EXHIBIT 10.2
LOAN AGREEMENT
LOAN AGREEMENT, dated as of February 1, 1999, among CIT Marine Trust
1999-A (the "Trust"), Xxxxxx Trust and Savings Bank, as collateral agent for the
Securityholders, the Insurer and the Trust (together with its successors and
assigns as trustee, the "Indenture Trustee"), The CIT Group/Sales Financing,
Inc., as servicer (the "Servicer"), and The CIT Group/Sales Financing, Inc., as
lender (the "Lender").
The CIT Group Securitization Corporation II, as seller (the "Seller"), the
Servicer CIT Marine Trust 1996-A (the "Selling Trust") and the Trust have
entered into the Sale and Servicing Agreement dated as of February 1, 1999 (as
the same may from time to time be amended, modified or otherwise supplemented,
the "Sale and Servicing Agreement"). Pursuant to the Sale and Servicing
Agreement, the Trust is to issue $11,028,156 aggregate principal amount of 6.20%
Asset Backed Certificates (the "Certificates"), representing interests in the
Trust. The Trust will also issue $325,000,000 Class A-1 5.45% Asset-Backed
Notes, $179,000,000 Class A-2 5.80% Asset-Backed Notes, $117,000,000 Class A-3
5.85% Asset-Backed Notes and $103,134,000 Class A-4 6.25% Asset-Backed Notes
(the "Notes" and, together with the Certificates, the "Securities") pursuant to
the Indenture dated February 1, 1999 between the Trust and Xxxxxx Trust and
Savings Bank, as trustee. The corpus of the Trust will consist of a pool of
marine installment sale contracts and direct loans and certain related rights
and other property (the "Contracts") to be acquired by the Trust from the Seller
and the Selling Trust and serviced on behalf of the Trust by the Servicer. The
payment of principal of and interest on the Notes and Certificates is to be
funded by, among other things, payments of principal and interest received by
the Trust on the Contracts.
It is a condition to the issuance of the Securities that the Lender make a
loan (the "Loan") to the Trust in the amount of $27,568,581, the proceeds of
which are to be deposited in the Loan Sub-Account to provide additional funds to
make payments on the Securities.
In consideration of the premises and the mutual agreements hereinafter set
forth, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Capitalized terms used but not defined in this
Agreement, including the recitals, shall have the meanings given to such terms
in the Sale and Servicing Agreement.
Section 2. Loan. The Lender shall make the Loan to the Trust on the
Closing Date. The Trust shall deposit the proceeds of the Loan in the Loan
Sub-Account. The Lender shall have no obligation to deposit any funds in the
Loan Sub-Account other than as provided in this Section 2. No one other than the
Trust, as the sole owner, beneficially and otherwise, of the Loan Sub-Account,
shall have any interest in the Loan Sub-Account or the other Reserve Account
Property.
Section 3. Repayment of the Loan.
(a) The outstanding principal amount of the Loan shall be due and payable
to the Lender by the Trust on the date (the "Maturity Date") which is the
earlier of (i) the close of business on the Certificate Final Distribution Date
or (ii) the date on which the Trust has terminated pursuant to Section 7.1 of
the Trust Agreement. On each Distribution Date prior to the Maturity Date, the
Trust, acting in accordance with instructions from the Servicer, shall make a
prepayment of the principal amount of the Loan from funds available therefor in
the Loan Sub-Account, such prepayment to be in an amount equal to the lesser of
the outstanding principal amount of the Loan and the Reserve Account Surplus
with respect to such Distribution Date remaining after making payments from the
Excess Sub-Account in accordance with Section 3(h) and after paying any accrued
and unpaid interest on the Loan in accordance with Section 3(e).
(b) (I) On each Distribution Date, the Trust, acting in accordance with
the instructions from the Servicer, shall, to the extent of funds available,
make, or cause to be made, the following payments to the Lender hereunder from
the Loan Sub-Account:
(i) Investment Earnings on funds on deposit in the Loan Sub-Account.
(ii) The Reserve Account Surplus with respect to such Distribution
Date remaining after payments from the Excess Sub-Account in accordance
with Section 3(h), in an amount equal to any accrued and unpaid interest
on the Loan required to be paid on such Distribution Date pursuant to
Section 3(e), the extent not previously paid.
(II) On each Distribution Date, the Trust, acting in accordance with the
instructions from the Servicer, shall, to the extent of funds available, make,
or cause to be made, the following payments to the Lender hereunder from the
Collection Account pursuant to Section 5.05(b)(viii) of the Sale and Servicing
Agreement:
(i) an amount equal to any accrued and unpaid interest on the Loan
required to be paid on such Distribution Date pursuant to Section 3(e)(i)
and (iii).
(c) On the Maturity Date, the Indenture Trustee, after the payment of all
amounts payable from the Reserve Account to the Securityholders, as provided in
Section 5.06 of the Sale and Servicing Agreement, and to the Lender, as provided
in clauses (a) and (b) above and clause (h) below, shall withdraw from the
Reserve Account all amounts on deposit in the Reserve Account and (A) shall pay
or cause to be paid to the Lender the outstanding principal amount of the Loan
and any accrued and unpaid interest on the Loan on such date and (B) shall pay
or cause to be paid any excess of such amounts over the amount in clause (A) to
the Holder of the AO Interest as provided in Section 5.06 of the Sale and
Servicing Agreement.
(d) On each Distribution Date, amounts paid to the Lender shall be applied
by the Lender first to the payment of any accrued and unpaid interest on the
Loan and second to the payment of unpaid principal of the Loan.
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(e) The Loan shall bear interest during each Interest Accrual Period at a
rate per annum determined such that the interest payable on the Loan is equal to
the sum of the following:
(i) 1.00% per annum of the average unpaid principal amount of the
Loan during such Interest Accrual Period, plus
(ii) the Investment Earnings on funds on deposit in the Loan
Sub-Account, plus
(iii) LIBOR plus 2.00% (the "Lender Rate") applied to the portion,
if any, of the average unpaid principal amount of the Loan during such
Interest Accrual Period in excess of the average amount on deposit in the
Loan Sub-Account (including the principal amount of all Eligible
Investments held, but excluding Investment Earnings thereon) during such
Interest Accrual Period.
"LIBOR" means, with respect to each Interest Accrual Period, the London
interbank offered rate for one-month United States dollar deposits determined by
the Lender for each Interest Accrual Period as follows: On each LIBOR
Determination Date, the Lender will determine LIBOR on the basis of the rate for
one-month United States dollar deposits that appears on the display page of the
Dow Xxxxx Telerate Service currently designated as Telerate page 3750 (or such
other page as may replace that page on that service for the purpose of
displaying comparable rates or prices), as of 11:00 a.m., London time, on such
date. If such rate does not appear on such page, the rate for that date will be
determined on the basis of the rates at which one-month loans in United States
dollars are offered by four major banks in the London interbank market, selected
by the Lender, at approximately 11:00 a.m., London time, on that day to banks in
the London interbank market. The Lender will request the principal London office
of each such bank to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be the arithmetic mean of the rates quoted by major banks in
New York City, selected by the Lender, at approximately 11:00 a.m., New York
City, on that day for one-month loans in United States dollars to leading
European banks. If no major banks are quoting rates for such loans at such time,
"LIBOR" will be deemed to mean LIBOR as in effect as of the preceding LIBOR
Determination Date. For purposes of this Agreement, "LIBOR Determination Date"
shall mean the second London Business Day prior to the commencement of each
Interest Period and "London Business Day" shall mean any Business Day in which
dealings in deposits in United States Dollars are transacted in the London
interbank market.
(f) Interest shall be payable monthly in arrears on each Distribution Date
to the Lender by the Trust, from the amounts payable pursuant to Section 3(b)
hereof. Interest on the Loan shall be calculated on the basis of the actual
number of days elapsed divided by 365, provided that interest in respect of the
Lender Rate shall be calculated on the basis of the actual number of days
elapsed divided by 360. Each determination thereof by the Lender pursuant to the
provisions of this Agreement shall be conclusive and binding on the Trust, the
Servicer and the Indenture Trustee, in the absence of manifest error.
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(g) If any portion of interest due and payable on a Distribution Date is
not paid on such Distribution Date (other than by reason of the Lender having
failed to provide information which is required by the Servicer, the Trust or
the Indenture Trustee to calculate the amount of such interest), the unpaid
portion of such interest shall be due and payable to the Lender by the Trust on
the next succeeding Distribution Date. Any interest which is not paid when due
shall accrue interest from the Distribution Date on which such interest was due
and payable to the date such interest is actually paid at a rate per annum equal
to the Lender Rate (in effect from time to time). The Lender shall, as soon as
practicable, notify the Servicer and the Indenture Trustee of each determination
of the Lender Rate.
(h) On each Distribution Date, the Trust, acting in accordance with
instructions from the Servicer shall, to the extent of the funds available,
make, or cause to be made, the following payments from the Excess Sub-Account in
the following order and priority:
(i) To the Lender, the Reserve Account Surplus, if any, in an amount
equal to the excess, if any, of any accrued and unpaid interest on the
Loan required to be paid on such Distribution Date pursuant to Section
3(e)(i) and (iii) and the actual amount distributed to the Lender pursuant
to Section 5.05(b)(viii) of the Sale and Servicing Agreement.
(ii) To the Lender, the Reserve Account Surplus, if any, in an
amount equal to the excess, if any, of the outstanding principal amount of
the Loan over the amount on deposit in the Loan Sub-Account.
(iii) To the Holder of the AO Interest, the Reserve Account Surplus,
if any, in an amount equal to the lesser of (A) such Reserve Account
Surplus or (B)(i) if the Net Yield on such Distribution Date (or any prior
Distribution Date) is (or was) less than 1.5%, an amount such that the
amount remaining on deposit in the Excess Sub-Account (after making this
payment) is not less than $3,675,811, or (ii) if the Net Yield on such
Distribution Date (or any prior Distribution Date) is (or was) less than
1.25%, an amount such that the amount remaining on deposit in the Excess
Sub-Account (after making this payment) is not less than the Specified
Reserve Amount for such Distribution Date.
Section 4. Limited Obligation; Waiver of Setoff.
Notwithstanding any provision in this Agreement to the contrary, only the
Trust is obligated to repay the Loan, together with interest thereon as provided
in Section 3, and such obligation, with respect to the Trust, shall be with
recourse solely to the funds from the Collection Account, the Reserve Account
Surplus and Investment Earnings on the Loan Sub-Account to the extent required
to be distributed in accordance with Section 3(b) hereof and amounts required to
be distributed in accordance with Section 3(c) hereof, in each case to the
extent payable to the Lender under the Sale and Servicing Agreement. No other
person or entity, including the Seller, the Servicer (or any person or
organization acting on the behalf of either of them, or any affiliate of either
of them), the Owner Trustee, the Indenture Trustee, the holder of the AO
Interest, the Trust, the Insurer, any Certificateholder or any Noteholder or any
officer or director of any of them, shall have any obligation to pay principal
of or interest on the Loan,
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except for the direct recourse indemnification obligation of each successor
Servicer pursuant to Section 6 hereof. The Lender agrees that it shall not have,
and hereby waives to the fullest extent permitted by law, any right of setoff or
lender's lien against any obligations or property of the Seller, the Servicer,
the Trust, the Owner Trustee, the Indenture Trustee, the Insurer, or any
Noteholder or Certificateholder.
Section 5. Investments; Information; Amendments to the Sale and Servicing
Agreement.
(a) The Indenture Trustee shall from time to time during the term of this
Agreement invest all amounts on deposit in the Loan Sub-Account in such Eligible
Investments as the Lender shall direct, which investments shall at all times be
made in compliance with the terms of the Sale and Servicing Agreement.
(b) The Servicer shall, to the extent the Servicer is in possession of
such information, provide the Lender with such information and data with respect
to the Reserve Account as the Lender may reasonably request.
Section 6. Servicer Agreement; Servicing Transfer.
(a) In the event that a successor Servicer is appointed pursuant to the
Sale and Servicing Agreement, from and after the effective date of such
appointment, the successor Servicer appointed pursuant to the Sale and Servicing
Agreement, and not the former Servicer, shall agree in writing to (i) be
responsible for the performance of all servicing functions to be performed from
and after such date, (ii) be bound by the terms, covenants and conditions
contained herein applicable to the Servicer and subject to the duties and
obligations of the Servicer hereunder and (iii) indemnify and hold harmless the
Lender from and against any and all claims, damages, losses, liabilities, costs
or expenses whatsoever which the Lender may incur (or which may be claimed
against the Lender) by reason of the gross negligence or willful misconduct of
the successor Servicer in exercising its powers and carrying out its obligations
under the Sale and Servicing Agreement. Such transfer of servicing shall not
affect any rights or obligations of the former Servicer acting as Servicer which
arose prior to the effective date of the transfer of servicing or the rights or
obligations of the former Servicer under this Agreement whether arising before
or after such date, except that such former Servicer shall have no obligation to
indemnify the Lender as a result of any act or failure to act of any successor
Servicer in the performance of the servicing functions.
(b) The Servicer shall forward to the Lender each document referred to in
Sections 4.13(a) and 4.13(b) of the Sale and Servicing Agreement and shall not
agree to amend the Sale and Servicing Agreement except in accordance with the
terms thereof (as amended from time to time).
(c) The Servicer agrees to indemnify and hold harmless the Lender from and
against any and all claims, damages, losses, liabilities, cost or expenses which
the Lender may incur (i) by reason of the gross negligence or willful misconduct
of the Servicer in exercising its powers and carrying out its obligations under
this Agreement and (ii) under the Securities Act of
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1933, as amended, the Securities Exchange Act of 1934, as amended, or any other
federal or state law or regulation arising out of or based upon any untrue
statement of a material fact in the Prospectus Supplement dated February 12,
1999 to the Prospectus dated September 29, 1998 relating to the issuance and
sale of the Securities (the "Prospectus") or other material provided to
investors and prospective investors by or on behalf of the Seller or the
Servicer in connection with the offer and sale of the Securities or any
amendments thereof or any supplement thereto or arising out of or based upon the
omission to state a material fact to make the statements in the Prospectus or
such other material or any amendment thereof or supplement thereto, in light of
the circumstances in which they were made, not misleading.
Section 7. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed in such State, without regard to principles of conflicts of law, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 8. Termination. This Agreement shall terminate on the later to
occur of: (a) the date on which the Trust terminates in accordance with Section
7.1 of the Trust Agreement, or (b) the payment in full of all amounts owed to
the Lender hereunder.
Section 9. Notices. Unless specifically indicated otherwise herein, all
notices and other communications provided for hereunder shall be in writing and,
if to the Lender, addressed to:
The CIT Group/Sales Financing, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Telephone: 000-000-0000
Telecopy: 000-000-0000
or, if to the Servicer, addressed to:
The CIT Group/Sales Financing, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Telephone: 000-000-0000
Telecopy: 000-000-0000
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or, if to the Trust or the Indenture Trustee, addressed to:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy : 000-000-0000
or as to any party at such other address as shall be designated by such party in
a written notice hereunder to the other parties.
Any notice or other communication shall be sufficiently given and shall be
deemed given when delivered to the addressee in writing, when mailed by
registered or certified mail, return receipt requested, or when transmitted by
telecopier, receipt of which by the addressee is confirmed by telephone.
Section 10. Bankruptcy. To the extent that the Indenture Trustee makes a
payment to the Lender, or the Lender receives any payment or proceeds with
respect to the Loan, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any state or federal
insolvency or bankruptcy law then, to the extent such payment is set aside, the
amount or part thereof intended to be satisfied shall be revived and continue in
full force and effect, as if such payment had not been received by the Lender.
Section 11. Limitation of Remedies. The Lender shall not have the right to
accelerate or otherwise cause the Loan or any portion thereof to become due and
payable prior to the Maturity Date for the Loan except as set forth in Section
3(a).
Section 12. No Petition. Notwithstanding any prior termination of this
Agreement the Lender shall not, prior to the date which is one year and one day
after the final payment of all of the Securities issued by the Trust, acquiesce,
petition or otherwise invoke or cause the Trust or the Seller to invoke the
process of any governmental authority for the purpose of commencing or
sustaining a case against the Trust or the Seller under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or the Seller or any substantial part of its property or ordering the
winding up or liquidation of the affairs of the Trust or the Seller.
Section 13. Participation; Miscellaneous. The Lender may, upon prior
written notice to the other parties hereto, sell participations to one or more
banks or other entities (each a "Participant") in all or a portion of its rights
under this Agreement (including all or a portion of the Loan); provided,
however, that (i) the Lender's rights and obligations under this Agreement shall
remain unchanged, (ii) the Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Indenture
Trustee, the Trust, the Seller, the Insurer and the Servicer shall continue to
deal solely and directly with the Lender in the exercise of its rights and
obligations under this Agreement, (iv) the Lender shall retain the sole right to
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enforce the obligations of the Trust, the Indenture Trustee, the Insurer, or the
Servicer under this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement and (v) such Participant expressly
agrees to be bound by the provisions contained in Sections 4 and 12 hereof.
Unless the Servicer consents in writing to such participation within 15 days of
receipt of notice of such participation, neither the Trust nor the Servicer
shall be obligated to the Lender for amounts payable under this Agreement in
excess of such amounts which would have been due and owing had such
participation not been granted.
Section 14. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
Section 15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 16. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Servicer, the Trust, the Indenture Trustee, the
Lender, and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
CIT MARINE TRUST 1999-A
By: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely
as Owner Trustee on behalf of the Trust
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Trust Officer
XXXXXX TRUST AND SAVINGS BANK, not
in its individual capacity but
solely as Indenture Trustee on
behalf of the Trust
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE CIT GROUP/SALES FINANCING, INC.,
as Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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Acknowledged as of date first above written:
THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
