Exhibit 4.1
--------------------------------------------------------------------------------
Home Equity Loan Asset Backed
Certificates
Series 200_-_
POOLING AND SERVICING AGREEMENT
among
THE CIT GROUP SECURITIZATION CORPORATION III,
as Depositor,
THE CIT GROUP/CONSUMER FINANCE, INC.,
as Seller and Master Servicer,
[[CONDUIT SELLER],
as Conduit Seller]
and
[TRUSTEE],
not in its individual capacity but solely as Trustee
Dated as of _____ __, 200_
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.......................................................2
SECTION 1.01. General....................................................2
SECTION 1.02. Specific Terms.............................................2
ARTICLE II ESTABLISHMENT OF THE TRUST; TRANSFER OF MORTGAGE LOANS..........31
SECTION 2.01. Establishment of the Trust................................31
SECTION 2.02. [Conveyance of the Initial Mortgage Loans.]...............31
SECTION 2.03. [Conveyance of the Subsequent Mortgage Loans.]............32
SECTION 2.04. [Reserved]................................................33
SECTION 2.05. [Appointment of REMIC Administrators.]....................33
SECTION 2.06. [Acceptance by Trustee.]..................................34
SECTION 2.07. [Designation of Interests in REMICs.].....................34
SECTION 2.08. [Intentionally Omitted.]..................................39
SECTION 2.09. [Intentionally Omitted.]..................................39
SECTION 2.10. [Intentionally Omitted.]..................................39
SECTION 2.11. [Intentionally Omitted.]..................................39
SECTION 2.12. [Miscellaneous REMIC Provisions.].........................39
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................40
SECTION 3.01. Representations and Warranties Regarding
CIT Consumer Finance....................................40
SECTION 3.02. Representations and Warranties Regarding Each
Mortgage Loan...........................................42
SECTION 3.03. Representations and Warranties Regarding the
Mortgage Loans in the Aggregate.........................46
SECTION 3.04. Representations and Warranties Regarding the Files........47
SECTION 3.05. Repurchase of Mortgage Loans or Substitution of
Mortgage Loans for Breach of Representations
and Warranties..........................................47
SECTION 3.06. [Conditions of Closing for the Subsequent
Mortgage Loans.]........................................49
ARTICLE IV DELIVERY OF MORTGAGE DOCUMENTS; CUSTODY OF MORTGAGE LOANS;
RECORDATION OF MORTGAGES........................................52
SECTION 4.01. Delivery of Mortgage Documents; Custody of
Mortgage Loans..........................................52
SECTION 4.02. Recordation of Mortgages..................................54
SECTION 4.03. Review of Mortgage Documents..............................55
ARTICLE V SERVICING OF MORTGAGE LOANS......................................57
SECTION 5.01. Responsibility for Mortgage Loan Administration...........57
-i-
Table of Contents
-----------------
(continued)
Page
----
SECTION 5.02. Standard of Care..........................................57
SECTION 5.03. Records...................................................57
SECTION 5.04. Inspection; Computer Tape.................................58
SECTION 5.05. Certificate Account.......................................58
SECTION 5.06. Enforcement...............................................62
SECTION 5.07. Trustee to Cooperate......................................63
SECTION 5.08. Costs and Expenses........................................64
SECTION 5.09. Maintenance of Insurance..................................64
SECTION 5.10. [REMIC Compliance.].......................................66
SECTION 5.11. Sub-servicer..............................................68
SECTION 5.12. [Calculation of One-Month LIBOR.].........................69
SECTION 5.13. [Applied Realized Loss Amounts.]..........................70
SECTION 5.14. [Reserved]................................................70
SECTION 5.15. Release of Collateral.....................................70
ARTICLE VI REPORTS.........................................................70
SECTION 6.01. Monthly Reports to the Trustee............................70
SECTION 6.02. Certificate of Servicing Officer..........................72
SECTION 6.03. Other Data................................................72
SECTION 6.04. Annual Report of Accountants..............................73
SECTION 6.05. Statements to Certificateholders..........................73
SECTION 6.06. Annual Statement as to Compliance.........................74
ARTICLE VII SERVICE TRANSFER...............................................74
SECTION 7.01. Event of Termination......................................74
SECTION 7.02. Transfer..................................................75
SECTION 7.03. Trustee to Act; Appointment of Successor..................76
SECTION 7.04. Notification to Certificateholders and to
Rating Agencies.........................................77
SECTION 7.05. Effect of Transfer........................................77
SECTION 7.06. Transfer of Accounts......................................78
ARTICLE VIII DISTRIBUTIONS AND WITHDRAWALS FROM CERTIFICATE ACCOUNT........78
SECTION 8.01. Monthly Distributions.....................................78
SECTION 8.02. Permitted Withdrawals from the Certificate Account........82
SECTION 8.03. Repurchase Option.........................................83
SECTION 8.04. Compensating Interest and Monthly Advances by the
Master Servicer.........................................84
SECTION 8.05. [Supplemental Interest Reserve Fund.].....................85
-ii-
Table of Contents
-----------------
(continued)
Page
----
ARTICLE IX THE CERTIFICATES................................................86
SECTION 9.01. The Certificates..........................................86
SECTION 9.02. Registration of Transfer and Exchange of Certificates.....86
SECTION 9.03. No Charge; Disposition of Void Certificates...............92
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates.........92
SECTION 9.05. Persons Deemed Holders....................................92
SECTION 9.06. Access to List of Certificateholders' Names
and Addresses...........................................93
SECTION 9.07. Authenticating Agents.....................................93
ARTICLE X INDEMNITIES......................................................93
SECTION 10.01. Liabilities to Mortgagors.................................93
SECTION 10.02. Tax Indemnification.......................................94
SECTION 10.03. Master Servicer's Indemnities.............................94
SECTION 10.04. Operation of Indemnities..................................94
SECTION 10.05. CIT Consumer Finance Indemnification......................95
ARTICLE XI THE TRUSTEE.....................................................95
SECTION 11.01. Duties of Trustee.........................................95
SECTION 11.02. Certain Matters Affecting the Trustee.....................96
SECTION 11.03. Trustee Not Liable for Certificates or Mortgage Loans.....97
SECTION 11.04. Rights of Certificateholders to Direct Trustee and
to Waive Events of Termination..........................97
SECTION 11.05. Master Servicer to Pay Trustee's Fees and Expenses........98
SECTION 11.06. Eligibility Requirements for Trustee......................99
SECTION 11.07. Resignation or Removal of Trustee.........................99
SECTION 11.08. Successor Trustee........................................100
SECTION 11.09. Merger or Consolidation of Trustee.......................100
SECTION 11.10. [Reserved]...............................................100
SECTION 11.11. Separate Trustees and Co-Trustees........................100
SECTION 11.12. Trustee May Own Certificates.............................101
SECTION 11.13. Agents of Trustee........................................102
ARTICLE XII MISCELLANEOUS.................................................102
SECTION 12.01. Master Servicer Not To Resign............................102
SECTION 12.02. Maintenance of Office or Agency..........................102
SECTION 12.03. Termination..............................................102
SECTION 12.04. Acts of Certificateholders...............................104
SECTION 12.05. Calculations.............................................105
SECTION 12.06. Assignment or Delegation by the Master Servicer;
Merger or Consolidation of the Depositor, CIT
Consumer Finance or the Master Servicer................105
-iii-
Table of Contents
-----------------
(continued)
Page
----
SECTION 12.07. Amendment................................................106
SECTION 12.08. [Contribution of Assets.]................................107
SECTION 12.09. Notices..................................................108
SECTION 12.10. Merger and Integration...................................109
SECTION 12.11. Reliance on Credit.......................................109
SECTION 12.12. No Bankruptcy Petition...................................109
SECTION 12.13. Headings.................................................109
SECTION 12.14. Governing Law............................................109
SECTION 12.15. Counterparts.............................................109
ARTICLE XIII THE DEPOSITOR................................................110
SECTION 13.01. Representations of the Depositor.........................110
SECTION 13.02. Merger or Consolidation of the Depositor.................111
SECTION 13.03. Limitation on Liability of the Depositor and Others......111
SECTION 13.04. The Depositor May Own Securities.........................111
-iv-
E X H I B I T S
---------------
[EXHIBIT A-1] - FORM OF [CLASS A-1] CERTIFICATE
[EXHIBIT A-2] - FORM OF [CLASS A-2] CERTIFICATE
[EXHIBIT A-3] - FORM OF [CLASS A-3] CERTIFICATE
[EXHIBIT A-4] - FORM OF [CLASS A-4] CERTIFICATE
[EXHIBIT A-5] - FORM OF [CLASS A-5] CERTIFICATE
[EXHIBIT A-6] - FORM OF [CLASS A-6] CERTIFICATE
[EXHIBIT A-7] - FORM OF [CLASS M-1] CERTIFICATE
[EXHIBIT A-8] - FORM OF [CLASS M-2] CERTIFICATE
[EXHIBIT A-9] - FORM OF [CLASS B] CERTIFICATE
[EXHIBIT A-10] - FORM OF [CLASS A-IO] CERTIFICATE
[EXHIBIT B] - FORM OF [CLASS X-IO] CERTIFICATE
[EXHIBIT C] - FORM OF [CLASS R] CERTIFICATE
[EXHIBIT D] - [LIST OF INITIAL MORTGAGE LOANS]
[EXHIBIT E] - [SCHEDULES OF MORTGAGE LOANS BY SELLER]
[EXHIBIT F] - [FORM OF DELAYED DELIVERY CERTIFICATION]
[EXHIBIT G] - [INTENTIONALLY OMITTED]
[EXHIBIT H] - [FORM OF TRANSFER AFFIDAVIT]
[EXHIBIT I] - [FORMS OF PRIVATE CERTIFICATE TRANSFEREE LETTER]
[EXHIBIT J] - [FORM OF TRANSFEROR LETTER]
[EXHIBIT K] - [FORM OF OFFICER'S CERTIFICATE RELATING TO QUALIFIED
SUBSTITUTE MORTGAGE LOANS]
[EXHIBIT L] - [FORM OF SUBSEQUENT PURCHASE AGREEMENT]
[EXHIBIT M] - [FORM OF SUBSEQUENT TRANSFER AGREEMENT]
[EXHIBIT N] [FORM OF ADDITION NOTICE]
-i-
POOLING AND SERVICING AGREEMENT, relating to CIT HOME EQUITY LOAN TRUST
200_-_, dated as of _____ __, 200_ by and among THE CIT GROUP SECURITIZATION
CORPORATION III, a Delaware corporation, in its capacity as the depositor (the
"Depositor"), THE CIT GROUP/CONSUMER FINANCE, INC., a Delaware corporation ("CIT
Consumer Finance") in its capacities as the seller (in such capacity, the
"Seller") and as the master servicer (in such capacity, the "Master Servicer"),
[[CONDUIT SELLER], a ____________________ (the "Conduit Seller" and together
with Seller, the "Sellers")] and [TRUSTEE], a ____________________, in its
capacity as the trustee (the "Trustee").
WHEREAS, the Seller wishes to establish a trust and one or more subtrusts
and provide for the allocation and sale of the beneficial interests therein and
the maintenance and distribution of the trust estate;
WHEREAS, the Seller [and the Conduit Seller] wish[es] to sell to the
Depositor, the Depositor wishes to purchase from the Seller [and the Conduit
Seller] and to sell to the Trust, and the Trust wishes to purchase, the Mortgage
Loans;
WHEREAS, the Master Servicer has agreed to service the Mortgage Loans,
which constitute the principal assets of the trust estate;
WHEREAS, all things necessary to make the Certificates, when executed and
authenticated by the Trustee, valid instruments, and to make this Agreement a
valid agreement, in accordance with their and its terms, have been done; and
WHEREAS, [TRUSTEE] is willing to serve in the capacity of Trustee
hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Depositor, the Seller, [the Conduit Seller,] the Master
Servicer, and the Trustee hereby agree as follows:
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.
"Aggregate Certificate Principal Balance" means, as of any date of
determination, the sum of the Certificate Principal Balance of all Classes of
the [Offered Certificates (other than the [Class A-IO] Certificates)].
"Agreement" means this Pooling and Servicing Agreement.
"Applicants" has the meaning assigned in Section 9.06.
"Applied Realized Loss Amount" means the amount, on any Distribution Date
after taking into account all Realized Losses experienced during the prior Due
Period and after taking into account the distribution of principal with respect
to the Certificates (other than the [Class A-IO], [Class X-IO] and [Class R]
Certificates) on such Distribution Date, by which the Aggregate Certificate
Principal Balance after giving effect to all distributions on such Distribution
Date exceeds the aggregate Principal Balance of the Mortgage Loans as of the end
of the related Due Period.
"Authenticating Agent" means any authenticating agent appointed pursuant
to Section 9.07.
"Balloon Loan" means a Mortgage Loan the terms of which require payment of
a substantial portion of the original principal balance of such Mortgage Loan to
be due at or prior to maturity.
"Base Prospectus" means the Depositor's Prospectus dated _____ __, 200_
constituting part of its Registration Statement on Form S-3 (Registration No.
333-__________) under the Securities Act.
- 2 -
"Basic Principal Amount" means, with respect to the Mortgage Loans and
each Distribution Date, the sum of (without duplication):
(a) the principal portion of all scheduled monthly payments on the
Mortgage Loans actually received by the Master Servicer with respect to
the related Due Period and any Prepayments on the Mortgage Loans made by
the Mortgagors of Mortgage Loans and actually received by the Master
Servicer with respect to the related Due Period;
(b) the outstanding principal balance of each Mortgage Loan that was
purchased by the Master Servicer or repurchased by the Seller with respect
to the related Due Period;
(c) any Substitution Adjustment relating to principal delivered by
the Seller with respect to the related Due Period in connection with a
substitution of a Mortgage Loan;
(d) all Liquidation Proceeds actually collected by or on behalf of
the Master Servicer with respect to the Mortgage Loans with respect to the
related Due Period (to the extent the Liquidation Proceeds relate to
principal);
(e) the principal portion of the proceeds received by the Trustee
upon termination of the Trust; and
(f) [any amounts transferred from the Pre-Funding Account to the
Certificate Account pursuant to Section 5.05A(d) upon the end of the
Funding Period.]
"Book-Entry Certificate" means any [Offered Certificate] registered in the
name of the Depository or its nominee, ownership of which is reflected on the
books of the Depository or on the books of a person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such Depository). Notwithstanding the foregoing, no [Class R]
Certificate shall be a "Book-Entry Certificate" regardless of whether it is an
[Offered Certificate].
"Business Day" means any day other than (a) a Saturday or a Sunday or (b)
another day on which banking institutions or trust companies in the State of
Oklahoma, the State of New Jersey or the State of New York are authorized by
law, regulation or executive order to be closed.
"Certificate" means a Home Equity Loan Asset Backed Certificate Series
200_-_ executed and delivered by the Trustee substantially in the form of
[Exhibits A-1 through A-10, Exhibit B and Exhibit C].
"Certificate Account" means a separate trust account maintained in the
name of the Trust as an Eligible Account.
"Certificate Principal Balance" means, as of the Closing Date as to each
of the following Classes of [Offered Certificates], the principal balances
thereof, as follows:
- 3 -
[Class A-1] Certificates - $[_____]
[Class A-2] Certificates - $[_____]
[Class A-3] Certificates - $[_____]
[Class A-4] Certificates - $[_____]
[Class A-5] Certificates - $[_____]
[Class A-6] Certificates - $[_____]
[Class M-1] Certificates - $[_____]
[Class M-2] Certificates - $[_____]
[Class B] Certificates - $[_____]
As of any time of determination after the Closing Date, with respect to a
Class of [Offered Certificates (other than the [Class A-IO] Certificates)], the
Certificate Principal Balance of such Class as of the Closing Date less the
aggregate of all amounts actually distributed to such Class in reduction of such
Class's Certificate Principal Balance pursuant to Section 7.03 hereof on all
prior Distribution Dates and, in the case of any Class of Subordinate
Certificates, reduced by any Applied Realized Loss Amounts allocated to such
Class on prior Distribution Dates. (The [Class A-IO Certificates], the [Class
X-IO Certificates] and the [Class R] Certificates do not have a Certificate
Principal Balance.)
"Certificate Rate" means any of the [Class A-IO] Certificate Rate, the
[Class A-1] Certificate Rate, the [Class A-2] Certificate Rate, the [Class A-3]
Certificate Rate, the [Class A-4] Certificate Rate, the [Class A-5] Certificate
Rate, the [Class A-6] Certificate Rate, the [Class M-1] Certificate Rate, the
[Class M-2] Certificate Rate, the [Class B] Certificate Rate or the [Class X-IO]
Certificate Rate.
"Certificate Register" means the register maintained pursuant to Section
9.02.
"Certificate Registrar" means the registrar appointed pursuant to Section
9.02.
"Certificateholder" or "Holder" means the person who is the beneficial
owner of a Book-Entry Certificate or the person in whose name a Certificate is
registered on the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer or any
Affiliate of the Seller or the Master Servicer shall be deemed not to be
outstanding, and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite Percentage Interest necessary
to effect any such consent, request, waiver or demand has been obtained unless
all the Certificates are held by such Persons; provided, however, that in
determining whether the Trustee shall be protected in relying upon any such
consent, waiver, request or demand only Certificates which the Trustee knows to
be so owned shall be so disregarded.
"CIT" means CIT Group Inc., a Delaware corporation.
- 4 -
"CIT Consumer Finance" means The CIT Group/Consumer Finance, Inc., a
Delaware corporation, and its successors in interest as permitted hereunder.
"CITSF" means The CIT Group/Sales Financing Inc., a Delaware corporation,
and its successors in interest as permitted hereunder.
"Class" means either any class of the [Offered Certificates] or the [Class
X-IO] Certificates or the [Class R] Certificates, or, collectively, all of the
Lower Tier Interests, as the case may be, bearing the same alphabetical and, if
applicable, numerical class designation.
["[Class A-IO] Certificate" means any one of the Certificates designated
on the face thereof as a [Class A-IO] Certificate, substantially in the form
annexed hereto as [Exhibit A-IO] authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and each evidencing
beneficial ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC Provisions.]
["[Class A-IO] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-IO] Certificates, [___]% per annum.]
["[Class A-1] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-1] Certificate, substantially in the form annexed
hereto as [Exhibit A-1] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-1] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-1] Certificates, the lesser of (A) the sum of (1)
One-Month LIBOR and (2) [___]% per annum and (B) the Net WAC Cap for the
Distribution Date.]
["[Class A-2] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-2] Certificate, substantially in the form annexed
hereto as [Exhibit A-2] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-2] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-2] Certificates, [___]% per annum.]
["[Class A-3] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-3] Certificate, substantially in the form annexed
hereto as [Exhibit A-3] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-3] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-3] Certificates, [___]% per annum.]
- 5 -
["[Class A-4] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-4] Certificate, substantially in the form annexed
hereto as [Exhibit A-4] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-4] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-4] Certificates, the lesser of (A) [___]% per annum (or
[___]% per annum for each Interest Period occurring after the Master Servicer
first fails to exercise its clean-up call option) and (B) the Net WAC Cap for
the Distribution Date.]
["[Class A-5] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-5] Certificate, substantially in the form annexed
hereto as [Exhibit A-5] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-5] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-5] Certificates, the lesser of (A) [___]% per annum (or
[___]% per annum for each Interest Period occurring after the Master Servicer
first fails to exercise its clean-up call option) and (B) the Net WAC Cap for
the Distribution Date.]
["[Class A-6] Calculation Percentage" means, with respect to any
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Certificate Principal Balance of the [Class A-6] Certificates and
the denominator of which is the total of the Certificate Principal Balances of
the Senior Certificates (other than the [Class A-IO] Certificates), in each case
before giving effect to distributions of principal on that Distribution Date.]
["[Class A-6] Certificate" means any one of the Certificates designated on
the face thereof as a [Class A-6] Certificate, substantially in the form annexed
hereto as [Exhibit A-6] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class A-6] Certificate Rate" means, with respect to any Distribution
Date and the [Class A-6] Certificates, the lesser of (A) [___]% per annum (or
[___]% per annum for each Interest Period occurring after the Master Servicer
first fails to exercise its clean-up call option) and (B) the Net WAC Cap for
the Distribution Date.]
["[Class A-6] Lockout Distribution Amount" means, with respect to any
Distribution Date, an amount equal to the product of (1) the applicable [Class
A-6] Lockout Percentage for the Distribution Date, (2) the [Class A-6]
Calculation Percentage and (3) the Senior Principal Distribution Amount for such
Distribution Date. In no event shall the [Class A-6] Lockout Distribution Amount
exceed the outstanding Certificate Principal Balance of the [Class A-6]
Certificates.]
- 6 -
["[Class A-6] Lockout Percentage" for each Distribution Date will be as
follows:]
Distribution Date Lockout Percentage
----------------- ------------------
_____ 20__ through _____ 20__ [___]%
_____ 20__ through _____ 20__ [___]%
_____ 20__ through _____ 20__ [___]%
_____ 20__ through _____ 20__ [___]%
_____ 20__ and thereafter [___]%
["[Class B] Certificate" means any one of the Certificates designated on
the face thereof as a [Class B] Certificate, substantially in the form annexed
hereto as [Exhibit A-9] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class B] Certificate Rate" means with respect to any Distribution Date
and the [Class B] Certificates, the lesser of (A) [___]% per annum (or [___]%
per annum for each Interest Period occurring after the Master Servicer first
fails to exercise its clean-up call option) and (B) the Net WAC Cap for the
Distribution Date.]
["[Class B] Principal Distribution Amount" means, with respect to any
Distribution Date on or after the Stepdown Date and so long as a Trigger Event
is not in effect, an amount equal to the excess of (1) the sum of (A) the
aggregate Certificate Principal Balance of the Senior Certificates (other than
the [Class A-IO] Certificates) (after giving effect to the distribution of the
Senior Principal Distribution Amount on such Distribution Date), (B) the
Certificate Principal Balance of the [Class M-1] Certificates (after giving
effect to the distribution of the [Class M-1] Principal Distribution Amount on
such Distribution Date), (C) the Certificate Principal Balance of the [Class
M-2] Certificates (after giving effect to the distribution of the [Class M-2]
Principal Distribution Amount on such Distribution Date) and (D) the Certificate
Principal Balance of the [Class B] Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) [___]% of the sum of the aggregate
of the Loan Balances of the Mortgage Loans and the Pre-Funded Amount as of the
last day of the related Due Period and (B) the sum of the aggregate of the Loan
Balances of the Mortgage Loans and the Pre-Funded Amount as of the last day of
the related Due Period minus the OC Floor; provided, however, that after the
Certificate Principal Balances of the Senior (other than the [Class A-IO]),
[Class M-1] and [Class M-2] Certificates are reduced to zero, the [Class B]
Principal Distribution Amount for such Distribution Date will equal 100% of the
Principal Distribution Amount.]
["Class Interest Carryover Shortfall" means as to any Class of [Offered
Certificates] and any Distribution Date, an amount equal to the sum of (i) the
excess of the Class
- 7 -
Monthly Interest Amount for the preceding Distribution Date and any outstanding
Class Interest Carryover Shortfall with respect to such Class on any preceding
Distribution Date, over the amount in respect of interest that is actually
distributed to the Holders of such Class on such preceding Distribution Date
plus (ii) one month's interest on such excess, to the extent permitted by law,
at the related Certificate Rate.]
["[Class M-1] Certificate" means any one of the Certificates designated on
the face thereof as a [Class M-1] Certificate, substantially in the form annexed
hereto as [Exhibit A-7] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class M-1] Certificate Rate" means with respect to any Distribution
Date and the [Class M-1] Certificates, the lesser of (A) [___]% per annum (or
[___]% per annum for each Interest Period occurring after the Master Servicer
first fails to exercise its clean-up call option) and (B) the Net WAC Cap for
the Distribution Date.]
["[Class M-1] Principal Distribution Amount" means, with respect to any
Distribution Date on or after the Stepdown Date, (x) 100% of the Principal
Distribution Amount if the Certificate Principal Balance of each Class of Senior
Certificates, other than the [Class A-IO] Certificates, has been reduced to zero
and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the
excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the
Senior Certificates, other than the [Class A-IO] Certificates (after giving
effect to distributions of the Senior Principal Distribution Amount for such
Distribution Date) and (B) the Certificate Principal Balance of the [Class M-1]
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) [___]% of the sum of the aggregate of the Loan Balances of all Mortgage
Loans and the Pre-Funded Amount as of the last day of the related Due Period and
(B) the sum of the aggregate of the Loan Balances of all Mortgage Loans and the
Pre-Funded Amount as of the last day of the related Due Period minus the OC
Floor.]
["[Class M-2] Certificate" means any one of the Certificates designated on
the face thereof as a [Class M-2] Certificate, substantially in the form annexed
hereto as [Exhibit A-8] authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing beneficial
ownership of an interest designated as a "regular interest" in the Master
REMIC.]
["[Class M-2] Certificate Rate" means with respect to any Distribution
Date and the [Class M-2] Certificates, the lesser of (A) [___]% per annum (or
[___]% per annum for each Interest Period occurring after the Master Servicer
first fails to exercise its clean-up call option) and (B) the Net WAC Cap for
the Distribution Date.]
["[Class M-2] Principal Distribution Amount" means, with respect to any
Distribution Date on or after the Stepdown Date, (x) 100% of the Principal
Distribution Amount if the aggregate Certificate Principal Balance of each of
the Senior Certificates, other than the [Class A-IO] Certificates, and the
[Class M-1] Certificates has been reduced to zero and a Trigger Event exists, or
(y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the
aggregate Certificate Principal Balance of the Senior Certificates, other than
the [Class A-IO]
- 8 -
Certificates (after giving effect to distributions of the Senior Principal
Distribution Amount for such Distribution Date), (B) the Certificate Principal
Balance of the [Class M-1] Certificates (after giving effect to distribution of
the [Class M-1] Principal Distribution Amount for such Distribution Date) and
(C) the Certificate Principal Balance of the [Class M-2] Certificates
immediately prior to such Distribution Date over (2) the lesser of [___]% of the
sum of the aggregate of the Loan Balances of all Mortgage Loans and the
Pre-Funded Amount as of the last day of the related Due Period and (B) the sum
of the aggregate of the Loan Balances of all Mortgage Loans and the Pre-Funded
Amount as of the last day of the related Due Period minus the OC Floor.]
["Class Monthly Interest Amount" means, with respect to any Distribution
Date and any Class of [Offered Certificates], the aggregate amount of interest
accrued during the related Interest Period at the related Certificate Rate on
the Certificate Principal Balance [or Notional Amount (in the case of the [Class
A-IO] Certificates)] of the Class of [Offered Certificates].]
["Class Principal Carryover Shortfall" means, as to any Class of
Subordinate Certificates and any Distribution Date, the excess, if any, of (i)
the sum of (x) the amount of the reduction in the Certificate Principal Balance
of that Class of Subordinate Certificates on such Distribution Date as a result
of the application of Applied Realized Loss Amounts and (y) the amount of such
reductions on prior Distribution Dates over (ii) the amount distributed in
respect of the Class Principal Carryover Shortfall to such Class of Subordinate
Certificates on prior Distribution Dates.]
"[Class R] Certificate" means any one of the Certificates designated on
the face thereof as a [Class R] Certificate, substantially in the form annexed
hereto as [Exhibit C], authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein. [For the purposes of the REMIC
Provisions, the [Class R] Certificate shall evidence beneficial ownership of (i)
an interest designated as the Class LT1-R Interest which is the "residual
interest" in REMIC I, (ii) an interest designated as the Class LT2-R Interest
which is the "residual interest" in REMIC II, (iii) an interest designated as
the Class LT3-R Interest which is the "residual interest" in REMIC III and (iv)
an interest designated as the Class MT-R Interest which is the "residual
interest" in the Master REMIC.]
["[Class X-IO] Certificate" means any one of the Certificates designated
on the face thereof as a [Class X-IO] Certificate, substantially in the form
annexed hereto as [Exhibit B], authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein, and evidencing
beneficial ownership of an interest designated as a "regular interest" in the
Master REMIC.]
["[Class X-IO] Certificate Rate" has the meaning specified in footnote 3
under the heading "Master REMIC" in Section 2.07 of this Agreement.]
["[Class X-IO] Distribution Amount" means the amount available for
distribution on each Distribution Date in excess of the amount due the [Offered
Certificates] (exclusive of any amount distributable to such classes
representing REMIC Net WAC Cap Carryover). The aggregate amount of [Class X-IO]
Distribution Amounts, however, cannot exceed the sum of (i)
- 9 -
the amount of interest currently accruing on the [Class X-IO], (ii) the amount
of interest previously accrued on the [Class X-IO] Interest issued by the Master
REMIC, (iii) the amount, if any, the sum of (a) the Initial Cut-off Date Pool
Principal Balance and (b) the Original Pre-funded Amount exceeds the aggregate
of Initial Principal Balances of the [Offered Certificates], and (iv) amounts
due the Class LTIII-PF-IO Interest issued by REMIC III. For the purpose of this
limitation, any amount of REMIC Net WAC Cap Carryover paid to the [Offered
Certificates] is treated as a Distribution on the [Class X-IO].]
["[Class X-IO] Initial Principal Balance" means an amount equal to the
initial Overcollateralization Amount as of the Closing Date. The [Class X-IO]
Certificates shall not accrue interest on this balance.]
"Clean-up Call Date" has the meaning assigned in Section 8.03.
"Closing Date" means _____ __, 200_.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Loan-to-Value Ratio" means, with respect to any Mortgage Loan at
any given time, the ratio, expressed as a percentage, determined by dividing (x)
the sum of the original Principal Balance of the Mortgage Loan plus the
then-current Principal Balance of any loan or loans secured by a senior lien on
the Mortgaged Property by (y) the value of the related Mortgaged Property, based
upon the appraisal or other valuation made at the time of origination of the
Mortgage Loan.
"Commission" means the United States Securities and Exchange Commission.
"Compensating Interest" has the meaning assigned in Section 8.04.
"Computer Tape" means the computer tape generated by the Master Servicer
which provides information relating to the Mortgage Loans, and includes the
master file.
["Conduit Mortgage Loans" means the mortgage loans listed on the Conduit
Schedule of Mortgage Loans.]
["Conduit Schedule of Mortgage Loans" means the Schedule of Mortgage Loans
attached as Schedule E-4 hereto.]
["Conduit Seller" means [CONDUIT SELLER], a ____________________ company.]
"Confirmatory Note" has the meaning assigned in Section 4.01(a).
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Agreement is located at the
address set forth in Section 12.09.
"Coupon Rate" means the rate of interest borne by each Note from time to
time.
- 10 -
["Cumulative Loss Trigger Event" means, with respect to any Distribution
Date and the Mortgage Loans, that the fraction, expressed as a percentage,
obtained by dividing (x) the aggregate amount of cumulative Realized Losses
incurred on the Mortgage Loans from the Initial Cut-Off Date through the last
day of the related Due Period by (y) the sum of the aggregate principal balance
of the Mortgage Loans as of the Initial Cut-Off Date plus the Original
Pre-Funded Amount, exceeds the applicable percentages described below with
respect to such Distribution Date:]
Distribution Date Loss Percentage
------------------------ --------------------------------------------------
____ 20__-_____ 20__ [__]% for _____ 20__, plus an additional 1/12th of
[__]% for each month thereafter through _____ 20__.
____ 20__-_____ 20__ [__]% for _____ 20__, plus an additional 1/12th of
[__]% for each month thereafter through _____ 20__.
____ 20__-_____ 20__ [__]% for _____ 20__, plus an additional 1/12th of
[__]% for each month thereafter through _____ 20__.
____ 20__ and thereafter [__]%
["Cumulative Realized Loss Termination Event" shall occur on any
Distribution Date if the aggregate amount of Cumulative Realized Losses with
respect to the Mortgage Loans, incurred from the Cut-Off Date through the last
day of the related Due Period, exceeds [___]% of the sum of (i) the aggregate
Principal Balance of the Mortgage Loans as of the Initial Cut-Off Date and (ii)
the Original Pre-Funded Amount.]
["Cumulative Realized Losses" means, as of any date of determination, the
aggregate amount of Realized Losses (net of any subsequent recoveries) with
respect to the Mortgage Loans.]
"Custodial Agreement" means the Custodial Agreement, dated as of _____ __,
200_, by and among [TRUSTEE], as Trustee, The CIT Group Securitization
Corporation III, as Depositor, [[CONDUIT SELLER], as Conduit Seller,] The CIT
Group/Consumer Finance, Inc., as Seller and Master Servicer, and [CUSTODIAN], as
Custodian.
"Custodian" means, [CUSTODIAN], as custodian pursuant to the Custodial
Agreement, or such other custodian appointed by the Master Servicer and the
Trustee pursuant thereto.
["Cut-Off Date" means, with respect to the Initial Mortgage Loans, the
Initial Cut-Off Date or, with respect to the Subsequent Mortgage Loans, the
Subsequent Cut-Off Date.]
"Definitive Certificates" has the meaning assigned in Section 9.02(g).
["Delayed Delivery Mortgage Loans" means the Initial Mortgage Loans for
which all or a portion of a related File is not delivered to the Trustee or the
Custodian on behalf of the
- 11 -
Trustee on the Closing Date. The number of Delayed Delivery Mortgage Loans shall
not exceed [___]% of the aggregate Loan Balance of the Initial Mortgage Loans as
of the Initial Cut-Off Date. To the extent that CIT Consumer Finance shall be in
possession of any Files with respect to any Delayed Delivery Mortgage Loan,
until delivery of such File to the Trustee or the Custodian on behalf of the
Trustee as provided in Section 4.01, CIT Consumer Finance shall hold such files
as Master Servicer hereunder, as agent and in trust for the Trustee.]
"Deleted Mortgage Loan" has the meaning assigned in Section 4.03.
["Delinquency Event" shall have occurred at any time that the 60+
Delinquency Percentage (Rolling Three Month) exceeds [___]% of the Senior
Enhancement Percentage.]
"Delinquent" means, with respect to any Mortgage Loan, that any payment
or, in the case of partial payment an amount greater than $[_____] of any
payment, due on such Mortgage Loan is not made by the Mortgagor by the close of
business on the scheduled Due Date for such payment. A Mortgage Loan is "30 days
Delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month) then on the last day of such immediately succeeding month.
Similarly for "60 days Delinquent," "90 days Delinquent" and so on.
"Depositor" means The CIT Group Securitization Corporation III, a Delaware
corporation, or any successor thereto.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is CEDE & CO., and any permitted successor depository. The
Depository shall at all times be a "clearing corporation" defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the third Business Day prior to each
Distribution Date.
"Direct Participant" or "DTC Participant" means any broker-dealer, bank or
other financial institution for which the Depository holds [Offered
Certificates] from time to time as a securities depository.
"Disqualified Organization" means the meaning set forth from time to time
in the definition thereof at Section 860E(e)(5) of the Code (or any successor
statute thereto) and applicable to the Trust.
- 12 -
"Distribution Date" means the [20]th day of each calendar month during the
term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in _____ 200_.
"Due Date" means, as to any Mortgage Loan, the date of the month on which
the monthly payment for such Mortgage Loan is due.
"Due Period" means, as to any Distribution Date, the calendar month
immediately preceding the month of such Distribution Date.
"Electronic Ledger" means the electronic master record of mortgage loans
of the Master Servicer.
"Eligible Account" means any account which is (i) an account maintained
with an Eligible Institution; (ii) an account or accounts the deposits in which
are fully insured by either the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC; (iii) a "segregated trust account" maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Trustee, which depository institution or trust
company has capital and surplus (or, if such depository institution or trust
company is a subsidiary of a bank holding company system, the capital and
surplus of the bank holding company) of not less than $50,000,000 and the
securities of such depository institution (or, if such depository institution is
a subsidiary of a bank holding company system and such depository institution's
securities are not rated, the securities of the bank holding company) have a
credit rating from each Rating Agency in one of its generic credit rating
categories which signifies investment grade; or (iv) an account that will not
cause any Rating Agency to downgrade or withdraw its then-current rating
assigned to the Certificates, as confirmed in writing by each Rating Agency.
"Eligible Institution" means the Trustee or any depository institution or
trust company (which may be the Trustee or an Affiliate of the Trustee)
organized under the laws of the United States or any state, the deposits of
which are insured to the full extent permitted by law by the Bank Insurance Fund
(presently administered by the Federal Deposit Insurance Corporation), which is
subject to supervision and examination by federal or state authorities and whose
short-term deposits have been rated P-1 or higher by Moody's and A-1 or higher
by Standard & Poor's or such other rating acceptable to the Rating Agencies.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means (A) any Person which, together with its
Affiliates (i) is qualified to act as Master Servicer of the Mortgage Loans
under applicable federal and state laws and regulations and (ii) services not
less than $100,000,000 in outstanding principal amount of residential mortgage
loans and has a net worth of at least $15,000,000, (B) CIT Consumer Finance and
(C) CITSF.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
- 13 -
"Event of Termination" has the meaning assigned in Section 7.01.
["Excess Interest" means, as to any Distribution Date, the sum of (A) the
interest amounts remaining, if any, after the application of payments pursuant
to clauses 1 through 5 of clause A. of Section 8.01(c) and (B) the Excess
Overcollateralization Amount (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date).]
["Excess Overcollateralization Amount" means, as to any Distribution Date,
the lesser of (i) the Basic Principal Amount for such Distribution Date and (ii)
the excess, if any, of (x) the Overcollateralization Amount (assuming 100% of
the related Basic Principal Amount is distributed on the [Offered Certificates])
over (y) the Required Overcollateralization Amount.]
"File" means, as to each Mortgage Loan (a) the original Note (b) the
original Mortgage with evidence of recording indicated thereon, (c) assignments
of the related Mortgage in recordable form and, if applicable, (d) any riders or
modifications of such Note and Mortgage, (e) any title insurance policies (which
may be evidenced in the file by binders, title commitments, title reports or
other indicia of title insurance provided by the title insurance company) with
respect to the Mortgages and (f) any assumption or modification agreement.
"Final Distribution Date" means the Distribution Date on which the final
distribution in respect of Certificates is made pursuant to Section 12.03.
["Fixed Rate Certificates" means the [Class A-2] Certificates, the [Class
A-3] Certificates, the [Class A-4] Certificates, the [Class A-5] Certificates,
the [Class A-6] Certificates, the [Class A-IO] Certificates, the [Class M-1]
Certificates, the [Class M-2] Certificates and the [Class B] Certificates.]
["Funding Period" means the period from the Closing Date until the
earliest to occur of (a) the date on which the amount on deposit in the
pre-funding account (excluding investment earnings) is less than $[_____], (b)
the close of business on _____ __, 200_ or (c) the Business Day immediately
preceding the Distribution Date on which the Net WAC Cap, exclusive of any
investment earnings included in the calculation thereof, is less than [___]% as
of the beginning of the month in which such Distribution Date occurs.]
"Hazard Insurance Policy" means, with respect to each Mortgage Loan, the
policy of fire and extended coverage insurance (and federal flood insurance, if
the related Mortgaged Property was, according to the related appraisal, located
in a federally designated special flood hazard area) required to be maintained
for the related Mortgaged Property, as provided in Section 5.09, and which, as
provided in said Section 5.09, may be a blanket policy maintained by the Master
Servicer in accordance with the terms and conditions of said Section 5.09.
"Holder" has the same meaning as "Certificateholder."
"Independent" means, with respect to any specified Person, any person or
firm rendering an opinion on the Closing Date or any Person who (a) is in fact
independent of the specified Person, (b) does not have any direct financial
interest or any material indirect financial interest in the specified Person or
any Affiliate of the specified Person (other than acting as
- 14 -
outside counsel for the specified Person or such Affiliate), and (c) is not
connected with the specified Person as an officer, employee, promoter,
underwriter, trustee, partner, director (other than a law firm a member of which
is a director) or person performing similar functions. Except with respect to
any person or firm rendering an opinion on the Closing Date, whenever it is
herein provided that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such person shall be approved by the Trustee and such
opinion or certificate shall state that the signer has read this definition and
that the signer is independent within the meaning hereof.
["Initial Cut-Off Date" means, with respect to the Initial Mortgage Loans,
the opening of business on _____ __, 200_.]
["Initial Cut-Off Date Pool Principal Balance" means the aggregate of the
Principal Balances of the Mortgage Loans as of the Initial Cut-Off Date.]
["Initial Mortgage Loan(s)" means one or more of the mortgage loans
described in the List of Initial Mortgage Loans, and which Mortgage Loans are to
be assigned by the Depositor to the Trust on the Closing Date; including,
without limitation, the Mortgage, collateral, liens, insurance policies and
guarantees of the obligations of the related Mortgage (other than guarantees, if
any, by the related broker) and any and all payments which are received pursuant
thereto on and after the Cut-Off Date, but excluding any payments which are
received pursuant thereto prior to the Cut-Off Date.]
["Initial Mortgage Loan Assets" has the meaning given to such term in
Section 2.02 hereof.]
["Initial Seller Mortgage Loans" means the mortgage loans listed on the
Seller Schedule of Initial Mortgage Loans.]
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract relating to a Mortgage Loan.
"Interest Determination Date" has the meaning assigned in Section 5.12.
["Interest Period" means the period for which interest on the outstanding
Certificate Principal Balance of each Class of [Offered Certificates] is
payable. Such period shall be [(i) in the case of the Fixed Rate Certificates
[and each Lower Tier Interest], the period from the first day of the calendar
month preceding the month of the Distribution Date through the last day of such
calendar month, with interest accruing on the basis of a 360-day year consisting
of twelve 30-day months;] [and (ii) in the case of the Variable Rate
Certificates, the period from the preceding Distribution Date to and including
the date prior to the current Distribution Date (or, in the case of the initial
Distribution Date, from the Closing Date to and including the date prior to the
initial Distribution Date) with interest accruing on the basis of the actual
number of days elapsed in the related Interest Period and a year of 360 days].]
- 15 -
["Investment Earnings" means investment earnings on the Pre-Funded Amount
deposited in the Pre-Funding Account pursuant to Section 5.05A, net of losses
and investment expenses.]
["Latest Possible Maturity Date" means the Distribution Date that as of
the Closing Date is three years after the scheduled maturity date of the Initial
Mortgage Loan with the latest scheduled maturity and such date shall not be
affected by when the Trust ceases to hold such Initial Mortgage Loan.]
"Liquidated Mortgage" means any Mortgage Loan as to which the Master
Servicer has determined that all amounts (including Liquidation Proceeds and
Insurance Proceeds) which it expects to recover from or on account of such
Mortgage Loan have been recovered; provided that any Mortgage Loan in respect of
which the related Mortgaged Property has been realized upon and disposed of and
the proceeds of such disposition have been received shall be deemed to be a
Liquidated Mortgage; provided, however, that a Liquidated Mortgage which has
been repurchased pursuant to Section 3.05(a) or 4.03(a) or as to which a
Qualified Substitute Mortgage Loan has been substituted pursuant to Section
3.05(b) or 4.03(b), in either case on or before the Business Day immediately
preceding the Distribution Date following the Due Period in which such Mortgage
Loan becomes a Liquidated Mortgage, shall be deemed not to have become a
Liquidated Mortgage during such Due Period. The Principal Balance of any
Liquidated Mortgage is zero.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Master Servicer in connection with
the Liquidated Mortgages, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including Insurance Proceeds) received
and retained in connection with Liquidated Mortgages, by foreclosure sale or
otherwise, net of Liquidation Expenses and net of any insurance premiums paid by
the Master Servicer pursuant to Section 5.09(a).
["List of Initial Mortgage Loans" means the list attached hereto as
[Exhibit D] identifying each Initial Mortgage Loan constituting part of the
corpus of the Trust.]
["List of Subsequent Mortgage Loans" means, with respect to the sale of
any Subsequent Mortgage Loans by the Depositor to the Trust pursuant to a
Subsequent Transfer Agreement, the list attached to such Subsequent Transfer
Agreement identifying each Subsequent Mortgage Loan which, upon the execution
and delivery of such Subsequent Transfer Agreement, will constitute part of the
corpus of the Trust.]
"Loan Balance" means, with respect to each Mortgage Loan and any date of
determination, the actual outstanding Principal Balance thereof on the related
Cut-Off Date or relevant cut-off date with respect to a Qualified Substitute
Mortgage Loan, less any principal payments relating to such Mortgage Loan
included in previous Monthly Remittance Amounts; provided, however, that the
Loan Balance for any Mortgage Loan that has become a Liquidated
- 16 -
Mortgage shall be zero as of the first day of the Due Period following the Due
Period in which such Mortgage Loan becomes a Liquidated Mortgage, and at all
times thereafter.
"Lower Tier Interests" means [ o ].
["Master REMIC" means the REMIC identified as the Master REMIC in Section
2.07.]
"Master Servicer" means CIT Consumer Finance until any Service Transfer
hereunder, and thereafter means the new servicer appointed pursuant to Article
VII.
"Master Servicing Fee" means, as to any Distribution Date, the sum of (a)
the Monthly Servicing Fee for such Distribution Date, (b) any net investment
earnings due to the Master Servicer as of such Distribution Date and (c) any
Mortgage Fees collected by the Master Servicer with respect to the related Due
Period.
"Monthly Advance" has the meaning assigned in Section 8.04.
"Monthly Interest Amount" means, with respect to any Distribution Date,
(A) the sum, without duplication, of clauses (i) through (v) of part (A) of the
definition of Monthly Remittance Amount; minus (B) any amounts netted from the
foregoing or withdrawn from the Certificate Account by or at the direction of
the Master Servicer as permitted by this Agreement.
"Monthly Remittance Amount" means, with respect to any Distribution Date,
(A) the sum, without duplication, of (i) all interest received (including any
related Monthly Advances) with respect to the related Due Period and the
Mortgage Loans (net of the related Master Servicing Fee paid by the Master
Servicer), (ii) all Compensating Interest paid by the Master Servicer with
respect to the related Due Period, (iii) the portion of the Purchase Price
amounts, and Substitution Adjustment relating to interest on the Mortgage Loans
paid by CIT Consumer Finance or the Master Servicer with respect to the related
Due Period, (iv) the interest portion of all Liquidation Proceeds actually
collected by the Master Servicer with respect to the related Due Period and the
Mortgage Loans, [(v) the Pre-Funding Earnings received with respect to the
related Due Period,] (vi) the principal actually collected by the Master
Servicer with respect to the related Due Period and the Mortgage Loans, (vii)
the outstanding principal balance of each Mortgage Loan that was purchased from
the Trustee with respect to the related Due Period, (viii) any Substitution
Adjustment relating to principal delivered by CIT Consumer Finance in connection
with a substitution of a Mortgage Loan with respect to the related Due Period,
(ix) the principal portion of all Liquidation Proceeds actually collected by the
Master Servicer with respect to the related Due Period and Mortgage Loans and
(x) the amount of investment losses required to be deposited pursuant to Section
5.05(b); minus (B) any amounts netted from the foregoing or withdrawn from the
Certificate Account by or at the direction of the Master Servicer as permitted
by this Agreement.
"Monthly Report" has the meaning assigned in Section 6.01.
["Monthly Servicing Fee" means, as to any Distribution Date, one twelfth
of the product of [___]% and the aggregate of the Loan Balances of all Mortgage
Loans as of the first
- 17 -
day of the related Due Period (or, in the case of the first Distribution Date,
the Initial Cut-Off Date).]
["Moody's" means Xxxxx'x Investors Service, Inc.]
"Mortgage" means the mortgage, deed of trust or similar instrument
creating a lien on an estate in fee simple in the real property securing a
Mortgage Loan.
"Mortgage Document" has the meaning assigned in Section 4.01(a).
"Mortgage Fees" means late fees, prepayment fees and other similar fees
relating to the Mortgage Loans.
["Mortgage Loan(s)" means one or more of the Initial Mortgage Loans and/or
Subsequent Mortgage Loans.]
["Mortgage Loan Assets" means the Initial Mortgage Loan Assets and the
Subsequent Mortgage Loan Assets.]
"Mortgage Pool" means the pool of Mortgage Loans assigned by the Depositor
to the Trust on the Closing Date [and on any Subsequent Transfer Date].
"Mortgage Rate" means, with respect to any particular Mortgage Loan, the
rate of interest specified in that Mortgage Loan adjusted to reflect a 30 day
month, 360 day year for any loan that uses another day count convention for
purposes of accruing interest.
"Mortgaged Property" means the property subject to a Mortgage.
"Mortgagor" means each Person who is indebted under a Mortgage Loan.
"Net Mortgage Rate" means, for each Mortgage Loan, (x) the Mortgage Rate
in effect for such Mortgage Loan as of the first day of the related Due Period,
minus (y) the Monthly Servicing Fee for such Mortgage Loan.
["Net WAC Cap" means, with respect to any Distribution Date and (A) the
[Class A-4], [Class A-5], [Class A-6], [Class M-1], [Class M-2] and [Class B]
Certificates, a rate per annum equal to the sum of (i) a fraction, expressed as
a percentage, the numerator of which is equal to the product of (a) the
aggregate Loan Balance of the Mortgage Loans as of the beginning of the related
Due Period and (b) the weighted average of the Net Coupon Rates on the Mortgage
Loans as of the beginning of the related Due Period, and the denominator of
which is equal to the sum of (a) the aggregate Loan Balance of the Mortgage
Loans plus (b) the amounts on deposit in the Pre-Funding Account, each as of the
first day of the related Due Period, plus (ii) a fraction, expressed as a
percentage, the numerator of which is equal to the product of (a) 12 and (b)
Pre-Funding Earnings for the Distribution Date, and the denominator of which is
equal to the sum of (a) the aggregate Loan Balance of the Mortgage Loans plus
(b) the amounts on deposit in the Pre-Funding Account, each as of the first day
of the related Due Period, minus (iii) a fraction, expressed as a percentage,
the numerator of which is the product of (a) [___]% and (b) the Notional Amount
of the [Class A-IO] Certificates for such Distribution
- 18 -
Date, and the denominator of which is equal to the sum of (a) the aggregate Loan
Balance of the Mortgage Loans plus (b) the amounts on deposit in the Pre-Funding
Account, each as of the first day of the related Due Period, and (B) the [Class
A-1] Certificates, a rate per annum equal to the product of (x) the sum of (i) a
fraction, expressed as a percentage, the numerator of which is equal to the
product of (a) the aggregate Loan Balance of the Mortgage Loans as of the
beginning of the related Due Period and (b) the weighted average of the Net
Coupon Rates on the Mortgage Loans as of the beginning of the related Due
Period, and the denominator of which is equal to the sum of (a) the aggregate
Loan Balance of the Mortgage Loans plus (b) the amounts on deposit in the
Pre-Funding Account, each as of the first day of the related Due Period, plus
(ii) a fraction, expressed as a percentage, the numerator of which is equal to
the product of (a) 12 and (b) the Pre-Funding Earnings for the Distribution
Date, and the denominator of which is equal to the sum of (a) the aggregate Loan
Balance of the Mortgage Loans plus (b) the amounts on deposit in the Pre-Funding
Account, each as of the first day of the related Due Period, minus (iii) a
fraction, expressed as a percentage, the numerator of which is the product of
(a) [___]% and (b) the Notional Amount of the [Class A-IO] Certificates for such
Distribution Date, and the denominator of which is equal to the sum of (a) the
aggregate Loan Balance of the Mortgage Loans plus (b) the amounts on deposit in
the Pre-Funding Account, each as of the first day of the related Due Period, and
(y) a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the related Due Period.]
["Net WAC Cap Carryover" means, with respect to any Distribution Date and
any of the [Class A-1] Certificates, [Class A-4] Certificates, [Class A-5]
Certificates, [Class A-6] Certificates, [Class M-1] Certificates, [Class M-2]
Certificates and [Class B] Certificates, the sum of (A) the excess of (1) the
amount of interest that any such Class of Certificates, as applicable, would
otherwise be entitled to receive on the Distribution Date had the Certificate
Rate for such [Class B]een calculated at the Certificate Rate for such Class and
Distribution Date without regard to the Net WAC Cap over (2) the amount of
interest payable on such Class at the respective Certificate Rate for such Class
for the Distribution Date and (B) the excess described in clause (A) for such
Class for all previous Distribution Dates (including any interest accrued on
that amount at the related Certificate Rate without regard to the Net WAC Cap)
not previously paid to such Class.]
"New Lease" means [ o ].
"Nonrecoverable Advance" means any advance made or proposed to be made
pursuant to Section 8.04, which the Master Servicer believes, in its good faith
judgment, is not, or if made would not be, ultimately recoverable from future
payments and collections of the related Mortgage Loan.
"Note" means the promissory note evidencing the indebtedness of a
Mortgagor under a Mortgage Loan.
["Notional Amount" means, with respect to the [Class A-IO] Certificates,
for any Distribution Date prior to the [___]th Distribution Date, the lesser of
(i) the sum of the aggregate Loan Balance of the Mortgage Loans and amounts
remaining on deposit in the Pre-Funding Account as of the beginning of the
related Due Period and (ii) the scheduled notional amount for such Distribution
Date set forth in the following schedule:]
- 19 -
Distribution Date Notional Amount
----------------- ---------------
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
_____ __, 200_ $[_____]
On and after the [___]th Distribution Date, the Notional Amount of the [Class
A-IO] Certificates will be zero.
"NRSRO" means any nationally recognized statistical rating organization.
["OC Floor" means an amount equal to [___]% of the sum of (1) the
aggregate of the Loan Balances of all Mortgage Loans as of the Initial Cut-Off
Date and (2) the Original Pre-Funded Amount.]
["OC Holiday Realized Loss Amount" means, with respect to the first three
Distribution Dates, to the extent of Excess Interest for such Distribution Date,
an amount equal to the amount of any Realized Losses that would otherwise be
allocated to the [Class M-1], [Class M-2] and [Class B] Certificates on such
Distribution Date.]
["OC Spread Holiday" means the period from and including the Closing Date
through and including the Distribution Date in _____ 200_.]
["Offered Certificate" means any one of the [Class A-1] Certificates, the
[Class A-IO] Certificates, the [Class A-2] Certificates, the [Class A-3]
Certificates, the [Class A-4] Certificates, the [Class A-5] Certificates, the
[Class A-6] Certificates, the [Class M-1] Certificates, the [Class M-2]
Certificates and the [Class B] Certificates.]
"Officer's Certificate" means a certificate signed by the chairman of the
board, president or any vice president of the Master Servicer and delivered to
the Trustee.
["One-Month LIBOR" has the meaning assigned in Section 5.12.]
"Opinion of Counsel" means a written opinion of counsel (internal or
external) who may be counsel for the Master Servicer, [except that any opinion
of counsel relating to the
- 20 -
qualification of any of the REMICs as a REMIC or compliance with the REMIC
Provisions must be an opinion of counsel Independent with respect to the
Depositor and the Master Servicer].
["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
Certificates, which amount is $[_____].]
"Outstanding Mortgage Loan" means, as to any Due Period, a Mortgage Loan
which was not the subject of a Principal Prepayment or was not fully paid prior
to or during such Due Period, which did not become a Liquidated Mortgage prior
to or during such Due Period, and which was not purchased (and did not become a
Deleted Mortgage Loan or a Replaced Mortgage Loan) prior to or with respect to
such Due Period pursuant to Section 3.05, Section 5.14 or Section 4.03.
["Overcollateralization Amount" means, with respect to any Distribution
Date, the excess, if any, of (1) the sum of the aggregate of the Loan Balances
of all Mortgage Loans and the Pre-Funded Amount as of the close of business on
the last day of the preceding Due Period over (2) the aggregate outstanding
Certificate Principal Balances of the [Offered Certificates (other than the
[Class A-IO] Certificates)] as of the Distribution Date (after taking into
account the payment of the related Principal Distribution Amount on the
Distribution Date).]
"Ownership Interest" means, with respect to any Certificate, any ownership
or security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
"Paying Agent" has the meaning assigned in Section 8.01(i).
"Percentage Interest" means, with respect to any [Offered Certificates] of
any Class [(other than the [Class A-IO] Certificates)], a fraction, expressed as
a decimal, the numerator of which is the principal balance represented by such
[Offered Certificate] as of the Closing Date and the denominator of which is the
Certificate Principal Balance represented by all the [Offered Certificates]
[(other than the [Class A-IO] Certificates)] of such Class as of the Closing
Date. [With respect to the [Class A-IO], [Class X-IO] or [Class R] Certificates,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate, all of which shall total 100% with respect to
the related Class.]
["Permitted Transferee" means, as to any [Class R] Certificateholder or
any other prospective transferee of a [Class R] Certificate, any Person other
than (a) the United States, a State or any political subdivision thereof, any
possession of the United States, a foreign government, an international
organization, or any agency or instrumentality of any of the foregoing, (b) an
organization (other than a cooperative described in Section 521 of the Code)
which would not be subject to tax under the Code (including the tax on unrelated
business taxable income, as defined in Section 512(a)(1) of the Code) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any [Class R] Certificate, (c) an organization which is engaged in furnishing
electrical energy, or providing telephone service, to persons in rural areas (as
described in Section 1381(a)(2)(C) of the Code), or (d) a person which is not a
United States Person. The terms "United States," "United States Person" "State"
and
- 21 -
"international organization" shall have the meanings set forth in Code Section
7701 or any successor provision and any regulations promulgated thereunder. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof, if all of the activities are subject
to tax, and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.]
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" has the meaning assigned in Section 9.02.
["Pre-Funded Amount" means, with respect to any date of determination, the
amount on deposit in the Pre-Funding Account as of such date.]
["Pre-Funding Account" means the Pre-Funding Account established and
maintained in accordance with Section 5.05A hereof.]
["Pre-Funding Earnings" means, with respect to any Distribution Date
occurring during the Funding Period, the actual Investment Earnings earned on
the Pre-Funded Amount during the period beginning on the previous Distribution
Date (or, in the case of the first Distribution Date, the Closing Date) and
ending on the day preceding such Distribution Date or, in the event the Funding
Period ends prior to _____ __, 200_, the last day of the Funding Period.]
"Principal Balance" means the unpaid principal balance of a Mortgage Loan.
["Principal Distribution Amount" means, as to any Distribution Date, the
lesser of (a) the aggregate Certificate Principal Balances of the [Offered
Certificates] [(other than the [Class A-IO] Certificates)] immediately preceding
such Distribution Date and (b) the sum of (i) the Basic Principal Amount for
such Distribution Date minus the Excess Overcollateralization Amount for such
Distribution Date, (ii) the Subordination Increase Amount, if any, for such
Distribution Date and (iii) the OC Holiday Realized Loss Amount, if any, for
such Distribution Date.]
"Principal Prepayment" means any prepayment of the entire Principal
Balance of a Mortgage Loan.
["Private Certificates" means the [[Class X-IO] Certificates and] [Class
R] Certificates.]
"Prohibited Transaction" means the definition thereof at Section
860F(a)(2) of the Code (or any successor statute thereto) and applicable to the
Trust.
"Property" means the underlying property securing a Mortgage Loan.
- 22 -
"Prospectus Supplement" means the CIT Home Equity Loan Trust 200_-_
Prospectus Supplement, dated _____ __, 200_, to the Base Prospectus.
"Purchase Price" means, with respect to a Mortgage Loan to be repurchased
hereunder, an amount equal to 100% of the outstanding Principal Balance thereof
as of the date of repurchase plus accrued and unpaid interest thereon to the
first day of the month in which the Purchase Price is to be distributed at its
Mortgage Rate plus unreimbursed Servicing Advances with respect to such Mortgage
Loan.
["Qualified Institutional Buyer" shall have the meaning specified in Rule
144A.]
"Qualified Substitute Mortgage Loan" means, as to any Deleted Mortgage
Loan or Replaced Mortgage Loan for which such Qualified Substitute Mortgage Loan
is being substituted pursuant to Section 3.05(b) or Section 4.03(b), a Mortgage
Loan that (a) as of the date of its substitution, satisfies all of the
representations and warranties (which, except when expressly stated to be as of
origination, shall be deemed to be determined as of the date of its substitution
rather than as of the related Cut-Off Date or the Closing Date) in Section 3.02
and does not cause any of the representations and warranties in Section 3.03, to
the extent previously applicable to the Deleted Mortgage Loan or Replaced
Mortgage Loan, and after giving effect to such substitution, to be incorrect,
(b) has a Principal Balance not in excess of the Principal Balance of the
Deleted Mortgage Loan or Replaced Mortgage Loan, (c) has a Mortgage Rate not
more than [1]% per annum lower than, and not more than [1]% per annum higher
than, that of the Deleted Mortgage Loan or Replaced Mortgage Loan and has an
interest start date on or before the beginning of the Due Period in which it is
transferred to the Trust, (d) has a Combined Loan-to-Value Ratio not higher than
that of the Deleted Mortgage Loan or Replaced Mortgage Loan, (e) has a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan or Replaced Mortgage Loan, (f) is of the same or
better credit risk category under the Seller's underwriting guidelines, (g) has
the same type of Mortgage Rate (i.e., a fixed rate Mortgage Loan) and (h) in the
case of a Balloon Loan, is a Balloon Loan, as the case may be. Notwithstanding
the foregoing, in the event that on any date more than one Qualified Substitute
Mortgage Loan is substituted for one or more Deleted Mortgage Loans or Replaced
Mortgage Loans, the requirement set forth in clause (b) above with respect to
the Principal Balance may be satisfied if the aggregate of the Principal
Balances of such Qualified Substitute Mortgage Loans is not greater than the
aggregate of the Principal Balances of such Qualified Mortgage Loans, the
requirement set forth in clause (c) above with respect to the Mortgage Rate may
be satisfied if the weighted average Mortgage Rate of such Qualified Substitute
Mortgage Loans is at least equal to the weighted average Mortgage Rate of such
Qualified Mortgage Loans; and the requirement set forth in clause (e) above with
respect to remaining term to stated maturity may be satisfied if the weighted
average remaining term to stated maturity of such Qualified Substitute Mortgage
Loans is not greater than the weighted average remaining term to stated maturity
of such Deleted Mortgage Loans or Replaced Mortgage Loans.
"Rating Agencies" means [Xxxxx'x and Standard & Poor's], or any successors
thereto; provided that if [Xxxxx'x and Standard & Poor's] no longer have a
rating outstanding on any Class of the Certificates, then references herein to
[Xxxxx'x and Standard & Poor's] shall be deemed to refer to the NRSRO then
rating any Class of the Certificates (or, if more than one
- 23 -
such NRSRO is then rating any Class of the Certificates, to each such NRSRO as
may be designated by the Servicer), and references herein to ratings by or
requirements of [Xxxxx'x and Standard & Poor's] shall be deemed to have the
equivalent meanings with respect to ratings by or requirements of such NRSRO.
"Rating Agency Condition" with respect to any action that is subject to
the Rating Agency Condition means, the condition that each Rating Agency shall
have been given at least 30 days prior notice of a contemplated action and that
each of the Rating Agencies shall not have notified the Depositor, the Master
Servicer or the Trustee in writing that such action will result in a downgrade
or withdrawal of the then current rating of any Class of the Certificates.
"Realized Loss" means as to any Liquidated Mortgage, the amount, if any,
by which the Principal Balance thereof as of the date of liquidation is in
excess of Liquidation Proceeds realized thereon and allocated to principal.
["Record Date" means, with respect to (i) any Distribution Date and each
Class of Fixed Rate Certificates and the [Class R] Certificates, the last
Business Day of the calendar month immediately preceding the calendar month in
which such Distribution Date occurs and (ii) any Distribution Date and the
Variable Rate Certificates and the [Class X-IO] Certificates, the Business Day
immediately preceding such Distribution Date, or if definitive Variable Rate
Certificates have been issued, the last Business Day of the calendar month
immediately preceding the calendar month in which such Distribution Date
occurs.]
["Reference Banks" means leading banks selected by the Trustee and engaged
in transactions in Eurodollar deposits in the international Eurocurrency
market.]
["Regular Certificate" means any REMIC II Certificate other than a [Class
R]-II Certificate.]
["REMIC" means a "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.]
["REMIC Administrator" means any Person appointed as REMIC Administrator
pursuant to Section 2.05.]
["REMIC Carryover Certificate" means all of the Offered Certificates.]
["REMIC I" means the segregated group of assets identified in Section 2.07
and constituting a REMIC created under this Agreement.]
["REMIC II" means the segregated group of assets consisting of the REMIC I
Regular Interests (as defined in Section 2.07 hereof) and constituting a REMIC
created under this Agreement.]
["REMIC III" means the segregated group of assets consisting of the REMIC
II Regular Interests (as defined in Section 2.07 hereof) and constituting a
REMIC created under this Agreement.]
- 24 -
["REMIC Net WAC Cap Carryover" means, for each Class of Certificates, the
amount determined by substituting the REMIC Net WAC Rate for the Net WAC Cap. In
the case of the [Class A-IO] Certificates, [Class A-2] Certificates, and [Class
A-3] Certificates, each such certificate shall be treated as subject to a
maximum rate equal to the REMIC Net WAC Cap and entitled to receive the REMIC
Net WAC Cap Carryover on the Distribution Date related to the Due Period in
which any amount of such REMIC Net WAC Cap Carryover arises.]
["REMIC Net WAC Rate" means the weighted average rate determined taking
the weighted average of each REMIC Regular Interest issued by REMIC II (other
than the LTII-PF-IO interest, except that for purposes of determining the REMIC
Net WAC Rate for REMIC III, the rate of each LTII-SB interest is treated as
equal to the REMIC Weighted Average Net Mortgage Rate reduced by [___]% per
annum until the Rate Change Date of such LTII-SB interest and the REMIC Weighted
Average Net Mortgage Rate thereafter. The REMIC Net WAC Rate is intended to
equal the Net WAC Cap determined by excluding (i) the amount of investment
earnings on the Pre-Funding Account, (ii) interest earned during the first three
Due Periods on Subsequent Mortgage Loans, and (iii) interest earned during Due
Period beginning in _____ 200_ for any Subsequent Mortgage Loan that does not
have an interest start date on or before _____ __, 200_ and shall be construed
in accordance with such intent.]
["REMIC Provisions" means provisions of the federal income tax law and the
applicable state and local law relating to REMICs and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.]
["REMIC WAC Excess" means the REMIC Net WAC Cap Carryover allocable to
each class of REMIC Carryover Certificate, respectively.]
["REMIC Weighted Average Net Mortgage Rate" means the weighted average of
the Net Mortgage Rates, except for this purpose the balance in the Pre-Funding
Account shall be treated as if it represented a Mortgage Loan with a zero
percent per annum rate and the rate on each Subsequent Mortgage Loan with an
interest start date on or before _____ __, 200_ shall be treated as zero during
the first three Due Periods and the rate on each Subsequent Mortgage Loan with
an interest start date after _____ __, 200_ shall be treated as zero during the
first four Due Periods.]
"REO Property" has the meaning assigned in Section 5.10.
"Replaced Mortgage Loan" has the meaning assigned in Section 3.05(b).
"Representative" means [UNDERWRITER], as representative of the several
underwriters pursuant to the Underwriting Agreement dated as of _____ __, 200_,
among CITCF, the Depositor and [UNDERWRITER].
"Repurchased Mortgage Loan" means any Mortgage Loan repurchased by CIT
Consumer Finance pursuant to Section 3.05(a), Section 5.14 or Section 4.03(a).
The Principal Balance of any Repurchased Mortgage Loan shall be zero as of the
last day of the related Due Period.
- 25 -
["Required Overcollateralization Amount" means as to any Distribution Date
(1) prior to the Distribution Date in _____ 200_, zero, (2) from and including
the Distribution Date in _____ 200_ but prior to the Stepdown Date, the product
of (x) [___]% and (y) the sum of the aggregate of the Loan Balances of all
Mortgage Loans as of the Initial Cut-Off Date plus the Original Pre-Funded
Amount; and (3) on and after the Stepdown Date, the greater of (i) the lesser of
(x) the product of [___]% and the sum of the aggregate of the Loan Balances of
all Mortgage Loans as of the Initial Cut-Off Date plus the Original Pre-Funded
Amount and (y) the product of [___]% and the aggregate of the Loan Balances of
all Mortgage Loans as of the end of the related Due Period and (ii) the OC
Floor; provided, however, that on each Distribution Date during the continuance
of a Trigger Event the Required Overcollateralization Amount will equal the
Required Overcollateralization Amount in effect as of the Distribution Date
immediately preceding the date on which the Trigger Event first occurred.]
["Reserve Interest Rate" has the meaning assigned in Section 5.12.]
"Responsible Officer" means, with respect to the Trustee, any officer in
its [Corporate Trust Department], as long as it is the Trustee hereunder,
including every vice president, assistant vice president, the secretary, every
assistant secretary, cashier or any assistant cashier, controller or assistant
controller, the treasurer, every assistant treasurer, every trust officer,
assistant trust officer and every other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by persons
who at the time shall be such officers, respectively and in each case, having
direct responsibility for the administration of this Agreement, or to whom a
corporate trust matter is referred because of knowledge of, familiarity with,
and authority to act with respect to a particular matter.
["Rule 144A" shall mean Rule 144A under the Securities Act, as such Rule
may be amended from time to time.]
["Schedule of Initial Mortgage Loans" means the [Conduit Schedule of
Mortgage Loans or] the Seller Schedule of Initial Mortgage Loans set forth,
[respectively, in Schedule I-A hereto or Schedule I-B hereto, as the context may
require].]
"Second Mortgage Loan" means a Mortgage Loan which constitutes a second
priority mortgage lien with respect to the related Property.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" means The CIT Group/Consumer Finance, Inc., a Delaware
corporation.
["Seller Mortgage Loans" means one or more of the Initial Seller Mortgage
Loans and/or Subsequent Mortgage Loans.]
["Seller Schedule of Initial Mortgage Loans" means the Schedule of Initial
Mortgage Loans attached as Schedule [E-3] hereto.]
["Sellers" means the Seller and the Conduit Seller.]
- 26 -
["Senior Certificates" means collective reference to the [Class A-1],
[Class A-IO], [Class A-2], [Class A-3], [Class A-4], [Class A-5] and the [Class
A-6] Certificates.]
["Senior Enhancement Percentage" means, as to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate Certificate Principal Balances of the Subordinate Certificates and
(ii) the Overcollateralization Amount (in each case, after taking into account
the distribution of the Principal Distribution Amount on such Distribution Date)
and the denominator of which is the sum of the aggregate of the Loan Balances of
all Mortgage Loans and the Pre-Funded Amount as of the last day of the related
Due Period.]
"Senior Lien" means with respect to any Second Mortgage Loan, the mortgage
loan relating to the corresponding Property having a first priority lien.
["Senior Principal Distribution Amount" means (a) with respect to any
Distribution Date prior to the Stepdown Date or during the continuance of a
Trigger Event, the lesser of (i) 100% of the Principal Distribution Amount and
(ii) the aggregate Certificate Principal Balances of the Senior Certificates
[(other than the [Class A-IO] Certificates)] immediately prior to such
Distribution Date, and (b) with respect to any other Distribution Date, the
lesser of (x) 100% of the Principal Distribution Amount and (y) the excess, if
any, of (i) the aggregate Certificate Principal Balances of the Senior
Certificates [(other than the [Class A-IO] Certificates)] immediately prior to
such Distribution Date over (ii) the lesser of (x) the product of [___]% and the
sum of the aggregate of the Loan Balances of all Mortgage Loans and the
Pre-Funded Amount as of the last day of the related Due Period and (y) the sum
of the aggregate of the Loan Balances of all Mortgage Loans and the Pre-Funded
Amount as of the last day of the related Due Period minus the OC Floor.]
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicing Advance" has the meaning assigned in Section 5.08.
"Servicing Officer" means any officer of the Master Servicer or a
sub-servicer, as applicable, involved in, or responsible for, the administration
and servicing of Mortgage Loans whose name and Specimen Signature appears on a
list of servicing officers appearing in an Officer's Certificate furnished to
the Trustee by the Master Servicer, as the same may be amended from time to
time.
["60+ Delinquency Percentage (Rolling Three Month)" means, with respect to
any Distribution Date, the average of the percentage equivalents of the
fractions determined for each of the three immediately preceding Due Periods (or
such fewer number of Due Periods since the Cut-Off Date, in the case of the
first two Determination Dates) the numerator of each of which is equal to the
sum of (without duplication) the aggregate Loan Balance of 60-Day Delinquent
Loans for such Due Period, and the denominator of which is the sum of the
aggregate of the Loan Balances of all Mortgage Loans and amounts on deposit in
the Pre-Funding Account as of the end of such Due Period.]
- 27 -
["60-Day Delinquent Loan" means with respect to any Due Period, and
without duplication, (i) all REO Properties as of the last day of such Due
Period, (ii) each Mortgage Loan with respect to which any portion greater than
$[_____] of a Monthly Payment is, as of the last day of such Due Period, two
months (calculated from Due Date with respect to such Mortgage Loan to Due Date)
or more past due (without giving effect to any grace period), provided that a
scheduled payment on a Mortgage Loan (and, accordingly, such Mortgage Loan) is
not considered delinquent or past due unless such payment has not been received
by the close of business on the scheduled due date for such payment in the
following month, and (iii) each Mortgage Loan in foreclosure as of the last day
of such Due Period.]
["Standard & Poor's" means Standard & Poor's Ratings Service, a division
of The XxXxxx-Xxxx Companies, Inc. or any successor thereto.]
["Stepdown Date" means the earlier to occur of (1) the Distribution Date
on which the aggregate Certificate Principal Balance of the Senior Certificates
(other than the [Class A-IO] Certificates) is reduced to zero and (2) the later
to occur of (A) the Distribution Date in _____ 200_ and (B) the first
Distribution Date on which the Certificate Principal Balance of the Senior
Certificates (other than the [Class A-IO] Certificates) (after giving effect to
the distribution of the Principal Distribution Amount on such Distribution Date)
is less than or equal to [___]% of the sum of the aggregate of the Loan Balances
of all Mortgage Loans and the Pre-Funded Amount as of the end of the related Due
Period.]
["Subordinate Certificates" means collective reference to the [Class M-1],
[Class M-2] and the [Class B] Certificates.]
["Subordination Deficiency" means, as to any Distribution Date, the
excess, if any, of (1) the Required Overcollateralization Amount for such
Distribution Date over (2) the Overcollateralization Amount for such
Distribution Date after giving effect to the distribution of the Basic Principal
Amount on such Distribution Date.]
["Subordination Increase Amount" means, with respect to the first three
Distribution Dates, zero, and as to any subsequent Distribution Date, the lesser
of (1) the Subordination Deficiency and (2) the Excess Interest.]
["Subsequent Cut-Off Date" means, with respect to the Subsequent Mortgage
Loans, the opening 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 Mortgage Loans which are transferred and assigned to
the Trust pursuant to the related Subsequent Transfer Agreement.]
["Subsequent Mortgage Loan(s)" means one or more of the mortgage loans
described in the List of Subsequent Mortgage Loans, which Mortgage Loans are to
be assigned by the Depositor to the Trust after the Closing Date; including,
without limitation, the Mortgage, collateral, liens, insurance policies and
guarantees of the obligations of the related Mortgage (other than guarantees, if
any, by the related broker) and any and all payments which are
- 28 -
received pursuant thereto on and after the Subsequent Cut-Off Date, but
excluding any payments which are received pursuant thereto prior to the
Subsequent Cut-Off Date.]
["Subsequent Mortgage Loan Assets" has the meaning given to such term in
the Subsequent Transfer Agreement.]
["Subsequent Purchase Agreement" means a Subsequent Purchase Agreement,
dated as of a Subsequent Cut-Off Date, between the Seller and the Depositor
providing for the sale of Subsequent Mortgage Loans from the Seller to the
Depositor and substantially in the form of [Exhibit L] hereto.]
["Subsequent Transfer Agreement" means each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date between the Trust and the Depositor
substantially in the form of [Exhibit M] hereto, by which Subsequent Mortgage
Loans are sold and assigned to the Trust.]
["Subsequent Transfer Date" means the date specified in the related
Subsequent Transfer Agreement.]
"Substitution Adjustment" has the meaning assigned in Section 3.05(b).
["Supplemental Interest Reserve Fund" means the Supplemental Interest
Reserve Fund established and maintained as described in Section 8.05.]
["Tax Matters Person" means, with respect to each of the REMICs created
hereunder, the Person designated as the "tax matters person" of such REMIC in
the manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury
Regulations Section 301.6231(a)(7)-1, which Person shall be the holder of the
Tax Matters Person Residual Interest.]
["Tax Matters Person Residual Interest" means the 0.01% interest in the
[Class R] Certificate transferred to the REMIC Administrator appointed pursuant
to this Agreement.]
["Tax Returns" means, with respect to (i) each of the REMICs created
hereunder, the federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of each of REMIC I, REMIC II, REMIC III and Master REMIC due to its
classification as a REMIC under the REMIC Provisions, and (ii) any portion of
the Trust that does not constitute part of REMIC I, REMIC II, REMIC III and
Master REMIC, Internal Revenue Service Form 1041, together, in each case, with
any and all other information, reports or returns that may be required to be
furnished to the Certificateholders or filed with the Internal Revenue Service
under any applicable provisions of federal tax law or any other governmental
taxing authority under applicable state and local tax laws.]
["Telerate Page 3750" means the display page currently so designated on
the Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying London interbank offered rates of major
banks).]
- 29 -
"Transfer" means any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
"Transferee" means any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor" means any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Treasury Regulations" means any proposed, temporary or final regulation
promulgated under the Code.
["Trigger Event" means the existence of a Delinquency Event or a
Cumulative Loss Trigger Event.]
"Trust" means CIT Home Equity Loan Trust 200_-_, the trust created by this
Agreement.
"Trust Estate" means [(a) the Mortgage Loan Assets and (b) such amounts as
may be held by the Trustee in the Certificate Account, the Supplemental Interest
Reserve Fund and the Pre-Funding Account, together with investment earnings on
such amounts, whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Master Servicer).]
"Trustee" means [TRUSTEE], a ____________________, not in its individual
capacity but solely as Trustee under this Agreement, and any successor
hereunder.
"Trustee Reimbursable Expenses" means, as of any Distribution Date, the
sum of (a) any trustee fee not paid on such Distribution Date and (b) any
amounts owed to the Trustee pursuant to Sections 7.03, 10.02, 10.03 and 11.05.
["Variable Rate Certificates" means the [Class A-1] Certificates.]
["WAC Excess" means the Net WAC Cap Carryover allocable to each of the
Offered Certificates, respectively.]
"Weighted Average Net Mortgage Rate" means, for any Distribution Date, the
weighted average of the Net Mortgage Rates for the Mortgage Loans as of the
first day of the related Due Period, weighted on the basis of their respective
Principal Balances outstanding as of the first day of the related Due Period.
- 30 -
ARTICLE II
ESTABLISHMENT OF THE TRUST; TRANSFER OF MORTGAGE LOANS
SECTION 2.01. Establishment of the Trust.
There is hereby created, by the Depositor, a separate trust which shall be
known as CIT Home Equity Loan Trust 200_-_. The Trust shall be administered
pursuant to the provisions of this Agreement for the benefit of
Certificateholders.
SECTION 2.02. [Conveyance of the Initial Mortgage Loans.]
[[Each of] the Seller, with respect to the Initial Seller Mortgage Loans,
[and the Conduit Seller, with respect to the Conduit Mortgage Loans,] hereby
bargains, sells, conveys, assigns and transfers to the Depositor, in trust,
without recourse and for the exclusive benefit of the Holders of the
Certificates, all of its right, title and interest in and to the Initial
Mortgage Loans, including (a) all principal collected and interest due on the
Initial Mortgage Loans on and after the Initial Cut-Off Date and any and all
other benefits accruing from the Initial Mortgage Loans which the Seller [and
the Conduit Seller, respectively,] is causing to be delivered to the Trustee or
the Custodian as designee of the Trustee, together with the related Mortgage
Documents and the Seller's [and Conduit Seller's respective] interest in any
Property, and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; and (b) proceeds of all the foregoing (including,
but not by way of limitation, all proceeds of any mortgage insurance, flood
insurance, hazard insurance and title insurance policy, if any, relating to the
Initial Mortgage Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified herein (the "Initial Mortgage
Loan Assets"). The parties intend and agree that each of the conveyance of the
Seller's right, title and interest in and to the Initial Seller Mortgage Loans
pursuant to this Agreement [and the conveyance of the Conduit Seller's right,
title and interest in and to the Conduit Mortgage Loans pursuant to this
Agreement] shall constitute an absolute sale. In the event, however, that
notwithstanding such intent and agreement, a transfer and assignment
contemplated hereby is determined not to be a conveyance of ownership, [each of]
the Seller [and the Conduit Seller] hereby grants to the Depositor a first
priority perfected security interest in the Initial Seller Mortgage Loans [and
the Conduit Mortgage Loans, respectively].]
[The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trust,
without recourse, all the right, title and interest of the Depositor in and to
the Trust Estate. The parties intend and agree that the conveyance of the
Depositor's right, title and interest in and to the Trust Estate pursuant to
this Agreement shall constitute an absolute sale. In the event, however, that
notwithstanding such intent and agreement, a transfer and assignment
contemplated hereby is determined not to be a conveyance of ownership, the
Depositor hereby grants to the Trust a first priority perfected security
interest in the Trust Estate.]
- 31 -
[The Trustee acknowledges such sale, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein in
accordance with the provisions of this Agreement.]
SECTION 2.03. [Conveyance of the Subsequent Mortgage Loans.]
[In consideration of the Trustee's delivery on the related Subsequent
Transfer Date to or upon the order of the Depositor of the purchase price for
the Subsequent Mortgage Loans 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 Depositor shall sell, transfer, assign, set over
and otherwise convey to the Trust, by execution of an assignment substantially
in the form of the Subsequent Transfer Agreement attached hereto as [Exhibit M],
and the Trust shall purchase all the right, title and interest of the Depositor
in and to the Subsequent Mortgage Loans and all the rights, benefits, and
obligations arising from and in connection with each Subsequent Mortgage Loan,
including (a) all principal collected and interest due on the Subsequent
Mortgage Loans on and after the related Subsequent Cut-Off Date and any and all
other benefits accruing from the Subsequent Mortgage Loans which the Seller is
causing to be delivered to the Trustee or the Custodian as designee of the
Trustee, together with the related Mortgage Documents and the Seller's interest
in any Property, and all payments thereon and proceeds of the conversion,
voluntary or involuntary, of the foregoing; and (b) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy,
relating to the Subsequent Mortgage Loans, cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
rights to payment of any and every kind, and other forms of obligations and
receivables which at any time constitute all or part of or are included in the
proceeds of any of the foregoing) to pay the Certificates as specified herein
(the "Subsequent Mortgage Loan Assets" and, together with the Initial Mortgage
Loan Assets, the "Mortgage Loan Assets"). The parties intend and agree that the
conveyance of the Depositor's right, title and interest in and to the Subsequent
Mortgage Loans pursuant to this Agreement shall constitute an absolute sale. In
the event, however, that notwithstanding such intent and agreement, a transfer
and assignment contemplated hereby is determined not to be a conveyance of
ownership, the Depositor hereby grants to the Trust a first priority perfected
security interest in the Subsequent Mortgage Loans. The "purchase price" for the
Subsequent Mortgage Loans shall be one hundred percent (100%) of the aggregate
principal amount outstanding on the Subsequent Mortgage Loans so transferred as
of the related Subsequent Cut-Off Date and shall be payable in immediately
available funds on the related Subsequent Transfer Date.]
[The amount released to or upon the order of the Depositor from the
Pre-Funding Account on any Subsequent Transfer Date (or from other amounts
payable to the Depositor on the Closing Date) in connection with any conveyance
of Subsequent Mortgage Loans to be included in the Mortgage Pool shall not
exceed the Original Pre-Funded Amount. The amount so released to or upon the
order of the Depositor in connection with any conveyance of Subsequent Mortgage
Loans shall, for federal income tax purposes, be considered cash contributed to
REMIC I by the Depositor and used by the Trustee to acquire the related
Subsequent Mortgage Loans for a purchase price established pursuant to this
Section 2.03.]
- 32 -
[On each Subsequent Transfer Date, the Seller shall transfer to the
Depositor pursuant to a Subsequent Purchase Agreement, and the Depositor shall
transfer to the Trust pursuant to a Subsequent Transfer Agreement, the
Subsequent Mortgage Loans to be transferred as of such Subsequent Transfer Date
and the related Subsequent Mortgage Loan Assets, upon the satisfaction of each
of the following conditions on or prior to such Subsequent Transfer Date:]
(a) [the Master Servicer shall provide the Trustee and the Rating Agencies
with an Addition Notice in the form attached as [Exhibit N] hereto and shall
provide any information reasonably requested by the Trustee, the Depositor or
the Rating Agencies with respect to the related Subsequent Mortgage Loans;]
(b) [the Master Servicer shall deliver to the Trustee and the Rating
Agencies a duly executed Subsequent Transfer Agreement and any other related
documentation in the forms of the exhibits listed thereon;]
(c) [each of the Seller and the Depositor shall deposit in the Certificate
Account all collections in respect of the Subsequent Mortgage Loans received by
it on or after such Subsequent Cut-Off Date (whether in the nature of amounts
held by it for later application on behalf of the related Mortgagor in respect
of a monthly payment due on or after such Subsequent Cut-Off Date or otherwise)
except for amounts in respect of interest accrued on such Subsequent Mortgage
Loans prior to such Subsequent Cut-Off Date;]
(d) [each of the Seller and the Depositor shall certify that, as of such
Subsequent Transfer Date, it was not insolvent, it was not made insolvent by
such transfer and it is not aware of any pending insolvency;]
(e) [the Funding Period shall not have expired; and]
(f) [the Subsequent Mortgage Loans shall satisfy the criteria set forth in
Section 3.06.]
[In addition, the Depositor will provide to the Trustee, the Rating
Agencies and the Master Servicer data regarding all Subsequent Mortgage Loans to
be transferred to the Trust on any Subsequent Transfer Date prior to the related
Subsequent Transfer Date.]
SECTION 2.04. [Reserved]
SECTION 2.05. [Appointment of REMIC Administrators.]
(a) [The Trustee may appoint one or more REMIC Administrators, which shall
be authorized to act on behalf of the Trustee in performing the functions set
forth in Section 5.10 herein. Each REMIC Administrator must be acceptable to the
Depositor and must be organized and doing business under the laws of the United
States of America or of any State and be subject to supervision or examination
by federal or state authorities. The Trustee initially appoints CIT Consumer
Finance as REMIC Administrator and CIT Consumer Finance hereby accepts such
appointment. The fees and expenses of the REMIC Administrator shall be paid by
the Master Servicer. The Depositor acknowledges that CIT Consumer Finance is an
acceptable
- 33 -
REMIC Administrator. If the Trustee makes appointments of REMIC Administrators
in the future, the Trustee shall advise the Depositor of the identity of such
REMIC Administrator, and the Depositor shall confirm in writing to the Trustee
whether such Person is acceptable as REMIC Administrator. The Trustee shall not
be liable for losses or liabilities to the Trust caused by any actions taken by
any REMIC Administrator appointed by the Trustee.]
(b) [Any Person into which any REMIC Administrator may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion, or consolidation to which any REMIC Administrator shall be a
party, or any Person succeeding to the corporate agency business of any REMIC
Administrator, shall continue to be the REMIC Administrator without the
execution or filing of any paper or any further act on the part of the Trustee
or the REMIC Administrator.]
(c) [Any REMIC Administrator (other than CIT Consumer Finance) may at any
time resign by giving at least 30 days' advance written notice of resignation to
the Trustee, the Certificate Registrar, the Paying Agent, the Master Servicer
and the Depositor. For so long as CIT Consumer Finance is acting as Master
Servicer hereunder, they may not resign as REMIC Administrator. The Trustee may
at any time terminate the agency of any REMIC Administrator by giving written
notice of termination to such REMIC Administrator, the Master Servicer, the
Certificate Registrar and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any REMIC Administrator shall
cease to be eligible in accordance with the provisions of this Section 2.05, the
Trustee may appoint a successor REMIC Administrator, in which case the Trustee
shall give written notice of such appointment to the Master Servicer and the
Depositor and shall mail notice of such appointment to all Holders of
Certificates; provided, however, that no successor REMIC Administrator shall be
appointed unless eligible under the provisions of this Section 2.05. Any
successor REMIC Administrator upon acceptance of its appointment hereunder shall
become vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as REMIC
Administrator.]
SECTION 2.06. [Acceptance by Trustee.]
[The Trustee hereby acknowledges conveyance of the Initial Mortgage Loans
and the Files with respect thereto pursuant to Section 2.02 hereof to the
Trustee on behalf of the Trust and declares that the Trustee will hold all
Initial Mortgage Loans that have been delivered in trust, upon the trusts herein
set forth, for the benefit of all Certificateholders, that the Trustee will
accept delivery of the Files with respect thereto pursuant to Section 4.01
hereof and the Trustee or the Custodian as its designee will hold such Files for
the benefit of the Trust as provided herein and shall issue to or upon the
written order of the Depositor, Certificates representing ownership of a
beneficial interest in 100% of the Trust.]
SECTION 2.07. [Designation of Interests in REMICs.]
[The Trust Fund for federal income tax purposes will consist of four
REMICs ("REMIC I", "REMIC II", "REMIC III" and the "Master REMIC"). The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.]
- 34 -
[REMIC I will consist of all of the assets constituting the Trust Fund
other than the assets held in the Supplemental Interest Reserve Fund, the
Pre-Funding Account (including any investment earnings thereon) and the REMIC
regular interests issued by REMIC I, REMIC II, REMIC III, and the Master REMIC
held by the Trust. REMIC I shall issue 3 uncertificated interests that shall be
designated as REMIC regular interests within the meaning of Code Section
860G(a)(1): the LTI-1 Interest, the LTI-2 Interest, and the LTI-PF-IO Interest
(the "REMIC I Regular Interests"). In addition, REMIC I shall issue the R-1
interest and shall designate such interest as its sole class of residual
interest.]
[REMIC II shall hold as its assets the uncertificated REMIC regular
interests issued by REMIC I. REMIC II shall issue the R-2 interest and shall
designate such interest as its sole class of residual interest. In addition,
REMIC II shall issue the 12 uncertificated REMIC regular interests (the "REMIC
II Regular Interests") set forth below for REMIC II.]
[REMIC III shall hold as its assets the uncertificated REMIC regular
interests issued by REMIC II. REMIC III shall issue the R-3 interest and shall
designate such interest as its sole class of residual interest. In addition,
REMIC III shall issue the 21 uncertificated REMIC regular interests (the "REMIC
III Regular Interests") set forth below for REMIC III.]
[The Master REMIC will consist of the REMIC III Regular Interests and will
be evidenced by the 11 Classes of regular interests set forth below for the
Master REMIC (which each will represent the "regular interests" in the Master
REMIC) and the R-4 Interest as the single "residual interest" in the Master
REMIC. The [Class R] shall not be considered a Certificate issued by the Master
REMIC, but instead shall represent beneficial ownership of the [Class R]-1,
[Class R]-2, [Class R]-3, and [Class R]-4 interests.]
[REMIC I:]
[The REMIC I Regular Interests, each of which is hereby designated a REMIC
regular interest for federal income tax purposes, shall have the following
principal balances, pass-through rates and corresponding Loan Groups in the
manner set forth in the following table:]
--------------------------------------------------------------------------------
REMIC Initial Pass-
Interests Balance Through Rate
--------------------------------------------------------------------------------
[LTI-1] (1) (2)
--------------------------------------------------------------------------------
[LTI-2] (3) (4)
--------------------------------------------------------------------------------
[LTI-PF-IO] (5) (6)
--------------------------------------------------------------------------------
(1) [The principal balance of the Initial Mortgage Loans as of the Cut-off
Date.]
(2) [The pass-through rate for the Class LTI-1 interest shall be a rate equal
to the weighted average of the Net Mortgage Rates for the Initial Mortgage
Loans for the first four Distribution Dates and the Weighted Average Net
Mortgage Rate for each Distribution Date thereafter.]
(3) [An amount equal to the Original Prefunded Amount.]
- 35 -
(4) [The pass-through rate for the Class LTI-2 interest shall be a rate equal
to zero during the first three Due Periods and a rate equal to the
weighted average of the Net Mortgage Rates for the Subsequent Mortgage
Loans for the fourth Due Period, except that any Subsequent Mortgage Loan
that has an interest start date after _____ __, 200_ shall be treated as
having a rate of zero percent per annum for the Due Period beginning _____
__, 200_. After the fourth Due Period the rate on the Class LTI-2 shall
equal the Weighted Average Net Mortgage Rate.]
(5) [The Class LTI-PF-IO shall not have a principal balance.]
(6) [The Class LTI-PF-IO shall be entitled to 100% of the interest accruing on
Subsequent Mortgage Loans during the first three Due Periods and shall be
entitled to 100% of the interest accruing on the Subsequent Mortgage Loans
with an interest start date after _____ __, 200_.]
[For the first four Distribution Dates, the Class LTI-1 shall be entitled
to receive distributions (and allocated Realized Losses) so that its Principal
Balance is reduced to the principal balance of the Initial Mortgage Loans at the
end of the Due Period related to such Distribution Date. For the first four
Distribution Dates, the Class LTI-2 shall be entitled to receive distributions
(and allocated Realized Losses) so that its Principal Balance is reduced to the
sum of: (i) the principal balance of the Subsequent Mortgage Loans at the end of
the Due Period related to such Distribution Date and (ii) any amount remaining
in the Pre-Funding Account at the end of the Due Period related to such
Distribution Date. After the first four Distribution Dates, the Class LTI-1 and
the Class LTI-2 shall be entitled to share proportionately in principal
payments, proceeds from the sale of any REO property, Realized Losses, and
interest payments based on their outstanding principal balances.]
[REMIC II:]
[The REMIC II Regular Interests shall have the following principal
balances, and the pass-through rates in the manner set forth in the following
table: ]
Notional Initial
REMIC II Balance of Initial Interests
Interest the A-IO(1) Interest Rate Rate Change Date Balance
-------- ----------- ------------- ---------------- -------
[LTII-1] (2) (3) N/A N/A
[LTII-SB (1)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (2)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (3)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (4)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (5)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (6)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (7)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (8)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (9)] [_____] (3) _____ __, 200_ [_____]
[LTII-SB (10)] [_____] (3) _____ __, 200_ [_____]
[LTII-PF-IO] (4) (4) N/A N/A
(1) [For the Distribution Date related to the Due Period immediately preceding
the Rate Change Date.]
(2) [The principal balance of the LTII-1 is equal to the principal balance of
the REMIC I Regular Interests less $[_____], which is the aggregate
principal balance of the Class LTII-SB Regular Interests.]
- 36 -
(3) [The LTII-1 interest and each LTII-SB interest shall bear interest based
on the REMIC Weighted Average Net Mortgage Rate.]
(4) [The LTII-PF-IO shall be entitled to 100% of the amount received with
respect to the Class LTI-PF-IO Interest issued by REMIC I.]
[On each Distribution Date, all Realized Losses and all payments of
principal payments from the Mortgage Loans will be allocated to the Class LTII-1
until such Class is reduced to zero. After the Class LTII-1 is reduced to zero,
all Realized Losses and all payments of principal from the Mortgage Loans will
be made to the outstanding Class of the Class LTII-SB Regular Interests with the
lowest numerical denomination until such Class is reduced to zero. For purposes
of applying these rules, principal payments from the Mortgage Loans shall be
treated as any payment from the Mortgage Loans that result in a reduction of the
principal of the Mortgage Loan during the Due Period.]
[REMIC III:]
[The REMIC III Regular Interests, each of which is hereby designated a
regular interest in REMIC III, shall have the following principal balances,
pass-through rates and Corresponding Classes of Certificates in the manner set
forth in the following table:]
Corresponding
Class of Master
REMIC Interests Initial Balance Interest Rate REMIC Interest
--------------- --------------- ------------- --------------
[LTIII-A1 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-1]
[LTIII-A2 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-2]
[LTIII-A3 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-3]
[LTIII-A4 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-4]
[LTIII-A5 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-5]
[LTIII-A6 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [A-6]
[LTIII-M1 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [M-1]
[LTIII-M2 (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [M-2]
[LTIII-B (1)] [1/2Corresponding Class Balance] [REMIC Net WAC Rate] [B]
[LTIII-Accrual (2) [REMIC Net WAC Rate] N/A
Interest]
[LTIII-AIOs] (3) (3) N/A
[LTIII-PF-IO] (4) (4) N/A
(1) [REMIC III Accretion Directed Class.]
(2) [An amount equal to the aggregate Principal Balances of the REMIC II
Regular Interests less an amount equal to the aggregate Principal Balances
of the REMIC III Regular Interests.]
- 37 -
(3) [The LTIII-AIOs represent 10 separate REMIC Regular Interests:
LTIII-AIO(1), LTIII-AIO(2), LTIII-AIO(3), LTIII-AIO(4), LTIII-AIO(5),
LTIII-AIO(6), LTIII-AIO(7), LTIII-AIO(8), LTIII-AIO(9), and LTIII-AIO(10).
Each LTIII-AIO REMIC regular interest will not have a principal balance,
but will have a notional balance that is equal to the principal balance of
the LTII-SB Interest issued by REMIC II with the same parenthetical number
(the "corresponding LTII-SB Interest"). The notional balance of each
LTIII-AIO Interest shall be reduced to zero on the Rate Change Date of the
corresponding LTII-SB Interest. Each LTIII-AIO Interest will have a rate
per annum from the Closing Date through the Rate Change Date of its
corresponding LTII-SB Interest, equal to the lesser of: (i) [___]% per
annum and (ii) the REMIC Weighted Average Net Mortgage Rate, and
thereafter, [___]% per annum.]
(4) [The Class LTIII-PF-IO Interest will not have a principal balance, but
will receive 100% of the amount received with respect to the Class
LTII-PF-IO Interest issued by REMIC II.]
[On each Distribution Date, [___]% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of the REMIC III Accretion Directed Classes (each such Class will be
reduced by an amount equal to [___]% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the principal balance of its
Corresponding Class) and will be accrued and added to the principal balance of
the LTIII Accrual Interest. On each Distribution Date, the increase in the
principal balance of the LTIII Accrual Interest may not exceed interest accruals
for such Distribution Date for the LTIII Accrual Interest.]
[All payments of principal from the Mortgage Loans shall be allocated
[___]% to the LTIII-Accrual Interest, and [___]% to the REMIC III Accretion
Directed Classes (in an amount equal to [___]% of the principal amounts
allocated to their respective Corresponding Classes), until paid in full.
Notwithstanding the above, to the extent that payments allocated to the [Class
X-IO] Certificates issued by the Master REMIC that arise from a reduction in the
Overcollateralized Amount, the Class LTIII Accrual Interest shall be allocated
principal payments equal to such reduction (until paid in full). Realized losses
shall be applied so that after all distributions have been made on each
Distribution Date (i) the principal balances of each REMIC III Accretion
Directed Class is equal to [___]% of the principal balance of its respective
Corresponding Class, and (ii) the LTIII Accrual Interest is equal to [___]% of
the aggregate principal balance of the Mortgage Pool plus [___]% of the
Overcollateralized Amount. For purposes of applying these rules principal
payments from the Mortgage Loans shall be treated as any payment from the
Mortgage Loans that result in a reduction of the principal of the Mortgage Loan
during the Due Period.]
[Master REMIC:]
[The following table sets forth characteristics of the Interests, each of
which is hereby designated as a "regular interest" in the Master REMIC:]
Original Certificate
Principal Balance Pass-Through Rate
----------------- -----------------
[Class A-1] [_____] (1)
[Class A-2] [_____] (1)
[Class A-3] [_____] (1)
[Class A-4] [_____] (1)
[Class A-5] [_____] (1)
- 38 -
[Class A-6] [_____] (1)
[Class M-1] [_____] (1)
[Class M-2] [_____] (1)
[Class B] [_____] (1)
[Class A-IO] (2)
[Class X-IO] (3)
(1) [The lesser of the related Pass-Through Rate and the REMIC Net WAC Rate.
Any entitlement to REMIC Net WAC Rate Carryover Amounts (including Net WAC
Rate Carryover Amounts) will not be an obligation of any REMIC created
under this Agreement.]
(2) [The [Class A-IO] Certificates will be entitled to 100% of the interest
distributions in respect of the 10 Class LTIII-AIO Interests.]
(3) [The [Class X-IO] Certificates will have a notional balance equal to the
aggregate Stated Principal Balance of the Mortgage Loans. The initial
interest rate of the [Class X-IO] Certificate shall be a rate sufficient
to cause all net interest from the Mortgage Loans to accrue on the [Class
X-IO] Certificate that is in excess of the amount of interest that accrues
on the Class A Certificates, the [Class A-IO] Certificates, Class M
Certificates, the [Class B] Certificates and the Class LTIII-PF-IO. For
each Distribution Date after the first Distribution Date, the Pass-Through
Rate in respect of the [Class X-IO] Certificates will be the excess of:
(i) the REMIC Net WAC Rate over (ii) the product of: (A) two and (B) the
weighted average Pass-Through Rate of the REMIC III Interests, where the
LTIII Accrual Interest is subject to a cap equal to zero and each REMIC
III Accretion Directed Class is subject to a cap equal to the Pass-Through
Rate on its Corresponding Class. The [Class X-IO] Certificates shall also
be entitled to principal equal to the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date over the
aggregate Certificate Principal Balance of the Class A Certificates, Class
M Certificates, and [Class B] as of the Closing Date. Such principal
balance shall not bear interest. In addition the [Class X-IO] Certificates
shall be entitled to 100% of the interest payments received with respect
to the Class LTII-PF-IO Interest issued by REMIC III.]
[The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on a REMIC
regular interest, without creating any shortfall--actual or potential (other
than for credit losses) to any REMIC regular interest. To the extent that the
structure is believed to diverge from such intention, the Master Servicer shall
resolve ambiguities to accomplish such result and shall to the extent necessary
rectify any drafting errors or seek clarification to the structure without
Certificateholder approval (but with guidance of counsel) to accomplish such
intention.]
SECTION 2.08. [Intentionally Omitted.]
SECTION 2.09. [Intentionally Omitted.]
SECTION 2.10. [Intentionally Omitted.]
SECTION 2.11. [Intentionally Omitted.]
SECTION 2.12. [Miscellaneous REMIC Provisions.]
(a) [The Holder of the Tax Matters Person Residual Interest in each REMIC
created hereunder is hereby designated as "tax matters person" as defined in the
REMIC Provisions with respect to the REMIC.]
- 39 -
(b) [The Trust and each REMIC created hereunder shall, for federal income
tax purposes, maintain books on a calendar year basis and report income on an
accrual basis.]
(c) [The Trustee shall cause each REMIC created hereunder to elect to be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of the Trust shall be
resolved in a manner that preserves the validity of such election to be treated
as a REMIC. The Trustee shall report all expenses of the Trust Estate to each
REMIC created hereunder.]
(d) [The amount, if any, transferred to the [Class R] Certificate, shall
be appropriately accounted for by the REMIC Administrator as derived from the
REMIC created under this Agreement producing such distributable amounts. No such
amounts are expected to arise under this agreement.]
(e) [The REMIC Administrator shall provide to the Internal Revenue Service
and to the person described in Section 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section 1.860D-l(b)(5)(ii), or any
successor regulation thereto with respect to each REMIC created hereunder. Such
information will be provided in the manner described in Treasury Regulation
Section 1.860E-2(a)(5), or any successor regulation thereto.]
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties Regarding CIT Consumer
Finance.
CIT Consumer Finance represents and warrants that:
(a) Organization and Good Standing. CIT Consumer Finance is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. CIT Consumer
Finance is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business transacted
by it or properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or other) of CIT Consumer
Finance.
(b) Authorization; Binding Obligations. CIT Consumer Finance has the power
and authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of CIT Consumer Finance enforceable in
accordance with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
- 40 -
(c) No Consent Required. CIT Consumer Finance is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of which
so to obtain would have a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of CIT Consumer Finance.
(d) No Violations. The execution, delivery and performance of this
Agreement by CIT Consumer Finance will not violate any provision of any existing
law or regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of CIT Consumer Finance, or constitute a material breach
of any mortgage, indenture, Mortgage Loan or other agreement to which CIT
Consumer Finance is a party or by which CIT Consumer Finance may be bound.
(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of CIT Consumer Finance threatened, against CIT Consumer Finance or
any of its properties or with respect to this Agreement or the Certificates
which, if adversely determined, would in the opinion of CIT Consumer Finance
have a material adverse effect on the transactions contemplated by this
Agreement.
[SECTION 3.01A. Representations and Warranties Regarding The Conduit
Seller.]
[The Conduit Seller represents and warrants that:]
(a) [Organization and Good Standing. The Conduit Seller is a
____________________ duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the
____________________ power to own its assets and to transact the business in
which it is currently engaged. The Conduit Seller is duly qualified to do
business 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
otherwise) of the Conduit Seller.]
(b) [Authorization; Binding Obligations. The Conduit Seller 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
____________________ 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 Conduit Seller enforceable in
accordance with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.]
(c) [No Consent Required. The Conduit Seller 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
- 41 -
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
Conduit Seller.]
(d) [No Violations. The execution, delivery and performance of this
Agreement by the Conduit Seller will not violate any provision of any existing
law or regulation or any order or decree of any court or the organizational
documents of the Conduit Seller, or constitute a material breach of any
mortgage, indenture, Mortgage Loan or other agreement to which the Conduit
Seller is a party or by which the Conduit Seller may be bound.]
(e) [Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Conduit Seller threatened, against the Conduit Seller or any of
its properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Conduit Seller have a material
adverse effect on the transactions contemplated by this Agreement.]
SECTION 3.02. Representations and Warranties Regarding Each Mortgage Loan.
CIT Consumer Finance as Seller with respect to the Seller Mortgage Loans
[and as Master Servicer, in consideration of its appointment hereunder, with
respect to the Conduit Mortgage Loans and with respect to the Mortgage Loans
taken as a whole,] represents and warrants to the Trust, the Depositor and the
Certificateholders [as to each Initial Mortgage Loan] as of the Closing Date
[and as to each Subsequent Mortgage Loan as of the related Subsequent Transfer
Date] (except as otherwise expressly stated):
(a) List of Mortgage Loans. The information set forth in the [List of
Initial Mortgage Loans or the List of Subsequent Mortgage Loans, as applicable,]
is true and correct as of its date.
(b) Payments. With respect to each Mortgage Loan, as of the related
Cut-Off Date, the scheduled payment due in the month immediately preceding such
Cut-Off Date was made by or on behalf of the Mortgagor (without any advance from
CIT Consumer Finance or any Person acting at the request of CIT Consumer
Finance) or was not delinquent for more than 60 days.
(c) No Waivers. The terms of the Mortgage Loan have not been waived,
altered or modified in any respect, except by instruments or documents
identified in the File with respect thereto.
(d) Binding Obligation. The Mortgage Loan is the legal, valid and binding
obligation of the Mortgagor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws from time to time in effect affecting generally the enforcement of
creditors' rights and remedies; and (ii) general principles of equity,
- 42 -
including, without limitation, principles of reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in equity or at law).
(e) No Defenses. No right of rescission, setoff, counterclaim or defense,
including the defense of usury, has been asserted with respect to the Mortgage
Loan.
(f) Insurance. The related Mortgaged Property is covered by a Hazard
Insurance Policy in the amount required by Section 5.09. All premiums due as of
the Closing Date on such insurance have been paid in full.
(g) Flood Insurance. If the related Mortgaged Property was, according to
the related appraisal, in a federally designated special flood hazard area, the
related Mortgage Property is covered by flood insurance in the amount required
by Section 5.09. All premiums due as of the Closing Date on such insurance have
been paid in full.
(h) Lawful Assignment. The Mortgage Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Mortgage Loan to the Depositor and to the Trustee under this Agreement, or
the ownership of the Mortgage Loan by the Trust, unlawful.
(i) Compliance with Law. All requirements of any federal, state or local
law, including, without limitation, usury, truth in lending, the Real Estate
Settlement Procedures Act and equal credit opportunity laws, applicable to the
Mortgage Loan have been complied with and such compliance is not affected by the
transfer of the Mortgage Loan to the Depositor or to the Trustee or by the
Trust's ownership of the Mortgage Loans, and CIT Consumer Finance shall for at
least the period of this Agreement, maintain in its possession, available for
the Trustee's inspection, and shall deliver to the Trustee upon demand, evidence
of compliance with all such requirements.
(j) Mortgage Loan in Force. The Mortgage Loan has not been satisfied or
rescinded, and the related Mortgaged Property has not been released from the
lien of the Mortgage Loan in whole or in part.
(k) Capacity of Parties. All parties to the Mortgage Loan had legal
capacity to execute the Mortgage Loan.
(l) Good Title. [Neither the Seller nor the Conduit Seller] has sold,
assigned or pledged the Mortgage Loan to any person other than the Depositor.
Prior to the transfer of the Mortgage Loan by the Seller [or the Conduit Seller]
to the Depositor and by the Depositor to the Trust, the Seller [or the Conduit
Seller, respectively,] had good and marketable title thereto free and clear of
any encumbrance, equity, loan, pledge, charge, claim or security interest and
was the sole owner thereof with full right to transfer the Mortgage Loan to the
Depositor or the Trust, respectively. The Depositor paid fair value to the
Seller [or the Conduit Seller] for the Mortgage Loan. Immediately upon the
transfer thereof, the Trust for the benefit of the Certificateholders shall
acquire good and marketable title to each Mortgage Loan free and clear of any
encumbrance, equity, loan, pledge, charge, claim or security interest.
- 43 -
(m) No Defaults. As of the related Cut-Off Date, there was no default,
breach, violation or event permitting acceleration existing under the Mortgage
Loan and no event which, with notice and the expiration of any grace or cure
period, would constitute such a default, breach, violation or event permitting
acceleration under such Mortgage Loan (except payment delinquencies permitted by
clause (b) above). [Neither the Seller nor the Conduit Seller] has waived any
such default, breach, violation or event permitting acceleration except payment
delinquencies permitted by clause (b) above.
(n) No Liens. As of the Closing Date, [in the case of each Initial
Mortgage Loan, or as of the related Subsequent Transfer Date, in the case of
each Subsequent Mortgage Loan,] there are, to the best of CIT Consumer Finance's
knowledge, no liens or claims which have been filed for work, labor or materials
affecting the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the Mortgage Loan (other than a senior
Mortgage in the case of a Mortgaged Property secured by a subordinate Mortgage).
(o) Enforceability. The Mortgage Loan contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby, except as enforceability of such provisions may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(p) [Qualified Mortgage for REMIC. Each Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code and the Treasury Regulations
thereunder. As of the Initial Cut-Off Date, in the case of the Initial Mortgage
Loans, and as of the related Subsequent Cut-Off Date, in the case of each
Subsequent Mortgage Loan, the Mortgage Loan was 59 days or less delinquent, was
not in foreclosure nor did CIT Consumer Finance consider acceleration and
liquidation of such Mortgage Loan to be reasonably foreseeable. As of the
Closing Date, with respect to the Initial Mortgage Loans, the fair market value
of the interest in real property securing each Initial Mortgage Loan (i) was at
least equal to 80 percent of the adjusted issue price of the obligation at the
time the obligation was originated (or, if later, but before the Closing Date,
the time the obligation was significantly modified, as such term is defined in
Treasury Regulations ss. 1.860G-2(b)(2)); or (ii) is at least equal to 80
percent of the adjusted issue price of the obligation on the Closing Date. As of
the related Subsequent Transfer Date, with respect to the Subsequent Mortgage
Loans, the fair market value of the interest in real property securing each
Subsequent Mortgage Loan (i) was at least equal to 80 percent of the adjusted
issue price of the obligation at the time the obligation was originated (or, if
later, but before the Subsequent Transfer Date, the time the obligation was
significantly modified, as such term is defined in Treasury Regulations ss.
1.860G-2(b)(2)); or (ii) is at least equal to 80 percent of the adjusted issue
price of the obligation on the Subsequent Transfer Date.]
[For purposes of this Section 3.02(p), the fair market value of the real
property interest must be first reduced by the amount of any lien on the real
property interest that is senior to the obligation being tested, and must be
further reduced by a proportionate amount of any lien that is in parity with the
obligation being tested, in each case before the percentages set forth in (i)
and (ii) above are determined. The adjusted issue price of an obligation is its
issue price plus the amount of accrued original issue discount, if any, as of
the date of determination.]
- 44 -
(q) Conventional Mortgage Loans. None of the Mortgage Loans is insured or
guaranteed by any governmental agency.
(r) Lien. Each Mortgage is a valid and subsisting first or subordinate
lien of record on the Mortgaged Property subject to the exceptions to title set
forth in any title insurance policy or attorney's opinion of title with respect
to the related Mortgage Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and such other exceptions to which similar properties are commonly
subject and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be provided by such
Mortgage.
(s) Recordation. Each original Mortgage was recorded or is in the process
of being recorded, in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of or purchasers from
the Seller delivering the related Mortgage Loan.
(t) Deed of Trust. With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Holders or the Trust to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the related Mortgagor.
(u) Licenses. The Trust is in compliance with any and all license, permit
and other requirements of any federal or state law applicable to its ownership
of the Mortgage Loan and its exercise of rights under the Mortgage Loan and this
Agreement. The Trust is not required to obtain the consent of any other party or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement the failure of which so to obtain would have a material adverse effect
on the Trust.
(v) Manufactured Housing. In the case of a Mortgage Loan financing a
dwelling which is a manufactured home, (i) the manufactured home is affixed to
the real property in such a manner as to render the manufactured home real
property under the laws of the jurisdiction in which it is located, (ii) the
Mortgage is a lien on the land on which the manufactured home is located as well
as the manufactured home itself, and (iii) the manufactured home (a) has a
minimum of 400 square feet of living space, (b) has a minimum width in excess of
102 inches and (c) is of a kind customarily used at a fixed location.
(w) Underwriting Guidelines. Each Mortgage Loan was underwritten in
accordance with the policies and procedures set forth in the Base Prospectus.
(x) Combined Loan-to-Value Ratio. At the time of its origination (and, in
the case of a Mortgage Loan that has been modified, at the time of origination
and at the time such Mortgage Loan was modified), no Mortgage Loan had a
Combined Loan-to-Value Ratio of greater than 100%.
- 45 -
(y) Mortgagor Not Subject to Bankruptcy Proceedings. No Mortgagor is in a
bankruptcy proceeding as of the related Cut-Off Date.
(z) Condition of Mortgaged Property. To the best of its knowledge, each
Mortgaged Property is free of material damage and is in good repair.
(aa) [Reserved]
(bb) [Reserved]
(cc) HOEPA. As of the related Cut-Off Date, no Mortgage Loan was subject
to the Home Ownership and Equity Protection Act of 1994 or any comparable state
law.
(dd) No Single Premium Insurance. No proceeds from any Mortgage Loan were
used to finance single-premium credit, life and disability insurance policies.
(ee) Prepayment Charges. No Mortgage Loan imposes a prepayment charge for
an original term in excess of five years.
(ff) Supervised Lender. All of the Mortgage Loans were originated by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing Act, or a savings and loan
association, a savings bank, a commercial bank, a credit union, an insurance
company or other similar institution which is supervised and examined by a
federal or state authority.
SECTION 3.03. Representations and Warranties Regarding the Mortgage Loans
in the Aggregate.
CIT Consumer Finance as Seller with respect to the Seller Mortgage Loans
[and as Master Servicer, in consideration of its appointment hereunder, with
respect to the Conduit Mortgage Loans and with respect to the Mortgage Loans
taken as a whole,] represents and warrants to the Trustee, the Depositor and the
Certificateholders that:
(a) Characteristics. As of the Closing Date, [each Initial Mortgage Loan
individually and the Initial Mortgage Loans in the aggregate] conform in all
material respects to the description thereof in the Prospectus Supplement.
(b) Computer Tape. As of Closing Date, [in the case of the Initial
Mortgage Loans, and as of the related Subsequent Transfer Date, in the case of
the Subsequent Mortgage Loans,] the Computer Tape made available by the Master
Servicer was complete and accurate as of its date and includes a description of
the same Mortgage Loans that are described in the [List of Initial Mortgage
Loans or the List of Subsequent Mortgage Loans, as applicable].
(c) Marking Records. By the Closing Date, [in the case of the Initial
Mortgage Loans, and as of the related Subsequent Transfer Date, in the case of
the Subsequent Mortgage Loans,] CIT Consumer Finance has caused the portions of
the Electronic Ledger relating to the Mortgage Loans constituting part of the
Trust to be clearly and unambiguously
- 46 -
marked to indicate that such Mortgage Loans constitute part of the Trust and are
owned by the Trust in accordance with the terms of the trust created hereunder.
(d) No Adverse Selection. Except for the effect of the representations and
warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Mortgage Loans.
SECTION 3.04. Representations and Warranties Regarding the Files.
CIT Consumer Finance represents and warrants to the Trustee, the Depositor
and the Certificateholders that:
(a) Possession. Immediately prior to the Closing Date, [in the case of the
Initial Mortgage Loans (excluding the Delayed Delivery Mortgage Loans), within
20 days after the Closing Date, in the case of the Delayed Delivery Mortgage
Loans, or immediately prior to the Subsequent Transfer Date, in the case of the
Subsequent Mortgage Loans,] [either] the Seller [or the Conduit Seller, as
applicable,] or the Custodian on behalf of the Seller [or the Conduit Seller],
will have possession of each original Mortgage Loan and the related File, and
there are and there will be no custodial agreements in effect materially and
adversely affecting the right of [either] the Seller [or the Conduit Seller, as
applicable,] to make, or to cause to be made, delivery of the Files required in
connection with the conveyance of the Mortgage Loans to the Depositor.
(b) Bulk Transfer Laws. As of the Closing Date, [in the case of the
Initial Mortgage Loans, or the Subsequent Transfer Date, in the case of the
Subsequent Mortgage Loans,] the transfer, assignment and conveyance of the
Mortgage Loans and the Files with respect thereto to the Depositor are not
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction.
SECTION 3.05. Repurchase of Mortgage Loans or Substitution of Mortgage
Loans for Breach of Representations and Warranties.
(a) Subject to Section 3.05(b), CIT Consumer Finance shall repurchase a
Mortgage Loan, at its Purchase Price, not later than 85 days after CIT Consumer
Finance receives written notice from the Trustee or the Master Servicer, or not
later than 90 days after CIT Consumer Finance otherwise becomes aware, of a
material breach of any representation or warranty of CIT Consumer Finance set
forth in Section 3.02 or 3.03 of this Agreement that materially and adversely
affects the interests of the Certificateholders in such Mortgage Loan and which
breach has not been cured. Upon discovery by the Master Servicer of a material
breach of a representation with respect to the Mortgage Loans, the Master
Servicer will promptly notify the Trustee and the Sellers. Upon discovery by the
Trustee of a material breach of a representation with respect to the Mortgage
Loans, the Trustee will promptly notify the Master Servicer and the Sellers. CIT
Consumer Finance shall effect such repurchase by paying to the Master Servicer
for deposit in the Certificate Account on the Business Day immediately preceding
the Distribution Date in the month following the month in which the loan was
repurchased, the aggregate of the Purchase Price of all Mortgage Loans that are
required to be repurchased pursuant to the preceding sentence. Notwithstanding
any other provision of the
- 47 -
Agreement, the obligation of CIT Consumer Finance under this Section shall not
terminate upon a Service Transfer pursuant to Article VII.
[CIT Consumer Finance shall, subject to this Section 3.05, repurchase such
Mortgage Loan or substitute a Qualified Substitute Mortgage Loan and shall
guarantee the payment of any tax imposed under the REMIC Provisions as a result
of such repurchase or substitution by paying to the Trustee the amount of such
tax not later than five Business Days before such tax shall be due and payable
to the extent that amounts previously paid over to and then held by the Trustee
pursuant to Section 5.10 hereof are insufficient to pay such tax and all other
taxes chargeable under Section 5.10. Pursuant to Section 5.10, the Master
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or imposed on
"contributions after start up date" under Section 860G(d) of the Code from
amounts otherwise distributable to the Private Certificateholders. The Master
Servicer shall give notice to the Trustee at the time of such repurchase of the
amounts due from CIT Consumer Finance pursuant to the guarantee of CIT Consumer
Finance and notice as to who should receive such payment.]
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by CIT Consumer Finance or
from moneys held in the funds and accounts created under this Agreement. The
Trustee shall be deemed conclusively to have complied with this Section if it
follows the directions of CIT Consumer Finance.
In the event any tax that is guaranteed by CIT Consumer Finance is
refunded to the Trust or otherwise is determined not to be payable, CIT Consumer
Finance shall be repaid the amount of such refund or that portion of any
guarantee payment made by CIT Consumer Finance that is not applied to the
payment of such tax.
It is understood and agreed that the conveyance set forth in this Section
3.05 shall inure to the benefit of the Trustee and the Certificateholders.
(b) On or prior to the date that is the second anniversary of the Closing
Date, CIT Consumer Finance, at its election, may substitute a Qualified
Substitute Mortgage Loan for a Mortgage Loan that it is obligated to repurchase
pursuant to Section 3.05(a) (such Mortgage Loan being referred to as the
"Replaced Mortgage Loan") upon satisfaction of the following conditions:
(i) CIT Consumer Finance shall have conveyed to the Trustee the
Mortgage Loan to be substituted for the Replaced Mortgage Loan and the
File related to such Mortgage Loan and CIT Consumer Finance shall have
marked the Electronic Ledger indicating that such Mortgage Loan
constitutes part of the Trust;
(ii) the Mortgage Loan to be substituted for the Replaced Mortgage
Loan is a Qualified Substitute Mortgage Loan and CIT Consumer Finance
delivers an Officer's Certificate, substantially in the form of [Exhibit
K] hereto, to the Trustee certifying that such Mortgage Loan is a
Qualified Substitute Mortgage Loan;
- 48 -
(iii) [CIT Consumer Finance shall have delivered to the Trustee an
Opinion of Counsel to the effect that the substitution of such Mortgage
Loan for such Replaced Mortgage Loan will not cause any of the REMICs to
fail to qualify as a REMIC at any time under then applicable REMIC
Provisions or cause any "prohibited transaction" that will result in the
imposition of a tax under such REMIC Provision;]
(iv) if the Principal Balance of such Replaced Mortgage Loan is
greater than the Principal Balance of the Mortgage Loan being substituted,
CIT Consumer Finance shall have deposited in the Certificate Account the
amount of such excess, plus accrued and unpaid interest (the "Substitution
Adjustment") and shall have included in the Officer's Certificate required
by clause (ii) above a certification that such deposit has been made; and
(v) CIT Consumer Finance shall have delivered to the Rating Agencies
prior written notice of such substitution, with a copy of such notice
delivered to the Trustee.
Upon satisfaction of such conditions, the Trustee shall add such Mortgage Loan
to, and delete such Replaced Mortgage Loan from, the List of Mortgage Loans.
Such substitution shall be effected prior to the expiration of the period in
which CIT Consumer Finance is otherwise obligated to repurchase such Replaced
Mortgage Loan pursuant to Section 3.05(a). Promptly after any substitution of a
Mortgage Loan, CIT Consumer Finance shall give written notice of such
substitution to the Rating Agencies.
(c) Promptly after the repurchase referred to in Section 3.05(a) or the
substitution referred to in Section 3.05(b), the Trustee shall execute such
documents in proper form as are presented to it by CIT Consumer Finance and are
reasonably necessary to reconvey the repurchased Mortgage Loan or Replaced
Mortgage Loan, as the case may be, to CIT Consumer Finance and deliver the
related File to CIT Consumer Finance.
(d) The repurchase obligation of CIT Consumer Finance set forth in this
Section 3.05 shall constitute the sole remedy available to the Trustee and the
Certificateholders for a breach of representation and warranty hereunder with
respect to the Mortgage Loans (but not with respect to any other breach by CIT
Consumer Finance of its obligations hereunder, as set forth herein).
SECTION 3.06. [Conditions of Closing for the Subsequent Mortgage Loans.]
[In connection with the transfer of any Subsequent Mortgage Loans to the
Trust, the following conditions shall have been satisfied on the related
Subsequent Transfer Date:]
(a) [As of the applicable Subsequent Cut-Off Date, each Subsequent
Mortgage Loan shall satisfy the following criteria:]
(i) [the Subsequent Mortgage Loan shall not be 30 or more days
delinquent as of the related Subsequent Cut-Off Date;]
- 49 -
(ii) [no Subsequent Mortgage Loan will have a remaining term of less
than 56 months or greater than 360 months from its first payment date;]
(iii) [no Subsequent Mortgage Loan will have a combined
loan-to-value ratio greater than 100%;]
(iv) [no Subsequent Mortgage Loan shall have a Mortgage Rate less
than [___]% ([___]% for any Mortgage Loan that accrues interest using the
simple interest method) or greater than [___]%;]
(v) [no Subsequent Mortgage Loan, to the extent a FICO score for
such Subsequent Mortgage Loan is available, shall have a FICO score less
than [___];]
(vi) [the Subsequent Mortgage Loan shall have been serviced by the
Master Servicer since origination or purchase by either Seller in
accordance with its standard servicing practices;]
(vii) [the Subsequent Mortgage Loan must have an interest start date
occurring on or before the Business Day immediately preceding the
Distribution Date in _____ 200_;]
(viii) [the Subsequent Mortgage Loan shall have been underwritten in
accordance with the policies and procedures set forth in the Base
Prospectus; and]
(ix) [no Subsequent Mortgage Loan will be originated in the state of
Georgia; and]
(x) [no Subsequent Mortgage Loan shall have a Principal Balance in
excess of $[_____] as of the related Cut-Off Date.]
(b) [Following the transfer of any Subsequent Mortgage Loans to the Trust,
the Mortgage Loans shall, as of the related Subsequent Cut-Off Date:]
(i) [have a weighted average age since origination of not more than
five months;]
(ii) [have a weighted average original term of not more than 360
months from the first payment date thereon;]
(iii) [have a weighted average Mortgage Rate of not less than [___]%
and not more than [___]%;]
(iv) [have a combined weighted average loan-to-value ratio of not
more than [___]%; provided that the percentage of Mortgage Loans in the
Mortgage Pool that have a combined loan-to-value ratio greater than [___]%
shall not exceed [___]% of the Mortgage Pool; and provided further that
the weighted average FICO
- 50 -
score of the Mortgage Loans in the Mortgage Pool (excluding Mortgage Loans
for which no FICO score is available) with a combined loan-to-value ratio
greater than [___]% shall not be less than [___];]
(v) [not include second lien Mortgage Loans in an amount exceeding
[___]% of the Mortgage Pool;]
(vi) [have a weighted average FICO score (excluding Mortgage Loans
for which no FICO score is available) of not less than [___]; provided
that the percentage of Mortgage Loans in the Mortgage Pool with a FICO
score (excluding Mortgage Loans for which no FICO score is available) that
is less than [___] shall not exceed [___]% of the Mortgage Pool;]
(vii) [not have a state concentration that is greater than [___]% of
the Mortgage Pool; and]
(viii) [have property type, occupancy status, debt-to-income, and
documentation type that does not vary by more than [___]% from the
Mortgage Pool as of the Initial Cut-Off Date.]
(c) [On or prior to any Subsequent Transfer Date, the following conditions
shall have been satisfied with respect to all Subsequent Mortgage Loans to be
transferred to the Trust on such Subsequent Transfer Date:]
(i) [the Depositor shall have confirmed to the Rating Agencies, the
Master Servicer, the Representative and the Trustee, in the related
Subsequent Transfer Agreement, the satisfaction of each condition
precedent specified in Section 2.03 and Section 3.06;]
(ii) [the Seller shall have delivered to the Depositor, the
Representative and the Trustee an Opinion of Counsel with respect to the
transfer of all of the Subsequent Mortgage Loans to the Trust on such
Subsequent Transfer Date substantially in the form of opinion attached as
[Exhibit B] to the form of Subsequent Purchase Agreement attached as
[Exhibit L] hereto;]
(iii) [the Trustee shall deliver to the Rating Agencies, the
Representative and the Depositor an Opinion of Counsel with respect to the
enforceability of each of the Subsequent Transfer Agreements substantially
in the form of the Opinion of Counsel delivered by the Trustee on the
Closing Date; and]
(iv) [the Seller shall represent and warrant that the Subsequent
Mortgage Loans satisfy the criteria set forth in this Section 3.06.]
- 51 -
ARTICLE IV
DELIVERY OF MORTGAGE DOCUMENTS; CUSTODY OF MORTGAGE LOANS;
RECORDATION OF MORTGAGES
SECTION 4.01. Delivery of Mortgage Documents; Custody of Mortgage Loans.
(a) CIT Consumer Finance shall deliver or cause to be delivered to the
Trustee or the Custodian as designee of the Trustee on the Closing Date, [with
respect to each Initial Mortgage Loan (except that, in the case of any Delayed
Delivery Mortgage Loans, such delivery may take place within twenty (20) days
following the Closing Date), or the related Subsequent Transfer Date, with
respect to each Subsequent Mortgage Loan, the original Note endorsed in blank
(and any modification or amendment thereto),] the original Mortgage with
evidence of recording indicated thereon (except for any Mortgage which has been
lost or which was not returned from the public recording office, a copy of which
(together with a certificate that the original of such Mortgage was delivered to
such recording office) shall be delivered initially and the original of which
shall be delivered to the Trustee or the Custodian as designee of the Trustee as
soon as the same is available to CIT Consumer Finance), assignments in blank of
the related Mortgage in recordable form and, if applicable, any riders or
modifications to such Note and Mortgage, any title insurance documents (which
may be evidenced by title insurance policies, binders, title commitments, title
reports or other indicia of title insurance provided by the title insurance
company) with respect to such Mortgage and any assumption or modification
agreement (collectively, the "Mortgage Documents"). The Trustee shall cause the
Custodian, on the Closing Date [and any Subsequent Transfer Date], to deliver to
the Trustee and the Master Servicer a Receipt of Notes pursuant to the Custodial
Agreement.
For certain Mortgage Loans transferred by the Depositor to the Trust, CIT
Consumer Finance may deliver to the Trustee or the Custodian as designee of the
Trustee, in lieu of the original Note, (i) a new promissory note signed by the
borrower confirming its obligation under the original Note (a "Confirmatory
Note"), or (ii) an affidavit of the Seller [or the Conduit Seller, as
applicable,] certifying that such Person or the Depositor was the sole owner of
the indebtedness evidenced by such note and the original thereof has been lost
or destroyed. CIT Consumer Finance hereby indemnifies the Trustee on behalf of
the Certificateholders and the Trust against any loss, liability, damage, claim
or expense resulting from CIT Consumer Finance's failure to deliver to the
Trustee or its designee the original Note or Confirmatory Note. Such
indemnification shall be terminated with respect to such Note or Confirmation
Note if CIT Consumer Finance subsequently delivers the original Note or a
Confirmatory Note. If CIT Consumer Finance delivers such a lost note affidavit
or fails to deliver any assumption and modification agreement, within 90 days
after the Closing Date, it shall deliver to the Trustee or the Custodian as
designee of the Trustee either the original Note or Confirmatory Note and
assumption and modification agreement, as applicable, or an Opinion of Counsel
satisfactory to the Trustee from counsel admitted to practice in the
jurisdiction in which the related Mortgaged Property is located to the effect
that the absence of the originals of such documents will not preclude the Master
Servicer from initiating or prosecuting to completion any foreclosure proceeding
with respect to such Mortgaged Property. If CIT Consumer Finance does not
deliver such documents or an Opinion of Counsel within such 90-day period, it
shall be required to use its best reasonable efforts to substitute another
Mortgage Loan or, if it is unable to make such substitution, to repurchase the
original Mortgage Loan at the Purchase Price, in each case in accordance with
the procedures and requirements of Section 3.05(b).
- 52 -
Notwithstanding anything to the contrary in this Section 4.01, within
twenty days after the Closing Date, CIT Consumer Finance shall either (i)
deliver to the Depositor, or at the Depositor's direction, to the Trustee or the
Custodian, on behalf of the Trustee, or other designee of the Depositor the File
as required pursuant to this Section 4.01 for each Delayed Delivery Mortgage
Loan or (ii) (A) substitute a Qualified Substitute Mortgage Loan for the Delayed
Delivery Mortgage Loan or (B) repurchase the Delayed Delivery Mortgage Loan,
which substitution or repurchase shall be accomplished in the manner and subject
to the conditions set forth in Section 3.05; provided, however, that if CIT
Consumer Finance fails to deliver a File for any Delayed Delivery Mortgage Loan
within the twenty-day period provided above, CIT Consumer Finance shall use its
best reasonable efforts to effect a substitution, rather than a repurchase of,
such Delayed Delivery Mortgage Loan and provided further that the cure period
provided in Section 4.03(a) shall not apply to the initial delivery of the File
for such Delayed Delivery Mortgage Loan, but rather CIT Consumer Finance shall
have five (5) Business Days to cure such failure to deliver. At the end of such
twenty-day period the Trustee shall send a Delayed Delivery Certification for
the Delayed Delivery Mortgage Loans in the form attached as [Exhibit F] hereto,
delivered during such twenty-day period in accordance with the provisions of
Section 4.01(b).
(b) Subject to the terms and conditions of this Section 4.01, the Trustee,
pursuant to the Custodial Agreement, (i) shall act as custodian of the Files for
the benefit of the Certificateholders and (ii) at the end of the twenty (20) day
period after the Closing Date execute and deliver to the Depositor, the Servicer
and the Sellers a Delayed Delivery Certification with respect to the Delayed
Delivery Mortgage Loans in the form attached as [Exhibit F] hereto, with any
applicable exceptions noted thereon.
(c) The Trustee agrees, in its capacity as Custodian pursuant to the
Custodial Agreement, to maintain the related Files at one of its offices as the
Trustee and the Master Servicer may from time to time agree.
(d) As Custodian, the Trustee shall have and perform the following powers
and duties:
(i) hold the Files on behalf of the Certificateholders, maintain
accurate records pertaining to each Mortgage Loan to enable the Master
Servicer to comply with the terms and conditions of this Agreement,
maintain a current inventory thereof, conduct periodic physical
inspections of the Files held by it under this Agreement and certify in
writing to the Master Servicer upon request that it continues to maintain
possession of such Files;
(ii) implement policies and procedures with respect to persons
authorized to have access to the Files and the receipting for Files taken
from their storage area by a Servicing Officer for purposes of servicing
or any other purposes;
(iii) maintain custody of the Files on behalf of the
Certificateholders; and
- 53 -
(iv) make originals of any document in the Files available to the
Master Servicer to enforce the Mortgage Loans.
(e) In performing its duties under the Custodial Agreement and this
Section 4.01, the Trustee agrees to exercise that degree of skill and care,
consistent with the same degree of skill and care that financial institutions
acting in comparable capacities would exercise or use under the circumstances in
the conduct of its own affairs with respect to similar Mortgage Loans. Subject
to Section 11.03, the Trustee, in performing its duties under this Section 4.01
and the Custodial Agreement, shall have liability for its own negligent action,
its own negligent failure to act or its own willful misconduct.
SECTION 4.02. Recordation of Mortgages.
(a) The Master Servicer will maintain a recorded first or subordinate
lien, as applicable, on each Mortgaged Property so long as the related Mortgage
Loan is the property of the Trust (except as it may be limited by the absence of
a duly recorded mortgage assignment). Within 90 days of the Closing Date [or the
related Subsequent Transfer Date, as applicable,] the Master Servicer will
record assignments to the Trust of the lien on any Mortgaged Property (or, where
permitted, assignments of the liens on any group of Mortgaged Properties), at
its sole expense, unless an opinion(s) of counsel is delivered by the Master
Servicer to the Trustee to the effect that recordation of an assignment is not
required to protect the interests of the Trustee in a Mortgage Loan and the
related Mortgaged Property or in a group of Mortgage Loans (and the related
Mortgage Properties). If, at a later date, the Trustee is advised by counsel to
the effect that recordation of an assignment is required to protect the
interests of the Trust in the Mortgage Loan or the related Mortgaged Property,
the Master Servicer will record such assignments to the Trust within sixty (60)
days, at CIT Consumer Finance's sole expense. The Trustee shall cooperate with
CIT Consumer Finance by executing such instruments prepared by or at the
direction of CIT Consumer Finance, as CIT Consumer Finance shall request to
facilitate recordation of the assignments.
If a Responsible Officer of the Trustee receives notice or has actual
knowledge that CIT Consumer Finance has failed to record such assignments of
Mortgages as provided above, the Trustee shall either (i) prepare such
assignments in recordable form and record such assignments in favor of the
Trustee within sixty (60) days at the expense of CIT Consumer Finance or (ii)
obtain opinions of counsel to the effect that recordation of assignments is not
required to protect the interests of the Trustee in the Mortgage Loans and the
related Mortgaged Property at the expense of CIT Consumer Finance. CIT Consumer
Finance hereby agrees to cooperate in the preparation, execution and recording
of such assignments.
(b) From time to time the Master Servicer shall, subject to the preceding
paragraph, take and cause to be taken such actions and execute such documents as
are necessary to perfect and protect the Certificateholders' interests in the
Mortgage Loans and their proceeds and the Mortgaged Properties against all other
persons. The accounting records and computer systems of the Depositor and of CIT
Consumer Finance will be marked to reflect the sale and assignments of the
Mortgage Loans by CIT Consumer Finance and the Depositor as contemplated herein.
- 54 -
SECTION 4.03. Review of Mortgage Documents.
(a) The Trustee, in its capacity as Custodian, shall review each Mortgage
Document within 60 days of delivery of such Mortgage Document and deliver to the
Trustee and the Master Servicer the Trust Receipt and Initial Certification
pursuant to the Custodial Agreement. If any Mortgage Document is found to be
missing or defective in a material respect, is not properly executed, is
unrelated to the Mortgage Loans of the Trust or does not conform in a material
respect to the description thereof provided by or on behalf of CIT Consumer
Finance, the Trustee, in its capacity as Custodian, shall notify the Master
Servicer and the Depositor, and the Master Servicer will notify CIT Consumer
Finance. If CIT Consumer Finance does not cure such defect within 85 days after
notice thereof from the Master Servicer or within 90 days after knowledge
thereof and the defect materially and adversely affects the interest of the
Trust in the related Mortgage Loan, CIT Consumer Finance shall be obligated to
repurchase the related Mortgage Loan from the Trust at the Purchase Price. CIT
Consumer Finance shall effect such repurchase by paying to the Master Servicer
for deposit in the Certificate Account on the Business Day immediately preceding
the Distribution Date in the month following the month in which the loan was
repurchased, the aggregate of the Purchase Price of all Mortgage Loans that are
required to be repurchased pursuant to the preceding sentence.
[Notwithstanding the provisions of the preceding paragraph, but subject to
Section 4.03(b), CIT Consumer Finance will not be required to repurchase a
Mortgage Loan as described in the preceding paragraph unless the Trustee has
received an Opinion of Counsel that such repurchase will not cause any of the
REMICs to fail to qualify as a REMIC at any time under the then applicable REMIC
Provisions. The cost of obtaining such Opinion of Counsel shall be borne by CIT
Consumer Finance. The Master Servicer shall obtain such Opinion of Counsel. CIT
Consumer Finance shall, subject to this Section 4.03, repurchase such Mortgage
Loan or substitute a Qualified Substitute Mortgage Loan and shall guarantee the
payment of any tax imposed under the REMIC Provisions as a result of such
repurchase or substitution by paying to the Trustee the amount of such tax not
later than five Business Days before such tax shall be due and payable to the
extent that amounts previously paid over to and then held by the Trustee
pursuant to Section 5.10 hereof are insufficient to pay such tax and all other
taxes chargeable under Section 5.10. Pursuant to Section 5.10, the Master
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or imposed on
"contributions after start up date" under Section 860G(d) of the Code from
amounts otherwise distributable to the Private Certificateholders. The Master
Servicer shall give notice to the Trustee at the time of such repurchase of the
amounts due from CIT Consumer Finance pursuant to the guarantee of CIT Consumer
Finance and notice as to who should receive such payment. The Trustee will have
no responsibility whatsoever for determining the amounts or any mathematical
calculations associated therewith.]
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by CIT Consumer Finance or
from moneys held in the funds and accounts created under this Agreement. The
Trustee shall be deemed conclusively to have complied with this Section if it
follows the directions of CIT Consumer Finance.
- 55 -
In the event any tax that is guaranteed by CIT Consumer Finance is
refunded to the Trust or otherwise is determined not to be payable, CIT Consumer
Finance shall be repaid the amount of such refund or that portion of any
guarantee payment made by CIT Consumer Finance that is not applied to the
payment of such tax.
(b) On or prior to the date that is the second anniversary of the Closing
Date, CIT Consumer Finance, at its election, may substitute a Qualified
Substitute Mortgage Loan for a Mortgage Loan that it is obligated to repurchase
pursuant to Section 4.03(a) (such Mortgage Loan being referred to as the
"Deleted Mortgage Loan") upon satisfaction of the following conditions:
(i) CIT Consumer Finance shall have conveyed to the Trustee, for the
benefit of the Certificateholders, the Mortgage Loan to be substituted for
the Deleted Mortgage Loan and the File related to such Mortgage Loan and
CIT Consumer Finance shall have marked the Electronic Ledger indicating
that such Mortgage Loan constitutes part of the Trust;
(ii) the Mortgage Loan to be substituted for the Deleted Mortgage
Loan is a Qualified Substitute Mortgage Loan and CIT Consumer Finance
delivers an Officer's Certificate, substantially in the form of [Exhibit
K] hereto, to the Trustee certifying that such Mortgage Loan is a
Qualified Substitute Mortgage Loan;
(iii) [CIT Consumer Finance shall have delivered to the Trustee an
Opinion of Counsel to the effect that the substitution of such Mortgage
Loan for such Deleted Mortgage Loan will not cause any of the REMICs to
fail to qualify as a REMIC at any time under then applicable REMIC
Provisions or cause any "prohibited transaction" that will result in the
imposition of a tax under such REMIC Provision;]
(iv) if the Principal Balance of such Deleted Mortgage Loan is
greater than the Principal Balance of the Mortgage Loan being substituted,
the Seller shall have deposited in the Certificate Account the amount of
such excess, plus accrued and unpaid interest (the "Substitution
Adjustment") and shall have included in the Officer's Certificate required
by clause (ii) above a certification that such deposit has been made; and
(v) CIT Consumer Finance shall have delivered to the Rating Agencies
prior written notice of such substitution.
Upon satisfaction of such conditions, the Trustee shall add such Mortgage Loan
to, and delete such Deleted Mortgage Loan from, the List of Mortgage Loans. Such
substitution shall be effected prior to the expiration of the period in which
CIT Consumer Finance is otherwise obligated to repurchase such Deleted Mortgage
Loan pursuant to Section 4.03(a). Promptly after any substitution of a Mortgage
Loan, CIT Consumer Finance shall give written notice of such substitution to the
Rating Agencies.
(c) Promptly after the repurchase referred to in Section 4.03(a) or the
substitution referred to in Section 4.03(b), the Trustee shall execute such
documents as are
- 56 -
presented to it by CIT Consumer Finance and are reasonably necessary to reconvey
the repurchased Mortgage Loan or Deleted Mortgage Loan, as the case may be, to
CIT Consumer Finance and deliver the related File to CIT Consumer Finance.
(d) The repurchase obligation of CIT Consumer Finance set forth in this
Section 4.03 shall constitute the sole remedy available to the Trust and the
Certificateholders for a defect in documentation relating to this Section 4.03.
ARTICLE V
SERVICING OF MORTGAGE LOANS
SECTION 5.01. Responsibility for Mortgage Loan Administration.
The Master Servicer shall manage, administer, service and make collections
on the Mortgage Loans and perform or cause to be performed all contractual and
customary undertakings of the holder of the Mortgage Loans to the Mortgagors.
The Trustee, at the request of a Servicing Officer, shall execute any reasonable
documents or take any action reasonably requested, necessary or appropriate to
enable the Master Servicer to carry out its servicing and administrative duties
hereunder. CIT Consumer Finance is hereby appointed the Master Servicer until
such time as any Service Transfer shall be effected under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections on the
Mortgage Loans pursuant to this Agreement, the Master Servicer shall exercise
that degree of skill and care consistent with the same degree of skill and care
that the Master Servicer exercises with respect to similar mortgage loans
serviced by the Master Servicer for its own account. [Notwithstanding the
foregoing, the Master Servicer shall not release or waive the right to collect
the unpaid balance on a Mortgage Loan or grant an extension of payments due on a
Mortgage Loan, unless either (i) such release, waiver or extension is occasioned
by a default or a reasonably foreseeable default (in the opinion of the Master
Servicer) on such Mortgage Loan; or (ii) such release, waiver or extension is of
a type which counsel has advised has been identified by the Code or Treasury
Regulations which would not be treated as an exchange of the Mortgage Loan for
purposes of Section 1001 of the Code; or (iii) unless the Master Servicer
obtains an Opinion of Counsel to the effect that such action will not cause the
Trust to fail to qualify as a REMIC under the Code and under the relevant state
and local law or result in the imposition of taxes on the Trust under the REMIC
Provisions.]
SECTION 5.03. Records.
The Master Servicer shall during the period it is Master Servicer
hereunder, maintain such books of account and other records as will enable the
Trustee to determine the status of each Mortgage Loan.
- 57 -
SECTION 5.04. Inspection; Computer Tape.
(a) At all times during the term hereof, the Master Servicer shall afford
the Trustee and its authorized agents reasonable access during normal business
hours to the Master Servicer's records relating to the Mortgage Loans and will
cause its personnel to assist in any examination of such records by the Trustee
or its authorized agents. The examination referred to in this Section 5.04 will
be conducted in a manner which does not unreasonably interfere with the Master
Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination the Trustee may make, the
Trustee or its authorized agents may, using generally accepted audit procedures,
verify the status of each Mortgage Loan and review the Electronic Ledger and
records relating thereto for conformity to Monthly Reports prepared pursuant to
Article VI and compliance with the standards represented to exist as to each
Mortgage Loan in this Agreement.
(b) At all times during the term hereof, the Master Servicer shall keep
available a copy of the List of Mortgage Loans at its principal executive office
for inspection by Certificateholders.
SECTION 5.05. Certificate Account.
(a) Certificate Account. On or before the Closing Date, the Trustee shall
establish the Certificate Account on behalf of the Trust as an Eligible Account.
If, at any time, the Certificate Account ceases to be maintained as an Eligible
Account, the Trustee (or the Master Servicer on its behalf) shall, within five
(5) Business Days (or such longer period, not to exceed thirty (30) calendar
days, as to which the Rating Agencies may consent) establish a new Certificate
Account meeting the condition specified above, transfer any cash and/or any
investments to such new Certificate Account and from the date such new
Certificate Account is established, it shall be the "Certificate Account." The
Certificate Account shall be held by [TRUSTEE], not in its individual capacity
but solely as trustee for the benefit of Holders of Home Equity Loan Asset
Backed Certificates, Series 200_-_ (The CIT Group/Consumer Finance, Inc., Master
Servicer) Certificate Account to be entitled "CIT 200_-_ Certificate Account."
The Master Servicer shall, subject to the second following sentence, deposit in
the Certificate Account, no later than two Business Days after the Closing Date,
any amounts representing payments received on the Mortgage Loans on and after
the Cut-Off Date, regardless of when due. The Master Servicer shall, subject to
the following sentence, pay into the Certificate Account as promptly as
practicable (not later than the second Business Day) following the receipt
thereof by the Master Servicer, all amounts received in respect of the Mortgage
Loans, including all payments from Mortgagors, Liquidation Proceeds, Insurance
Proceeds, Monthly Advances and any Purchase Price (or Substitution Adjustment)
paid pursuant to Section 3.05, Section 5.14 or Section 4.03. Notwithstanding
anything in this Agreement to the contrary, for so long as, and only so long as,
CIT Consumer Finance shall remain the Master Servicer hereunder and CIT Consumer
Finance remains a wholly-owned direct or indirect subsidiary of 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 at least [P-1 by Moody's] or a
long-term debt rating of at xxxxx [X0 by Moody's] (notice of the failure to
maintain such rating shall be given to the Trustee by the Master Servicer within
ten (10) days of the occurrence thereof), the Master Servicer may make the
deposits to the Certificate Account specified in the two preceding
- 58 -
sentences on a monthly basis, but in any case shall make the deposits to the
Certificate Account not later than the Business Day immediately preceding the
applicable Distribution Date, in an amount equal to the net amount of such
deposits and payments which would have been made to the Certificate Account
during such Due Period but for the provisions of this sentence. The Master
Servicer shall not be required to deposit in the Certificate Account amounts
that are otherwise permitted to be withdrawn therefrom pursuant to clauses (c),
(d), (e) and (f) of Section 8.02 or amounts that are payable to the Master
Servicer pursuant to Section 8.04; provided, however, the Master Servicer shall
be required to so deposit the Master Servicing Fee referred to in Section
8.02(g) unless CIT Consumer Finance is the Master Servicer (in which case CIT
Consumer Finance, as Master Servicer, shall not be required to so deposit the
Master Servicing Fee referred to in Section 8.02(g)). All amounts paid into the
Certificate Account under this Agreement shall be held in trust for the
Certificateholders (or the Master Servicer, to the extent the Master Servicer is
entitled to receive any such amounts pursuant to this Agreement) until payment
of any such amounts is authorized under this Agreement.
(b) The Eligible Institution maintaining the Certificate Account shall, in
the name of the Trustee, as trustee, invest the amounts in the Certificate
Account solely in Eligible Investments that mature not later than one Business
Day prior to the next succeeding Distribution Date, in accordance with
instructions provided to the Trustee by the Master Servicer in writing. Once
such funds are invested, such Eligible Institution shall not change the
investment of such funds. All net income and gain from the investment of funds
in the Certificate Account shall be deposited in the Certificate Account. All
income and gain realized from any such investment of funds in the Certificate
Account (to the extent investment of such funds is permitted hereunder) shall be
for the benefit of the Master Servicer and may be withdrawn by the Trustee at
the written direction (which may be in the form of a Monthly Report) of the
Master Servicer on each Distribution Date pursuant to subsection 8.02(h). An
amount equal to any net loss on such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds, without right
to reimbursement, immediately as realized. "Eligible Investments" are any of the
following:
(i) [direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America and which are
non-callable;]
(ii) (A) [demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustee or any Affiliate of
the Trustee, acting in its commercial capacity) incorporated under the
laws of the United States of America or any state thereof or the District
of Columbia (or any domestic branch or agency of a foreign bank) and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, the commercial paper or other
short-term debt obligations of such depository institution or trust
company have been rated at least [P-1 or higher from Moody's and A-1+ from
Standard & Poor's] or such other rating acceptable to the Rating Agencies
and (B) any
- 59 -
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 A-1+ from
Standard & Poor's];]
(iv) [securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any State thereof which have a long-term credit rating of at
least [Aa3] or a short-term credit rating of [P-1 from Moody's and at
least AAA from Standard & Poor's] at the time of such investment;]
(v) [commercial paper (which may be commercial paper issued by CIT
Group Inc.) having a rating of at least [P-1 from Moody's and A-1 by
Standard & Poor's] at the time of such investment; and]
(vi) [money market funds rated [Aaa or P-1 by Moody's and AAAm or
AAAm-G by Standard & Poor's], including, without limitation, any such fund
for which the Trustee or an affiliate of the Trustee serves as an
investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, notwithstanding that (i) the Trustee or an
affiliate of the Trustee charges and collects fees and expenses from such
funds for services rendered, (ii) the Trustee charges and collects fees
and expenses for services rendered pursuant to this instrument, and (iii)
services performed for such funds and pursuant to this instrument may
converge at any time. (The Seller and the Master Servicer specifically
authorize the Trustee or an affiliate of the Trustee to charge and collect
all fees and expenses from such funds for services rendered to such funds,
in addition to any fees and expenses the Trustee may charge and collect
for services rendered pursuant to this instrument).]
The Trustee may trade with itself or with an Affiliate on an arm's length
basis in the purchase or sale of such Eligible Investments. The Trustee shall
not be liable for the selection of or for any investment losses made at the
direction of the Master Servicer on any Eligible Investments.
SECTION 5.05A. [Pre-Funding Account.]
(a) [On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust as an Eligible Account, and the funds
on deposit therein will be invested solely in Eligible Investments that mature
not later than one Business Day prior to the next succeeding Distribution Date,
until they are applied by the Trustee. If, at any time during the Funding
Period, the Pre-Funding Account ceases to be an Eligible Account, the Trustee
(or the Master Servicer on its behalf) shall within five (5) Business Days (or
such longer period, not to exceed thirty (30) calendar days, as to which the
Rating Agency may consent) establish a new Pre-Funding Account as an Eligible
Account and any cash and/or any investments shall be transferred to such new
Pre-Funding Account and from the date such new Pre-Funding Account is
established, it shall be the "Pre-Funding Account." The Pre-Funding Account
shall be held by
- 60 -
[TRUSTEE], not in its individual capacity but solely as trustee for the benefit
of Holders of Home Equity Loan Asset Backed Certificates, Series 200_-_ (The CIT
Group/Consumer Finance, Inc., Master Servicer) and shall be entitled "CIT 200_-_
Pre-Funding Account." The Pre-Funding 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 Trustee is
hereby instructed to deposit the Original Pre-Funded Amount into the Pre-Funding
Account. The Pre-Funding Account will not be a part of any of REMIC I, REMIC II,
REMIC III or Master REMIC.]
(b) [On any Subsequent Transfer Date, the Master Servicer shall instruct
the Trustee in writing (which may be in the form of a Monthly Report) 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 Mortgage Loans sold to the Trust on such Subsequent Transfer Date and
pay such amount to or upon the order of Depositor with respect to such transfer.
In no event shall the Master Servicer be permitted to instruct the Trustee to
release from the Pre-Funding Account with respect to Subsequent Mortgage Loans
to be transferred to the Trust an amount which, when added to the amounts
previously released from the Pre-Funding Account to acquire Subsequent Mortgage
Loans, would exceed the Original Pre-Funded Amount.]
(c) [On each Distribution Date occurring during the Funding Period, the
Trustee shall withdraw Pre-Funding Earnings from the Pre-Funding Account, to the
extent available, and deposit such Pre-Funding Earnings in the Supplemental
Interest Reserve Account for payment to the Holders of the Certificates on such
Distribution Dates as a portion of the Monthly Interest Amount with respect to
each such Distribution Date.]
(d) [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 _____ 200_ Distribution Date) the Master Servicer shall instruct the Trustee
in writing (which may be in the form of a Monthly Report) to withdraw from the
Pre-Funding Account, and the Trustee shall so withdraw, the difference, if any,
between (A) the sum of the Original Pre-Funded Amount, and (B) all amounts
theretofore withdrawn from the Pre-Funding Account with respect to the purchase
and transfer to the Trust of Subsequent Mortgage Loans, and the Trustee shall
deposit such amount into the Certificate Account for payment to the Holders of
the Certificates as a portion of the Basic Principal Amount 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.]
(e) [Any Pre-Funding Earnings on deposit in the Pre-Funding Account on the
last day of the Funding Period shall be deposited by the Trustee in the
Supplemental Interest Reserve Account on such date and shall constitute part of
the Monthly Interest Amount on the first Distribution Date thereafter or, if the
end of the Funding Period is on a Distribution Date, then on such date.]
[The REMIC Administrator, on behalf of the Trustee, shall account for the
Pre-Funding Account as an outside reserve fund within the meaning of Treasury
regulation 1.860G-2(h) and not an asset of any REMIC created pursuant to this
Agreement. The [Class X-IO]
- 61 -
Certificates shall evidence ownership of the Pre-Funding Account for federal tax
purposes and the Holders thereof shall direct the Trustee in writing as to the
investment of amounts therein.]
(f) [The REMIC Administrator, on behalf of the Trustee, shall account for
any distributions pursuant to Section 8.01 of an amount equal to the excess, if
any, of the Net WAC Cap for any Certificate over the REMIC Net WAC Rate for the
REMIC regular interest attributable to such Certificate as a payment from the
Supplemental Interest Reserve Account passing outside any REMIC created pursuant
to this Agreement.]
SECTION 5.06. Enforcement.
(a) The Master Servicer shall, consistent with customary servicing
procedures and the terms of this Agreement, act with respect to the Mortgage
Loans in such manner as will maximize the receipt of principal and interest on
the Mortgage Loans and Liquidation Proceeds in respect of Liquidated Mortgages.
(b) The Master Servicer may xxx to enforce or collect upon Mortgage Loans,
including foreclosure of any Mortgaged Property, in its own name, if possible,
or as agent for the Trustee. If the Master Servicer elects to commence a legal
proceeding to enforce a Mortgage Loan, the act of commencement shall be deemed
to be an automatic assignment of the Mortgage Loan to the Master Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Master Servicer may not enforce a Mortgage Loan
on the ground that it is not a real party in interest or a holder entitled to
enforce the Mortgage Loan, the Trustee on behalf of the Trust shall, at the
Master Servicer's expense, take such steps as the Master Servicer deems
necessary to enforce the Mortgage Loan, including bringing suit in its name or
the names of the Certificateholders.
(c) The Master Servicer shall exercise any rights of recourse against
third persons that exist with respect to any Mortgage Loan in accordance with
the Master Servicer's usual practice. In exercising recourse rights, the Master
Servicer is authorized on the Trustee's behalf to reassign the Mortgage Loan or
to resell the related Mortgaged Property to the person against whom recourse
exists at the price set forth in the document creating the recourse.
(d) Prior to a Service Transfer, the Master Servicer may grant to the
Mortgagor on any Mortgage Loan any rebate, refund or adjustment out of the
Certificate Account that the Master Servicer in good faith believes is required
because of a Principal Prepayment of the Mortgage Loan. The Master Servicer
shall not permit any rescission or cancellation of any Mortgage Loan, except to
the extent, if any, required by law.
(e) Prior to a Service Transfer, the Master Servicer may, consistent with
its customary servicing procedures and in accordance with Section 5.02, grant to
the Mortgagor on any Mortgage Loan an extension of payments due under such
Mortgage Loan, provided that such extension does not result in any payments
coming due on or after _____ 200_.
(f) The Master Servicer may enforce any due-on-sale clause in a Mortgage
Loan if such enforcement is consistent with its customary servicing procedures
for obligations similar to the Mortgage Loans, provided that such enforcement is
permitted by applicable law
- 62 -
and will not adversely affect any applicable insurance policy. If an assumption
and modification of a Mortgage Loan is permitted by the Master Servicer upon the
conveyance of the related Mortgaged Property, the Master Servicer shall use its
best efforts to obtain an assumption and modification agreement in connection
therewith and deliver such assumption and modification agreement to the Trustee
for addition to the related File.
(g) In the event that applicable state law requires that the sale of any
Mortgaged Property to which the Trustee has acquired title, through foreclosure
or otherwise, be conducted through a licensed real estate broker or if the
Master Servicer otherwise determines that it is prudent, the Master Servicer
shall retain such broker, and the fees payable to such broker in connection with
any such sale shall constitute Liquidation Expenses.
(h) Absent a default in payment by a Mortgagor or a reasonably foreseeable
payment default by a Mortgagor, the Servicer shall not make any change to a
Mortgage that could affect payments on the Mortgage if such change would be
considered a significant modification to the Mortgage under Treasury regulation
section 1.860G-2(b).
(i) Consistent with the standard of care set forth in Section 5.02, the
Master Servicer may, in its discretion, (i) waive any assumption fee, prepayment
charge, penalty interest, late payment or other charge in connection with a
Mortgage Loan, and (ii) arrange with a Mortgagor a schedule for the repayment of
delinquent amounts, subject to Section 5.02. To the extent the Master Servicer
consents to the deferment of the due dates for payments due on a Mortgage Loan,
the Master Servicer shall make payment of any required Monthly Advance with
respect to the payments so extended to the same extent as if such installment
had not been deferred.
SECTION 5.07. Trustee to Cooperate.
Upon payment in full on any Mortgage Loan, the Master Servicer shall
notify the Trustee by certification of a Servicing Officer (which certification
shall include a statement to the effect that such Mortgage Loan has been paid in
full and that all amounts received in connection with such payments which are
required to be deposited in the Certificate Account pursuant to Section 5.05
have been so deposited). The Master Servicer is authorized to execute an
instrument in satisfaction of such Mortgage Loan and to do such other acts and
execute such other documents as the Master Servicer reasonably deems to be
necessary to discharge the Mortgagor thereunder and eliminate the security
interest in the Mortgaged Property related thereto. The Master Servicer shall
determine when a Mortgage Loan has been paid in full. To the extent that
insufficient payments are received on a Mortgage Loan credited by the Master
Servicer as prepaid or paid in full and satisfied, the shortfall shall be paid
by the Master Servicer out of its own funds. From time to time as appropriate
for servicing and foreclosure in connection with any Mortgage Loan, the Trustee
shall, upon written request of a Servicing Officer and delivery to the Trustee,
of a receipt signed by such Servicing Officer, cause the original Mortgage Loan
and the related File to be released to the Master Servicer and shall execute
such documents as the Master Servicer shall deem necessary to the prosecution of
any such proceedings. Such receipt shall obligate the Master Servicer to return
the original Mortgage Loan and the related File to the Trustee when its need by
the Master Servicer has ceased unless the Mortgage Loan shall be liquidated or
repurchased as described in Section 3.05 or 4.03. Upon
- 63 -
the request of a Servicing Officer, the Trustee shall perform such other acts as
reasonably requested by the Master Servicer and otherwise cooperate with the
Master Servicer in enforcement of the Certificateholders' rights and remedies
with respect to the Mortgage Loans.
SECTION 5.08. Costs and Expenses.
(a) All costs and expenses incurred by the Master Servicer in carrying out
its duties hereunder, including all fees and expenses incurred in connection
with the enforcement of Mortgage Loans (including enforcement of Liquidated
Mortgages), shall be paid by the Master Servicer and the Master Servicer shall
not be entitled to reimbursement hereunder, except that the Master Servicer
shall be reimbursed out of the Liquidation Proceeds of a Liquidated Mortgage for
ordinary and necessary Liquidation Expenses incurred by it directly in
connection with realizing upon the related Mortgaged Property.
(b) In addition, the Master Servicer shall pay the cost of (i) the
preservation, restoration and protection of any Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, and (iii) the
management and liquidation of a Mortgaged Property acquired in satisfaction of
the related Mortgage Loan. Such expenditures may include costs of collection
efforts, reappraisals when a Mortgage Loan is past due, legal fees in connection
with foreclosure actions, advancing payments on the related senior mortgages, if
any, acquiring the related senior mortgage(s), if any, advances of delinquent
property taxes, upkeep and maintenance of the Mortgaged Property if it is
acquired through foreclosure, and similar types of expenses. Each such
expenditure constitutes a "Servicing Advance." The Master Servicer shall be
obligated to make the Servicing Advances incurred in the performance of its
servicing obligations only if it determines (i) that such actions will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable to it as described in clause (c) of this Section 5.08.
(c) The Master Servicer shall be entitled to recover Servicing Advances to
the extent permitted by the related Mortgage Loan or, if not theretofore
recovered from the Mortgagor on whose behalf such Servicing Advance was made,
from Liquidation Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Master Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan. Servicing Advances shall be reimbursable to the Master Servicer
from the sources described above out of the funds on deposit in the Certificate
Account pursuant to Section 8.02(c), such right of reimbursement being prior to
the rights of Certificateholders to receive any related Liquidation Proceeds
(including Insurance Proceeds).
SECTION 5.09. Maintenance of Insurance.
(a) Except as otherwise provided in subsection (b) of this Section 5.09,
the Master Servicer shall cause to be maintained with respect to each REO
Property one or more Hazard Insurance Policies which provide, at a minimum, the
same coverage as a standard form fire and extended coverage insurance policy
that is customary for the type of Mortgaged Property, issued by a company
authorized to issue such policies in the state in which the related Mortgaged
Property is located, and in an amount which is not less than (i) the maximum
- 64 -
insurable value of such Mortgaged Property, (ii) the outstanding principal
balance due from the Mortgagor on the related Mortgage Loan and the related
senior mortgage (if any) or (iii) the minimum amount required to compensate for
damage or loss on a replacement cost basis, whichever is less; provided,
however, that the amount of coverage provided by each Hazard Insurance Policy
shall be sufficient to avoid the application of any co-insurance clause
contained therein; and provided, further, that such Hazard Insurance Policies
may provide for customary deductible amounts. If an REO Property's location is
within a federally designated special flood hazard area, the Master Servicer
shall also cause such flood insurance to be maintained, which coverage shall be
at least equal to the minimum amount specified in the preceding sentence or such
lesser amount as may be available under the federal flood insurance program;
provided, however, that the failure of the Master Servicer to maintain such
flood insurance coverage in the case of a Mortgage Loan for which such flood
insurance coverage was not maintained as of the Cut-Off Date shall not give rise
to an Event of Termination under Section 7.01. Each Hazard Insurance Policy
caused to be maintained by the Master Servicer shall contain a standard loss
payee clause in favor of the Master Servicer and its successors and assigns. The
Master Servicer may, but shall not be obligated to, cause to be maintained, with
respect to each Mortgage Loan in which the related Mortgaged Property has not
become an REO Property, one or more Hazard Insurance Policies, which coverage
shall be at least equal to the minimum amount specified above. If any Mortgagor
is in default in the payment of premiums on its Hazard Insurance Policy or
Hazard Insurance Policies, the Master Servicer may, but shall not be obligated
to, in the case of a Mortgage Loan in which the related Mortgaged Property has
not become an REO Property, pay such premiums out of its own funds. If the
Master Servicer elects to pay such premiums out of its own funds, it may
separately add such premium to the Mortgagor's obligation as provided by the
Mortgage Loan, but shall not add such premium to the remaining principal balance
of the Mortgage Loan. The payment by the Mortgagor to the Master Servicer of
such premiums (and interest thereon) shall not be an asset of the Trust and
shall not be deposited by the Master Servicer in the Certificate Account.
(b) The Master Servicer may, in lieu of causing individual Hazard
Insurance Policies to be maintained with respect to each REO Property pursuant
to subsection (a) of this Section 5.09, and shall, to the extent that a Mortgage
Loan does not require the Mortgagor to maintain a Hazard Insurance Policy with
respect to the related Mortgaged Property, maintain one or more blanket
insurance policies covering losses on the Mortgagor's interest in the Mortgage
Loans resulting from the absence or insufficiency of individual Hazard Insurance
Policies. Any such blanket policy shall be substantially in the form and in the
amount carried by the Master Servicer at such time. The Master Servicer shall
pay the premium for such policy on the basis described therein. If the insurer
under such blanket insurance policy shall cease to be acceptable to the Master
Servicer, the Master Servicer shall exercise its best reasonable efforts to
obtain from another insurer a replacement policy comparable to such policy. The
Master Servicer shall provide the Rating Agencies with notice of the occurrence
of any event specified in the preceding sentence.
(c) The Master Servicer, or any affiliate of the Master Servicer, may, to
the extent permitted by law (a) enter into agreements with one or more insurers
or other Persons pursuant to which the Master Servicer or such affiliate will
earn commissions and fees in connection with any insurance policy purchased by a
Mortgagor including, without limitation,
- 65 -
any hazard insurance policy (whether or not such hazard insurance policy is
force-placed pursuant to the provisions of any Mortgage Loan), or any other
insurance policy whatsoever and (b) in connection with the foregoing, to
solicit, or permit and assist any insurer or any agent thereof to solicit
(including, without limitation, providing such insurer or agent a list of
Mortgagors including name, address or other information) any Mortgagor.
(d) The Master Servicer shall keep in force throughout the term of this
Agreement (i) a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement, and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among Persons which service a
portfolio of home equity mortgage loans having an aggregate principal amount of
$500,000,000 or more and which are generally regarded as Master Servicers
acceptable to institutional investors.
SECTION 5.10. [REMIC Compliance.]
[In the event that any tax is imposed on "prohibited transactions" of the
Trust as defined in Section 860F(a)(2) of the Code or on "contributions after
startup date" as defined in Section 860G(d) of the Code, such tax shall be
charged against amounts otherwise distributable to the Holders of the Private
Certificates in accordance with their Percentage Interests to the extent
hereinafter provided. Notwithstanding anything to the contrary contained herein,
the Master Servicer shall retain from amounts otherwise distributable to the
Holders of the Private Certificates on any Distribution Date sufficient funds
for the payment of such tax, including without limitation any tax payable
pursuant to Section 3.05 and 4.03, and shall pay such amount to the Trustee
(such payment to be accompanied by an Officer's Certificate of the Master
Servicer detailing such tax payment) or, if the Master Servicer (other than as a
Holder of a Private Certificate) has paid such tax, reimburse the Master
Servicer therefor (to the extent that the Master Servicer has not been
previously reimbursed or indemnified therefor). The Master Servicer agrees first
to seek indemnification for any such tax payment from any indemnifying parties
before reimbursing itself from amounts otherwise distributable to the Holders of
the Private Certificates.]
[In the event that any Mortgaged Property is acquired in a foreclosure or
other realization procedure (an "REO Property"), the Master Servicer shall sell
such REO Property by the close of the third calendar year following the year of
acquisition of such property by the Trust, unless the Master Servicer seeks, and
receives within such period, an Opinion of Counsel, addressed to the Trustee and
the Master Servicer, to the effect that the holding by the Trust of such REO
Property subsequent to the close of the third calendar year following the year
of acquisition of such property by the Trust will not result in the imposition
of taxes on "prohibited transactions" on any of the REMICs created under this
Agreement as defined in Section 860F of the Code or cause any of the REMICs
created under this Agreement to fail to qualify as a REMIC at any time that any
Offered Certificates or Private Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property such that
it will qualify as "foreclosure property" within the meaning of Section
860G(a)(8) and will not result in the receipt by the REMIC of any "income from
nonpermitted assets" within the meaning of Section 860F(a)(2)(B) or the Code.
Pursuant to its efforts to sell such REO Property, the Master Servicer shall
either itself or through an agent selected by the Master Servicer protect and
- 66 -
conserve such REO Property in the same manner and to such extent as it is
customary in the locality where such REO Property is located and may, incident
to its conservation and protection of the interests of the Certificateholders,
rent the same, or any part thereof, as the Master Servicer deems to be in the
best interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property.]
[The Master Servicer shall deposit all Liquidation Proceeds in the
Certificate Account in accordance with Section 5.05(a). The Master Servicer
shall include with its Monthly Report to the Trustee a separate report
specifying, with respect to each Mortgage Loan that becomes a Liquidated
Mortgage during the prior Due Period, the unpaid principal balance and the
Liquidation Proceeds for such Mortgage Loan.]
[The Master Servicer shall not:]
(i) [authorize the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real
Property;]
(ii) [authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;]
(iii) [authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and then only
if more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the
Code; or]
(iv) [authorize any Person to directly operate any REO Property on
any date more than 90 days after its date of acquisition by the Trust
Fund;]
[unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund, in
which case the Servicer may take such actions as are specified in such Opinion
of Counsel.]
[The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:]
(i) ]the terms and conditions of any such contract shall not be
inconsistent herewith;]
(ii) [any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above, and remit all related revenues
(net of such costs and expenses) to the Servicer as soon as
- 67 -
practicable, but in no event later than thirty days following the receipt
thereof by such Independent Contractor;]
(iii) [none of the provisions of this Section relating to any such
contract or to actions taken through any such Independent Contractor shall
be deemed to relieve the Servicer of any of its duties and obligations to
the Trustee on behalf of the Certificateholders with respect to the
operation and management of any such REO Property; and]
(iv) [the Servicer shall be obligated with respect thereto to the
same extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.]
SECTION 5.11. Sub-servicer.
The Master Servicer may enter into subservicing agreements with one or
more sub-servicers (which shall be Eligible Servicers) for the servicing and
administration of certain of the Mortgage Loans. Each subservicing agreement
will be upon such terms and conditions as are not inconsistent with this
Agreement and the standard of care set forth herein and as the Master Servicer
and the sub-servicer have agreed. All compensation payable to a sub-servicer
under a subservicing agreement shall be payable by the Master Servicer from its
servicing compensation or otherwise from its own funds, and none of the Trust,
the Trustee or the Certificateholders will have any liability to the
sub-servicer with respect thereto.
Notwithstanding any subservicing agreement or any of the provisions of
this Agreement relating to agreements or any arrangements between the Master
Servicer or a sub-servicer or any reference to actions taken through such
Persons or otherwise, the Master Servicer shall remain obligated and liable to
the Trust, the Trustee, and the Certificateholders for the servicing and
administering of the Mortgage Loans and the other Trust property in accordance
with the provisions of this Agreement without diminution of such obligation or
liability by virtue of such subservicing agreements.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Mortgage Loans and the
other Trust property involving a sub-servicer in its capacity as such shall be
deemed to be between the sub-servicer and the Master Servicer alone, and the
Trustee and the Certificateholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the
sub-servicer except as set forth in the next succeeding paragraph or as set
forth in such subservicing agreement.
In the event the Master Servicer shall for any reason no longer be acting
as such, the successor Master Servicer may, in its discretion, thereupon assume
all of the rights and obligations of the outgoing Master Servicer under a
subservicing agreement. In such event, the successor Master Servicer shall be
deemed to have assumed all of the Master Servicer's interest therein and to have
replaced the outgoing Master Servicer as a party to each such subservicing
agreement to the same extent as if such subservicing agreement had been assigned
to the successor Master Servicer, except that the outgoing Master Servicer shall
not thereby be relieved
- 68 -
of any liability or obligations on the part of the outgoing Master Servicer to
the sub-servicer under such subservicing agreement. The outgoing Master Servicer
shall, upon request of the Trust, but at the expense of the outgoing Master
Servicer, deliver to the successor Master Servicer all documents and records
relating to each such subservicing agreement and the Mortgage Loans and other
Trust property then being serviced thereunder and an accounting of amount
collected and held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of any subservicing agreement to the successor
Master Servicer. In the event that the successor Master Servicer elects not to
assume a subservicing agreement, the outgoing Master Servicer, at its expense,
shall cause the sub-servicer to deliver to the successor Master Servicer all
documents and records relating to the Mortgage Loans and the other Trust
property being serviced thereunder and all amounts held (or thereafter received)
by such sub-servicer (together with an accounting of such amounts) and shall
otherwise use its best efforts to effect the orderly and efficient transfer of
servicing of the Mortgage Loans and the other Trust property being serviced by
such sub-servicer to the successor Master Servicer.
SECTION 5.12. [Calculation of One-Month LIBOR.]
(a) [On the second business day preceding each Distribution Date or, in
the case of the first Distribution Date, on the second business day preceding
the Closing Date (each such date, an "Interest Determination Date"), the Trustee
shall determine the London interbank offered rate for one-month U.S. dollar
deposits ("One-Month LIBOR") for the next Interest Period for the Variable Rate
Certificates on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as such rates appear in the Telerate Page 3750,
as of 11:00 a.m. (London time) on such Interest Determination Date. As used in
this section, "business day" means a day on which banks are open for dealing in
foreign currency and exchange in London and New York City.]
[If on such Interest Determination Date fewer than two Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest Period
for the Variable Rate Certificates shall be the higher of (x) One-Month LIBOR as
determined on the previous Interest Determination Date and (y) the Reserve
Interest Rate. The "Reserve Interest Rate" shall be the rate per annum that the
Trustee determines to be either (i) the arithmetic mean (rounded upwards if
necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar
lending rates which New York City banks selected by the Trustee are quoting on
the relevant Interest Determination Date to the principal London offices of
leading banks in the London interbank market or (ii) in the event that the
Trustee can determine no such arithmetic mean, the lowest one-month U.S. dollar
lending rate which New York City banks selected by the Trustee are quoting on
such Interest Determination Date to leading European banks.]
(b) [The establishment of One-Month LIBOR on each Interest Determination
Date by the Trustee and the Trustee's calculation of the rate of interest
applicable to the Variable Rate Certificates for the related Interest Period
shall (in the absence of manifest error) be final and binding.]
- 69 -
SECTION 5.13. [Applied Realized Loss Amounts.]
[On each Distribution Date, the Master Servicer shall determine the total
of the Applied Realized Loss Amounts for such Distribution Date. The Applied
Realized Loss Amount for any Distribution Date shall be applied by reducing the
Certificate Principal Balance of each Class of Subordinate Certificates
beginning with the Class of Subordinate Certificates then outstanding with the
lowest payment priority, in each case until the respective Certificate Principal
Balance thereof is reduced to zero. Any Applied Realized Loss Amount allocated
to a Class of Certificates shall be allocated among the Certificates of such
Class in proportion to their respective Percentage Interests. Applied Realized
Loss Amounts will not be allocated to reduce the Certificate Principal Balance
of the Senior Certificates.]
SECTION 5.14. [Reserved]
SECTION 5.15. Release of Collateral.
The Master Servicer may, if such action is consistent with the standard of
care set forth in Section 5.02, release a portion of land from the lien of the
Mortgage thereon; provided that the Combined Loan-to-Value Ratio immediately
after the date of the release of such land is not greater than the Combined
Loan-to-Value Ratio as of the Cut-Off Date. [The Master Servicer may not release
such land unless an Opinion of Counsel is provided to the effect that such
release would not disqualify any of the REMICs formed hereunder or result in a
"prohibited transaction" tax as defined in Section 860F of the Code.]
ARTICLE VI
REPORTS
SECTION 6.01. Monthly Reports to the Trustee.
On or before the Determination Date, the Master Servicer shall furnish a
report (the "Monthly Report") to the Trustee, any Paying Agent and (if CIT
Consumer Finance is not the Master Servicer) CIT Consumer Finance. The
determination by the Master Servicer of the amount of the distributions to be
made to the Certificateholders, and, with respect to reimbursing the Master
Servicer for the Monthly Advances made by it as provided in Section 8.04, the
Master Servicer shall, in the absence of obvious error, be presumptively deemed
to be correct for all purposes hereunder, and the Trustee shall be protected in
relying upon the same without any independent check or verification.
[The Monthly Reports shall contain the following information:]
(i) [the amount of the distribution with respect to such Holder's
Certificates (based on a Certificate in the original principal or notional
amount of $1,000);]
(ii) [the amount of such Holder's distributions allocable to
principal, separately identifying the aggregate amount of any Prepayments
in full or other
- 70 -
Prepayments or other recoveries of principal included therein (based on a
Certificate in the original principal or notional amount of $1,000) and
any related Subordination Increase Amount;]
(iii) [the amount of such Holder's distributions allocable to
interest (based on a Certificate in the original principal or notional
amount of $1,000);]
(iv) [any Class Interest Carryover Shortfall for any Class of
Offered Certificates for such Distribution Date;]
(v) [any Class Principal Carryover Shortfall for any Class of
Subordinate Certificates for such Distribution Date;]
(vi) [the principal or notional amount of each Class of Offered
Certificate which will be Outstanding and the aggregate Loan Balance,
after giving effect to any payment of principal on such Distribution
Date;]
(vii) [the Overcollateralization Amount and Required
Overcollateralization Amount, if any, remaining after giving effect to all
distributions and transfers on such Distribution Date;]
(viii) [based upon information furnished by the Master Servicer,
such information as may be required by Section 6049(d)(7)(C) of the Code
and the regulations promulgated thereunder to assist the Holders in
computing their market discount;]
(ix) [the total of any Substitution Adjustments and any Purchase
Price amounts included in such distribution;]
(x) [the weighted average Coupon Rate of the Mortgage Loans; and]
(xi) [the Senior Enhancement Percentage;]
(xii) [the amount of any Applied Realized Loss Amount for each Class
of Subordinate Certificates as of the close of such Distribution Date;]
(xiii) [during the Funding Period, the amount of funds on deposit in
the Pre-Funding Account;]
(xiv) [during the Funding Period, the number and aggregate principal
balance of Subsequent Mortgage Loans;]
(xv) [during the Funding Period, the number and aggregate principal
balance of Subsequent Mortgage Loans purchased by the Trust on the related
Distribution Date; and]
(xvi) [during the Funding Period, the amount of investment earnings,
net of losses and investment expenses, on amounts on deposit in the
Pre-Funding Account.]
- 71 -
[In addition, the Monthly Report shall contain the following information
with respect to each of the Mortgage Loans:]
(a) [the number and aggregate Principal Balance of Mortgage Loans (i)
30-59 days delinquent, (ii) 60-89 days delinquent and (iii) 90 or more days
delinquent, as of the close of business on the last business day of the calendar
month next preceding the Distribution Date and the number and aggregate
Principal Balances of the Mortgage Loans and related data (as used herein,
"delinquent" means a Mortgage Loan as to which payments aggregating $[_____] or
more are delinquent);]
(b) [the number and aggregate Principal Balance of all Mortgage Loans in
foreclosure proceedings as of the close of business on the last business day of
the calendar month preceding such Distribution Date;]
(c) [the book value of any real estate acquired through foreclosure or
grant of a deed in lieu of foreclosure as of the close of business on the last
business day of the calendar month next preceding the Distribution Date;]
(d) [the amount of Realized Losses and Cumulative Realized Losses and any
subsequent recoveries on Liquidated Mortgages;]
(e) [the number and aggregate Principal Balance of Mortgage Loans
repurchased pursuant to Section 5.14 and the amount of Cumulative Realized
Losses with respect to such Mortgage Loss repurchased;]
(f) [whether the applicable Trigger Event has occurred; and]
(g) [Mortgage Loans that are "balloon" loans.]
SECTION 6.02. Certificate of Servicing Officer.
Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer certifying the accuracy of the Monthly Report
and that no Event of Termination or event that with notice or lapse of time or
both would become an Event of Termination has occurred, or if such event has
occurred and is continuing, specifying the event and its status.
SECTION 6.03. Other Data.
In addition, the Master Servicer shall, on request of the Trustee, furnish
the Trustee such underlying data as can be generated by the Master Servicer's
existing data processing system without undue modification or expense. In
addition, the Master Servicer shall accurately and fully provide information
regarding payment performance of the Mortgagors to the nationally recognized
credit repositories. Nothing in this Section shall derogate from the obligation
of the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
- 72 -
SECTION 6.04. Annual Report of Accountants.
Within 90 days after the end of each calendar year, commencing _____ __,
200_, the Master Servicer, at its expense, shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to deliver to the Trustee and the Underwriters a report which
opines on, at a minimum, the servicing entity's compliance with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers. Copies of the annual statement of accountants shall also be
provided to the Rating Agencies by the Master Servicer.
SECTION 6.05. Statements to Certificateholders.
(a) Concurrently with each distribution charged to the Certificate
Account, the Trustee, so long as it has received the Monthly Report from the
Master Servicer, shall forward or cause to be forwarded by mail to each
Certificateholder (or to the Depository), the Monthly Report.
The Trustee (so long as it has received the Monthly Report from the Master
Servicer) and the Master Servicer shall inform any Certificateholder inquiring
by telephone of the information contained in the most recent Monthly Report. The
Trustee shall be entitled to rely conclusively upon the accuracy of the Monthly
Report without independent verification unless it actually knows that the
information contained therein is not accurate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish upon request or cause to be furnished to each Person
who at any time during the calendar year was a Certificateholder a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year and such other information as the
Master Servicer deems necessary or desirable for Certificateholders to prepare
their tax returns which has been provided in writing by the Master Servicer to
the Trustee. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time in force.
Copies of all reports provided to the Trustee shall also be provided by
the Master Servicer to the Rating Agencies and the Underwriters.
(b) The Master Servicer shall, on behalf of the Trust, cause to be filed
with the Commission any periodic reports required to be filed on behalf of the
Trust under the provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
thereunder. Upon the request of the Master Servicer, the Seller shall cooperate
with the Master Servicer in the preparation of any such report and the Seller
and the Trustee each shall provide to the Master Servicer in a timely manner all
such information or documentation as is in the possession of such Person and
that the Master Servicer may reasonably request in connection with the
performance of its duties and obligations under this Section 6.05.
- 73 -
The Master Servicer shall file with the Commission a Form 15 and a Form
10K, and any amendments thereto, with respect to the Trust as soon as
practicable following the first date on which the conditions to filing thereof
have been satisfied.
SECTION 6.06. Annual Statement as to Compliance.
(a) The Master Servicer shall deliver to the Trustee and the Underwriters
within 90 days after the end of each calendar year commencing _____ __, 200_, a
certificate signed by a Responsible Officer of the Master Servicer, stating that
(i) a review of the activities of the Master 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 Master 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 Master Servicer shall deliver to the Trustee, promptly after
having obtained knowledge thereof, a certificate of a Responsible Officer of the
Master Servicer specifying any event which with the giving of notice or lapse of
time, or both, would become an Event of Termination under subsection (a) or (b)
of Section 7.01 hereof.
ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Event of Termination.
"Event of Termination" means the occurrence of any of the following:
(a) Any failure by the Master Servicer to make any deposit into the
Certificate Account required to be made hereunder or remit to the Trustee any
payment and the continuance of such failure for a period of five Business Days
after the giving of written notice of such failure, requiring the same to be
remedied, to the Master Servicer by the Trustee or to the Master Servicer and
the Trustee by Certificateholders (other than the [Class X-IO] and [Class R]
Certificates) of any Class evidencing, as to such Class, Percentage Interests
aggregating not less than 51%;
(b) Any failure by the Master Servicer duly to observe or perform in any
material respect any of its covenants or agreements in this Agreement, which
failure continues unremedied for thirty (30) days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer and
the Trustee by Certificateholders (other than the [Class X-IO] and [Class R]
Certificates) of any Class evidencing, as to such Class, Percentage Interests
aggregating not less than 51%;
(c) Any assignment by the Master Servicer of its duties or rights
hereunder except as specifically permitted hereunder;
- 74 -
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Master Servicer in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Master Servicer, as the case may be, or for any substantial
liquidation of its affairs, and such order remains undischarged and unstayed for
at least sixty (60) days;
(e) The Master Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Master Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing;
(f) The failure of the Master Servicer to be an Eligible Servicer;
(g) Provided that [Standard & Poor's] shall not have notified the Master
Servicer or the Trustee that the Cumulative Realized Loss Termination Event no
longer constitutes an Event of Termination, upon the occurrence and during the
continuance of a Cumulative Realized Loss Termination Event, and after the
giving of written notice, to the effect that such Certificateholders desire to
cause an Event of Termination, to the Trustee by Certificateholders evidencing
Percentage Interests aggregating not less than 51% of the Certificates (other
than the [Class X-IO] and [Class R] Certificates); and
(h) (1) Any failure by the Master Servicer to make a Servicing Advance to
the extent such failure materially and adversely affects the interests of the
Holders and the continuance of such failure for a period of five Business Days
after the giving of written notice of such failure, requiring the same to be
remedied, to the Master Servicer by the Trustee; or (2) any failure by the
Master Servicer to make a Monthly Advance and the continuance of such failure on
the Distribution Date.
SECTION 7.02. Transfer.
If an Event of Termination has occurred and is continuing, the Trustee
may, or at the written direction of Certificateholders (other than the [Class
X-IO] and [Class R] Certificates) with aggregate Percentage Interests evidencing
not less than 51% of the [Offered Certificates] shall, unless prohibited by
applicable law, terminate all (but not less than all) of the rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
(such termination being herein called a "Service Transfer"). Any such
termination shall also terminate all (but not less than all) of the rights and
obligations of any sub-servicer under a sub-servicing agreement. On receipt of
such notice (or, if later, on a date designated therein), all authority and
power of the Master Servicer under this Agreement, whether with respect to the
Mortgage Loans, the Files or otherwise (except with respect to the Certificate
Account, the transfer of which shall be governed by Section 7.06), shall pass to
and be vested in the Trustee pursuant to and under this Section 7.02 (subject to
applicable law regarding the Trustee's ability to make advances),
- 75 -
unless prohibited by applicable law; and, without limitation, the Trustee is
authorized and empowered to execute and deliver on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments (including, without limitation, documents required to make the
Trustee or a successor Master Servicer the sole assignee of the Mortgagee's
position in, or legal title holder of record of, each Mortgaged Property), and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. CIT Consumer Finance agrees to cooperate with the
Trustee in effecting the termination of the responsibilities and rights of the
Master Servicer hereunder, including, without limitation, the transfer to the
Trustee for administration by it of all cash amounts which shall at the time be
held by the Master Servicer for deposit, or have been deposited by the Master
Servicer, in the Certificate Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Mortgage Loans
and the execution of any documents required to make the Trustee or a successor
Master Servicer the sole assignee of the Mortgagee's position in, or legal title
holder of record of, each Mortgaged Property. The Master Servicer shall be
entitled to receive any other amounts which are payable to the Master Servicer
under this Agreement, at the time of the termination of its activities as Master
Servicer, to the extent that funds in the Certificate Account are available for
the payment thereof without reducing the amount of distributions that would be
made to Holders of the [Offered Certificates or Private Certificates]. The
Master Servicer shall transfer (and shall cause any sub-servicer to transfer) to
the new Master Servicer (i) the Master Servicer's records relating to the
Mortgage Loans in such electronic form as the new Master Servicer may reasonably
request and (ii) the Mortgage Loans and the Files in the Master Servicer's or a
sub-servicer's possession. The Trustee (or other successor Master Servicer) will
not be responsible for delays attributable to the outgoing Master Servicer's
failure to deliver information, defects in the information supplied by the
outgoing Master Servicer or other circumstances beyond the control of the
Trustee (or other successor Master Servicer).
SECTION 7.03. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of termination
pursuant to Section 7.02, the Trustee shall either appoint a successor servicer
who is an Eligible Servicer or shall become the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof (including, without limitation, the
obligation to make Monthly Advances pursuant to Section 8.04), and the Master
Servicer shall be relieved of such responsibilities, duties and liabilities
arising after such Service Transfer; provided, however, that (i) the Trustee (or
such other successor servicer) will not assume any obligations of CIT Consumer
Finance pursuant to Section 3.05 and (ii) the Trustee (or such other successor
servicer) shall not be liable for any acts or omissions of the Master Servicer
occurring prior to such Service Transfer or for any breach by CIT Consumer
Finance of any of its representations and warranties contained herein or in any
related document or agreement. As compensation therefor, the Trustee (or such
other successor servicer) shall, except as provided in Section 7.02 and in this
Section 7.03, be entitled to such compensation as the Master Servicer would have
been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act,
- 76 -
appoint, or petition a court of competent jurisdiction to appoint, an Eligible
Servicer as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending appointment of a successor to the Master Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall,
without the written consent of 100% of the Certificateholders, be in excess of
the Master Servicing Fee. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The outgoing Master Servicer shall be obligated to pay the costs
associated with the transfer of the servicing files and records to the Trustee
(or other successor Master Servicer).
SECTION 7.04. Notification to Certificateholders and to Rating Agencies.
(a) Promptly following the occurrence of any Event of Termination, the
Master Servicer shall give written notice thereof to the Trustee,
Certificateholders at their respective addresses appearing on the Certificate
Register and to the Rating Agencies.
(b) Within ten (10) days following any termination or appointment of a
successor to the Master Servicer pursuant to this Article VII, the Trustee shall
give written notice thereof to Certificateholders at their respective addresses
appearing on the Certificate Register.
(c) The Trustee shall give written notice to the Rating Agencies at least
thirty (30) days prior to the date upon which any Eligible Servicer (other than
the Trustee) is to assume the responsibilities of Master Servicer pursuant to
Section 7.03, naming such successor Master Servicer.
SECTION 7.05. Effect of Transfer.
(a) After the Service Transfer, the Trustee or new Master Servicer may
notify the Mortgagors to make payments directly to the new Master Servicer that
are due under the Mortgage Loans after the effective date of the Service
Transfer.
(b) After the Service Transfer, the replaced Master Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Mortgage Loans and the new Master Servicer shall have all of
such obligations, except that the replaced Master Servicer shall remain liable
for any liability of the replaced Master Servicer hereunder that was already
accrued at the time of the Service Transfer and except that the replaced Master
Servicer will transmit or cause to be transmitted directly to the new Master
Servicer for its own account, promptly on receipt and in the same form in which
received, any amounts (properly endorsed where required for the new Master
Servicer to collect them) received as payments upon or otherwise in connection
with the Mortgage Loans.
(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities and other
agreements of the Master
- 77 -
Servicer and CIT Consumer Finance pursuant to Article X and Sections 3.05, 4.03
and 11.05) other than those relating to the management, administration,
servicing or collection of the Mortgage Loans.
SECTION 7.06. Transfer of Accounts.
Notwithstanding the provisions of Section 7.02, if the Certificate Account
shall be maintained with the Master Servicer and an Event of Termination shall
occur and be continuing, the Master Servicer shall, promptly after receipt of a
notice of termination, if any, pursuant to Section 7.02, establish, or cooperate
with the Trustee to establish, new accounts in trust for the Certificateholders
conforming with the requirements of this Agreement with an Eligible Institution
other than the Master Servicer and promptly transfer, or cooperate with the
Trustee to transfer, all funds in the Certificate Account to such new accounts,
which shall thereafter be deemed the Certificate Account for the purposes
hereof.
ARTICLE VIII
DISTRIBUTIONS AND WITHDRAWALS FROM
CERTIFICATE ACCOUNT
SECTION 8.01. Monthly Distributions.
(a) Distributions on the Certificates shall be made from funds in the
Certificate Account. Each Certificateholder as of a Record Date shall be paid on
the next succeeding Distribution Date by check mailed to such Certificateholder
at the address for such Certificateholder appearing on the Certificate Register
(or, if a Holder of an [Offered Certificate] holds an aggregate Percentage
Interest of at least 5% of the [Offered Certificates or a Holder of a Private
Certificate] holds a Certificate with a Percentage Interest of 50% of such
Certificate, and if such Certificateholder so requests, by wire transfer of
immediately available funds pursuant to written instructions delivered to the
Trustee at least five days prior to the related Record Date, which instructions,
until revised, shall remain operative for all Distribution Dates thereafter),
such Certificateholder's Percentage Interest of the amount to be distributed.
Final payment on any Certificate shall be made only upon presentation and
surrender of such Certificate at the office or agency of the Paying Agent.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificateholder that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificateholder that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book-Entry Certificates and the Depository's rules. Neither the Trustee, the
Certificate Registrar, the Sellers, the Depositor nor the Master Servicer shall
have any responsibility therefor except as otherwise provided by applicable law.
- 78 -
(c) On each Distribution Date, the Trustee, based solely on the Monthly
Report furnished to it pursuant to Section 6.01, shall make the following
allocations, disbursements and transfers, from amounts deposited in the
Certificate Account in the following order of priority, and each such
allocation, transfer and disbursement shall be treated as having occurred only
after all preceding allocations:
A. [The Monthly Interest Amount is required to be distributed in the
following order of priority until such amounts have been fully distributed:]
1. [first, to the Master Servicer, the Master Servicer Fee;]
2. [second, to each Class of the Senior Certificates, the Class
Monthly Interest Amount and any Class Interest Carryover Shortfall for
such Class on that Distribution Date; provided, however, if the interest
collections are not sufficient to make a full distribution of the Class
Monthly Interest Amount and any Class Interest Carryover Shortfall with
respect to the Senior Certificates, the interest amounts will be
distributed pro rata among each such Class of Senior Certificates based on
the ratio of:]
(i) [the Class Monthly Interest Amount and Class Interest
Carryover Shortfall for that Class to]
(ii) [the total amount of Class Monthly Interest Amount and any
Class Interest Carryover Shortfall for the Senior
Certificates;]
3. [third, to the [Class M-1] Certificates, the Class Monthly
Interest Amount for that Class and Distribution Date;]
4. [fourth, to the [Class M-2] Certificates, the Class Monthly
Interest Amount for that Class and Distribution Date;]
5. [fifth, to the [Class B] Certificates, the Class Monthly Interest
Amount for that Class and Distribution Date; and]
6. [sixth, any remainder will be treated as Excess Interest and
distributed pursuant to clause C. below.]
B. [The Principal Distribution Amount for that Distribution Date is
required to be distributed in the following order of priority until the
Principal Distribution Amount has been fully distributed:]
1. [to the Senior Certificates (other than the [Class A-IO]
Certificates), the Senior Principal Distribution Amount for such
Distribution Date, excluding any Subordination Increase Amount or OC
Holiday Realized Loss Amount included in that amount, as follows:]
(i) [to the [Class A-6] Certificates, the [Class A-6] Lockout
Distribution Amount for that Distribution Date;]
- 79 -
(ii) [to the [Class A-1] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero:]
(iii) [to the [Class A-2] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero;]
(iv) [to the [Class A-3] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero;]
(v) [to the [Class A-4] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero;]
(vi) [to the [Class A-5] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero; and]
(vii) [to the [Class A-6] Certificates, until the Certificate
Principal Balance of that class has been reduced to zero;]
2. [to the [Class M-1] Certificates, the [Class M-1] Principal
Distribution Amount for that Class and such Distribution Date, excluding
any Subordination Increase Amount or OC Holiday Realized Loss Amount
included in that amount, until the Certificate Principal Balance of that
Class has been reduced to zero;]
3. [to the [Class M-2] Certificates, the [Class M-2] Principal
Distribution Amount for that Class and such Distribution Date, excluding
any Subordination Increase Amount or OC Holiday Realized Loss Amount
included in that amount, until the Certificate Principal Balance of that
Class has been reduced to zero; and]
4. [to the [Class B] Certificates, the [Class B] Principal
Distribution Amount for that Class and such Distribution Date, excluding
any Subordination Increase Amount or OC Holiday Realized Loss Amount
included in that amount, until the Certificate Principal Balance of that
Class has been reduced to zero.]
C. [Any Monthly Interest Amount remaining pursuant to clause A.6 above,
together with any Excess Overcollateralization Amount, will be treated as Excess
Interest and will be required to be distributed in the following order of
priority until fully distributed:]
1. [the Subordination Increase Amount or, during the OC Spread
Holiday, the OC Holiday Realized Loss Amount for such Distribution Date,
payable in the order of priority set forth in clauses B.1 through B.4
above;]
2. [to the [Class M-1] Certificates, the Class Interest Carryover
Shortfall for that Class;]
3. [to the [Class M-1] Certificates, the Class Principal Carryover
Shortfall for that Class;]
- 80 -
4. [to the [Class M-2] Certificates, the Class Interest Carryover
Shortfall for that Class;]
5. [to the [Class M-2] Certificates, the Class Principal Carryover
Shortfall for that Class;]
6. [to the [Class B] Certificates, the Class Interest Carryover
Shortfall for that Class;]
7. [to the [Class B] Certificates, the Class Principal Carryover
Shortfall for that Class;]
8. [to the [Class X-IO] Certificates, for deposit to the
Supplemental Interest Reserve Fund, the lesser of (a) the [Class X-IO]
Distribution Amount and (b) the WAC Excess;]
9. [first, concurrently, to the [Class A-1], [Class A-4], [Class
A-5] and [Class A-6] Certificates, pro rata, the related Net WAC Cap
Carryover from and to the extent of funds on deposit in the Supplemental
Interest Reserve Fund, and second, sequentially, to the [Class M-1],
[Class M-2] and [Class B] Certificates, payable in that order of priority,
the related Net WAC Cap Carryover from and to the extent of funds on
deposit in the Supplemental Interest Reserve Fund;]
10. [to the Trustee as reimbursement for all Trustee Reimbursable
Expenses incurred in connection with its duties and obligations under the
Agreement to the extent not paid by the Master Servicer;]
11. [to the Master Servicer to the extent of any unreimbursed
Monthly Advances;]
12. [To the [Class X-IO] Certificates, an amount equal to the [Class
X-IO] Distribution Amount less any amounts thereof applied pursuant to
clauses C.8 through C.11 above; and]
13. [To the [Class R] Certificates, the remainder.]
(d) [Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Distribution Dates to the Holders of the related
[Offered Certificates] on account of principal pursuant to Section 8.01(c) shall
not exceed the original Certificate Principal Balance of the related [Offered
Certificates].]
(e) [Reserved]
(f) [Reserved]
(g) [Notwithstanding the foregoing, amounts otherwise distributable to a
Certificateholder pursuant to such paragraph which are required to be withheld
and remitted to a
- 81 -
taxing authority shall be withheld and remitted to such taxing authority, and
such amounts shall be treated as actually distributed to such Certificateholder
for all purposes of this Agreement.]
(h) [The Master Servicer may direct the Trustee to pay to the Master
Servicer an amount equal to unreimbursed Servicing Advances (without interest)
with respect to each Mortgage Loan for which the Master Servicer has made a
Servicing Advance, to the extent not netted from deposits to the Certificate
Account pursuant to Section 5.05 and only to the extent funds are available for
distribution from the Certificate Account, by wire transfer of immediately
available funds, from subsequent collections with respect to interest on or with
respect to such Mortgage Loan, Liquidation Proceeds and Insurance Proceeds or
the Purchase Price of such Mortgage Loan. The Trustee (in its capacity as
Trustee) has no obligation to make advances (other than Monthly Advances as
specified in Section 8.04(d)) to the Master Servicer or any other party
hereunder.]
(i) [[PAYING AGENT] hereby accepts the appointment to act as the paying
agent (the "Paying Agent") hereunder and shall make the payments to the
Certificateholders required by this Agreement. [PAYING AGENT], in its capacity
as Paying Agent, shall maintain an office at ____________________. The Trustee
hereby agrees, and shall require any other Paying Agent (if other than the
Trustee) to agree in writing, that all amounts held by it for payment hereunder
will be held in trust for the benefit of the Certificateholders and that such
Paying Agent will notify the Trustee of any failure by the Master Servicer to
make funds available to the Paying Agent for the payment of amounts due on the
Certificates. In respect of each Distribution Date, the Trustee shall withdraw
from the Certificate Account and deposit in an account established by the Paying
Agent for the purpose of this Section funds sufficient to make the distribution
to Certificateholders pursuant to this Section. Such funds shall be available to
the Paying Agent by 11:00 A.M. on each Distribution Date.]
(j) [The REMIC Adminsitrator, on behalf of the Trustee, shall account for
the right of an Offered Certificate to receive an amount currently in excess of
the rate on the Master REMIC Regular Interest to which such Offered Certificate
relates as a distribution first to the [Class X-IO] Certificate and then as a
payment by the Supplemental Interest Reserve Fund to such Certificateholder.]
(k) [On any Distribution Date, the Weighted Average Net Mortgage Rate, and
the resulting Net WAC Cap, will be calculated based on the rate of interest on
each related Mortgage Loan as may be reduced by any shortfalls in interest
collection resulting from application of the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.]
SECTION 8.02. Permitted Withdrawals from the Certificate Account.
The Trustee shall at the written direction of the Master Servicer, from
time to time as provided herein, make withdrawals from the Certificate Account
of amounts deposited in said account pursuant to Section 5.05 that are
attributable to the Mortgage Loans for the following purposes:
(a) to make payments to Certificateholders and the Master Servicer
in the amounts and in the manner provided for in Section 8.01;
- 82 -
(b) to pay to CIT Consumer Finance with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 3.05 or 4.03 or 5.14, all amounts received thereon and
not required to be distributed to Certificateholders as of the date on
which the related Principal Balance or Purchase Price is determined;
(c) to make payments to the Master Servicer in the amounts and in
the manner provided for in Section 8.01(h);
(d) to reimburse the Master Servicer out of Liquidation Proceeds for
Liquidation Expenses and taxes incurred by it, to the extent such
reimbursement is permitted pursuant to Section 5.08;
(e) to reimburse the Master Servicer for the payment of taxes as
permitted by Section 5.10;
(f) to withdraw any amount deposited in the Certificate Account that
was not required to be deposited therein;
(g) to pay to the Master Servicer (if CIT Consumer Finance or one of
its Affiliates is not the Master Servicer) the Master Servicing Fees
payable by the Master Servicer for such Distribution Date and the Master
Servicing Fees payable by the Master Servicer from any prior Distribution
Date previously unpaid; and
(h) to pay to the Master Servicer net investment earnings from funds
on deposit in the Certificate Account due to the Master Servicer pursuant
to Section 5.05(b).
Since, in connection with withdrawals pursuant to clause (b) of the
preceding paragraph, CIT Consumer Finance's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such clause. The Master Servicer shall keep and
maintain an accounting for the purpose of justifying any withdrawal from the
Certificate Account pursuant to clause (f).
SECTION 8.03. Repurchase Option.
(a) The Trust created hereby and the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby (other than the responsibility of the Trustee to make any final
distributions to Certificateholders as set forth below and the rights and
immunities of the Trustee under Article XI) shall terminate upon the earlier of
the Distribution Date following the later of the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust or the termination of the Trust pursuant to Section
12.03, or the sale by the Trustee of all the Mortgage Loans and all the property
acquired in respect of any Mortgage Loan remaining in the Trust pursuant to
subsection (b) below.
- 83 -
(b) The Master Servicer, at its option, may purchase all of the Mortgage
Loans and all REO Property acquired in respect of any Mortgage Loan remaining in
the Trust on any Distribution Date on which the Pool Principal Balance is less
than or equal to [10]% of the sum of the aggregate Loan Balance of the [Initial
Mortgage Loans as of the Initial Cut-Off Date and the Original Pre-Funded
Amount] (the first such Distribution Date, the "Clean-up Call Date") at a
purchase price equal to the greater of (A) the sum of (1) 100% of the Principal
Balance and accrued interest on each Mortgage Loan (other than any Mortgage Loan
as to which title to the underlying property has been acquired and whose fair
market value is included pursuant to clause (2) below as of the Final
Distribution Date) and (2) the fair market value of such acquired property (as
determined by the Master Servicer as of the close of business on the third
Business Day next preceding the date upon which notice of any such termination
is furnished to Certificateholders pursuant to Section 12.03), (B) the aggregate
fair market value (as determined by the Master Servicer as of the close of
business on such third Business Day) of all of the assets of the Trust, and (C)
an amount that when added to amounts on deposit in the Certificate Account
available for distribution to Certificateholders for such Distribution Date
would result in proceeds sufficient to distribute the Aggregate Certificate
Principal Balance and interest for such Distribution Date and any unpaid
interest with respect to one or more prior Distribution Dates. The Master
Servicer shall effect such purchase by depositing such purchase price in the
Certificate Account on the Business Day immediately preceding such Distribution
Date. Promptly after such purchase, the Trustee shall execute such documents as
are presented to it by the Master Servicer and are reasonably necessary to
convey the Mortgage Loans and REO Property to the Master Servicer and deliver
the Files to the Master Servicer.
SECTION 8.04. Compensating Interest and Monthly Advances by the Master
Servicer.
(a) By the close of business on the day prior to each Distribution Date,
the Master Servicer shall pay to the Trust, but only to the extent of the Master
Servicing Fee for such month, with respect to each Mortgage Loan as to which the
Master Servicer received a Principal Prepayment with respect to the related Due
Period an amount ("Compensating Interest") equal to the excess of (i) 30 days'
interest on the Principal Balance of each such Mortgage Loan as of the beginning
of the related Due Period at the Mortgage Rate over, (ii) the amount of interest
actually received on the related Mortgage Loan during such Due Period.
(b) The Master Servicer shall be required to make an advance of its own
funds no later than the fourth Business Day prior to the Distribution Date, in
the amount, if any, by which 30 days' interest at the Mortgage Rate on the then
outstanding Principal Balance of a Mortgage Loan exceeds the amount received by
the Master Servicer in respect of interest on the Mortgage Loan with respect to
the related Due Period (any such advance, a "Monthly Advance"), subject to
limitations set forth in subsection (c) below. The Master Servicer shall be
permitted to reimburse itself for a Monthly Advance (i) from late collections on
the related Mortgage Loan and (ii) as otherwise provided in subsection (c).
(c) The Master Servicer shall not be obligated to make a Monthly Advance
if it determines that such Monthly Advance is a Nonrecoverable Advance. The
determination by the Master Servicer that any advance is, or if made would
constitute, a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee and
- 84 -
stating the reasons for such determination. If an unreimbursed Monthly Advance
shall become a Nonrecoverable Advance, the Master Servicer shall be reimbursed
from interest collections on all of the Mortgage Loans prior to any distribution
to Certificateholders pursuant to Section 8.01(c).
(d) In the event that the Master Servicer fails for any reason to make a
Monthly Advance required to be made pursuant to this Section 8.04, the Trustee
shall, on or before the related Distribution Date, deposit in the Certificate
Account an amount equal to the excess of (a) Monthly Advances required to be
made by the Master Servicer that would have been deposited in such Certificate
Account over (b) the amount of any Monthly Advance made by the Master Servicer
with respect to such Distribution Date; provided, however, that the Trustee
shall be required to make such Monthly Advance only if it is not prohibited by
law from doing so and it has determined that such Monthly Advance would be
recoverable from amounts to be received with respect to such Mortgage Loan,
including late payments, Liquidation Proceeds, Insurance Proceeds or otherwise.
The Trustee shall be entitled to be reimbursed from the Certificate Account for
Monthly Advances made by it pursuant to this Section 8.04(d) as if it were the
Master Servicer.
SECTION 8.05. [Supplemental Interest Reserve Fund.]
[On the Closing Date, the holders of the [Class X-IO] Certificates will
deposit, or cause to be deposited, into the Supplemental Interest Reserve Fund,
$[_____]. On each Distribution Date as to which there is WAC Excess, the Trustee
in accordance with the Monthly Report shall deposit into the Supplemental
Interest Reserve Fund an amount equal to the WAC Excess which is payable
pursuant to Section 8.01(c) clause C.9. If no WAC Excess is payable on a
Distribution Date, the Trustee in accordance with the Monthly Report shall
deposit into the Supplemental Interest Reserve Fund on behalf of the [Class
X-IO] Certificateholders an amount such that when added to other amounts already
on deposit in the fund, the aggregate amount on deposit therein is equal to
$[_____]. For Federal and state income tax purposes, the [Class X-IO]
Certificateholders will be deemed to be the owners of the Supplemental Interest
Reserve Fund and all amounts deposited into the Supplemental Interest Reserve
Fund (other than the initial $[_____] deposit) shall be treated as amounts
distributed by the Master REMIC with respect to the [Class X-IO] Distribution
Amount. Amounts held in the Supplemental Interest Reserve Fund and not
distributable to the [Offered Certificateholders] on any Distribution Date will
be invested by the Trustee in Eligible Investments designated in writing by the
[Class X-IO] Certificateholders having maturities on or prior to the next
succeeding Distribution Date on which such amounts will be distributable to the
[Offered Certificateholders]. In no event shall the Trustee be liable for
investment losses on investments selected by the [Class X-IO] Certificateholder.
In the absence of written directions, funds on deposit in the Supplemental
Interest Reserve Fund shall remain uninvested or, at the discretion of the
Trustee, be deposited in the Trustee's "cash reserves account" (but only if such
account qualifies as an Eligible Investment) unless otherwise instructed by the
Master Servicer. Upon the termination of the Trust, or the payment in full of
the [Offered Certificates], all amounts remaining on deposit in the Supplemental
Interest Reserve Fund will be released from the lien of the Trust and
distributed to the [Class X-IO] Certificateholders or their designees. The
Supplemental Interest Reserve Fund will be part of the Trust but not part of any
REMIC created hereunder and any
- 85 -
payments to the Offered Certificates of WAC Excess and will not be payments with
respect to a "regular interest" in a REMIC within the meaning of Code Section
860G(a)(1). The REMIC Administrator, on behalf of the Trustee, shall account for
the rights of the Offered Certificates to received payments from the
Supplemental Interest Reserve Fund as contractual rights that are property that
the trustee holds separate and apart from each regular interest to which they
relate. This obligation is intended to satisfy the requirements of Treasury
regulation section 1.860G-2(i) and shall be interpreted and applied consistent
with such regulation.]
ARTICLE IX
THE CERTIFICATES
SECTION 9.01. The Certificates.
The [Class A-1], the [Class A-2] Certificates, the [Class A-3]
Certificates, the [Class A-4] Certificates, the [Class A-5] Certificates, the
[Class A-6] Certificates, the [Class M-1] Certificates, the [Class M-2]
Certificates, the [Class B] Certificates, the [Class A-IO] Certificates, the
[Class X-IO] Certificates and the [Class R] Certificates shall be in
substantially the forms set forth in [Exhibits X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0, X-00, X and C] hereof, respectively.
The Certificates shall be authenticated by manual signature on behalf of
the Trustee by a duly authorized Responsible Officer or authorized signatory at
the written request of the Depositor. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless such
Certificate has been authenticated by manual signature in accordance with this
Section, and such signature upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication, except for those Certificates authenticated on the Closing Date,
which shall be dated the Closing Date.
SECTION 9.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. [Promptly after the Closing Date the Trustee will give the Master
Servicer, in writing, the names of all Private Certificateholders and the
Trustee will give the Master Servicer, prompt written notice of any change in
the Private Certificateholders.] The Trustee will give prompt written notice to
Certificateholders and the Master Servicer of any change in the Certificate
Registrar.
(b) [No transfer, sale, pledge or other disposition of any Private
Certificate or any interest therein (including any transfer by a
Certificateholder of any interest in a Book-Entry Certificate) shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act and effective registration or qualification under
applicable state securities laws or is made in a transaction that does not
require such registration or
- 86 -
qualification. Until such time as the Private Certificates shall be registered
pursuant to a registration statement filed under the Securities Act and the
Private Certificates shall bear a legend to the effect set forth in the
preceding sentence.]
[In the event that registration of a transfer of a Private Certificate or
any interest therein (including any transfer by a Certificateholder of any
interest in a Book-Entry Certificate) is to be made in reliance upon the
exemption from registration under the Securities Act contained in Rule 144A,
such transfer shall be made only to a Qualified Institutional Buyer which is
aware that the transfer of such Certificate is being made in reliance on Rule
144A and is acquiring such Certificate for its own account or for the account of
a Qualified Institutional Buyer, as the case may be, and such transferee shall
be deemed to have represented that the foregoing is true and correct and that
such transferee understands that such Certificates have not been and will not be
registered under the Securities Act and may not be reoffered, resold, pledged or
otherwise transferred except (A) to a person who such transferee reasonably
believes is a Qualified Institutional Buyer in a transaction meeting the
requirements of Rule 144A and (B) in accordance with all applicable securities
laws of the states of the United States.]
[In the event that registration of a transfer of a Private Certificate or
any interest therein (including any transfer by a Certificateholder of any
interest in a Book-Entry Certificate) is to be made in reliance upon an
exemption from registration under the Securities Act (other than the exemption
from registration contained in Rule 144A) and applicable state securities laws
in order to assure compliance with the Securities Act, the transferor or the
transferee shall deliver to the Trustee and the Master Servicer an Opinion of
Counsel that such transfer may be made pursuant to an exemption from the
Securities Act (other than the exemption from registration contained in Section
3(a)(2) thereof).]
[The Holder of a Private Certificate desiring to effect a transfer of such
Certificate shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Master Servicer against any liability that may result if such
transfer is not so exempt or is not made in accordance with such federal and
state laws.]
[Neither the Master Servicer, the Depositor, the Certificate Registrar,
the Paying Agent, the Seller nor the Trustee is obligated to register the
Private Certificates under the Securities Act or under any state securities
laws.]
[Prospective transferors of Private Certificates (or Book-Entry
Certificates), and prospective transferees of Certificates (or Book-Entry
Certificates) that are Qualified Institutional Buyers buying Certificates in
reliance upon Rule 144A may request from the Master Servicer information
regarding the Trust and the Trust assets. Within five (5) Business Days of any
such request, the Master Servicer shall deliver to any such prospective
transferor or transferee (i) a copy of each Monthly Report delivered to
Certificateholders since the first Distribution Date pursuant to Section 6.05,
(ii) information relating to the Sellers, the Master Servicer, the Mortgage
Loans and this Agreement substantially in the form of the Base Prospectus and
the Prospectus Supplement and (iii) such other information as may be required to
comply with Rule 144A and any interpretation thereof.]
- 87 -
(c) [As a condition to the registration of any Transfer of any Private
Certificate, the prospective transferee shall deliver to the Certificate
Registrar and the Trustee a certificate substantially in the form attached
hereto as [Exhibit I] (a "Private Certificate Transferee Letter") or shall
supply other evidence to the same effect satisfactory to the Master Servicer.]
(d) [Each Person who has or who acquires any Ownership Interest in a
[Class R] Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Master Servicer as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (vi) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a [Class R] Certificate are expressly subject to the following
provisions:]
(i) [Each Person holding or acquiring any Ownership Interest in a
[Class R] Certificate shall be a Permitted Transferee and shall promptly
notify the Master Servicer of any change or impending change in its status
as a Permitted Transferee.]
(ii) [No Ownership Interest in a [Class R] Certificate may be
Transferred without the express written consent of the Master Servicer,
and the Trustee shall not register the Transfer of any [Class R]
Certificate without such consent with respect to any proposed Transfer. In
connection with any proposed Transfer of any Ownership Interest in a
[Class R] Certificate, the Master Servicer shall, as a condition to such
consent, require delivery to it, in form and substance satisfactory to it,
and the proposed Transferee shall deliver to the Master Servicer and the
Trustee, the following:]
(A) [an affidavit (a "Transfer Affidavit") of the proposed
Transferee, in the form attached as [Exhibit H] hereto, that it is
not a "disqualified organization" within the meaning of Section
860E(e)(5) of the Code, and that the proposed Transferee is not
acquiring its Ownership Interest in the [Class R] Certificate as a
nominee, trustee or agent for, or for the benefit of, any Person who
is not a Permitted Transferee; and]
(B) [an express agreement by the proposed Transferee to be
bound by and to abide by the provisions of this Section and the
restrictions noted on the face of the [Class R] Certificates.]
(iii) [Notwithstanding the delivery of a Transfer Affidavit by a
proposed Transferee under clause (ii) above, if the Master Servicer has
actual knowledge that the Transfer Affidavit is false, no Transfer of an
Ownership Interest in a [Class R] Certificate to such proposed Transferee
shall be effected.]
(iv) [Each Person holding or acquiring any Ownership Interest in a
[Class R] Certificate shall agree (A) to require a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a [Class R] Certificate and (B) not to Transfer its Ownership
Interest in a [Class R] Certificate or to cause the Transfer of an
Ownership Interest in a [Class R] Certificate to
- 88 -
any other Person if it has actual knowledge that such Transfer Affidavit
is false.]
(v) [Any attempted or purported Transfer of any Ownership Interest
in a [Class R] Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported Transferee shall become a Holder of
a [Class R] Certificate in violation of the provisions of this Section,
then, upon discovery by or due notification of the Trustee that the
registration of Transfer of such [Class R] Certificate was not in fact
permitted by this Section, the last preceding Permitted Transferee shall
be restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such [Class R] Certificate. The Trustee shall
be under no liability to any Person for any registration of transfer of a
[Class R] Certificate that is in fact not permitted by this Section or for
making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions
of this Agreement so long as the Transfer was registered with the express
prior written consent of the Master Servicer. The Trustee shall be
entitled but not obligated to recover from any Holder of a [Class R]
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such [Class R] Certificate at
and after either such time. Any such payments so recovered by the Trustee
shall be paid and delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.]
(vi) [If any purported Transferee shall become a Holder of a [Class
R] Certificate in violation of the restrictions in this Section, then the
Master Servicer shall have the right without notice to the Holder or any
prior Holder of such [Class R] Certificate, to sell such [Class R]
Certificate to a purchaser selected by the Master Servicer on such terms
as the Master Servicer may choose. Such purchaser may be the Master
Servicer itself or any Affiliate of the Master Servicer. The proceeds of
such sale, net of commissions (which may include commissions payable to
the Master Servicer or its Affiliates), expenses and taxes due, if any,
will be remitted by the Master Servicer to the last preceding Permitted
Transferee of such [Class R] Certificate, except that in the event that
the Master Servicer determines that the Holder or any prior Holder of such
[Class R] Certificate may be liable for any amount due under this Section
or any other provision of this Agreement, the Master Servicer may withhold
a corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (vi) shall be
determined in the sole discretion of the Master Servicer, and it shall not
be liable to any Person having an Ownership Interest in a [Class R]
Certificate as a result of its exercise of such discretion.]
[Upon notice to the Master Servicer that any legal or beneficial interest
in any portion of a [Class R] Certificate has been transferred, either directly
or indirectly to any person that is not a Permitted Transferee or an agent
(including a broker, nominee, or middleman) of such Transferee in contravention
of the foregoing restrictions, the Master Servicer agrees to furnish to the
Internal Revenue Service and to the transferor of such [Class R] Certificate or
such agent such information necessary to the application of Section 860E(e) of
the Code as may be
- 89 -
required by the Code or any regulations or administrative pronouncements
thereunder, including but not limited to the present value of the total
anticipated excess inclusions with respect to such [Class R] Certificate (or
portion thereof) for periods after such transfer. At the election of the Master
Servicer, the Master Servicer may charge a reasonable fee for computing and
furnishing such information to the transferor or to such agent referred to
above; however, the Master Servicer shall in no event be excused from furnishing
such information to the Internal Revenue Service. The foregoing restrictions on
transfer contained in this Section 9.02(d) shall cease to apply to Transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, the Depositor and the Master Servicer, in form and substance
satisfactory to the Master Servicer, an Opinion of Counsel that eliminating such
restrictions will not cause any of the REMICs to fail to qualify as a REMIC at
any time while the Certificates are outstanding.]
(e) At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class of authorized denominations of the same
aggregate denomination, upon surrender of the Certificates to be exchanged at
such office. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and deliver on behalf of the Trust, and the Trustee shall
authenticate, the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for transfer
or exchange shall be duly endorsed by, or shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder thereof or his or her attorney duly
authorized in writing.
(f) Except as provided in paragraph (g) below the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the [Offered Certificates] may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificateholders and
with respect to ownership and transfers of such [Offered Certificates]; (iii)
ownership and transfers of registration of the [Offered Certificates] on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificateholders of the [Offered Certificates]
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different
Certificateholders; and (vi) the Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificateholders.
All transfers by Certificateholders of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificateholder. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificateholders it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
- 90 -
(g) If (x)(i) the Depositor or the Depository advises the Trustee in
writing that the Depository is no longer willing or able properly to discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor at its sole option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificateholders, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully registered [Offered Certificates] (the "Definitive
Certificates") to Certificateholders requesting the same. Upon surrender to the
Trustee of the [Offered Certificates] by the Depository, accompanied by
registration instructions from the Depository for registration, the Trustee
shall issue the Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(h) On or prior to the Closing Date, there shall be delivered to the
Depository one [Class A-1] Certificate, one [Class A-IO] Certificate, one [Class
A-2] Certificate, one [Class A-3] Certificate, one [Class A-4] Certificate, one
[Class A-5] Certificate, one [Class A-6] Certificate, one [Class M-1]
Certificate, one [Class M-2] Certificate and one [Class B] Certificate, each in
registered form registered in the name of the Depository's nominee, Cede & Co.,
the total face amount of which represents 100% of the Certificate Principal
Balance or Notional Amount as of the Closing Date of each [Offered Certificate].
If, however, the aggregate principal or notional amount of a Class of [Offered
Certificates] exceeds $400,000,000, one [Offered Certificate] will be issued
with respect to each $400,000,000 of principal or notional amount and an
additional Certificate of such Class or Classes will be issued with respect to
any remaining principal or notional amount. Each such [Offered Certificate]
registered in the name of the Depository's nominee shall bear the following
legend:
"Unless this Certificate is presented by an authorized representative of
The Depository Trust Company to the Trustee or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company (and any payment is made to Cede
& Co. or to such other entity as is requested by an authorized representative of
the Depository Trust Company), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein."
(i) [No transfer of a Private Certificate shall be made unless the Trustee
shall have received either: (i) a representation letter from the transferee of
such Private Certificate, acceptable to and in form and substance satisfactory
to the Trustee (which may be combined with the investment letter required by
subsection (b) above), to the effect that such transferee is not an employee
benefit plan subject to Section 406 of ERISA nor a plan or other arrangement
subject to Section 406 of ERISA nor a plan or other arrangement subject to
Section 4975 of the Code (collectively, a "Plan"), nor is acting on behalf of
any Plan nor using the assets of any Plan
- 91 -
to effect such transfer or (ii) in the event that any Private Certificate is
purchased by a Plan, or by a person or entity acting on behalf of any Plan or
using the assets of any Plan to effect such transfer (including the assets of
any Plan held in an insurance company separate or general account), an Opinion
of Counsel, acceptable to and in form and substance satisfactory to the Trustee,
which Opinion of Counsel shall be at the expense of the transferee and shall not
be at the expense of either the Depositor, the Trustee or the Trust Estate, to
the effect that the purchase or holding of any Private Certificates will not
result in any non-exempt prohibited transaction under ERISA and/or Section 4975
of the Code, and will not subject the Trustee to any obligation or liability in
addition to those expressly undertaken under this Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of a Certificate to
or on behalf of any Plan without the delivery to the Trustee of an Opinion of
Counsel as described above shall be null and void and of no effect.]
(j) [Notwithstanding anything to the contrary contained in this Section
9.02, the [Class R] Certificates and [Class X-IO] Certificates may be
transferred to The CIT GP Corporation III, without regard to Section 9.02(c)
above.]
SECTION 9.03. No Charge; Disposition of Void Certificates.
No service charge shall be made to a Certificateholder for any transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be disposed of in a manner approved
by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save each of them harmless, then in the absence of notice to
the Certificate Registrar or the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall authenticate, and the Trustee shall
execute and deliver on behalf of the Trust, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of the
same Class and same denomination. Upon the issuance of any new Certificate under
this Section 9.04, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith. Any duplicate Certificate
issued pursuant to this Section 9.04 shall constitute complete and indefeasible
evidence of ownership of the Percentage Interest evidenced thereby, as if
originally issued, whether or not the destroyed, lost or stolen Certificate
shall be found at any time.
SECTION 9.05. Persons Deemed Holders.
Prior to due presentation of a Certificate for registration of transfer,
the Master Servicer, the Depositor, the Trustee, the Paying Agent and the
Certificate Registrar may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the
- 92 -
purpose of receiving remittances pursuant to Section 8.01 and for all other
purposes whatsoever, and none of the Master Servicer, the Depositor, the
Trustee, the Certificate Registrar, the Paying Agent or any agent of the Master
Servicer, the Depositor, the Trustee, the Paying Agent or the Certificate
Registrar shall be affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar will furnish to the Trustee, the Master Servicer
and the Depositor within five Business Days after receipt by the Certificate
Registrar of a request therefor from the Trustee, the Master Servicer or the
Depositor, in writing, a list, in such form as the Trustee, the Master Servicer
or the Depositor 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 Holders of Certificates evidencing, as to any Class,
Percentage Interests aggregating 25% or more (hereinafter referred to as
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than ninety (90) days prior to the date of receipt of such
Applicants' request, the Trustee shall promptly request from the Certificate
Registrar a current list as provided above, and shall afford such Applicants
access to such list promptly upon receipt. Every Certificateholder, by receiving
and holding a Certificate, agrees with the Certificate Registrar and the Trustee
that none of the Depositor, the Master Servicer, the Certificate Registrar or
the Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders hereunder,
regardless of the source from which such information was derived.
SECTION 9.07. Authenticating Agents.
The Trustee may appoint one or more Authenticating Agents with power to
act on its behalf and subject to its direction in the authentication of the
Certificates. For all purposes of this Agreement, the authentication of
Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the authentication of Certificates "by the Trustee."
ARTICLE X
INDEMNITIES
SECTION 10.01. Liabilities to Mortgagors.
No liability to any Mortgagor under any of the Mortgage Loans arising out
of any act or omission to act of the Master Servicer in servicing the Mortgage
Loans prior to the Closing Date is intended to be assumed by the Depositor, the
Trust, the Trustee or the Certificateholders under or as a result of this
Agreement and the transactions contemplated hereby and, to the maximum extent
permitted and valid under mandatory provisions of law, the Depositor, the Trust,
the Trustee and the Certificateholders expressly disclaim such assumption.
- 93 -
SECTION 10.02. Tax Indemnification.
CIT Consumer Finance will pay, and shall indemnify, defend, and hold
harmless the Trustee, the Trust, and the Certificateholders from and against,
any taxes that may at any time be asserted with respect to, and as of the date
of, the transfer of the Mortgage Loans to the Trust, including, without
limitation, any sales, gross receipts, personal or real property, privilege or
license taxes (but not including any federal, state or other taxes arising out
of the creation of the Trust and the issuance of the Certificates or
distributions with respect thereto) and costs, expenses and reasonable counsel
fees in defending against the same.
SECTION 10.03. Master Servicer's Indemnities.
The Master Servicer (excepting the Trustee if it is Master Servicer) will
indemnify, defend, and hold harmless the Trustee, the Custodian, the Paying
Agent, the Trust, and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon
such Persons, through the willful misfeasance, negligence, or bad faith of the
Master Servicer in the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties under this Agreement.
The Master Servicer (excepting the Trustee if it is Master Servicer) will
indemnify, defend, and hold harmless from and against, and pay to the Trustee
all costs, expenses, losses, claims, damages, and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained in this Agreement in accordance with the terms and conditions
herein, except to the extent that such cost, expense, loss, claim, damage or
liability: (a) shall be due to the willful misconduct, gross negligence or bad
faith of the Trustee; (b) relates to any tax other than the taxes with respect
to which the Master Servicer shall be required to indemnify the Trustee pursuant
to this Agreement; (c) shall arise from the Trustee's breach of any of its
representations or warranties set forth in this Agreement; or (d) shall arise
out of or be incurred in connection with the acceptance or performance by the
Trustee of the duties of successor Master Servicer hereunder.
SECTION 10.04. Operation of Indemnities.
The indemnification provided under this Article shall include reasonable
fees and expenses of counsel; provided that the Master Servicer shall only be
required to pay the fees and expenses of one counsel, selected by the related
indemnitee and reasonably satisfactory to Master Servicer, in any single
litigation (or related proceedings); provided further, however, if the Trustee
obtains the written advice of counsel (of national reputation) that it may have
conflicting claims with another indemnitee or the Master Servicer or its
interests may be adverse to another indemnitee or the Master Servicer, then the
Master Servicer shall pay for the cost of one law firm of national reputation
selected by the Trustee, and approved by the Master Servicer (which approval
shall not be unreasonably withheld). If the Master Servicer shall have made any
indemnity payments pursuant to this Agreement and the recipient thereafter
collects any of such amounts from others, the recipient will promptly repay such
amounts to the Master Servicer and/or the Depositor, without interest. The
indemnities under this Agreement shall survive the resignation or removal of the
Trustee, or the termination of this Agreement.
- 94 -
SECTION 10.05. CIT Consumer Finance Indemnification.
CIT Consumer Finance will pay, and shall indemnify, defend, and hold
harmless the Trustee and the Trust from and against any and all costs, expenses,
losses, claims, damages, and liabilities imposed upon the Trust arising out of
or based upon a breach of a representation or warranty made by CIT Consumer
Finance hereunder.
ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Termination and after
the curing of all Events of Termination which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Termination has occurred (which has not been cured),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement but shall have no duty
to verify the factual content therein, including mathematical calculations.
Subject to Section 11.03, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct; provided,
however, that:
(a) Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
(b) The Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(c) The Trustee shall not be (i) personally liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the
- 95 -
discretion or rights or powers conferred upon it by this Agreement and (ii)
answerable or accountable under any circumstances except for its own negligence
or willful misconduct;
(d) The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of the Holders of 25% or more of the Certificates relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Agreement;
(e) The Trustee shall not be charged with knowledge of any event referred
to in Section 7.01 unless a Responsible Officer of the Trustee at the Corporate
Trust Office obtains actual knowledge of such event or fact or the Trustee
receives written notice of such event or fact from the Master Servicer or the
Holders of 25% or more of the Certificates; and
(f) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. None
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of CIT Consumer Finance, the Depositor or the Master Servicer
under this Agreement, except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) The Trustee may consult with counsel and any opinion of any counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such opinion of counsel;
(c) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or direction
of any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; provided, however, that nothing contained herein
shall relieve the Trustee of the obligations, upon the occurrence of an Event of
Termination (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the
- 96 -
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of 25% or more of the Certificates;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Master Servicer or, if paid by the Trustee,
shall be reimbursed by the Master Servicer upon demand;
(e) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys
or independent contractors and shall not be liable for any acts or omissions of
such agents, attorneys or independent contractors if appointed by it with due
care hereunder; and
(f) [The Trustee shall have no liability for any acts or omissions of CIT
Consumer Finance as REMIC Administrator and the appointment of CIT Consumer
Finance to act as REMIC Administrator shall be deemed to have been made with due
care on the part of the Trustee.]
SECTION 11.03. Trustee Not Liable for Certificates or Mortgage Loans.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein or in the Certificates (other than the Trustee's authentication
thereof). The Trustee makes no representations as to the validity or sufficiency
of this Agreement or of the Certificates (other than its authentication or
execution thereof) or of any Mortgage Loan, File or related document. The
Trustee shall not be accountable for the use or application by the Master
Servicer or the Depositor of funds paid to CIT Consumer Finance in consideration
of conveyance of the Mortgage Loans to the Depositor by CIT Consumer Finance or
deposited in or withdrawn from the Certificate Account by the Master Servicer.
SECTION 11.04. Rights of Certificateholders to Direct Trustee and to Waive
Events of Termination.
Holders of the [Offered Certificates] evidencing Percentage Interests
aggregating 25% or more shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that,
subject to Section 11.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceedings so directed would
- 97 -
be illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction. Notwithstanding the
above in this Section 11.04, the Trustee shall not be required to act unless and
until it has been provided with an indemnity or security reasonably satisfactory
to it; provided further that nothing in this Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by the Certificateholders; and provided further
that the Trustee shall instead follow the directions of the Holders of the
[Offered Certificates and Private Certificates] evidencing Percentage Interests
(other than the [Class X-IO] and [Class R] Certificates) aggregating 51% or more
whenever it receives conflicting directions from the Certificateholders. Holders
of the [Offered Certificates and Private Certificates] evidencing Percentage
Interests (other than the [Class X-IO] and [Class R] Certificates) aggregating
51% or more may on behalf of Certificateholders waive any past Event of
Termination hereunder and its consequences, except a default in respect of a
covenant or provision hereof which under Section 12.07 cannot be modified or
amended without the consent of all Certificateholders, and upon any such waiver,
such Event of Termination shall cease to exist and shall be deemed to have been
cured for every purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Event of Termination or impair any right consequent
thereon.
SECTION 11.05. Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer agrees:
(a) that the Master Servicer shall pay to the Trustee such
compensation for all services rendered by it hereunder as agreed by the
Trustee and the Master Servicer (which compensation is set forth in a
prior agreement between the Master Servicer and the Trustee which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, that the Master
Servicer shall reimburse the Trustee, to the extent requested by the
Trustee, for all reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements
of it agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the Trust and its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any
of the Trustee's powers or duties hereunder.
The covenants in this Section 11.05 shall be for the benefit of the
Trustee in each of its capacities and roles hereunder, including Trustee, Paying
Agent, Custodian, Certificate
- 98 -
Registrar [and, if it is so acting, REMIC Administrator hereunder,] and shall
survive the termination of this Agreement.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in a state and city acceptable
to the Depositor and organized and doing business under the laws of the United
States of America or any State, authorized under such laws to exercise corporate
trust powers, and shall have a combined capital and surplus of at least
$50,000,000 or shall be a member of a bank holding system the aggregate combined
capital and surplus of which is $50,000,000 and the Trustee shall be subject to
supervision and examination by a federal or state authority having jurisdiction
over depositary institutions. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of a supervising or
examining authority, then for the purposes of this Section 11.06, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
addition, the Trustee shall at all times have a long-term deposit rating of at
least Baa3 and BBB, by Xxxxx'x and Standard & Poor's, respectively, or a
short-term debt rating of at least P-3 and A-3 by Xxxxx'x and Standard & Poor's,
respectively, or as such Rating Agency shall otherwise deem acceptable. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer, the
Depositor and the Rating Agencies. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to each of the
Master Servicer and the successor Trustee. If no successor Trustee shall have
been so appointed and shall have accepted appointment within thirty (30) days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If, at any time, the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.06 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee. If the Depositor shall have removed the Trustee under the authority
of the immediately preceding sentence, the Depositor shall promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor Trustee. Upon appointment of any successor Trustee, the Trustee being
replaced shall change the name of the Certificate Account to the name of such
successor Trustee.
- 99 -
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.08.
SECTION 11.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 11.07 shall
execute, acknowledge and deliver to the Master Servicer, the Depositor and to
its predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Master Servicer, the Depositor and the predecessor Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
11.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.08, the Master Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to each Certificateholder at their addresses as
shown in the Certificate Register. If the Master Servicer fails to mail such
notice within ten days after acceptance of appointment by the successor Trustee,
the successor Trustee shall cause such notice to be mailed at the expense of the
Master Servicer.
SECTION 11.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trustee business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be eligible under the provisions
of Section 11.06, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 11.10. [Reserved]
SECTION 11.11. Separate Trustees and Co-Trustees.
The Master Servicer and the Trustee, where applicable, shall have the
power from time to time to appoint one or more persons or corporations to act
either as co-trustees jointly with the Trustee, or as separate trustees, or as
custodians, for the purpose of conforming to any legal requirement, restriction
or condition (i) with respect to the holding of the Mortgage Loans or the Files
or (ii) with respect to the enforcement of a Mortgage Loan in any state in which
a Mortgaged Property is located or in any state in which any portion of the
Trust is located. The
- 100 -
separate trustees, co-trustees, or custodians so appointed shall be trustees or
custodians for the benefit of all Certificateholders and shall, subject to the
provisions of the following paragraph, have such power, rights and remedies as
shall be specified in the instrument of appointment; provided, however, that no
such appointment shall, or shall be deemed to, constitute an agent of the
Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(b) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee, to the extent also imposed upon such separate
trustees, co-trustees or custodians, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee,
co-trustee, or custodian jointly, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including holding of the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(c) no separate trustee, co-trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other separate
trustee, co-trustee or custodian hereunder; and
(d) the Master Servicer may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so appointed by it.
If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Master
Servicer if and only to the extent the Master Servicer shall have consented in
writing to his or its appointment, which consent shall not be unnecessarily
withheld.
SECTION 11.12. Trustee May Own Certificates.
The Trustee in its individual or other capacity may become the owner or
pledgee of Certificates representing less than all the beneficial interest in
the Trust with the same rights as it would have if it were not Trustee.
- 101 -
SECTION 11.13. Agents of Trustee.
To the extent not prohibited by law and not inconsistent with the terms of
this Agreement (including, without limitation, Section 11.11), the Trustee may,
with the prior consent of the Master Servicer, appoint one or more agents to
carry out ministerial matters on behalf of the Trustee under this Agreement.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Master Servicer Not To Resign.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that the performance of its
duties hereunder is no longer permissible under this Agreement or applicable
law. Any such determination permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel for the Master Servicer to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor Master Servicer shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 7.03.
SECTION 12.02. Maintenance of Office or Agency.
The Trustee will maintain, at its own expense, an office in New York City.
Such offices are currently located at ____________________. The Trustee will
give prompt written notice to Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
SECTION 12.03. Termination.
(a) Subject to the other provisions of this Section, the respective
obligations and responsibilities of the Depositor, the Master Servicer and the
Trustee created hereby (other than the obligation of the Trustee to make certain
payments after the Final Distribution Date to Certificateholders and the
obligation of the Master Servicer to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Distribution Date pursuant to this Section 12.03 following the earlier
of: (i) the purchase by the Master Servicer on any Distribution Date of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust pursuant to Section 8.03(b), (ii) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust or the disposition of all property acquired upon
repossession of any Mortgaged Property and (iii) the Latest Possible Maturity
Date; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
(b) Notice of any termination, specifying the Final Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders
- 102 -
may surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer
(if the Depositor or the Master Servicer is exercising its right to purchase the
assets of the Trust) or by the Trustee (in any other case) by letter to
Certificateholders mailed out not earlier than the [15]th day and not later than
the [25]th day of the month (or, in the case of final payment of liquidation of
the last Mortgage Loan remaining in the Trust, as promptly as practicable after
receipt of such final payment or liquidation) next preceding the month of such
final distribution specifying (i) the Final Distribution Date upon which final
payment of the Certificates will be made upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee herein specified. Such notice shall provide that, in addition to any
other office or agency of the Trustee designated therein, the presentation and
surrender of Certificates as aforesaid may occur at an office or agency of the
Trustee in ____________________ specified therein. If the Master Servicer is
obligated to give notice to Certificateholders as aforesaid, it shall give such
notice to the Trustee, the Certificate Registrar and to the Rating Agencies at
the time such notice is given to Certificateholders. In the event such notice is
given by the Master Servicer or the Master Servicer shall deposit in the
Certificate Account on or before the Final Distribution Date in immediately
available funds an amount equal to the purchase price for the assets of the
Trust computed as above provided.
(c) Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed any unpaid Certificate Principal Balance and unpaid
interest payable to the Certificateholders, in accordance with written
instructions from the Master Servicer, and in accordance with the priorities set
forth in Section 8.01(c).
(d) In the event that all of the Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if the Master Servicer exercised
its right to purchase the assets of the Trust) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If, within one year after the second notice, all the
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds on deposit in
such escrow account.
(e) [Upon any termination pursuant to this Section, the Trust shall be
terminated in accordance with the following additional requirements, unless the
Trustee has received an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust as described in
Section 860F of the Code, or (ii) cause any of the
- 103 -
REMICs to fail to qualify as a REMIC at any time that any Offered Certificates
or Private Certificates are outstanding:]
(i) [Within ninety (90) days prior to the Final Distribution Date
set forth in the notice given by the Master Servicer or the Trustee under
this Section, the Master Servicer shall prepare and the Trustee shall
execute a plan of complete liquidation of the Trust; and]
(ii) [At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Distribution Date, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
to the Depositor or the Master Servicer as the case may be, for cash.]
SECTION 12.04. Acts of Certificateholders.
(a) Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates (other than the [Class X-IO] and [Class R]
Certificates) of the specified Class or Classes evidencing, as to each such
Class, Percentage Interests aggregating 51% or more.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where required, to the Master Servicer. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to Section
11.01) conclusive in favor of the Trustee, the Master Servicer and the Depositor
if made in the manner provided in this Section.
(c) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(d) The ownership of Certificates shall be proved by the Certificate
Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done by the Trustee,
the Master Servicer or the Depositor in reliance thereon, whether or not
notation of such action is made upon such security.
(f) The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
- 104 -
SECTION 12.05. Calculations.
Except as otherwise provided in this Agreement, all interest rate and
basis point calculations under this Agreement will be made on the basis of a
360-day year consisting of twelve thirty-day months and will be carried out to
at least three decimal places.
SECTION 12.06. Assignment or Delegation by the Master Servicer; Merger or
Consolidation of the Depositor, CIT Consumer Finance or the Master Servicer.
Except as specifically authorized hereunder, and except for its
obligations as Master Servicer, in respect of which a transfer thereof is dealt
with under Article VII, the Master Servicer may not assign or delegate any of
its rights or obligations hereunder, except its right to receive any fees
pursuant to this Agreement, absent the prior written consent of Holders of
Certificates (other than the [Class X-IO] and [Class R] Certificates) of each
Class evidencing, as to each such Class, Percentage Interests aggregating
66-2/3% or more, and any attempt to do so without such consent shall be void.
Notwithstanding the foregoing, CIT Consumer Finance may not delegate its
obligation to repurchase Mortgage Loans under Section 3.05 or 4.03.
Notwithstanding the foregoing, any person into which the Depositor, CIT
Consumer Finance or the Master Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Depositor,
CIT Consumer Finance or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor, CIT Consumer Finance or the Master
Servicer, shall be the successor of the Depositor, CIT Consumer Finance or the
Master Servicer hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or surviving
Person to the Master Servicer shall satisfy the criteria set forth in the
definition of an Eligible Master Servicer. Each of CIT Consumer Finance, the
Depositor and the Master Servicer shall promptly notify the Rating Agencies of
any such merger to which it is a party.
Neither the Depositor nor the Master Servicer, nor any of the directors,
officers, employees or agents of the Depositor or the Master Servicer, shall be
under any liability to the Trustee or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties or representations made herein, or
failure to perform its or his obligations in compliance with any standard of
care set forth in this Agreement, or any liability which otherwise would be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Depositor, the Master Servicer and any director, officer, employee or agent
of the Depositor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action, which arises
under this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Depositor or the Master Servicer may in
its discretion undertake any such action which it may deem necessary or
desirable to in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders thereunder and the
interests of the Certificateholders thereunder. In such
- 105 -
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities payable from the Certificate
Account and the Depositor and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account.
SECTION 12.07. Amendment.
(a) This Agreement may be amended from time to time by agreement of the
Trustee and the Master Servicer at any time, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
(iii) to add to the duties of either of the Sellers, Trustee or the Master
Servicer, [(iv) to make such changes as are necessary to maintain the status of
any of the REMICs created under this Agreement as a REMIC; provided that the
Trustee has received an Opinion of Counsel to the effect that such action is
necessary or helpful to maintain such qualification,] (v) to add or amend any
provisions as required by [Xxxxx'x, Standard & Poor's] or any other NRSRO in
order to maintain or improve any rating of the Certificates (it being understood
that, after the rating required by Section 2.02 hereof has been obtained,
neither the Trustee, the Depositor nor CIT Consumer Finance is obligated to
maintain or improve such rating), or (vi) to add any other provisions or make
any other revisions not inconsistent with any other provision herein upon
receipt of an Opinion of Counsel to the Master Servicer addressed to the Trustee
that such amendment will not adversely affect in any material respect the
interests of any Certificateholder [(including, without limitation, the
maintenance of the status of any of the REMICs under the Code and under relevant
state and local law)].
(b) This Agreement may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of Holders of Certificates (other
than the [Class X-IO] and [Class R] Certificates) of each Class affected thereby
evidencing, as to each such Class, Percentage Interests aggregating 51% or more,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments on any Certificate without the consent of the Holder of each
Certificate affected thereby, (ii) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding, [(iii) result in the disqualification of any of
the REMICs created under this Agreement as a REMIC under the Code, (iv)
adversely affect the status of any of the REMICs created under this Agreement as
a REMIC or the status of the Certificates as "regular interests" therein, (v)
cause any tax (other than any tax imposed on "net income from foreclosure
property" under Section 860G(c)(1) of the Code that would be imposed without
regard to such amendment) to be imposed on the Trust, including, without
limitation, any tax imposed on "prohibited transactions" under Section
860G(d)(1) of the Code or (vi) adversely affect in any material respect the
interest of the [Class R] Certificateholders without the unanimous consent of
the [Class R] Certificateholders].
(c) [This Agreement may also be amended from time to time, without the
consent of any of the Certificateholders, by the Master Servicer and the Trustee
to modify, eliminate or add to the provisions of this Agreement to such extent
as shall be necessary or helpful to (i) maintain the qualification of any of the
REMICs created under this Agreement as a REMIC under the Code and under relevant
state and local law or avoid, or reduce the risk of, the
- 106 -
imposition of any tax on the Trust or any REMIC created under this Agreement
under the Code that would be a claim against the Trust assets, provided that (A)
there shall have been delivered an Opinion of Counsel addressed to the Trustee
to the effect that such action is necessary or helpful to maintain such
qualification or avoid any such tax or reduce the risk of its imposition and (B)
such amendment shall not have any of the effects described in the proviso to
Section 12.07(a), or (ii) prevent the Trust from entering into any "prohibited
transaction" as defined in Section 860F of the Code, provided that such
amendment under this clause (ii) shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder (including, without limitation, the maintenance of any of the
REMICs created under this Agreement as a REMIC under the Code and under relevant
state and local law).]
(d) Promptly after the execution of any amendment or consent pursuant to
this Section, the Trustee shall furnish written notification of the substance of
such amendment to each Certificateholder (but only if such amendment is pursuant
to Section 12.07(b) and affects the Class of Certificates held by such
Certificateholder) and, in all cases, to the Rating Agencies (which shall be
furnished no later than 5 days after the execution and delivery thereof), which
notification will be prepared by the Master Servicer and delivered to the
Trustee.
(e) It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
(f) The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
(g) In connection with any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel to the Master Servicer to the
effect that such amendment is authorized or permitted by the Agreement.
(h) Upon the execution of any amendment or consent pursuant to this
Section, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every Holder of Certificates theretofore or thereafter issued hereunder shall be
bound thereby.
SECTION 12.08. [Contribution of Assets.]
[Following the Closing Date, the Trustee shall not accept any contribution
of additional assets (except for the Subsequent Mortgage Loans and Files
delivered on each Subsequent Transfer Date) to the Trust unless the Trustee has
received an Opinion of Counsel addressed to the Trustee to the effect that (i)
the contribution of such assets into the Trust will not cause any of the REMICs
to fail to qualify as a REMIC under the Code and under the relevant state and
local law and (ii) such contribution will not cause the imposition of a tax on
"prohibited transactions" (as defined in Section 860F of the Code or under
similar provisions under the relevant state and local law) or on contributions
to the Trust after the "start-up day" (as defined in
- 107 -
Section 860G of the Code or under similar provisions under the relevant state
and local law) with respect thereto.]
SECTION 12.09. Notices.
All communications, instructions, directions and notices pursuant hereto
to the Depositor, the Master Servicer and the Trustee and the Rating Agencies
shall be in writing and delivered or mailed to it at the appropriate following
address:
If to the Depositor:
The CIT Group Securitization Corporation, III
Xxx XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
cc: Senior Vice President - Securitization
If to the Master Servicer:
The CIT Group/Consumer Finance, Inc.
Xxx XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
With a copy to:
CIT Group Inc.
Xxx XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Assistant General Counsel
If to the Trustee or the Paying Agent:
------------------------------------
------------------------------------
------------------------------------
If to [RATING AGENCY]:
------------------------------------
------------------------------------
------------------------------------
If to the Representative:
------------------------------------
------------------------------------
------------------------------------
- 108 -
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
shall be in writing and delivered or mailed at the address shown in the
Certificate Register.
SECTION 12.10. Merger and Integration.
Except as specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived, or supplemented except as
provided herein.
SECTION 12.11. Reliance on Credit.
The parties hereto acknowledge that, with respect to receiving payments on
the Certificates, the Certificateholders are relying on the Mortgagors to make
payments on the Mortgage Loans and not on the creditworthiness of the Depositor,
the Trustee, CIT Consumer Finance, CIT or any of their respective affiliates.
The parties hereto further acknowledge that the transfer of any Mortgage Loans
by CIT Consumer Finance to the Depositor or by the Depositor to the Trust is
intended to be a true sale of such Mortgage Loans, and not a financing, such
that creditors of CIT Consumer Finance and the Depositor are intended to have no
further claim to the Mortgage Loans or any payments made thereon as a source of
repayment of any indebtedness of CIT Consumer Finance or the Depositor to such
creditors.
SECTION 12.12. No Bankruptcy Petition.
Each of CIT Consumer Finance, the Trustee and the Master Servicer agrees
that, prior to the date which is one year and one day after the payment in full
of the [Offered Certificates and Private Certificates] it will not institute
against, or join any other person in instituting against, the Depositor or the
Trust any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any Federal or state bankruptcy or
similar law.
SECTION 12.13. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 12.14. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of New York, without regard to its
conflict-of-laws provisions.
SECTION 12.15. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
- 109 -
ARTICLE XIII
THE DEPOSITOR
SECTION 13.01. Representations of the Depositor.
The Depositor hereby makes the following representations as to itself on
which the Trustee on behalf of the Trust shall rely in accepting the Mortgage
Loans in trust and authenticating the Certificates. The representations are made
as of the execution and delivery of this Agreement, and shall survive the sale
of the Mortgage Loans to the Trust.
(i) Organization and Good Standing. The Depositor 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 Depositor 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 Depositor or on the Certificates or the
transactions contemplated by this Agreement.
(ii) Authorization; Binding Obligations. The Depositor 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 Depositor
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 Depositor 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 Depositor
or on the Certificates or the transactions contemplated by this Agreement.
(iv) No Violations. The execution, delivery and performance of this
Agreement by the Depositor 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 Depositor, or constitute a material breach
of any mortgage, indenture, contract or other agreement to which the
Depositor is a party or by which the Depositor may be bound.
- 110 -
(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 Depositor threatened, against the Depositor or any
of its properties or with respect to this Agreement or the Certificates
which, if adversely determined, would in the opinion of the Depositor have
a material adverse effect on the transactions contemplated by this
Agreement.
SECTION 13.02. Merger or Consolidation of the Depositor.
Any Person into which the Depositor may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Depositor
shall be a party, or any Person succeeding to the business of the Depositor,
shall be the successor of the Depositor 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.
SECTION 13.03. Limitation on Liability of the Depositor and Others.
(a) Neither the Depositor nor any of the directors, officers, employees or
agents of the Depositor shall be under any liability to the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
notwithstanding anything herein to the contrary, no party to this Agreement
shall have any recourse against the Depositor for any actions taken, or failed
to be taken, by the Depositor.
(b) The Depositor and any director, officer, employee or agent of the
Depositor 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 Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action which arises under this Agreement.
SECTION 13.04. The Depositor May Own Securities.
The Depositor and any Person controlling, controlled by, or under common
control with the Depositor may in its individual or any other capacity become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Depositor or an Affiliate thereof, except as otherwise provided in
the definition of "Certificateholder." Certificates so owned by or pledged to
the Depositor or such controlling or commonly controlled Person shall have an
equal and proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates.
- 111 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of _____ __,
200_.
THE CIT GROUP/CONSUMER FINANCE, INC.
By:
--------------------------------------------
Name:
Title:
[CONDUIT SELLER]
[By:
--------------------------------------------
Name:
Title:]
THE CIT GROUP SECURITIZATION CORPORATION, III
By:
--------------------------------------------
Name:
Title:
[TRUSTEE], not in its individual
capacity but solely as Trustee
By:
--------------------------------------------
Name:
Title:
- 112 -
