"), among CITSF, The CIT Group Securitization Corporation II and
the CIT RV Trust 1997-A (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further
certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of
the Articles of Incorporation of CITSF, together with all amendments
thereto as in effect on the date hereof;
(ii) attached hereto as Exhibit II is a true and correct copy of the
By-Laws of CITSF, as amended, as in effect on the date hereof;
(iii) the representations and warranties of CITSF contained in
Sections 8.01 and 3.01C of the Agreement are true and correct on and as of the
date hereof and, to the best of his knowledge, the representations and
warranties of CITSF contained in Sections 3.01A and 3.01B of the Agreement are
true and correct on and as of the date hereof;
(iv) no event with respect to CITSF has occurred and is continuing
which would constitute an Event of Termination or an event that, with notice or
lapse of time or both, would become an Event of Termination under the Agreement;
and
(v) each of the agreements and conditions of CITSF to be performed
on or before the date hereof pursuant to the Agreement have been performed in
all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this __ day
of _______________, 1996.
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT 10.1
PURCHASE AGREEMENT
This Purchase Agreement dated as of November 1, 1997 (the "Agreement"), is
between THE CIT GROUP SECURITIZATION CORPORATION II, as purchaser (the
"Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller (the "Seller").
Subject to the terms hereof, the Seller agrees to sell, and the Purchaser
agrees to purchase, the recreation vehicle simple interest retail installment
sale contracts and direct loans set forth on Exhibit A (collectively, the
"Contracts"), having an aggregate outstanding principal balance as of November
1, 1997 (the "Cut-off Date"), of approximately $564,122,864.
It is the intention of the Seller and the Purchaser that the Purchaser
shall sell the Contracts to the CIT RV Trust 1997-A and shall enter into a Sale
and Servicing Agreement, dated as of the date hereof, with the CIT RV Trust
1997-A and the Seller, pursuant to which the sale of 6.800% Asset-Backed
Certificates (the "Certificates") and the Class A-1 5.800% Asset-Backed Notes,
the Class A-2 5.985% Asset-Backed Notes, the Class A-3 6.018% Asset-Backed
Notes, the Class A-4 6.200% Asset-Backed Notes, the Class A-5 6.250% Asset-
Backed Notes, the Class A-6 6.350% Asset-Backed Notes and the Class A-7 6.400%
Notes (collectively, the "Class A Notes") and the Class B 6.450% Asset-Backed
Notes (the "Class B Notes" and, together with the Class A Notes, the "Notes"
and, together with the Certificates, the "Securities"), will be issued by the
Trust.
The Purchaser and the Seller wish to prescribe the terms and conditions of
the purchase by the Purchaser of the Contracts and the servicing and
administration of the Contracts.
In consideration of the premises and the mutual agreements hereinafter set
forth, the Purchaser and the Seller agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in this
-----------
Agreement shall have the respective meanings assigned to them in the Sale and
Servicing Agreement. All references in this Purchase Agreement to Articles,
Sections, subsections and exhibits are to the same contained in or attached to
this Purchase Agreement unless otherwise specified.
<PAGE>
ARTICLE II
SALE AND CONVEYANCE OF CONTRACTS;
CONTRACT FILES
SECTION 2.01. Sale and Conveyance of Contracts. On the Closing Date,
--------------------------------
subject to the terms and conditions hereof, the Seller shall and by execution of
this Agreement 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
Contracts and all the rights, benefits, and obligations arising from and in
connection with each Contract, (ii) assignments of the security interests in the
Financed Vehicles granted by the Obligors pursuant to the Contracts, (iii) all
payments received by the Seller on or with respect to the Contracts on or after
the Cut-off Date (exclusive of payments with respect to Post Cut-off Date
Insurance Add-Ons), (iv) the interest of the Seller in any Financed Vehicle
(including any right to receive future Net Liquidation Proceeds) that secures
the Contracts and that shall have been repossessed by the Servicer by or on
behalf of the Trust; (v) all rights of the Seller to proceeds of Insurance
Policies covering the Obligors and the Contracts, (vi) the proceeds from any
Servicer's Errors and Omissions Protection Policy, any fidelity bond and any
blanket physical damage policy, to the extent such proceeds relate to any
Financed Vehicle, (vii) all rights of recourse against any cosigner or under any
personal guarantee with respect to the Contracts (other than any right as
against a Dealer under a Dealer Agreement), (viii) all amounts held for the
Trust in the Collection Account, (ix) all amounts held for the Trust in the Pre-
Funding Account, (x) all proceeds in any way derived from any of the foregoing
items, and (xi) all documents contained or required to be contained in the
Contract Files relating to the Contracts. The parties intend and agree that the
conveyance of the Seller's right, title and interest in and to the Contracts
pursuant to this Agreement shall constitute an absolute sale.
The Seller hereby declares and covenants that it shall at no time have
any legal, equitable or beneficial interest in, or any right, including without
limitation any reversionary or offset right, to the Collection Account and the
Reserve Account, and that, in the event it receives any of the same, it shall
hold same in trust for the benefit of the Trust on behalf of the Securityholders
and shall immediately endorse over to the Trust any such amount it receives.
SECTION 2.02. Purchase Price; Payments on the Contracts.
-----------------------------------------
(a) The purchase price for the Contracts shall be an amount equal to
$564,122,864. 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 Contracts received by the Seller that belong to
the Purchaser under the terms of this Agreement.
2
<PAGE>
SECTION 2.03. Conditions to Sale of Contracts. The Purchaser's
-------------------------------
obligations hereunder are subject to the following conditions:
(a) The Purchaser shall have received (i) the Sale and Servicing Agreement
executed by all the parties thereto, (ii) all documents required by the Sale and
Servicing Agreement and (iii) such other opinions and documents as the Purchaser
may reasonably require in connection with the purchase of the Contracts
hereunder or the sale of the Notes and the Certificates;
(b) The representations and warranties of the Seller and the Servicer made
in the Sale and Servicing Agreement shall be true and correct on the Closing
Date; and
(c) The Purchaser shall have received from counsel to the Seller a letter
stating that the Purchaser may rely on such counsel's opinion delivered pursuant
to the Sale and Servicing Agreement and such counsel's opinions to Moody's
Investors Service, Inc. and Standard and Poor's Ratings Service in respect of
the sale of the Contracts to the Purchaser by the Seller, or such opinions may
be addressed and delivered to the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the Contract
--------------------
Files with respect to the Contracts available to the Purchaser or its agent for
examination at the Trust's offices or such other location as otherwise shall be
agreed upon by the Purchaser and the Seller.
SECTION 2.05. Transfer of Contracts. Pursuant to the Sale and Servicing
---------------------
Agreement, the Purchaser will assign all of its right, title and interest in and
to the Contracts to the Trust for the benefit of the Securityholders. The
Purchaser has the right to assign its interest under this Agreement as may be
required to effect the purposes of the Sale and Servicing Agreement, by written
notice to the Seller and without the consent of the Seller, and the assignee
shall succeed to the rights and obligations hereunder of the Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE OF CONTRACTS
SECTION 3.01. Representations and Warranties of the Seller.
--------------------------------------------
(a) The representations and warranties of the Seller contained in the Sale
and Servicing Agreement are incorporated herein, and are made to the Purchaser
on the date hereof, as if set forth herein and as if made to the Purchaser on
the date hereof. The Seller will make such representations and warranties in
the Sale and Servicing Agreement directly to the Trust and will become obligated
in respect of such representations and warranties pursuant to the Sale and
Servicing Agreement. On the Closing Date, the Seller shall deliver to the
Purchaser an Officers' Certificate, dated the Closing Date, to the effect that
the representations and warranties made in the Sale and Servicing Agreement by
the Seller are true and correct as of the Closing Date.
3
<PAGE>
(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 Contracts by the Seller to the Purchaser and by the Purchaser
to the Trust, and shall inure to the benefit of the Purchaser, the Trust and
their successors and permitted assignees.
(c) The Seller shall indemnify the Purchaser and the Servicer and hold the
Purchaser and the Servicer harmless against any loss, penalties, fines,
forfeitures, legal fees and related costs, judgments and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller's representations and
warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.01 to indemnify the Purchaser and the Servicer as provided in this
Section 3.01 constitutes the sole remedy of the Purchaser and the Servicer
respecting a breach of the foregoing representations and warranties. The Trust
shall also have the remedies provided in the Sale and Servicing Agreement.
(d) Each indemnified party shall give prompt notice to the Seller of any
action commenced against it with respect to which indemnity may be sought
hereunder but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement, unless the failure to notify materially prejudices the rights and
condition of the Seller. The Seller shall be entitled to participate in any
such action, and to assume the defense thereof, and after notice from the Seller
to an indemnified party of its election to assume the defense thereof, the
Seller will not be liable to such indemnified party under this Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof.
(e) Any cause of action against the Seller or relating to or arising out of
the breach of any representations and warranties made or incorporated by
reference in this Section 3.01 shall accrue as to any Contract upon (i)
discovery of such breach by the Purchaser or the Servicer or notice thereof by
the Seller to the Purchaser and the Servicer, (ii) failure by the Seller to cure
such breach and (iii) demand upon the Seller by the Purchaser for all amounts
payable in respect of such Contract.
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 and
the Purchaser.
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.
4
<PAGE>
SECTION 4.03. Termination. The Seller's obligations under this Agreement
-----------
shall survive the sale of the Contracts to the Purchaser.
SECTION 4.04. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
SECTION 4.05. Notices. All demands, notices and communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed by
first class mail, postage prepaid, to (i) in the case of the Seller, The CIT
Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: President, or such other address as may hereafter be furnished to
Purchaser in writing by the Seller or (ii) in the case of the Purchaser, The CIT
Group Securitization Corporation II, 650 CIT Drive, Livingston, New Jersey
07039, Attention: President, or such other address as may hereafter be
furnished to the Seller by the Purchaser.
SECTION 4.06. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 4.07. Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the Seller and the Purchaser and their respective
successors and assigns, as may be permitted hereunder.
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 SECURITIZATION
CORPORATION II,
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
6
<PAGE>
EXHIBIT A
List of Contracts
<PAGE>
EXHIBIT 10.2
LOAN AGREEMENT
LOAN AGREEMENT, dated as of November 1, 1997, among the CIT RV Trust
1997-A (the "Trust"), Harris Trust and Savings Bank, as collateral agent for the
Securityholders and the Trust (together with its successors and assigns as
trustee, the "Indenture Trustee"), The CIT Group/Sales Financing, Inc., as
servicer (the "Servicer"), and The CIT Group/Sales Financing, Inc., as lender
(the "Lender").
The CIT Group Securitization Corporation II, as seller (the "Seller"),
------
the Servicer and the Trust have entered into the Sale and Servicing Agreement
dated as of November 1, 1997 (as the same may from time to time be amended,
modified or otherwise supplemented, the "Sale and Servicing Agreement").
----------------------------
Pursuant to the Sale and Servicing Agreement, the Trust is to issue $14,122,864
aggregate principal amount of 6.800% Asset Backed Certificates (the
"Certificates"), representing interests in the Trust. The Trust will also issue
- -------------
$40,300,000 Class A-1 5.800% Asset-Backed Notes, $32,000,000 Class A-2 5.985%
Asset-Backed Notes, $89,000,000 Class A-3 6.018% Asset-Backed Notes,
$128,000,000 Class A-4 6.200% Asset-Backed Notes, $74,000,000 Class A-5 6.250%
Asset-Backed Notes, $106,000,000 Class A-6 6.350% Asset-Backed Notes,
$49,700,000 Class A-7 6.400% Asset-Backed Notes and $31,000,000 Class B 6.450%
Asset-Backed Notes (the "Notes" and, together with the Certificates, the
-----
"Securities") pursuant to the Indenture dated November 1, 1997 between the Trust
- -----------
and Harris Trust and Savings Bank, as trustee. The corpus of the Trust will
consist of a pool of recreation vehicle retail installment sale contracts and
direct loans and certain related rights and other property (the "Contracts") to
---------
be acquired by the Trust from the Seller and serviced on behalf of the Trust by
the Servicer. The payment of principal of and interest on the Notes and
Certificates is to be funded by, among other things, payments of principal and
interest received by the Trust on the Contracts.
It is a condition to the issuance of the Securities that the Lender
make a loan (the "Loan") to the Trust in the amount of $11,282,457, the proceeds
----
of which are to be deposited in the reserve account established and maintained
pursuant to Section 5.01(a)(iv) of the Sale and Servicing Agreement (the
"Reserve Account") to provide additional funds to make payments on the
- ----------------
Securities.
In consideration of the premises and the mutual agreements hereinafter
set forth, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used but not defined in
-------------
this Agreement shall have the meanings given to such terms in the Sale and
Servicing Agreement.
Section 2. Loan. The Lender shall make the Loan to the Trust on the
----
Closing Date. The Trust shall deposit the proceeds of the Loan in the Reserve
Account. The Lender shall have no obligation to deposit any funds in the
Reserve Account other than as provided in this Section 2. No one other than the
Trust, as the sole owner, beneficially and otherwise, of the Reserve Account,
shall have any interest in the Reserve Account or the other Reserve Account
Property.
<PAGE>
Section 3. Repayment of the Loan.
---------------------
(a) The outstanding principal amount of the Loan shall be due and
payable to the Lender by the Trust on the date (the "Maturity Date") which is
the earlier of (i) the close of business on the Certificate Final Distribution
Date or (ii) the date on which the Trust has terminated pursuant to Section 7.1
of the Trust Agreement. On each Distribution Date prior to the Maturity Date,
the Trust, acting in accordance with instructions from the Servicer, shall make
a prepayment of the principal amount of the Loan from funds available therefor
in the Reserve Account, such prepayment to be in an amount equal to the lesser
of the outstanding principal amount of the Loan and the Reserve Account Surplus
with respect to such Distribution Date remaining after paying any accrued and
unpaid interest on the Loan in accordance with Section 3(e).
(b) On each Distribution Date, the Trust, acting in accordance with
the instructions from the Servicer, shall, to the extent of funds available,
make or cause to be made, the following payments to the Lender hereunder from
the Reserve Account:
(i) Investment Earnings on deposit in the Reserve Account in an amount
equal to the lesser of (A) such Investment Earnings accrued since the second
preceding Deposit Date on funds on deposit in the Reserve Account and (B) the
sum of (1) any accrued and unpaid interest on the Loan required to be paid on
such Distribution Date pursuant to Section 3(f) and (2) the amount required to
be applied as a payment of principal of the Loan on such Distribution Date
pursuant to Section 3(a).
(ii) the Reserve Account Surplus, if any, in an amount equal to the
sum of (1) any accrued and unpaid interest on the Loan required to be paid on
such Distribution Date pursuant to Section 3(f) and (2) the amount required to
be applied as a payment of principal of the Loan on such Distribution Date in
accordance with Section 3(a).
(c) On the Maturity Date, the Indenture Trustee, after the payment of
all amounts payable from the Reserve Account to the Securityholders, as provided
in Section 5.06 of the Sale and Servicing Agreement, and to the Lender, as
provided in clauses (a) and (b) above, shall withdraw from the Reserve Account
all amounts on deposit in the Reserve Account and (A) shall pay or cause to be
paid to the Lender the outstanding principal amount of the Loan and any accrued
and unpaid interest on the Loan on such date and (B) shall pay or cause to be
paid any excess of such amounts over the amount in clause (A) to the holder of
the AO Interest as provided in Section 5.06 of the Sale and Servicing Agreement.
(d) On each Distribution Date, amounts paid to the Lender shall be
applied by the Lender first to the payment of any accrued and unpaid interest on
-----
the Loan and second to the payment of unpaid principal of the Loan.
------
(e) The Loan shall bear interest during each Interest Period (as
defined below) at a rate per annum determined such that the interest payable on
the Loan is equal to the sum of the following:
2
<PAGE>
(i) 0.70% per annum of the average unpaid principal amount of the
Loan during such Interest Period, plus
----
(ii) the Investment Earnings multiplied by a fraction (not
greater than 1.0) the numerator of which is the average unpaid principal
amount of the Loan during such Interest Period and the denominator of which
is the average amount on deposit (including the principal amount of all
Eligible Investments held, but excluding Investment Earnings) in the
Reserve Account during such Interest Period, plus
----
(iii) LIBOR plus 1.00% (the "Lender Rate") applied to the
portion, if any, of the average unpaid principal amount of the Loan during
such Interest Period in excess of the average amount on deposit in the
Reserve Account (including the principal amount of all Eligible Investments
held, but excluding Investment Earnings) during such Interest Period.
"Interest Period" means (A) with respect to the initial Distribution Date, the
---------------
period commencing on the Closing Date and ending on the day immediately
preceding the initial Distribution Date and (B) with respect to each subsequent
Distribution Date, the period commencing on the preceding Distribution Date and
ending on the day preceding such Distribution Date. "LIBOR" means, with respect
-----
to each Interest Period, the London interbank offered rate for one-month United
States dollar deposits determined by the Lender for each Interest Period as
follows: On each LIBOR Determination Date, the Lender will determine LIBOR on
the basis of the rate for one-month United States dollar deposits that appears
on the display page of the Dow Jones Telerate Service currently designated as
Telerate page 3750 (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices), as of 11:00 a.m.,
London time, on such date. If such rate does not appear on such page, the rate
for that date will be determined on the basis of the rates at which one-month
loans in United States dollars are offered by four major banks in the London
interbank market, selected by the Lender, at approximately 11:00 a.m., London
time, on that day to banks in the London interbank market. The Lender will
request the principal London office of each such bank to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that date
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Lender, at
approximately 11:00 a.m., New York City, on that day for one-month loans in
United States dollars to leading European banks. If no major banks are quoting
rates for such loans at such time, "LIBOR" will be deemed to LIBOR as in effect
as of the preceding LIBOR Determination Date. For purposes of this Agreement,
"LIBOR Determination Date" shall mean the second London Business Day prior to
the commencement of each Interest Period and "London Business Day" shall mean
any Business Day in which dealings in deposits in United States Dollars are
transacted in the London interbank market.
(f) Interest shall be payable monthly in arrears on each Distribution
Date to the Lender by the Trust, from the amounts payable pursuant to Section
3(b) hereof. Interest on the Loan shall be calculated on the basis of the
actual number of days elapsed divided by 365, provided that interest in respect
of the Lender Rate shall be calculated on the basis of the actual
3
<PAGE>
number of days elapsed divided by 360. Each determination thereof by the Lender
pursuant to the provisions of this Agreement shall be conclusive and binding on
the Trust, the Servicer and the Indenture Trustee, in the absence of manifest
error.
(g) If any portion of interest due and payable on a Distribution Date
is not paid on such Distribution Date (other than by reason of the Lender having
failed to provide information which is required by the Servicer, the Trust or
the Indenture Trustee to calculate the amount of such interest), the unpaid
portion of such interest shall be due and payable to the Lender by the Trust on
the next succeeding Distribution Date. Any interest which is not paid when due
shall accrue interest from the Distribution Date on which such interest was due
and payable to the date such interest is actually paid at a rate per annum equal
to the Lender Rate (in effect from time to time). The Lender shall, as soon as
practicable, notify the Servicer and the Indenture Trustee of each determination
of the Lender Rate.
Section 4. Limited Obligation; Waiver of Setoff.
------------------------------------
Notwithstanding any provision in this Agreement to the contrary, only
the Trust is obligated to repay the Loan, together with interest thereon as
provided in Section 3, and such obligation, with respect to the Trust, shall be
with recourse solely to the funds from the Reserve Account Surplus and
Investment Earnings on the Reserve Account to the extent required to be
distributed in accordance with Section 3(b) hereof and amounts required to be
distributed in accordance with Section 3(c) hereof, in each case to the extent
payable to the Lender under the Sale and Servicing Agreement. No other person
or entity, including the Seller, the Servicer (or person or organization acting
on the behalf of either of them, or any affiliate of either of them), the Owner
Trustee, the Indenture Trustee, the holder of the AO Interest, the Trust, any
Certificateholder or any Noteholder or any officer or director of any of them,
shall have any obligation to pay principal of or interest on the Loan, except
for the direct recourse indemnification obligation of each successor Servicer
pursuant to Section 6 hereof. The Lender agrees that it shall not have, and
hereby waives to the fullest extent permitted by law, any right of setoff or
lender's lien against any obligations or property of the Seller, the Servicer,
the Trust, the Owner Trustee, the Indenture Trustee or any Noteholder or
Certificateholder.
Section 5. Investments; Information; Amendments to the Sale and
----------------------------------------------------
Servicing Agreement.
- -------------------
(a) The Indenture Trustee shall from time to time during the term of
this Agreement invest all amounts on deposit in the Reserve Account in such
Eligible Investments as the Lender shall direct, which investments shall at all
times be made in compliance with the terms of the Sale and Servicing Agreement.
In the event that the amount on deposit in the Reserve Account (including the
principal amount of all Eligible Investments held, but excluding Investment
Earnings) exceeds the outstanding principal balance of the Loan, then the holder
of the AO Interest shall have the right to direct the Indenture Trustee to
invest, in Eligible Investments, the amount by which the amount on deposit in
the Reserve Account (including the principal amount of all Eligible Investments
held, but excluding Investment Earnings) exceeds the outstanding principal
balance of the Loan.
4
<PAGE>
(b) The Servicer shall, to the extent the Servicer is in possession of
such information, provide the Lender with such information and data with respect
to the Reserve Account as the Lender may reasonably request.
Section 6. Servicer Agreement; Servicing Transfer.
--------------------------------------
(a) In the event that a successor Servicer is appointed pursuant to
the Sale and Servicing Agreement, from and after the effective date of such
appointment, the successor Servicer appointed pursuant to the Sale and Servicing
Agreement, and not the former Servicer, shall agree in writing to (i) be
responsible for the performance of all servicing functions to be performed from
and after such date, (ii) be bound by the terms, covenants and conditions
contained herein applicable to the Servicer and subject to the duties and
obligations of the Servicer hereunder and (iii) indemnify and hold harmless the
Lender from and against any and all claims, damages, losses, liabilities, costs
or expenses whatsoever which the Lender may incur (or which may be claimed
against the Lender) by reason of the gross negligence or willful misconduct of
the successor Servicer in exercising its powers and carrying out its obligations
under the Sale and Servicing Agreement. Such transfer of servicing shall not
affect any rights or obligations of the former Servicer acting as Servicer which
arose prior to the effective date of the transfer of servicing or the rights or
obligations of the former Servicer under this Agreement whether arising before
or after such date, except that such former Servicer shall have no obligation to
indemnify the Lender as a result of any act or failure to act of any successor
Servicer in the performance of the servicing functions.
(b) The Servicer shall forward to the Lender each document referred to
in Sections 4.13(a) and 4.13(b) of the Sale and Servicing Agreement and shall
not agree to amend the Sale and Servicing Agreement except in accordance with
the terms thereof (as amended from time to time).
(c) The Servicer agrees to indemnify and hold harmless the Lender from
and against any and all claims, damages, losses, liabilities, cost or expenses
which the Lender may incur (i) by reason of the gross negligence or willful
misconduct of the Servicer in exercising its powers and carrying out its
obligations under this Agreement and (ii) under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934 or any other federal or state law
or regulation arising out of or based upon any untrue statement of a material
fact in the Prospectus Supplement dated November 20, 1997 to the Prospectus
dated October 29, 1997 relating to the issuance and sale of the Securities (the
"Prospectus") or other material provided to investors and prospective investors
by or on behalf of the Seller or the Servicer in connection with the offer and
sale of the Securities or any amendments thereof or any supplement thereto or
arising out of or based upon the omission to state a material fact to make the
statements in the Prospectus or such other material or any amendment thereof or
supplement thereto, in light of the circumstances in which they were made, not
misleading.
SECTION 7. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW, AND THE
5
<PAGE>
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 8. Termination. This Agreement shall terminate on the later
-----------
to occur of: (a) the date on which the Trust terminates in accordance with
Section 7.1 of the Trust Agreement, or (b) the payment in full of all amounts
owed to the Lender hereunder.
Section 9. Notices. Unless specifically indicated otherwise herein,
-------
all notices and other communications provided for hereunder shall be in writing
and, if to the Lender, addressed to:
The CIT Group/Sales Financing, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
Telephone: 201-740-5000
Telecopy: 201-740-5410
or, if to the Servicer, addressed to:
The CIT Group/Sales Financing, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
Telephone: 201-740-5000
Telecopy: 201-740-5410
or, if to the Trust or the Indenture Trustee, addressed to:
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, IL 60606
Telephone: 312-461-6030
Telecopy : 312-461-3525
or as to any party at such other address as shall be designated by such party in
a written notice hereunder to the other parties.
Any notice or other communication shall be sufficiently given and
shall be deemed given when delivered to the addressee in writing, when mailed by
registered or certified mail, return receipt requested, or when transmitted by
telecopier, receipt of which by the addressee is confirmed by telephone.
Section 10. Bankruptcy. To the extent that the Indenture Trustee
----------
makes a payment to the Lender, or the Lender receives any payment or proceeds
with respect to the Loan,
6
<PAGE>
which payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any state or federal insolvency or bankruptcy
law then, to the extent such payment is set aside, the amount or part thereof
intended to be satisfied shall be revived and continue in full force and effect,
as if such payment had not been received by the Lender.
Section 11. Limitation of Remedies. The Lender shall not have the
----------------------
right to accelerate or otherwise cause the Loan or any portion thereof to become
due and payable prior to the Maturity Date for the Loan except as set forth in
Section 3(a).
Section 12. No Petition. The Lender, by entering into this
-----------
Agreement, hereby covenants and agrees that it will not at any time institute,
join in or otherwise cause the institution of, against the Trust or the Seller
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state or
similar law prior to a year and a day after the Securities shall have been paid
in full.
Section 13. Participation; Miscellaneous. The Lender may, upon prior
----------------------------
written notice to the other parties hereto, sell participations to one or more
banks or other entities (each "Participant") in all or a portion of its rights
under this Agreement (including all or a portion of the Loan); provided,
however, that (i) the Lender's rights and obligations under this Agreement shall
remain unchanged, (ii) the Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Indenture
Trustee, the Trust, the Seller and the Servicer shall continue to deal solely
and directly with the Lender in the exercise of its rights and obligations under
this Agreement, (iv) the Lender shall retain the sole right to enforce the
obligations of the Trust, the Indenture Trustee, or the Servicer under this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement and (v) such Participant expressly agrees to be bound by the
provisions contained in Sections 4 and 12 hereof. Unless the Servicer consents
in writing to such participation within 15 days of receipt of notice of such
participation, neither the Trust nor the Servicer shall be obligated to the
Lender for amounts payable under this Agreement in excess of such amounts which
would have been due and owing had such participation not been granted.
Section 14. Counterparts. This Agreement may be executed by one or
------------
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 15. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 16. Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the Servicer, the Trust, the Indenture Trustee,
the Lender, and their respective successors and assigns.
7
<PAGE>
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
CIT RV TRUST 1997-A
By: FIRST OMNI BANK, N.A.
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust
By: /s/ David L. Williams
___________________________
Name: David L. Williams
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
not in its individual capacity but
solely as Indenture Trustee on behalf
of the Trust
By: /s/ E. Kay Liederman
_______________________________
Name: E. Kay Liederman
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
By: /s/ Frank Garcia
_______________________________
Name: Frank Garcia
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.,
as Lender
By: /s/ Frank Garcia
_______________________________
Name: Frank Garcia
Title: Vice President
<PAGE>
Acknowledged as of date first above written:
THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
By:
------------------------------
Name:
Title:
