SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 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): February 22, 1996
The CIT Group Securitization Corporation II
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-65057 22-3328188
(Commission File Number) (IRS Employer Identification No.)
650 CIT Drive
Livingston, New Jersey 07039
(Address of principal executive offices and zip code)
Registrants' telephone number, including area code: (201) 740-5000
N/A
(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On February 22, 1996 The CIT Group Securitization Corporation II (the
"Company") sold $236,250,000 aggregate principal amount of Class A 5.40% Asset
Backed Notes (the "Notes") and $13,750,000 aggregate principal amount of 5.85%
Asset Backed Certificates (the "Certificates"). The Certificates have the
benefit of certain funds deposited in a cash collateral 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 dated February 15, 1996 (the
"Prospectus").
The Certificates represent an ownership interest in the CIT RV Owner Trust
1996-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 4.1 (the "Trust Agreement"). The Notes were issued
pursuant to an Indenture annexed hereto as Exhibit 4.2.
The property of the Trust consists of a pool of simple interest retail
installment sale contracts secured by the new and used recreational vehicles
financed thereby (the "Contracts") and certain other property described in the
Prospectus, including, without limitation, $68,255,035 which was deposited in a
Pre-Funding Account and $499,116 which was deposited in a Capitalized Interest
Account. Amounts on deposit in the Pre-Funding Account will be used to purchase
additional simple interest retail installment sale contracts secured by the new
and used recreational vehicles financed thereby and amounts on deposit in the
Capitalized Interest Account will be used, to the extent necessary, to make
payments of interest on the Notes and Certificates while funds remain on deposit
in the Pre-Funding Account, all as described in the Prospectus.
All of the Contracts were acquired by the Company from The CIT Group/Sales
Financing, Inc. pursuant to the terms of a Purchase Agreement annexed hereto as
Exhibit 10, and sold by the Company to the Trust pursuant to the Sale and
Servicing Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Sale and Servicing Agreement.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following are filed herewith. The exhibit numbers correspond with Item
601(b) of Regulation S-K.
Exhibit No. Description
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1 Underwriting Agreement among The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc. and Salomon
Brothers Inc on behalf of itself and as representative of the
several underwriters dated August 15, 1996.
4.1 Trust Agreement between The CIT Group Securitization Corporation
II and The Bank of New York (Delaware), as Owner Trustee, dated
as of February 1, 1996.
4.2 Indenture between the CIT RV Owner Trust 1996-A and Harris Trust
and Savings Bank, as Indenture Trustee, dated as of February 1,
1996.
4.3 Sale and Servicing Agreement between The CIT Group Securitization
Corporation II, The CIT Group/Sales Financing, Inc. and the CIT
RV Owner Trust 1996-A, dated as of February 1, 1996.
10 Purchase Agreement between The CIT Group/Sales Financing, Inc.
and The CIT Group Securitization Corporation II, dated as of
February 1, 1996.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Frank Garcia
-----------------------------
Name: Frank Garcia
Title: Vice President
Dated: March 6, 1996
CIT RV OWNER TRUST 1996-A
$236,250,000 CLASS A 5.40% ASSET BACKED NOTES
$13,750,000 5.85% ASSET BACKED CERTIFICATES
THE CIT GROUP SECURITIZATION CORPORATION II
(SELLER)
February 15, 1996
UNDERWRITING AGREEMENT
SALOMON BROTHERS INC
as Representative of
the Several Underwriters (the "Representative"),
Seven World Trade Center
New York, New York 10048
Dear Sirs:
1. Introductory. The CIT Group Securitization Corporation II, a Delaware
corporation (the "Seller") and a wholly-owned limited-purpose finance subsidiary
of The CIT Group Holdings, Inc., a Delaware corporation ("CIT") proposes to
cause CIT RV Owner Trust 1996-A (the "Trust") to issue and sell $236,250,000
principal amount of its Class A 5.40% Asset Backed Notes (the "Notes") and
$13,750,000 principal amount of its 5.85% Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities"). The Securities
are registered under the registration statement referred to in Section 2(a). The
assets of the Trust include, among other things, a pool of retail receivables
generated pursuant to motor vehicle retail installment sale contracts (the
"Initial Contracts") secured by new and used recreational vehicles financed
thereby (the "Initial Financed Vehicles"), and certain monies received
thereunder on or after February 1, 1996, amounts deposited in the Pre-Funding
Account and Capitalized Interest Account, the right to receive payments under
certain circumstances from funds deposited in the Cash Collateral Account
pursuant to the Cash Collateral Agreement to be dated as of February 1, 1996
(the "Cash Collateral Agreement") between the Trust, the Owner Trustee, the
Servicer and The Dai-Ichi Kangyo Bank, Limited, New York Branch (the "Cash
Collateral Depositor") and the Sale and Servicing Agreement (as defined below),
additional retail receivables generated pursuant to motor vehicle retail
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installment sale contracts (the "Subsequent Contracts;" and together with the
Initial Contracts, the "Contracts") secured by new and used recreational
vehicles financed thereby (the "Subsequent Financed Vehicles;" and together with
the Initial Financed Vehicles, the "Financed Vehicles") to be conveyed to the
Trust subsequent to the date of issuance of the Securities and certain monies
received thereunder on or after their respective subsequent cutoff dates, and
the other property and the proceeds thereof to be conveyed to the Trust pursuant
to the Sale and Servicing Agreement to be dated as of February 1, 1996 (the
"Sale and Servicing Agreement") among the Trust, the Seller, and The CIT
Group/Sales Financing, Inc., a wholly-owned subsidiary of CIT, as servicer
("CITSF" or the "Servicer"). The Contracts and other assets of the Trust will be
sold by CITSF to the Seller pursuant to a Purchase Agreement to be dated as of
February 1, 1996 (the "Purchase Agreement") between CITSF and the Seller, and
finally by the Seller to the Trust pursuant to the Sale and Servicing Agreement.
Certain of the Contracts and other property sold by CITSF to the Seller will
first be purchased by CITSF from The CIT Group/Consumer Finance, Inc. (NY)
("CITCF-NY") pursuant to a Purchase Agreement to be dated as of February 1, 1996
(the "CITCF-NY Sale Agreement") between CITCF-NY and CITSF. The Servicer will
service the Contracts on behalf of the Trust pursuant to the Sale and Servicing
Agreement. The Notes will be issued pursuant to the Indenture to be dated as of
February 1, 1996 (as amended and supplemented from time to time, the
"Indenture"), between the Trust and Harris Trust and Savings Bank (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 February 1, 1996 (the "Trust Agreement"), between the Seller and The Bank
of New York (Delaware) as owner trustee (the "Owner Trustee").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Sale and Servicing Agreement and the Indenture.
The Seller and CITSF hereby agree with the several Underwriters named in
Schedule I hereto (the "Underwriters") as follows:
2. Representations and Warranties of the Seller and CITSF. Each of the
Seller and CITSF, jointly and severally, 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:
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(a) A registration statement on Form S-1 (No. 33- 65057) relating to the
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission (the "Commission") and either (i) has been declared
effective under the Securities Act of 1933, as amended (the "Act"), and is not
proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If the Seller does not propose to amend such
registration statement and if any post-effective amendment to such registration
statement has been filed with the Commission prior to the execution and delivery
of this Agreement, the most recent such amendment has been declared effective by
the Commission. For purposes of this Agreement, "Effective Time" means (i) if
the Seller has advised the Representative that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the Commission, or (ii) if the Seller has advised the Representative that it
proposes to file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement, as amended
by such amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. "Effective Date" means the date of the Effective
Time. Such registration statement, as amended at the Effective Time, including
all material incorporated by reference therein and including all information (if
any) deemed to be a part of such registration statement as of the Effective Time
pursuant to Rule 430A(b) under the Act, is hereinafter referred to as the
"Registration Statement," and the form of prospectus relating to the Securities,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as
included in the Registration Statement, including all material incorporated by
reference in such prospectus is hereinafter referred to as the "Prospectus."
(b) If the Effective Time is prior to the execution and delivery of this
Agreement: (i) on the Effective Date, the 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 (ii) on the date of this
Agreement, the Registration Statement conforms, and at the time of filing of the
Prospectus pursuant to 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
includes, or will include, any untrue statement of a material fact or omits, or
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will omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective Time is
subsequent to the execution and delivery of this Agreement: (i) on the Effective
Date, the Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act, the Trust Indenture Act and the Rules
and Regulations, (ii) on the Effective Date, the Registration Statement will not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading and (iii) on the Effective Date, at the time of filing of
the Prospectus pursuant to Rule 424(b) and at the Closing Date, the Prospectus
will not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The two preceding sentences do not apply to statements in
or omissions from the Registration Statement or Prospectus based upon written
information furnished to the Seller by any Underwriter through the
Representative specifically for use therein. 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 7(a)).
(c) Each of the Seller, CITSF and The CIT GP Corporation II ("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 Cash Collateral Agreement,
the CITCF-NY Sale Agreement, the Purchase Agreement, the Note Depository
Agreement and the Certificate Depository Agreement.
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(d) 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.
(e) 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.
(f) The execution and delivery by each of the Seller and CIT GP on the
Closing Date of the Basic Documents to which it is a party and the performance
of its obligations thereunder will be within its corporate power of the Seller
and CIT GP and duly authorized by all necessary corporate action on the part of
the Seller and CIT GP on and as of the Closing Date; and neither the issuance
and sale of the Securities to the Underwriters, nor the execution and delivery
by each of the Seller and CIT GP of the Basic Documents to which it is a party,
nor the consummation by the Seller or CIT GP of the transactions therein
contemplated, nor compliance by the Seller or CIT GP with the provisions hereof
or thereof, nor the grant of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, will materially conflict with or
result in a material breach of, or constitute a material default under, any of
the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Seller or CIT GP or its properties or the certificate of
incorporation or by-laws of the Seller or CIT GP or any of the provisions of any
indenture, mortgage, contract or other instrument to which the Seller or CIT GP
is a party or by which the Seller or CIT GP is bound or result in the creation
or imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, contract or other
instrument.
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(g) 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.
(h) 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 (i) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally, (ii) as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (iii) as to
enforceability with respect to rights of indemnity thereunder, to limitations of
public policy under applicable securities laws.
(i) 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).
(j) The Trust Agreement when executed and delivered on the Closing Date
will be duly authorized, executed and delivered by each of the Seller
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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).
(k) The Cash Collateral 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).
(l) 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.
(m) 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.
(n) 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.
(o) 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
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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.
(p) As of the Closing Date, the Initial Contracts and related property will
have been duly and validly assigned to the Owner Trustee in accordance with the
Basic Documents; and when such assignment is effected, a duly and validly
perfected transfer of all such Initial Contracts subject to no prior lien,
mortgage, security interest, pledge, charge or other encumbrance created by the
Seller, CITSF, CITCF-NY or CIT GP will have occurred. As of the Closing Date,
the Trust's grant of a security interest in the Collateral to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, charge
or other encumbrance created by the Seller, CITSF, CITCF-NY or CIT GP. As of
each Subsequent Transfer Date, the Subsequent Contracts and related property
conveyed to the Trust on such date will have been duly and validly assigned to
the Owner Trustee in accordance with the Basic Documents; and when such
assignment is effected, the duly and validly perfected transfer of all such
Subsequent Contracts will be subject to no prior lien, mortgage, security
interest, pledge, charge or other encumbrance created by the Seller, CITSF,
CITCF-NY or CIT GP. As of each Subsequent Transfer Date, the Trust's grant of a
security interest in the Collateral sold to the Trust on such Subsequent
Transfer Date pursuant to the Indenture will vest in the Indenture Trustee, for
the benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, charge
or other encumbrance created by the Seller, CITSF, CITCF-NY or CIT GP.
(q) As of the Closing Date, each of the Initial Contracts will meet the
eligibility criteria described in the Prospectus and as of each Subsequent
Transfer Date, each of the Subsequent Contracts being transferred to the Trust
will meet the eligibility criteria described in the Prospectus.
(r) 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
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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.
(s) 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").
(t) 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.
(u) 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.
3. Purchase, Sale and Delivery of Securities. On the basis of the
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 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
at the Class A Rate from February 15, 1996 to (but excluding) the Closing Date,
and the principal balance of the Certificates set forth opposite the name of
such Underwriter in Schedule I hereto at a purchase price equal to the Total
Price to Seller specified in Schedule IV hereto plus accrued interest at the
Pass-Through Rate from February 15, 1996 to (but excluding) the Closing Date.
The Seller will deliver the Securities to the Representative, for the
account of the Underwriters, against payment of the purchase price by wire
transfer of immediately available funds to the Seller, or to such bank as may be
designated by the Seller, at the office of Schulte Roth & Zabel, 900 Third
Avenue, New York, New York 10022 on February 22, 1996 at 10:00 a.m., New York
City time, or at such other time not later than seven full business days
thereafter as the Representative and the Seller determine, such time being
herein referred to as the "Closing Date." The Securities to be so delivered will
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be initially represented by one or more Notes and one or more Certificates
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Securities will be
represented by book entries on the records of DTC and participating members
thereof. One Certificate in definitive form in the principal amount of $150,000
will be registered in the name of CIT GP (the "GP Certificate"). Definitive
Notes and Definitive Certificates (other than the GP Certificate) will be
available only under the limited circumstances set forth in the Indenture and
Trust Agreement. The notes and certificates evidencing the Notes and
Certificates will be made available for checking and packaging at the offices of
Schulte Roth & Zabel at least 24 hours prior to the Closing Date.
4. Offering by Underwriters. It is understood that, after the 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) If the Effective Time is prior to the execution and delivery of this
Agreement, the Seller will file the Prospectus, properly completed, with the
Commission pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by the Representative which consent shall not be
unreasonably withheld, subparagraph (4)) of Rule 424(b) not later than the
earlier of (i) the second business day following the execution and delivery of
this Agreement or (ii) the fifth business day after the Effective Date. 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 as filed or the related
prospectus or 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 the effectiveness of the Registration Statement (if
the Effective Time is subsequent to the execution and delivery of this
Agreement) and 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) As soon as practicable, but not later than the Availability Date (as
defined below), the Seller will cause the Trust to make generally available to
Noteholders and Certificateholders an earnings statement of the Trust covering a
period of at least 12 months beginning after the Effective Date which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the
applicable Rules and Regulations thereunder. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Trust's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(f) The Seller will furnish to each of the Underwriters copies of the
Registration Statement (two of which will be signed and include all exhibits),
each related preliminary prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Representative may from time to time reasonably request.
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(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 Exchange 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, the Seller, CITSF and CIT GP will pay or cause to be paid all costs
and expenses incident to the performance of their respective obligations
hereunder, including (i) the preparation, issuance and delivery of the
Securities, (ii) any fees charged by Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Structured Ratings Group, a Division of The McGraw-Hill
Companies, Inc. ("S&P" and, together with Moody's, the "Rating Agencies"), for
the rating of the Securities, (iii) the expenses incurred in printing,
reproducing and distributing the registration statement as filed, the
Registration Statement, preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto required pursuant to Section 5(d)
hereof), (iv) the fees and disbursements of counsel to the Seller, CITSF 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 8
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).
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(i) On or before the Closing Date, the Seller, CITSF and CITCF-NY shall
cause each of their respective books and records (including any computer
records) relating to the Initial Contracts to be marked to show the absolute
ownership by the Owner Trustee in accordance with Section 3.01B(d) of the Sale
and Servicing Agreement, on behalf of the Trust, of the Initial Contracts, and
from and after the Closing Date neither the Seller, CITSF, as Servicer, nor
CITCF-NY shall take any action inconsistent with the ownership by the Owner
Trustee on behalf of the Trust of the Initial Contracts, other than as permitted
by the Basic Documents.
(j) On or before each Subsequent Transfer Date, the Seller, CITSF and
CITCF-NY shall cause each of their respective books and records (including any
computer records) relating to the Subsequent Contracts to be sold on such
Subsequent Transfer Date to be marked to show the absolute ownership by the
Owner Trustee in accordance with Section 3.01B(d) of the Sale and Servicing
Agreement, on behalf of the Trust, of such Subsequent Contracts, and from and
after such Subsequent Transfer Date neither the Seller, CITSF, as Servicer, nor
CITCF-NY shall take any action inconsistent with the ownership by the Owner
Trustee on behalf of the Trust of such Subsequent Contracts, other than as
permitted by the Basic Documents.
(k) Until the retirement of the Securities, or until such time as the
Underwriters shall cease to maintain a secondary market in the Securities,
whichever occurs first, the Seller or CITSF will deliver to the Representative
the certified public accountants' annual statements of compliance furnished to
the Indenture Trustee or the Owner Trustee pursuant to the Indenture and the
Sale and Servicing Agreement, as soon as such statements are furnished to the
Indenture Trustee or the Owner Trustee.
(l) To the extent, if any, that either of the ratings provided with respect
to the Securities by either Rating Agency is conditional upon the furnishing of
documents or the taking of any other actions by the Seller, CITSF, CITCF-NY or
CIT GP, the Seller, CITSF, CITCF-NY or CIT GP, as the case may be, shall furnish
such documents and take any such other actions as may be 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.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy of the representations and warranties on the part of the Seller
and CITSF, and contained or incorporated herein, to the accuracy of the
statements of officers of the Seller and CITSF made pursuant to the provisions
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hereof, to the performance by the Seller 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) If the Effective Time is not prior to the execution and delivery of
this Agreement, the Effective Time shall have occurred not later than 10:00
p.m., New York City time, on the date of this Agreement or such later date as
shall have been consented to by the Representative. If the Effective Time is
prior to the execution and delivery of this Agreement, the Prospectus shall have
been filed with the Commission in accordance with the Rules and Regulations and
Section 5(a) hereof. On or prior to the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller, 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 has been issued and
no proceedings for that purpose have been instituted or, to the best of their
knowledge, are contemplated by the Commission and (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
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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.
(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.
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(f) The Representative shall have received a written opinion of in-house
General Counsel of the Seller, CITSF and CITCF-NY, or other counsel satisfactory
to the Representative in its reasonable judgment, dated the Closing Date, in
substantially the form set forth below, with such changes therein as the
Representative and counsel for the Underwriters shall reasonably agree:
(i) The Seller and CITSF have each been duly organized and are validly
existing as corporations in good standing under the laws of the State of
Delaware. CITCF-NY has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New York.
(ii) The Seller, CITSF and CITCF-NY each have the corporate power and
corporate authority to carry on their respective businesses as described in
the Prospectus and to own and operate their respective properties in
connection therewith.
(iii) The Seller, CITSF and CITCF-NY are each corporations duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their organization and each has the corporate power to own
its assets and to transact the business in which it is currently engaged
and to perform their respective obligations under each of the Basic
Documents to which it is a party. The Seller, CITSF and CITCF-NY are each
qualified to do business as a foreign corporation and each is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
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
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equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (C) the enforceability as to rights to indemnity
thereunder may be limited under applicable law.
(v) Each of the Basic Documents to which the Seller, CITSF or CITCF-NY
is a party have been duly authorized, executed and delivered by each of the
Seller, CITSF and CITCF-NY, and each constitutes a valid and binding
obligation of, each of the Seller, CITSF and CITCF-NY, enforceable against
each of the Seller, CITSF and CITCF-NY in accordance with its terms, except
that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) such enforcement may be
limited by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(vi) The execution and delivery by each of the Seller, CITSF and
CITCF-NY of each of the Basic Documents to which it is a party, the
performance of their respective obligations thereunder and the signing of
the Registration Statement by the Seller are within the corporate power of
the Seller, CITSF and CITCF-NY, as applicable, and have been duly
authorized by all necessary corporate action on the part of the Seller,
CITSF and CITCF-NY, as applicable; and neither the issue and sale of the
Securities, nor the consummation of the transactions contemplated by the
Basic Documents nor the fulfillment of the terms thereof, nor the grant of
the security interest in the Collateral to the Indenture Trustee pursuant
to the Indenture will, to the best of such counsel's knowledge, conflict
with or constitute a breach of, or 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
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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 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
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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
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Trust Agreement, all of the Seller's right, title and interest in and to
the Contracts and any security interests securing the Contracts will have
been conveyed to the Trust and the Trust will be the holder of a valid and
binding security interest in the Contracts against the Seller.
(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 other
filings, registrations, notices, consents, approvals, authorizations,
orders or permits as have been obtained.
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(iv) There are no legal or governmental proceedings pending to which
CIT GP is a party or of which any property of CIT GP is the subject, and no
such proceedings are known by such counsel to be threatened or contemplated
by governmental authorities or threatened by others, (A) that are required
to be disclosed in the Registration Statement and are not disclosed therein
or (B)(1) asserting the invalidity of all or part of the Trust Agreement,
(2) that could materially and adversely affect CIT GP's obligations under
the Trust Agreement or (3) seeking to affect adversely the federal or state
income tax attributes of the Securities.
(v) CIT GP has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
the corporate power and corporate authority to perform its obligations
under the Trust Agreement.
(vi) The Trust Agreement has been duly authorized, executed and
delivered by CIT GP.
Such opinion may contain such assumptions, qualifications and limitations
as are customary in opinions of this type and are reasonably acceptable to
counsel to the Underwriters.
(h) The Representative shall have received a written opinion of Lowenstein,
Sandler, Kohl, Fisher and Boylan, special local New Jersey counsel for the
Seller and CITSF, dated the Closing Date, in form and substance satisfactory to
the Representative and counsel for the Underwriters, to the effect that:
(i)(A) If the transfer of the Contracts is deemed to be the grant of a
security interest, and not a true sale, (1) to the extent that the Uniform
Commercial Code as in effect in the State of New Jersey (the "New Jersey
UCC") applies to the perfection of the Seller's security interests in the
Contracts and the proceeds thereof under Section 9-103 of the New Jersey
UCC, when the financing statements executed by CITSF as debtor (the "First
Step Financing Statements") have been duly executed and delivered and filed
or recorded, as appropriate, in the office of the Secretary of State of New
Jersey, such security interests will be perfected and (2) to the extent
that the New Jersey UCC applies to the perfection of the Trust's security
interests in the Contracts and the proceeds thereof under Section 9-103 of
the New Jersey UCC, when the First Step Financing Statements and the
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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
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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 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
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such security interests exist) and (vi) Section 552 of the Bankruptcy Code
with respect to any Contracts acquired by the Seller or the Trust
subsequent to the commencement of a case by or against CITSF, the Seller or
the Trust under the Bankruptcy Code; (4) such counsel's opinions may be
inapplicable to any Subsequent Contracts unless, upon the proper filing of
New Jersey UCC financing statements describing the Subsequent Contracts,
(i) the assumptions, qualifications and limitations in this letter shall be
true as to conditions then existing and as to the Subsequent Contracts,
(ii) there are no changes in law, and (iii) all searches have been updated
and reveal no liens against any of the Subsequent Contracts; and (5) such
counsel's opinion may be further subject to the effect of general
principles of equity, regardless of whether such principles are considered
in a proceeding in equity or at law, as the same may be applied in a
proceeding seeking to enforce any obligation.
(i) Solely insofar as the present laws of the State of New Jersey and
the Federal law of the United States of America are concerned, in a
properly presented and decided case, a court would conclude that the
transfer of the Contracts and the proceeds thereof by CITSF to the Seller
constitute true sales of such Contracts and, assuming a court reached that
conclusion, in such a case a court would conclude that the Contracts and
the proceeds would not be considered property of the estate of CITSF
pursuant to Section 541 of the Bankruptcy Code, and the Contracts and the
proceeds thereof would not be subject to the automatic stay pursuant to
Section 362 of the Bankruptcy Code; provided, however, such counsel need
express no opinion (A) with respect to how long the Seller could be denied
possession of the Contracts before the issues discussed in this paragraph
are finally decided on appeal or other review, (B) with respect to the
availability of a preliminary injunction or temporary restraining order
pursuant to the broad equitable powers granted to a bankruptcy court and
(C) as to the conveyance of any Subsequent Contracts unless, upon the
proper filing of UCC financing statements describing the Subsequent
Contracts, (1) the assumptions, qualifications and limitations in such
opinion shall be true as to conditions then existing and (2) all searches
have been updated and reveal no liens against any of the Subsequent
Contracts.
(ii) Solely insofar as the present laws of the State of New Jersey and
the Federal law of the United States of America are concerned, in a
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properly presented and decided case, a court would conclude that the
transfer of the Contracts and the proceeds thereof by the Seller to the
Trust constitute true sales of such Contracts and, assuming a court reached
that conclusion, in such a case a court would conclude that the Contracts
and the proceeds would not be considered property of the estate of the
Seller pursuant to Section 541 of the Bankruptcy Code, and the Contracts
and the proceeds thereof would not be subject to the automatic stay
pursuant to Section 362 of the Bankruptcy Code; provided, however, such
counsel need express no opinion (A) with respect to how long the Trust
could be denied possession of the Contracts before the issues discussed in
this paragraph are finally decided on appeal or other review, (B) with
respect to the availability of a preliminary injunction or temporary
restraining order pursuant to the broad equitable powers granted to a
bankruptcy court and (C) as to the conveyance of any Subsequent Contracts
unless, upon the proper filing of UCC financing statements describing the
Subsequent Contracts, (1) the assumptions, qualifications and limitations
in such opinion shall be true as to conditions then existing and (2) all
searches have been updated and reveal no liens against any of the
Subsequent Contracts.
Such opinion may contain such assumptions, qualifications and limitations
as are customary in opinions of this type and are reasonably acceptable to
counsel to the Underwriters. In rendering such opinion, such counsel may state
that they express no opinion as to the laws of any jurisdiction other than the
Federal law of the United States of America and the laws of the State of New
Jersey.
(i) The Representative shall have received a written opinion of Schulte
Roth & Zabel, special counsel to the Seller, CITSF and CITCF-NY, dated the
Closing Date, in substantially the form set forth below, with such changes
therein as the Representative and counsel for the Underwriters shall reasonably
agree:
(i) When the Notes have been duly executed, delivered and
authenticated in accordance with the Indenture and delivered and paid for
pursuant to this Agreement, the Notes will be validly issued, outstanding
and entitled to the benefits of the Indenture, except that (A) enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
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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
February 14, 1996 and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement or any
part thereof or any amendment thereto has been issued under the Act and no
proceeding for that purpose has been instituted or threatened by the
Commission.
(iii) The form of the Indenture has been qualified under the Trust
Indenture Act.
(iv) Neither the Trust Agreement nor the Sale and Servicing Agreement
need to be qualified under the Trust Indenture Act. The Trust is not, and
will not as a result of the offer and sale of the Securities as
contemplated in the Prospectus and in this Agreement become, required to
register as an "investment company" under the Investment Company Act.
(v) The statements in the Prospectus 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-1 (No. 33-65057) relating
to the Securities as of the 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
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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 the registration
statement on Form S-1 (No. 33-65057) 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-1 (No. 33-65057) relating to
the Securities, the Registration Statement or Prospectus (except as stated in
Sections 6(j)(v) and 6(j)(vii) above) and has made no independent check or
verification thereof for the purpose of rendering this opinion, on the basis of
the foregoing (relying as to materiality to a large extent upon the certificates
of officers and other representatives of the Seller, CITSF and CIT GP), no facts
have come to their attention that leads such counsel to believe that the
registration statement on Form S-1 (No. 33-65057) relating to the Securities, as
of the Effective Date, the Registration Statement, 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
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opinion of such counsel, which shall state that such counsel believes that their
reliance thereon is justified.
(j) The Representative shall have received, in form and substance
satisfactory to the Representative and counsel for the Underwriters an opinion
of Schulte Roth & Zabel, special counsel to the Trust, dated the Closing Date,
regarding the creation of a security interest in the Collateral in favor of the
Indenture Trustee on behalf of the Noteholders to the extent 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.
(k) The Representative shall have received an opinion of Stroock & Stroock
& Lavan, counsel for the Underwriters, dated the Closing Date, with respect to
the validity of the Securities and such other related matters as the
Representative shall require and the Seller shall have furnished or caused to be
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(l) The Representative shall have received an opinion of Dechert, Price &
Rhodes, counsel to the Cash Collateral Depositor, dated the Closing Date, in
form and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that:
(i) The Cash Collateral Depositor is licensed to maintain a branch in
the State of New York and has full power and authority to enter into, and
to take all action required of it, under the Cash Collateral Agreement.
(ii) The Cash Collateral Agreement has been duly authorized, executed
and delivered by the Cash Collateral Depositor.
(iii) The Cash Collateral Agreement constitutes a legal, valid and
binding agreement of the Cash Collateral Depositor, enforceable against the
Cash Collateral Depositor in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency,
liquidation, reorganization, moratorium or other similar laws affecting the
enforcement of rights of creditors against the Cash Collateral Depositor
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generally, as such laws would apply in the event of bankruptcy, insolvency,
liquidation, receivership, or reorganization or any moratorium or similar
occurrence affecting the Cash Collateral Depositor, and the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or law).
(m) The Representative shall have received an opinion of Tsunematsu Yanase
& Seikine, Japanese counsel to the Cash Collateral Depositor, in form and
substance satisfactory to the Representative and counsel for the Underwriters,
to the effect that the Cash Collateral Depositor is a banking corporation
validly existing under the laws of Japan.
(n) The Representative shall have received an opinion of Seward & Kissel,
counsel to the Indenture Trustee, dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriters, to the
effect that:
(i) The Indenture constitutes a legal, valid and binding agreement of
the Indenture Trustee, enforceable against the Indenture Trustee in
accordance with its terms, except as enforceability thereof may be limited
by bankruptcy, insolvency, liquidation, reorganization, moratorium or other
similar laws affecting the enforcement of rights of creditors against the
Indenture Trustee generally, as such laws would apply in the event of
bankruptcy, insolvency, liquidation, receivership, or reorganization or any
moratorium or similar occurrence affecting the Indenture Trustee, and the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or law).
(ii) The Notes have been duly authenticated and delivered by the
Indenture Trustee in accordance with the terms of the Indenture.
(o) The Representative shall have received an opinion of in-house 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 Trustee is an Illinois 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.
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(ii) The Indenture has been duly authorized, executed and delivered by
the Indenture Trustee.
(p) The Representative shall have received an opinion of Richards, Layton &
Finger, counsel to the Owner Trustee, dated the Closing Date, in form and
substance satisfactory to the Representative and counsel for the Underwriters,
to the effect that:
(i) The Owner Trustee is a Delaware banking corporation duly
incorporated and validly existing under the laws of the state of Delaware.
(ii) The Owner Trustee has the full power and authority to accept the
office of owner trustee under the Trust Agreement and to enter into and
perform its obligations under the Trust Agreement and the transactions
contemplated thereby.
(iii) 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.
(iv) 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).
(v) 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.
(vi) 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
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violation of, or constitute a default under the Article of Association,
By-Laws or other organizational documents of the Owner Trustee
(q) 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 Cash Collateral
Agreement, the Sale and Servicing Agreement, the Notes and the
Certificates, and to issue the Notes and the Certificates.
(iv) The Trust has duly authorized and executed the Trust Agreement,
the Indenture, the Cash Collateral Agreement, the Sale and Servicing
Agreement, the Notes and the Certificates.
(v) The Trust has the power under the Trust Agreement and the Delaware
Business Trust Act to pledge the Trust Estate to the Indenture Trustee as
security for the Notes.
(vi) The Certificates have been executed, authenticated and delivered
by the Owner Trustee upon the order of the Seller in accordance with the
Trust Agreement and when delivered to and paid for pursuant to this
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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) The Notes have been executed, authorized and delivered by the
Owner Trustee upon the order of the Seller in accordance with the Trust
Agreement and the Indenture.
(viii) To the extent that Article 9 of the Uniform Commercial Code as
in effect in the State of Delaware (the "Delaware UCC") is applicable
(without regard to conflicts of laws principles), and assuming that the
security interest created by the Indenture in the Collateral has been duly
created and has attached, upon the filing of a UCC-1 financing statement
with the Secretary of State of the State of Delaware, the Indenture Trustee
will have a perfected security interest in such Collateral and the proceeds
thereof; and such security interest will be prior to any other security
interest granted by the Trust that is perfected solely by the filing of
financing statements under the Delaware UCC, excluding purchase money
security interests under ss. 9-312 of the Delaware UCC and temporarily
perfected security interests in proceeds under ss. 9-306 of the Delaware
UCC.
(ix) No re-filing or other action is necessary under the Delaware UCC
in the State of Delaware in order to maintain the perfection of the
security interest referenced above except for the filing of continuation
statements at five-year intervals.
(x) Under ss. 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,
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(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.
(xi) Under ss. 3805(c) of the Delaware Business Trust Act, and
assuming that the Sale and Servicing Agreement conveys good title to the
Contracts to the Trust as a true sale and not as a security arrangement,
the Trust, rather than the Certificateholders, is the owner of the
Contracts subject to (i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and similar laws
relating to and affecting the rights and remedies of creditors generally,
(ii) principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(xii) The execution and delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, of the Indenture and the Sale and
Servicing Agreement do not require any consent, approval or authorization
of, or any registration or filing with, any governmental authority of the
State of Delaware, except for the filing of the Certificate of Trust with
the Secretary of State.
(xiii) Neither the consummation by the Owner Trustee of the
transactions contemplated by the Trust Agreement or, on behalf of the
Trust, the transactions contemplated by the Trust Agreement, Indenture and
the Sale and Servicing Agreement nor the fulfillment of the terms thereof
by the Owner Trustee will conflict with or result in a breach or violation
of any law of the State of Delaware.
Such opinion may contain such assumptions, qualifications and limitations
as are customary in opinions of this type and are reasonably acceptable to
counsel to the Underwriters. In rendering such opinion, such counsel may state
that they express no opinion as to the laws of any jurisdiction other than the
Federal law of the United States of America and the laws of the State of
Delaware.
(r) The Notes shall have been rated "Aaa" by Moody's and "AAA" by S&P, and
the Certificates shall have been rated at least "A2" by Moody's and "A" by S&P.
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(s) The Representative shall have received copies of each opinion of
counsel delivered to either Rating Agency or the Cash Collateral Depositor,
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.
(t) 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.
(u) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Seller in connection with the issuance and sale of
the Securities as herein contemplated shall be in form and substance
satisfactory to the Representative and counsel for the Underwriters.
7. Indemnification and Contribution. (a) CITSF will indemnify and hold each
Underwriter harmless against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that (i) CITSF will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
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statement or alleged untrue statement in or omission or alleged omission from
any of such documents 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
Underwriters' Information (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 7(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 arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Seller or CITSF by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Seller or CITSF
in connection with investigating or defending any such action or claim as such
expenses are incurred, it being understood and agreed that (i) the only such
information furnished by any Underwriter consists of the following information
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contained in the Prospectus: (a) the last paragraph at the bottom of the cover
page concerning the terms of the offering by the Underwriters, (b) the legend
concerning over-allotments and (c) the information contained under the caption
"Underwriting" (the "Underwriters' Information") 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 7(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.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above in such proportion as is
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appropriate to reflect not only the relative benefits received by the Seller and
CITSF on the one hand and the Underwriters on the other from the offering of the
Securities but also the relative fault of the Seller and CITSF on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. The relative benefits received by the
Seller and CITSF on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by the Seller and CITSF
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Seller, CITSF or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of CITSF under this Section shall be in addition to any
liability which the Seller or CITSF may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller or CITSF, to each officer of the
Seller or CITSF who has signed the Registration Statement and to each person, if
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any, who controls the Seller or CITSF within the meaning of the Act.
8. 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 9 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 7 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 9 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.
9. Failure to Purchase the Securities. If any Underwriter or Underwriters
default in their obligations to purchase the principal amount of the 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 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
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non-defaulting Underwriter, the Seller or CITSF, except as provided in Section
8. 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.
10. Notices. All communications hereunder will be in writing and, if sent
to the Representative or the Underwriters, will be mailed, delivered or sent by
facsimile transmission and confirmed to the Representative at Seven World Trade
Center, New York, NY 10048, Attention: Legal Department (facsimile number (212)
783-4009); if sent to the Seller, will be mailed, delivered or sent by facsimile
transmission and confirmed to it at The CIT Group Securitization Corporation II,
650 CIT Drive, Livingston, New Jersey 07039, Attention: James J. Egan, Jr.,
President (facsimile number (201) 740-5410); if sent to CIT, will be mailed,
delivered or sent by facsimile transmission and confirmed to it by The CIT Group
Holdings, Inc., 1211 Avenue of the Americas, New York, New York 10036,
Attention: Joseph M. Leone, Executive Vice President and Chief Financial Officer
(facsimile number (212) 536-1971); and if sent to CITSF, will be mailed,
delivered or sent by facsimile transmission and confirmed to it at The CIT
Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: James J. Egan, Jr., President (facsimile number (201) 740-5410).
11. 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.
12. 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.
13. 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.
14. Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original, but all such
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counterparts shall together constitute but one and the same Agreement.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
40
<PAGE>
If the foregoing is in accordance with the Representative's understanding
of our agreement, kindly sign and return to us a counterpart hereof, whereupon
it will become a binding agreement among the Seller, CITSF and the several
Underwriters in accordance with its terms.
Very truly yours,
THE CIT GROUP SECURITIZATION CORPORATION II
By:
-----------------------------------------
Name:
Title:
THE CIT GROUP/SALES FINANCING, INC.
By:
-----------------------------------------
Name:
Title:
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written:
SALOMON BROTHERS INC
By:
-------------------------------
Name:
Title:
Acting on behalf of itself
and as the Representative
of the several Underwriters.
41
<PAGE>
SCHEDULE I
Initial Principal
Amount of
Underwriter Notes
- ----------- -----------------
Salomon Brothers Inc ............................. $118,125,000
UBS Securities Inc. .............................. 118,125,000
------------
Total $236,250,000
============
Initial Principal
Amount of
Underwriter Certificates
- ----------- -----------------
Salomon Brothers Inc ............................. $ 6,875,000
UBS Securities Inc. .............................. 6,875,000
-----------
Total $13,750,000
===========
<PAGE>
SCHEDULE II
Locations of Chief Executive Offices and Principal Places of Business
The CIT Group Securitization
Corporation II 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Sales Financing, Inc. 650 CIT Drive
Livingston, NJ 07039-0491
The CIT Group/Consumer Finance,
Inc. (NY) 650 CIT Drive
Livingston, NJ 07039-0491
Locations of Records
The CIT Group Securitization
Corporation II 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
The CIT Group/Sales Financing, Inc. 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
The CIT Group/Consumer Finance,
Inc. (NY) 715 South Metropolitan Avenue
Suite 150
Oklahoma City, OK 73124-0610
<PAGE>
SCHEDULE III
Original
Principal Class A
Security Amount $ Price % Price $ Rate%
- -------- -------------- ------- -------------- -------
Notes 236,250,000 99.976 236,193,300 5.40
Total Price to Public: $236,193,300
Total Price to Seller: 235,425,488
------------
Underwriting Discounts
and Commissions: $ 767,812
<PAGE>
SCHEDULE IV
Original Pass-
Principal Through
Security Amount $ Price % Price $ Rate%
- -------- -------------- ------- -------------- -------
Certificates 13,750,000 99.791 13,721,262 5.85
Total Price to Public: $13,721,262
Total Price to Seller: 13,652,512
-----------
Underwriting Discounts
and Commissions: $ 68,750
================================================================================
TRUST AGREEMENT
BETWEEN
THE CIT GROUP SECURITIZATION CORPORATION II
SELLER
AND
THE BANK OF NEW YORK (DELAWARE)
OWNER TRUSTEE
DATED AS OF February 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
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 2.8 Title to Trust Property.....................................4
SECTION 2.9 Situs of Trust..............................................4
SECTION 2.10 Representations and Warranties of the Seller................4
SECTION 2.11 Representations and Warranties of the Holder
of the GP Interest..........................................5
SECTION 2.12 Tax Treatment...............................................6
ARTICLE III THE CERTIFICATES................................................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..........................10
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 Disposition by the Holder of the GP Interest...............11
SECTION 3.11 Book-Entry Certificates....................................11
SECTION 3.12 Notices to Depository......................................12
SECTION 3.13 Definitive Certificates....................................12
SECTION 3.14 Seller as Certificateholder................................13
ARTICLE IV ACTIONS BY OWNER TRUSTEE........................................14
SECTION 4.1 Prior Notice to Certificateholders with Respect to
Certain Matters............................................14
SECTION 4.2 Action by Certificateholders with Respect to
Certain Matters............................................14
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy....15
<PAGE>
SECTION 4.4 Restrictions on Certificateholders' Power..................15
SECTION 4.5 Majority Control...........................................15
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.......................16
SECTION 5.1 Establishment of Accounts..................................16
SECTION 5.2 Application of Trust Funds.................................16
SECTION 5.3 Method of Payment..........................................17
SECTION 5.4 Accounting and Reports to the Certificateholders.
The Internal Revenue Service and Others....................18
SECTION 5.5 Signature on Returns; Tax Matters Partner..................18
ARTICLE VI THE OWNER TRUSTEE...............................................19
SECTION 6.1 Duties of Owner Trustee....................................19
SECTION 6.2 Rights of Owner Trustee....................................20
SECTION 6.3 Acceptance of Trusts and Duties............................20
SECTION 6.4 Action Upon Instruction by Certificateholders..............22
SECTION 6.5 Furnishing of Documents....................................22
SECTION 6.6 Representations and Warranties of Owner Trustee............22
SECTION 6.7 Reliance; Advice of Counsel................................23
SECTION 6.8 Owner Trustee May Own Certificates and Notes...............24
SECTION 6.9 Compensation and Indemnity.................................24
SECTION 6.10 Replacement of Owner Trustee...............................24
SECTION 6.11 Merger or Consolidation of Owner Trustee...................26
SECTION 6.12 Appointment of Co-Trustee or Separate Trustee..............26
SECTION 6.13 Eligibility Requirements for Owner Trustee.................27
ARTICLE VII TERMINATION OF TRUST AGREEMENT.................................28
SECTION 7.1 Termination of Trust Agreement.............................28
SECTION 7.2 Dissolution upon Bankruptcy of the Holder
of the GP Interest.........................................30
ARTICLE VIII AMENDMENTS......................................................31
SECTION 8.1 Amendments Without Consent of Certificateholders
or Noteholders.............................................31
SECTION 8.2 Amendments With Consent of Certificateholders
and Noteholders............................................31
SECTION 8.3 Form of Amendments.........................................31
ARTICLE IX MISCELLANEOUS.....................................................33
SECTION 9.1 No Legal Title to Owner Trust Estate.......................33
SECTION 9.2 Limitations on Rights of Others............................33
SECTION 9.3 Notices....................................................33
SECTION 9.4 Severability...............................................34
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SECTION 9.5 Counterparts...............................................34
SECTION 9.6 Successors and Assigns.....................................34
SECTION 9.7 No Petition Covenant.......................................34
SECTION 9.8 No Recourse................................................34
SECTION 9.9 Headings...................................................34
SECTION 9.10 Governing Law..............................................34
SECTION 9.11 Certificate Transfer Restrictions..........................35
SECTION 9.12 Indemnification by the Servicer............................35
ii
<PAGE>
TRUST AGREEMENT, dated as of February 1, 1996, between THE CIT GROUP
SECURITIZATION CORPORATION II, a Delaware corporation, as Seller, and The Bank
of New York (Delaware), a Delaware banking corporation, 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 Owner
Trust 1996-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 Certificate Owners and the
Seller.
SECTION 2.3 Purposes and Powers. The purpose of the Trust is to engage in
the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement, and to sell, transfer or exchange the Notes and
the Certificates;
(ii) with the proceeds of the sale of the Notes and the Certificates
to fund the Capitalized Interest Account and the Pre-Funding Account and to
pay the organizational, start-up and transactional expenses of the Trust
and to pay the balance of the proceeds to the Seller pursuant to the Sale
and Servicing Agreement;
(iii) to acquire, manage and hold the Contracts;
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<PAGE>
(iv) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate pursuant to the terms of the Indenture and to hold, manage and
distribute to the Certificate Owners pursuant to the terms of this
Agreement and the Sale and Servicing Agreement any portion of the Trust
Estate released from the lien of, and remitted to the Trust pursuant to,
the Indenture;
(v) to enter into and perform its obligations and exercise its rights
under the Basic Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith;
(vii) to hold and administer the Certificate Distribution Account and
Cash Collateral Account and apply the proceeds thereof as provided in the
Sale and Servicing Agreement;
(viii) to acquire Subsequent Contracts from the Seller from time to
time with funds on deposit in the Pre-Funding Account; and
(ix) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities and shall
not engage in any activity other than in connection with the foregoing or other
than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4 Appointment of Owner Trustee. The Seller hereby appoints the
Owner Trustee as trustee of the Trust effective as of the date hereof, to have
all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Owner Trust Estate. The Seller
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $10. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares that it
shall hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificate Owners, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
2
<PAGE>
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 II; Liability of
The CIT GP Corporation II.
(a) On the Closing Date, the Seller shall and does hereby transfer and
assign its entire interest in the Trust to The CIT GP Corporation II and The CIT
GP Corporation II shall otherwise in addition purchase at least a 1% interest in
the Trust (the "GP Interest"). The holder of the GP Interest (which initially
shall be The CIT GP Corporation II) shall pay organizational expenses of the
Trust as they may arise or shall, upon the request of the Owner Trustee,
promptly reimburse the Owner Trustee for any such expenses paid by the Owner
Trustee. The holder of the GP Interest shall be liable directly to and shall
indemnify the injured party for all losses, claims, damages, liabilities and
expenses of the Trust (including Expenses, to the extent not paid out of the
Owner Trust Estate) to the extent that the holder of the GP Interest would be
liable if the Trust were a partnership under the Delaware Revised Uniform
Limited Partnership Act in which the holder of the GP Interest were a general
partner; provided, however, that the holder of the GP Interest shall not be
liable for (i) any losses incurred by a Certificateholder or a Certificate Owner
in its capacity as an investor in the Certificates or by a Noteholder or Note
Owner in its capacity as an investor in the Notes, (ii) any losses, claims,
damages, liabilities and expenses arising out of the imposition by any taxing
authority of any federal, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Certificateholders, the Certificate
Owners, the Noteholders, the Note Owners, the Owner Trustee or the Indenture
Trustee (including any liabilities, costs or expenses with respect thereto) with
respect to the Contracts not specifically indemnified or represented to
hereunder or (iii) any obligations or liabilities of the Trust or the Owner
Trustee under, in connection with or pursuant to the Cash Collateral Agreement.
In addition, any third party creditors of the Trust (other than in connection
with the obligations described in the preceding sentence for which the holder of
the GP Interest shall not be liable) shall be deemed third party beneficiaries
of this subsection 2.7(a). The obligations of the holder of the GP Interest
under this subsection 2.7(a) shall be evidenced by the Certificates issued
pursuant to Section 3.10, which for purposes of the Business Trust Statute shall
be deemed to be a separate class of Certificates from all other Certificates
issued by the Trust; provided, however, that the rights and obligations
evidenced by all Certificates, regardless of class, shall, except as provided in
this subsection 2.7(a), be identical.
(b) No Certificate Owner, other than to the extent set forth in subsection
2.7(a) with respect to the holder of the GP Interest, shall have any personal
liability for any liability or obligation of the Trust.
3
<PAGE>
(c) No Certificate Owner, including the holder of the GP Interest, shall
have the right to exercise any control of the Trust other than to the extent of
its percentage ownership of the Certificates as provided herein.
SECTION 2.8 Title to Trust Property. Legal title to all the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be, for the benefit of the Trust.
SECTION 2.9 Situs of Trust. The Trust shall be located and administered in
the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any employees in any state other than
Delaware or New York; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State of
Delaware. Payments shall be received by the Trust only in Delaware or New York,
and payments will be made by the Trust only from Delaware or New York. The
principal office of the Trust shall be the Corporate Trust Office in Delaware.
SECTION 2.10 Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Owner Trustee, as of the Closing Date,
that:
(a) The Seller has been organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with power and
authority to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted and had at all relevant
times, and now has, power, authority and legal right to acquire and own the
Contracts.
(b) The Seller is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business requires such qualifications.
(c) The Seller has the power and authority to execute and deliver this
Agreement and to carry out its terms, the Seller has full power and authority to
sell and assign the property to be sold and assigned to and deposited with, as
part of, the Trust and the Seller has duly authorized such sale and assignment
to the Trust by all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the Seller by all
necessary corporate action.
(d) The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms of this Agreement do not conflict with, result in
any breach of any of the terms and provisions of or constitute (with or without
notice or lapse of time) a default under its certificate of incorporation or
by-laws of the Seller, or any indenture, agreement or other instrument to which
4
<PAGE>
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 GP
Interest. The CIT GP Corporation II, as intended holder of the GP Interest,
hereby represents and warrants to the Owner Trustee, as of the Closing Date,
that:
(a) It has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Illinois, 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.
(e) It has been duly capitalized by the delivery of a demand note (the
"Demand Note") from The CIT Group Holdings, Inc. ("CIT"), which Demand Note has
not been canceled, waived or terminated. The proceeds of such Demand Note have
not been used and will not be used to pay (i) any of the expenses of the holder
of the GP Interest in connection with the transfer contemplated by the Basic
Documents or (ii) the purchase price for such Certificates purchased pursuant to
Section 2.7. Such Demand Note is enforceable against CIT, subject to its terms,
and subject to the applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally and subject to the general principles of equity
(whether applied in a proceeding at law or in equity).
5
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SECTION 2.12 Tax Treatment. 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:
(a) 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 (i) the amount of
monthly interest at the Pass-Through Rate to which the Certificateholders
are entitled to for the related Due Period, (ii) interest on the excess, if
any, of the amount of interest and principal due to the Certificateholders
for the preceding Distribution Date over the amount in respect of interest
at the Pass-Through Rate that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, to the extent
permitted by law, at the Pass-Through Rate from such preceding Distribution
Date through the current Distribution Date, and (iii) the portion of the
market discount, if any, on the Contracts accrued during such month that is
allocable to the excess of the initial aggregate principal amount, if any,
of the Certificates over their initial aggregate issue price; and
(b) to the holder of the GP Interest, to the extent of any remaining
net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated to the holder of the GP
Interest to the extent the holder of the GP Interest is reasonably expected, as
determined by the Servicer, to bear the economic burden of such net losses, then
net losses shall be allocated among the Certificateholders as of the first
Record Date following the end of such month in proportion to their ownership of
principal amount of Certificates on such Record Date until the principal balance
of the Certificates is reduced to zero. The holder of the GP Interest is
authorized to modify the allocations in this paragraph if necessary or
appropriate, in its sole discretion, for the allocations to fairly reflect the
economic income, gain or loss to the holder of the GP Interest, the
Certificateholders, or as otherwise required by the Code.
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 may be issued to the holder of the GP Interest pursuant to Section
2.7 in such denominations as to represent at least 1% of the initial Certificate
Balance and (b) one Certificate may be issued in a denomination other than an
integral multiple of $1,000. The Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of a Responsible Officer of the Owner
Trustee. Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trust, shall be valid and binding obligations of the
Trust, notwithstanding that such individuals or any of them shall have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of authentication and delivery of such
Certificates.
(b) The Definitive Certificates (as hereinafter defined) shall be
typewritten, printed, lithographed or engraved or produced by any combination of
these methods (with or without steel engraved borders) all as determined by the
officers executing such Certificates, as evidenced by their execution of such
Certificates.
(c) The terms of the Certificates set forth in Exhibit A shall form part of
this Agreement.
SECTION 3.3 Execution, Authentication and Delivery. Concurrently with the
sale of the Initial Contracts to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates in an aggregate
principal amount equal to the initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Seller, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Seller, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee, or by the Owner Trustee's
authenticating agent, by manual signature. Such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication. The Bank of New York is hereby appointed as the Owner Trustee's
authenticating agent.
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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. The Bank of New
York shall be the initial Certificate Registrar. Upon any resignation of a
Certificate Registrar, the Owner Trustee shall promptly appoint a successor or,
if it elects not to make such an appointment, assume the duties of Certificate
Registrar.
(b) Upon surrender for registration or transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute on behalf of the Trust, authenticate and deliver (or shall cause its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by the
Owner Trustee or any authenticating agent.
(c) At the option of a Holder of Certificates, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
principal amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office maintained pursuant to Section 3.8. Whenever any
Certificates are so surrendered for exchange, the Owner Trustee shall execute on
behalf of the Trust, authenticate and deliver (or shall cause its authenticating
agent to authenticate and deliver) one or more Certificates dated the date of
authentication by the Owner Trustee or any authenticating agent. Such
Certificates shall be delivered to the Holder making the exchange.
(d) Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Holder or his attorney duly authorized in writing with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act. Each Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently destroyed by the Owner Trustee or
Certificate Registrar in accordance with its customary practice.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
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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
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in the Certificate Register as the Certificateholder of such Certificate for the
purpose of receiving distributions pursuant to Article V and for all other
purposes whatsoever, and neither the Owner Trustee nor the Certificate Registrar
shall be affected by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and Addresses. The
Owner Trustee shall furnish or cause to be furnished to the Servicer, the Seller
and the holder of the GP Interest, within 15 days after receipt by the Owner
Trustee of a request therefor from the Servicer, the Seller or the holder of the
GP Interest in writing, a list, in such form as the Servicer, the Seller or the
holder of the GP Interest may reasonably require, of the names and addresses of
the Certificateholders as of the most recent Record Date. If three or more
Holders of Certificates or one or more Holder of Certificates evidencing not
less than 25% of the Certificate Balance apply in writing to the Owner Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Certificateholders. Each Holder, by receiving and holding a Certificate, shall
be deemed to have agreed not to hold the Seller, the holder of the GP Interest
or the Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.8 Maintenance of Corporate Trust Office. The Owner Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates the offices of The Bank of New York, 101 Barclay
Street, 12 East Floor, New York, New York 10286 as its principal office for such
purposes. The Owner Trustee shall give prompt written notice to the Seller and
to the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 3.9 Appointment of Paying Agent. The Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.2 and make withdrawals from the Cash Collateral Account of
amounts to be deposited in the Certificate Distribution Account and amounts, if
any, to be paid to the holder of the GP Interest, in each case pursuant to the
Sale and Servicing Agreement and amounts to be paid to the Cash Collateral
Depositor pursuant to the Cash Collateral Agreement, and the Paying Agent shall
report the amounts of such distributions and withdrawals to the Owner Trustee
and the Servicer. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account and/or the Cash Collateral
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 The Bank of New York, and any co-paying agent chosen by
the Owner Trustee, and acceptable to the Servicer. The Paying Agent shall be
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permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. If The Bank of New York shall no longer be the Paying Agent, the Owner
Trustee shall appoint a successor to act as Paying Agent (which shall be an
Eligible Institution). The Owner Trustee shall cause such successor Paying Agent
or any additional Paying Agent appointed by the Owner Trustee to execute and
deliver to the Owner Trustee an instrument in which such successor Paying Agent
or additional Paying Agent shall agree with the Owner Trustee that as Paying
Agent, such successor Paying Agent or additional Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders. The Paying Agent shall return all unclaimed funds to
the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Owner Trustee. The provisions of
Sections 6.3, 6.6, 6.7 and 6.9 shall apply to the Owner Trustee also in its role
as Paying Agent (if the Owner Trustee shall also act as Paying Agent), for so
long as the Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 3.10 Disposition by the Holder of the GP Interest. On and after the
Closing Date, the holder of the GP Interest shall retain beneficial and record
ownership of Certificates representing at least 1% of the Certificate Balance.
Any attempted transfer of any Certificate that would reduce such interest of the
holder of the GP Interest below 1% of the Certificate Balance shall be void. The
Owner Trustee shall cause any Certificate issued to the Seller to contain a
legend to such effect.
SECTION 3.11 Book-Entry Certificates. The Certificates, upon original
issuance, shall be issued in the form of a typewritten Certificate or
Certificates representing Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Depository by or on behalf of the Trust;
provided, however, that one Definitive Certificate may be issued to The CIT GP
Corporation II, as holder of the GP Interest pursuant to Section 2.7. Such
Certificate or Certificates (other than the Definitive Certificate issued to The
CIT GP Corporation II) shall initially be registered on the Certificate Register
in the name of Cede & Co., the nominee of the initial Depository and no
Certificate Owner shall receive a definitive Certificate representing such
Certificate Owner's interest in such Certificate, except as provided in Section
3.13. Unless and until definitive fully registered Certificates (the "Definitive
Certificates") shall have been issued to Certificate Owners pursuant to Section
3.13:
(a) the provisions of this Section 3.11 shall be in full force and effect;
(b) the Certificate Registrar and the Owner Trustee shall be entitled to
deal with the Depository for all purposes of this Agreement (including the
payment of principal of and interest on the Certificates and the giving of
instructions or directions hereunder) as the sole Holder of the Certificate, and
shall have no obligation to the Certificate Owners;
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(c) to the extent that the provisions of this Section 3.11 conflict with
any other provisions of this Agreement, the provisions of this Section 3.11
shall control;
(d) the rights of the Certificate Owners shall be exercised only through
the Depository and shall be limited to those established by law and agreements
between such Certificate Owners and the Depository and/or the Depository
Participants. Pursuant to the Certificate Depository Agreement unless and until
Definitive Certificates are issued pursuant to Section 3.13, the initial
Depository will make book-entry transfers among the Depository Participants and
receive and transmit payments of principal of and interest on the Certificates
to such Depository Participants;
(e) whenever this Agreement requires or permits actions to be taken based
upon instructions or directions of Holders of Certificates evidencing a
specified percentage of the Certificate Balance, the Depository shall be deemed
to represent such percentage only to the extent that it has received
instructions to such effect from Certificate Owners and/or Depository
Participants owning or representing, respectively, such required percentage of
Certificates and has delivered such instructions to the Owner Trustee.
SECTION 3.12 Notices to Depository. Whenever a notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 3.13, the Owner Trustee shall give all such notices and
communications specified herein to be given to Certificateholders to the
Depository and shall have no further obligation to the Certificate Owners,
except to the holder of the GP Interest.
SECTION 3.13 Definitive Certificates. If (i) the Servicer advises the Owner
Trustee in writing that the Depository is no longer willing or able to properly
discharge its responsibilities with respect to the Certificates, and the
Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Owner Trustee in writing that it elects to terminate the
book-entry system through the Depository, or (iii) after the occurrence of an
Event of Default or an Event of Termination, Certificate Owners representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interest of the Certificate
Owners, then the Depository shall notify all Certificate Owners and the Owner
Trustee of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Owner Trustee of the typewritten Certificate or Certificates
representing the Book-Entry Certificates by the Depository, accompanied by
registration instructions, the Owner Trustee shall execute and authenticate the
Definitive Certificates in accordance with the instructions of the Depository.
Neither the Certificate Registrar nor the Owner Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Owner Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders.
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SECTION 3.14 Seller as Certificateholder. The Seller in its individual or
any other capacity may become the owner or pledgee of Certificates and may
otherwise deal with the Owner Trustee or its Affiliates as if it were not the
Seller.
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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
a majority of the Certificateholders, to (a) remove the Servicer under the Sale
and Servicing Agreement pursuant to Section 9.01 thereof, (b) appoint a
successor Servicer pursuant to Section 9.02 of the Sale and Servicing Agreement,
or (c) except as expressly provided in the Basic Documents, sell the Contracts
or any interest therein after the termination of the Indenture.
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SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Holders of Certificates (including the holder of the GP Interest) and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided herein, any
action that may be taken or consent that may be given or withheld by the
Certificateholders under this Agreement may be taken, given or withheld by the
Holders of Certificates evidencing not less than a majority of the Certificate
Balance. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by Holders of Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Accounts.
(a) On or prior to the Closing Date, the Trust shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee or the Owner
Trustee, as appropriate, for the benefit of the Noteholders and
Certificateholders (and, in the case of the Cash Collateral Account, for the
benefit of the Certificateholders and the Cash Collateral Depositor) the
accounts as provided in Section 5.01 of the Sale and Servicing Agreement.
(b) The Owner Trustee shall possess all right, title and interest in and to
all funds on deposit from time to time in the Certificate Distribution Account
and the Cash Collateral Account and in all proceeds thereof. Except as otherwise
provided herein or in the Sale and Servicing Agreement, the Certificate
Distribution Account and the Cash Collateral Account shall be under the sole
dominion and control of the Owner Trustee for the benefit of the
Certificateholders and, in the case of the Cash Collateral Account, for the
benefit of the Certificateholders and the Cash Collateral Depositor, as their
respective interests may appear. If, at any time, the Certificate Distribution
Account or the Cash Collateral Account ceases to be held at an Eligible
Institution, the Owner Trustee (or the Servicer on behalf of the Owner Trustee,
if the Certificate Distribution Account or the Cash Collateral Account is not
then held by the Owner Trustee or an Affiliate thereof) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Certificate Distribution Account or
Cash Collateral Account at an Eligible Institution and shall transfer any cash
and/or any investments to such new Certificate Distribution Account or Cash
Collateral Account, as the case may be.
SECTION 5.2 Application of Trust Funds.
(a) On each Distribution Date, the Owner Trustee shall (i) transfer or
cause the transfer of amounts on deposit in the Cash Collateral Account to the
Certificate Distribution Account pursuant to Section 5.06 of the Sale and
Servicing Agreement, (ii) transfer and distribute, or cause to be transferred
and distributed, amounts on deposit in the Cash Collateral Account to the holder
of the GP Interest and the Cash Collateral Depositor, respectively, pursuant to
Section 5.06 of the Sale and Servicing Agreement and the applicable provisions
of the Cash Collateral Agreement, respectively, on or prior to such Distribution
Date, and (iii) distribute to the Certificateholders, on a pro rata basis,
amounts deposited in the Certificate Distribution Account pursuant to the Sale
and Servicing Agreement on or prior to such Distribution Date first in respect
of interest and then in respect of principal.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.08 of the Sale and Servicing Agreement on such
Distribution Date setting forth, among other things, the amount of the
distribution allocable to principal and to interest, the Certificate Balance
after giving effect to such distribution, the amount of funds on deposit in the
Pre-Funding Account during the Funding Period, the number and aggregate
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principal balance of Subsequent Contracts purchased by the Trust on the related
Distribution Date during the Funding Period and the Servicer Payment with
respect to such Distribution Date or Monthly Period, as applicable.
(c) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this Section
5.2. The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Certificateholders sufficient funds for the
payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Owner Trustee may in its sole discretion withhold such
amounts in accordance with this subsection 5.2(c). If a Certificateholder wishes
to apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.
(d) If the Indenture Trustee holds escheated funds for payment to the Trust
pursuant to Section 3.3(e) of the Indenture, the Owner Trustee shall, upon
notice from the Indenture Trustee that such funds exist, submit on behalf of the
Trust an Issuer Order to the Indenture Trustee pursuant to Section 3.3(e) of the
Indenture instructing the Indenture Trustee to pay such funds to or at the order
of the Seller.
SECTION 5.3 Method of Payment. Subject to subsection 7.1(c), distributions
required to be made to Certificateholders on any Distribution Date shall be made
to each Certificateholder of record on the immediately preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Record Date and such Holder's Certificates in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) such Certificateholder is the
holder of the GP Interest, or an Affiliate thereof, or, if not, by check mailed
to such Certificateholder at the address of such holder appearing in the
Certificate Register; provided, however, that, unless Definitive Certificates
have been issued pursuant to Section 3.13, with respect to Certificates
registered on the Record Date in the name of the nominee of the Depository
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of the
Certificates (whether on the Certificate Final Distribution Date or otherwise)
will be payable only upon presentation and surrender of such Certificate at the
office or agency maintained for that purpose by the Owner Trustee pursuant to
Section 3.8.
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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 such tax returns relating to the Trust and
make such elections as may from time to time be required or appropriate under
any applicable state or federal statute or rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or cause to be collected any withholding tax as described in and
in accordance with subsection 5.2(c) with respect to income or distributions to
Certificateholders.
SECTION 5.5 Signature on Returns; Tax Matters Partner. The Owner Trustee
shall sign on behalf of the Trust any and all tax returns of the Trust, unless
applicable law requires a Certificateholder to sign such documents, in which
case such documents shall be signed by the holder of the GP Interest. To the
extent one may be required, the holder of the GP Interest shall be the "tax
matters partner" of the Trust pursuant to the Code.
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ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.1 Duties of Owner Trustee.
(a) The Owner Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Agreement and the other Basic
Documents to which the Trust is a party, including the administration of the
Trust in the interest of the Certificateholders, subject to the Basic Documents
and in accordance with the provisions of this Agreement and the Basic Documents
to which the Trust is a party. No implied covenants or obligations shall be read
into this Agreement.
The Owner Trustee is authorized from time to time to take such action as
the Servicer directs in writing with respect to the Basic Documents and shall,
upon the written direction of the Servicer, execute and deliver any amendments
to this Agreement or any of the Basic Documents.
(b) Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer to carry out its obligations under
the Sale and Servicing Agreement.
(c) In the absence of bad faith on its part, the Owner Trustee may
conclusively rely upon certificates or opinions furnished to the Owner Trustee
and conforming to the requirements of this Agreement in determining the truth of
the statements and the correctness of the opinions contained therein; provided,
however, that the Owner Trustee shall have examined such certificates or
opinions so as to determine compliance of the same with the requirements of this
Agreement.
(d) The Owner Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection 6.1(d) shall not limit the effect of subsection
6.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Owner Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Owner Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 4.1, 4.2 or 6.4.
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(e) Subject to Sections 5.1 and 5.2, monies received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law or the Sale and Servicing Agreement and may be deposited under such general
conditions as may be prescribed by law, and the Owner Trustee shall not be
liable for any interest thereon.
(f) The Owner Trustee shall not take any action that (i) is inconsistent
with the purposes of the Trust set forth in Section 2.3 or (ii) would, to the
actual knowledge of a Responsible Officer of the Owner Trustee, result in the
Trust's becoming taxable as a corporation for federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section 6.1 and any such direction shall be null
and void.
SECTION 6.2 Rights of Owner Trustee. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents and each certificate or
other document attached as an exhibit to or contemplated by the Basic Documents
to which the Trust is to be a party, in such form as the Seller shall approve as
evidenced conclusively by the Owner Trustee's execution thereof. In addition to
the foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as the
Servicer recommends with respect to the Basic Documents.
SECTION 6.3 Acceptance of Trusts and Duties. Except as otherwise provided
in this Article VI, in accepting the trusts hereby created The Bank of New York
(Delaware) 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
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of the assignment of any Contract to the Trust or of any intervening assignment;
the completeness of any Contract; the performance or enforcement of any
Contract; the compliance by the Seller or the Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the Servicer,
the Trustee or the Servicer or any subservicer taken in the name of the Owner
Trustee.
(b) the Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the Servicer
or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Basic
Document, if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes or the Certificate Balance of and
interest on the Certificates;
(e) the Owner Trustee shall not be responsible for or in respect of and
makes no representation as to the validity or sufficiency of any provision of
this Agreement or for the due execution hereof by the Seller or for the form,
character, genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, the Notes, the Certificates (other than the certificate of
authentication on the Certificates) or of any Contracts or any related
documents, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to any Noteholder, to any Certificateholder or the
Cash Collateral Depositor, 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 Noteholders, promptly upon receipt of a
written request therefor, copies of the Purchase Agreement, any Subsequent
Purchase Agreements, the Sale and Servicing Agreement, any Subsequent Transfer
Agreements and this Agreement.
SECTION 6.6 Representations and Warranties of Owner Trustee. The Owner
Trustee hereby represents and warrants to the Seller, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation.
(b) It has full power, authority and legal right to execute, deliver and
perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
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(c) The execution, delivery and performance by it of this Agreement (i)
shall not violate any provision of any law or regulation governing the banking
and trust powers of the Owner Trustee or any order, writ, judgment or decree of
any court, arbitrator or governmental authority applicable to the Owner Trustee
or any of its assets, (ii) shall not violate any provision of the corporate
charter or by-laws of the Owner Trustee, or (iii) shall not violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any properties
included in the Trust pursuant to the provisions of any mortgage, indenture,
contract, agreement or other undertaking to which it is a party, which
violation, default or lien could reasonably be expected to have a materially
adverse effect on the Owner Trustee's performance or ability to perform its
duties as Owner Trustee under this Agreement or on the transactions contemplated
in this Agreement.
(d) The execution, delivery and performance by the Owner Trustee of this
Agreement shall not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any other
action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of banks or trust companies in the
jurisdiction in which the Trust was formed.
(e) This Agreement has been duly executed and delivered by the Owner
Trustee and constitutes the legal, valid and binding agreement of the Owner
Trustee, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
SECTION 6.7 Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties and need not
investigate any fact or matter in any such document. The Owner Trustee may
accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee: (i) may act directly or through its agents,
attorneys, custodians or nominees pursuant to agreements entered into with any
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of them, and the Owner Trustee shall not be liable for the conduct or misconduct
of such agents, attorneys, custodians or nominees if such agents, attorneys,
custodians or nominees shall have been selected by the Owner Trustee with
reasonable care; and (ii) may consult with counsel, accountants and other
skilled professionals to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this Agreement or any
Basic Document.
SECTION 6.8 Owner Trustee May Own Certificates and Notes. The Owner Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates or Notes and may deal with the Seller, the Indenture Trustee and
the Servicer in transactions in the same manner as it would have if it were not
the Owner Trustee.
SECTION 6.9 Compensation and Indemnity. The Owner Trustee shall receive as
compensation for its services hereunder such fees as have been separately agreed
upon before the date hereof between the Seller, or any person representing the
Seller, and the Owner Trustee, and the Owner Trustee shall be entitled to be
reimbursed by the Servicer for its other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, custodians, nominees, representatives, experts and counsel as the Owner
Trustee may employ in connection with the exercise and performance of its rights
and its duties hereunder. If the Seller shall fail to compensate the Owner
Trustee, the Servicer shall pay to the Owner Trustee such compensation. The
Servicer shall indemnify the Owner Trustee and its successors, assigns, agents
and servants in accordance with the provisions of Section 8.02 of the Sale and
Servicing Agreement. The indemnities contained in this Section 6.9 shall survive
the resignation, removal or termination of the Owner Trustee or the termination
of this Agreement. Any amounts paid to the Owner Trustee pursuant to this
Article VI shall be deemed not to be a part of the Owner Trust Estate
immediately after such payment.
SECTION 6.10 Replacement of Owner Trustee.
(a) The Owner Trustee may resign at any time and be discharged from the
trusts hereby created by giving 30 days' prior written notice thereof to the
Servicer, provided that such resignation shall not become effective until a
successor Owner Trustee has been appointed. The Servicer may appoint a successor
Owner Trustee by delivering a written instrument pursuant to Section 6.10(b). If
no successor Owner Trustee shall have been appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee. The Servicer shall remove the Owner
Trustee if:
(i) the Owner Trustee shall cease to be eligible in accordance with
the provisions of Section 6.13 and shall fail to resign after written
request therefor by the Servicer;
(ii) the Owner Trustee shall be adjudged bankrupt or insolvent;
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(iii) a receiver or other public officer shall be appointed or take
charge or control of the Owner Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
(b) If the Owner Trustee resigns or is removed or if a vacancy exists in
the office of Owner Trustee for any reason the Servicer shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate (one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee) and shall pay all fees owed to the outgoing
Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 6.10
shall not become effective until a written acceptance of appointment is
delivered by the successor Owner Trustee to the outgoing Owner Trustee and the
Servicer and all fees and expenses due to the outgoing Owner Trustee are paid.
Any successor Owner Trustee appointed pursuant to this Section 6.10 shall be
eligible to act in such capacity in accordance with Section 6.13 and, following
compliance with the preceding sentence, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor under this Agreement,
with like effect as if originally named as Owner Trustee. The Servicer shall
provide notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.
(d) The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement. The Servicer and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
(e) Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 6.10, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Noteholders and
the Rating Agencies .
SECTION 6.11 Merger or Consolidation of Owner Trustee. Any corporation into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 6.13, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; provided, however, that the Owner Trustee shall mail notice
of such merger, conversion or consolidation to the Rating Agencies.
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SECTION 6.12 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Servicer and the Owner Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or as separate trustee or trustees, of all or any part of the Owner
Trust Estate, and to vest in such Person, in such capacity, such title to the
Trust, or any part thereof, and, subject to the other provisions of this Section
6.12, such powers, duties, obligations, rights and trusts as the Servicer and
the Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee alone shall have the power to make such
appointment. Pursuant to a Co-Trustee Agreement, dated as of February 1, 1996,
between The Bank of New York (Delaware) and The Bank of New York, the Owner
Trustee shall appoint The Bank of New York, as a co-trustee hereunder and such
agreement is hereby incorporated herein by reference. No co-trustee or separate
trustee under this Agreement shall be required to meet the terms of eligibility
as a successor trustee pursuant to Section 6.13 and no notice of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
6.10.
(b) Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
jointly by the Owner Trustee and such separate trustee or co-trustee (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
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acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 6.13 Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times: (a) be authorized to exercise corporate trust powers; (b)
have a combined capital and surplus of at least $50,000,000 and be subject to
supervision or examination by federal or state authorities; and (c) have (or
have a parent which has) a long-term unsecured debt rating of at least "BBB" by
Standard & Poor's and have a long-term unsecured debt rating of at least "Baa3"
by Moody's. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 6.13, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.13, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
At all times at least one of the Owner Trustee or the Co-trustee appointed
pursuant hereto shall be a person that satisfies the provisions of Section
3807(a) of the Business Trust Statute (the "Delaware Trustee").
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ARTICLE VII
TERMINATION OF TRUST AGREEMENT
SECTION 7.1 Termination of Trust Agreement.
(a) This Agreement has been entered into in part to induce the Indenture
Trustee and the Certificateholders from time to time to participate in the
transactions contemplated hereby, and each of the Owner Trustee, the holder of
the GP Interest and the Seller agree that the Indenture Trustee (so long as the
Indenture shall not have been terminated in accordance with its terms) and the
Certificateholders from time to time are third party beneficiaries hereof, and
shall be entitled to enforce the terms of this Agreement to the same extent as
if they were signatories hereto, subject, however, to Article IV hereof and to
the applicable provisions of the Indenture. So long as the Indenture shall not
have been terminated in accordance with its terms, this Agreement and the Trust
created hereby are irrevocable by the Owner Trustee and the Seller, unless the
Indenture Trustee and the Certificateholders consent in writing to such
termination. This Agreement (other than Section 6.9) and the Trust shall
terminate and be of no further force or effect on the earlier of: (i) the final
distribution by the Owner Trustee of all monies or other property or proceeds of
the Owner Trust Estate in accordance with the terms of the Indenture, the Sale
and Servicing Agreement (including the exercise by the Servicer of its option to
purchase the Contracts pursuant to Section 11.01 of the Sale and Servicing
Agreement or resulting from the mandatory sale of all Contracts pursuant to
Section 11.02 of the Sale and Servicing Agreement) and Article V, (ii) at the
time provided in Section 7.2 or (iii) twenty-one years less one day after the
death of the last survivor of all of the decedents of the grandparents of David
C. Rockefeller living on the date of the earliest execution of this Agreement by
any party hereto, but if this Agreement and the Trust created hereby shall be or
become authorized under applicable law to be valid for a period commencing on
the twenty-first anniversary of the death of such last survivor (or, without
limiting the generality of the foregoing, if legislation shall become effective
providing for the validity of this Agreement and the Trust created hereby for a
period in gross exceeding the period for which this Agreement and the Trust
created hereby are hereinabove stated to extend and be valid), then this
Agreement and the Trust created hereby shall not terminate under this subsection
(iii), but shall extend to and continue in effect, but only if such
non-termination and extension shall then be valid under applicable law, until
the day proceeding such date as the same shall, under applicable law, cease to
be valid. Upon such termination, all monies or other property or proceeds
constituting part of the Owner Trust Estate shall be distributed in accordance
with the terms of the Agreement. The bankruptcy, liquidation, dissolution, death
or incapacity of any Certificateholder, other than the holder of the GP Interest
as described in Section 7.2, shall not (x) operate to terminate this Agreement
or the Trust, nor (y) entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or the Owner Trust
Estate nor (z) otherwise affect the rights, obligations and liabilities of the
parties hereto. The bankruptcy, liquidation or dissolution of the Owner Trustee
(or any other beneficiary herewith) will not terminate this Agreement or the
Trust, nor entitle such person's legal representatives or heirs, as appropriate,
to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust or Owner Trust Estate, nor otherwise affect
the rights, obligations and liabilities of the parties hereto. No creditor of
any Certificateholder shall obtain legal title to or exercise legal or equitable
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remedies with respect to the Owner Trust Estate as a result of such
Certificateholder's holding of the Certificate. No transfer, by operation of law
or otherwise, of any right, title and interest of any Certificateholder in and
to its undivided beneficial interest in the Owner Trust Estate shall operate to
terminate this Agreement or the Trust created hereby.
(b) Except as provided in Section 7.1(a), neither the Seller nor the holder
of the GP Interest nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer given
pursuant to Section 11.01 of the Sale and Servicing Agreement, or within five
Business Days of the Owner Trustee receiving notice of such termination from the
Indenture Trustee pursuant to Section 11.02 of the Sale and Servicing Agreement,
stating: (i) the Distribution Date upon or with respect to which final payment
of the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Paying Agent therein designated; (ii) the
amount of any such final payment; and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Paying
Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2.
(d) If all of the Certificateholders shall not surrender their Certificates
for cancellation within six months after the date specified in the above
mentioned written notice, the Owner Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Owner Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Subject to applicable laws with respect to escheat of
funds, any funds remaining in the Trust after exhaustion of such remedies in the
preceding sentence shall be deemed property of the holder of the GP Interest and
distributed by the Owner Trustee to the holder of the GP Interest.
(e) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute.
SECTION 7.2 Dissolution upon Bankruptcy of the Holder of the GP Interest.
Upon the occurrence of an Insolvency Event with respect to the holder of the GP
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Interest, this Agreement and the Trust shall be terminated and the Contracts
liquidated in accordance with Section 7.1 unless, within 90 days after such
occurrence, the Owner Trustee shall have received written instructions from (a)
each of the Certificateholders (other than the holder of the GP Interest) and
(b) each of the Noteholders, to the effect that each such party disapproves of
the liquidation of the Contracts and termination of the Trust. Promptly after
the occurrence of any Insolvency Event with respect to the holder of the GP
Interest: (i) the holder of the GP Interest shall give the Indenture Trustee and
the Owner Trustee written notice of such Insolvency Event; (ii) the Owner
Trustee shall, upon the receipt of such written notice from the holder of the GP
Interest, give prompt written notice to the Certificateholders and the Indenture
Trustee of the occurrence of such event and (iii) the Indenture Trustee shall,
upon receipt of written notice of such Insolvency Event from the Owner Trustee
or the holder of the GP Interest, give prompt written notice to the Noteholders
of the occurrence of such event; provided, however, that any failure to give a
notice required by this sentence shall not prevent or delay in any manner a
termination of the Trust pursuant to the first sentence of this Section 7.2. If
no such instructions are received within such 90-day period, the Owner Trustee
shall direct the Indenture Trustee promptly to sell the assets of the Trust
(other than the Designated Accounts and the Cash Collateral Account) in a
commercially reasonable manner and on commercially reasonable terms. The
proceeds of any such sale, disposition or liquidation of the assets of the Trust
shall be treated as collections on the Contracts and deposited in the Collection
Account pursuant to Section 5.02 of the Sale and Servicing Agreement.
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ARTICLE VIII
AMENDMENTS
SECTION 8.1 Amendments Without Consent of Certificateholders or
Noteholders. This Agreement may be amended by the Seller and the Owner Trustee
without the consent of any of the Noteholders or the Certificateholders (but
with prior written notice to each of the Rating Agencies and in the case of
clauses (iii) and (vi), satisfaction of the Rating Agency Condition), to (i)
correct manifest error or cure any ambiguity, (ii) correct or supplement any
provision in this Agreement that may be inconsistent with any other provision in
this Agreement, (iii) add or amend any provision as requested by Moody's or
Standard & Poor's to maintain or improve the rating of the Notes or
Certificates, (iv) add to the covenants, restrictions or obligations of the
Seller, the holder of the GP Interest, the Owner Trustee or the Indenture
Trustee, (v) evidence and provide for the acceptance of the appointment of a
successor trustee with respect to the Owner Trust Estate and add to or change
any provisions as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee pursuant to Article VI and (vi) add,
change or eliminate any other provision of this Agreement provided that an
amendment pursuant to this clause (vi), as evidenced by an Opinion of Counsel,
does not adversely affect in any material respect the interests of the
Noteholders or the Certificateholders.
SECTION 8.2 Amendments With Consent of Certificateholders and Noteholders.
This Agreement may be amended from time to time by the Seller and the Owner
Trustee with the consent of Noteholders whose Notes evidence not less than a
majority of the aggregate outstanding 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 (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Contracts, or
distributions that shall be required to be made on any Note or Certificate, any
Contract Rate, the Pass Through Rate or the Class A Rate or (b) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the holders of all Notes and all of the Certificate Balance with
respect to Certificates then outstanding. 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.
31
<PAGE>
(b) It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to Section 8.2 to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(c) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
(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.
32
<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 for Section 2.7, the
last sentence of Section 5.2(a) and Section 9.12, 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,
with a copy to The Bank of New York at 101 Barclay Street, 12 East Floor, New
York, New York 10286, attn: Peter Lagatta, (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
Corporation, to Standard & Poor's Corporation, 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.
33
<PAGE>
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 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), each
Certificateholder or Certificate Owner, the Indenture Trustee and each
Noteholder or Note Owner shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the holder of the GP
Interest or the Seller, acquiesce, petition or otherwise invoke or cause the
holder of the GP Interest to invoke the process of any court or governmental
authority for the purpose of commencing or sustaining a case against the holder
of the GP Interest or the Seller under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the holder of the
GP Interest or the Seller or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the holder of the GP Interest or
the Seller.
SECTION 9.8 No Recourse. Each Certificateholder by accepting a Certificate
acknowledges that such Certificateholder's Certificates represent beneficial
interests in the Trust only and do not represent interests in or obligations of
the Seller, the holder of the GP Interest, the Servicer, the Owner Trustee, the
Indenture Trustee or any Affiliate thereof and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Certificates or the Basic Documents.
SECTION 9.9 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 9.10 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
34
<PAGE>
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) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1)
of the Code or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof and the Certificate
Owner shall each be deemed to have represented and warranted that it is not a
Benefit Plan and not subject to the foregoing limitation.
SECTION 9.12 Indemnification by the Servicer. The Owner Trustee further
acknowledges and accepts the conditions and limitations with respect to the
Servicer's obligation to indemnify, defend and hold the Owner Trustee harmless
as set forth in Section 8.02 of the Sale and Servicing Agreement.
35
<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
THE BANK OF NEW YORK (DELAWARE),
as Owner Trustee
By: /s/ Joseph G. Ernst
Name: Joseph G. Ernst
Title: Assistant 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 GP Interest:
THE CIT GP CORPORATION II
By: /s/ Frank Garcia
Name: Frank Garcia
Title: Vice President
36
<PAGE>
EXHIBIT A
NUMBER ______ $ _________________
CUSIP NO. 125596AF3
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO INTEREST IN THIS CERTIFICATE MAY BE ACQUIRED BY OR FOR THE ACCOUNT OF
(i) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, ("ERISA")) THAT IS SUBJECT
TO THE PROVISIONS OF TITLE I OF ERISA, (ii) A PLAN DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (INCLUDING, WITHOUT
LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS), OR (iii) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY. BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE HOLDER HEREOF AND THE
CERTIFICATE OWNER SHALL EACH BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT
IS NOT A BENEFIT PLAN.
PURSUANT TO THE TRUST AGREEMENT (AS DEFINED BELOW), THE CIT GP CORPORATION
II ("GP CORP") SHALL RETAIN BENEFICIAL AND RECORD OWNERSHIP OF CERTIFICATES
REPRESENTING AT LEAST 1% OF THE CERTIFICATE BALANCE, AND ANY ATTEMPTED TRANSFER
OF THIS CERTIFICATE THAT REDUCES THE BENEFICIAL AND RECORD INTEREST OF GP CORP
TO BELOW 1% OF THE CERTIFICATE BALANCE SHALL BE VOID.
CIT RV OWNER TRUST 1996-A
5.85% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used recreational vehicles and sold to the Trust by The CIT Group
Securitization Corp II (This Certificate does not represent an interest in or
<PAGE>
obligation of The CIT Group Securitization Corporation II, The CIT Group/Sales
Financing, Inc. or The CIT Group Holdings, Inc. or any of their respective
affiliates, except to the extent described below.)
THIS CERTIFIES THAT ___________ is the registered owner of a nonassessable,
fully-paid, fractional undivided interest in CIT RV Owner Trust 1996-A (the
"Trust") formed by The CIT Group Securitization Corporation II, a Delaware
corporation.
The Trust was created pursuant to a Trust Agreement, dated as of February
1, 1996 (as amended and supplemented from time to time, the "Trust Agreement"),
between the Seller and The Bank of New York (Delaware), 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
5.85% Asset Backed Certificates (the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property of
the Trust includes a pool of simple interest retail installment sale contracts
(the "Contracts") secured by the new and used recreational vehicles financed
thereby (the "Financed Vehicles"), certain monies received under the Initial
Contracts on and after February 1, 1996 (the "Initial Cut-off Date") or under
the Subsequent Contracts as of the related Subsequent Cut-off Date, security
interests in the Initial Financed Vehicles, the Collection Account, the Cash
Collateral Account, the Note Distribution Account, the Certificate Distribution
Account, the Capitalized Interest Account and the Pre-Funding Account, in each
case together with the proceeds thereof (except for investment earnings on the
Cash Collateral Account), the proceeds from claims under certain insurance
policies in respect of individual Initial Financed Vehicles or the related
Obligors and certain rights under the Sale and Servicing Agreement. The rights
of the holders of the Certificates are subordinated to the rights of the holders
of the Notes, as set forth in the Sale and Servicing Agreement.
Under the Trust Agreement, there shall be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day,
commencing on March 15, 1996 (each, a "Distribution Date"), to the person in
whose name this Certificate is registered on the related Record Date (as defined
below), such Certificateholder's fractional undivided interest in the amount of
interest and principal to be distributed to Certificateholders on such
Distribution Date. On each Distribution Date interest on this Certificate shall
be distributed in an amount equal to one-twelfth of the product of the rate per
annum shown above and the outstanding principal amount of this Certificate as of
the preceding Distribution Date after giving effect to all payments of principal
and other reductions in the principal amount of this Certificate to be made on
such Distribution Date (or in the case of the first Distribution Date the
original outstanding principal amount of this Certificate). The "Record Date,"
with respect to any Distribution Date, means the close of business on the day
immediately preceding such Distribution Date, or if Definitive Certificates are
issued, the last day of the month immediately preceding the month in which such
Distribution Date occurs.
A-2
<PAGE>
The distributions in respect of principal 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
first to interest due and payable on this Certificate as provided above and then
to the unpaid distributions in respect of principal 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 or Certificate Owner, by its acceptance of a
Certificate or, in the case of a Certificate Owner, a beneficial interest in a
Certificate, covenants and agrees that such Certificateholder or Certificate
Owner, as the case may be, shall not, prior to the date which is one year and
one day after the termination of the Trust Agreement, acquiesce, petition or
otherwise invoke or cause the Seller, the Issuer or the holder of the GP
Interest to invoke the process of any court or governmental authority for the
purpose of commencing or sustaining a case against the Seller, the Issuer or the
holder of the GP Interest under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller, the
Issuer or the holder of the GP Interest or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller, the
Issuer or the holder of the GP Interest.
Distributions on this Certificate shall be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments shall be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate shall be made after due notice by the Owner Trustee of the pendency
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.
A-3
<PAGE>
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee by manual signature, this Certificate
shall not entitle the holder hereof to any benefit under the Trust Agreement or
the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-4
<PAGE>
IN WITNESS WHEREOF, the Co-Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Certificate to be duly executed.
CIT RV OWNER TRUST 1996-A
BY: THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Co-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.
THE BANK OF NEW YORK (DELAWARE)
not in its
capacity but solely
as Co-Trustee
By:
----------------------------
The Bank of New York, as
authenticating agent
A-5
<PAGE>
REVERSE OF CERTIFICATE
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer, The CIT Group Holdings, Inc., the holder of the GP
Interest, the Indenture Trustee, the Owner Trustee, the Cash Collateral
Depositor 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 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 The Bank of New York.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $20,000 or integral multiples of $1,000 in excess
thereof; provided, however, that one Certificate may be issued in a denomination
other than an integral multiple of $1,000 such that the holder of the GP
Interest may be issued 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,
A-6
<PAGE>
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 following any Record Date as
of which the Pool Balance is 10% or less of the Initial Pool Balance. In
addition, within ten days following a Distribution Date as of which the Pool
Balance is 5% or less of the Initial Pool Balance an auction sale of the
remaining Contracts will be conducted (in each case, as described in the Sale
and Servicing Agreement) and such auction shall 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 OWNER TRUST 1996-A
THIS Certificate of Trust of CIT RV Owner Trust 1996-A (the "Trust"), dated
as of February 1, 1996, is being duly executed and filed by , a
-----------------
Delaware banking corporation, 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
Owner Trust 1996-A.
2. Delaware Trustee. The name and business address of the Trust
resident in the State of Delaware is
------------ -------, ----------, -- -----.
3. This Certificate of Trust shall be effective as of 1996.
----- --,
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
executed this Certificate of Trust as of the date first-above written.
--------------------------------, not in its individual capacity but solely
as Owner Trustee under a Trust Agreement dated as of February 1, 1996
By:
-----------------------------
Name:
Title:
================================================================================
THE CIT RV OWNER TRUST 1996-A
Class A 5.40% Asset Backed Notes
------------------------------------
INDENTURE
Dated as of February 1, 1996
------------------------------------
HARRIS TRUST AND SAVINGS BANK,
Indenture Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
================================================================================
TIA Indenture
Section Section
------- -------
- --------------------------------------------------------------------------------
310(a)(1) ..................................... 6.11
(a)(2) ..................................... 6.11
(a)(3) ..................................... 6.10
(a)(4) ..................................... 6.14
(b) ..................................... 6.11
(c) ..................................... N.A.
311(a) ..................................... 6.12
(b) ..................................... 6.12
(c) ..................................... N.A.
312(a)) ..................................... 7.1, 7.2
(b) ..................................... 7.2
(c) ..................................... 7.2
313(a) ..................................... 7.4(a), 7.4(b)
(b)(1) ..................................... 7.4(a)
(b)(2) ..................................... 7.4(a)
(c) ..................................... 7.4(a)
(d) ..................................... 7.4(a)
314(a) ..................................... 7.3(a), 3.9
(b) ..................................... 3.6
(c)(1) ..................................... 2.2, 2.9, 4.1, 11.1
(c)(2) ..................................... 11.1(a)
(c)(3) ..................................... 11.1(a)
(d) ..................................... 2.9, 11.1(b)
(e) ..................................... 11.1(a)
(f) ..................................... 11.1(a)
315(a) ..................................... 6.1(b)
(b) ..................................... 6.5
(c) ..................................... 6.1(a)
(d) ..................................... 6.2, 6.1(c)
(e) ..................................... 5.13
316(a) last
sentence ..................................... 1.1
(a)(1)(A) ..................................... 5.11
(a)(1)(B) ..................................... 5.12
(a)(2) ..................................... Omitted
316(b), (c) ..................................... 5.7
317(a)(1) ..................................... 5.3(b)
(a)(2) ..................................... 5.3(d)
(b) ..................................... 3.3
318(a) ..................................... 11.7
================================================================================
Note: This cross reference table shall not, for any purpose, be deemed to
be part of this Indenture.
N.A. means Not Applicable
i
<PAGE>
TABLE OF CONTENTS
Page
----
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....................................6
SECTION 2.7 Payment of Principal and Interest.............................7
SECTION 2.8 Cancellation of Notes.........................................8
SECTION 2.9 Release of Collateral.........................................8
SECTION 2.10 Book-Entry Notes.............................................9
SECTION 2.11 Notices to Depository........................................9
SECTION 2.12 Definitive Notes.............................................9
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
ii
<PAGE>
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 3.11 Successor or Transferee.....................................18
SECTION 3.12 No Other Business...........................................19
SECTION 3.13 No Borrowing................................................19
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities...........19
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.................................20
SECTION 3.20 Further Instruments and Acts................................20
SECTION 3.21 Representations and Warranties by the
Issuer to the Indenture Trustee...........................20
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
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SECTION 5.4 Remedies; Priorities.........................................27
SECTION 5.5 Optional Preservation of the Contracts.......................28
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......................................30
SECTION 5.12 Waiver of Past Defaults.....................................31
SECTION 5.13 Undertaking for Costs.......................................31
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..............................35
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......................................36
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.............................38
SECTION 6.11 Eligibility; Disqualification...............................40
SECTION 6.12 Preferential Collection of Claims Against Issuer............40
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SECTION 6.13 Representations and Warranties of Indenture Trustee.........40
SECTION 6.14 Indenture Trustee May Enforce
Claims Without Possession of Notes.......................41
SECTION 6.15 Suit for Enforcement........................................41
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee...........41
ARTICLE VII: NOTEHOLDERS' LISTS AND REPORTS..................................42
SECTION 7.1 Issuer To Furnish Indenture Trustee
Names and Addresses of Noteholders.........................42
SECTION 7.2 Preservation of Information, Communications to Noteholders...42
SECTION 7.3 Reports by Issuer............................................42
SECTION 7.4 Reports by Trustee...........................................43
ARTICLE VIII: ACCOUNTS, DISBURSEMENTS AND RELEASES...........................44
SECTION 8.1 Collection of Money..........................................44
SECTION 8.2 Designated Accounts and the Cash Collateral Account;.........44
SECTION 8.3 General Provisions Regarding Accounts........................44
SECTION 8.4 Release of Trust Estate......................................45
SECTION 8.5 Opinion of Counsel...........................................46
ARTICLE IX: SUPPLEMENTAL INDENTURES..........................................47
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.......47
SECTION 9.2 Supplemental Indentures With Consent of Noteholders..........48
SECTION 9.3 Execution of Supplemental Indentures.........................49
SECTION 9.4 Effect of Supplemental Indenture.............................49
SECTION 9.5 Conformity with Trust Indenture Act..........................50
SECTION 9.6 Reference in Notes to Supplemental Indentures................50
ARTICLE X: REDEMPTION OF NOTES...............................................51
SECTION 10.1 Redemption..................................................51
SECTION 10.2 Form of Redemption Notice...................................51
SECTION 10.3 Notes Payable on Redemption Date.............................52
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ARTICLE XI: MISCELLANEOUS....................................................53
SECTION 11.1 Compliance Certificates and Opinions, etc...................53
SECTION 11.2 Form of Documents Delivered to Indenture Trustee............54
SECTION 11.3 Acts of Noteholders.........................................55
SECTION 11.4 Notices, etc., to Indenture Trustee,
Issuer and Rating Agencies...............................56
SECTION 11.5 Notices to Noteholders; Waiver..............................57
SECTION 11.6 Alternate Payment and Notice Provisions.....................57
SECTION 11.7 Conflict with Trust Indenture Act...........................57
SECTION 11.8 Effect of Headings and Table of Contents....................58
SECTION 11.9 Successors and Assigns......................................58
SECTION 11.10 Separability...............................................58
SECTION 11.11 Benefits of Indenture......................................58
SECTION 11.12 Legal Holidays.............................................58
SECTION 11.13 Governing Law..............................................59
SECTION 11.14 Counterparts...............................................59
SECTION 11.15 Recording of Indenture.....................................59
SECTION 11.16 No Recourse................................................59
SECTION 11.17 No Petition................................................60
SECTION 11.18 Inspection.................................................60
SECTION 11.19 Indemnification by and Reimbursement of the Servicer.......61
Exhibit A- Form of Asset Backed Notes
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INDENTURE, dated as of February 1, 1996, between THE CIT RV OWNER TRUST
1996-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 Initial Contracts on or after the Initial Cut-off Date
and under the Subsequent Contracts on or after the related Subsequent Cut-off
Date; (iii) such amounts as from time to time may be held in one or more
accounts (other than the Excluded Assets) established and maintained by the
Servicer pursuant to the Sale and Servicing Agreement (including all investments
in such accounts and all income from the funds therein and all proceeds
thereof); (iv) all monies on deposit in the Pre-Funding Account and the
Capitalized Interest Account (including all investments in such accounts and all
income from the funds therein and all proceeds thereof); (v) security interests
in the Financed Vehicles granted by the Obligors and any accessions thereto and
any other interest of the Issuer in the Financed Vehicles; (vi) the right to
proceeds from physical damage, credit life and disability insurance policies, if
any, covering individual Financed Vehicles or Obligors, as the case may be;
(vii) the rights of the Issuer under the Sale and Servicing Agreement (but
excluding all rights of the Issuer to the Excluded Assets) and the Subsequent
Transfer Agreements and the Subsequent Purchase Agreements; and (viii) all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any and
all proceeds of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, 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.
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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 February 1, 1996 among, the Issuer, The CIT Group Securitization
Corporation II (the "Company" or the "Seller") and The CIT Group/Sales
Financing, Inc., as Servicer ("CITSF"). All references in this Indenture to
Articles, Sections, subsections and exhibits are to the same contained in or
attached to this Indenture unless otherwise specified. All terms defined in this
Indenture shall have the defined meanings when used in any certificate, notice,
Note or other document made or delivered pursuant hereto unless otherwise
defined therein.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, such provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a Commission rule have
the respective meanings assigned to them by such definitions.
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ARTICLE II
THE NOTES
SECTION 2.1 Form.
(a) The Class A Notes, with the Indenture Trustee's certificate of
authentication, shall be substantially in the form set forth in Exhibit A, 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 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 which may be issued in a
denomination other than an integral multiple of $1,000).
(b) The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized Officer on the Notes
may be manual or facsimile.
(c) Notes bearing the manual or facsimile signature of individuals who were
Authorized Officers of the Issuer at the time such signatures were affixed shall
bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such office prior to the authentication and delivery of such
Notes or did not hold such office at the date of such Notes.
(d) The Indenture Trustee, in exchange for the Grant of the Contracts and
the other components of the Trust, and simultaneously with the constructive
delivery to the Indenture Trustee of the Contract Files with respect to the
Initial Contracts and the other components and assets of the Trust, shall cause
to be authenticated and delivered to or upon the order of the Issuer, the Class
A Notes for original issue in aggregate principal amount of $236,250,000. The
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aggregate principal amount of Notes outstanding at any time may not exceed
$236,250,000 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,
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.
(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
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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 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.
(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.
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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.
(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
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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 Class A Notes set forth in Exhibit A at the Class A Rate, and such
interest shall be payable on each Distribution Date as specified in the form of
Class A Note set forth in Exhibit A. 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 the Notes shall be payable in full on the
Class A Final Scheduled Distribution Date and, to the extent of funds available
therefor, in installments on the Distribution Dates (if any) preceding the Class
A Final Scheduled Distribution Date, in accordance with Section 8.2(c). All
principal payments on the Notes shall be made pro rata to the Noteholders
entitled thereto. 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 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 the Notes shall be due and
payable, if not previously paid, if:
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(i) an Event of Default shall have occurred and be continuing; and
(ii) the Indenture Trustee or the Noteholders representing not less
than a majority of the aggregate outstanding principal amount of the Notes
have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2.
(d) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest at the Class A Rate 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 the Notes is to be paid, the Indenture Trustee shall
notify each Noteholder of record 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.
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 ss.ss.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.
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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 instructions to such effect from Note Owners and/or
Depository Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes; and (ii) has delivered such
instructions to the Indenture Trustee.
SECTION 2.11 Notices to Depository. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Depository and shall have no
obligation to the Note Owners.
2.12 Definitive Notes.
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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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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. On each Distribution Date and on the
Redemption Date (if applicable), the Issuer shall cause amounts on deposit in
the Note Distribution Account to be distributed to the Noteholders in accordance
with Sections 2.7 and 8.2, less amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal. Any
amounts so withheld shall be considered as having been paid by the Issuer to
such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the Notes
remains outstanding, the Issuer shall maintain in the Borough of Manhattan, the
City of New York, an office (the "Agency Office"), being an office or agency
where Notes may be surrendered to the Issuer for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby initially appoints the
Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer
shall give prompt written notice to the Indenture Trustee of the location, and
of any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Indenture
Trustee, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust.
(a) As provided in Section 8.2(a) and (b), all payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Note Distribution Account pursuant to Section 8.2(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so withdrawn from the Note Distribution Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section 3.3.
(b) On or before each Distribution Date or the Redemption Date (if
applicable), the Issuer shall deposit or cause to be deposited in the Note
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due with respect to the Notes, such sum to be held in trust for the
benefit of the Persons entitled thereto and (unless the Paying Agent is the
Indenture Trustee) shall promptly notify the Indenture Trustee of its action or
failure so to act.
(c) The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
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Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent in effect at the time of determination; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
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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 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).
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
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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, 1996,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain the lien and
security interest created by this Indenture. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until April 15 in the following calendar
year.
Section 3.7 Performance of Obligations; Servicing of Contracts.
(a) The Issuer shall not take any action and shall use its reasonable
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
otherwise expressly provided in this Indenture, the Sale and Servicing Agreement
or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in the Basic Documents or an Officers'
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and 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.
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(d) If the Issuer shall have knowledge of the occurrence of an Event of
Termination under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall specify
in such notice the response or action, if any, the Issuer has taken or is taking
with respect to such default. If an Event of Termination shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Contracts, the Issuer and the
Indenture Trustee shall take all reasonable steps available to them pursuant to
the Sale and Servicing Agreement to remedy such failure or to effect a Service
Transfer pursuant to the Sale and Servicing Agreement.
Without derogating from the absolute nature of the assignment granted to
the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it shall not, without the prior
written consent of the Indenture Trustee or the Holders of at least a majority
in aggregate outstanding principal amount of the Notes, as applicable in
accordance with the terms thereof, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or any of the Basic
Documents (other than the Cash Collateral Agreement), or waive timely
performance or observance by the Servicer or the Seller under the Sale and
Servicing Agreement, a Subsequent Purchase Agreement, a Subsequent Transfer
Agreement or the Purchase Agreement. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, as applicable, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
Section 3.8 Negative Covenants. So long as any Notes are outstanding, the
Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the properties
or assets of the Issuer, except the Issuer may (i) collect, liquidate, sell or
otherwise dispose of Contracts (including Repurchased Contracts and Liquidated
Contracts) and Financed Vehicles, (ii) make cash payments out of the Designated
Accounts and (iii) take other actions, in each case as contemplated by the Basic
Documents;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of the Notes (other than amounts properly withheld
from such payments under 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
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(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,
1996, and otherwise in compliance with Section 314(a)(4) of the TIA, an
Officer's Certificate signed by an Authorized Officer, dated as of April 15 of
such year, stating that a review of the activities of the Issuer during such
fiscal year and of performance under this Indenture has been made and, to the
best of such Authorized Officer's knowledge, based on such review, the Issuer
has fulfilled all of its obligations under this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such Authorized Officer and the nature and
status thereof. A copy of such certificate may be obtained by any Noteholder by
a request in writing to the Issuer addressed to the Corporate Trust Office of
the Indenture Trustee.
SECTION 3.10 Consolidation, Merger, etc. of Issuer; Disposition of Trust
Assets.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and timely payment of the principal of and
interest on all Notes and the performance or observance of every 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;
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(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 such consolidation or merger and such supplemental
indenture comply with this Section 3.10;
(D) that all conditions precedent herein provided for in this
Section 3.10 have been complied with, which shall include any filing
required by the Exchange Act.
(b) Except as otherwise expressly permitted by this Indenture or the other
Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets (other than the Excluded
Assets), including those included in the Trust Estate, to any Person unless:
(i) the Person that acquires such properties or assets of the Issuer
(A) shall be a United States citizen or a Person organized and existing
under the laws of the United States of America or any State or the District
of Columbia and (B) by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee:
(1) expressly assumes the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein;
(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
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Issuer against and from any loss, liability or expense arising under
or related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange Act in
connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction and such Person;
(iv) any action as is necessary to maintain the Lien created by this
Indenture shall have been taken: and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Issuer,
each stating that:
(A) such sale, conveyance, exchange, transfer or disposition and
such supplemental indenture comply with this Section 3.10;
(B) such sale, conveyance, exchange, transfer or disposition and
such supplemental indenture has no material adverse tax consequence to
the Trust or to any Noteholders or Certificateholders; and
(C) that all conditions precedent herein provided for in this
Section 3.10 have been complied with, which shall include any filing
required by the Exchange Act.
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
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Trustee from the Person acquiring such assets and properties stating that the
Trust is to be so released.
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 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.
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.
3.14 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
SECTION 3.15 Servicer's Obligations. The Issuer shall use its best efforts
to cause the Servicer to comply with its obligations under the Sale and
Servicing Agreement.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
expenditure (whether by long-term or operating lease or otherwise) for capital
assets (either real, personal or intangible property) other than the purchase of
the Contracts and other property and rights from the Seller pursuant to the
Basic Documents.
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 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
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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 Cash Collateral Depositor (and any
successor in interest thereto), the holder of the GP Interest and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement, the Cash Collateral
Agreement or the Trust Agreement. The Issuer shall not, directly or indirectly,
make payments to or distributions from the Collection Account except in
accordance with the Basic Documents.
SECTION 3.19 Notice of Events of Default. The Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder, each Event of Termination, any Insolvency Event with respect
to the Affiliated Purchaser, each default on the part of the Seller or the
Servicer of their obligations under the Basic Documents.
SECTION 3.20 Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.21 Representations and Warranties by the Issuer to the Indenture
Trustee. The Issuer hereby represents and warrants to the Indenture Trustee as
follows:
(a) Good Title. No Contract has been sold, transferred, assigned
or pledged by the Trust to any Person other than the Indenture
Trustee; immediately prior to the conveyance of the Contracts pursuant
to this Indenture, the Trust had good and marketable title thereto,
free of any Lien; and, upon execution and delivery of this Indenture
by the Trust, the Indenture Trustee shall have all of the right, title
and interest of the Trust in, to and under the Contracts, the unpaid
indebtedness evidenced thereby and the collateral security therefor,
free of any Lien; and
(b) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Indenture
Trustee a first perfected ownership interest in the Contracts shall
have been made.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except as to: (i) rights
of registration of transfer and exchange; (ii) substitution of mutilated,
destroyed, lost or stolen Notes; (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon; (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.19 and 3.21; (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Sections
4.2 and 4.4); and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, if:
(a) either:
(1) all Notes theretofore authenticated and delivered (other than (A)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.5 and (B) Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.3) have been delivered to the Indenture
Trustee for cancellation: or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
(A) have become due and payable,
(B) will be due and payable on the Class A 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 and accrued interest on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Class A Final Scheduled Distribution Date for such Notes or the
Redemption Date for such Notes (if such
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Notes have been called for redemption pursuant to Section 10.1(a)(i)
or (ii), or Section 10.1(b)), as the case may be;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1(a) and each stating
that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Section 4.2 Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Sale and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
SECTION 4.4 Duration of Position of Indenture Trustee. Notwithstanding the
earlier payment in full of all principal and interest due to the Noteholders
under the terms of the Notes and the cancellation of the Notes pursuant to
Section 3.1, the Indenture Trustee shall continue to act in the capacity as
Indenture Trustee hereunder and, for the benefit of the Certificateholders,
shall comply with its obligations under the Basic Documents, as appropriate,
until such time as all payments in respect of Certificate Balance and interest
due to the Certificateholders have been paid in full.
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ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. For the purposes of this Indenture, "Event
of Default" wherever used herein, means any one of the following events:
(a) failure to pay any interest on any Note as and when the same becomes
due and payable, and such default shall continue 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 default 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 outstanding principal balance
of the Notes; or
(c) failure to pay in full the outstanding principal balance of the Notes
on or prior to the Class A Final Scheduled Distribution Date; 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 outstanding principal balance of the Notes, a written
notice specifying such default and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Trust Estate in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the Trust Estate, or the making by the Issuer of any general assignment
for the benefit of
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creditors, or the failure by the Issuer generally to pay its debts as such debts
become due, or the taking of action by the Issuer in furtherance of any of the
foregoing.
The Issuer shall deliver to the Indenture Trustee, within five Business
Days after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under Section 5.1(c), its status and
what action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default should occur and be continuing, then and in
every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the aggregate outstanding principal
amount of the Notes may declare all the Notes to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
the Noteholders) setting forth the Event or Events of Default, and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
(b) At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V, the
Holders of Notes representing a majority of the aggregate outstanding principal
amount of the Notes, by written notice to the Issuer and the Indenture Trustee,
may waive all Defaults set forth in the notice delivered pursuant to Section
5.2(a), and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided herein;
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provided, that no such rescission and annulment shall extend to or affect any
subsequent default or impair any right consequent thereto; and provided further,
that if the Indenture Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission and annulment or for any other reason, or shall have
been determined adversely to the Indenture Trustee, then and in every such case,
the Indenture Trustee, the Issuer and the Noteholders, as the case may be, shall
be restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall continue as though no such proceedings
had been taken.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if an Event of Default occurs and is
continuing under Sections 5.1(a), 5.1(b) or 5.1(c) of this Indenture, then the
Issuer shall, upon demand of the Indenture Trustee, pay to the Indenture
Trustee, for the ratable 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 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
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case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor trustee except as a
result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
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(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing and the
Notes have been accelerated under Section 5.2(a), the Indenture Trustee may do
one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration of acceleration
or otherwise, enforce any judgment obtained, and collect from the Issuer
and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the Holders
of all of the aggregate outstanding principal amount of the Notes consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Noteholders are sufficient to discharge 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
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payable, and the Indenture Trustee obtains the consent of Holders of a majority
of the aggregate outstanding principal amount of the Notes. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.7;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, ratably among all Noteholders, without preference or priority of
any kind, according to the amounts due and payable on all the Notes for
principal;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably among all Noteholders, without preference or priority of
any kind, according to the amounts due and payable on all the Notes for
interest;
FOURTH: to the Issuer for distribution to the Certificateholders for
amounts due and unpaid on the Certificates for interest, ratably among all
such Certificateholders, without preference or priority of any kind,
according to the amounts due and payable on all the Certificates for
interest;
FIFTH: to the Issuer for distribution to the Certificateholders for
amounts due and unpaid on the Certificates for principal, ratably among all
such Certificateholders, without preference or priority of any kind,
according to the amounts due and payable on all the Certificates for
principal;
SIXTH: to the Issuer for distribution to the Cash Collateral Depositor
of amounts due to it under the Cash Collateral Agreement; and
SEVENTH: to the Issuer for distribution to the holder of the GP
Interest.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.4. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder and the
Indenture Trustee a notice that states the record date, the payment date and the
amount to be paid.
SECTION 5.5 Optional Preservation of the Contracts. If the Notes have been
declared to be due and payable under Section 5.2 following an Event of Default
and such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may, but need not, elect to take and maintain possession
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of the Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Indenture Trustee shall take such desire into
account when determining whether or not to take and maintain possession of the
Trust Estate. In determining whether to take and maintain possession of the
Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate outstanding
principal amount of the Notes have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in
its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a
majority of the aggregate outstanding principal amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders of Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Notes. For the protection and enforcement of the provisions of
this Section 5.6, each and every Noteholder shall be entitled to such relief as
can be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders of Notes, each representing
less than a majority of the aggregate outstanding principal amount of the Notes,
the Indenture Trustee in its sole
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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.
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 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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(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 Notes may waive any past Default
or Event of Default and its consequences except a Default (i) in the payment of
principal of or interest on any of the Notes or (ii) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Noteholders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
(b) Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any Proceeding
for the enforcement of any right or remedy under this Indenture, or in any
Proceeding against the Indenture Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such Proceeding of
an undertaking to pay the costs of such Proceeding, and that such court may in
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its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the aggregate outstanding
principal amount of the Notes; or
(c) any Proceeding instituted by any Noteholder for the enforcement of the
payment of principal of or interest on any Note on or after the respective due
dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, or
plead or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture. The Issuer
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
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 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
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actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Basic Documents (other than with
respect to the Excluded Assets).
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3%
of the aggregate outstanding principal amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Basic Documents (other than with
respect to the Excluded Assets), including the right or power to take any action
to compel or secure performance or observance by the Seller or the Servicer of
each of their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver thereunder, and any
right of the Issuer to take such action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so and at
the Servicer's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee may reasonably request to compel or secure the performance and
observance by CITSF of each of its obligations to the Seller under or in
connection with the Sale and Servicing Agreement, the Purchase Agreement and the
Subsequent Purchase Agreement in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale and Servicing Agreement, the
Purchase Agreement and the Subsequent Purchase Agreement to the extent and in
the manner reasonably directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by CITSF of each of its obligations under the Sale and
Servicing Agreement, the Purchase Agreement and the Subsequent Purchase
Agreement.
If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3%
of the aggregate outstanding principal amount of the Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Seller against CITSF
under or in connection with the Sale and Servicing Agreement, the Purchase
Agreement and the Subsequent Purchase Agreement, including the right or power to
take any action to compel or secure performance or observance by CITSF of each
of its obligations to the Seller thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, the Purchase Agreement and the Subsequent Purchase Agreement, and any
right of the Seller to take such action shall be suspended.
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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
(ii) 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.
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(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(h) The Indenture Trustee shall take the actions required to be taken by it
set forth in Article XI of the Sale and Servicing Agreement in connection with a
sale of the Contracts.
SECTION 6.2 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.3 Indenture Trustee May Own Notes. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer, the Servicer or any of their respective
Affiliates with the same rights
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it would have if it were not Indenture Trustee; provided, however, that the
Indenture Trustee shall comply with Sections 6.10 and 6.11. Any Paying Agent,
Note Registrar, co-registrar or co-paying agent may do the same with like
rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee shall not
be responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
Section 6.5 Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of the Default within 90 days after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Note, the Indenture Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture Trustee
shall deliver to each Noteholder the information and documents set forth in
Article VII, and, in addition, all such information with respect to the Notes as
may be required to enable such holder to prepare its federal and state income
tax returns.
SECTION 6.7 Compensation; Indemnity.
(a) The Issuer shall cause the Servicer pursuant to the Sale and Servicing
Agreement to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Servicer pursuant to the Sale and Servicing Agreement to
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall cause the Servicer
pursuant to the Sale and Servicing Agreement to indemnify the Indenture Trustee
in accordance with Section 8.02 of the Sale and Servicing Agreement.
(b) The Issuer's obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(d) or (e) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
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SECTION 6.8 Replacement of Indenture Trustee.
(a) The Indenture Trustee may resign at any time by so notifying the
Issuer. The Holders of a majority in aggregate outstanding principal amount of
the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee
and may appoint a successor Indenture Trustee. Such resignation or removal shall
become effective in accordance with Section 6.8(c). The Issuer shall remove the
Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
(b) If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Holders
of a majority in aggregate outstanding principal amount of the Notes may appoint
a successor Indenture Trustee, but until a successor Indenture Trustee shall
have been so appointed by the Holders of the Notes, the Issuer shall appoint a
successor Indenture Trustee, and until the Issuer has appointed such successor
the resignation of the Indenture Trustee shall not become effective. After any
such appointment other than by the holders of the Notes, the person making such
appointment shall forthwith cause notice thereof to be mailed to the holders of
the Notes at their addresses as the same then appear in the register of the
Issuer; but any successor Trustee so appointed shall, immediately and without
further act, be superseded by a successor Trustee appointed by the holders of
the Notes in the manner above prescribed, if such appointment be made prior to
the expiration of one year from the date of the mailing of such notice by the
Issuer, or by such receivers, trustees, custodians, or assignees. A retiring
Indenture Trustee shall not be liable for any acts or omissions of a successor
Indenture Trustee occurring after the retirement of such retired Indenture
Trustee, which retirement was effected pursuant to the terms and subject to the
conditions of this Indenture.
(c) A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
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(d) If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Trustee, the Issuer or the Holders of a majority of the aggregate outstanding
principal amount of the Notes may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section 6.8, the Issuer's obligations under Section 6.7 and the Servicer's
corresponding obligations under the Sale and Servicing Agreement shall continue
for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
(a) Any corporation into which the Indenture Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
however, that such corporation shall be eligible under the provisions of Section
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding.
(b) If at the time such successor or successors by merger or consolidation
to the Indenture Trustee shall succeed to the trusts created by this Indenture,
any of the Notes shall have been authenticated but not delivered, any such
successor to the Indenture Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Notes so authenticated; and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture Trustee.
In all such cases such certificate of authentication shall have the same full
force as is provided anywhere in the Notes or herein with respect to the
certificate of authentication of the Indenture Trustee.
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,
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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.
(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.
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SECTION 6.11 Eligibility; Disqualification. The Indenture Trustee shall at
all times satisfy the requirements of TIA ss. 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 ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
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 ss.
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A trustee who has resigned or been
removed shall be subject to TIA ss. 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 an Illinois 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
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(e) this Indenture has been duly executed and delivered by the Indenture
Trustee and constitutes the legal, valid and binding agreement of the Indenture
Trustee, enforceable in accordance with its terms.
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of
Notes. All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Indenture Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Indenture Trustee shall be brought in its
own name as Indenture Trustee. Any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel, be for the ratable
benefit of the Noteholders in respect of which such judgment has been obtained.
SECTION 6.15 Suit for Enforcement. If an Event of Default shall occur and
be continuing, the Indenture Trustee, in its discretion may, subject to the
provisions of Section 6.1, proceed to protect and enforce its rights and the
rights of the Noteholders under this Indenture by Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee. Holders of
Notes evidencing not less than a majority of the aggregate outstanding principal
amount of the Notes shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided,
however, that subject to Section 6.1, the Indenture Trustee shall have the right
to decline to follow any such direction if the Indenture Trustee being advised
by counsel determines that the action so directed may not lawfully be taken, or
if the Indenture Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would be illegal or subject it to
personal liability or be unduly prejudicial to the rights of Noteholders not
parties to such direction; and provided, further, that nothing in this Indenture
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 ss. 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 ss. 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
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conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA ss. 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 ss. 313(a), within 60 days after each June 1,
beginning with June 1, 1996, the Indenture Trustee shall mail to each Noteholder
as required by TIA ss. 313(c) a brief report dated as of such date that complies
with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA ss.
313(b). A copy of any report delivered pursuant to this Section 7.4(a) shall, at
the time of its mailing to Noteholders, be filed by the Indenture Trustee with
the Commission and each stock exchange, if any, on which the Notes are listed.
The Issuer shall notify the Indenture Trustee if and when the Notes are listed
on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall include with
each payment to each Noteholder a copy of the statement for the related Due
Period applicable to such Distribution Date as required pursuant to the Sale and
Servicing Agreement.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2 Designated Accounts and the Cash Collateral Account;Payments.
(a) On or prior to the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee or Owner Trustee,
as appropriate, for the benefit of the Noteholders or the Certificateholders
(and, in the case of the Cash Collateral Account, the Cash Collateral Depositor)
as appropriate, the accounts as provided in Section 5.01 of the Sale and
Servicing Agreement.
(b) On or before each Distribution Date, all amounts of monies relating to
the preceding Due Period will be deposited into the Collection Account as
provided in Section 5.02 of the Sale and Servicing Agreement. On or before each
Distribution Date, the amount which is due to the Noteholders with respect to
the preceding Due Period will be transferred from the Collection Account to the
Note Distribution Account as provided in Section 5.05 of the Sale and Servicing
Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal and interest. To the extent that the funds available for
distribution in the Note Distribution Account are not sufficient to pay all
amounts of accrued and unpaid principal and interest on the Notes, such amounts
will be distributed first in respect of interest and then in respect of
principal.
SECTION 8.3 General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Designated Accounts and the
Cash Collateral Account shall be invested in
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Eligible Investments and, in the case in the Collection Account and the Note
Distribution Account, reinvested by the Indenture Trustee upon Issuer Order, and
in the case of the Certificate Distribution Account and the Cash Collateral
Account, reinvested by the Owner Trustee (or its designated agent) subject to
the provisions of Section 5.01(c) of the Sale and Servicing Agreement. The
Issuer shall not direct the Indenture Trustee to make any investment of any
funds or to sell any investment held in any of the Collection Account and the
Note Distribution Account unless the security interest granted and perfected in
such account (to the extent provided in the Basic Documents) shall continue to
be perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Designated Accounts
or the Cash Collateral Account resulting from any loss on any Eligible
Investment included therein except for losses attributable to the Indenture
Trustee's failure to make payments on such Eligible Investments issued by the
Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.
(c) If (i) the Servicer shall have failed to give investment directions for
any funds on deposit in the Designated Accounts to the Indenture Trustee by
11:00 a.m., New York City Time (or such other time as may be agreed by the
Servicer and the Indenture Trustee) on any Business Day; or (ii) a Default or
Event of Default shall have occurred and be continuing with respect to the Notes
but the Notes shall not have been declared due and payable pursuant to Section
5.2, or, if such Notes shall have been declared due and payable following an
Event of Default, amounts collected or receivable from the Trust Estate are
being applied in accordance with Section 5.5 as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in such Designated Accounts in one or
more Eligible Investments selected by the Indenture Trustee; provided that the
Indenture Trustee will not be liable for the performance of such investments so
long as it invests the funds in such Designated Accounts in Eligible
Investments.
SECTION 8.4 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.7, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the Lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are consistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
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(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 ss.ss. 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
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.
(a) 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.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, at any time and from time to time enter into one
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or more 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 modifying in any manner the rights of the Noteholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
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 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;
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(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 discretion determine whether or not
any Notes would be affected (such that the consent of each would be required) by
any supplemental indenture proposed pursuant to this Section 9.2 and any such
determination shall be conclusive upon the Holders of all Notes, whether
authenticated and delivered thereunder before or after the date upon which such
supplemental indenture becomes effective. The Indenture Trustee shall not be
liable for any such determination made in good faith.
(c) It shall be sufficient if an Act of Noteholders approves the substance,
but not the form, of any proposed supplemental indenture.
(d) Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.2, the Indenture Trustee
shall mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
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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.
(a) The Notes are subject to redemption upon (i) the exercise by the
Servicer of its option to purchase the Contracts pursuant to Section 11.01 of
the Sale and Servicing Agreement, (ii) the mandatory sale of the Contracts
pursuant to Section 11.02 of the Sale and Servicing Agreement, or (iii) at the
end of the Funding Period to the extent funds remain on deposit in the
Pre-Funding Account pursuant to Section 5.01(b)(iv) of the Sale and Servicing
Agreement. Such redemption shall occur on any Distribution Date. The purchase
price for the Notes shall be equal to the applicable redemption price as set
forth in such Sections (the "Redemption Price"), provided the Issuer has
available funds sufficient to pay such amount. The Issuer shall furnish the
Rating Agencies notice of such redemption. If the Notes are to be redeemed
pursuant to Section 10.1(a)(i) or 10.1(a)(ii), the Issuer shall furnish notice
thereof to the Indenture Trustee not later than 25 days prior to the Redemption
Date and the Issuer shall deposit into the Note Distribution Account, on or
before the Redemption Date, the aggregate Redemption Price of the Notes to be
redeemed, whereupon all such Notes shall be due and payable on the Redemption
Date. The Servicer shall give the Indenture Trustee written notice on the
Determination Date prior to the Distribution Date on which funds are to be
released from the Pre-Funding Account pursuant to Section 5.01(b)(iv) of the
Sale and Servicing Agreement with respect to redemption of the Notes pursuant to
Section 10.1(a)(iii).
(b) If the assets of the Trust are sold pursuant to Section 7.2 of the
Trust Agreement, all amounts deposited in the Note Distribution Account pursuant
to the Sale and Servicing Agreement as a result thereof shall be paid to the
Noteholders. If amounts are to be paid to Noteholders pursuant to this Section
10.1(b), the Servicer or the Issuer shall, to the extent practicable, furnish
notice of such event to the Indenture Trustee not later than 25 days prior to
the Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.2 Form of Redemption Notice.
(a) Notice of redemption of the Notes under Section 10.1(a) shall be given
by the Indenture Trustee by first class mail, postage prepaid, mailed not less
than five days in the case of Section 10(a)(i) and (ii) and not less than three
Business Days in the case of Section 10(a)(iii), prior to the applicable
Redemption Date to each Noteholder of Notes of record at such Noteholder's
address appearing in the Note Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
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(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 the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
(d) Prior notice of redemption under Section 10.1(b) is not required to be
given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date.
The Notes subject to redemption shall, following notice of redemption as
required by Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), on the Redemption Date cease to be outstanding for purposes of this
Indenture and shall thereafter represent only the right to receive the
applicable Redemption Price and (unless the Issuer shall default in the payment
of such Redemption Price) no interest shall accrue on such Redemption Price for
any period after the date to which accrued interest is calculated for purposes
of calculating such Redemption Price.
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ARTICLE X
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
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Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the then
current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (b)(ii), is 10% or
more of the aggregate outstanding principal amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the aggregate outstanding principal amount of the Notes.
(iii) Other than with respect to the release of any Repurchased
Contracts or Liquidated Contracts or disbursement from the Pre-Funding
Account, whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
Person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signatory thereof as to the matters described in clause (b)(iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than Repurchased Contracts or
Liquidated Contracts or disbursement from the Pre-Funding Account, or
securities released from the lien of this Indenture since the commencement
of the then current calendar year, as set forth in the certificates
required by clause (b)(iii) above and this clause (b)(iv), equals 10% or
more of the aggregate outstanding principal amount of the Notes, but such
certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
aggregate outstanding principal amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this Section
11.1, the Issuer may (A) collect, liquidate, sell or otherwise dispose of
Contracts, Financed Vehicles and the Excluded Assets as and to the extent
expressly permitted or required by the Basic Documents, (B) make cash
payments out of the Designated Accounts, the Cash Collateral Account and
the other Excluded Assets as and to the extent expressly permitted or
required by the Basic Documents and (C) take any other action not
inconsistent with the TIA.
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
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one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
or a class of Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such 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)
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conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office and,
unless otherwise specified in this Indenture, may be sent by electronic
facsimile transmission (with hard copy to follow via first class mail), mailed
by certified mail, return receipt requested, or delivered by hand; or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and either sent by
electronic facsimile transmission (with hard copy to follow via first class
mail) or mailed, by certified mail, return receipt requested to the Issuer and
the Owner Trustee, care of the Owner Trustee at its Corporate Trust Office or at
any other address previously furnished in writing to the Indenture Trustee by
the Issuer.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall likewise
promptly transmit any notice received by it from the Noteholders to the Issuer,
with a copy to the Owner Trustee at its Corporate Trust Office.
(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;
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and (ii) in the case of Standard & Poor's Corporation, at the following address:
Standard & Poor's Corporation, 26 Broadway (20th Floor), New York, New York
10004, Attn: Asset Backed Surveillance Department or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 11.5 Notices to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if it is in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at such Person's address as it appears on the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If notice to Noteholders is
given by mail, neither the failure to mail such notice nor any defect in any
notice so mailed to any particular Noteholder shall affect the sufficiency of
such notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given regardless of whether such notice is in fact actually received.
(b) Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
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.
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(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 TIAss.ss.310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns.
(a) All covenants and agreements in this Indenture and the Notes by the
Issuer shall bind its successors and assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture Trustee in this Indenture
shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11 Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder, and
the Noteholders, and any 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.
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SECTION 11.13 Governing Law.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts.
This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.15 Recording of Indenture.
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16 No Recourse.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against:
(i) the Indenture Trustee or the Owner Trustee in its individual
capacity;
(ii) any owner of a beneficial interest in the Issuer; or
(iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, 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
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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 Articles VI, VII and VIII of the
Trust Agreement.
SECTION 11.17 No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by accepting a Note issued hereunder, hereby covenant and agree that
they shall not, prior to the date which is one year and one day after the
termination of this Indenture with respect to the Trust pursuant to Section 4.1,
acquiesce, petition or otherwise invoke or cause the Seller, the holder of the
GP Interest (which initially shall be The CIT GP Corporation II) or the Trust to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Seller or the Trust under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Trust or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller or the Trust.
SECTION 11.18 Inspection.
The Issuer agrees that, on reasonable prior notice, it shall permit any
representative of the Indenture Trustee, during the Issuer's normal business
hours, to examine all the books of account, records, reports, and other papers
of the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder. Notwithstanding anything herein to the contrary,
the foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is or becomes publicly known, or information obtained by the
Indenture Trustee from sources other than the Servicer or the Seller or any of
their affiliates, (ii) disclosure of any and all information (A) if required to
do so by any applicable statute, law, rule or regulation, (B) to any government
agency or regulatory 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
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authorized by the Servicer or the Seller; provided, however, the Indenture
Trustee shall give the Servicer prior notice of any such disclosure.
SECTION 11.19 Indemnification by and Reimbursement of the Servicer.
The Indenture Trustee further acknowledges and accepts the conditions and
limitations with respect to the Servicer's obligation to indemnify, defend and
hold the Indenture Trustee harmless as set forth in the Sale and Servicing
Agreement.
* * * * *
61
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
CIT RV OWNER TRUST 1996-A
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but solely as
Owner Trustee,
By: /s/ Joseph G. Ernst
Name: Joseph G. Ernst
Title: Assistant Vice President
HARRIS TRUST AND SAVINGS BANK,
an Illinois banking corporation
as Indenture Trustee,
By: /s/ E. Kay Liederman
Name: E. Kay Liederman
Title: Vice President
62
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EXHIBIT A
FORM OF ASSET BACKED NOTES
REGISTERED $_____________
No. 1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 125596AE6
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
CIT RV OWNER TRUST 1996-A
CLASS A 5.40% ASSET BACKED NOTES
CIT RV OWNER TRUST 1996-A, a business trust organized and existing under
the laws of the State of Delaware (herein referred to as the "Issuer"), for
value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of _______________ DOLLARS ($_________) payable in
accordance with the Indenture, prior to the occurrence of an Event of Default
and a declaration that the Notes are due and payable, on each Distribution Date
to the extent of amounts available therefor in an amount equal to the difference
between (i) the sum of (x) the Pool Balance on the last day of the second
proceeding Due Period (or, in the case of the first Distribution Date the
Initial Cut-off Date Principal Balance) and (y) the amount on deposit in the
Pre-Funding Account (exclusive of Pre-Funding Earnings) on the last day of the
second preceding Due Period (or, in the case of the first
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<PAGE>
Distribution Date, as of the Closing Date), less (ii) the sum of (x) the Pool
Balance on the last day of the preceding Due Period and (y) the amount on
deposit in the Pre-Funding Account (exclusive of Pre-Funding Earnings) on the
last day of the preceding Due Period; provided, however, that the outstanding
principal balance of this Note shall be due and payable on the earlier of the
December, 2011 Distribution Date (the "Class A Final Scheduled Distribution
Date") and the Redemption Date with respect to a redemption of Notes, if any,
pursuant to Section 10.1(a)(i) or (ii) or Section 10.1(b) of the Indenture. On
each Distribution Date until the principal of this Note is paid or made
available for payment, the Issuer shall pay interest on this Note in an amount
equal to one-twelfth of the product of the rate per annum shown above and the
principal amount of this Note outstanding on the preceding Distribution Date
after giving effect to all payments of principal and interest made on the
preceding Distribution Date (or in the case of the first Distribution Date, the
original outstanding principal amount of this Note). Interest on this Note will
accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding the then
current Distribution Date or, if no interest has yet been paid, from February
15, 1996. 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.
2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: CIT RV OWNER TRUST 1996-A
By: THE BANK OF NEW YORK (DELAWARE),
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, an Illinois Banking
corporation not in its
individual capacity but
solely as Indenture
Trustee
By: _______________________
Name:
Title:
3
<PAGE>
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as Class A 5.40% Asset Backed Notes (herein called the "Class A
Notes" or "Notes"), all issued under an Indenture, dated as of February 1, 1996
(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. The Class A 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 Notes and all other Notes issued pursuant to the Indenture are
and will be equally and ratably secured by the Collateral pledged as security
therefor as provided in the Indenture.
Subject to the immediately following paragraph, principal on the Class A
Notes shall be payable in full on the earlier of the Distribution Date which is
the Class A Final Scheduled Distribution Date for the Class A Notes set forth
above and the Redemption Date, if any, pursuant to Section 10.1(a)(i) or (a)(ii)
or Section 10.1(b) of the Indenture. In addition, principal on the Class A 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 March 15, 1996.
Notwithstanding the provisions of the preceding paragraph, the entire
unpaid principal amount of this Note shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders representing not less than a majority of
the outstanding amount of the Notes have declared the Notes to be immediately
due and payable in the manner provided in Section 5.2 of the Indenture. In such
event, the Holders of all Notes shall be entitled to receive repayment of
principal ratably in proportion to their respective unpaid principal balances.
All principal payments on the Class A Notes shall be made pro rata to the
Holders of the Class A Notes.
Payments of interest on this Note at the rate of 5.40% per annum shall be
due and payable on each Distribution Date, together with the installment of
principal, if any, if not in full payment of this Note, shall be made
by check mailed to the Person whose name appears as the
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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 day
immediately preceding such Distribution Date, or if Definitive Notes are issued,
the last 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 authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in their
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
5
<PAGE>
the Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller, the holder of the GP Interest or the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Seller, the holder of the GP Interest or the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller, the holder of the GP Interest or the Issuer or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Seller, the holder of the GP Interest or the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note Owner, a
beneficial interest in a Note, unless otherwise required by appropriate taxing
authorities, agrees to treat the Notes as indebtedness secured by the Contracts
for the purpose of federal income taxes, state and local income and franchise
taxes and any other taxes imposed upon, measured by or based upon gross or net
income.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
outstanding principal amount of all the Notes. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the outstanding principal amount of the Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. TheIndenture also permits the
6
<PAGE>
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither the Seller, the Servicer, the holder of
the GP Interest, the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee solely as the Owner Trustee in the assets of the Issuer.
The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
7
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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.
8
================================================================================
THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
CIT RV OWNER TRUST 1996-A
-------------------------------
SALE AND SERVICING AGREEMENT
Dated as of February 1, 1996
--------------------------------
$250,000,000
CIT RV Owner Trust 1996-A
Class A 5.40% Asset Backed Notes
5.85% Asset Backed Certificates
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I Definitions.........................................................1
Section 1.01 General.....................................................1
Section 1.02 Specific Terms..............................................1
ARTICLE II Conveyance of Contracts; Acceptance by Trustee...................23
Section 2.01 Conveyance of the Initial Contracts........................23
Section 2.02 Conveyance of the Subsequent Contracts.....................23
Section 2.03 Acceptance by Owner Trustee................................24
ARTICLE III Representations and Warranties; The Contracts...................25
Section 3.01A Representations and Warranties Regarding Each
Contract...................................................25
Section 3.01B Representations and Warranties Regarding the Contracts in
the Aggregate..............................................29
Section 3.01C Representations and Warranties Regarding the Contract
Files......................................................30
Section 3.01D Conditions of Closing for the Subsequent Contracts.........31
Section 3.02 Repurchase of Contracts for Breach of Representations and
Warranties.................................................33
Section 3.03 Custody of Contract Files..................................34
Section 3.04 Duties of Servicer as Custodian............................34
Section 3.05 Instructions; Authority to Act.............................35
Section 3.06 Effective Period and Termination...........................36
ARTICLE IV Administration and Servicing of Contracts........................37
Section 4.01 Duties of Servicer.........................................37
Section 4.02 Collection of Contract Payments............................39
Section 4.03 Realization Upon Contracts.................................39
Section 4.04 Physical Damage Insurance..................................40
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
Retitling..................................................42
Section 4.06 Covenants of Servicer......................................43
Section 4.07 Purchase of Contracts Upon Breach..........................44
Section 4.08 Servicing Fee..............................................44
Section 4.09 Servicer's Certificate.....................................44
Section 4.10 Annual Statement as to Compliance..........................45
Section 4.11 Annual Report of Accountants...............................45
Section 4.12 Duties of Owner Trustee....................................46
Section 4.13 Reports to Securityholders and the Rating Agencies.........46
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
Policy.....................................................46
Section 4.15 Trustees to Cooperate......................................47
<PAGE>
Section 4.16 Costs and Expenses.........................................47
ARTICLE V Accounts; Distributions; Statements to Certificateholders.........47
Section 5.01 Collection Account, Pre-Funding Account, Capitalized
Interest Account and Cash Collateral Account...............47
Section 5.02 Collections; Applications..................................52
Section 5.03 Monthly Advances...........................................54
Section 5.04 A Non-Reimbursable Payments................................54
Section 5.04 Additional Deposits........................................55
Section 5.05 Distributions..............................................55
Section 5.06 Cash Collateral Account....................................56
Section 5.07 Net Deposits...............................................58
Section 5.08 Statements to Securityholders..............................58
ARTICLE VI [Reserved]........................................................61
ARTICLE VII The Company.....................................................62
Section 7.01 Representations of Company.................................62
Section 7.02 Merger or Consolidation of Company.........................63
Section 7.03 Limitation on Liability of the Company and Others..........63
Section 7.04 The Company May Own Securities.............................63
Section 7.05 Indebtedness of and Sale of Assets by the Company..........64
ARTICLE VIII The Servicer; Representations and Indemnities..................65
Section 8.01 Representations of CITSF...................................65
Section 8.02 Liability of Servicer, Indemnities.........................66
Section 8.03 Merger or Consolidation of Servicer........................67
Section 8.04 Limitation on Liability of Servicer and Others.............68
Section 8.05 Servicer Not To Resign.....................................68
ARTICLE IX Default...........................................................69
Section 9.01 Events of Termination......................................69
Section 9.02 Indenture Trustee to Act; Appointment of Successor.........70
Section 9.03 Notification to Securityholders............................71
Section 9.04 Rights to Direct Trustees and Waiver of Events of
Termination................................................72
Section 9.05 Effect of Transfer.........................................72
ARTICLE X [Reserved].........................................................74
<PAGE>
ARTICLE XI Optional Purchase and Auction Sale................................75
Section 11.01 Optional Purchase of All Contracts........................75
Section 11.02 Mandatory Sale of all Contracts...........................75
ARTICLE XII Miscellaneous Provisions........................................78
Section 12.01 Amendment.................................................78
Section 12.02 Protection of Title to Trust..............................79
Section 12.03 Limitation on Rights of Securityholders...................82
Section 12.04 Governing Law.............................................82
Section 12.05 Notices...................................................82
Section 12.06 Severability of Provisions................................83
Section 12.07 Submission to Jurisdiction; Venue.........................83
Section 12.08 Counterparts..............................................84
Section 12.09. Merger and Integration....................................84
Section 12.10 Headings..................................................84
EXHIBITS
Exhibit A List of Initial Contracts
Exhibit B Form of Subsequent Purchase Agreement
Exhibit C Form of Subsequent Transfer Agreement
Exhibit D Form of Assignment
Exhibit E Form of Owner Trustee's Acknowledgment and Certification
Exhibit F Form of Servicer's Certificate
Exhibit G Form of Monthly Report
Exhibit H Termination - Auction Procedures
Exhibit I Form of Officers' Certificate
<PAGE>
This Sale and Servicing Agreement, dated as of February 1, 1996, is made
among The CIT Group Securitization Corporation II, as seller (together with its
permitted successors and assigns, the "Company" or the "Seller"), The CIT
Group/Sales Financing, Inc., a corporation organized and existing under the laws
of the State of Delaware, as servicer (in its individual capacity, "CITSF," or,
together with its permitted successors and assigns, the "Servicer"), and CIT RV
Owner Trust 1996-A (the "Issuer" and the "Trust"), for which The Bank of New
York (Delaware), a Delaware banking corporation, 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.
"Amount Available" on any Distribution Date is equal to all amounts on
deposit in the Collection Account attributable to collections or deposits made
in respect of the Contracts in the related Due Period (together with the
Purchase Price for any Repurchased Contracts paid on or prior to the Deposit
Date immediately preceding such Distribution Date) less the following amounts
(to the extent that the Servicer has not already withheld such amounts from
collections on the Contracts);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
<PAGE>
under the Sale and Servicing Agreement; any amounts incorrectly deposited in the
Collection Account; and net investment earnings on the funds in the Collection
Account due to the Servicer pursuant to the Sale and Servicing Agreement and 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)
pursuant to the Sale and Servicing Agreement.
"Available Cash Collateral Amount" means, with respect to any date of
determination, the lesser of (i) the Required Cash Collateral Amount and (ii)
the amount on deposit in the Cash Collateral Account, excluding Investment
Earnings with respect thereto.
"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).
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Sale and Servicing Agreement, the Indenture, the Cash Collateral Agreement, the
Purchase Agreement, any Subsequent Purchase Agreement and any Subsequent
Transfer Agreements.
"Benefit Plan" means a benefit plan as described in Section 9.11 of the
Trust Agreement.
"Book-Entry Certificates" means a beneficial interest in the Certificates,
ownership and transfers of which shall be made through book entries by a
Depository as described in Section 3.11 of the Trust Agreement.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Depository as
described in Section 2.10 of the Indenture.
"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 ss. 3801 et seq., as the same may be amended from time to time.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Cash Collateral Account" means the deposit account established and
maintained pursuant to Section 5.01(a)(iv) hereof.
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"Cash Collateral Account Property" means the Cash Collateral Account, all
amounts deposited from time to time in the Cash Collateral Account and all
investments from time to time in the Cash Collateral Account, all income on such
investments and all cash and non-cash proceeds of such investments and all cash
and non-cash proceeds of such income from the date of the establishment of the
Cash Collateral Account until the termination thereof pursuant to the terms of
the Cash Collateral Agreement.
"Cash Collateral Account Surplus" means, as of any Distribution Date, the
amount, if any, by which Available Cash Collateral Amount, after taking into
account any deposits to the Cash Collateral Account pursuant to Section 5.06(a)
on such Distribution Date and any withdrawals from the Cash Collateral Account
pursuant to Section 5.06(b) or (c) on such Distribution Date, exceeds the
Required Cash Collateral Amount for the next Distribution Date.
"Cash Collateral Depositor" means the financial institution which is a
party to the Cash Collateral Agreement and which, pursuant to the Cash
Collateral Agreement, will make a loan to the Trust on the Closing Date, the
proceeds of which will be deposited in the Cash Collateral Account on the
Closing Date.
"Cash Collateral Agreement" means the Cash Collateral Agreement dated as of
February 1, 1996 among the Cash Collateral Depositor, the Trust, the Servicer
and the Owner Trustee.
"Certificate" means any one of the 5.85% 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, $13,750,000
and, on any Distribution Date thereafter, the initial Certificate Balance
reduced by (i) all distributions in respect of principal to the
Certificateholders actually made, including payments of any Principal
Liquidation Loss Amount and payments of any Principal Distribution Amount, (ii)
the aggregate amount of all Principal Liquidation Loss Amounts distributable to
Certificateholders to the extent such amounts have not been previously
distributed and (iii) on or after the Cross-over Date, the aggregate amount of
all Principal Distribution Amounts distributable to Certificateholders to the
extent such amounts have not been previously distributed.
"Certificate Depository Agreement" means the Agreement, dated as of the
Closing Date, among the Trust, the Servicer, the Owner Trustee and The
Depository Trust Company (as the initial Depository), relating to the
Certificates, as the same may be amended and supplemented from time to time.
"Certificate Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Trust Agreement.
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"Certificate Final Distribution Date" means the December 2011 Distribution
Date.
"Certificateholder" means the holder of record of a Certificate pursuant to
the terms of the Trust Agreement.
"Certificate Interest Distribution Amount" means the amount of interest
payable on a Distribution Date to the Holders of the Certificates. Such amount
will equal (i) one-twelfth of the product of the Pass-Through Rate and the
Certificate Balance as of the preceding Distribution Date, after giving effect
to any distributions of principal and interest to be made on the Certificates on
such preceding Distribution Date and other reductions in the Certificate Balance
on such preceding Distribution Date or (ii) in the case of the first
Distribution Date, one-twelfth of the product of the Pass-Through Rate and the
original Certificate Balance.
"Certificate Pre-Funded Percentage" means the percentage derived from the
fraction, the numerator of which is the Certificate Balance and the denominator
of which is the sum of the initial principal balance of the Notes and the
initial Certificate Balance.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement to be filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Owners" means with respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of the Depository, or on the books of a Person maintaining an
account with such Depository (directly as a Depository Participant or as an
indirect participant, in each case in accordance with the rules of such
Depository).
"Certificate Pool Factor" means a seven-digit decimal which the Servicer
will compute each month indicating the remaining Certificate Balance as of the
Distribution Date, as a fraction of the initial Certificate Balance. The
Certificate Pool Factor will be 1.0000000 as of the Initial Cut-off Date, and
thereafter will decline to reflect reductions in the outstanding principal
balance of the Certificates. A Certificateholder's portion of the aggregate
outstanding Certificate Balance is the product of (i) the original denomination
of the Certificateholder's Certificate and (ii) the Certificate Pool Factor.
"Certificate Register" means the register of Certificates specified in
Section 3.4 of the Trust Agreement.
"Certificate Registrar" means the registrar at any time of the Certificate
Register, appointed pursuant to Section 3.4 of the Trust Agreement.
"CIT" means The CIT Group Holdings, Inc.
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"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 Final Scheduled Distribution Date" means the December 2011
Distribution Date.
"Class A Interest Distribution Amount" means the amount of interest payable
on a Distribution Date to the Holders of the Class A Notes. Such amount will
equal (i) one-twelfth of the product of the Class A Rate and the outstanding
principal amount of Class A Notes as of the preceding Distribution Date, after
giving effect to any distributions of principal and interest to be made on the
Class A Notes on such preceding Distribution Date or (ii) in the case of the
first Distribution Date, one-twelfth of the product of the Class A Rate and the
outstanding principal balance of the Class A Notes as of the Closing Date.
"Class A Note" means any one of the Class A 5.40% Asset Backed Notes in the
aggregate principal amount of $236,250,000 issued pursuant to the Indenture and
substantially in the form of Exhibit A to the Indenture.
"Class A Rate" means 5.40% per annum, calculated on the basis of a 360-day
year comprised of twelve 30-day months.
"Closing Date" means February 22, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the Treasury Regulations promulgated thereunder.
"Collateral" means the collateral specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such established and
maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means The CIT Group Securitization Corporation II, and its
successors in interest as permitted under the related agreement.
"Computer Tape" means the computer tape generated by the Servicer which
provides information relating to the Contracts, and includes the master file and
the history file.
"Contract(s)" means one or more of the Initial Contracts and/or Subsequent
Contracts.
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"Contract File" means, as to each Contract (i) the 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 of title documents for recreational vehicles,
other evidence of ownership of the related Financed Vehicle which is customarily
relied upon in such jurisdiction as evidence of title to a recreational vehicle;
(iii) evidence of one or more of the following types of perfection of the
security interest in the related Financed Vehicle granted by such Contract, as
appropriate: (a) notation of such security interest on the title document, (b) a
financing statement meeting the requirements of the UCC, with evidence of
recording indicated thereon, or (c) such other evidence of perfection of a
security interest in a recreational vehicle as is customarily relied upon in the
jurisdiction in which the related Financed Vehicle is located; (iv) an
assignment of the Contract evidencing the chain of title of the Contract from
the Dealer which is the originator thereof to CITSF or CITCF-NY; and (v) any
extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the rate of
interest specified in that Contract.
"Corporate Trust Office" means with respect to the Indenture Trustee or the
Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or the Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 311 West Monroe Street,
Chicago, Illinois 60606, attn: Indenture Trust Administration, and in the case
of the Owner Trustee, at White Clay Center, Route 273, Newark, Delaware, 19711,
attn: Corporate Trust Administration.
"Co-Trustee" means The Bank of New York pursuant to a Co-Trustee Agreement,
dated as of February 1, 1996, between The Bank of New York and the Owner
Trustee.
"Cross-over Date" means the Distribution Date on which the Notes have been
paid in full.
"Dealer" means the Recreational Vehicle dealer which sold a Financed
Vehicle and which originated and assigned the Contract relating to such Financed
Vehicle to CITSF or CITCF-NY under a Dealer Agreement.
"Dealer Agreement" means the agreement, if any, under which Contracts were
originated by a Dealer and sold to CITSF or CITCF-NY, and all documents and
instruments relating thereto.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become an Event of Default.
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"Defaulted Contract" means, with respect to any Due Period, a Contract
(other than a Repurchased Contract) in respect of which payments exceeding $65
in the aggregate were delinquent 120 days or more as of the last day of such Due
Period; provided, however, that a Paid-Ahead Contract and a Contract which is
delinquent due to the Soldiers' and Sailors' Relief Act of 1940 shall not be
deemed to be delinquent.
"Definitive Certificates" means the Certificates specified in Section 3.13
of the Trust Agreement.
"Definitive Notes" means the Notes specified in Section 2.12 of the
Indenture.
"Demand Note" means the note issued by CIT to The CIT GP Corporation II
which is payable on demand.
"Deposit Date" means, with respect to any Distribution Date, the Business
Day immediately preceding such related Distribution Date.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is CEDE & CO., and any permitted successor depository. The
Depository shall at all times be a "clearing corporation" defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Agreement" means the Agreement, dated as of the Closing Date,
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, the Pre-Funding Account and the
Capitalized Interest Account, collectively.
"Determination Date" means the third Business Day prior to each
Distribution Date.
"Distribution Date" means the date on which payments of interest and
principal on the Securities will be made. Such Distribution Dates will be on the
fifteenth day of each month or, if any such day is not a Business Day, on the
next succeeding Business Day, commencing March 15, 1996.
"Draw Amount" has the meaning specified in Section 5.06(b) of the Sale and
Servicing Agreement.
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"Due Date" shall mean, with respect to each Contract, the day set forth in
such Contract as the date on which payments under such Contract are scheduled to
be made.
"Due Period" means with respect to any Distribution Date the period during
which principal, interest and fees will be collected on the Contracts for
application towards the payment of principal and interest to the Securityholders
and the payment of fees on such Distribution Date. The "Due Period" will be the
calendar month immediately preceding the Distribution Date. The first Due Period
will commence on and include February 1, 1996 and will end on and include
February 29, 1996.
"Electronic Ledger" means the electronic master record of installment sale
contracts of the Servicer.
"Eligible Institution" means either (i) the corporate trust department of
the Indenture Trustee, the Owner Trustee or any paying agent satisfying the
criteria under the Trust Agreement or Indenture, as applicable or (ii) a
depository institution or trust company 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), which is subject to supervision and
examination by federal or state authorities and (unless the Certificate Account
is a trust account maintained in the corporate trust department of such
depository institution) whose short-term deposits have been rated P-1 by Moody's
and A-1+ by Standard & Poor's (except with regard to the Collection Account and
the Cash Collateral Account where a short-term deposit rating of A-1 by Standard
& Poor's is sufficient), or in one of the two highest rating categories by
Moody's and Standard & Poor's in the case of unsecured long-term debt.
"Eligible Investments" means, at any time, any one or more of the
obligations and securities described in Section 5.01(c) of the Sale and
Servicing Agreement.
"Eligible Servicer" means CITSF, the Trustees or any other Person qualified
to act as Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than $100,000,000 in outstanding
principal amount of recreational or motor vehicle installment sale contracts.
"ERISA" means The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means an event as described in Section 5.1 of the
Indenture.
"Event of Termination" means an event specified in Section 9.01 of the Sale
and Servicing Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
8
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"Excluded Assets" means any amounts on deposit in the Certificate
Distribution Account and Cash Collateral Account and any Investment Earnings
thereon.
"Final Draw Amount" has the meaning set forth in Section 5.06(c) of the
Sale and Servicing Agreement.
"Financed Vehicle" with respect to a Contract means the new or used
Recreational Vehicle, together with all accessions thereto, securing an
Obligor's indebtedness under such Contract.
"Force-Placed Insurance" means insurance described in Section 4.04(a) of
the Sale and Servicing Agreement.
"Force-Placed Insurance Premium" means any premium for theft and physical
damage insurance purchased by CITSF or CITCF-NY.
"Funding Period" means the period commencing on the Closing Date and ending
on the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account is less than $100,000, (ii) the date on which an Event of
Default occurs under the Indenture, (iii) the date on which an Event of
Termination occurs under the Sale and Servicing Agreement, (iv) the insolvency
of the Company, CITSF, CITCF-NY or CIT or (v) the close of business on May 15,
1996.
"GP Interest" means the ownership interest of at least 1% of the
Certificate Balance, which shall initially be held by The CIT GP Corporation II,
as described in Section 2.7 of the Trust Agreement.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note or Certificate is registered
on the Note Register or the Certificate Register, as applicable.
9
<PAGE>
"Indenture" means the indenture, dated as of February 1, 1996, 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.
"Initial Capitalized Interest Deposit" means the amount deposited in the
Capitalized Interest Account on the Closing Date from the proceeds of the sale
of the Notes and Certificates, which amount is $499,196.
"Initial Cash Collateral Amount" means $5,625,000.
"Initial Contract" means one or more of the fixed-rate simple interest
installment sale contracts described in the List of Initial Contracts, which
constitute part of the corpus of the Trust, and which Contracts are to be
assigned by the Company to the Trust; including, without limitation, all related
security interests, collateral, liens, insurance policies and guarantees of the
obligations of the related Obligor (other than guarantees, if any, by the
related Dealer) and any and all rights to receive payments which are received
pursuant thereto from and after the Initial Cut-off Date, but excluding any
rights to receive payments which are received pursuant thereto prior to the
Initial Cut-off Date.
"Initial Cut-off Date" means February 1, 1996.
"Initial Cut-off Date Principal Balance" means the aggregate unpaid
principal balance of all of the Initial Contracts as of the Initial Cut-off
Date.
"Initial Financed Vehicle" means a Financed Vehicle with respect to an
Initial Contract.
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"Initial Pool Balance" means the sum of (i) the Pool Balance as of the
Initial Cut-off Date and (ii) the aggregate principal balance of all Subsequent
Contracts added to the Trust as of their respective Subsequent Cut-off Dates.
"Insolvency Event" with respect to a specified Person, (i) the entry of a
decree or order by a court, agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or liquidator for
such Person, in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of such
Person's affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 90 consecutive days; (ii) the consent by such Person
to the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Person or of or relating to substantially all
of such Person's property, or (iii) such Person shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
"Insurance Policy" means, with respect to each Contract, the policy of
physical damage and all other insurance covering the Financed Vehicles or the
Obligors, as provided in Section 4.04(a) of the Sale and Servicing Agreement,
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) of
the Sale and Servicing Agreement.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
Insurance Policy.
"Interest Accrual Period" means the period for which interest is payable on
a Distribution Date on the Securities, which shall be the one-month period from
the most recent Distribution Date on which interest has been paid to but
excluding the following Distribution Date, or in the case of the initial
Distribution Date the one-month period from February 15, 1996 to but excluding
the initial Distribution Date.
"Interest Shortfall" means with respect to any Contract and any
Distribution Date, the excess of (x) the sum of (i) the product of one-twelfth
of the weighted average of the Pass-Through Rate and the Class A Rate multiplied
by the outstanding principal amount of such Contract as of the last day of the
second preceding Due Period (or, in the case of the first Due Period ending
after the Contract was acquired by the Trust, as of the Initial Cut-off Date or
the Subsequent Cut-off Date, as applicable to such Contract) and (ii) the
product of (A) one-twelfth of the Servicing Fee Rate and (B) the outstanding
principal amount of such Contract as of the last day of the second preceding Due
Period (or, in the case of the first Due Period ending after the Contract was
acquired by the Trust, as of the Initial Cut-off Date or the Subsequent Cut-off
Date, as applicable to such Contract) over (y) the amount of interest, if any,
collected on such Contract in the related Due Period.
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"Investment Earnings" means investment earnings deposited in a Designated
Account or the Cash Collateral Account, as applicable, net of losses and
investment expenses.
"Issuer" means the Trust until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained in the
Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee
"Late Fees" means any late fees, prepayment charges, extension fees or
other administrative fees or similar charges allowed by applicable law with
respect to the Contracts.
"Lien" means any security interest, charge, pledge, equity or encumbrance
of any kind other than tax liens, mechanics' liens and any liens that attach by
operation of law.
"Liquidated Contract" means any Contract as to which the Servicer has
determined that all amounts which it expects to recover from or on account of
such Contract have been recovered; provided that any Contract in respect of
which the related Financed Vehicle has been realized upon and disposed of and
the proceeds of such disposition have been received, shall be deemed to be a
Liquidated Contract.
"Liquidation Expenses" means any out-of-pocket expenses incurred by the
Servicer hereunder relating to the liquidation of a Contract which are
permissible hereunder.
"List of Initial Contracts" means the list attached to the Sale and
Servicing Agreement as Exhibit A identifying each Initial Contract constituting
part of the corpus of the Trust, which list (i) identifies each Initial Contract
and (ii) sets forth as to each Initial Contract (a) the Initial Cut-off Date
Principal Balance, (b) the amount of the monthly payment due from the Obligor as
of the Initial Cut-off Date, (c) the Contract Rate as of the Initial Cut-off
Date and (d) the maturity date.
"List of Subsequent Contracts" means, with respect to the sale of any
Subsequent Contracts by the Company to the Trust pursuant to a Subsequent
Transfer Agreement, the list attached to such Subsequent Transfer Agreement
identifying each Subsequent Contract which, upon the execution and delivery of
such Subsequent Transfer Agreement, will constitute part of the corpus of the
Trust, which list (i) identifies each such Subsequent Contract and (ii) sets
forth as to each such Subsequent Contract (a) the Subsequent Cut-off Date
Principal Balance, (b) the amount of monthly payment due from the Obligor as of
the applicable Subsequent Cut-off Date, (c) the Contract Rate as of the
applicable Subsequent Cut-off Date and (d) the maturity date.
"Military Reservist Relief Act" means the California Military Reservist
Relief Act of 1991.
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"Monthly Advance" means, with respect to any Distribution Date, any payment
made by the Servicer pursuant to Section 5.03 of the Sale and Servicing
Agreement on the preceding Deposit Date.
"Monthly Report" has the meaning assigned in Section 4.09 of the Sale and
Servicing Agreement. The form of Monthly Report is attached as Exhibit G to the
Sale and Servicing Agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors in
interest.
"Net Liquidation Proceeds" means the monies collected (from whatever
source) during a Due Period on a Liquidated Contract, net of the sum of (a) any
amount expended by or on behalf of the Servicer in effecting such collections
permissible hereunder, plus (b) any payments required by law to be remitted to
the Obligor, except such amounts as constitute Post Cut-off Date Insurance
Add-ons.
"Nonrecoverable Advance" means any advance made or proposed to be made
pursuant to Section 5.03 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, 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.
"Nonreimbursable Payment" shall have the meaning set forth in Section 5.04A
of the Sale and Servicing Agreement.
"Notes" means the Class A 5.40% Asset Backed Notes.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a) of the Sale and Servicing
Agreement.
"Noteholder" means the holder of record of a Note pursuant to the
Indenture.
"Note Owners" with respect to a Book-Entry Note, means the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository Participant or as an Indirect Participant,
in each case in accordance with the rules of such Depository).
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"Note Pool Factor" means a seven-digit decimal which the Servicer will
compute each month indicating the remaining outstanding principal balance of the
Notes as of the Distribution Date, as a fraction of the initial outstanding
principal balance of the Notes. The Note Pool Factor will be 1.0000000 as of the
Initial Cut-off Date, and thereafter will decline to reflect reductions in the
outstanding principal balance of the Notes. A Noteholder's portion of the
aggregate outstanding principal balance of the Notes is the product of (i) the
original denomination of the Noteholder's Note and (ii) the Note Pool Factor.
"Note Pre-Funded Percentage" means the percentage derived from the fraction
the numerator of which is the initial principal balance of the Notes and the
denominator of which is the initial principal balance of the Notes and the
initial Certificate Balance.
"Note Register" means the register of the Notes as specified in Section 2.4
of the Indenture.
"Note Registrar" means the registrar at any time of the Note Register,
appointed pursuant to Section 2.4 of the Indenture.
"Obligor" means each Person who is indebted under a Contract.
"Officers' Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an officer's certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel who may, except as
otherwise expressly provided, 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.
"Original Pre-Funded Amount" means the amount deposited in the Pre-Funding
Account on the Closing Date from the proceeds of the sale of the Notes and
Certificates, which amount is $68,255,035.
"Outstanding Certificate Interest" means the aggregate amount for each
prior Distribution Date of the difference between (i) the Certificate Interest
Distribution Amount and (ii) the amount of interest actually distributed to the
Holders of the Certificates.
"Outstanding Class A Interest" means the aggregate amount for each prior
Distribution Date of the difference between (i) the Class A Interest
Distribution Amount and (ii) the amount of interest actually distributed to the
Holders of the Class A Notes.
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"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 of
the Sale and Servicing Agreement, all funds deposited from time to time in the
Designated Accounts and the Cash Collateral Account (except the Note
Distribution Account) and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Basic
Documents.
"Owner Trustee" means The Bank of New York (Delaware), a Delaware banking
corporation, or any successor trustee under the Trust Agreement.
"Paid-Ahead Contract" means a Contract in respect of which the related
Obligor, in addition to making his regularly scheduled payment in any Due
Period, makes one or more additional payments in such Due Period, such that the
Servicer, in accordance with its customary servicing procedures, (i) treats such
additional payments as a Principal Prepayment applied to reduce the principal
balance of the related Contract and (ii) does not require the Obligor to make a
scheduled payment in respect of such Contract for the number of Due Dates which
corresponds to the number of such additional scheduled payments.
"Pass-Through Rate" means 5.85% per annum, calculated on the basis of a
360-day year comprised of twelve 30-day months.
"Paying Agent" with respect to the Indenture means the Indenture Trustee or
any other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal and interest on the Notes
on behalf of the Issuer. "Paying Agent" with respect to the Trust Agreement
means any paying agent or co-paying agent appointed pursuant to Section 3.9 of
the Trust Agreement that meets the eligibility requirements of Section 6.13 of
the Trust Agreement.
"Permitted Investments" will include the following obligations and
securities: (i) obligations of the United States or any agency thereof, backed
by the full faith and credit of the United States; (ii) general obligations of
or obligations guaranteed by any State, and certificates of deposit, demand or
time deposits, federal funds or banker's acceptances issued by any depository
institution or trust company incorporated under the laws of the United States or
of any state and subject to supervision and examination by federal or state
banking authorities; in each case rated in the highest rating of each Rating
Agency for such obligations, or such lower rating as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to either
the Notes or the Certificates by such Rating Agency; and (iii) demand or time
deposits or certificates of deposit issued by any bank, trust company, savings
bank or other savings institution, which deposits are fully insured by the FDIC;
in each case rated in the highest rating of each Rating Agency for such
obligations, or such lower rating as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to either the Notes or the
Certificates by such Rating Agency.
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"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.
"Pool Balance" means the aggregate outstanding principal balance of the
Contracts.
"Post Cut-off Date Insurance Add-Ons" means Force-Placed Insurance Premiums
added to the Contracts on or after the Initial Cut-off Date with regard to each
Initial Contract, or on or after the related Subsequent Cut-off Date with regard
to each Subsequent Contract, which amounts are to be repaid to an account
separate from the Collection Account over the remaining life of such Contract.
"Pre-Funding Account" means the Pre-Funding Account established and
maintained in accordance with Section 5.01(b) of the Sale and Servicing
Agreement.
"Pre-Funded Amount" means, with respect to any Determination Date, the
amount on deposit in the Pre-Funding Account.
"Pre-Funding Earnings" means (i) with respect to the March 15, 1996
Distribution Date, the actual Investment Earnings earned on the Pre-Funded
Amount during the period beginning on the Closing Date through March 14, 1996
(inclusive), (ii) with respect to the April 15, 1996 Distribution Date, the
actual Investment Earnings earned on the Pre-Funded Amount during the period
beginning on March 15, 1996 through April 14, 1996 (inclusive), and (iii) with
respect to the May 15, 1996 Distribution Date, the actual Investment Earnings
earned on the Pre-Funded Amount during the period beginning on April 15, 1996
through May 14, 1996 (inclusive).
"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" equals the difference between
(i) the sum of (x) the Pool Balance on the last day of the second preceding Due
Period (or, in the case of the first Distribution Date, the Initial Cut-off Date
Principal Balance) and (y) the Pre-Funded Amount (exclusive of Pre-Funding
Earnings) on the last day of the second preceding Due Period (or, in the case of
the first Distribution Date, as of the Closing Date), less (ii) the sum of (x)
the Pool Balance on the last day of the preceding Due Period and (y) the
Pre-Funded Amount (exclusive of Pre-Funding Earnings) on the last day of the
preceding Due Period; provided, however, that the Principal Distribution Amount
on the Class A Final Scheduled Distribution Date will equal the outstanding
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principal balance of the Notes as of such date and the Principal Distribution
Amount on the Certificate Final Distribution Date will equal the Certificate
Balance on such date. For the purposes of determining the Principal Distribution
Amount, the unpaid principal balance of a Defaulted Contract or a Repurchased
Contract is deemed to be zero on and after the last day of the Due Period in
which such Contract became a Defaulted Contract or a Repurchased Contract. The
Principal Distribution Amount will not exceed the outstanding principal balance
of the Notes or, after the Cross-over Date, the Certificate Balance.
"Principal Liquidation Loss Amount" for any Distribution Date equals the
amount, if any, by which the sum of the aggregate outstanding principal balance
of the Notes and the Certificate Balance (after giving effect to all
distributions of principal on such Distribution Date but before giving effect to
any other reductions in the Certificate Balance on such Distribution Date)
exceeds the sum of the Pool Balance plus the Pre-Funded Amount (exclusive of
Pre-Funding Earnings), if any, at the close of business on the last day of the
related Due Period.
"Principal Prepayment" means a payment or other recovery of principal on a
Contract (including Insurance Proceeds that are not liquidation proceeds, but
exclusive of liquidation proceeds) 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 made.
"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 February 1,
1996, between the Seller and CITSF, as amended and supplemented from time to
time.
"Purchase Price" means, with respect to a Contract to be purchased under
the Sale and Servicing Agreement, an amount equal to the remaining principal
amount outstanding on such Contract on the date of purchase, plus 30 days'
interest thereon in an amount equal to the sum of (i) the product of one-twelfth
of the weighted average of the Pass-Through Rate and of the Class A Rate and the
remaining principal amount outstanding on the Contract and (ii) accrued and
unpaid Servicing Fees thereon at the Servicing Fee Rate to the date of such
purchase.
"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.
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"Rating Agency Condition" with respect to any action means, the condition
that each Rating Agency shall have been given at least 10 days prior notice
thereof and that each of the Rating Agencies shall have notified the Seller, the
Servicer and the Issuer in writing that such action shall not result in a
downgrade or withdrawal of the then current rating of the Notes or Certificates.
"Record Date" with respect to any Distribution Date means the day
immediately preceding the related Distribution Date or, in the event Definitive
Securities have been issued, the last day of the month immediately preceding the
month in which such Distribution Date occurs.
"Recreational Vehicle" shall mean new or used motor homes, travel trailers
and other types of recreational vehicles.
"Redemption Date" means the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.1(a) or (b) of the Indenture, as applicable.
"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, for any Due Period, a Contract which (i)
CITSF purchased pursuant to Section 3.02 of the Sale and Servicing Agreement or
(ii) the Servicer purchased pursuant to Section 4.07 of the Sale and Servicing
Agreement, in each case, effective as of a date preceding such Due Period.
"Required Capitalized Interest Amount" for any Distribution Date during the
Funding Period is an amount equal to the product of (x) the weighted average of
the Class A Rate and the Pass-Through Rate as of the first day of the related
Interest Accrual Period minus 2.5%, (y) the undisbursed funds (excluding
investment earnings) in the Pre-Funding Account (as of such Distribution Date,
after giving effect to any purchases of Subsequent Contracts on such
Distribution Date, excluding such Subsequent Contracts which do not have a Due
Date in the month of the related Subsequent Transfer Date) and (z) a fraction,
the numerator of which is equal to the maximum number of Distribution Dates
remaining in the Funding Period and the denominator of which is 12.
"Required Cash Collateral Amount" means 2.25% of the sum of (i) the Pool
Balance and (ii) the amount (excluding Investment Earnings) on deposit in the
Pre-Funding Account, in each case, as of the first day of the related Due
Period, but in no event less than $1,875,000; provided, however, that if, with
respect to any Distribution Date, (a) the average of the principal balance of
Contracts 60 days or more delinquent (including Contracts relating to Financed
Vehicles that have been repossessed) as a percentage of the Pool Balance for the
three preceding Due Periods exceeds 1.75% or (b) the average of the principal
balances of all Contracts which became Defaulted Contracts, less any Net
Liquidation Proceeds on Defaulted Contracts, expressed as an annualized
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percentage of the average outstanding Pool Balance of the three preceding Due
Periods exceeds 1.75%, then the Required Cash Collateral Amount with respect to
such Distribution Date shall be 4.50% of the Pool Balance as of the first day of
the related Due Period, but in no event (i) less than $1,875,000 or (ii) greater
than $5,625,000; provided, further, however, that the Required Cash Collateral
Amount shall never be greater than the outstanding balance of the Certificates
and may be reduced from time to time 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 and the Certificates.
"Responsible Officer" with respect to the Indenture Trustee or the Owner
Trustee means, any officer within the Corporate Trust Office of such trustee,
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.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of February 1, 1996, among the Seller, the Servicer and the Trust, as
amended and supplemented from time to time.
"Securities" means the Notes and the Certificates.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Securityholders" means the Person in whose name a Note or Certificate is
registered on the Note Register or the Certificate Register, as applicable.
"Seller" means the Person executing the Sale and Servicing Agreement as the
Seller, or any successor in interest to the Seller pursuant to the terms of the
Sale and Servicing Agreement.
"Service Transfer" has the meaning assigned in Section 9.01 of the Sale and
Servicing Agreement.
"Servicer" means the Person executing the Sale and Servicing Agreement as
the Servicer, or any successor Servicer pursuant to a Service Transfer under the
Sale and Servicing Agreement.
"Servicer's Certificate" means a certificate, substantially in the form of
Exhibit F to the Sale and Servicing Agreement, completed by and executed on
behalf of the Servicer by a Servicing Officer in accordance with Section 4.09 of
the Sale and Servicing Agreement.
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"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 of the Sale and Servicing Agreement.
"Servicing Fee" means, as to any Distribution Date, the sum of (i)
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date) 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 1%.
"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.
"Servicer Payment" with respect to a Distribution Date means, the sum of
the Servicing Fee for such Distribution Date and the aggregate unpaid Servicing
Fees for past Distribution Date.
"Simple Interest Contract" means a Contract as to which interest is
calculated each day on the basis of the actual principal balance outstanding on
such day.
"Soldiers' and Sailors' Civil Relief Act" means the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.
"Standard & Poor's" means Standard & Poor's Structured Ratings Group, a
division of The McGraw-Hill Companies, Inc and its successors in interest.
"Stated Principal Balance" means, as of any Distribution Date, the unpaid
principal balance of a Contract at the end of the related Due Period.
"Subsequent Contracts" means one or more of the fixed-rate simple interest
installment sale contracts described in the List of Subsequent Contracts, which
constitute part of the corpus of the Trust, and which Contracts are to be
assigned by the Company to the Trust; including, without limitation, all related
security interests, collateral, liens, insurance policies and guarantees of the
obligations of the related Obligor (other than guarantees, if any, by the
related Dealer) and any and all rights to receive payments which are received
pursuant thereto from and after the Subsequent Cut-off Date, but excluding any
rights to receive payments which are received pursuant thereto prior to the
Subsequent Cut-off Date.
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"Subsequent Cut-off Date" means the beginning of business on the first day
of the month of the related Subsequent Transfer Date specified in a Subsequent
Transfer Agreement with respect to those Subsequent Contracts which are
transferred and assigned to the Trust pursuant to the related Subsequent
Transfer Agreement.
"Subsequent Cut-off Date Pool Principal Balance" means, as of any
Subsequent Transfer Date, the sum of (i) the Initial Cut-off Date Principal
Balance and (ii) the aggregate unpaid principal balances of the Subsequent
Contracts to be sold on such Subsequent Transfer Date as of the related
Subsequent Cut-off Date and (iii) if applicable, an amount calculated as
provided in clause (ii) with respect to all Subsequent Transfer Dates, if any,
occurring prior to such Subsequent Transfer Date.
"Subsequent Cut-off Date Principal Balance" means the aggregate unpaid
principal balance of all of the Subsequent Contracts transferred pursuant to a
Subsequent Transfer Agreement, as of the related Subsequent Cut-off Date.
"Subsequent Financed Vehicle" means a Financed Vehicle with regard to a
Subsequent Contract.
"Subsequent Purchase Agreement" means a Subsequent Purchase Agreement dated
as of a Subsequent Cut-off Date between CITSF and the Company providing for the
sale of Subsequent Contracts from CITSF to the Company and substantially in the
form of Exhibit B to the Sale and Servicing Agreement.
"Subsequent Transfer Agreement" means each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date between the Trust and the Company
substantially in the form of Exhibit C to the Sale and Servicing Agreement, by
which Subsequent Contracts are sold and assigned to the Trust.
"Subsequent Transfer Date" means the date specified in the related
Subsequent Transfer Agreement.
"Temporary Notes" means the Notes specified in Section 2.3 of the
Indenture.
"TIA" or "Trust Indenture Act" means The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Treasury Regulations" means any proposed, temporary or final regulation
promulgated under the Code.
"Trust" means CIT RV Owner Trust 1996-A, a Delaware business trust created
by the Trust Agreement.
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"Trust Agreement" means the Trust Agreement dated as of February 1, 1996
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.
"Trust Indenture Act" or "TIA" means The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trustees" means both the Indenture Trustee and the Owner Trustee.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
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ARTICLE II
Conveyance of Contracts;
Acceptance by Trustee
Section 2.01 Conveyance of the Initial Contracts.
On the Closing Date, the Company shall sell, transfer, assign absolutely,
set over and otherwise convey to the Trust by execution of an assignment
substantially in the form of Exhibit D hereto, and the Trust shall purchase, (i)
all the right, title and interest of the Company in and to the Initial Contracts
and all the rights, benefits, and obligations arising from and in connection
with each Initial Contract, (ii) the security interests in the Initial Financed
Vehicles granted by the Obligors pursuant to the Initial Contracts, (iii) all
payments received by the Company on or with respect to the Initial Contracts on
or after the Initial Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any Initial
Financed Vehicles (including any right to receive future Net Liquidation
Proceeds) that secure the Initial Contracts and that shall have been repossessed
by the Servicer by or on behalf of the Trust; (v) all rights of the Company to
proceeds of Insurance Policies covering the Obligors and the Initial Contracts,
(vi) the proceeds from any Servicer's Errors and Omissions Protection Policy,
any fidelity bond and any blanket hazard policy, to the extent such proceeds
relate to any Initial Financed Vehicle, (vii) all rights of recourse against any
cosigner or under any personal guarantee with respect to the Initial Contracts
(other than any right as against a Dealer under a Dealer Agreement), (viii) all
amounts held for the Trust in the Collection Account, (ix) all amounts held for
the Trust in the Pre-Funding Account, (x) all amounts held for the Trust in the
Capitalized Interest Account, (xi) all proceeds in any way derived from any of
the foregoing items, and (xii) all documents contained or required to be
contained in the Contract Files relating to the Initial Contracts. The parties
intend and agree that the conveyance of the Company's right, title and interest
in and to the Initial Contracts (and all rights, entitlements and amounts listed
above) pursuant to this Agreement shall constitute an absolute sale.
The Company hereby declares and covenants that it shall at no time have any
legal, equitable or beneficial interest in, or any right, including without
limitation any reversionary or offset right, to the Collection Account, the
Pre-Funding Account, the Capitalized Interest Account and the Cash Collateral
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 Conveyance of the Subsequent Contracts.
In consideration of the Owner Trustee's delivery on the related Subsequent
Transfer Date to or upon the order of the Company of the purchase price for the
Subsequent Contracts to be conveyed to the Trust on such date up to the balance
of funds on deposit in the Pre-Funding Account on such related Subsequent
Transfer Date, the Company shall sell, transfer, assign, set over and otherwise
convey to the Trust by execution of an assignment substantially in the form of
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the Subsequent Transfer Agreement attached hereto as Exhibit C, and the Trust
shall purchase, (i) all the right, title and interest of the Company in and to
the Subsequent Contracts and all the rights, benefits, and obligations arising
from and in connection with each Subsequent Contract, (ii) the security
interests in the Subsequent Financed Vehicles granted by the Obligors pursuant
to the Subsequent Contracts, (iii) all payments received by the Company on or
with respect to the Subsequent Contracts on or after the Subsequent Cut-off Date
(exclusive of payments with respect to Post Cut-off Date Insurance Add-Ons),
(iv) the interest of the Company in any Subsequent Financed Vehicles (including
any right to receive future Net Liquidation Proceeds) that secure the Subsequent
Contracts and that shall have been repossessed by the Servicer by or on behalf
of the Trust; (v) all rights of the Company to proceeds of Insurance Policies
covering the Obligors and the Subsequent Contracts, (vi) the proceeds from any
Servicer's Errors and Omissions Protection Policy, any fidelity bond and any
blanket hazard policy, to the extent such proceeds relate to any Subsequent
Financed Vehicle, (vii) all rights of recourse against any cosigner or under any
personal guarantee with respect to the Subsequent Contracts (other than any
right as against a Dealer under a Dealer Agreement), (viii) all proceeds in any
way derived from any of the foregoing items, and (ix) all documents contained or
required to be contained in the Contract Files relating to the Subsequent
Contracts. The parties intend and agree that the conveyance of the Company's
right, title and interest in and to the Subsequent Contracts pursuant to this
Agreement shall constitute an absolute sale. The "purchase price" shall be one
hundred percent (100%) of the aggregate principal amount outstanding on the
Subsequent Contracts so transferred as of the related Subsequent Cut-off Date.
Section 2.03 Acceptance by Owner Trustee.
(a) On the Closing Date, the Owner Trustee shall deliver a certificate to
the Company substantially in the form of Exhibit E hereto acknowledging to the
best of its knowledge conveyance of the Initial Contracts and Contract Files
relating thereto to the Owner Trustee and declaring that the Owner Trustee,
through the Servicer, as custodian, pursuant to Section 3.03 hereto, will hold
all Contracts that have been delivered in trust, upon the trusts herein set
forth, for the use and benefit of all Certificateholders and Noteholders, as
their respective interests may appear, subject to the terms and provisions of
this Agreement and the Basic Documents.
(b) On any Subsequent Transfer Date, the Owner Trustee shall deliver a
certificate to the Company substantially in the form of Exhibit E hereto
acknowledging to the best of its knowledge conveyance of the Subsequent
Contracts and Contract Files relating thereto to the Owner Trustee and declaring
that the Owner Trustee, through the Servicer, as custodian, pursuant to Section
3.04 hereto, will hold all Contracts that have been delivered in trust, upon the
trusts herein set forth, for the use and benefit of all Certificateholders and
Noteholders, as their respective interests may appear, subject to the terms and
provisions of this Agreement and the Basic Documents.
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ARTICLE III
Representations and Warranties; The Contracts
3.01A Representations and Warranties Regarding Each Contract.
The Initial Contracts have been sold by CITSF to the Company pursuant to
the Purchase Agreement. Any Subsequent Contracts will be sold by CITSF to the
Company pursuant to a Subsequent Purchase Agreement. In connection with such
sales, CITSF made the representations and warranties in Sections 3.01A, 3.01B,
3.01C and 8.01 of this Agreement to the Company (such representations and
warranties being incorporated in the Purchase Agreement and any Subsequent
Purchase Agreement) and assumed the obligations in Section 3.02 of this
Agreement. As a condition of the purchase by the Company, the Company has
required that CITSF make such representations and warranties directly to the
Trust and the Securityholders so that the Trust may recover directly against
CITSF on such representations and warranties rather than indirectly through
claims by the Company against CITSF. Consequently, CITSF represents and warrants
to the Trust and the Securityholders as to each Initial Contract as of the
Closing Date and as to each Subsequent Contract as of the related Subsequent
Transfer Date (except as otherwise expressly stated):
(a) List of Contracts. The information set forth in the List of Initial
Contracts or the List of Subsequent Contracts, as applicable, is true and
correct as of its date.
(b) Payments. With respect to an Initial Contract, as of the Initial
Cut-off Date, the payment of principal and interest for its Due Date next
preceding the Cut-off Date was made by or on behalf of the Obligor (without any
advance from CITSF or any Person acting at the request of CITSF) or was not
delinquent for more than 30 days and, with respect to a Subsequent Contract, as
of the related Subsequent Cut-off Date (or the date of origination, if later)
the payment of principal and interest for its Due Date next preceding the
related Subsequent Cut-off Date was made by or on behalf of the Obligor (without
an advance from CITSF or any Person acting at the request of CITSF) or was not
more than 30 days delinquent.
(c) No Waivers. The terms of the Contract have not been waived, altered,
amended or modified in any respect, except by instruments or documents
identified in the Contract File with respect thereto, and no waiver, alteration,
amendment or modification has caused such Contract to fail to meet any of the
other representations and warranties made by CITSF with respect thereto.
(d) Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally and equitable remedies.
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(e) No Defenses. No facts which give rise to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, by the
Obligor, have been asserted with respect to the 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 not so covered, is covered by a blanket
insurance policy maintained by CITSF. As of the Initial Cut-off Date, the
Servicer has not obtained Force-Placed Insurance with respect to any Initial
Contract and, as of any Subsequent Cut-off Date, the Servicer has not obtained
Force-Placed Insurance with respect to any Subsequent Contract.
(g) Origination. The Contract was originated by a Dealer in the United
States of America and was purchased by CITSF or CITCF-NY in the ordinary course
of its business.
(h) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract to the Company under the Purchase Agreement in the case of an
Initial Contract, or under a Subsequent Purchase Agreement in the case of a
Subsequent Contract, the transfer of the Contract to the Trust under this
Agreement in the case of an Initial Contract, or under a Subsequent Transfer
Agreement in the case of a Subsequent Contract, or pursuant to transfers of
Securities, or the ownership of the Contracts by the Trust, unlawful.
(i) Compliance with Law. All requirements of any federal, state or local
law, including, without limitation, usury, truth in lending and equal credit
opportunity laws, applicable to the 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.
(j) 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 lien of the Contract in whole or in part.
(k) 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 Initial Cut-off Date Principal Balance of such
Contract in the case of an Initial Contract or the Subsequent Cut-off Date
Principal Balance of such Contract in the case of a Subsequent 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.
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(l) 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 Recreational Vehicle, such filings or recordings have
been duly made and show CITSF or CITCF-NY as secured party.
(m) Capacity of Parties. All parties to the Contract had legal capacity to
execute the Contract.
(n) Good Title. CITSF or CITCF-NY purchased the Contract for fair value and
took possession thereof in the ordinary course of its business, without
knowledge that the Contract was subject to a security interest in favor of a
third party. Neither CITSF, CITCF-NY nor the Company has sold, assigned or
pledged the Contract to any person other than CITSF, the Company or the Trust,
respectively. Prior to the transfer of the Contract by CITCF-NY to CITSF, CITSF
to the Company and by the Company to the Trust, CITCF-NY, CITSF or the Company,
respectively, had good and marketable title thereto free and clear of any
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.
(o) No Defaults. As of the Initial Cut-off Date for each Initial Contract,
and as of the related Subsequent Cut-off Date for each Subsequent Contract,
there was no default, breach, violation or event permitting acceleration
existing under the Contract and no event which, with notice and the expiration
of any grace or cure period, would constitute such a default, breach, violation
or event permitting acceleration under such Contract (except payment
delinquencies permitted by subsection (b) above). Neither CITCF-NY nor CITSF has
waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by subsection (b) above.
(p) No Liens. As of the Closing Date for each Initial Contract, and as of
the related Subsequent Transfer Date for each Subsequent Contract, there are, to
the best of CITSF's knowledge, 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 lien of the
Contract.
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(q) 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.
(r) 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.
(s) 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.
(t) Obligor Not Subject to Bankruptcy Proceedings. The Obligor on the
Contract was not in a bankruptcy proceeding as of the Initial Cut-off Date for
each Initial Contract or as of the related Subsequent Cut-off Date for each
Subsequent Contract.
(u) No Repossession. As of the Initial Cut-off Date for each Initial
Contract, or as of the related Subsequent Cut-off Date for each Subsequent
Contract, the Financed Vehicle which secured the Contract had not been
repossessed without reinstatement.
(v) Obligor Not a Relief Act Obligor. If (i) the Obligor on the Contract is
in the military (including an Obligor who is a member of the National Guard or
is in the reserves) and (ii) the Contract is subject to the Soldiers' and
Sailors' Civil Relief Act or the Military Reservist Relief Act, such Obligor has
not made a claim to CITSF that
(A) the amount of interest on the related Contract should be
limited to 6% pursuant to the Soldiers' and Sailors' Civil Relief Act
during the period of such Obligor's active duty status, or
(B) payments on such Contract should be delayed pursuant to the
Military Reservist Relief Act,
in either case, unless a court has ordered otherwise upon application of CITSF.
(w) Only One Original. There is only one original executed copy of the
Contract, which, immediately prior to the execution of the Agreement, was in the
possession of CITSF.
(x) Contract is Chattel Paper. The Contract is "chattel paper" as defined
in the New Jersey UCC.
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(y) Selection Criteria. As of the Initial Cut-off Date for each Initial
Contract, or as of the related Subsequent Cut-off Date for each Subsequent
Contract, the Contract satisfies the eligibility criteria discussed in the
Prospectus for the Securities under the heading "The Contract Pool-General".
Section 3.01B Representations and Warranties Regarding the Contracts in the
Aggregate.
CITSF represents and warrants to the Trust and the Securityholders, that:
(a) Amounts. The aggregate principal amounts payable by Obligors under the
Initial Contracts as of the Initial Cut-off Date equal the Initial Cut-off Date
Principal Balance.
(b) Characteristics. The Contracts have the following characteristics as of
the Initial Cut-off Date:
(i) each Contract is secured by a Financed Vehicle which is a new or
used Recreational Vehicle;
(ii) each Initial Contract has a fixed Contract Rate, which is equal
to or greater than 8.25%;
(iii) the remaining maturity of each Initial Contract is at least 8
months, but not more than 180 months;
(iv) the original maturity of each Initial Contract was at least 12
months, but not more than 180 months;
(v) the weighted average remaining term to stated maturity of each
Initial Contract was at least 148 months;
(vi) the weighted average Contract Rate of the Initial Contracts was
10.00%;
(vii) the final scheduled payment dates on the Initial Contracts range
from September 1996 to February 2011;
(viii) the average remaining principal balance of the Initial
Contracts per contract was $25,728;
(ix) the outstanding principal balances of the Initial Contracts
ranged from $1,021 to $249,295;
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(x) each of the Initial Contracts was first entered onto the
Servicer's or CITCF-NY's servicing system (which, typically, represents the
date on which CITSF or CITCF-NY funds the purchase of such Contracts from
Dealers) between January 1994 and January 1996;
(xi) not more than 5% of the Obligors under the Initial Contracts by
Initial Cut-off Date Principal Balance had mailing addresses in any one
state, as determined by information provided by Obligors (except Obligors
with mailing addresses in California, Texas, Arizona, Florida, and
Missouri, which represent approximately 18.13%, 11.70%, 7.39%, 6.73%, and
5.49%, respectively, of the Initial Cut-off Date Principal Balance);
(xii) at least 67.77% of the Contracts, based on Initial Cut-off Date
Principal Balance, were secured by new Financed Vehicles at origination;
and
(xiii) not more than 3% of the Contracts, based on Initial Cut-off
Date Principal Balance, were secured by Recreational Vehicles other than
motor homes and travel trailers.
(c) Computer Tape. As of the Closing Date, in the case of the Initial
Contracts, and as of the related Subsequent Transfer Date, in the case of any
Subsequent Contracts, the Computer Tape made available by the Servicer was
complete and accurate as of its date and included a description of the same
Contracts that are described in the List of Initial Contracts or the applicable
List of Subsequent Contracts, as the case may be.
(d) Marking Records. By the Closing Date in the case of the Initial
Contracts or by the related Subsequent Transfer Date in the case of the
Subsequent Contracts, CITSF has caused the portions of the Electronic Ledger
relating to the Contracts constituting part of the Trust to be clearly and
unambiguously marked to indicate that such Contracts constitute part of the
Trust and are owned by the Trust in accordance with the terms of the trust
created hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
employed in selecting the Contracts from the recreational vehicle installment
sale contracts owned by CITSF which were purchased by CITSF from CITCF-NY or
Dealers, except that CITSF did not select any such contract which would cause a
breach of any representation or warranty of CITSF contained in this Agreement
that would materially adversely affect the Trust's interest in such Contract.
Section 3.01C Representations and Warranties Regarding the Contract Files.
CITSF represents and warrants to the Trust and the Securityholders that:
(a) Possession. Immediately prior to the Closing Date in the case of the
Initial Contracts, or the Subsequent Transfer Date in the case of the Subsequent
Contracts, CITSF will have possession of each original Contract and the related
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Contract File, and there are and there will be no custodial agreements in effect
materially and adversely affecting the right of CITSF to make, or to cause to be
made, any delivery required in connection with the conveyance of the Contracts
to the Company or from the Company to the Trust.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the Contract Files from CITSF to the Company and from the Company
to the Trust are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 3.01D Conditions of Closing for the Subsequent Contracts.
On or before the transfer of any Subsequent Contracts on the related
Subsequent Transfer Date, the following conditions shall have been satisfied:
(a) The Servicer shall have provided the Rating Agencies and the Trustees
with notice, at least 2 Business Days prior to the Subsequent Transfer Date, of
the Subsequent Contracts to be sold and the aggregate principal balance thereof;
(b) The Servicer shall have delivered to the Trustees a duly executed
Subsequent Transfer Agreement;
(c) The Funding Period shall not have terminated;
(d) The Servicer shall have delivered to the Trustees an Officer's
Certificate confirming the satisfaction of each condition precedent specified in
this Section 3.01D and in the related Subsequent Transfer Agreement;
(e) The Company shall have delivered to the Trustees an Assignment in the
form of Exhibit D and the Opinion of Counsel required by the related Subsequent
Purchase Agreement;
(f) The Company shall have delivered an Officers' Certificate to each
Trustee and each Rating Agency certifying that immediately following the
transfer of such Subsequent Contracts to the Trust that none of the following
would occur: (i) the weighted average Contract Rate of the Contracts based on
the Subsequent Cut-off Date Pool Principal Balance would be less than 9.85%,
(ii) less than 63% of the Contracts by Subsequent Cut-off Date Pool Principal
Balance would be attributable to Contracts to finance the purchase of new
Recreational Vehicles at the time the related Contract was originated, (iii)
more than 4% of the Contracts by Subsequent Cut-off Date Pool Principal Balance
would be attributable to Contracts to finance the purchase of Recreational
Vehicles other than motor homes and travel trailers, (iv) the weighted average
remaining term to maturity of the Contracts based on the Subsequent Cut-off Date
Pool Principal Balance would be more than 157 months, and (v) more than 34% of
the Contracts based on the Subsequent Cut-off Date Pool Principal Balance would
have a credit score of less than 179. In addition, all of such Subsequent
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Contracts must (i) be secured by Recreational Vehicles with Obligors having
mailing addresses in the United States at the time of origination, (ii) have a
Due Date not later than the month following the Subsequent Cut-off Date with
respect to such Subsequent Contract, (iii) have a final scheduled payment date
of no later than May 2011; (iv) satisfy the representations and warranties
specified in this Agreement, (v) not be selected by either CITSF or the Seller
in a manner that it believes is adverse to the interest of the Security Holders,
(vi) have a Contract Rate of at least 8.25%, (vii) provide for level monthly
payments which provide interest at the related Contract Rate and, if paid in
accordance with their schedules, fully amortize the amount financed over an
original term of no greater than 180 months, (viii) as of the related Subsequent
Cut-off Date, the most recent scheduled payment of principal and interest on
each Subsequent Contract had been made by or on behalf of the related Obligor or
not have been delinquent more than 30 days, (ix) no Subsequent Financed Vehicle
will have been repossessed without reinstatement as of the related Subsequent
Cut-off Date, (x) as of the related Subsequent Cut-Off Date, no Obligor on any
Subsequent Contract will be the subject of a bankruptcy proceeding, (xi) as of
the related Subsequent Cut-off Date, each Subsequent Contract will have a
remaining principal balance of not less than $1,000 and not more than $300,000,
and (xii) satisfy such other requirements as the Rating Agencies shall request;
(g) The Servicer shall have delivered to the Trustees the relevant List of
Subsequent Contracts;
(h) The Servicer shall have delivered an Officer's Certificate to the
Trustees substantially in the form of Exhibit I hereto;
(i) The Servicer shall have delivered to the Trustees for filing with the
appropriate office in the following jurisdictions the following executed UCC-1
Financing Statements, each listing the relevant Subsequent Contracts as required
by Article 9 of the UCC: (i) UCC-1 Financing Statements executed by CITSF as
debtor, naming the Company as Secured Party and filed in New Jersey and Oklahoma
to perfect the sale from CITSF to the Company, (ii) UCC-1 Financing Statements
executed by the Company as debtor naming the Trust as secured party and filed in
New Jersey and Oklahoma to perfect the sale from the Company to the Trust, and
(iii) UCC-1 Financing Statements executed by the Trust as debtor, naming the
Indenture Trustee as secured party and filed in New Jersey, Oklahoma and
Delaware;
(j) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has reviewed each such Subsequent Contract
and the Contract File with respect thereto, and confirming that each such
Subsequent Contract and the Contract File with respect thereto conforms in all
material respects to the relevant List of Subsequent Contracts, that each
Contract File with respect to such Subsequent Contract is complete in all
material respects, and that each Recreational Vehicle securing any such
Subsequent Contract is covered by a Hazard Insurance Policy as required by this
Agreement;
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(k) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that all funds received with respect to such Subsequent
Contract on and after the relevant Subsequent Cut-off Date through the
Subsequent Transfer Date have been deposited in the Collection Account;
(l) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has accepted delivery of such Subsequent
Contracts and the Contract Files with respect to such Subsequent Contracts and
will hold such Subsequent Contracts and Contract Files as custodian on behalf of
the Trustees for the benefit of the Trust as provided herein;
(m) The Servicer shall have delivered to the Trustees one or more Opinions
of Counsel, either (i) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and
delivered for filing that are necessary fully to preserve and protect the
interest of the Trustees in the Contracts, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (ii) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest; it being understood
that the opinions on perfection delivered by counsel on the Closing Date, if
delivered on the Subsequent Transfer Date as to the Subsequent Contracts, shall
satisfy the foregoing requirement; and
(n) The Seller and the Trustees shall not have been advised by either
Rating Agency that the conveyance of such Subsequent Contracts will result in a
qualification, modification or withdrawal of its then current rating of either
the Notes or the Certificates.
Section 3.02 Repurchase of Contracts for Breach of Representations and
Warranties.
(a) Subject to Section 3.02(b), CITSF shall repurchase a Contract, at its
Purchase Price, not later than 85 days after CITSF receives written notice from
either of the Trustees or the Servicer, or not later than 90 days after CITSF
otherwise becomes aware, of a breach of any representation or warranty of CITSF
set forth in Section 3.01A or 3.01B of this Agreement that materially and
adversely affects the Trust's interest in such Contract and which breach has not
been cured. CITSF shall effect such repurchase by paying to the Servicer for
deposit in the Collection Account on the Deposit Date in the month following the
month in which the Contract is repurchased the aggregate of the Purchase Price
of all Contracts that are required to be repurchased pursuant to the preceding
sentence. With respect to any Contract incorrectly described on the List of
Initial Contracts or any List of Subsequent Contracts, as the case may be, only
with respect to remaining unpaid principal balance, which CITSF would otherwise
be required to repurchase pursuant to this Section 3.02, CITSF may, in lieu of
repurchasing such Contract, deposit in the Collection Account, not later than
one Business Day after the first Determination Date which is more than 90 days
after CITSF becomes aware or receives written notice from the Trustees or the
Servicer of such incorrect description, cash in an amount sufficient to cure
such deficiency or discrepancy. CITSF shall send written notice of any such cash
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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) Promptly after any repurchase referred to in Section 3.02(a), the Trust
shall execute such documents as are presented to it by CITSF and are reasonably
necessary to reconvey the Repurchased Contract to CITSF.
(c) 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 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
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
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(iii) attend to all details in connection with maintaining custody of
the Contract Files on behalf of the Trust.
In performing its duties under this Section 3.04, the Servicer agrees to
act with reasonable care, consistent with the same degree of skill and care that
it exercises with respect to similar contracts serviced by it for its own
account. The Servicer shall promptly report to the Trust in writing any material
failure by it to hold the Contract Files as herein provided and shall promptly
take appropriate action to remedy any such failure. In acting as custodian of
the Contract Files, the Servicer agrees further not to assert any beneficial
ownership interests in the Contracts or the Contract Files. The Servicer agrees
to indemnify the Trust, the Certificateholders, the Noteholders, the Owner
Trustee and the Indenture Trustee for any and all liabilities, obligations,
losses, damages, payments, costs, or expense of any kind whatsoever which may be
imposed on, incurred or asserted against the Trust, the Certificateholders, the
Noteholders, the Owner Trustee and the Indenture Trustee as the result of any
act or omission by the Servicer relating to the maintenance and custody of the
Contract Files; provided, however, that the Servicer will not be liable for any
portion of any such amount resulting from the negligence or willful misconduct
of the Trust, the Certificateholders, the Noteholders, the Owner Trustee or the
Indenture Trustee.
(b) Maintenance of and Access to Records. The Servicer, in its capacity as
custodian, agrees to maintain the Contract Files at its office in the State of
Oklahoma, or at such of its offices as shall from time to time be identified to
the Trust by written notice. The Servicer, in its capacity as custodian, may
temporarily move individual Contract Files or any portion thereof without notice
as necessary to conduct collection and other servicing activities in accordance
with its customary practices and procedures, but shall promptly return such
Contract File as soon as practicable after it is no longer needed for such
purpose.
The Servicer, in its capacity as custodian, shall make available to the
Trust, or its duly authorized representatives, attorneys or auditors, the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal operating hours as the Trust shall
reasonably instruct which does 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. A certified copy of a
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by-law or of a resolution of the Board of Directors of the Owner Trustee or the
Indenture Trustee, as applicable, shall constitute conclusive evidence of the
authority of any such Responsible Officer to act and shall be considered in full
force and effect until receipt by the Servicer of written notice to the contrary
given by the Trust.
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 or if all of the rights
and obligations of the Servicer shall have been terminated under Section 9.01,
the appointment of the Servicer as custodian may be terminated by the Indenture
Trustee or by the Holders of Notes evidencing not less than a majority of the
aggregate outstanding principal balance of the Notes as of the close of the
preceding Distribution Date (or, if the Notes have been paid in full and the
Indenture has been discharged in accordance with its terms, by the Owner Trustee
or by the Holders of Certificates evidencing not less than a majority of the
Certificate Balance as of the close of the preceding Distribution Date), in the
same manner as rights and obligations of the Servicer may be terminated under
Section 9.01. The Trust may terminate the Servicer's appointment as custodian at
any time with cause upon written notification to the Servicer. As soon as
practicable after any termination of such appointment, the Servicer shall
deliver the Contract Files to the Trust or the Trust's agent at such place or
places as the Trust may reasonably designate. The Servicer shall cooperate with
the Trust in making the transfer and shall bear all of the Servicer's costs and
expenses with respect to such transfer, but the Trust shall bear the actual
costs and expenses of packing and transporting the Contract Files to the
location designated by the Trust. Notwithstanding the termination of the
Servicer as custodian, the Trust agrees that upon any such termination, the
Trust shall provide, or cause its agent to provide, access to the Contract Files
to the Servicer for the purpose of carrying out its duties and responsibilities
with respect to the servicing of the Contracts hereunder.
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ARTICLE IV
Administration and Servicing of Contracts
Section 4.01 Duties of Servicer.
(a) The Servicer, as agent for the Trust, shall manage, administer, service
and make collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. The Trust, at the request of a Servicing Officer, shall furnish the
Servicer with any reasonable documents or take any action reasonably requested,
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(b) In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise the same degree
of skill and care that the Servicer exercises with respect to similar contracts
serviced by the Servicer for its own account.
(c) The Servicer may enter into subservicing agreements with one or more
subservicers (which shall be Eligible Servicers) for the servicing and
administration of certain of the Contracts. References in this Agreement to
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by the Servicer in servicing the Contracts shall include
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by a subservicer on behalf of the Servicer. Each
subservicing agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and the standard of care set forth herein and
as the Servicer and the subservicer have agreed. All compensation payable to a
subservicer under a subservicing agreement shall be payable by the Servicer from
its servicing compensation or otherwise from its own funds, and none of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders will have any liability to the subservicer with respect thereto.
Notwithstanding any subservicing agreement or any of the provisions of this
Agreement relating to agreements or any arrangements between the Servicer or a
subservicer or any reference to actions taken through such Persons or otherwise,
the Servicer shall remain obligated and liable to the Trust, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Contracts and the other Trust property in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Contracts and the other
Trust property involving a subservicer in its capacity as such shall be deemed
to be between the subservicer and the Servicer alone, and the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders shall not be
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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.
In the event the Servicer shall for any reason no longer be acting as such,
the successor Servicer may, in its discretion, thereupon assume all of the
rights and obligations of the outgoing Servicer under a subservicing agreement.
In such event, the successor Servicer shall be deemed to have assumed all of the
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such subservicing agreement to the same extent as if such
subservicing agreement had been assigned to the successor Servicer, except that
the outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the Trust,
but at the expense of the outgoing Servicer, deliver to the successor Servicer
all documents and records relating to each such subservicing agreement and the
Contracts and other Trust property then being serviced thereunder and an
accounting of amount collected and held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of any subservicing agreement to
the successor Servicer. In the event that the successor Servicer elects not to
assume a subservicing agreement, the outgoing Servicer, at its expense, shall
cause the subservicer to deliver to the successor Servicer all documents and
records relating to the Contracts and the other Trust property being serviced
thereunder and all amounts held (or thereafter received) by such subservicer
(together with an accounting of such amounts) and shall otherwise use its best
efforts to effect the orderly and efficient transfer of servicing of the
Contracts and the other Trust property being serviced by such subservicer to the
successor Servicer.
(d) The Servicer's duties shall include collection and posting of all
payments, responding to inquiries by Obligors or by federal, state or local
governmental authorities with respect to the Contracts, investigating
delinquencies, reporting tax information to Obligors, administering and
enforcing Insurance Policies in accordance with its customary practices,
accounting for collections, furnishing monthly and annual statements to the
Trust with respect to distributions, and making Monthly Advances pursuant to
Section 5.03 hereof.
The Servicer shall be authorized and empowered by the Trust to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
or with respect to the Financed Vehicles.
Upon written request of the Servicer and receipt by the Trust of an
Officer's Certificate setting forth the facts underlying such request, the Trust
shall furnish the Servicer with any limited powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder and the Trust shall not be held
liable for such actions of the Servicer thereunder.
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Section 4.02 Collection of Contract Payments. The Servicer shall make
reasonable efforts 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 collection procedures as it follows with
respect to comparable new or used Recreational Vehicle installment sale
contracts that it services for itself and others. The Servicer shall not reduce
scheduled payments, extend any Contract or otherwise modify the terms of any
Contract; provided, however, that, consistent with its normal procedures, the
Servicer may extend or modify the payment schedule of any Contract for credit
related reasons that would be acceptable to the Servicer with respect to
comparable Contract secured by a new or used Recreational Vehicle that it
services for itself or others, if (a) the maturity of such Contract would not be
extended beyond the 180th day prior to the Class A Final Scheduled Distribution
Date and (b) the reducing, rescheduling, extension or other modification of the
terms of the Contract would not constitute a cancellation of such Contract and
the creation of a new installment sale contract. If, as a result of rescheduling
or extending of payments or any other modification, such 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 as of the last day of the Due Period on which it became aware or received
written notice from the Trust of such failure. The Servicer may, in accordance
with its customary standards, policies and procedures, in its discretion, waive
any Late Fees that may be collected in the ordinary course of servicing a
Contract.
Section 4.03 Realization Upon Contracts.
(a) The Servicer will, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on the Contracts and Net
Liquidation Proceeds in respect of Defaulted Contracts.
Notwithstanding the standard of care specified in Section 4.01 hereof, the
Servicer shall commence procedures for the repossession of any Financed Vehicle
or take such other steps that in the Servicer's reasonable judgment will
maximize the receipt of principal and interest or Net Liquidation Proceeds with
respect to the Contract secured by such Financed Vehicle, including, without
limitation, selling such Financed Vehicle at a public or private sale, subject
to the requirements of the applicable state and federal law. In connection with
such repossession or foreclosure, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with Section 4.01 hereof. In the event that title to any Financed Vehicle is
acquired in foreclosure or by conveyance in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trust, or, at its election, to its
nominee on behalf of the Trust.
(b) The Servicer shall be entitled to recover all reasonable fees of third
parties and expenses incurred by it in the course of converting any Financed
Vehicle into cash proceeds including, without limitation, expenses relating to
recovery and repossession of such Financed Vehicle, from liquidation proceeds
with respect to such Financed Vehicle. The Net Liquidation Proceeds realized in
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connection with any such action with respect to a Contract shall be deposited by
the Servicer in the Collection Account in the manner specified in Section 5.02
hereof and shall be applied to reduce (or to satisfy, as the case may be) the
Purchase Price of the Contract, if such Contract is to be purchased by CITSF
pursuant to Section 3.02 hereof, is to be purchased by the Servicer pursuant to
Section 4.07 hereof, or is to be purchased by CITSF pursuant to Section 11.02
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
by an amount equal to or greater than the amount of such expenses.
(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 Principal Prepayment
in Full. The Servicer will not permit any rescission or cancellation of any
Contract.
(e) The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy.
Section 4.04 Physical Damage Insurance.
(a) The Servicer, in accordance with its customary servicing procedures,
shall require that each Obligor shall have obtained and shall maintain physical
damage insurance covering the Financed Vehicle, provided that such insurance
shall be in an amount no greater than the outstanding principal balance of the
related Contract or, if such insurance also covers the interest of the related
Obligor in the Financed Vehicle, no greater than the greater of the outstanding
principal balance of the related Contract and the value of the Financed Vehicle,
or such lesser amount permitted by applicable law. The Servicer shall enforce
its rights under the Contracts to require the Obligors to maintain physical
damage insurance, in accordance with the Servicer's customary practices and
procedures with respect to comparable new or used recreational vehicles financed
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by installment sale contracts that it services for itself or others. If an
Obligor fails to maintain such insurance, the Servicer shall obtain and advance
on behalf of such Obligor, as required under the terms of the applicable
Contract and this Agreement, the premiums for such insurance, with uninsured
physical damage loan insurance endorsements, each insurance policy naming the
Servicer as an additional insured and loss payee, and issued by an insurer
having a rating of "A" or better by A.M. Best (such insurance being referred to
herein as "Force-Placed Insurance"). Such Force-Placed Insurance and any
commissions or finance charges collected by the Servicer in connection therewith
shall be, to the extent permitted by law, in an amount in accordance with
customary servicing procedures, but in no event in an amount greater than the
outstanding principal balance of the related Contract or, if such insurance also
covers the interest of the related Obligor in the Financed Vehicle, no greater
than the greater of the outstanding principal balance of the related Contract
and the value of the Financed Vehicle, or such lesser amount permitted by
applicable law and the Servicer shall disclose to the related Obligor all
information with respect to such Force-Placed Insurance, commissions and finance
charges as required by applicable law. The Servicer does not, under its
customary servicing procedures, require Force-Placed Insurance when the
principal balance of the related retail installment sale contract or installment
loan falls below the level or levels periodically established in accordance with
such customary servicing procedures. In accordance with such customary servicing
procedures, the Servicer may periodically readjust such levels, suspend
Force-Placed Insurance or arrange other methods of protection of the Financed
Vehicles that it deems necessary or advisable, provided that the Servicer
determines that such actions do not materially and adversely affect the
interests of the Certificateholders or the Noteholders. Any portion of the
principal balance of a Contract consisting of 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 will not allocate payments to Post
Cut-off Date Insurance Add-Ons if any amount of principal or interest is due but
unpaid on the Contracts. The Servicer shall not deposit payments posted with
respect to Post Cut-off Date Insurance Add-Ons in the Collection Account and
shall instead promptly pay such amounts to an account of the Servicer maintained
for that purpose. In the event that an Obligor under a Contract with respect to
which the Servicer has advanced funds to obtain Force-Placed Insurance makes
scheduled payments under the Contract, but has failed to make scheduled payments
of such Post Cut-off Date Insurance Add-Ons as due, and the Servicer has
determined that eventual payment of such amount is unlikely, the Servicer may,
but shall not be required to, take any action available to it, including
determining that the related Contract is a Defaulted Contract; provided,
however, that any Net Liquidation Proceeds with respect to such Contract shall
be applied first to the accrued and unpaid interest at the Contract Rate, then
to the principal amount outstanding, and the remainder, if any, to repayment of
any Post Cut-off Date Insurance Add-Ons.
(b) The Servicer may, in lieu of causing individual Insurance Policies to
be maintained with respect to each Financed Vehicle pursuant to subsection (a)
of this Section 4.04 maintain one or more blanket insurance policies covering
losses on the Obligor's interest in the Contracts resulting from the absence or
insufficiency of individual Insurance Policies. To the extent that the Obligor's
individual insurance policy does not cover theft of the Financed Vehicle (to the
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extent required under the Servicer's customary practices and procedures with
respect to comparable new or used recreational vehicle installment sale
contracts that it services for itself or others), the Servicer shall Force-Place
Insurance, which may be obtained pursuant to one or more blanket insurance
policies covering theft and other risks. The proceeds of any such blanket
insurance policies relating to the Contracts shall be deposited in the
Collection Account as collections on the Contracts in accordance with the
provisions of Article V hereof.
Any such blanket policy shall be substantially in the form and in the
amount carried by the Servicer as of the date of this Agreement. The Servicer
shall pay the premium for such policy on the basis described therein. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to (i) claims under individual Hazard Insurance Policies maintained
pursuant to subsection (a) of this Section 4.04, or (ii) claims under any
blanket insurance policy. If the insurer under such blanket insurance policy
shall cease to be acceptable to the Servicer, the Servicer shall exercise its
best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy. The Servicer shall provide each Rating Agency with
notice of the occurrence of any event specified in the preceding sentence.
(c) The Servicer, or any affiliate of the Servicer, may, to the extent
permitted by law (i) enter into agreements with one or more insurers or other
Persons pursuant to which the Servicer or such affiliate will earn commissions
and fees in connection with any insurance policy purchased by an Obligor
including, without limitation, any hazard insurance policy (whether or not such
hazard insurance policy is force-placed pursuant to the provisions of any
Contract), or any other insurance policy whatsoever and (ii) in connection with
the foregoing, to solicit, or permit and assist any insurer or any agent thereof
to solicit (including, without limitation, providing such insurer or agent a
list of Obligors including name, address or other information) any Obligor.
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
Retitling.
(a) The Servicer, in accordance with its customary servicing procedures,
shall take such steps as are necessary to maintain perfection of the security
interest created by each Contract in the related Financed Vehicle in favor of
CITSF or CITCF-NY. The Servicer hereby agrees to take such steps as are
necessary to re-perfect such security interest in the name of CITSF or CITCF-NY
in the event of the relocation of a Financed Vehicle to a jurisdiction other
than the jurisdiction in which steps had been taken to perfect the security
interest in favor of CITSF or CITCF-NY. In the event that the assignment of the
Contract to the Trust is insufficient, without a notation on the related
Financed Vehicle's certificate of title, to grant to the Trust a perfected
security interest in the related Financed Vehicle, CITSF or CITCF-NY hereby
agrees to serve as the Trust's agent for the purpose of perfecting the security
interest in such Financed Vehicle and that CITSF's or CITCF-NY's listing as the
secured party on the certificate of title is in the capacity as agent of the
Trust.
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(b) If, at any time, a Service Transfer has occurred and CITSF is no longer
the Servicer, and the new Servicer is unable to foreclose upon a Financed
Vehicle because the title document for such Financed Vehicle does not show such
new Servicer or the Trust as the lienholder, CITSF shall take all necessary
steps to apply for a replacement title document showing the new Servicer or the
Trust as the secured party.
(c) In order to facilitate the new Servicer's actions, as described in
subsection 4.05(b) hereof, CITSF will provide the new Servicer with any
necessary power of attorney permitting it to retitle the Financed Vehicle. The
Company hereby appoints the Trust its attorney-in-fact to endorse, as
appropriate, the certificate of title relating to any Financed Vehicle in order
to cause a change in the registration of legal owner of the Financed Vehicle to
the Trust at such time as such certificate of title is endorsed and delivered to
the Department of Motor Vehicles of the State of California (or any other state
department of motor vehicles) with appropriate fees. The Company will provide
the Trust with any necessary power of attorney for such purpose.
(d) If the new Servicer is unable to retitle the Financed Vehicle, in the
event that the new Servicer seeks to foreclose on a Financed Vehicle then CITSF
will take all actions necessary to act with the new Servicer, to the extent
permitted by law, to foreclose upon the Financed Vehicle, including, as
appropriate, the filing of any UCC-1 or UCC-2 financing statements necessary to
perfect the security interest in any Financed Vehicle.
Section 4.06 Covenants of Servicer. The Servicer shall make the following
covenants on which the Owner Trustee and Indenture Trustee will rely in
accepting the Contracts in trust and executing and authenticating the
Certificates and the Notes:
(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Contract shall not be released from the security interest
granted by the Contract in whole or in part except as contemplated herein;
(ii) No Impairment. The Servicer shall not 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. The Servicer shall not 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
Recreational Vehicles, nor extend or forgive payments on a Contract, except
as provided in Section 4.02 hereof; and
(iv) Compliance with Insurance Policies. The Servicer shall not fail
to comply with the provisions of any Insurance Policy, if the failure to so
comply would impair the protection or benefit to be afforded by such
Insurance Policies.
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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 4.04(a) with respect to Force-Placed Insurance,
Section 4.06 and the proviso in Section 4.02 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 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 Determination 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 with respect to Force-Placed Insurance under Section 4.04(a) hereof
or any representation or warranty of the Servicer in Section 4.06 hereof that
materially and adversely affects the Trust's interest in such Contract. The
Servicer shall effect such purchase by depositing, in accordance with Section
5.04 hereof, the Purchase Price of such Contract (less any Net Liquidation
Proceeds deposited, or to be deposited, by the Servicer in the Collection
Account with respect to such Contract pursuant to Section 5.02 hereof) in the
Collection Account on the Deposit Date immediately preceding the Determination
Date referred to in the preceding sentence. The effective date of such purchase
shall be the last day of the Due Period preceding such Determination 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 4.06 hereof or Section 4.02 hereof shall be to
require the Servicer to purchase Contracts pursuant to this Section 4.07.
Section 4.08 Servicing Fee.
The Servicing Fee for a Distribution Date shall be equal to the sum of (i)
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date) and (ii) any Investment
Earnings on amounts on deposit in the Collection Account, the Certificate
Distribution Account and the Note Distribution Account. In addition, the
Servicer will be entitled to collect and retain any Late Fees received by the
Servicer from Obligors during the preceding Due Period.
Section 4.09 Servicer's Certificate.
On or before each Determination Date, the Servicer shall furnish a report
(the "Monthly Report"), which shall be in substantially the form of Exhibit G,
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 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
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day of the related Due Period and each Contract which the Servicer shall have
determined to be a Defaulted Contract or a Liquidated Contract during such Due
Period. The Trustees shall not be required to recompute, verify or recalculate
information contained in the Servicer's Certificate.
Each Monthly Report shall be accompanied by a certificate of a Servicing
Officer substantially in the form of Exhibit F, 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 underlying data as can be generated by the Servicer's existing
data processing system without undue modification or expense.
Section 4.10 Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Trustees within 90 days after the end
of each calendar year commencing March 31, 1997, a certificate signed by the
president, the treasurer or any vice president 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, an Officer's Certificate specifying any event which
with the giving of notice or lapse of time, or both, would become an Event of
Termination under subsection (a) or (b) of Section 9.01 hereof. The Company
shall deliver to the Trustees, promptly after having obtained knowledge thereof,
an Officer's Certificate specifying any event which with the giving of notice or
lapse of time, or both, would become an Event of Termination under subsection
(a) or (b) of Section 9.01 hereof.
Section 4.11 Annual Report of Accountants. On or before March 31 of each
year, commencing March 31, 1997, the Servicer, at its expense, shall cause a
firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement which opines
on, at a minimum, the Servicer's compliance with the minimum servicing standards
set forth in the Uniform Single Attestation Program for Mortgage Bankers (in
accordance with the 1995 revisions thereto). Such examination and report of
independent public accountants will be prepared in accordance with the
requirements set forth in the Uniform Single Attestation Program for Mortgage
Bankers (in accordance with the 1995 revisions thereto). Copies of the annual
statement of accountants shall also be provided to each Rating Agency and to the
Trustees.
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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.
The Servicer shall prepare for execution by the Issuer or the Owner
Trustee, or shall cause to be prepared by other appropriate persons, all
documents, reports, filings, instruments, certificates and opinions as shall be
required to be prepared, filed or delivered by the Issuer or the Owner Trustee
pursuant to the Indenture or the Trust Agreement.
In furtherance of the foregoing, the Servicer's duties shall include,
without limitation, compliance with the requirements of Sections 5.4 and 5.5 of
the Trust Agreement and Sections 2.2, 2.4, 2.7(d), 2.7(e), 2.9, 3.3, 3.4, 3.5,
3.6, 3.7(b), 3.7(d), 3.9, 3.10, 3.19, 4.1, 5.4, 6.8, 6.10, 7.1, 7.3, 8.2, 8.3,
8.4, 8.5, 9.1, 9.2, 9.3, 9.6, 10.2, 11.1(a), 11.1(b), 11.4, 11.6 and 11.15 of
the Indenture.
Section 4.13 Reports to Securityholders and the Rating Agencies
(a) Concurrently with each distribution charged to the Certificate
Distribution Account and the Note Distribution Account, the Owner Trustee and
the Indenture Trustee, respectively, so long as each has received the Monthly
Report from the Servicer, shall forward or cause to be forwarded by mail to each
Securityholder, such Monthly Report.
(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, each annual statement as to compliance described in
Section 4.10 hereof and each statement to Securityholders described in Section
5.08 hereof.
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
Policy.
The Servicer shall during the term of its service as Servicer maintain in
force (a) at such time as the long-term debt of its parent is rated less than A
by Standard & Poor's or less than A3 by Moody's, a policy or policies of
insurance covering errors and omissions for failure to maintain insurance as
required by this Agreement, and (b) a fidelity bond in respect of its officers,
employees and agents. Such policy or policies and such fidelity bond shall be in
such form and amount as is generally customary among Persons which service a
portfolio of recreational vehicle installment sale contracts having an aggregate
principal amount of $100,000,000 or more and which are generally regarded as
servicers acceptable to institutional investors.
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Section 4.15 Trustees to Cooperate.
Upon payment in full on any Contract, the Servicer will notify the Trustees
by certification of a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payments which are required to be deposited in the Collection Account pursuant
to Section 5.05 have been so deposited). The Servicer is authorized to execute
an instrument in satisfaction of such Contract and to do such other acts and
execute such other documents as the Servicer deems necessary to discharge the
Obligor thereunder and eliminate the security interest in the Financed Vehicle
related thereto. The Servicer shall determine when a Contract has been paid in
full. To the extent that insufficient payments are received on a Contract
credited by the Servicer as prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds.
Section 4.16 Costs and Expenses.
Except as provided in Section 4.03 hereof, all costs and expenses incurred
by the Servicer in carrying out its duties hereunder, including all fees and
expenses incurred in connection with the enforcement of Contracts (including
enforcement of Defaulted Contracts and repossessions of Financed Vehicles
securing such Contracts), shall be paid by the Servicer and the Servicer shall
not be entitled to reimbursement hereunder.
ARTICLE V
Accounts; Distributions; Statements to Certificateholders
Section 5.01 Collection Account, Pre-Funding Account, Capitalized Interest
Account and Cash Collateral 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, with an Eligible Institution (which
initially shall be the Indenture Trustee) an account known as the "CIT RV
Owner Trust 1996-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.
(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, with the Indenture Trustee an account known as the "CIT RV
Owner Trust 1996-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.
(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, with an Eligible Institution
(which initially shall be The Bank of New York, the Paying Agent of the
Owner Trustee) an account known as
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the "CIT RV Owner Trust 1996-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 Owner Trustee with an Eligible Institution
(which, initially, shall be The Bank of New York, the Paying Agent of the
Owner Trustee), an account known as the "CIT RV Owner Trust 1996-A Cash
Collateral Account (the "Cash Collateral Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders and owned by the Trust.
(b) Pre Funding Account and Capitalized Interest Account.
(i) On or before the Closing Date, there shall be established and
maintained the Pre-Funding Account and the Capitalized Interest Account, in
the name of the Owner Trustee, on behalf of the Trust for the benefit of
the Noteholders and Certificateholders with the Indenture Trustee and the
funds on deposit therein will be invested solely in Permitted Investments
that mature not later than one Business Day prior to the next succeeding
Distribution Date, until they are applied by the Owner Trustee. If, at any
time during the Funding Period, the Indenture Trustee ceases to be an
Eligible Institution, the Indenture Trustee (or the Servicer on its behalf)
shall within five (5) Business Days (or such longer period, not to exceed
thirty (30) calendar days, as to which the Rating Agency may consent)
establish a new Pre-Funding Account or Capitalized Interest Account with an
Eligible Institution that agrees to act as custodian on behalf of the
Indenture Trustee of the amounts on deposit in such accounts, transfer any
cash and/or any investments to such new Pre-Funding Account or Capitalized
Interest Account and from the date such new Pre-Funding Account or
Capitalized Interest Account is established, they shall be the "Pre-Funding
Account" or "Capitalized Interest Account", as appropriate. The Pre-Funding
Account shall be entitled the "CIT RV Owner Trust 1996-A Pre-Funding
Account". The Capitalized Interest Account shall be entitled the "CIT RV
Owner Trust 1996-A Capitalized Interest Account". Each of the Pre-Funding
Account and the Capitalized Interest Account shall bear an additional
designation clearly indicating that the funds on deposit therein are held
for the benefit of, and owned by, the Trust. On the Closing Date, the Trust
will deposit the Original Pre-Funded Amount into the Pre-Funding Account
and deposit the Initial Capitalized Interest Deposit into the Capitalized
Interest Account.
(ii) On any Subsequent Transfer Date, the Servicer shall instruct the
Owner Trustee to withdraw from the Pre-Funding Account an amount equal to
100% of the unpaid principal balance thereof as of the related Subsequent
Cut-off Date of the Subsequent Contracts sold to the Trust on such
Subsequent Transfer Date and pay such amount to or upon the order of
Company with respect to such transfer. In no event shall the Servicer be
permitted to instruct the Owner Trustee to release from the Pre-Funding
Account with respect to Subsequent Contracts to be transferred to the Trust
an amount, which, when added to the amounts previously released from the
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Pre-Funding Account to acquire Subsequent Contracts, would exceed the
Original Pre-Funded Amount.
(iii) On the Distribution Dates occurring in March, April and May of
1996, the Owner Trustee shall withdraw Pre-Funding Earnings from the
Pre-Funding Account, to the extent available, and deposit such amount in
the Collection Account for payment to the Holders of the Securities on such
Distribution Dates, in an amount equal to the difference, if any, between
(x) the sum of the amount of interest payable to the Noteholders on such
Distribution Date and the amount of interest payable to the
Certificateholders on such Distribution Date and (y) that portion of the
Amount Available allocated to make such interest payments to Noteholders
and Certificateholders, respectively, on such Distribution Dates. On such
Distribution Dates, such funds, if any, shall be used first to pay to the
Noteholders, to the extent available, the Pre-Funding Earnings so withdrawn
such that the Noteholders will receive such amounts of interest due on such
Distribution Date, and second, to pay to the Certificateholders, to the
extent available, the remaining Pre-Funding Earnings so withdrawn such that
the Certificateholders will receive such amounts of interest due on such
Distribution Date.
(iv) On the Distribution Dates occurring in March, April and May of
1996, the Owner Trustee shall withdraw monies on deposit in the Capitalized
Interest Account, to the extent available, and deposit such amount in the
Collection Account for payment to the Holders of the Securities on such
Distribution Date, in an amount equal to the excess, if any, of (x) the
product of (1) the weighted average of the Class A Rate and the
Pass-Through Rate as of the first day of the related Interest Accrual
Period and (2) the undisbursed funds (excluding investment earnings) in the
Pre-Funding Account (as of the last day of the related Due Period) over (y)
the amount if any Pre-Funding Earnings in the Pre-Funding Account that are
available to pay interest on the Securities on such Distribution Date
pursuant to clause (iii) above. On such Distribution Dates, such funds, if
any, shall be used first to pay to the Noteholders, to the extent
available, the amount so withdrawn such that the Noteholders will receive
such amounts of interest due on such Distribution Date, and second, to pay
to the Certificateholders, to the extent available, the amount so withdrawn
such that the Certificateholders will receive such amounts of interest due
on such Distribution Date.
(v) On the Distribution Dates occurring in March, April and May 1996,
the Owner Trustee shall withdraw the difference between the amount on
deposit in the Capitalized Interest Account on such Distribution Date
(after giving effect to all withdrawals therefrom pursuant to subsection
(iv) above) and the Required Capitalized Interest Amount for such
Distribution Date, and distribute the amount of such difference to the
holder of the GP Interest.
(vi) On the last day of the Funding Period (or, if such day is not a
Business Day, on the next succeeding Business Day) (but in no event later
than the May 15, 1996 Distribution Date) the Servicer shall instruct the
Owner Trustee to withdraw from the Pre-Funding Account, and the Owner
Trustee shall so withdraw, the difference, if any, between (A) the sum of
the Original Pre-Funded Amount, and (B) all amounts theretofore withdrawn
from the Pre-Funding Account with respect to the purchase and transfer to
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the Trust of Subsequent Contracts, and the Owner Trustee shall (i) deposit
the Note Pre-Funded Percentage of such amounts into the Note Distribution
Account and (ii) deposit the Certificate Pre-Funded Percentage of such
amounts into the Certificate Distribution Account. Such amounts will be
used to prepay the principal amount of the outstanding Notes and
Certificates in accordance with the Note Pre-Funded Percentage and the
Certificate Pre-Funded Percentage, respectively, on the Distribution Date
immediately following the Funding Period or if the end of the Funding
Period is on a Distribution Date, then on such date.
(vii) Any Pre-Funding Earnings on deposit in the Pre-Funding Account
and all amounts remaining on deposit in the Capitalized Interest Account on
the last day of the Funding Period which were not distributed to the
Securityholders or the holder of the GP Interest pursuant to Section
5.01(b) shall be deposited by the Owner Trustee in the Collection Account
on such date and shall constitute part of the Amount Available on the first
Distribution Date thereafter or, if the end of the Funding Period is on a
Distribution Date, then on such date.
(c) The Eligible Institution maintaining the accounts described in Sections
5.01(a) and (b) above shall, in the name of the Trust, invest amounts on deposit
solely in Eligible Investments (except for the Pre-Funding Account which will be
invested solely in Permitted Investments) that mature not later than one
Business Day prior to the next succeeding Distribution Date, in accordance with
instructions provided to the Trustees by the Servicer in writing (or, in the
case of the Cash Collateral Account, in accordance with instructions provided to
the Servicer by the Cash Collateral Depositor, on behalf of the Owner Trustee
and the Cash Collateral Depositor, in writing). Once such funds are invested,
such Eligible Institution shall not change the investment of such funds.
Notwithstanding the foregoing, amounts deposited in the Collection Account from
funds on deposit in the Pre-Funding Account pursuant to Section 5.01(b) may not
be invested at all. All Investment Earnings from the investment of funds in the
accounts described in Sections 5.01(a) and (b) above shall be deposited in the
accounts in which such Investment Earnings were earned; provided, however,
Investment Earnings from the investment of funds in the Cash Collateral Account
shall be retained in a separate interest subaccount of the Cash Collateral
Account and realized losses, if any, on amounts so invested shall be charged
against undistributed Investment Earnings from the Cash Collateral 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 5.05(b)(ii). All Investment Earnings realized from any
such investment of funds in the Pre-Funding Account and the Capitalized Interest
Account shall be distributed as provided in Section 5.01(b). All Investment
Earnings realized from any such investment of funds in the Cash Collateral
Account shall be distributed as provided in Section 5.06. An amount equal to any
net loss on such investments shall be deposited in the Collection Account, the
Certificate Distribution Account and Note Distribution Account by the Servicer
out of its own funds, without right to reimbursement, immediately as realized.
"Eligible Investments" are any of the following:
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(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 Cash Collateral
Account or the Certificate Distribution Account, such Standard & Poor's
rating shall be at least A-1); or any other demand or time deposit or
certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation and which is rated at least P-1 by Moody's;
(iii) repurchase obligations with respect to any security described in
either clause (i) or (ii) above and entered into with any institution whose
commercial paper is at least rated P-1 from Moody's and at least A-1+ by
Standard & Poor's (or, with respect to the investment of any amounts on
deposit in the Cash Collateral Account or the Certificate Distribution
Account, such Standard & Poor's rating shall be at least A-1);
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least A2 or P-1 from
Moody's and at least AA- from Standard & Poor's at the time of such
investment (or, with respect to the investment of any amounts on deposit in
the Cash Collateral Account or the Certificate Distribution Account, such
Standard & Poor's rating shall be at least A);
(v) commercial paper having a rating of at least P-1 from Moody's and
at least A-1+ from Standard & Poor's (or, with respect to the investment of
any amounts on deposit in the Cash Collateral Account or the Certificate
Distribution Account, such Standard & Poor's rating shall be at least A-1)
at the time of such investment; and
(vi) money market funds which are rated Aaa by Moody's and at least
AAAm or AAAm-G by Standard & Poor's, including funds which meet such rating
requirements for which the Trustees or an affiliate of the Trustees serves
as an investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, notwithstanding that (i) such Trustee or an
affiliate of such Trustee charges and collects fees and expenses from such
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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),
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 Initial Cut-off Date through and including the Closing
Date. Subject to subsections 5.02(b) and (c), the Servicer shall deposit in the
Collection Account 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) CITSF shall remain the Servicer hereunder and CITSF remains a
direct or indirect subsidiary of CIT, if CIT 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
will be made to secure timely remittance of monthly collections to the
Collection Account and the Trustees are provided with a letter from each
Rating Agency to the effect that the utilization of such alternative
remittance schedule and any amendment required to be made to this Agreement
in connection therewith will not result in a qualification, reduction or
withdrawal of its then-current rating of the Notes or Certificates,
the Servicer may make the deposits to the Collection Account specified in
subsection 5.05(a) on a monthly basis, but not later than the Deposit Date
immediately preceding the Distribution 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
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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), this Agreement may be modified, to the extent necessary, without
the consent of any Securityholder.
(c) Amounts Not Required to be Deposited. The Servicer will 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) that has been purchased by CITSF or the
Servicer pursuant to this Agreement and that are not required to be
distributed to Securityholders,
(ii) net investment earnings on funds deposited in the Collection
Account, the Certificate Distribution Account, the Note Distribution
Account and the Cash Collateral Account,
(iii) amounts received as Late Fees,
(iv) amounts received in respect of Post Cut-off Date Insurance
Add-ons,
(v) any repossession profits on Liquidated Contracts,
(vi) amounts received as liquidation proceeds, to the extent the
Servicer is entitled to reimbursement of liquidation expenses relating
thereto pursuant to Section 4.03, and
(vii) amounts to be reimbursed to the Servicer in respect of
Nonrecoverable Advances.
(e) Permitted Withdrawals from the Collection Account. The Indenture
Trustee will, from time to time as provided herein, make withdrawals from the
Collection Account of amounts deposited in said account pursuant to this
Agreement that are attributable to the Contracts for the following purposes:
(i) to make payments and distributions in the amounts and in the
manner provided for in Section 5.05;
(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, 11.01 or 11.02, all amounts received thereon and
not required to be distributed to Noteholders and Certificateholders;
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(iii) to withdraw any amount deposited in the Collection Account that
was not required to be deposited therein; and
(iv) to reimburse the Servicer out of liquidation proceeds for
liquidation expenses incurred by it, to the extent such reimbursement is
permitted under Section 4.03 and to the extent such expenses have not
otherwise been reimbursed.
Since, in connection with withdrawals pursuant to clauses (ii) and (iv) 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 (iii) of this
subsection 5.02(d).
Section 5.03 Monthly Advances. With respect to each Contract as to which
there has been an Interest Shortfall during the related Due Period (other than
an Interest Shortfall arising from either (i) a Principal Prepayment in Full of
a Contract or (ii) a Contract which has been subject to a Relief Act Reduction
during such Due Period), the Servicer shall make a Monthly Advance in the amount
of such Interest Shortfall, but only to the extent the Servicer, in its good
faith judgment, expects to recoup such Monthly Advance from subsequent payments
of interest by or on behalf of the Obligors, Net Liquidation Proceeds or
proceeds from Insurance Policies 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 they are 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 by subsequent collections in respect of
interest on such Contract made by or on behalf of the Obligor, and Net
Liquidation Proceeds or proceeds from Insurance Policies 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 A Non-Reimbursable Payments. On each Deposit Date, the
Servicer shall make a deposit (a "Non-Reimbursable Payment") to the Collection
Account in respect of each Contract for which there has been an Interest
Shortfall during the preceding Due Period arising either from a Principal
Prepayment in Full or a Relief Act Reduction in respect of such Contract during
such Due Period, in an amount equal to the Interest Shortfall.
The Servicer shall deposit the aggregate amount of Non-Reimbursable
Payments in respect of a Due Period into the Collection Account at the time and
in the manner specified in Section 5.03. The Servicer shall not be entitled to
reimbursement for any Non-Reimbursable Payment.
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Section 5.04 Additional Deposits. CITSF and the Servicer, as the case may
be, shall deposit into the Collection Account the aggregate Purchase Price
pursuant to Sections 3.02, 4.02, 4.07, 11.01 and 11.02, 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 will make a determination and inform the Indenture Trustee and the
Owner Trustee 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 Servicing Fee; (vii) the aggregate amount of Non-Reimbursable Payments;
(viii) the amounts required to be withdrawn from the Cash Collateral Account for
such Distribution Date in accordance with Sections 5.05(b) and 5.06 hereof and
the applicable provisions of the Cash Collateral Agreement; (ix) any amounts to
be deposited into the Cash Collateral Account pursuant to Sections 5.05(b)(viii)
and 5.06 hereof and the applicable provisions of the Cash Collateral Agreement
and (x) the aggregate amount of unreimbursed Monthly Advances to be reimbursed
to the Servicer.
(b) On each Distribution Date the Indenture Trustee, based on the
instruction provided by the Servicer in subsection (a) above, will withdraw the
Amount Available from the Collection Account to make the following payments (to
the extent sufficient funds are available therefor) in the following order and
priority:
(i) the aggregate amount of any unreimbursed Monthly Advances made by
the Servicer (and which are then due to be reimbursed to the Servicer) will
be paid to the Servicer;
(ii) the Servicer Payment (to the extent not previously retained by
the Servicer) will be paid to the Servicer;
(iii) the Class A Interest Distribution Amount, including any
Outstanding Class A Interest, will be deposited into the Note Distribution
Account, for payment to the Noteholders;
(iv) on and prior to the Cross-over Date, the Principal Distribution
Amount, including any unpaid principal due on prior Distribution Dates,
will be deposited into the Note Distribution Account, for payment to the
Noteholders;
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(v) the Certificate Interest Distribution Amount, including any
Outstanding Certificate Interest, will be deposited into the Certificate
Distribution Account, for payment to the Certificateholders;
(vi) prior to the Cross-over Date, the Principal Liquidation Loss
Amount, if any, will be deposited into the Certificate Distribution
Account, for payment to the Certificateholders;
(vii) on and after the Cross-over Date, the Principal Distribution
Amount (to the extent not paid to Noteholders on the Cross-over Date),
including any unpaid principal due on prior Distribution Dates, will be
deposited into the Certificate Distribution Account, for payment to the
Certificateholders;
(viii) an amount equal to the lesser of (a) the balance, if any,
remaining after the payments in clauses (i) through (vii) above and (b) the
sum of (1) the amount by which the Required Cash Collateral Amount with
respect to the following Distribution Date exceeds the amount on deposit in
the Cash Collateral Account (exclusive of Investment Earnings on amounts on
deposit therein) on the current Distribution Date after giving effect to
any withdrawals therefrom on such Distribution Date, and (2) the amount, if
any, by which (I) the amount of payments of principal and interest required
to be made on the Loan on such Distribution Date pursuant to the Cash
Collateral Agreement exceeds (II) the Investment Earnings accrued on the
Cash Collateral Account since the preceding Deposit Date and any Cash
Collateral Account Surplus (prior to taking into account any deposits to be
made into the Cash Collateral Account on such Distribution Date), will be
deposited in the Cash Collateral Account, for payment to the
Certificateholders, the Cash Collateral Depositor and the holder of the GP
Interest in accordance with the provisions of Section 5.06 hereof and the
Cash Collateral Agreement; and
(ix) the balance, if any, remaining after the payments in clauses (i)
through (viii) above shall be distributed to the holder of the GP Interest.
(c) On each Distribution Date, the Indenture Trustee and the Owner Trustee
shall distribute all amounts in the Note Distribution Account and the
Certificate Distribution Account, respectively, to the Noteholders and the
Certificateholders, respectively as provided in the Indenture and Trust
Agreement respectively.
Section 5.06 Cash Collateral Account. (a) The Owner Trustee shall, on the
Closing Date, deposit or cause to be deposited in the Cash Collateral Account by
wire transfer of immediately available funds the Initial Cash Collateral Amount
from the proceeds of the loan to be made on the Closing Date by the Cash
Collateral Depositor under the Cash Collateral Agreement. On each Distribution
Date, the Owner Trustee shall deposit or cause to be deposited into the Cash
Collateral Account by wire transfer of immediately available funds any amount it
receives pursuant to Section 5.05(b)(viii) of this Agreement, which amount shall
be designated as being for
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deposit in the Cash Collateral Account. The Owner Trustee shall have the sole
right to make withdrawals from the Cash Collateral Account and to exercise all
rights with respect to the Cash Collateral Account Property. Amounts withdrawn
from the Cash Collateral Account and paid to the Certificateholders, the Cash
Collateral Depositor or the holder of the GP Interest, as provided herein and in
the Cash Collateral Agreement, shall not be required to be reimbursed to the
Cash Collateral Account by the Trustees, the Securityholders, the Cash
Collateral Depositor, any Paying Agent or any transferee thereof.
(b) In the event that the sum of the Certificate Interest Distribution
Amount (including any Outstanding Certificate Interest), Principal Liquidation
Loss Amount and Principal Distribution Amount to be distributed to the
Certificateholders for any Distribution Date exceeds the amount deposited in the
Certificate Distribution Account pursuant to Sections 5.05(b)(v), 5.05(b)(vi)
and 5.05(b)(vii) of this Agreement, respectively, on such Distribution Date, the
Servicer shall instruct the Owner Trustee in writing to withdraw or cause to be
withdrawn from the Cash Collateral Account on or before the related Deposit Date
the lesser of the amount of such excess and the Available Cash Collateral Amount
(the "Draw Amount"). The Owner Trustee shall deposit such amount, or cause such
amount to be deposited, into the Certificate Distribution Account no later than
12:00 noon, New York City time, on such Deposit Date.
(c) On or before the Deposit Date immediately preceding the Certificate
Final Distribution Date, the Servicer shall instruct the Owner Trustee to
withdraw or cause to be withdrawn from the Cash Collateral Account an amount
(the "Final Draw Amount") equal to the lesser of (i) the Certificate Balance 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)(vii) of this Agreement and (ii)
the amount on deposit in the Cash Collateral Account, excluding Investment
Earnings with respect thereto, after giving effect to any withdrawal from the
Cash Collateral Account pursuant to clause (b) of this Section 5.06. The Owner
Trustee shall deposit such amount, or cause such amount to be deposited, into
the Certificate Distribution Account no later than 12:00 noon, New York City
time, on such Deposit Date.
(d) Investment Earnings on amounts on deposit in the Cash Collateral
Account and Cash Collateral Account Surplus on deposit in the Cash Collateral
Account shall be distributed to the Cash Collateral Depositor to the extent
required by Sections 3(a) and (b) of the Cash Collateral Agreement.
(e) On each Distribution Date, the Owner Trustee shall pay to the holder of
the GP Interest any amounts which remain on deposit in the Cash Collateral
Account after making the payments contemplated by the foregoing subparagraphs
(b) and (d), and which are in excess of the Required Cash Collateral Amount (as
determined by the Servicer) for the following Distribution Date. On the
Certificate Final Distribution Date, the Owner Trustee shall pay to the holder
of the GP Interest any amounts remaining on deposit in the Cash Collateral
Account after paying the Final Draw Amount to the Certificateholders as
contemplated by subparagraph (c) above and paying the outstanding principal and
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interest payable to the Cash Collateral Depositor pursuant to Section 3(c) of
the Cash Collateral Agreement.
(f) If at any time the Cash Collateral Account ceases to be maintained at
an Eligible Institution as required by Section 5.01(a), the Owner Trustee shall
within 10 Business Days (or such longer period not to exceed 30 calendar days,
as to which each Rating Agency may consent) establish a new Cash Collateral
Account meeting the conditions specified in Section 5.01(a) and shall transfer
any and all cash and investments in the Cash Collateral Account to such new Cash
Collateral Account.
Section 5.07 Net Deposits. CITSF (in whatever capacity) may make the
remittances required pursuant to this Agreement, net of amounts to be retained
by it or distributed to it (also in whatever capacity), pursuant to this
Agreement, for so long as (a) it shall be the Servicer and (b) it will be
entitled, pursuant to Section 5.02, to make deposits on a monthly basis, rather
than a daily basis. Nonetheless, the Servicer shall account for all of the
above-described amounts as if such amounts were deposited and distributed
separately.
Section 5.08 Statements to Securityholders. On each Distribution Date, the
Servicer shall prepare and will include with the distribution to each
Securityholder, the Monthly Report, setting forth for the related Due Period the
following information:
(i) the amount of collections on the Contracts during the immediately
preceding Due Period;
(ii) the Amount Available 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 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 Factor 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 and Non-Reimbursable Payments on
such date;
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(viii) the amount, if any, withdrawn from the Cash Collateral Account
and distributed to the Certificateholders with respect to such Distribution
Date;
(ix) the Available Cash Collateral Amount, after giving effect to any
deposit to or withdrawal from the Cash Collateral 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 and 90 days or more as of the last day of the related Due
Period;
(xi) the amount of investment earnings, net of losses and investment
expenses on amounts on deposit in the Collection Account;
(xii) during the Funding Period, the amount of funds on deposit in the
Pre-Funding Account;
(xiii) during the Funding Period, the number and aggregate principal
balance of Subsequent Contracts;
(xiv) during the Funding Period, the number and aggregate principal
balance of Subsequent Contracts purchased by the Trust on the related
Distribution Date;
(xv) during the Funding Period, the amount, if any, withdrawn from the
Capitalized Interest Account to make payments of interest on the
Securities;
(xvi) during the Funding Period, the amount remaining on deposit in
the Capitalized Interest Account;
(xvii) during the Funding Period, the amount investment earnings, net
of losses and investment expenses on amounts on deposit in the Pre-Funding
Account;
(xviii) during the Funding Period, the amount investment earnings, net
of losses and investment expenses on amounts on deposit in the Capitalized
Interest Account;
(xix) on the Distribution Date immediately following the end of the
Funding Period (or if the Funding Period ends on a Distribution Date on
such Distribution Date), the aggregate principal amount and percentage of
each of the Notes and Certificates which are being redeemed;
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(xx) the aggregate principal balance of all Contracts which became
Defaulted Contracts during the related Due Period;
(xxi) the number and aggregate principal amount of Contracts which
were prepaid, in part or in whole, during the related Due Period;
(xxii) the aggregate outstanding principal balance of the Notes as of
such Distribution Date after giving effect to any distributions on such
Distribution Date;
(xxiii) the Certificate Balance as of such Distribution Date after
giving effect to any distributions thereon and reductions thereto on such
Distribution Date;
(xxiv) the amount, if any, by which the amount due to be distributed
to Noteholders and Certificateholders exceeds the actual amount distributed
on the related Distribution Date to Noteholders and Certificateholders,
respectively;
(xxv) the Draw Amount, if any, and the Final Draw Amount (if
applicable) with respect to such Distribution Date;
(xxvi) the Required Cash Collateral Amount;
(xxvii) the amount of the surplus to be distributed to the holder of
the GP Interest after all payments have been made in respect of the
Securities and the Servicer Payment has been paid.
Within a reasonable period of time after the end of each calendar year, but
not later than the latest date permitted by law, the Servicer shall furnish or
cause to be furnished to each Person who at any time during the calendar year
was a Securityholder a statement containing the information with respect to
interest accrued and principal paid on its Securities during 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 shall speak 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
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is a party or by which the Company may be bound.
(v) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Company have a material
adverse effect on the transactions contemplated by this Agreement.
Section 7.02 Merger or Consolidation of Company.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company, shall
be the successor of the Company hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Company shall promptly notify each
Rating Agency of any such merger to which it is a party and such merger shall
satisfy the Rating Agency Condition.
Section 7.03 Limitation on Liability of the Company and Others.
(a) Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; notwithstanding anything herein to
the contrary, no party to this Agreement shall have any recourse against the
Company for any actions taken, or failed to be taken, by the Company.
(b) The Company and any director, officer, employee or agent of the Company
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
(c) The Company shall not be under any obligation to appear in, prosecute
or defend any legal action which arises under this Agreement.
Section 7.04 The Company May Own Securities.
The Company and any Person controlling, controlled by, or under common
control with the Company may in its individual or any other capacity become the
owner or pledgee of Notes or Certificates with the same rights as it would have
if it were not the Company or an Affiliate thereof, except as otherwise provided
in the definition of "Noteholder" or "Certificateholder", respectively. Notes
and Certificates so owned by or pledged to the Company or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
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the provisions of this Agreement, without preference, priority or distinction as
among all of the Notes and Certificates.
Section 7.05 Indebtedness of and Sale of Assets by the Company.
(a) The Company will not incur any material indebtedness (other than
indebtedness which is contemporaneously repaid upon the issuance of securities
by the Company or by selling any assets in connection therewith to the extent
permitted by its Certificate of Incorporation) nor will it sell all or
substantially all of its assets, if either such action would result in the
downgrading by Moody's of any outstanding securities of the Company or any trust
or other entity of which the Company is the settlor or depositor, which
securities are then rated by Moody's; provided, however, nothing contained in
this Agreement shall prohibit the Company from issuing any securities or acting
as the settlor or depositor of any trust or other entity (or selling any assets
in connection therewith) to the extent permitted by its Certificate of
Incorporation.
(b) Prior to the issuance of any securities by the Company, the Company
shall give at least 5 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 shall speak as of the execution and delivery
of this Agreement, and shall survive the sale of the Contracts to the Trust.
(i) Organization and Good Standing. CITSF is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. CITSF
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of CITSF or on the Certificates or the transactions contemplated
by the Agreement.
(ii) Authorization; Binding Obligations. CITSF has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of CITSF
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(iii) No Consent Required. CITSF is not required to obtain the consent
of any other party or any consent, license, approval or authorization from,
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement the failure of which so to obtain would
have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of CITSF or on the Certificates or the
transactions contemplated by the Agreement.
(iv) No Violations. The execution, delivery and performance of this
Agreement by CITSF will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of CITSF, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which CITSF is a party
or by which CITSF may be bound.
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(v) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of CITSF threatened, against CITSF or any of its properties
or with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of CITSF have a material adverse effect on
the transactions contemplated by this Agreement.
Section 8.02 Liability of Servicer, Indemnities.
The Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Servicer, CITSF or the Company
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 out of or resulting from the negligent use
or operation by the Servicer of a Financed Vehicle, to the extent such loss
is not reimbursed pursuant to any Insurance Policy, the Servicer's Errors
and Omission Policy or any fidelity bond.
(ii) Subject to Section 8.04(a), the Servicer will defend and
indemnify the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from
any negligent action taken, or negligently failed to be taken, by the
Servicer with respect to any Financed Vehicle, to the extent such loss is
not reimbursed pursuant to any Insurance Policy, the Servicer's Errors and
Omission Policy or any fidelity bond.
(iii) The Servicer agrees to pay, and shall indemnify, defend, and
hold harmless the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders from and against, any taxes that may
at any time be asserted with respect to, and as of the date of, 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 of, or was imposed upon such Persons,
through the willful misfeasance, negligence, or bad faith of the Servicer
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in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(v) The Servicer shall indemnify, defend, and hold harmless from and
against, and pay to the Trustees all costs, expenses, losses, claims,
damages, and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein contained in
accordance with the terms and conditions herein and in the Indenture and
the Trust Agreement, as the case may be, except to the extent that such
cost, expense, loss, claim, damage or liability: (a) shall be due to the
willful misfeasance, gross negligence or bad faith of such Trustee; (b)
relates to any tax other than the taxes with respect to which the Company
shall be required to indemnify such Trustee pursuant to this Agreement; (c)
shall arise from such Trustee's breach of any of its representations or
warranties set forth in the Trust Agreement or the Indenture, as
applicable; (d) shall be one as to which the Company is required to
indemnify such Trustee or (e) shall arise out of or be incurred in
connection with the acceptance or performance by such Trustee of the duties
of successor Servicer hereunder.
Indemnification under this Section 8.02 shall include reasonable fees and
expenses of counsel in any litigation appointed by the Servicer and reasonably
satisfactory to the indemnitee, provided that the Servicer shall only be
required to pay the fees and expenses of one counsel in any single litigation
(or related proceedings) for all indemnitees; provided, however, if in the
written opinion of counsel reasonably satisfactory to the Servicer, the
interests of the Servicer and either of the Trustees conflict such that the
Servicer and such Trustee may not both be represented by such counsel, upon ten
days prior written notice to the Servicer, such Trustee 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 or the
Company 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 and/or the Company, without
interest. The indemnities under this Section 8.02 shall survive the resignation
or removal of the Trustees, 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 the Company, nor any of the directors,
officers, employees or agents of the Servicer or the Company shall be under any
liability to the Trustees, 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
breach of warranties or representations made herein, or failure to perform its
or his obligations in compliance with any standard of care set forth in this
Agreement, or any liability which otherwise would be imposed by reason of any
breach of the terms and conditions of this Agreement.
(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.
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ARTICLE IX
Default
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 and the continuance of such failure for a period
of five Business Days after the Servicer has become aware that such deposit was
required;
(b) Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than pursuant to
Section 9.01(a)), which failure continues unremedied for 30 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 balance of the Notes, or the outstanding Certificate
Balance, respectively;
(c) Any assignment or delegation by the Servicer of its duties or rights
hereunder except as specifically permitted hereunder, or any attempt to make
such an assignment or delegation;
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
(e) The Servicer shall have commenced a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
have consented to the entry of an order for relief in an involuntary case under
any such law, or shall have consented to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Servicer or for any substantial part of its
property, or shall have made any general assignment for the benefit of its
creditors, or shall have failed to, or admitted in writing its inability to, pay
its debts as they become due, or shall have taken any corporate action in
furtherance of the foregoing; or
(f) The failure of the Servicer to be an Eligible Servicer.
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If an Event of Termination has occurred and is continuing, the Indenture
Trustee may or at the written direction of Holders of Notes evidencing a
majority of the aggregate outstanding principal balance of the Notes (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 Holders of Certificates evidencing a
majority or more of the Certificate Balance) shall, unless prohibited by
applicable law, terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service Transfer"). On receipt of such notice (or, if
later, on a date designated therein), all authority and power of the Servicer
under this Agreement, whether with respect to the Contracts, the Contract Files
or otherwise (except with respect to the Collection Account, the transfer of
which shall be governed by Section 9.06), shall pass to and be vested in the
Indenture Trustee pursuant to and under this Section 9.01 (however, if all of
the Notes have been paid in full and the Indenture has been discharged in
accordance with its terms, 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, 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. The Servicer shall transfer to
the new Servicer (i) the Servicer's records relating to the Contracts in such
electronic form as the new Servicer may reasonably request and (ii) the
Contracts and any of the Contract Files in the Servicer's possession.
Section 9.02 Indenture Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 9.01 or a notice of determination pursuant to Section 8.05,
the Indenture Trustee shall be the successor in all respects to the Servicer in
its capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and the Servicer shall be relieved of such responsibilities, duties and
liabilities arising after such Service Transfer; provided, however, that (i) the
Indenture Trustee will not assume any obligations of CITSF pursuant to Section
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3.02 or be obligated to deposit any net loss on an investment directed by a
predecessor Servicer pursuant to Section 5.01(b), and (ii) the Indenture Trustee
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 representations
and warranties 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 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 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 100% of the Securityholders, be in excess of the
Servicing Fee. 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 Cash Collateral
Depositor (so long as the Loan under the Cash Collateral 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 Cash Collateral Depositor (so long as the Loan under the
Cash Collateral Agreement is still outstanding) and to the Certificateholders
and Noteholders at their respective addresses appearing on the Certificate
Register and the Note Register.
(c) The Indenture Trustee shall give written notice to each Rating Agency
at least 30 days prior to the date upon which any Eligible Servicer (other than
the Indenture Trustee) is to assume the responsibilities of Servicer pursuant to
Section 9.02, naming such successor Servicer.
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Section 9.04 Rights to Direct Trustees and Waiver of Events of
Termination.
Holders of Notes or Certificates evidencing not less than 25% of the
aggregate outstanding principal amount of the Notes or 25% of the Certificate
Balance, respectively, shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Indenture
Trustee or the Owner Trustee, respectively, or exercising any trust or power
conferred on the Trustees; provided, however, that, subject to Section 10.01,
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 balance of the Notes (or, if all of the Notes have been
paid in full and the Indenture has been discharged in accordance with its terms,
Certificates evidencing not less than a majority of the Certificate Balance)
may, on behalf of the Noteholders and Certificateholders, waive any past Event
of Termination hereunder and its consequences (except a continuing failure to
make any required deposits to or payments from the Collection Account and the
other accounts contemplated herein in accordance with this Agreement, which
default cannot be waived without the consent of all Securityholders) and, upon
any such waiver, such Event of Termination shall cease to exist and shall be
deemed to have been cured for every purpose of this Agreement; but no such
waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon.
Section 9.05 Effect of Transfer.
(a) After the Service Transfer, the Indenture Trustee or new Servicer may
notify the Obligors to make payments directly to the new 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 new 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 new Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the new 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.
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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, following any Record Date as of which the Pool
Balance 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
20th day of the month preceding the month as of which such purchase is to be
effected occurs; provided, however, that CITSF shall not effect any such
purchase if the long-term unsecured obligations of its parent are rated less
than Baa3 by Moody's or less than BBB by Standard & Poor's, unless the Trustees
shall have received an Opinion of Counsel acceptable to them that payment of the
purchase price to the Securityholders will not constitute a voidable preference
or a fraudulent transfer under the United States Bankruptcy Code. CITSF shall
effect such purchase by depositing, in accordance with Section 5.04, 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) 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 following the month in
which such purchase is to be effected; provided, however, in no event shall the
amount so deposited, when added to the amounts on deposit in the Collection
Account on such date and available for distribution to Securityholders on the
next Distribution Date, be less than the amount required to pay all accrued and
unpaid interest on the Notes, the remaining principal balance of the Notes,
accrued and unpaid interest on the Certificates and the Certificate Balance,
after giving effect to the reimbursement of the Servicer for all unpaid Monthly
Advances and the Servicer Payment. The effective date of such purchase shall be
the last day of the Due Period which ends in the month referred to in the
preceding sentence.
Section 11.02 Mandatory Sale of all Contracts. In accordance with the
procedures and schedule set forth in Exhibit H hereto (the "Auction
Procedures"), the Indenture Trustee (or, if the Notes have been paid in full and
the Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall conduct an auction (the "Auction") of the Contracts remaining in
the Trust (such Contracts hereinafter referred to as the "Auction Property") in
order to effect a termination of the Trust pursuant to Section 7.1 of the Trust
Agreement on the second Distribution Date succeeding the Record Date on which
the Pool Balance is 5% or less of the Initial Pool Balance. Such Auction shall
be conducted within 10 days following the Distribution Date following the Record
Date on which the Pool Balance is 5% or less of the Initial Pool Balance. CITSF
and the Company may, but shall not be required to, bid at the Auction. Such
Trustee shall sell and transfer the Auction Property to the highest bidder
therefor at the Auction provided that:
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(i) the Auction has been conducted in accordance with the Auction
Procedures;
(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for recreational vehicle retail installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing that
at least two of such bidders (including the winning bidder) are
participants in the market for recreational vehicle retail installment sale
contracts willing and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not less
than the aggregate fair market value of the Auction Property (as determined
by such Trustee in its sole discretion);
(v) any bid submitted by CITSF, the Company or any affiliate of either
of them shall reasonably represent the fair market value of the Auction
Property, as independently verified and represented in writing by a
qualified independent third party evaluator (which may include the Advisor
or an investment banking firm) selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of the
Auction Property which will be at least equal to the sum of (A) the greater
of (1) the aggregate Purchase Price for the Contracts (including Defaulted
Contracts), plus the appraised value of any other property held by the
Trust (less liquidation expenses) or (2) an amount that, when added to
amounts on deposit in the Collection Account and available for distribution
to Securityholders on the second Distribution Date following the
consummation of such sale (the "Liquidation Distribution Date"), would
result in proceeds sufficient to distribute to Securityholders the amounts
of interest due to the Securityholders for such Distribution Date and any
unpaid interest payable to the Securityholders with respect to one or more
prior Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the sum of (1) an amount sufficient to
reimburse the Servicer for any unreimbursed Monthly Advances for which it
is entitled to reimbursement and (2) the Servicing Fee payable on such
second Distribution Date, including any unpaid Servicing Fees with respect
to one or more prior Due Periods.
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
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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 time to time in the future, but shall not under any further
obligation to, solicit bids for sale of the assets of the Trust Fund 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.
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ARTICLE XII
Miscellaneous Provisions
Section 12.01 Amendment. This Agreement may be amended in writing by the
Company, the Servicer and the Owner Trustee (and, in the event such amendments
affect the Indenture Trustee, the Indenture Trustee) without prior notice to or
the consent of any of the Securityholders, and in the case of clauses (v) and
(vi), upon satisfaction of the Rating Agency Condition, (i) to correct manifest
error or cure any ambiguity, (ii) to correct or supplement any provisions herein
or therein which may be inconsistent with any other provisions herein or
therein, as the case may be, (iii) to add or amend any provisions as requested
by Moody's or Standard & Poor's in order to maintain or improve any rating of
the Notes or Certificates (it being understood that, after the Closing Date,
neither the Owner Trustee, the Indenture Trustee, the Company nor CITSF is
obligated to maintain or improve such rating); (iv) to add to the covenants,
restrictions or obligations of the Company, the Servicer, the Owner Trustee or
the Indenture Trustee; (v) to evidence and provide for the acceptance of the
appointment of a successor trustee with respect to the Owner Trust Estate and
add to or change any provisions as shall be necessary to facilitate the
administration of the trusts under the Trust Agreement by more than one trustee
pursuant to Article VI of the Trust Agreement or (vi) to add, change or
eliminate any other provisions provided that an amendment pursuant to this
clause (vi), shall not, as evidenced by an Opinion of Counsel for the Servicer
or the Company, adversely affect in any material respect the interests of the
Trust, any Noteholder or any Certificateholder.
This Agreement may also be amended in writing from time to time by the
Company, the Servicer and the Owner Trustee (and, in the event such amendments
affect the Indenture Trustee, the Indenture Trustee), with the consent of
Holders of Certificates evidencing not less than a majority of the Certificate
Balance and the consent of Holders of Notes evidencing not less than a majority
of the aggregate outstanding principal balance 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, collections of payments of Contracts, or
distributions that shall be required to be made on any Certificate or Note,
respectively, the Contract Rate, the Pass-Through Rate or the Class A Rate or
(ii) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all Certificates and Notes then
outstanding.
Notwithstanding the foregoing, no amendment materially affecting the rights
of the Cash Collateral Depositor shall be made without the consent of the Cash
Collateral Depositor (so long as the Loan under the Cash Collateral Agreement is
still 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
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(so long as the Loan under the Cash Collateral Agreement is still outstanding)
the Cash Collateral Depositor and, in all cases, to each Rating Agency, which
notification will be prepared by the Servicer and delivered to such Trustee.
It shall not be necessary for the consent of the Certificateholders, the
Noteholders or the Cash Collateral Depositor 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, the Noteholders or the Cash Collateral Depositor,
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, the Owner
Trustee shall be entitled to receive an Opinion of Counsel to the Servicer to
the effect that such amendment is authorized or permitted by the 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 deliver the following fully executed UCC-1 financing
statements to the Trustees for filing:
(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
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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 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 amend any
certificate of title to name CITSF, the Company or the Trust as the lienholder,
and neither the Servicer nor the Company will 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 final sentence of the last
paragraph of Section 12.01(a)) 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.
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(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 so that, from and after the time of sale under this Agreement of the
Contracts to the Trust, the master computer records of the Company and the
Servicer (including archives) that shall refer to a Contract indicate clearly
that such Contract is owned by the Trust. Indication of the Trust's ownership of
a Contract shall be deleted from or modified on the Company's and the Servicer's
computer systems when, and only when, the Contract shall have been paid in full,
repurchased or assigned pursuant hereto.
(f) At all times during the term hereof, the Servicer shall afford the
Trust and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trust or its authorized
agents. The examination referred to in this Section 12.01(f) will 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 and compliance with
the standards represented to exist as to each Contract in this Agreement.
Nothing in this Section 12.01(f) 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
12.01(f).
(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.
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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
Sections 9.04 and this Section 12.02) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to this
Agreement, nor shall anything set forth in this Agreement or contained in the
terms of the Securities, be construed so as to constitute the Holders as
partners or members of an association; nor shall any Securityholder be under any
liability to any third person by reason of any action taken pursuant to any
provision of this Agreement.
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 10.03(b); no one or more Holders of Securities shall have
any right in any manner whatever 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 12.02, 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
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If to the Servicer:
The CIT Group/Sales Financing, Inc.
650 CIT Drive
Livingston, New Jersey 07039
Attention: President
If to Standard & Poor's:
Standard & Poor's Corporation
25 Broadway
New York, New York 10004
Attention: ABS Group/Market Surveillance
If to Moody's:
Moody's Investors Service Inc.
99 Church Street
New York, New York 10007
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder or a
Noteholder shall be in writing and delivered or mailed at the address shown in
the Certificate Register or Note Register, respectively.
Copies of all communications and notices required hereunder to be given to
the Owner Trustee shall be sent to The Bank of New York (Delaware) at White Clay
Center, Route 273, Newark, Delaware 19711, Attention: Corporate 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.
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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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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of February
1, 1996.
THE CIT GROUP/SALES FINANCING, INC.
By: /s/ Richard W. Bauerband
Name: Richard W. Bauerband
Title: Executive Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Frank Garcia
Name: Frank Garcia
Title: Vice President
CIT RV OWNER TRUST 1996-A
By: THE BANK OF NEW YORK (DELAWARE)
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust
By: /s/ Joseph G. Ernst
Name: Joseph G. Ernst
Title: Assistant 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
<PAGE>
EXHIBIT A
LIST OF INITIAL CONTRACTS
<PAGE>
EXHIBIT B
SUBSEQUENT PURCHASE AGREEMENT
This Subsequent Purchase Agreement dated as of __________ __, 1996 (the
"Agreement"), is between THE CIT GROUP SECURITIZATION CORPORATION II, as
purchaser (the "Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller
(the "Seller").
Reference is hereby made to the Purchase Agreement dated as of February 1,
1996 between the parties hereto (the "Purchase Agreement") pursuant to which the
Purchaser purchased from the Seller the recreational vehicle installment sales
contracts set forth on Exhibit A thereto (the "Initial Contracts"). The
Purchaser sold the Initial Contracts to the trust established pursuant to the
Trust Agreement dated as of February 1, 1996 between the Purchaser and The Bank
of New York (Delaware), as trustee (the "Owner Trustee").
Pursuant to the Sale and Servicing Agreement dated as of February 1, 1996
between the CIT RV Owner Trust 1996-A (the "Trust"), the Purchaser and the
Seller, the Purchaser agreed to purchase from the Seller and the Seller agreed
to sell to the Purchaser, subject to the terms and conditions set forth in
Section _____ of the Sale and Servicing Agreement, Subsequent Contracts for the
fixed purchase price specified in the Sale and Servicing Agreement for delivery
on the date specified herein. The purchase price for any Subsequent Contract
will be funded from money on deposit in the Pre-Funding Account during the
Funding Period. The purchase of any Subsequent Contract by the Purchaser must be
evidenced by the execution and delivery of a Subsequent Purchase Agreement
substantially in the form of Exhibit B to the Sale and Servicing Agreement.
Accordingly, subject to the terms hereof and the Sale and Servicing Agreement,
the Seller agrees to sell, and the Purchaser agrees to purchase, the
recreational vehicle installment sales contracts set forth on Exhibit A hereto
(collectively, the "Subsequent Contracts"), having an aggregate outstanding
principal balance as of ________ __, 1996 (the "Subsequent Cut-Off Date") of
$______________.
The Purchaser and the Seller wish to prescribe the terms and conditions of
the purchase by the Purchaser of the Subsequent Contracts and the servicing and
administration of the Subsequent Contracts.
In consideration of the premises and the mutual agreements hereinafter set
forth, the Purchaser and the Seller agree as follows:
<PAGE>
ARTICLE
DEFINITIONS
SECTION 1.1.Definitions. Certain capitalized terms used in this Agreement
shall have the respective meanings assigned to them in the Sale and Servicing
Agreement. All references in this Agreement to Articles, Sections, subsections
and exhibits are to the same contained in or attached to this Agreement unless
otherwise specified.
ARTICLE
SALE AND CONVEYANCE OF SUBSEQUENT CONTRACTS;
CONTRACT FILES
SECTION 2.1.Sale and Conveyance of Contracts. On _________ __, 1996 (the
"Subsequent Transfer Date"), subject to the terms and conditions hereof, the
Seller shall sell, transfer, assign absolutely, set over and otherwise convey to
the Purchaser as of the Subsequent Transfer Date (i) all the right, title and
interest of the Company in and to the Subsequent Contracts and all the rights,
benefits, and obligations arising from and in connection with each Subsequent
Contract, (ii) the security interests in the Subsequent Financed Vehicles
granted by the Obligors pursuant to the Subsequent Contracts, (iii) all payments
received by the Company on or with respect to the Subsequent Contracts on or
after the Subsequent Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any
Subsequent Financed Vehicle (including any right to receive future Net
Liquidation Proceeds) that secures the Subsequent Contracts and that shall have
been repossessed by the Servicer by or on behalf of the Trust; (v) all rights of
the Company to proceeds of Insurance Policies covering the Obligors and the
Subsequent Contracts, (vi) the proceeds from any Servicer's Errors and Omissions
Protection Policy, any fidelity bond and any blanket hazard policy, to the
extent such proceeds relate to any Subsequent Financed Vehicle, (vii) all rights
of recourse against any cosigner or under any personal guarantee with respect to
the Subsequent Contracts (other than any right as against a Dealer under a
Dealer Agreement), (viii) all proceeds in any way derived from any of the
foregoing items, and (ix) all documents contained or required to be contained in
the Contract Files relating to the Subsequent Contracts. The parties intend and
agree that the conveyance of the Seller's right, title and interest in and to
the Subsequent Contracts (and all rights, entitlements and amounts listed above)
pursuant to this Agreement shall constitute an absolute sale.
SECTION 2.2. Purchase Price; Payments on the Subsequent Contracts.
The purchase price for the Subsequent Contracts shall be an amount equal to
$_______________, which is the aggregate outstanding principal balance of the
Subsequent Contracts transferred pursuant to this Agreement as of the Subsequent
Cut-off Date, and the Seller hereby acknowledges receipt of such amount in
respect of the sale of the Subsequent Contracts hereunder. Such purchase price
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shall be payable in immediately available funds on the Subsequent Transfer Date
from funds on deposit in the Pre-Funding Account.
The Purchaser shall be entitled to all payments of principal and interest
received on or after the Subsequent Cut-off Date. All payments of principal and
interest received before the Subsequent Cut-off Date shall belong to the Seller.
The Seller shall hold in trust for the Purchaser and shall promptly remit to the
Purchaser, any payments on the Subsequent Contracts received by the Seller that
belong to the Purchaser under the terms of this Agreement.
SECTION 2.3.Conditions to Sale of Subsequent Contracts. The Purchaser's
obligations hereunder are subject to the following conditions:
1.The Purchaser shall have received:
a. the Sale and Servicing Agreement executed by all the parties
thereto,
b. the documents listed in Section 3.01D of the Sale and
Servicing Agreement, and
c. such other opinions and documents as the Purchaser may
reasonably require in connection with the purchase of the
Subsequent Contracts hereunder or the sale of the Notes and
Certificates;
2.The representations and warranties with respect to the Subsequent
Contracts of (i) the Seller and the Servicer made in the Sale and Servicing
Agreement and (ii) the Seller made in the Purchase Agreement and this
Agreement shall be true and correct with respect to the Subsequent
Contracts on the Subsequent Transfer Date; and
3. The conditions for transfer of the Subsequent Contracts from the
Purchaser to the Trust set forth in Section 3.01D of the Sale and Servicing
Agreement have been fulfilled.
SECTION 2.4.Examination of Files. The Seller will make the Contract Files
with respect to the Subsequent Contracts available to the Purchaser or its agent
for examination at the Trust's offices or such other location as otherwise shall
be agreed upon by the Purchaser and the Seller.
SECTION 2.5.Transfer of Subsequent Contracts. Pursuant to the Sale and
Servicing Agreement, the Purchaser will assign all of its right, title and
interest in and to the Subsequent Contracts to the Trust for the benefit of the
Securityholders. The Purchaser has the right to assign its interest under this
Agreement as may be required to effect the purposes of the 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.
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ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.1.Representations and Warranties of the Seller.
1. The representations and warranties of the Seller contained in Article
III of the Sale and Servicing Agreement with respect to the Subsequent Contracts
are incorporated herein, and are made to the Purchaser on the Subsequent
Transfer Date, as if set forth herein and as if made to the Purchaser on the
date hereof. The Seller will make such representations and warranties in the
Sale and Servicing Agreement directly to the Trust and will become obligated in
respect of such representations and warranties pursuant to Article III of the
Sale and Servicing Agreement. On the Subsequent Transfer Date, the Seller shall
deliver to the Purchaser an Officers' Certificate, dated the Subsequent Transfer
Date, to the effect that the representations and warranties made in the Sale and
Servicing Agreement with respect to the Subsequent Contracts by the Seller are
true and correct as of the Subsequent Transfer Date.
2. It is understood and agreed that the representations and warranties
incorporated by reference in this Agreement by Section 3.1(1) hereof shall
remain operative and in full force and effect, shall survive the transfer and
conveyance of the Subsequent Contracts by the Seller to the Purchaser and by the
Purchaser to the Trust, and shall inure to the benefit of the Purchaser, the
Trust and their successors and permitted assignees.
3. The Seller shall indemnify the Purchaser and the Servicer and hold the
Purchaser and the Servicer harmless against any loss, penalties, fines,
forfeitures, legal fees and related costs, judgments and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller's representations and
warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.1 to indemnify the Purchaser and the Servicer as provided in this
Section 3.1 constitutes the sole remedy of the Purchaser and the Servicer
respecting a breach of the foregoing representations and warranties. The Trust
shall also have the remedies provided in the Sale and Servicing Agreement.
4. Each indemnified party shall give prompt notice to the Seller of any
action commenced against it with respect to which indemnity may be sought
hereunder but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement, unless the failure to notify materially prejudices the rights and
condition of the Seller. The Seller shall be entitled to participate in any such
action, and to assume the defense thereof, and after notice from the Seller to
an indemnified party of its election to assume the defense thereof, the Seller
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof.
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5. Any cause of action against the Seller or relating to or arising out of
the breach of any representations and warranties made or incorporated by
reference in this Section 3.1 shall accrue as to any Subsequent Contract upon
discovery of such breach by the Purchaser or the Servicer or notice thereof by
the Seller to the Purchaser and the Servicer, failure by the Seller to cure such
breach and demand upon the Seller by the Purchaser for all amounts payable in
respect of such Subsequent Contract.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.1.Amendment. This Agreement may be amended from time to time by
the Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser.
SECTION 4.2.Counterparts. For the purpose of facilitating the execution of
this Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 4.3.Termination. The Seller's obligations under this Agreement
shall survive the sale of the Subsequent Contracts to the Purchaser.
SECTION 4.4.Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
SECTION 4.5. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed by
first class mail, postage prepaid, to in the case of the Seller, The CIT
Group/Sales Financing, Inc., 650 CIT Drive, Livingston, New Jersey 07039,
Attention: President, or such other address as may hereafter be furnished to
Purchaser in writing by the Seller, or in the case of the Purchaser, The CIT
Group Securitization Corporation II, 650 CIT Drive, Livingston, New Jersey
07039, Attention: President, or such other address as may hereafter be furnished
to the Seller by the Purchaser.
SECTION 4.6.Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
B-5
<PAGE>
SECTION 4.7.Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Seller and the Purchaser and their respective
successors and assigns, as may be permitted hereunder.
SECTION 4.8.Opinion. The Counsel to the Seller shall deliver to the
Purchaser and the Trustees an opinion in the form of Exhibit B hereto.
B-6
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
THE CIT GROUP SECURITIZATION
CORPORATION II,
as Purchaser
By:
---------------------------
Name:
-------------------------
Title:
------------------------
THE CIT GROUP/SALES FINANCING, INC.,
as Seller
By:
---------------------------
Name:
-------------------------
Title:
------------------------
B-7
<PAGE>
EXHIBIT A
List of Subsequent Contracts
B-8
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL
[Date]
Harris Trust and Savings Bank,
solely in its capacity as Indenture Trustee
under the Sale and Servicing agreement referred
to herein
111 West Monroe Street
P.O. Box 755
Chicago, IL 60690-0755
The Bank of New York (Delaware),
solely in its capacity as Owner Trustee
under the Sale and Servicing Agreement
White Clay Center
Route 273
Newark, DE 19711
Dear Sirs,
I have acted as counsel to The CIT Group/Sales Financing, Inc. ("CITSF")
and The CIT Group Securitization Corporation II, a Delaware corporation (the
"Company"), in connection with the sale of CIT RV Owner Trust 1996-A, Class A
5.40% Asset Backed Notes (the "Notes") and 5.85% Asset Backed Certificates (the
"Certificates" and, collectively with the Notes, the "Securities"). The Notes
represent obligations of, and the Certificates represent interests in, a trust,
the CIT RV Owner Trust 1996-A (the "Trust"), consisting of a pool of installment
sale contracts secured by new and used recreational vehicles (collectively, the
"Contracts") and certain related property. The Company purchased certain of the
Contracts from CITSF (the "Initial Contracts") pursuant to a Purchase Agreement,
dated as of February 1, 1996, by and between CITSF and the Company. Additional
Contracts are being purchased by the Company from CITSF (the "Subsequent
Contracts") pursuant to the Subsequent Purchase Agreement dated as of ________
__, 1996 (the "Subsequent Purchase Agreement"). Pursuant to a Sale and Servicing
Agreement, dated as of February 1, 1996 (the "Sale and Servicing Agreement"),
among the Company, CITSF and the Trust, the Company transferred the Initial
Contracts to the Trust. The Company will also transfer, pursuant to the Sale and
Servicing Agreement, the Subsequent Contracts to the Trust, the corpus of which
will consist of each of the Initial Contracts and the Subsequent Contracts and
certain other property transferred by the Company to the Trust.
B-9
<PAGE>
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Subsequent Purchase Agreement.
In rendering the following opinions, I have examined (i) the Subsequent
Purchase Agreement; (ii) the Sale and Servicing Agreement; (iii) the Certificate
of Incorporation of each of CITSF and the Company; (iv) the By-Laws of each of
CITSF and the Company; (v) copies of certain unanimous consents adopted by the
Board of Directors of the Company authorizing the issuance and sale of the
Securities and the purchase of the Contracts; and (vi) copies of certain
unanimous written consents of the Board of Directors of CITSF. I have also
examined such other documents and made such investigations of law as I have
considered necessary and appropriate for the purposes of the opinions expressed
herein. I have assumed the authenticity of signatures on original documents and
the conformity to the original of all documents submitted to me as certified,
conformed or photostatic copies and have relied as to all matters of fact on
certificates, representations or statements by officers of the Company or CITSF.
In making my examination of agreements, instruments and other documents and
in giving opinions herein, I have assumed that the Trustees have and had the
power and capacity to execute and deliver such agreements, instruments and other
documents and to perform all of their obligations thereunder and that such
agreements, instruments and other documents were duly authorized by all
requisite action by or on behalf of the Trustees were duly executed,
acknowledged, as necessary, and delivered by or on behalf of and are the legal,
valid and binding obligations of, and are enforceable in accordance with their
terms against, the Trustees.
Based upon, and subject to, the foregoing I am of the opinion that:
1. The Subsequent Purchase Agreement has been duly authorized, executed and
delivered by each of CITSF and the Company and constitutes the legal, valid and
binding agreement of each of CITSF and the Company, and is enforceable against
each of CITSF and the Company in accordance with its terms; the Subsequent
Purchase Agreement is effective to transfer all of CITSF's right, title and
interest in and to the Subsequent Contracts and other property described in
Section 2.1 of the Subsequent Purchase Agreement to the Company; the Sale and
Servicing Agreement is effective to transfer all of the Company's right, title
and interest in and to such Subsequent Contracts and other property to the Trust
subject to no prior liens or encumbrances.
2. No consent, approval, authorization or order of, registration or filing
with, or notice to any governmental authority or court is required under federal
laws or the laws of the State of Delaware for the execution, delivery and
performance by the Company of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by the Company,
except for those which have been obtained or except such as may be required
under the Securities Act of 1933, as amended or the regulations promulgated
thereunder or state securities or Blue Sky laws of any jurisdiction.
B-10
<PAGE>
3. No consent, approval, authorization or order of, registration or filing
with, or notice to, any governmental authority or court is required under
federal laws or the laws of the State of Delaware for the execution, delivery
and performance by CITSF of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by CITSF except for
those which have been obtained or except such as may be required under the
Securities Act of 1933, as amended or the regulations promulgated thereunder or
state securities or Blue Sky laws of any jurisdiction.
I am furnishing this opinion to you solely for your benefit. This opinion
is not to be used, circulated, quoted or otherwise referred to or relied on by
any other person or for any other purpose.
The foregoing opinion is given on the express understanding that the
undersigned is an officer of the Company and CITSF and shall in no event incur
any personal liability in connection with the said opinion.
Very truly yours,
B-11
<PAGE>
EXHIBIT C
FORM OF SUBSEQUENT TRANSFER AGREEMENT
The CIT Group Securitization Corporation II, as Seller, and the CIT RV
Owner Trust 1996-A (the "Trust"), as Purchaser, pursuant to the Sale and
Servicing Agreement, dated as of February 1, 1996, among the Seller, The CIT
Group/Sales Financing, Inc., as Servicer and the Trust (the "Sale and Servicing
Agreement"), hereby confirm their understanding with respect to the sale by the
Seller and the purchase by the Purchaser of those Recreational Vehicle Contracts
listed on the attached List of Subsequent Contracts (the "Subsequent
Contracts").
Conveyance of Subsequent Contracts. The Seller shall sell, transfer, assign
absolutely, set over and otherwise convey to the Purchaser as of the Subsequent
Transfer Date (i) all the right, title and interest of the Seller in and to the
Subsequent Contracts and all the rights, benefits, and obligations arising from
and in connection with each Subsequent Contract, (ii) the security interests in
the Subsequent Financed Vehicles granted by the Obligors pursuant to the
Subsequent Contracts, (iii) all payments received by the Seller on or with
respect to the Subsequent Contracts on or after the Subsequent Cut-off Date
(exclusive of payments with respect to Post Cut-off Date Insurance Add-Ons),
(iv) the interest of the Seller in any Subsequent Financed Vehicle (including
any right to receive future Net Liquidation Proceeds) that secures the
Subsequent Contracts and that shall have been repossessed by the Servicer by or
on behalf of the Trust; (v) all rights of the Seller to proceeds of Insurance
Policies covering the Obligors and the Subsequent Contracts, (vi) the proceeds
from any Servicer's Errors and Omissions Protection Policy, any fidelity bond
and any blanket hazard policy, to the extent such proceeds relate to any
Subsequent Financed Vehicle, (vii) all rights of recourse against any cosigner
or under any personal guarantee with respect to the Subsequent Contracts (other
than any right as against a Dealer under a Dealer Agreement), (viii) all
proceeds in any way derived from any of the foregoing items and (ix) all
documents contained or required to be contained in the Contract Files relating
to the Subsequent Contracts. The parties intend and agree that the conveyance of
the Seller's right, title and interest in and to the Subsequent Contracts (and
all rights, entitlements and amounts listed above) pursuant to this Agreement
shall constitute an absolute sale.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Sale and Servicing Agreement shall be
borne by the Seller.
The Seller hereby affirms the representations and warranties set forth in
the Sale and Servicing Agreement that relate to the Subsequent Contracts as of
the date hereof. The Seller hereby confirms that it has delivered notice of the
sale of the Subsequent Contracts pursuant to the Sale and Servicing Agreement
and that each of the conditions relating to the transfer of the Subsequent
Contracts, set forth in the Sale and Servicing Agreement, have been satisfied as
of the date hereof.
<PAGE>
All terms and conditions of the Sale and Servicing Agreement are hereby
ratified, confirmed and incorporated herein, provided that in the event of any
conflict the provisions of this Subsequent Transfer Agreement shall control over
the conflicting provisions of the Sale and Servicing Agreement.
Terms capitalized herein and not defined herein shall have their respective
meanings as set forth in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer
Agreement to be duly executed as of this ____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II, as Seller
By:
---------------------------
Name:
Title:
THE CIT RV OWNER TRUST 1996-A
By: THE BANK OF NEW YORK (DELAWARE),
as Owner Trustee
By:
---------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement") dated
as of February 1, 1996, among The CIT Group/Sales Financing, Inc. ("CITSF"), The
CIT Group Securitization Corporation II (the "Company"), and the CIT RV Owner
Trust 1996-A (the "Trust"), the Company does hereby sell, transfer, assign, set
over and otherwise convey to the Trust created by the Trust Agreement, (i) all
right, title and interest of the Company in and to the Initial Contracts and all
the rights, benefits and obligations arising from and in connection with each
Initial Contract, (ii) the security interests in the Initial Financed Vehicles
granted by the Obligors pursuant to the Initial Contracts, (iii) all payments
received by the Company on or with respect to the Initial Contracts on or after
the Initial Cut-off Date (exclusive of payments with respect to Post Cut-off
Date Insurance Add-Ons), (iv) the interest of the Company in any Initial
Financed Vehicle (including any right to receive future Net Liquidation
Proceeds) that secures the Initial Contracts and that shall have been
repossessed by the Servicer by or on behalf of the Trust; (v) all rights of the
Company to proceeds of Insurance Policies covering the Obligors and the Initial
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket hazard policy, to the extent such
proceeds relate to any Initial Financed Vehicle, (vii) all rights of recourse
against any cosigner or under any personal guarantee with respect to the Initial
Contracts (other than any right as against a Dealer under a Dealer Agreement),
(viii) all amounts held for the Trust in the Collection Account, (ix) all
amounts held for the Trust in the Pre-Funding Account, (x) all amounts held for
the Trust in the Capitalized Interest Account, (xi) all proceeds in any way
derived from any of the foregoing items and (xii) all documents contained or
required to be contained in the Contract Files relating to the Initial
Contracts. The parties intend and agree that the conveyance of the Company's
right, title and interest in and to the Initial Contracts (and all rights,
entitlements and amounts listed above) pursuant to this Agreement shall
constitute an absolute sale.
All capitalized terms used herein without definition have the meanings
ascribed to such terms in the Agreement. This Assignment is made pursuant to the
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this ___ day of ________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II
By:
---------------------------
Name:
Title:
<PAGE>
FORM OF ASSIGNMENT OF SUBSEQUENT CONTRACTS
For good and valuable consideration in the amount of $______________ paid
by the CIT RV Owner Trust 1996-A (the "Purchaser"), to The CIT Group
Securitization Corporation II (the "Seller"), the Seller does hereby sell,
transfer, assign absolutely, set over and otherwise convey to the Purchaser as
of the Subsequent Transfer Date (i) all the right, title and interest of the
Seller in and to the Subsequent Contracts and all the rights, benefits, and
obligations arising from and in connection with each Subsequent Contract, (ii)
the security interests in the Subsequent Financed Vehicles granted by the
Obligors pursuant to the Subsequent Contracts, (iii) all payments received by
the Seller on or with respect to the Subsequent Contracts on or after the
Subsequent Cut-off Date (exclusive of payments with respect to Post Cut-off Date
Insurance Add-Ons), (iv) the interest of the Seller in any Subsequent Financed
Vehicle (including any right to receive future Net Liquidation Proceeds) that
secures the Subsequent Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Seller to proceeds
of Insurance Policies covering the Obligors and the Subsequent Contracts, (vi)
the proceeds from any Servicer's Errors and Omissions Protection Policy, any
fidelity bond and any blanket hazard policy, to the extent such proceeds relate
to any Subsequent Financed Vehicle, (vii) all rights of recourse against any
cosigner or under any personal guarantee with respect to the Subsequent
Contracts (other than any right as against a Dealer under a Dealer Agreement),
(viii) all proceeds in any way derived from any of the foregoing items, and (ix)
all documents contained or required to be contained in the Contract Files
relating to the Subsequent Contracts. The parties intend and agree that the
conveyance of the Seller's right, title and interest in and to the Subsequent
Contracts (and all rights, entitlements and amounts listed above) pursuant to
this Agreement shall constitute an absolute sale. Certain capitalized terms used
in this Assignment shall have the respective meanings assigned to them in the
Sale and Servicing Agreement, dated as of February 1, 1996, among The CIT Group
Securitization Corporation II, CITSF and the CIT RV Owner Trust 1996-A.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II,
By:
---------------------------
Name:
D-2
<PAGE>
EXHIBIT E
FORM OF OWNER TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
The Bank of New York (Delaware), a Delaware banking association, acting as
Owner Trustee (the "Owner Trustee") of the Trust created pursuant to the Trust
Agreement, dated as of February 1, 1996, between The CIT Group Securitization
Corporation II (the "Company") and the Owner Trustee, to the best of its
knowledge acknowledges pursuant to the Sale and Servicing Agreement dated as of
February 1, 1996 among the Company, The CIT Group/Sales Financing, Inc. and the
Owner Trustee (the "Agreement"), that the Owner Trustee has received, and holds
in trust thereunder the following through the Servicer as custodian: (i) all the
right, title and interest of the Company in and to the [Initial] [Subsequent]
Contracts and all the rights, benefits, and obligations arising from and in
connection with each [Initial] [Subsequent] Contract, (ii) the security
interests in the [Initial] [Subsequent] Financed Vehicles granted by the
Obligors pursuant to the [Initial] [Subsequent] Contracts, (iii) all payments
received by the Company on or with respect to the [Initial] [Subsequent]
Contracts on or after the [Initial] [Subsequent] Cut-off Date (exclusive of
payments with respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest
of the Company in any [Initial] [Subsequent] Financed Vehicle (including any
right to receive future Net Liquidation Proceeds) that secures the [Initial]
[Subsequent] Contracts and that shall have been repossessed by the Servicer by
or on behalf of the Trust; (v) all rights of the Company to proceeds of
Insurance Policies covering the Obligors and the [Initial] [Subsequent]
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket hazard policy, to the extent such
proceeds relate to any [Initial] [Subsequent] Financed Vehicle, (vii) all rights
of recourse against any cosigner or under any personal guarantee with respect to
the [Initial] [Subsequent] Contracts (other than any right as against a Dealer
under a Dealer Agreement), (viii) all proceeds in any way derived from any of
the foregoing items, (ix) all documents contained or required to be contained in
the Contract Files relating to the [Initial] [Subsequent] Contracts, (x) the
Collection Account, (xi) the Pre-Funding Account, and (xii) the Capitalized
Interest Account. [The Owner Trustee shall issue to, or upon the written order
of, the Company Certificates representing ownership of a beneficial interest in
100% of the Trust and Notes representing obligations of the Trust.] Capitalized
terms used herein have the meanings given them in the Agreement.
<PAGE>
IN WITNESS WHEREOF, The Bank of New York, as Co-Trustee, has caused this
acknowledgment to be executed by its duly authorized officer as of this ___ day
of ________, 1996.
THE BANK OF NEW YORK,
as Co-Trustee
By:
---------------------------
Name:
Title:
E-2
<PAGE>
EXHIBIT F
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of The CIT Group/Sales
Financing, Inc., a corporation organized under the laws of Delaware ("CITSF"),
and that as such he is duly authorized to execute and deliver this certificate
on behalf of CITSF pursuant to Section 4.09 of the Sale and Servicing Agreement,
dated as of February 1, 1996 (the "Agreement"), among CITSF, The CIT Group
Securitization Corporation II and The Bank of New York (Delaware), as Owner
Trustee (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement), and further certifies that:
1. The Monthly Report for the period from _________ to _______ attached to
this certificate is complete and accurate in accordance with the requirements of
Sections 4.09 and 5.08 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with notice
or lapse of time or both would become an Event of Termination has occurred. [If
an Event of Termination has occurred, such Event of Termination shall be
specified and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ____ day
of _____, 199_.
THE CIT GROUP/SALES FINANCING, INC.
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT G
THE CIT RV OWNER TRUST 1996-A
CLASS A 5.40% ASSET BACKED NOTES
5.85% ASSET BACKED CERTIFICATES
MONTHLY REPORT
DISTRIBUTION DATE: __________, 199_
Amount Available $
--------------
Amount of collections on Contracts $
--------------
Distribution Amounts
1. Aggregate Note distribution $
--------------
2. Aggregate Certificate distribution $
--------------
Interest
3. Aggregate amount of Interest
a. Notes $
--------------
b. Certificates $
--------------
4. Total distribution in respect of interest
a. Notes $
--------------
b. Certificates $
--------------
Principal
5. Principal Distribution Amount $
--------------
6. Distribution made in respect of Principal
a. Notes $
--------------
b. Certificates $
--------------
7. Outstanding Principal Balance of Notes: $
--------------
<PAGE>
8. Certificate Balance $
--------------
Contract Pool
9. Pool Balance $
--------------
10. Note Pool Factor $
--------------
11. Certificate Pool Factor $
--------------
Delinquency Information
Aggregate Principal
Number Balance
-----------------------------------
12. Delinquent Contracts
a. 30-59 days $
-------- ------------------
b. 60-89 days $
-------- ------------------
c. 90 days or more $
-------- ------------------
13. Repossessed Contracts $
-------- ------------------
14. Repossessed Contracts
Remaining in Inventory $
-------- ------------------
Miscellaneous
15. Monthly Servicing Fee $
--------------
16. Amount of Servicer Fee Paid $
--------------
17. Amount withdrawn from the Cash Collateral $
Account and Delivered to Certificateholders --------------
18. Available Cash Collateral Amount after %
any withdrawal or deposit to the Cash --------------
Collateral Account divided by the Pool
Balance
19. Required Cash Collateral Amount $
--------------
20. Amount of Investment Earnings (net of losses $
--------------
G-2
<PAGE>
and investment expenses) on amounts on deposit
in the Collection Account
21. Amount of Funds on deposit in the $
Pre-Funding Account --------------
22. Amount of Investment Earnings (net of losses $
and investment expenses) on amounts on deposit --------------
in the Pre-Funding Account
23. Amount of Funds on deposit in the $
Capitalized Interest Account --------------
24. Amount of Investment Earnings (net of losses $
and investment expenses) on amounts on deposit --------------
in the Capitalized Interest Account
25. Weighted average Contract Rate of all %
outstanding Contracts --------------
26. Number of Subsequent Contracts
--------------
27. Aggregate principal balance of $
Subsequent Contracts --------------
28. Number of Subsequent Contracts Purchased
since the preceding Distribution Date --------------
29. Aggregate Stated Principal Balance of the $
Subsequent Contracts purchased --------------
since the preceding Distribution Date
30. Amount of funds withdrawn from the $
Capitalized Interest Account to make payments --------------
of interest in respect of the Securities
31. Amount of Monthly Advances by Servicer $
--------------
32. Amount of Non-Reimbursable Payments by $
Servicer --------------
33. Amount by which the amount due to be $
distributed to Noteholders exceeds the actual --------------
amount distributed to Noteholders
G-3
<PAGE>
34. Amount by which the amount due to be $
distributed to Certificateholders exceeds the actual --------------
amount distributed to Certificateholders
35. Aggregate Principal Balance of all Contracts $
which became Defaulted Contracts --------------
36. Number of Contracts which were prepaid,
in part or in whole --------------
37. Aggregate principal amount of $
Contracts which were prepaid, in part or --------------
in whole
38. Amount to be distributed to the holder of the $
GP Interest --------------
G-4
<PAGE>
EXHIBIT H
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 11.02 of the Sale and
Servicing Agreement (the "Agreement"), dated as of February 1, 1996, between The
CIT Group Securitization Corporation II, the CIT Group/Sales Financing, Inc. and
The Bank of New York (Delaware), as Owner Trustee. Capitalized terms used herein
that are not otherwise defined shall have the meanings described thereto in the
Agreement. All references herein to "Trustee" shall be references to Harris
Trust and Savings Bank, as Indenture Trustee, pursuant to an Indenture, dated as
of February 1, 1996, between the Owner Trustee and the Indenture Trustee.
However, if the Notes have been paid in full, and the Indenture has been
discharged in accordance with its terms, all references herein to "Trustee"
shall be references to the Owner Trustee.
I. Pre-Auction Process
(a) Upon receiving notice of the Auction Date, the Advisor will initiate
its general Auction procedures consisting of the following: (i) with
the assistance of the Servicer, prepare a general solicitation package
along with a confidentiality agreement; (ii) derive a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the Trustee; and (vi) notify the
Servicer of all potential bidders and anticipated timetable.
(b) The general solicitation package will include: (i) the prospectus from
the public offering of the Notes and Certificates; (ii) a copy of all
monthly servicing reports or a copy of all annual servicing reports
and the prior year's monthly servicing reports; (iii) a form of a
Purchase Agreement and Sale and Servicing Agreement; (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 11.02 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Scheduled Principal Balance
as of the related Distribution Date reflecting the same data
attributes used to create the Initial Cut-off Date tables for the
prospectus dated February __, 1996 relating to the public offering of
the Notes and Certificates.
(c) The Trustee, with the assistance of the Servicer and the Advisor, will
maintain an auction package beginning at the time of closing of the
transaction, which will contain terms (i)-(iii) listed in the
preceding paragraph. If the Advisor is unable to perform its role as
advisor to the Trustee, the Servicer acting in its capacity under the
<PAGE>
Agreement will select a successor Advisor and inform the Trustee of
its actions.
(d) The Advisor will send solicitation packages to all bidders at least 15
business days before the Auction Date. Bidders will be required to
submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 business days
before the Auction Date. The Servicer and the Advisor will be required
to satisfy all relevant questions at least five Business Days prior to
the Auction Date and distribute the questions and answers to all
bidders.
II. Auction Process
(a) ______________________, in its role as Advisor to the Trustee, will be
allowed to bid in the Auction, but will not be required to do so.
(b) The Servicer will also be allowed to bid in the Auction if it deems
appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the offices
of the Trustee by 1:00 p.m. New York City time, with the winning
bidder to be notified by 2:00 p.m. New York City time. All acceptable
bids (as described in Section 11.02 of the Agreement) will be due on a
conforming basis on the bid sheet contained in the solicitation
package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for recreational vehicle retail installment
sale contract willing and able to purchase the Auction Property, the
Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Balance will be required to be wired to
the Trustee upon acceptance of the bid. This deposit, along with any
interest income attributable to it, will be credited to the purchase
price but will not be refundable. The Trustee will establish a
separate account for the acceptance of the good faith deposit, until
such time as the account is fully funded and all monies are
transferred into the Collection Account, such time not to exceed one
Business Day before the related Distribution Date (as described
above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Purchase Agreement, Sale and Servicing Agreement and Servicer's
Representations and Warranties (which shall be substantially identical
to the representations and warranties set forth in Section 8.01 of the
Agreement).
(g) ____________, in its capacity as Advisor to the Trustee, will provide
to the Trustee a letter concluding whether or not the winning bid is a
H-2
<PAGE>
fair market value bid. _________________ will also provide such letter
if it is the winning bidder. In the case where __________ or the
Servicer is the winning bidder it will in its letter provide for
market comparable and valuations.
(h) The Auction will stipulate that the Servicer be retained to service
the Contracts sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
H-3
<PAGE>
EXHIBIT I
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF OFFICER
The undersigned certifies that the undersigned is the ____________________
of The CIT Group/Sales Financing, Inc., a corporation organized under the laws
of Delaware ("CITSF"), and that as such is duly authorized to execute and
deliver this certificate on behalf of CITSF in connection with the Sale and
Servicing Agreement, dated as of February 1, 1996 (the "Agreement"), among
CITSF, The CIT Group Securitization Corporation II and the CIT RV Owner Trust
1996-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:
PURCHASE AGREEMENT
This Purchase Agreement dated as of February 1, 1996 (the "Agreement"), is
between THE CIT GROUP SECURITIZATION CORPORATION II, as purchaser (the
"Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller (the "Seller").
Subject to the terms hereof, the Seller agrees to sell, and the Purchaser
agrees to purchase, the recreational vehicle installment sales contracts set
forth on Exhibit A (collectively, the "Contracts"), having an aggregate
outstanding principal balance as of February 1, 1996 (the "Initial Cut-off
Date") of approximately $181,744,965.
It is the intention of the Seller and the Purchaser that the Purchaser
shall sell the Contracts to the CIT RV Owner Trust 1996-A and shall enter into a
Sale and Servicing Agreement, dated as of the date hereof, with the CIT RV Owner
Trust 1996-A and the Seller, pursuant to which 5.85% Asset Backed Certificates
(the "Certificates"), evidencing ownership interests in the Contracts and Class
A 5.40% Asset Backed Notes secured by the Contracts, will be issued.
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.
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 sell, transfer,
assign absolutely, set over and otherwise convey to the Purchaser (i) all the
right, title and interest of the Seller in and to the Initial Contracts and all
the rights, benefits, and obligations arising from and in connection with each
<PAGE>
Initial Contract, (ii) the security interests in the Initial Financed Vehicles
granted by the Obligors pursuant to the Initial Contracts, (iii) all payments
received by the Seller on or with respect to the Initial Contracts on or after
the Initial Cut-off Date (exclusive of payments with respect to Post Cut-off
Date Insurance Add-Ons), (iv) the interest of the Seller in any Initial Financed
Vehicle (including any right to receive future Net Liquidation Proceeds) that
secures the Initial Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Seller to proceeds
of Insurance Policies covering the Obligors and the Initial Contracts, (vi) the
proceeds from any Servicer's Errors and Omissions Protection Policy, any
fidelity bond and any blanket hazard policy, to the extent such proceeds relate
to any Initial Financed Vehicle, (vii) all rights of recourse against any
cosigner or under any personal guarantee with respect to the Initial Contracts
(other than any right as against a Dealer under a Dealer Agreement), (viii) all
amounts held for the Trust in the Collection Account, (ix) all amounts held for
the Trust in the Pre-Funding Account, (x) all amounts held for the Trust in the
Capitalized Interest Account, (xi) all proceeds in any way derived from any of
the foregoing items, and (xii) all documents contained or required to be
contained in the Contract Files relating to the Initial Contracts. The parties
intend and agree that the conveyance of the Seller's right, title and interest
in and to the Initial Contracts pursuant to this Agreement shall constitute an
absolute sale.
The Seller hereby declares and covenants that it shall at no time have any
legal, equitable or beneficial interest in, or any right, including without
limitation any reversionary or offset right, to the Collection Account, the
Pre-Funding Account, the Capitalized Interest Account and the Cash Collateral
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
$181,744,964.71. Such purchase price shall be payable in immediately available
funds on the Closing Date.
(b) The Purchaser shall be entitled to all payments of principal and
interest received on or after the Initial Cut-off Date. All payments of
principal and interest received before the Initial Cut-off Date shall belong to
the Seller. The Seller shall hold in trust for the Purchaser and 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.
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 Certificates;
<PAGE>
(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 Corporation 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 Initial Contracts available to the Purchaser or its
agent for examination at the Trust's offices or such other location as otherwise
shall be agreed upon by the Purchaser and the Seller.
SECTION 2.05. Transfer of 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.
(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.
<PAGE>
(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.
SECTION 4.03. Termination. The Seller's obligations under this Agreement
shall survive the sale of the Contracts to the Purchaser.
<PAGE>
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.
<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/ Richard W. Bauerband
Name: Richard W. Bauerband
Title: Executive Vice President
