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THE CIT GROUP SECURITIZATION CORPORATION II,
as Seller
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
CIT RV OWNER TRUST 1996-A
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SALE AND SERVICING AGREEMENT
Dated as of February 1, 1996
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$250,000,000
CIT RV Owner Trust 1996-A
Class A 5.40% Asset Backed Notes
5.85% Asset Backed Certificates
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TABLE OF CONTENTS
ARTICLE I Definitions.........................................................1
Section 1.01 General.....................................................1
Section 1.02 Specific Terms..............................................1
ARTICLE II Conveyance of Contracts; Acceptance by Trustee...................23
Section 2.01 Conveyance of the Initial Contracts........................23
Section 2.02 Conveyance of the Subsequent Contracts.....................23
Section 2.03 Acceptance by Owner Trustee................................24
ARTICLE III Representations and Warranties; The Contracts...................25
Section 3.01A Representations and Warranties Regarding Each
Contract...................................................25
Section 3.01B Representations and Warranties Regarding the Contracts in
the Aggregate..............................................29
Section 3.01C Representations and Warranties Regarding the Contract
Files......................................................30
Section 3.01D Conditions of Closing for the Subsequent Contracts.........31
Section 3.02 Repurchase of Contracts for Breach of Representations and
Warranties.................................................33
Section 3.03 Custody of Contract Files..................................34
Section 3.04 Duties of Servicer as Custodian............................34
Section 3.05 Instructions; Authority to Act.............................35
Section 3.06 Effective Period and Termination...........................36
ARTICLE IV Administration and Servicing of Contracts........................37
Section 4.01 Duties of Servicer.........................................37
Section 4.02 Collection of Contract Payments............................39
Section 4.03 Realization Upon Contracts.................................39
Section 4.04 Physical Damage Insurance..................................40
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
Retitling..................................................42
Section 4.06 Covenants of Servicer......................................43
Section 4.07 Purchase of Contracts Upon Breach..........................44
Section 4.08 Servicing Fee..............................................44
Section 4.09 Servicer's Certificate.....................................44
Section 4.10 Annual Statement as to Compliance..........................45
Section 4.11 Annual Report of Accountants...............................45
Section 4.12 Duties of Owner Trustee....................................46
Section 4.13 Reports to Securityholders and the Rating Agencies.........46
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
Policy.....................................................46
Section 4.15 Trustees to Cooperate......................................47
Section 4.16 Costs and Expenses.........................................47
ARTICLE V Accounts; Distributions; Statements to Certificateholders.........47
Section 5.01 Collection Account, Pre-Funding Account, Capitalized
Interest Account and Cash Collateral Account...............47
Section 5.02 Collections; Applications..................................52
Section 5.03 Monthly Advances...........................................54
Section 5.04 A Non-Reimbursable Payments................................54
Section 5.04 Additional Deposits........................................55
Section 5.05 Distributions..............................................55
Section 5.06 Cash Collateral Account....................................56
Section 5.07 Net Deposits...............................................58
Section 5.08 Statements to Securityholders..............................58
ARTICLE VI [Reserved]........................................................61
ARTICLE VII The Company.....................................................62
Section 7.01 Representations of Company.................................62
Section 7.02 Merger or Consolidation of Company.........................63
Section 7.03 Limitation on Liability of the Company and Others..........63
Section 7.04 The Company May Own Securities.............................63
Section 7.05 Indebtedness of and Sale of Assets by the Company..........64
ARTICLE VIII The Servicer; Representations and Indemnities..................65
Section 8.01 Representations of CITSF...................................65
Section 8.02 Liability of Servicer, Indemnities.........................66
Section 8.03 Merger or Consolidation of Servicer........................67
Section 8.04 Limitation on Liability of Servicer and Others.............68
Section 8.05 Servicer Not To Resign.....................................68
ARTICLE IX Default...........................................................69
Section 9.01 Events of Termination......................................69
Section 9.02 Indenture Trustee to Act; Appointment of Successor.........70
Section 9.03 Notification to Securityholders............................71
Section 9.04 Rights to Direct Trustees and Waiver of Events of
Termination................................................72
Section 9.05 Effect of Transfer.........................................72
ARTICLE X [Reserved].........................................................74
ARTICLE XI Optional Purchase and Auction Sale................................75
Section 11.01 Optional Purchase of All Contracts........................75
Section 11.02 Mandatory Sale of all Contracts...........................75
ARTICLE XII Miscellaneous Provisions........................................78
Section 12.01 Amendment.................................................78
Section 12.02 Protection of Title to Trust..............................79
Section 12.03 Limitation on Rights of Securityholders...................82
Section 12.04 Governing Law.............................................82
Section 12.05 Notices...................................................82
Section 12.06 Severability of Provisions................................83
Section 12.07 Submission to Jurisdiction; Venue.........................83
Section 12.08 Counterparts..............................................84
Section 12.09. Merger and Integration....................................84
Section 12.10 Headings..................................................84
EXHIBITS
Exhibit A List of Initial Contracts
Exhibit B Form of Subsequent Purchase Agreement
Exhibit C Form of Subsequent Transfer Agreement
Exhibit D Form of Assignment
Exhibit E Form of Owner Trustee's Acknowledgment and Certification
Exhibit F Form of Servicer's Certificate
Exhibit G Form of Monthly Report
Exhibit H Termination - Auction Procedures
Exhibit I Form of Officers' Certificate
This Sale and Servicing Agreement, dated as of February 1, 1996, is made
among The CIT Group Securitization Corporation II, as seller (together with its
permitted successors and assigns, the "Company" or the "Seller"), The CIT
Group/Sales Financing, Inc., a corporation organized and existing under the laws
of the State of Delaware, as servicer (in its individual capacity, "CITSF," or,
together with its permitted successors and assigns, the "Servicer"), and CIT RV
Owner Trust 1996-A (the "Issuer" and the "Trust"), for which The Bank of New
York (Delaware), a Delaware banking corporation, acts not in its individual
capacity but solely as Owner Trustee (together with permitted successors and
assigns, the "Owner Trustee").
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereto agree as provided herein:
ARTICLE I
Definitions
Section 1.01 General.
For the purpose of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the terms defined in this Article
include the plural as well as the singular, the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Section
references refer to Sections of this Agreement.
Section 1.02 Specific Terms.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agency Office" means the office of the Trust maintained pursuant to
Section 3.2 of the Indenture.
"Amount Available" on any Distribution Date is equal to all amounts on
deposit in the Collection Account attributable to collections or deposits made
in respect of the Contracts in the related Due Period (together with the
Purchase Price for any Repurchased Contracts paid on or prior to the Deposit
Date immediately preceding such Distribution Date) less the following amounts
(to the extent that the Servicer has not already withheld such amounts from
collections on the Contracts);any repossession profits on Liquidated Contracts,
any Liquidation Expenses incurred and taxes and insurance advanced by the
Servicer in respect of Financed Vehicles that are reimbursable to the Servicer
under the Sale and Servicing Agreement; any amounts incorrectly deposited in the
Collection Account; and net investment earnings on the funds in the Collection
Account due to the Servicer pursuant to the Sale and Servicing Agreement and any
other amounts permitted to be withdrawn from the Collection Account by the
Servicer (or to be retained by the Servicer from collections on the Contracts)
pursuant to the Sale and Servicing Agreement.
"Available Cash Collateral Amount" means, with respect to any date of
determination, the lesser of (i) the Required Cash Collateral Amount and (ii)
the amount on deposit in the Cash Collateral Account, excluding Investment
Earnings with respect thereto.
"Authorized Officer" means with respect to the Trust, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Trust and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Sale and Servicing Agreement, the Indenture, the Cash Collateral Agreement, the
Purchase Agreement, any Subsequent Purchase Agreement and any Subsequent
Transfer Agreements.
"Benefit Plan" means a benefit plan as described in Section 9.11 of the
Trust Agreement.
"Book-Entry Certificates" means a beneficial interest in the Certificates,
ownership and transfers of which shall be made through book entries by a
Depository as described in Section 3.11 of the Trust Agreement.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Depository as
described in Section 2.10 of the Indenture.
"Business Day" means any day other than a Saturday, Sunday or any day on
which banking institutions or trust companies in the States of New York,
Delaware, Illinois or Oklahoma are authorized or required by law, regulation or
executive order to be closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as the same may be amended from time to time.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Cash Collateral Account" means the deposit account established and
maintained pursuant to Section 5.01(a)(iv) hereof.
2
"Cash Collateral Account Property" means the Cash Collateral Account, all
amounts deposited from time to time in the Cash Collateral Account and all
investments from time to time in the Cash Collateral Account, all income on such
investments and all cash and non-cash proceeds of such investments and all cash
and non-cash proceeds of such income from the date of the establishment of the
Cash Collateral Account until the termination thereof pursuant to the terms of
the Cash Collateral Agreement.
"Cash Collateral Account Surplus" means, as of any Distribution Date, the
amount, if any, by which Available Cash Collateral Amount, after taking into
account any deposits to the Cash Collateral Account pursuant to Section 5.06(a)
on such Distribution Date and any withdrawals from the Cash Collateral Account
pursuant to Section 5.06(b) or (c) on such Distribution Date, exceeds the
Required Cash Collateral Amount for the next Distribution Date.
"Cash Collateral Depositor" means the financial institution which is a
party to the Cash Collateral Agreement and which, pursuant to the Cash
Collateral Agreement, will make a loan to the Trust on the Closing Date, the
proceeds of which will be deposited in the Cash Collateral Account on the
Closing Date.
"Cash Collateral Agreement" means the Cash Collateral Agreement dated as of
February 1, 1996 among the Cash Collateral Depositor, the Trust, the Servicer
and the Owner Trustee.
"Certificate" means any one of the 5.85% Asset Backed Certificates executed
by the Owner Trustee and authenticated by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.
"Certificate Balance" initially means, as of the Closing Date, $13,750,000
and, on any Distribution Date thereafter, the initial Certificate Balance
reduced by (i) all distributions in respect of principal to the
Certificateholders actually made, including payments of any Principal
Liquidation Loss Amount and payments of any Principal Distribution Amount, (ii)
the aggregate amount of all Principal Liquidation Loss Amounts distributable to
Certificateholders to the extent such amounts have not been previously
distributed and (iii) on or after the Cross-over Date, the aggregate amount of
all Principal Distribution Amounts distributable to Certificateholders to the
extent such amounts have not been previously distributed.
"Certificate Depository Agreement" means the Agreement, dated as of the
Closing Date, among the Trust, the Servicer, the Owner Trustee and The
Depository Trust Company (as the initial Depository), relating to the
Certificates, as the same may be amended and supplemented from time to time.
"Certificate Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Trust Agreement.
3
"Certificate Final Distribution Date" means the December 2011 Distribution
Date.
"Certificateholder" means the holder of record of a Certificate pursuant to
the terms of the Trust Agreement.
"Certificate Interest Distribution Amount" means the amount of interest
payable on a Distribution Date to the Holders of the Certificates. Such amount
will equal (i) one-twelfth of the product of the Pass-Through Rate and the
Certificate Balance as of the preceding Distribution Date, after giving effect
to any distributions of principal and interest to be made on the Certificates on
such preceding Distribution Date and other reductions in the Certificate Balance
on such preceding Distribution Date or (ii) in the case of the first
Distribution Date, one-twelfth of the product of the Pass-Through Rate and the
original Certificate Balance.
"Certificate Pre-Funded Percentage" means the percentage derived from the
fraction, the numerator of which is the Certificate Balance and the denominator
of which is the sum of the initial principal balance of the Notes and the
initial Certificate Balance.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement to be filed for
the Trust pursuant to Section 3810(a) of the Business Trust Statute.
"Certificate Owners" means with respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of the Depository, or on the books of a Person maintaining an
account with such Depository (directly as a Depository Participant or as an
indirect participant, in each case in accordance with the rules of such
Depository).
"Certificate Pool Factor" means a seven-digit decimal which the Servicer
will compute each month indicating the remaining Certificate Balance as of the
Distribution Date, as a fraction of the initial Certificate Balance. The
Certificate Pool Factor will be 1.0000000 as of the Initial Cut-off Date, and
thereafter will decline to reflect reductions in the outstanding principal
balance of the Certificates. A Certificateholder's portion of the aggregate
outstanding Certificate Balance is the product of (i) the original denomination
of the Certificateholder's Certificate and (ii) the Certificate Pool Factor.
"Certificate Register" means the register of Certificates specified in
Section 3.4 of the Trust Agreement.
"Certificate Registrar" means the registrar at any time of the Certificate
Register, appointed pursuant to Section 3.4 of the Trust Agreement.
"CIT" means The CIT Group Holdings, Inc.
4
"CITCF-NY" means The CIT Group/Consumer Finance, Inc. (NY).
"CITSF" means The CIT Group/Sales Financing, Inc., and its successors in
interest as permitted under the related agreement.
"Class A Final Scheduled Distribution Date" means the December 2011
Distribution Date.
"Class A Interest Distribution Amount" means the amount of interest payable
on a Distribution Date to the Holders of the Class A Notes. Such amount will
equal (i) one-twelfth of the product of the Class A Rate and the outstanding
principal amount of Class A Notes as of the preceding Distribution Date, after
giving effect to any distributions of principal and interest to be made on the
Class A Notes on such preceding Distribution Date or (ii) in the case of the
first Distribution Date, one-twelfth of the product of the Class A Rate and the
outstanding principal balance of the Class A Notes as of the Closing Date.
"Class A Note" means any one of the Class A 5.40% Asset Backed Notes in the
aggregate principal amount of $236,250,000 issued pursuant to the Indenture and
substantially in the form of Exhibit A to the Indenture.
"Class A Rate" means 5.40% per annum, calculated on the basis of a 360-day
year comprised of twelve 30-day months.
"Closing Date" means February 22, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the Treasury Regulations promulgated thereunder.
"Collateral" means the collateral specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such established and
maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means The CIT Group Securitization Corporation II, and its
successors in interest as permitted under the related agreement.
"Computer Tape" means the computer tape generated by the Servicer which
provides information relating to the Contracts, and includes the master file and
the history file.
"Contract(s)" means one or more of the Initial Contracts and/or Subsequent
Contracts.
5
"Contract File" means, as to each Contract (i) the original copy of the
Contract, (ii) either (a) the original title document for the related Financed
Vehicle or a duplicate certified by the appropriate governmental authority which
issued the original thereof or the application for such title document, or (b)
if the laws of the jurisdiction in which the related Financed Vehicle is located
do not provide for the issuance of title documents for recreational vehicles,
other evidence of ownership of the related Financed Vehicle which is customarily
relied upon in such jurisdiction as evidence of title to a recreational vehicle;
(iii) evidence of one or more of the following types of perfection of the
security interest in the related Financed Vehicle granted by such Contract, as
appropriate: (a) notation of such security interest on the title document, (b) a
financing statement meeting the requirements of the UCC, with evidence of
recording indicated thereon, or (c) such other evidence of perfection of a
security interest in a recreational vehicle as is customarily relied upon in the
jurisdiction in which the related Financed Vehicle is located; (iv) an
assignment of the Contract evidencing the chain of title of the Contract from
the Dealer which is the originator thereof to CITSF or CITCF-NY; and (v) any
extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the rate of
interest specified in that Contract.
"Corporate Trust Office" means with respect to the Indenture Trustee or the
Owner Trustee, the principal office at which at any particular time the
corporate trust business of the Indenture Trustee or the Owner Trustee,
respectively, shall be administered, which offices at the Closing Date are
located, in the case of the Indenture Trustee, at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, attn: Indenture Trust Administration, and in the case
of the Owner Trustee, at Xxxxx Xxxx Center, Xxxxx 000, Xxxxxx, Xxxxxxxx, 00000,
attn: Corporate Trust Administration.
"Co-Trustee" means The Bank of New York pursuant to a Co-Trustee Agreement,
dated as of February 1, 1996, between The Bank of New York and the Owner
Trustee.
"Cross-over Date" means the Distribution Date on which the Notes have been
paid in full.
"Dealer" means the Recreational Vehicle dealer which sold a Financed
Vehicle and which originated and assigned the Contract relating to such Financed
Vehicle to CITSF or CITCF-NY under a Dealer Agreement.
"Dealer Agreement" means the agreement, if any, under which Contracts were
originated by a Dealer and sold to CITSF or CITCF-NY, and all documents and
instruments relating thereto.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become an Event of Default.
6
"Defaulted Contract" means, with respect to any Due Period, a Contract
(other than a Repurchased Contract) in respect of which payments exceeding $65
in the aggregate were delinquent 120 days or more as of the last day of such Due
Period; provided, however, that a Paid-Ahead Contract and a Contract which is
delinquent due to the Soldiers' and Sailors' Relief Act of 1940 shall not be
deemed to be delinquent.
"Definitive Certificates" means the Certificates specified in Section 3.13
of the Trust Agreement.
"Definitive Notes" means the Notes specified in Section 2.12 of the
Indenture.
"Demand Note" means the note issued by CIT to The CIT GP Corporation II
which is payable on demand.
"Deposit Date" means, with respect to any Distribution Date, the Business
Day immediately preceding such related Distribution Date.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is CEDE & CO., and any permitted successor depository. The
Depository shall at all times be a "clearing corporation" defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Agreement" means the Agreement, dated as of the Closing Date,
among the Trust, the Servicer, the Indenture Trustee and the Depository,
relating to the Notes, as the same may be amended and supplemented from time to
time.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Designated Accounts" means the Collection Account, the Note Distribution
Account, the Certificate Distribution Account, the Pre-Funding Account and the
Capitalized Interest Account, collectively.
"Determination Date" means the third Business Day prior to each
Distribution Date.
"Distribution Date" means the date on which payments of interest and
principal on the Securities will be made. Such Distribution Dates will be on the
fifteenth day of each month or, if any such day is not a Business Day, on the
next succeeding Business Day, commencing March 15, 1996.
"Draw Amount" has the meaning specified in Section 5.06(b) of the Sale and
Servicing Agreement.
7
"Due Date" shall mean, with respect to each Contract, the day set forth in
such Contract as the date on which payments under such Contract are scheduled to
be made.
"Due Period" means with respect to any Distribution Date the period during
which principal, interest and fees will be collected on the Contracts for
application towards the payment of principal and interest to the Securityholders
and the payment of fees on such Distribution Date. The "Due Period" will be the
calendar month immediately preceding the Distribution Date. The first Due Period
will commence on and include February 1, 1996 and will end on and include
February 29, 1996.
"Electronic Ledger" means the electronic master record of installment sale
contracts of the Servicer.
"Eligible Institution" means either (i) the corporate trust department of
the Indenture Trustee, the Owner Trustee or any paying agent satisfying the
criteria under the Trust Agreement or Indenture, as applicable or (ii) a
depository institution or trust company organized under the laws of the United
States or any state, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund (currently administered by the
Federal Deposit Insurance Corporation), which is subject to supervision and
examination by federal or state authorities and (unless the Certificate Account
is a trust account maintained in the corporate trust department of such
depository institution) whose short-term deposits have been rated P-1 by Moody's
and A-1+ by Standard & Poor's (except with regard to the Collection Account and
the Cash Collateral Account where a short-term deposit rating of A-1 by Standard
& Poor's is sufficient), or in one of the two highest rating categories by
Moody's and Standard & Poor's in the case of unsecured long-term debt.
"Eligible Investments" means, at any time, any one or more of the
obligations and securities described in Section 5.01(c) of the Sale and
Servicing Agreement.
"Eligible Servicer" means CITSF, the Trustees or any other Person qualified
to act as Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than $100,000,000 in outstanding
principal amount of recreational or motor vehicle installment sale contracts.
"ERISA" means The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means an event as described in Section 5.1 of the
Indenture.
"Event of Termination" means an event specified in Section 9.01 of the Sale
and Servicing Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
8
"Excluded Assets" means any amounts on deposit in the Certificate
Distribution Account and Cash Collateral Account and any Investment Earnings
thereon.
"Final Draw Amount" has the meaning set forth in Section 5.06(c) of the
Sale and Servicing Agreement.
"Financed Vehicle" with respect to a Contract means the new or used
Recreational Vehicle, together with all accessions thereto, securing an
Obligor's indebtedness under such Contract.
"Force-Placed Insurance" means insurance described in Section 4.04(a) of
the Sale and Servicing Agreement.
"Force-Placed Insurance Premium" means any premium for theft and physical
damage insurance purchased by CITSF or CITCF-NY.
"Funding Period" means the period commencing on the Closing Date and ending
on the earliest to occur of (i) the date on which the amount on deposit in the
Pre-Funding Account is less than $100,000, (ii) the date on which an Event of
Default occurs under the Indenture, (iii) the date on which an Event of
Termination occurs under the Sale and Servicing Agreement, (iv) the insolvency
of the Company, CITSF, CITCF-NY or CIT or (v) the close of business on May 15,
1996.
"GP Interest" means the ownership interest of at least 1% of the
Certificate Balance, which shall initially be held by The CIT GP Corporation II,
as described in Section 2.7 of the Trust Agreement.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of, the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note or Certificate is registered
on the Note Register or the Certificate Register, as applicable.
9
"Indenture" means the indenture, dated as of February 1, 1996, between the
Issuer and the Indenture Trustee, as amended and supplemented from time to time.
"Indenture Trustee" means Xxxxxx Trust and Savings Bank, not in its
individual capacity but solely as trustee under the Indenture, or any successor
trustee under the Indenture.
"Independent" when used with respect to any specified Person, means that
the Person (i) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliates of any of the foregoing Persons, (ii) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing Persons
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
"Initial Capitalized Interest Deposit" means the amount deposited in the
Capitalized Interest Account on the Closing Date from the proceeds of the sale
of the Notes and Certificates, which amount is $499,196.
"Initial Cash Collateral Amount" means $5,625,000.
"Initial Contract" means one or more of the fixed-rate simple interest
installment sale contracts described in the List of Initial Contracts, which
constitute part of the corpus of the Trust, and which Contracts are to be
assigned by the Company to the Trust; including, without limitation, all related
security interests, collateral, liens, insurance policies and guarantees of the
obligations of the related Obligor (other than guarantees, if any, by the
related Dealer) and any and all rights to receive payments which are received
pursuant thereto from and after the Initial Cut-off Date, but excluding any
rights to receive payments which are received pursuant thereto prior to the
Initial Cut-off Date.
"Initial Cut-off Date" means February 1, 1996.
"Initial Cut-off Date Principal Balance" means the aggregate unpaid
principal balance of all of the Initial Contracts as of the Initial Cut-off
Date.
"Initial Financed Vehicle" means a Financed Vehicle with respect to an
Initial Contract.
10
"Initial Pool Balance" means the sum of (i) the Pool Balance as of the
Initial Cut-off Date and (ii) the aggregate principal balance of all Subsequent
Contracts added to the Trust as of their respective Subsequent Cut-off Dates.
"Insolvency Event" with respect to a specified Person, (i) the entry of a
decree or order by a court, agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or liquidator for
such Person, in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of such
Person's affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 90 consecutive days; (ii) the consent by such Person
to the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Person or of or relating to substantially all
of such Person's property, or (iii) such Person shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations.
"Insurance Policy" means, with respect to each Contract, the policy of
physical damage and all other insurance covering the Financed Vehicles or the
Obligors, as provided in Section 4.04(a) of the Sale and Servicing Agreement,
and which, as provided therein, may be a blanket policy maintained by the
Servicer in accordance with the terms and conditions of such Section 4.04(b) of
the Sale and Servicing Agreement.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
Insurance Policy.
"Interest Accrual Period" means the period for which interest is payable on
a Distribution Date on the Securities, which shall be the one-month period from
the most recent Distribution Date on which interest has been paid to but
excluding the following Distribution Date, or in the case of the initial
Distribution Date the one-month period from February 15, 1996 to but excluding
the initial Distribution Date.
"Interest Shortfall" means with respect to any Contract and any
Distribution Date, the excess of (x) the sum of (i) the product of one-twelfth
of the weighted average of the Pass-Through Rate and the Class A Rate multiplied
by the outstanding principal amount of such Contract as of the last day of the
second preceding Due Period (or, in the case of the first Due Period ending
after the Contract was acquired by the Trust, as of the Initial Cut-off Date or
the Subsequent Cut-off Date, as applicable to such Contract) and (ii) the
product of (A) one-twelfth of the Servicing Fee Rate and (B) the outstanding
principal amount of such Contract as of the last day of the second preceding Due
Period (or, in the case of the first Due Period ending after the Contract was
acquired by the Trust, as of the Initial Cut-off Date or the Subsequent Cut-off
Date, as applicable to such Contract) over (y) the amount of interest, if any,
collected on such Contract in the related Due Period.
11
"Investment Earnings" means investment earnings deposited in a Designated
Account or the Cash Collateral Account, as applicable, net of losses and
investment expenses.
"Issuer" means the Trust until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained in the
Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee
"Late Fees" means any late fees, prepayment charges, extension fees or
other administrative fees or similar charges allowed by applicable law with
respect to the Contracts.
"Lien" means any security interest, charge, pledge, equity or encumbrance
of any kind other than tax liens, mechanics' liens and any liens that attach by
operation of law.
"Liquidated Contract" means any Contract as to which the Servicer has
determined that all amounts which it expects to recover from or on account of
such Contract have been recovered; provided that any Contract in respect of
which the related Financed Vehicle has been realized upon and disposed of and
the proceeds of such disposition have been received, shall be deemed to be a
Liquidated Contract.
"Liquidation Expenses" means any out-of-pocket expenses incurred by the
Servicer hereunder relating to the liquidation of a Contract which are
permissible hereunder.
"List of Initial Contracts" means the list attached to the Sale and
Servicing Agreement as Exhibit A identifying each Initial Contract constituting
part of the corpus of the Trust, which list (i) identifies each Initial Contract
and (ii) sets forth as to each Initial Contract (a) the Initial Cut-off Date
Principal Balance, (b) the amount of the monthly payment due from the Obligor as
of the Initial Cut-off Date, (c) the Contract Rate as of the Initial Cut-off
Date and (d) the maturity date.
"List of Subsequent Contracts" means, with respect to the sale of any
Subsequent Contracts by the Company to the Trust pursuant to a Subsequent
Transfer Agreement, the list attached to such Subsequent Transfer Agreement
identifying each Subsequent Contract which, upon the execution and delivery of
such Subsequent Transfer Agreement, will constitute part of the corpus of the
Trust, which list (i) identifies each such Subsequent Contract and (ii) sets
forth as to each such Subsequent Contract (a) the Subsequent Cut-off Date
Principal Balance, (b) the amount of monthly payment due from the Obligor as of
the applicable Subsequent Cut-off Date, (c) the Contract Rate as of the
applicable Subsequent Cut-off Date and (d) the maturity date.
"Military Reservist Relief Act" means the California Military Reservist
Relief Act of 1991.
12
"Monthly Advance" means, with respect to any Distribution Date, any payment
made by the Servicer pursuant to Section 5.03 of the Sale and Servicing
Agreement on the preceding Deposit Date.
"Monthly Report" has the meaning assigned in Section 4.09 of the Sale and
Servicing Agreement. The form of Monthly Report is attached as Exhibit G to the
Sale and Servicing Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors in
interest.
"Net Liquidation Proceeds" means the monies collected (from whatever
source) during a Due Period on a Liquidated Contract, net of the sum of (a) any
amount expended by or on behalf of the Servicer in effecting such collections
permissible hereunder, plus (b) any payments required by law to be remitted to
the Obligor, except such amounts as constitute Post Cut-off Date Insurance
Add-ons.
"Nonrecoverable Advance" means any advance made or proposed to be made
pursuant to Section 5.03 in respect of a Contract, which the Servicer believes,
in its good faith judgment, is not, or if made would not be, ultimately
recoverable from subsequent collections in respect of interest on such Contract
made by or on behalf of the Obligor thereunder, Net Liquidation Proceeds or
insurance proceeds in respect of such Contract. In determining whether an
advance is or will be nonrecoverable, the Servicer need not take into account
that it might receive any amounts in a deficiency judgment. The determination by
the Servicer that any advance is, or if made would constitute, a Nonrecoverable
Advance, shall be evidenced by an officer's certificate of the Servicer
delivered to the Trustees and stating the reasons for such determination.
"Nonreimbursable Payment" shall have the meaning set forth in Section 5.04A
of the Sale and Servicing Agreement.
"Notes" means the Class A 5.40% Asset Backed Notes.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a) of the Sale and Servicing
Agreement.
"Noteholder" means the holder of record of a Note pursuant to the
Indenture.
"Note Owners" with respect to a Book-Entry Note, means the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository Participant or as an Indirect Participant,
in each case in accordance with the rules of such Depository).
13
"Note Pool Factor" means a seven-digit decimal which the Servicer will
compute each month indicating the remaining outstanding principal balance of the
Notes as of the Distribution Date, as a fraction of the initial outstanding
principal balance of the Notes. The Note Pool Factor will be 1.0000000 as of the
Initial Cut-off Date, and thereafter will decline to reflect reductions in the
outstanding principal balance of the Notes. A Noteholder's portion of the
aggregate outstanding principal balance of the Notes is the product of (i) the
original denomination of the Noteholder's Note and (ii) the Note Pool Factor.
"Note Pre-Funded Percentage" means the percentage derived from the fraction
the numerator of which is the initial principal balance of the Notes and the
denominator of which is the initial principal balance of the Notes and the
initial Certificate Balance.
"Note Register" means the register of the Notes as specified in Section 2.4
of the Indenture.
"Note Registrar" means the registrar at any time of the Note Register,
appointed pursuant to Section 2.4 of the Indenture.
"Obligor" means each Person who is indebted under a Contract.
"Officers' Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an officer's certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means a written opinion of counsel who may, except as
otherwise expressly provided, be counsel (internal or external) for the Seller
or Servicer. In addition, for the purposes of the Indenture: (i) the opinion
shall be addressed to the Indenture Trustee as Indenture Trustee and (ii) the
opinion shall comply with any applicable requirements of Section 11.1 of the
Indenture and shall be in form and substance satisfactory to the Indenture
Trustee.
"Original Pre-Funded Amount" means the amount deposited in the Pre-Funding
Account on the Closing Date from the proceeds of the sale of the Notes and
Certificates, which amount is $68,255,035.
"Outstanding Certificate Interest" means the aggregate amount for each
prior Distribution Date of the difference between (i) the Certificate Interest
Distribution Amount and (ii) the amount of interest actually distributed to the
Holders of the Certificates.
"Outstanding Class A Interest" means the aggregate amount for each prior
Distribution Date of the difference between (i) the Class A Interest
Distribution Amount and (ii) the amount of interest actually distributed to the
Holders of the Class A Notes.
14
"Owner Trust Estate" means all right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to Article II of
the Sale and Servicing Agreement, all funds deposited from time to time in the
Designated Accounts and the Cash Collateral Account (except the Note
Distribution Account) and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Basic
Documents.
"Owner Trustee" means The Bank of New York (Delaware), a Delaware banking
corporation, or any successor trustee under the Trust Agreement.
"Paid-Ahead Contract" means a Contract in respect of which the related
Obligor, in addition to making his regularly scheduled payment in any Due
Period, makes one or more additional payments in such Due Period, such that the
Servicer, in accordance with its customary servicing procedures, (i) treats such
additional payments as a Principal Prepayment applied to reduce the principal
balance of the related Contract and (ii) does not require the Obligor to make a
scheduled payment in respect of such Contract for the number of Due Dates which
corresponds to the number of such additional scheduled payments.
"Pass-Through Rate" means 5.85% per annum, calculated on the basis of a
360-day year comprised of twelve 30-day months.
"Paying Agent" with respect to the Indenture means the Indenture Trustee or
any other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal and interest on the Notes
on behalf of the Issuer. "Paying Agent" with respect to the Trust Agreement
means any paying agent or co-paying agent appointed pursuant to Section 3.9 of
the Trust Agreement that meets the eligibility requirements of Section 6.13 of
the Trust Agreement.
"Permitted Investments" will include the following obligations and
securities: (i) obligations of the United States or any agency thereof, backed
by the full faith and credit of the United States; (ii) general obligations of
or obligations guaranteed by any State, and certificates of deposit, demand or
time deposits, federal funds or banker's acceptances issued by any depository
institution or trust company incorporated under the laws of the United States or
of any state and subject to supervision and examination by federal or state
banking authorities; in each case rated in the highest rating of each Rating
Agency for such obligations, or such lower rating as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to either
the Notes or the Certificates by such Rating Agency; and (iii) demand or time
deposits or certificates of deposit issued by any bank, trust company, savings
bank or other savings institution, which deposits are fully insured by the FDIC;
in each case rated in the highest rating of each Rating Agency for such
obligations, or such lower rating as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to either the Notes or the
Certificates by such Rating Agency.
15
"Person" means any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Pool Balance" means the aggregate outstanding principal balance of the
Contracts.
"Post Cut-off Date Insurance Add-Ons" means Force-Placed Insurance Premiums
added to the Contracts on or after the Initial Cut-off Date with regard to each
Initial Contract, or on or after the related Subsequent Cut-off Date with regard
to each Subsequent Contract, which amounts are to be repaid to an account
separate from the Collection Account over the remaining life of such Contract.
"Pre-Funding Account" means the Pre-Funding Account established and
maintained in accordance with Section 5.01(b) of the Sale and Servicing
Agreement.
"Pre-Funded Amount" means, with respect to any Determination Date, the
amount on deposit in the Pre-Funding Account.
"Pre-Funding Earnings" means (i) with respect to the March 15, 1996
Distribution Date, the actual Investment Earnings earned on the Pre-Funded
Amount during the period beginning on the Closing Date through March 14, 1996
(inclusive), (ii) with respect to the April 15, 1996 Distribution Date, the
actual Investment Earnings earned on the Pre-Funded Amount during the period
beginning on March 15, 1996 through April 14, 1996 (inclusive), and (iii) with
respect to the May 15, 1996 Distribution Date, the actual Investment Earnings
earned on the Pre-Funded Amount during the period beginning on April 15, 1996
through May 14, 1996 (inclusive).
"Predecessor Notes" with respect to any particular Note means every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for purposes of this definition, any Note
authenticated and delivered under Section 2.5 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Principal Distribution Amount" equals the difference between
(i) the sum of (x) the Pool Balance on the last day of the second preceding Due
Period (or, in the case of the first Distribution Date, the Initial Cut-off Date
Principal Balance) and (y) the Pre-Funded Amount (exclusive of Pre-Funding
Earnings) on the last day of the second preceding Due Period (or, in the case of
the first Distribution Date, as of the Closing Date), less (ii) the sum of (x)
the Pool Balance on the last day of the preceding Due Period and (y) the
Pre-Funded Amount (exclusive of Pre-Funding Earnings) on the last day of the
preceding Due Period; provided, however, that the Principal Distribution Amount
on the Class A Final Scheduled Distribution Date will equal the outstanding
16
principal balance of the Notes as of such date and the Principal Distribution
Amount on the Certificate Final Distribution Date will equal the Certificate
Balance on such date. For the purposes of determining the Principal Distribution
Amount, the unpaid principal balance of a Defaulted Contract or a Repurchased
Contract is deemed to be zero on and after the last day of the Due Period in
which such Contract became a Defaulted Contract or a Repurchased Contract. The
Principal Distribution Amount will not exceed the outstanding principal balance
of the Notes or, after the Cross-over Date, the Certificate Balance.
"Principal Liquidation Loss Amount" for any Distribution Date equals the
amount, if any, by which the sum of the aggregate outstanding principal balance
of the Notes and the Certificate Balance (after giving effect to all
distributions of principal on such Distribution Date but before giving effect to
any other reductions in the Certificate Balance on such Distribution Date)
exceeds the sum of the Pool Balance plus the Pre-Funded Amount (exclusive of
Pre-Funding Earnings), if any, at the close of business on the last day of the
related Due Period.
"Principal Prepayment" means a payment or other recovery of principal on a
Contract (including Insurance Proceeds that are not liquidation proceeds, but
exclusive of liquidation proceeds) which is received in advance of its Due Date
and applied upon receipt (or, in the case of a partial Principal Prepayment,
upon the next scheduled payment date on such Contract) to reduce the outstanding
principal amount of such Contract prior to the date or dates on which such
principal amount is scheduled to be made.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
principal balance of a Contract.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreement" means the Purchase Agreement dated as of February 1,
1996, between the Seller and CITSF, as amended and supplemented from time to
time.
"Purchase Price" means, with respect to a Contract to be purchased under
the Sale and Servicing Agreement, an amount equal to the remaining principal
amount outstanding on such Contract on the date of purchase, plus 30 days'
interest thereon in an amount equal to the sum of (i) the product of one-twelfth
of the weighted average of the Pass-Through Rate and of the Class A Rate and the
remaining principal amount outstanding on the Contract and (ii) accrued and
unpaid Servicing Fees thereon at the Servicing Fee Rate to the date of such
purchase.
"Rating Agencies" as of any date means the nationally recognized
statistical rating organizations requested by the Seller to provide ratings of
the Notes and the Certificates which are rating the Notes and Certificates on
such date.
17
"Rating Agency Condition" with respect to any action means, the condition
that each Rating Agency shall have been given at least 10 days prior notice
thereof and that each of the Rating Agencies shall have notified the Seller, the
Servicer and the Issuer in writing that such action shall not result in a
downgrade or withdrawal of the then current rating of the Notes or Certificates.
"Record Date" with respect to any Distribution Date means the day
immediately preceding the related Distribution Date or, in the event Definitive
Securities have been issued, the last day of the month immediately preceding the
month in which such Distribution Date occurs.
"Recreational Vehicle" shall mean new or used motor homes, travel trailers
and other types of recreational vehicles.
"Redemption Date" means the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.1(a) or (b) of the Indenture, as applicable.
"Relief Act Reduction" shall mean the reduction of the rate of interest
payable on any Contract to a rate below the Contract Rate pursuant to the
Soldiers' and Sailors' Civil Relief Act or the Military Reservist Relief Act.
"Repurchased Contract" means, for any Due Period, a Contract which (i)
CITSF purchased pursuant to Section 3.02 of the Sale and Servicing Agreement or
(ii) the Servicer purchased pursuant to Section 4.07 of the Sale and Servicing
Agreement, in each case, effective as of a date preceding such Due Period.
"Required Capitalized Interest Amount" for any Distribution Date during the
Funding Period is an amount equal to the product of (x) the weighted average of
the Class A Rate and the Pass-Through Rate as of the first day of the related
Interest Accrual Period minus 2.5%, (y) the undisbursed funds (excluding
investment earnings) in the Pre-Funding Account (as of such Distribution Date,
after giving effect to any purchases of Subsequent Contracts on such
Distribution Date, excluding such Subsequent Contracts which do not have a Due
Date in the month of the related Subsequent Transfer Date) and (z) a fraction,
the numerator of which is equal to the maximum number of Distribution Dates
remaining in the Funding Period and the denominator of which is 12.
"Required Cash Collateral Amount" means 2.25% of the sum of (i) the Pool
Balance and (ii) the amount (excluding Investment Earnings) on deposit in the
Pre-Funding Account, in each case, as of the first day of the related Due
Period, but in no event less than $1,875,000; provided, however, that if, with
respect to any Distribution Date, (a) the average of the principal balance of
Contracts 60 days or more delinquent (including Contracts relating to Financed
Vehicles that have been repossessed) as a percentage of the Pool Balance for the
three preceding Due Periods exceeds 1.75% or (b) the average of the principal
balances of all Contracts which became Defaulted Contracts, less any Net
Liquidation Proceeds on Defaulted Contracts, expressed as an annualized
18
percentage of the average outstanding Pool Balance of the three preceding Due
Periods exceeds 1.75%, then the Required Cash Collateral Amount with respect to
such Distribution Date shall be 4.50% of the Pool Balance as of the first day of
the related Due Period, but in no event (i) less than $1,875,000 or (ii) greater
than $5,625,000; provided, further, however, that the Required Cash Collateral
Amount shall never be greater than the outstanding balance of the Certificates
and may be reduced from time to time if the Rating Agencies shall have given
prior written notice to the Seller, the Servicer and the Issuer that such
reduction will not result in a downgrade or withdrawal of the then current
rating of the Notes and the Certificates.
"Responsible Officer" with respect to the Indenture Trustee or the Owner
Trustee means, any officer within the Corporate Trust Office of such trustee,
and, with respect to the Servicer, the President, any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer or assistant
officer of such Person customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of February 1, 1996, among the Seller, the Servicer and the Trust, as
amended and supplemented from time to time.
"Securities" means the Notes and the Certificates.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Securityholders" means the Person in whose name a Note or Certificate is
registered on the Note Register or the Certificate Register, as applicable.
"Seller" means the Person executing the Sale and Servicing Agreement as the
Seller, or any successor in interest to the Seller pursuant to the terms of the
Sale and Servicing Agreement.
"Service Transfer" has the meaning assigned in Section 9.01 of the Sale and
Servicing Agreement.
"Servicer" means the Person executing the Sale and Servicing Agreement as
the Servicer, or any successor Servicer pursuant to a Service Transfer under the
Sale and Servicing Agreement.
"Servicer's Certificate" means a certificate, substantially in the form of
Exhibit F to the Sale and Servicing Agreement, completed by and executed on
behalf of the Servicer by a Servicing Officer in accordance with Section 4.09 of
the Sale and Servicing Agreement.
19
"Servicer's Errors and Omissions Protection Policy" means the errors and
omissions policy maintained by the Servicer or any similar replacement policy,
if any, pursuant to Section 4.14 of the Sale and Servicing Agreement.
"Servicing Fee" means, as to any Distribution Date, the sum of (i)
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date) and (ii) any Investment
Earnings on amounts on deposit in the Collection Account, the Note Distribution
Account and the Certificate Distribution Account.
"Servicing Fee Rate" means 1%.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officers' Certificate
furnished to the Trust by the Servicer, as the same may be amended from time to
time.
"Servicer Payment" with respect to a Distribution Date means, the sum of
the Servicing Fee for such Distribution Date and the aggregate unpaid Servicing
Fees for past Distribution Date.
"Simple Interest Contract" means a Contract as to which interest is
calculated each day on the basis of the actual principal balance outstanding on
such day.
"Soldiers' and Sailors' Civil Relief Act" means the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.
"Standard & Poor's" means Standard & Poor's Structured Ratings Group, a
division of The XxXxxx-Xxxx Companies, Inc and its successors in interest.
"Stated Principal Balance" means, as of any Distribution Date, the unpaid
principal balance of a Contract at the end of the related Due Period.
"Subsequent Contracts" means one or more of the fixed-rate simple interest
installment sale contracts described in the List of Subsequent Contracts, which
constitute part of the corpus of the Trust, and which Contracts are to be
assigned by the Company to the Trust; including, without limitation, all related
security interests, collateral, liens, insurance policies and guarantees of the
obligations of the related Obligor (other than guarantees, if any, by the
related Dealer) and any and all rights to receive payments which are received
pursuant thereto from and after the Subsequent Cut-off Date, but excluding any
rights to receive payments which are received pursuant thereto prior to the
Subsequent Cut-off Date.
20
"Subsequent Cut-off Date" means the beginning of business on the first day
of the month of the related Subsequent Transfer Date specified in a Subsequent
Transfer Agreement with respect to those Subsequent Contracts which are
transferred and assigned to the Trust pursuant to the related Subsequent
Transfer Agreement.
"Subsequent Cut-off Date Pool Principal Balance" means, as of any
Subsequent Transfer Date, the sum of (i) the Initial Cut-off Date Principal
Balance and (ii) the aggregate unpaid principal balances of the Subsequent
Contracts to be sold on such Subsequent Transfer Date as of the related
Subsequent Cut-off Date and (iii) if applicable, an amount calculated as
provided in clause (ii) with respect to all Subsequent Transfer Dates, if any,
occurring prior to such Subsequent Transfer Date.
"Subsequent Cut-off Date Principal Balance" means the aggregate unpaid
principal balance of all of the Subsequent Contracts transferred pursuant to a
Subsequent Transfer Agreement, as of the related Subsequent Cut-off Date.
"Subsequent Financed Vehicle" means a Financed Vehicle with regard to a
Subsequent Contract.
"Subsequent Purchase Agreement" means a Subsequent Purchase Agreement dated
as of a Subsequent Cut-off Date between CITSF and the Company providing for the
sale of Subsequent Contracts from CITSF to the Company and substantially in the
form of Exhibit B to the Sale and Servicing Agreement.
"Subsequent Transfer Agreement" means each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date between the Trust and the Company
substantially in the form of Exhibit C to the Sale and Servicing Agreement, by
which Subsequent Contracts are sold and assigned to the Trust.
"Subsequent Transfer Date" means the date specified in the related
Subsequent Transfer Agreement.
"Temporary Notes" means the Notes specified in Section 2.3 of the
Indenture.
"TIA" or "Trust Indenture Act" means The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Treasury Regulations" means any proposed, temporary or final regulation
promulgated under the Code.
"Trust" means CIT RV Owner Trust 1996-A, a Delaware business trust created
by the Trust Agreement.
21
"Trust Agreement" means the Trust Agreement dated as of February 1, 1996
between the Seller and the Owner Trustee.
"Trust Estate" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Noteholders (including, without limitation, all
property and interest Granted to the Indenture Trustee), including any proceeds
thereof, but excluding the Excluded Assets.
"Trust Indenture Act" or "TIA" means The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trustees" means both the Indenture Trustee and the Owner Trustee.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
22
ARTICLE II
Conveyance of Contracts;
Acceptance by Trustee
Section 2.01 Conveyance of the Initial Contracts.
On the Closing Date, the Company shall sell, transfer, assign absolutely,
set over and otherwise convey to the Trust by execution of an assignment
substantially in the form of Exhibit D hereto, and the Trust shall purchase, (i)
all the right, title and interest of the Company in and to the Initial Contracts
and all the rights, benefits, and obligations arising from and in connection
with each Initial Contract, (ii) the security interests in the Initial Financed
Vehicles granted by the Obligors pursuant to the Initial Contracts, (iii) all
payments received by the Company on or with respect to the Initial Contracts on
or after the Initial Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any Initial
Financed Vehicles (including any right to receive future Net Liquidation
Proceeds) that secure the Initial Contracts and that shall have been repossessed
by the Servicer by or on behalf of the Trust; (v) all rights of the Company to
proceeds of Insurance Policies covering the Obligors and the Initial Contracts,
(vi) the proceeds from any Servicer's Errors and Omissions Protection Policy,
any fidelity bond and any blanket hazard policy, to the extent such proceeds
relate to any Initial Financed Vehicle, (vii) all rights of recourse against any
cosigner or under any personal guarantee with respect to the Initial Contracts
(other than any right as against a Dealer under a Dealer Agreement), (viii) all
amounts held for the Trust in the Collection Account, (ix) all amounts held for
the Trust in the Pre-Funding Account, (x) all amounts held for the Trust in the
Capitalized Interest Account, (xi) all proceeds in any way derived from any of
the foregoing items, and (xii) all documents contained or required to be
contained in the Contract Files relating to the Initial Contracts. The parties
intend and agree that the conveyance of the Company's right, title and interest
in and to the Initial Contracts (and all rights, entitlements and amounts listed
above) pursuant to this Agreement shall constitute an absolute sale.
The Company hereby declares and covenants that it shall at no time have any
legal, equitable or beneficial interest in, or any right, including without
limitation any reversionary or offset right, to the Collection Account, the
Pre-Funding Account, the Capitalized Interest Account and the Cash Collateral
Account, and that, in the event it receives any of the same, it shall hold same
in trust for the benefit of the Trust on behalf of the Securityholders and shall
immediately endorse over to the Trust any such amount it receives.
Section 2.02 Conveyance of the Subsequent Contracts.
In consideration of the Owner Trustee's delivery on the related Subsequent
Transfer Date to or upon the order of the Company of the purchase price for the
Subsequent Contracts to be conveyed to the Trust on such date up to the balance
of funds on deposit in the Pre-Funding Account on such related Subsequent
Transfer Date, the Company shall sell, transfer, assign, set over and otherwise
convey to the Trust by execution of an assignment substantially in the form of
23
the Subsequent Transfer Agreement attached hereto as Exhibit C, and the Trust
shall purchase, (i) all the right, title and interest of the Company in and to
the Subsequent Contracts and all the rights, benefits, and obligations arising
from and in connection with each Subsequent Contract, (ii) the security
interests in the Subsequent Financed Vehicles granted by the Obligors pursuant
to the Subsequent Contracts, (iii) all payments received by the Company on or
with respect to the Subsequent Contracts on or after the Subsequent Cut-off Date
(exclusive of payments with respect to Post Cut-off Date Insurance Add-Ons),
(iv) the interest of the Company in any Subsequent Financed Vehicles (including
any right to receive future Net Liquidation Proceeds) that secure the Subsequent
Contracts and that shall have been repossessed by the Servicer by or on behalf
of the Trust; (v) all rights of the Company to proceeds of Insurance Policies
covering the Obligors and the Subsequent Contracts, (vi) the proceeds from any
Servicer's Errors and Omissions Protection Policy, any fidelity bond and any
blanket hazard policy, to the extent such proceeds relate to any Subsequent
Financed Vehicle, (vii) all rights of recourse against any cosigner or under any
personal guarantee with respect to the Subsequent Contracts (other than any
right as against a Dealer under a Dealer Agreement), (viii) all proceeds in any
way derived from any of the foregoing items, and (ix) all documents contained or
required to be contained in the Contract Files relating to the Subsequent
Contracts. The parties intend and agree that the conveyance of the Company's
right, title and interest in and to the Subsequent Contracts pursuant to this
Agreement shall constitute an absolute sale. The "purchase price" shall be one
hundred percent (100%) of the aggregate principal amount outstanding on the
Subsequent Contracts so transferred as of the related Subsequent Cut-off Date.
Section 2.03 Acceptance by Owner Trustee.
(a) On the Closing Date, the Owner Trustee shall deliver a certificate to
the Company substantially in the form of Exhibit E hereto acknowledging to the
best of its knowledge conveyance of the Initial Contracts and Contract Files
relating thereto to the Owner Trustee and declaring that the Owner Trustee,
through the Servicer, as custodian, pursuant to Section 3.03 hereto, will hold
all Contracts that have been delivered in trust, upon the trusts herein set
forth, for the use and benefit of all Certificateholders and Noteholders, as
their respective interests may appear, subject to the terms and provisions of
this Agreement and the Basic Documents.
(b) On any Subsequent Transfer Date, the Owner Trustee shall deliver a
certificate to the Company substantially in the form of Exhibit E hereto
acknowledging to the best of its knowledge conveyance of the Subsequent
Contracts and Contract Files relating thereto to the Owner Trustee and declaring
that the Owner Trustee, through the Servicer, as custodian, pursuant to Section
3.04 hereto, will hold all Contracts that have been delivered in trust, upon the
trusts herein set forth, for the use and benefit of all Certificateholders and
Noteholders, as their respective interests may appear, subject to the terms and
provisions of this Agreement and the Basic Documents.
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ARTICLE III
Representations and Warranties; The Contracts
3.01A Representations and Warranties Regarding Each Contract.
The Initial Contracts have been sold by CITSF to the Company pursuant to
the Purchase Agreement. Any Subsequent Contracts will be sold by CITSF to the
Company pursuant to a Subsequent Purchase Agreement. In connection with such
sales, CITSF made the representations and warranties in Sections 3.01A, 3.01B,
3.01C and 8.01 of this Agreement to the Company (such representations and
warranties being incorporated in the Purchase Agreement and any Subsequent
Purchase Agreement) and assumed the obligations in Section 3.02 of this
Agreement. As a condition of the purchase by the Company, the Company has
required that CITSF make such representations and warranties directly to the
Trust and the Securityholders so that the Trust may recover directly against
CITSF on such representations and warranties rather than indirectly through
claims by the Company against CITSF. Consequently, CITSF represents and warrants
to the Trust and the Securityholders as to each Initial Contract as of the
Closing Date and as to each Subsequent Contract as of the related Subsequent
Transfer Date (except as otherwise expressly stated):
(a) List of Contracts. The information set forth in the List of Initial
Contracts or the List of Subsequent Contracts, as applicable, is true and
correct as of its date.
(b) Payments. With respect to an Initial Contract, as of the Initial
Cut-off Date, the payment of principal and interest for its Due Date next
preceding the Cut-off Date was made by or on behalf of the Obligor (without any
advance from CITSF or any Person acting at the request of CITSF) or was not
delinquent for more than 30 days and, with respect to a Subsequent Contract, as
of the related Subsequent Cut-off Date (or the date of origination, if later)
the payment of principal and interest for its Due Date next preceding the
related Subsequent Cut-off Date was made by or on behalf of the Obligor (without
an advance from CITSF or any Person acting at the request of CITSF) or was not
more than 30 days delinquent.
(c) No Waivers. The terms of the Contract have not been waived, altered,
amended or modified in any respect, except by instruments or documents
identified in the Contract File with respect thereto, and no waiver, alteration,
amendment or modification has caused such Contract to fail to meet any of the
other representations and warranties made by CITSF with respect thereto.
(d) Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally and equitable remedies.
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(e) No Defenses. No facts which give rise to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, by the
Obligor, have been asserted with respect to the Contract.
(f) Insurance. The Obligor on the Contract is required to maintain physical
damage insurance covering the related Financed Vehicle in accordance with
CITSF's normal requirements or, if not so covered, is covered by a blanket
insurance policy maintained by CITSF. As of the Initial Cut-off Date, the
Servicer has not obtained Force-Placed Insurance with respect to any Initial
Contract and, as of any Subsequent Cut-off Date, the Servicer has not obtained
Force-Placed Insurance with respect to any Subsequent Contract.
(g) Origination. The Contract was originated by a Dealer in the United
States of America and was purchased by CITSF or CITCF-NY in the ordinary course
of its business.
(h) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract to the Company under the Purchase Agreement in the case of an
Initial Contract, or under a Subsequent Purchase Agreement in the case of a
Subsequent Contract, the transfer of the Contract to the Trust under this
Agreement in the case of an Initial Contract, or under a Subsequent Transfer
Agreement in the case of a Subsequent Contract, or pursuant to transfers of
Securities, or the ownership of the Contracts by the Trust, unlawful.
(i) Compliance with Law. All requirements of any federal, state or local
law, including, without limitation, usury, truth in lending and equal credit
opportunity laws, applicable to the Contract have been complied with in all
material respects and such compliance is not affected by the Trust's ownership
of the Contracts, and CITSF shall for at least the period of this Agreement,
maintain in its possession, available for the Trust's inspection, and shall
deliver to the Trust upon demand, evidence of compliance with all such
requirements.
(j) Contract in Force. The Contract has not been satisfied or subordinated
in whole or in part or rescinded, and the Financed Vehicle securing the Contract
has not been released from the lien of the Contract in whole or in part.
(k) Valid Security Interest. The Contract creates a valid and enforceable
perfected first priority security interest in favor of CITSF, CITCF-NY or the
Dealer which originated such Contract in the Financed Vehicle covered thereby as
security for payment of the Initial Cut-off Date Principal Balance of such
Contract in the case of an Initial Contract or the Subsequent Cut-off Date
Principal Balance of such Contract in the case of a Subsequent Contract, which
security interest (if in favor of CITCF-NY or the Dealer) has been validly and
effectively assigned to CITSF. CITSF has assigned all of its right, title and
interest in such Contract, including the security interest in the Financed
Vehicle covered thereby, to the Company, and the Company has assigned all of its
right, title and interest in such Contract and such Financed Vehicle to the
Trust.
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(l) Notation of Security Interest. CITSF or CITCF-NY has taken all
necessary action with respect to the Contract to perfect the security interest
in the Financed Vehicle covered thereby in favor of CITSF or CITCF-NY. With
respect to each Contract, if the related Financed Vehicle is located in a state
in which notation of a security interest on the title document is required or
permitted to perfect such security interest, the title document shows, or if a
new or replacement title document with respect to such Financed Vehicle is being
applied for such title document will be issued within 180 days and will show,
CITSF or CITCF-NY as the holder of a first priority security interest in such
Financed Vehicle; if the related Financed Vehicle is located in a state in which
the filing of a financing statement under the UCC is required to perfect a
security interest in a Recreational Vehicle, such filings or recordings have
been duly made and show CITSF or CITCF-NY as secured party.
(m) Capacity of Parties. All parties to the Contract had legal capacity to
execute the Contract.
(n) Good Title. CITSF or CITCF-NY purchased the Contract for fair value and
took possession thereof in the ordinary course of its business, without
knowledge that the Contract was subject to a security interest in favor of a
third party. Neither CITSF, CITCF-NY nor the Company has sold, assigned or
pledged the Contract to any person other than CITSF, the Company or the Trust,
respectively. Prior to the transfer of the Contract by CITCF-NY to CITSF, CITSF
to the Company and by the Company to the Trust, CITCF-NY, CITSF or the Company,
respectively, had good and marketable title thereto free and clear of any
encumbrance, equity, loan, pledge, charge, claim or security interest and was
the sole owner thereof with full right to transfer the Contract to the Company
and the Trust, respectively. The Company paid fair value to CITSF for the
Contracts. Immediately upon the transfer thereof, the Trust for the benefit of
the Securityholders shall acquire good and marketable title to each Contract
free and clear of any encumbrance, equity, loan, pledge, charge, claim or
security interest, and the transfer thereof shall have been perfected under
applicable law.
(o) No Defaults. As of the Initial Cut-off Date for each Initial Contract,
and as of the related Subsequent Cut-off Date for each Subsequent Contract,
there was no default, breach, violation or event permitting acceleration
existing under the Contract and no event which, with notice and the expiration
of any grace or cure period, would constitute such a default, breach, violation
or event permitting acceleration under such Contract (except payment
delinquencies permitted by subsection (b) above). Neither CITCF-NY nor CITSF has
waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by subsection (b) above.
(p) No Liens. As of the Closing Date for each Initial Contract, and as of
the related Subsequent Transfer Date for each Subsequent Contract, there are, to
the best of CITSF's knowledge, no liens or claims which have been filed for
work, labor or materials affecting the Financed Vehicle securing the Contract
which are or may be liens prior to, or equal or coordinate with, the lien of the
Contract.
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(q) Equal Installments. The Contract is a Simple Interest Contract and
provides for level monthly payments which provide interest at the stated
Contract Rate and, if paid in accordance with its schedule, fully amortize the
loan over its original term.
(r) Enforceability. The Contract contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security, except as enforceability of such provisions may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
(s) Obligor Not a Governmental Entity. The Obligor on the Contract is not
the United States of America or any state or any agency, department,
instrumentality or political subdivision thereof.
(t) Obligor Not Subject to Bankruptcy Proceedings. The Obligor on the
Contract was not in a bankruptcy proceeding as of the Initial Cut-off Date for
each Initial Contract or as of the related Subsequent Cut-off Date for each
Subsequent Contract.
(u) No Repossession. As of the Initial Cut-off Date for each Initial
Contract, or as of the related Subsequent Cut-off Date for each Subsequent
Contract, the Financed Vehicle which secured the Contract had not been
repossessed without reinstatement.
(v) Obligor Not a Relief Act Obligor. If (i) the Obligor on the Contract is
in the military (including an Obligor who is a member of the National Guard or
is in the reserves) and (ii) the Contract is subject to the Soldiers' and
Sailors' Civil Relief Act or the Military Reservist Relief Act, such Obligor has
not made a claim to CITSF that
(A) the amount of interest on the related Contract should be
limited to 6% pursuant to the Soldiers' and Sailors' Civil Relief Act
during the period of such Obligor's active duty status, or
(B) payments on such Contract should be delayed pursuant to the
Military Reservist Relief Act,
in either case, unless a court has ordered otherwise upon application of CITSF.
(w) Only One Original. There is only one original executed copy of the
Contract, which, immediately prior to the execution of the Agreement, was in the
possession of CITSF.
(x) Contract is Chattel Paper. The Contract is "chattel paper" as defined
in the New Jersey UCC.
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(y) Selection Criteria. As of the Initial Cut-off Date for each Initial
Contract, or as of the related Subsequent Cut-off Date for each Subsequent
Contract, the Contract satisfies the eligibility criteria discussed in the
Prospectus for the Securities under the heading "The Contract Pool-General".
Section 3.01B Representations and Warranties Regarding the Contracts in the
Aggregate.
CITSF represents and warrants to the Trust and the Securityholders, that:
(a) Amounts. The aggregate principal amounts payable by Obligors under the
Initial Contracts as of the Initial Cut-off Date equal the Initial Cut-off Date
Principal Balance.
(b) Characteristics. The Contracts have the following characteristics as of
the Initial Cut-off Date:
(i) each Contract is secured by a Financed Vehicle which is a new or
used Recreational Vehicle;
(ii) each Initial Contract has a fixed Contract Rate, which is equal
to or greater than 8.25%;
(iii) the remaining maturity of each Initial Contract is at least 8
months, but not more than 180 months;
(iv) the original maturity of each Initial Contract was at least 12
months, but not more than 180 months;
(v) the weighted average remaining term to stated maturity of each
Initial Contract was at least 148 months;
(vi) the weighted average Contract Rate of the Initial Contracts was
10.00%;
(vii) the final scheduled payment dates on the Initial Contracts range
from September 1996 to February 2011;
(viii) the average remaining principal balance of the Initial
Contracts per contract was $25,728;
(ix) the outstanding principal balances of the Initial Contracts
ranged from $1,021 to $249,295;
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(x) each of the Initial Contracts was first entered onto the
Servicer's or CITCF-NY's servicing system (which, typically, represents the
date on which CITSF or CITCF-NY funds the purchase of such Contracts from
Dealers) between January 1994 and January 1996;
(xi) not more than 5% of the Obligors under the Initial Contracts by
Initial Cut-off Date Principal Balance had mailing addresses in any one
state, as determined by information provided by Obligors (except Obligors
with mailing addresses in California, Texas, Arizona, Florida, and
Missouri, which represent approximately 18.13%, 11.70%, 7.39%, 6.73%, and
5.49%, respectively, of the Initial Cut-off Date Principal Balance);
(xii) at least 67.77% of the Contracts, based on Initial Cut-off Date
Principal Balance, were secured by new Financed Vehicles at origination;
and
(xiii) not more than 3% of the Contracts, based on Initial Cut-off
Date Principal Balance, were secured by Recreational Vehicles other than
motor homes and travel trailers.
(c) Computer Tape. As of the Closing Date, in the case of the Initial
Contracts, and as of the related Subsequent Transfer Date, in the case of any
Subsequent Contracts, the Computer Tape made available by the Servicer was
complete and accurate as of its date and included a description of the same
Contracts that are described in the List of Initial Contracts or the applicable
List of Subsequent Contracts, as the case may be.
(d) Marking Records. By the Closing Date in the case of the Initial
Contracts or by the related Subsequent Transfer Date in the case of the
Subsequent Contracts, CITSF has caused the portions of the Electronic Ledger
relating to the Contracts constituting part of the Trust to be clearly and
unambiguously marked to indicate that such Contracts constitute part of the
Trust and are owned by the Trust in accordance with the terms of the trust
created hereunder.
(e) No Adverse Selection. No adverse selection procedures have been
employed in selecting the Contracts from the recreational vehicle installment
sale contracts owned by CITSF which were purchased by CITSF from CITCF-NY or
Dealers, except that CITSF did not select any such contract which would cause a
breach of any representation or warranty of CITSF contained in this Agreement
that would materially adversely affect the Trust's interest in such Contract.
Section 3.01C Representations and Warranties Regarding the Contract Files.
CITSF represents and warrants to the Trust and the Securityholders that:
(a) Possession. Immediately prior to the Closing Date in the case of the
Initial Contracts, or the Subsequent Transfer Date in the case of the Subsequent
Contracts, CITSF will have possession of each original Contract and the related
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Contract File, and there are and there will be no custodial agreements in effect
materially and adversely affecting the right of CITSF to make, or to cause to be
made, any delivery required in connection with the conveyance of the Contracts
to the Company or from the Company to the Trust.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the Contract Files from CITSF to the Company and from the Company
to the Trust are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
Section 3.01D Conditions of Closing for the Subsequent Contracts.
On or before the transfer of any Subsequent Contracts on the related
Subsequent Transfer Date, the following conditions shall have been satisfied:
(a) The Servicer shall have provided the Rating Agencies and the Trustees
with notice, at least 2 Business Days prior to the Subsequent Transfer Date, of
the Subsequent Contracts to be sold and the aggregate principal balance thereof;
(b) The Servicer shall have delivered to the Trustees a duly executed
Subsequent Transfer Agreement;
(c) The Funding Period shall not have terminated;
(d) The Servicer shall have delivered to the Trustees an Officer's
Certificate confirming the satisfaction of each condition precedent specified in
this Section 3.01D and in the related Subsequent Transfer Agreement;
(e) The Company shall have delivered to the Trustees an Assignment in the
form of Exhibit D and the Opinion of Counsel required by the related Subsequent
Purchase Agreement;
(f) The Company shall have delivered an Officers' Certificate to each
Trustee and each Rating Agency certifying that immediately following the
transfer of such Subsequent Contracts to the Trust that none of the following
would occur: (i) the weighted average Contract Rate of the Contracts based on
the Subsequent Cut-off Date Pool Principal Balance would be less than 9.85%,
(ii) less than 63% of the Contracts by Subsequent Cut-off Date Pool Principal
Balance would be attributable to Contracts to finance the purchase of new
Recreational Vehicles at the time the related Contract was originated, (iii)
more than 4% of the Contracts by Subsequent Cut-off Date Pool Principal Balance
would be attributable to Contracts to finance the purchase of Recreational
Vehicles other than motor homes and travel trailers, (iv) the weighted average
remaining term to maturity of the Contracts based on the Subsequent Cut-off Date
Pool Principal Balance would be more than 157 months, and (v) more than 34% of
the Contracts based on the Subsequent Cut-off Date Pool Principal Balance would
have a credit score of less than 179. In addition, all of such Subsequent
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Contracts must (i) be secured by Recreational Vehicles with Obligors having
mailing addresses in the United States at the time of origination, (ii) have a
Due Date not later than the month following the Subsequent Cut-off Date with
respect to such Subsequent Contract, (iii) have a final scheduled payment date
of no later than May 2011; (iv) satisfy the representations and warranties
specified in this Agreement, (v) not be selected by either CITSF or the Seller
in a manner that it believes is adverse to the interest of the Security Holders,
(vi) have a Contract Rate of at least 8.25%, (vii) provide for level monthly
payments which provide interest at the related Contract Rate and, if paid in
accordance with their schedules, fully amortize the amount financed over an
original term of no greater than 180 months, (viii) as of the related Subsequent
Cut-off Date, the most recent scheduled payment of principal and interest on
each Subsequent Contract had been made by or on behalf of the related Obligor or
not have been delinquent more than 30 days, (ix) no Subsequent Financed Vehicle
will have been repossessed without reinstatement as of the related Subsequent
Cut-off Date, (x) as of the related Subsequent Cut-Off Date, no Obligor on any
Subsequent Contract will be the subject of a bankruptcy proceeding, (xi) as of
the related Subsequent Cut-off Date, each Subsequent Contract will have a
remaining principal balance of not less than $1,000 and not more than $300,000,
and (xii) satisfy such other requirements as the Rating Agencies shall request;
(g) The Servicer shall have delivered to the Trustees the relevant List of
Subsequent Contracts;
(h) The Servicer shall have delivered an Officer's Certificate to the
Trustees substantially in the form of Exhibit I hereto;
(i) The Servicer shall have delivered to the Trustees for filing with the
appropriate office in the following jurisdictions the following executed UCC-1
Financing Statements, each listing the relevant Subsequent Contracts as required
by Article 9 of the UCC: (i) UCC-1 Financing Statements executed by CITSF as
debtor, naming the Company as Secured Party and filed in New Jersey and Oklahoma
to perfect the sale from CITSF to the Company, (ii) UCC-1 Financing Statements
executed by the Company as debtor naming the Trust as secured party and filed in
New Jersey and Oklahoma to perfect the sale from the Company to the Trust, and
(iii) UCC-1 Financing Statements executed by the Trust as debtor, naming the
Indenture Trustee as secured party and filed in New Jersey, Oklahoma and
Delaware;
(j) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has reviewed each such Subsequent Contract
and the Contract File with respect thereto, and confirming that each such
Subsequent Contract and the Contract File with respect thereto conforms in all
material respects to the relevant List of Subsequent Contracts, that each
Contract File with respect to such Subsequent Contract is complete in all
material respects, and that each Recreational Vehicle securing any such
Subsequent Contract is covered by a Hazard Insurance Policy as required by this
Agreement;
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(k) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that all funds received with respect to such Subsequent
Contract on and after the relevant Subsequent Cut-off Date through the
Subsequent Transfer Date have been deposited in the Collection Account;
(l) The Servicer shall have delivered an Officers' Certificate to the
Trustees stating that the Servicer has accepted delivery of such Subsequent
Contracts and the Contract Files with respect to such Subsequent Contracts and
will hold such Subsequent Contracts and Contract Files as custodian on behalf of
the Trustees for the benefit of the Trust as provided herein;
(m) The Servicer shall have delivered to the Trustees one or more Opinions
of Counsel, either (i) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and
delivered for filing that are necessary fully to preserve and protect the
interest of the Trustees in the Contracts, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (ii) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest; it being understood
that the opinions on perfection delivered by counsel on the Closing Date, if
delivered on the Subsequent Transfer Date as to the Subsequent Contracts, shall
satisfy the foregoing requirement; and
(n) The Seller and the Trustees shall not have been advised by either
Rating Agency that the conveyance of such Subsequent Contracts will result in a
qualification, modification or withdrawal of its then current rating of either
the Notes or the Certificates.
Section 3.02 Repurchase of Contracts for Breach of Representations and
Warranties.
(a) Subject to Section 3.02(b), CITSF shall repurchase a Contract, at its
Purchase Price, not later than 85 days after CITSF receives written notice from
either of the Trustees or the Servicer, or not later than 90 days after CITSF
otherwise becomes aware, of a breach of any representation or warranty of CITSF
set forth in Section 3.01A or 3.01B of this Agreement that materially and
adversely affects the Trust's interest in such Contract and which breach has not
been cured. CITSF shall effect such repurchase by paying to the Servicer for
deposit in the Collection Account on the Deposit Date in the month following the
month in which the Contract is repurchased the aggregate of the Purchase Price
of all Contracts that are required to be repurchased pursuant to the preceding
sentence. With respect to any Contract incorrectly described on the List of
Initial Contracts or any List of Subsequent Contracts, as the case may be, only
with respect to remaining unpaid principal balance, which CITSF would otherwise
be required to repurchase pursuant to this Section 3.02, CITSF may, in lieu of
repurchasing such Contract, deposit in the Collection Account, not later than
one Business Day after the first Determination Date which is more than 90 days
after CITSF becomes aware or receives written notice from the Trustees or the
Servicer of such incorrect description, cash in an amount sufficient to cure
such deficiency or discrepancy. CITSF shall send written notice of any such cash
33
deposit to the Rating Agencies as promptly as possible following such deposit.
Notwithstanding any other provision of the Agreement, the obligation of CITSF
under this Section shall not terminate upon a Service Transfer pursuant to
Article VII.
(b) Promptly after any repurchase referred to in Section 3.02(a), the Trust
shall execute such documents as are presented to it by CITSF and are reasonably
necessary to reconvey the Repurchased Contract to CITSF.
(c) The repurchase obligation of CITSF set forth in this Section 3.02 shall
constitute the sole remedy available to the Trust and the Securityholders for a
breach of representation and warranty hereunder with respect to the Contracts
(but not with respect to any other breach by CITSF of its obligations hereunder,
as set forth herein).
Section 3.03 Custody of Contract Files.
To assure uniform quality in servicing the Contracts and to reduce
administrative costs, the Trust, upon the execution and delivery of this
Agreement, revocably appoints the Servicer, and the Servicer accepts such
appointment, to act as the agent of the Trust and as custodian of the Contract
File with respect to each Contract, each of which is hereby constructively
delivered to the Trust.
Section 3.04 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold the
Contract Files on behalf of the Trust for the use and benefit of the Trust and
maintain such accurate and complete accounts, records and computer systems
pertaining to the Contracts as shall enable the Owner Trustee and the Indenture
Trustee to comply with their obligations pursuant to this Agreement and the
Basic Documents.
As custodian, the Servicer shall have and perform the following powers and
duties:
(i) hold the Contract Files on behalf of the Trust, maintain accurate
records pertaining to each Contract to enable it to comply with the terms
and conditions of this Agreement, maintain a current inventory thereof,
conduct annual physical inspections of Contract Files held by it under this
Agreement and certify to the Trust annually that it continues to maintain
possession of such Contract Files;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract Files on the Servicer's premises, and the receipting for Contract
Files taken from their storage area by an employee of the Servicer for
purposes of servicing or any other purposes; and
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(iii) attend to all details in connection with maintaining custody of
the Contract Files on behalf of the Trust.
In performing its duties under this Section 3.04, the Servicer agrees to
act with reasonable care, consistent with the same degree of skill and care that
it exercises with respect to similar contracts serviced by it for its own
account. The Servicer shall promptly report to the Trust in writing any material
failure by it to hold the Contract Files as herein provided and shall promptly
take appropriate action to remedy any such failure. In acting as custodian of
the Contract Files, the Servicer agrees further not to assert any beneficial
ownership interests in the Contracts or the Contract Files. The Servicer agrees
to indemnify the Trust, the Certificateholders, the Noteholders, the Owner
Trustee and the Indenture Trustee for any and all liabilities, obligations,
losses, damages, payments, costs, or expense of any kind whatsoever which may be
imposed on, incurred or asserted against the Trust, the Certificateholders, the
Noteholders, the Owner Trustee and the Indenture Trustee as the result of any
act or omission by the Servicer relating to the maintenance and custody of the
Contract Files; provided, however, that the Servicer will not be liable for any
portion of any such amount resulting from the negligence or willful misconduct
of the Trust, the Certificateholders, the Noteholders, the Owner Trustee or the
Indenture Trustee.
(b) Maintenance of and Access to Records. The Servicer, in its capacity as
custodian, agrees to maintain the Contract Files at its office in the State of
Oklahoma, or at such of its offices as shall from time to time be identified to
the Trust by written notice. The Servicer, in its capacity as custodian, may
temporarily move individual Contract Files or any portion thereof without notice
as necessary to conduct collection and other servicing activities in accordance
with its customary practices and procedures, but shall promptly return such
Contract File as soon as practicable after it is no longer needed for such
purpose.
The Servicer, in its capacity as custodian, shall make available to the
Trust, or its duly authorized representatives, attorneys or auditors, the
Contract Files and the related accounts, records and computer systems maintained
by the Servicer at such times during normal operating hours as the Trust shall
reasonably instruct which does not unreasonably interfere with the Servicer's
normal operations or customer or employee relations.
(c) Release of Documents. Upon written instruction from the Trust, the
Servicer, in its capacity as custodian, shall release or cause to be released
any document in the Contract Files to the Trust, the Trust's agent or the
Trust's designee, as the case may be, at such place or places as the Trust may
designate, as soon as practicable. The Servicer, in its capacity as custodian,
shall not be responsible for any loss occasioned by the failure of the Trust,
its agent or its designee to return any document or any delay in doing so.
Section 3.05 Instructions; Authority to Act.
The Servicer shall be deemed to have received proper instructions from
either of the Trustees with respect to the Contract Files upon its receipt of
written instructions signed by a Responsible Officer. A certified copy of a
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by-law or of a resolution of the Board of Directors of the Owner Trustee or the
Indenture Trustee, as applicable, shall constitute conclusive evidence of the
authority of any such Responsible Officer to act and shall be considered in full
force and effect until receipt by the Servicer of written notice to the contrary
given by the Trust.
Section 3.06 Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Closing Date and shall continue in
full force and effect until terminated pursuant to this Section 3.06 or until
this Agreement shall be terminated. The Servicer may perform its duties as
custodian through one or more agents, which agents may maintain physical
possession of Contract Files as agent for the Servicer acting as custodian. If
the Servicer shall resign as Servicer under Section 8.05 or if all of the rights
and obligations of the Servicer shall have been terminated under Section 9.01,
the appointment of the Servicer as custodian may be terminated by the Indenture
Trustee or by the Holders of Notes evidencing not less than a majority of the
aggregate outstanding principal balance of the Notes as of the close of the
preceding Distribution Date (or, if the Notes have been paid in full and the
Indenture has been discharged in accordance with its terms, by the Owner Trustee
or by the Holders of Certificates evidencing not less than a majority of the
Certificate Balance as of the close of the preceding Distribution Date), in the
same manner as rights and obligations of the Servicer may be terminated under
Section 9.01. The Trust may terminate the Servicer's appointment as custodian at
any time with cause upon written notification to the Servicer. As soon as
practicable after any termination of such appointment, the Servicer shall
deliver the Contract Files to the Trust or the Trust's agent at such place or
places as the Trust may reasonably designate. The Servicer shall cooperate with
the Trust in making the transfer and shall bear all of the Servicer's costs and
expenses with respect to such transfer, but the Trust shall bear the actual
costs and expenses of packing and transporting the Contract Files to the
location designated by the Trust. Notwithstanding the termination of the
Servicer as custodian, the Trust agrees that upon any such termination, the
Trust shall provide, or cause its agent to provide, access to the Contract Files
to the Servicer for the purpose of carrying out its duties and responsibilities
with respect to the servicing of the Contracts hereunder.
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ARTICLE IV
Administration and Servicing of Contracts
Section 4.01 Duties of Servicer.
(a) The Servicer, as agent for the Trust, shall manage, administer, service
and make collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. The Trust, at the request of a Servicing Officer, shall furnish the
Servicer with any reasonable documents or take any action reasonably requested,
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(b) In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise the same degree
of skill and care that the Servicer exercises with respect to similar contracts
serviced by the Servicer for its own account.
(c) The Servicer may enter into subservicing agreements with one or more
subservicers (which shall be Eligible Servicers) for the servicing and
administration of certain of the Contracts. References in this Agreement to
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by the Servicer in servicing the Contracts shall include
actions taken, to be taken, permitted to be taken, or restrictions on actions
permitted to be taken, by a subservicer on behalf of the Servicer. Each
subservicing agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and the standard of care set forth herein and
as the Servicer and the subservicer have agreed. All compensation payable to a
subservicer under a subservicing agreement shall be payable by the Servicer from
its servicing compensation or otherwise from its own funds, and none of the
Trust, the Owner Trustee, the Indenture Trustee, the Certificateholders or the
Noteholders will have any liability to the subservicer with respect thereto.
Notwithstanding any subservicing agreement or any of the provisions of this
Agreement relating to agreements or any arrangements between the Servicer or a
subservicer or any reference to actions taken through such Persons or otherwise,
the Servicer shall remain obligated and liable to the Trust, the Owner Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Contracts and the other Trust property in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Contracts and the other
Trust property involving a subservicer in its capacity as such shall be deemed
to be between the subservicer and the Servicer alone, and the Owner Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders shall not be
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deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the subservicer except as set forth in the next
succeeding paragraph.
In the event the Servicer shall for any reason no longer be acting as such,
the successor Servicer may, in its discretion, thereupon assume all of the
rights and obligations of the outgoing Servicer under a subservicing agreement.
In such event, the successor Servicer shall be deemed to have assumed all of the
Servicer's interest therein and to have replaced the outgoing Servicer as a
party to each such subservicing agreement to the same extent as if such
subservicing agreement had been assigned to the successor Servicer, except that
the outgoing Servicer shall not thereby be relieved of any liability or
obligations on the part of the outgoing Servicer to the subservicer under such
subservicing agreement. The outgoing Servicer shall, upon request of the Trust,
but at the expense of the outgoing Servicer, deliver to the successor Servicer
all documents and records relating to each such subservicing agreement and the
Contracts and other Trust property then being serviced thereunder and an
accounting of amount collected and held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of any subservicing agreement to
the successor Servicer. In the event that the successor Servicer elects not to
assume a subservicing agreement, the outgoing Servicer, at its expense, shall
cause the subservicer to deliver to the successor Servicer all documents and
records relating to the Contracts and the other Trust property being serviced
thereunder and all amounts held (or thereafter received) by such subservicer
(together with an accounting of such amounts) and shall otherwise use its best
efforts to effect the orderly and efficient transfer of servicing of the
Contracts and the other Trust property being serviced by such subservicer to the
successor Servicer.
(d) The Servicer's duties shall include collection and posting of all
payments, responding to inquiries by Obligors or by federal, state or local
governmental authorities with respect to the Contracts, investigating
delinquencies, reporting tax information to Obligors, administering and
enforcing Insurance Policies in accordance with its customary practices,
accounting for collections, furnishing monthly and annual statements to the
Trust with respect to distributions, and making Monthly Advances pursuant to
Section 5.03 hereof.
The Servicer shall be authorized and empowered by the Trust to execute and
deliver, on behalf of itself, the Trust, the Owner Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders, or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Contracts
or with respect to the Financed Vehicles.
Upon written request of the Servicer and receipt by the Trust of an
Officer's Certificate setting forth the facts underlying such request, the Trust
shall furnish the Servicer with any limited powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder and the Trust shall not be held
liable for such actions of the Servicer thereunder.
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Section 4.02 Collection of Contract Payments. The Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Contracts as and when the same shall become due, and in
connection therewith shall follow such collection procedures as it follows with
respect to comparable new or used Recreational Vehicle installment sale
contracts that it services for itself and others. The Servicer shall not reduce
scheduled payments, extend any Contract or otherwise modify the terms of any
Contract; provided, however, that, consistent with its normal procedures, the
Servicer may extend or modify the payment schedule of any Contract for credit
related reasons that would be acceptable to the Servicer with respect to
comparable Contract secured by a new or used Recreational Vehicle that it
services for itself or others, if (a) the maturity of such Contract would not be
extended beyond the 180th day prior to the Class A Final Scheduled Distribution
Date and (b) the reducing, rescheduling, extension or other modification of the
terms of the Contract would not constitute a cancellation of such Contract and
the creation of a new installment sale contract. If, as a result of rescheduling
or extending of payments or any other modification, such rescheduling, extension
or modification breaches any of the terms of the preceding sentence, then the
Servicer shall be obligated to purchase such Contract pursuant to Section 4.07
hereof as of the last day of the Due Period on which it became aware or received
written notice from the Trust of such failure. The Servicer may, in accordance
with its customary standards, policies and procedures, in its discretion, waive
any Late Fees that may be collected in the ordinary course of servicing a
Contract.
Section 4.03 Realization Upon Contracts.
(a) The Servicer will, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on the Contracts and Net
Liquidation Proceeds in respect of Defaulted Contracts.
Notwithstanding the standard of care specified in Section 4.01 hereof, the
Servicer shall commence procedures for the repossession of any Financed Vehicle
or take such other steps that in the Servicer's reasonable judgment will
maximize the receipt of principal and interest or Net Liquidation Proceeds with
respect to the Contract secured by such Financed Vehicle, including, without
limitation, selling such Financed Vehicle at a public or private sale, subject
to the requirements of the applicable state and federal law. In connection with
such repossession or foreclosure, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with Section 4.01 hereof. In the event that title to any Financed Vehicle is
acquired in foreclosure or by conveyance in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trust, or, at its election, to its
nominee on behalf of the Trust.
(b) The Servicer shall be entitled to recover all reasonable fees of third
parties and expenses incurred by it in the course of converting any Financed
Vehicle into cash proceeds including, without limitation, expenses relating to
recovery and repossession of such Financed Vehicle, from liquidation proceeds
with respect to such Financed Vehicle. The Net Liquidation Proceeds realized in
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connection with any such action with respect to a Contract shall be deposited by
the Servicer in the Collection Account in the manner specified in Section 5.02
hereof and shall be applied to reduce (or to satisfy, as the case may be) the
Purchase Price of the Contract, if such Contract is to be purchased by CITSF
pursuant to Section 3.02 hereof, is to be purchased by the Servicer pursuant to
Section 4.07 hereof, or is to be purchased by CITSF pursuant to Section 11.02
hereof. The foregoing shall be subject to the provision that, in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its sole discretion that such repair and/or
repossession will increase the Net Liquidation Proceeds of the related Contract
by an amount equal to or greater than the amount of such expenses.
(c) The Servicer may xxx to enforce or collect upon Contracts, including
foreclosure of any security interest in a Financed Vehicle, in its own name, if
possible, or as agent for the Trust. If the Servicer elects to commence a legal
proceeding to enforce a Contract or any Insurance Policy in respect thereof, the
act of commencement shall be deemed to be an automatic assignment of the
Contract to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Contract on the ground that it is not a real party in interest or a
holder entitled to enforce the Contract, the Trust shall, at the Servicer's
expense, take such steps as the Servicer deems necessary to enforce the
Contract, including bringing suit in its name or the names of the
Securityholders.
(d) Prior to a Service Transfer, the Servicer may grant to the Obligor on
any Contract any rebate, refund or adjustment out of the Collection Account that
the Servicer in good faith believes is required because of Principal Prepayment
in Full. The Servicer will not permit any rescission or cancellation of any
Contract.
(e) The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy.
Section 4.04 Physical Damage Insurance.
(a) The Servicer, in accordance with its customary servicing procedures,
shall require that each Obligor shall have obtained and shall maintain physical
damage insurance covering the Financed Vehicle, provided that such insurance
shall be in an amount no greater than the outstanding principal balance of the
related Contract or, if such insurance also covers the interest of the related
Obligor in the Financed Vehicle, no greater than the greater of the outstanding
principal balance of the related Contract and the value of the Financed Vehicle,
or such lesser amount permitted by applicable law. The Servicer shall enforce
its rights under the Contracts to require the Obligors to maintain physical
damage insurance, in accordance with the Servicer's customary practices and
procedures with respect to comparable new or used recreational vehicles financed
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by installment sale contracts that it services for itself or others. If an
Obligor fails to maintain such insurance, the Servicer shall obtain and advance
on behalf of such Obligor, as required under the terms of the applicable
Contract and this Agreement, the premiums for such insurance, with uninsured
physical damage loan insurance endorsements, each insurance policy naming the
Servicer as an additional insured and loss payee, and issued by an insurer
having a rating of "A" or better by A.M. Best (such insurance being referred to
herein as "Force-Placed Insurance"). Such Force-Placed Insurance and any
commissions or finance charges collected by the Servicer in connection therewith
shall be, to the extent permitted by law, in an amount in accordance with
customary servicing procedures, but in no event in an amount greater than the
outstanding principal balance of the related Contract or, if such insurance also
covers the interest of the related Obligor in the Financed Vehicle, no greater
than the greater of the outstanding principal balance of the related Contract
and the value of the Financed Vehicle, or such lesser amount permitted by
applicable law and the Servicer shall disclose to the related Obligor all
information with respect to such Force-Placed Insurance, commissions and finance
charges as required by applicable law. The Servicer does not, under its
customary servicing procedures, require Force-Placed Insurance when the
principal balance of the related retail installment sale contract or installment
loan falls below the level or levels periodically established in accordance with
such customary servicing procedures. In accordance with such customary servicing
procedures, the Servicer may periodically readjust such levels, suspend
Force-Placed Insurance or arrange other methods of protection of the Financed
Vehicles that it deems necessary or advisable, provided that the Servicer
determines that such actions do not materially and adversely affect the
interests of the Certificateholders or the Noteholders. Any portion of the
principal balance of a Contract consisting of Post Cut-off Date Insurance
Add-Ons will not be owned by the Trust, and amounts allocable thereto will not
be available for distribution in respect of the Securities. Unless otherwise
designated by the Obligor, the Servicer will not allocate payments to Post
Cut-off Date Insurance Add-Ons if any amount of principal or interest is due but
unpaid on the Contracts. The Servicer shall not deposit payments posted with
respect to Post Cut-off Date Insurance Add-Ons in the Collection Account and
shall instead promptly pay such amounts to an account of the Servicer maintained
for that purpose. In the event that an Obligor under a Contract with respect to
which the Servicer has advanced funds to obtain Force-Placed Insurance makes
scheduled payments under the Contract, but has failed to make scheduled payments
of such Post Cut-off Date Insurance Add-Ons as due, and the Servicer has
determined that eventual payment of such amount is unlikely, the Servicer may,
but shall not be required to, take any action available to it, including
determining that the related Contract is a Defaulted Contract; provided,
however, that any Net Liquidation Proceeds with respect to such Contract shall
be applied first to the accrued and unpaid interest at the Contract Rate, then
to the principal amount outstanding, and the remainder, if any, to repayment of
any Post Cut-off Date Insurance Add-Ons.
(b) The Servicer may, in lieu of causing individual Insurance Policies to
be maintained with respect to each Financed Vehicle pursuant to subsection (a)
of this Section 4.04 maintain one or more blanket insurance policies covering
losses on the Obligor's interest in the Contracts resulting from the absence or
insufficiency of individual Insurance Policies. To the extent that the Obligor's
individual insurance policy does not cover theft of the Financed Vehicle (to the
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extent required under the Servicer's customary practices and procedures with
respect to comparable new or used recreational vehicle installment sale
contracts that it services for itself or others), the Servicer shall Force-Place
Insurance, which may be obtained pursuant to one or more blanket insurance
policies covering theft and other risks. The proceeds of any such blanket
insurance policies relating to the Contracts shall be deposited in the
Collection Account as collections on the Contracts in accordance with the
provisions of Article V hereof.
Any such blanket policy shall be substantially in the form and in the
amount carried by the Servicer as of the date of this Agreement. The Servicer
shall pay the premium for such policy on the basis described therein. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to (i) claims under individual Hazard Insurance Policies maintained
pursuant to subsection (a) of this Section 4.04, or (ii) claims under any
blanket insurance policy. If the insurer under such blanket insurance policy
shall cease to be acceptable to the Servicer, the Servicer shall exercise its
best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy. The Servicer shall provide each Rating Agency with
notice of the occurrence of any event specified in the preceding sentence.
(c) The Servicer, or any affiliate of the Servicer, may, to the extent
permitted by law (i) enter into agreements with one or more insurers or other
Persons pursuant to which the Servicer or such affiliate will earn commissions
and fees in connection with any insurance policy purchased by an Obligor
including, without limitation, any hazard insurance policy (whether or not such
hazard insurance policy is force-placed pursuant to the provisions of any
Contract), or any other insurance policy whatsoever and (ii) in connection with
the foregoing, to solicit, or permit and assist any insurer or any agent thereof
to solicit (including, without limitation, providing such insurer or agent a
list of Obligors including name, address or other information) any Obligor.
Section 4.05 Maintenance of Security Interests in Financed Vehicles;
Retitling.
(a) The Servicer, in accordance with its customary servicing procedures,
shall take such steps as are necessary to maintain perfection of the security
interest created by each Contract in the related Financed Vehicle in favor of
CITSF or CITCF-NY. The Servicer hereby agrees to take such steps as are
necessary to re-perfect such security interest in the name of CITSF or CITCF-NY
in the event of the relocation of a Financed Vehicle to a jurisdiction other
than the jurisdiction in which steps had been taken to perfect the security
interest in favor of CITSF or CITCF-NY. In the event that the assignment of the
Contract to the Trust is insufficient, without a notation on the related
Financed Vehicle's certificate of title, to grant to the Trust a perfected
security interest in the related Financed Vehicle, CITSF or CITCF-NY hereby
agrees to serve as the Trust's agent for the purpose of perfecting the security
interest in such Financed Vehicle and that CITSF's or CITCF-NY's listing as the
secured party on the certificate of title is in the capacity as agent of the
Trust.
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(b) If, at any time, a Service Transfer has occurred and CITSF is no longer
the Servicer, and the new Servicer is unable to foreclose upon a Financed
Vehicle because the title document for such Financed Vehicle does not show such
new Servicer or the Trust as the lienholder, CITSF shall take all necessary
steps to apply for a replacement title document showing the new Servicer or the
Trust as the secured party.
(c) In order to facilitate the new Servicer's actions, as described in
subsection 4.05(b) hereof, CITSF will provide the new Servicer with any
necessary power of attorney permitting it to retitle the Financed Vehicle. The
Company hereby appoints the Trust its attorney-in-fact to endorse, as
appropriate, the certificate of title relating to any Financed Vehicle in order
to cause a change in the registration of legal owner of the Financed Vehicle to
the Trust at such time as such certificate of title is endorsed and delivered to
the Department of Motor Vehicles of the State of California (or any other state
department of motor vehicles) with appropriate fees. The Company will provide
the Trust with any necessary power of attorney for such purpose.
(d) If the new Servicer is unable to retitle the Financed Vehicle, in the
event that the new Servicer seeks to foreclose on a Financed Vehicle then CITSF
will take all actions necessary to act with the new Servicer, to the extent
permitted by law, to foreclose upon the Financed Vehicle, including, as
appropriate, the filing of any UCC-1 or UCC-2 financing statements necessary to
perfect the security interest in any Financed Vehicle.
Section 4.06 Covenants of Servicer. The Servicer shall make the following
covenants on which the Owner Trustee and Indenture Trustee will rely in
accepting the Contracts in trust and executing and authenticating the
Certificates and the Notes:
(i) Security Interest to Remain in Force. The Financed Vehicle
securing each Contract shall not be released from the security interest
granted by the Contract in whole or in part except as contemplated herein;
(ii) No Impairment. The Servicer shall not impair the rights of the
Trust in the Contracts or take any action inconsistent with the Trust's
ownership of the Contracts, except as expressly provided herein;
(iii) Amendments. The Servicer shall not increase the number of
payments under a Contract, nor increase the principal amount of such
Contract which is used to finance the purchase price of the related
Recreational Vehicles, nor extend or forgive payments on a Contract, except
as provided in Section 4.02 hereof; and
(iv) Compliance with Insurance Policies. The Servicer shall not fail
to comply with the provisions of any Insurance Policy, if the failure to so
comply would impair the protection or benefit to be afforded by such
Insurance Policies.
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Section 4.07 Purchase of Contracts Upon Breach
The Servicer or the Trustees, as the case may be, shall inform the other
parties promptly, in writing, upon the discovery of any breach by the Servicer
of its covenants under Section 4.04(a) with respect to Force-Placed Insurance,
Section 4.06 and the proviso in Section 4.02 hereof which materially and
adversely affects the Trust's interest in any Contract. The Trustees shall not
be deemed to have discovered such a breach until such time as a Responsible
Officer of the Trustees receives written notice of such breach. Except as
otherwise specified in Section 4.02 hereof, unless the breach shall have been
cured, the Servicer shall purchase such Contract, at its Purchase Price, not
later than the first Determination Date which is more than 60 days after the
Servicer receives written notice from the Trustees, or not later than 60 days
after the Servicer otherwise becomes aware of, a breach of any of its
obligations with respect to Force-Placed Insurance under Section 4.04(a) hereof
or any representation or warranty of the Servicer in Section 4.06 hereof that
materially and adversely affects the Trust's interest in such Contract. The
Servicer shall effect such purchase by depositing, in accordance with Section
5.04 hereof, the Purchase Price of such Contract (less any Net Liquidation
Proceeds deposited, or to be deposited, by the Servicer in the Collection
Account with respect to such Contract pursuant to Section 5.02 hereof) in the
Collection Account on the Deposit Date immediately preceding the Determination
Date referred to in the preceding sentence. The effective date of such purchase
shall be the last day of the Due Period preceding such Determination Date. The
sole remedy of the Trust, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders against the Servicer with respect to a
breach pursuant to Section 4.06 hereof or Section 4.02 hereof shall be to
require the Servicer to purchase Contracts pursuant to this Section 4.07.
Section 4.08 Servicing Fee.
The Servicing Fee for a Distribution Date shall be equal to the sum of (i)
one-twelfth of the product of the Servicing Fee Rate and the Pool Balance as of
the last day of the second preceding Due Period (or, in the case of the first
Distribution Date, as of the Initial Cut-off Date) and (ii) any Investment
Earnings on amounts on deposit in the Collection Account, the Certificate
Distribution Account and the Note Distribution Account. In addition, the
Servicer will be entitled to collect and retain any Late Fees received by the
Servicer from Obligors during the preceding Due Period.
Section 4.09 Servicer's Certificate.
On or before each Determination Date, the Servicer shall furnish a report
(the "Monthly Report"), which shall be in substantially the form of Exhibit G,
to the Owner Trustee, the Indenture Trustee, any Paying Agent (under the
Indenture and the Trust Agreement) and (if CITSF is not the Servicer) CITSF. The
determination by the Servicer of the amount of the distributions to be made
pursuant to Section 5.05 hereof shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder, and the Trustees
shall be protected in relying upon the same without any independent check or
verification. The Servicer shall also specify in the Monthly Report each
Contract which CITSF or the Servicer is required to repurchase as of the last
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day of the related Due Period and each Contract which the Servicer shall have
determined to be a Defaulted Contract or a Liquidated Contract during such Due
Period. The Trustees shall not be required to recompute, verify or recalculate
information contained in the Servicer's Certificate.
Each Monthly Report shall be accompanied by a certificate of a Servicing
Officer substantially in the form of Exhibit F, certifying the accuracy of the
Monthly Report and that no Event of Termination or event that with notice or
lapse of time or both would become an Event of Termination has occurred, or if
such event has occurred and is continuing, specifying the event and its status.
In addition, the Servicer shall, on request of the Trustees, furnish the
Trustees such underlying data as can be generated by the Servicer's existing
data processing system without undue modification or expense.
Section 4.10 Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Trustees within 90 days after the end
of each calendar year commencing March 31, 1997, a certificate signed by the
president, the treasurer or any vice president of the Servicer, stating that (i)
a review of the activities of the Servicer during the preceding calendar year of
its performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such preceding calendar year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustees, promptly after having
obtained knowledge thereof, an Officer's Certificate specifying any event which
with the giving of notice or lapse of time, or both, would become an Event of
Termination under subsection (a) or (b) of Section 9.01 hereof. The Company
shall deliver to the Trustees, promptly after having obtained knowledge thereof,
an Officer's Certificate specifying any event which with the giving of notice or
lapse of time, or both, would become an Event of Termination under subsection
(a) or (b) of Section 9.01 hereof.
Section 4.11 Annual Report of Accountants. On or before March 31 of each
year, commencing March 31, 1997, the Servicer, at its expense, shall cause a
firm of independent public accountants which is a member of the American
Institute of Certified Public Accountants to furnish a statement which opines
on, at a minimum, the Servicer's compliance with the minimum servicing standards
set forth in the Uniform Single Attestation Program for Mortgage Bankers (in
accordance with the 1995 revisions thereto). Such examination and report of
independent public accountants will be prepared in accordance with the
requirements set forth in the Uniform Single Attestation Program for Mortgage
Bankers (in accordance with the 1995 revisions thereto). Copies of the annual
statement of accountants shall also be provided to each Rating Agency and to the
Trustees.
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Section 4.12 Duties of Owner Trustee
The Servicer shall monitor the performance of the Issuer and the Owner
Trustee and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's or the Owner Trustee's duties under the Indenture and the
Trust Agreement.
The Servicer shall prepare for execution by the Issuer or the Owner
Trustee, or shall cause to be prepared by other appropriate persons, all
documents, reports, filings, instruments, certificates and opinions as shall be
required to be prepared, filed or delivered by the Issuer or the Owner Trustee
pursuant to the Indenture or the Trust Agreement.
In furtherance of the foregoing, the Servicer's duties shall include,
without limitation, compliance with the requirements of Sections 5.4 and 5.5 of
the Trust Agreement and Sections 2.2, 2.4, 2.7(d), 2.7(e), 2.9, 3.3, 3.4, 3.5,
3.6, 3.7(b), 3.7(d), 3.9, 3.10, 3.19, 4.1, 5.4, 6.8, 6.10, 7.1, 7.3, 8.2, 8.3,
8.4, 8.5, 9.1, 9.2, 9.3, 9.6, 10.2, 11.1(a), 11.1(b), 11.4, 11.6 and 11.15 of
the Indenture.
Section 4.13 Reports to Securityholders and the Rating Agencies
(a) Concurrently with each distribution charged to the Certificate
Distribution Account and the Note Distribution Account, the Owner Trustee and
the Indenture Trustee, respectively, so long as each has received the Monthly
Report from the Servicer, shall forward or cause to be forwarded by mail to each
Securityholder, such Monthly Report.
(b) The Servicer shall forward to each Rating Agency each letter of the
independent certified public accountants' described in Section 4.11 hereof, each
Servicer's Certificate, each annual statement as to compliance described in
Section 4.10 hereof and each statement to Securityholders described in Section
5.08 hereof.
Section 4.14 Maintenance of Fidelity Bond and Errors and Omission
Policy.
The Servicer shall during the term of its service as Servicer maintain in
force (a) at such time as the long-term debt of its parent is rated less than A
by Standard & Poor's or less than A3 by Moody's, a policy or policies of
insurance covering errors and omissions for failure to maintain insurance as
required by this Agreement, and (b) a fidelity bond in respect of its officers,
employees and agents. Such policy or policies and such fidelity bond shall be in
such form and amount as is generally customary among Persons which service a
portfolio of recreational vehicle installment sale contracts having an aggregate
principal amount of $100,000,000 or more and which are generally regarded as
servicers acceptable to institutional investors.
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Section 4.15 Trustees to Cooperate.
Upon payment in full on any Contract, the Servicer will notify the Trustees
by certification of a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payments which are required to be deposited in the Collection Account pursuant
to Section 5.05 have been so deposited). The Servicer is authorized to execute
an instrument in satisfaction of such Contract and to do such other acts and
execute such other documents as the Servicer deems necessary to discharge the
Obligor thereunder and eliminate the security interest in the Financed Vehicle
related thereto. The Servicer shall determine when a Contract has been paid in
full. To the extent that insufficient payments are received on a Contract
credited by the Servicer as prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds.
Section 4.16 Costs and Expenses.
Except as provided in Section 4.03 hereof, all costs and expenses incurred
by the Servicer in carrying out its duties hereunder, including all fees and
expenses incurred in connection with the enforcement of Contracts (including
enforcement of Defaulted Contracts and repossessions of Financed Vehicles
securing such Contracts), shall be paid by the Servicer and the Servicer shall
not be entitled to reimbursement hereunder.
ARTICLE V
Accounts; Distributions; Statements to Certificateholders
Section 5.01 Collection Account, Pre-Funding Account, Capitalized Interest
Account and Cash Collateral Account.
(a) (i) On or before the Closing Date, there shall be established and
maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders and Certificateholders, with an Eligible Institution (which
initially shall be the Indenture Trustee) an account known as the "CIT RV
Owner Trust 1996-A Collection Account" (the "Collection Account"), bearing
an additional designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and Certificateholders.
(ii) On or before the Closing Date, there shall be established and
maintained in the name of the Indenture Trustee, for the benefit of the
Noteholders, with the Indenture Trustee an account known as the "CIT RV
Owner Trust 1996-A Note Distribution Account" (the "Note Distribution
Account"), bearing an additional designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders.
(iii) On or before the Closing Date, pursuant to the Trust Agreement,
there shall be established and maintained in the name of the Owner Trustee,
for the benefit of the Certificateholders, with an Eligible Institution
(which initially shall be The Bank of New York, the Paying Agent of the
Owner Trustee) an account known as
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the "CIT RV Owner Trust 1996-A Certificate Distribution Account" (the
"Certificate Distribution Account"), bearing an additional designation
clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders and owned by the Trust.
(iv) On or before the Closing Date, there shall be established and
maintained in the name of the Owner Trustee with an Eligible Institution
(which, initially, shall be The Bank of New York, the Paying Agent of the
Owner Trustee), an account known as the "CIT RV Owner Trust 1996-A Cash
Collateral Account (the "Cash Collateral Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders and owned by the Trust.
(b) Pre Funding Account and Capitalized Interest Account.
(i) On or before the Closing Date, there shall be established and
maintained the Pre-Funding Account and the Capitalized Interest Account, in
the name of the Owner Trustee, on behalf of the Trust for the benefit of
the Noteholders and Certificateholders with the Indenture Trustee and the
funds on deposit therein will be invested solely in Permitted Investments
that mature not later than one Business Day prior to the next succeeding
Distribution Date, until they are applied by the Owner Trustee. If, at any
time during the Funding Period, the Indenture Trustee ceases to be an
Eligible Institution, the Indenture Trustee (or the Servicer on its behalf)
shall within five (5) Business Days (or such longer period, not to exceed
thirty (30) calendar days, as to which the Rating Agency may consent)
establish a new Pre-Funding Account or Capitalized Interest Account with an
Eligible Institution that agrees to act as custodian on behalf of the
Indenture Trustee of the amounts on deposit in such accounts, transfer any
cash and/or any investments to such new Pre-Funding Account or Capitalized
Interest Account and from the date such new Pre-Funding Account or
Capitalized Interest Account is established, they shall be the "Pre-Funding
Account" or "Capitalized Interest Account", as appropriate. The Pre-Funding
Account shall be entitled the "CIT RV Owner Trust 1996-A Pre-Funding
Account". The Capitalized Interest Account shall be entitled the "CIT RV
Owner Trust 1996-A Capitalized Interest Account". Each of the Pre-Funding
Account and the Capitalized Interest Account shall bear an additional
designation clearly indicating that the funds on deposit therein are held
for the benefit of, and owned by, the Trust. On the Closing Date, the Trust
will deposit the Original Pre-Funded Amount into the Pre-Funding Account
and deposit the Initial Capitalized Interest Deposit into the Capitalized
Interest Account.
(ii) On any Subsequent Transfer Date, the Servicer shall instruct the
Owner Trustee to withdraw from the Pre-Funding Account an amount equal to
100% of the unpaid principal balance thereof as of the related Subsequent
Cut-off Date of the Subsequent Contracts sold to the Trust on such
Subsequent Transfer Date and pay such amount to or upon the order of
Company with respect to such transfer. In no event shall the Servicer be
permitted to instruct the Owner Trustee to release from the Pre-Funding
Account with respect to Subsequent Contracts to be transferred to the Trust
an amount, which, when added to the amounts previously released from the
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Pre-Funding Account to acquire Subsequent Contracts, would exceed the
Original Pre-Funded Amount.
(iii) On the Distribution Dates occurring in March, April and May of
1996, the Owner Trustee shall withdraw Pre-Funding Earnings from the
Pre-Funding Account, to the extent available, and deposit such amount in
the Collection Account for payment to the Holders of the Securities on such
Distribution Dates, in an amount equal to the difference, if any, between
(x) the sum of the amount of interest payable to the Noteholders on such
Distribution Date and the amount of interest payable to the
Certificateholders on such Distribution Date and (y) that portion of the
Amount Available allocated to make such interest payments to Noteholders
and Certificateholders, respectively, on such Distribution Dates. On such
Distribution Dates, such funds, if any, shall be used first to pay to the
Noteholders, to the extent available, the Pre-Funding Earnings so withdrawn
such that the Noteholders will receive such amounts of interest due on such
Distribution Date, and second, to pay to the Certificateholders, to the
extent available, the remaining Pre-Funding Earnings so withdrawn such that
the Certificateholders will receive such amounts of interest due on such
Distribution Date.
(iv) On the Distribution Dates occurring in March, April and May of
1996, the Owner Trustee shall withdraw monies on deposit in the Capitalized
Interest Account, to the extent available, and deposit such amount in the
Collection Account for payment to the Holders of the Securities on such
Distribution Date, in an amount equal to the excess, if any, of (x) the
product of (1) the weighted average of the Class A Rate and the
Pass-Through Rate as of the first day of the related Interest Accrual
Period and (2) the undisbursed funds (excluding investment earnings) in the
Pre-Funding Account (as of the last day of the related Due Period) over (y)
the amount if any Pre-Funding Earnings in the Pre-Funding Account that are
available to pay interest on the Securities on such Distribution Date
pursuant to clause (iii) above. On such Distribution Dates, such funds, if
any, shall be used first to pay to the Noteholders, to the extent
available, the amount so withdrawn such that the Noteholders will receive
such amounts of interest due on such Distribution Date, and second, to pay
to the Certificateholders, to the extent available, the amount so withdrawn
such that the Certificateholders will receive such amounts of interest due
on such Distribution Date.
(v) On the Distribution Dates occurring in March, April and May 1996,
the Owner Trustee shall withdraw the difference between the amount on
deposit in the Capitalized Interest Account on such Distribution Date
(after giving effect to all withdrawals therefrom pursuant to subsection
(iv) above) and the Required Capitalized Interest Amount for such
Distribution Date, and distribute the amount of such difference to the
holder of the GP Interest.
(vi) On the last day of the Funding Period (or, if such day is not a
Business Day, on the next succeeding Business Day) (but in no event later
than the May 15, 1996 Distribution Date) the Servicer shall instruct the
Owner Trustee to withdraw from the Pre-Funding Account, and the Owner
Trustee shall so withdraw, the difference, if any, between (A) the sum of
the Original Pre-Funded Amount, and (B) all amounts theretofore withdrawn
from the Pre-Funding Account with respect to the purchase and transfer to
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the Trust of Subsequent Contracts, and the Owner Trustee shall (i) deposit
the Note Pre-Funded Percentage of such amounts into the Note Distribution
Account and (ii) deposit the Certificate Pre-Funded Percentage of such
amounts into the Certificate Distribution Account. Such amounts will be
used to prepay the principal amount of the outstanding Notes and
Certificates in accordance with the Note Pre-Funded Percentage and the
Certificate Pre-Funded Percentage, respectively, on the Distribution Date
immediately following the Funding Period or if the end of the Funding
Period is on a Distribution Date, then on such date.
(vii) Any Pre-Funding Earnings on deposit in the Pre-Funding Account
and all amounts remaining on deposit in the Capitalized Interest Account on
the last day of the Funding Period which were not distributed to the
Securityholders or the holder of the GP Interest pursuant to Section
5.01(b) shall be deposited by the Owner Trustee in the Collection Account
on such date and shall constitute part of the Amount Available on the first
Distribution Date thereafter or, if the end of the Funding Period is on a
Distribution Date, then on such date.
(c) The Eligible Institution maintaining the accounts described in Sections
5.01(a) and (b) above shall, in the name of the Trust, invest amounts on deposit
solely in Eligible Investments (except for the Pre-Funding Account which will be
invested solely in Permitted Investments) that mature not later than one
Business Day prior to the next succeeding Distribution Date, in accordance with
instructions provided to the Trustees by the Servicer in writing (or, in the
case of the Cash Collateral Account, in accordance with instructions provided to
the Servicer by the Cash Collateral Depositor, on behalf of the Owner Trustee
and the Cash Collateral Depositor, in writing). Once such funds are invested,
such Eligible Institution shall not change the investment of such funds.
Notwithstanding the foregoing, amounts deposited in the Collection Account from
funds on deposit in the Pre-Funding Account pursuant to Section 5.01(b) may not
be invested at all. All Investment Earnings from the investment of funds in the
accounts described in Sections 5.01(a) and (b) above shall be deposited in the
accounts in which such Investment Earnings were earned; provided, however,
Investment Earnings from the investment of funds in the Cash Collateral Account
shall be retained in a separate interest subaccount of the Cash Collateral
Account and realized losses, if any, on amounts so invested shall be charged
against undistributed Investment Earnings from the Cash Collateral Account. All
Investment Earnings realized from any such investment of funds in the Collection
Account, Certificate Distribution Account and Note Distribution Account (to the
extent investment of such funds is permitted hereunder) shall be for the benefit
of the Servicer and may be withdrawn by the Servicer on each Distribution Date
pursuant to subsection 5.05(b)(ii). All Investment Earnings realized from any
such investment of funds in the Pre-Funding Account and the Capitalized Interest
Account shall be distributed as provided in Section 5.01(b). All Investment
Earnings realized from any such investment of funds in the Cash Collateral
Account shall be distributed as provided in Section 5.06. An amount equal to any
net loss on such investments shall be deposited in the Collection Account, the
Certificate Distribution Account and Note Distribution Account by the Servicer
out of its own funds, without right to reimbursement, immediately as realized.
"Eligible Investments" are any of the following:
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(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation (if
then rated Aaa by Moody's), the Federal National Mortgage Association, or
any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America and which are non-callable;
(ii) demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by, or federal funds sold by any depository institution
or trust company (including the Trustees or any Affiliate of the Trustees,
acting in their commercial capacity) incorporated under the laws of the
United States of America or any state thereof or the District of Columbia
(or any domestic branch or agency of a foreign bank) and subject to
supervision and examination by federal and/or state authorities, so long
as, at the time of such investment or contractual commitment providing for
such investment, the commercial paper or other short-term debt obligations
of such depository institution or trust company have been rated at least
P-1 or higher from Moody's and A-1+ from Standard & Poor's (or, with
respect to the investment of any amounts on deposit in the Cash Collateral
Account or the Certificate Distribution Account, such Standard & Poor's
rating shall be at least A-1); or any other demand or time deposit or
certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation and which is rated at least P-1 by Moody's;
(iii) repurchase obligations with respect to any security described in
either clause (i) or (ii) above and entered into with any institution whose
commercial paper is at least rated P-1 from Moody's and at least A-1+ by
Standard & Poor's (or, with respect to the investment of any amounts on
deposit in the Cash Collateral Account or the Certificate Distribution
Account, such Standard & Poor's rating shall be at least A-1);
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least A2 or P-1 from
Moody's and at least AA- from Standard & Poor's at the time of such
investment (or, with respect to the investment of any amounts on deposit in
the Cash Collateral Account or the Certificate Distribution Account, such
Standard & Poor's rating shall be at least A);
(v) commercial paper having a rating of at least P-1 from Moody's and
at least A-1+ from Standard & Poor's (or, with respect to the investment of
any amounts on deposit in the Cash Collateral Account or the Certificate
Distribution Account, such Standard & Poor's rating shall be at least A-1)
at the time of such investment; and
(vi) money market funds which are rated Aaa by Moody's and at least
AAAm or AAAm-G by Standard & Poor's, including funds which meet such rating
requirements for which the Trustees or an affiliate of the Trustees serves
as an investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, notwithstanding that (i) such Trustee or an
affiliate of such Trustee charges and collects fees and expenses from such
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funds for services rendered, (ii) such Trustee charges and collects fees
and expenses for services rendered pursuant to this instrument, and (iii)
services performed for such funds and pursuant to this instrument may
converge at any time. (The Seller and the Servicer specifically authorize
such Trustee or an affiliate of such Trustee to charge and collect all fees
and expenses from such funds for services rendered to such funds, in
addition to any fees and expenses such Trustee may charge and collect for
services rendered pursuant to this instrument).
The Trustees may trade with themselves, each other, or with an Affiliate on
an arm's length basis in the purchase or sale of such Eligible Investments. The
Trustees shall not be liable for the selection of or for any investment losses
made at the written direction of the Servicer on any Eligible Investments.
Section 5.02 Collections; Applications.
(a) Deposits to Collection Account. Subject to subsections 5.02(b) and (c),
the Servicer shall deposit in the Collection Account, no later than two Business
Days after the Closing Date, any amounts representing payments received on the
Contracts on or after the Initial Cut-off Date through and including the Closing
Date. Subject to subsections 5.02(b) and (c), the Servicer shall deposit in the
Collection Account as promptly as practicable (not later than the second
Business Day) following the receipt thereof by the Servicer, all amounts
received in respect of the Contracts, including all loan payments from Obligors,
Net Liquidation Proceeds and Insurance Proceeds.
(b) Monthly Deposits to Collection Account. Notwithstanding anything in
this Agreement to the contrary, for so long as, and only so long as,
(i) CITSF shall remain the Servicer hereunder and CITSF remains a
direct or indirect subsidiary of CIT, if CIT shall have and maintain a
short-term debt rating of at least A-1 by Standard & Poor's and either a
short-term debt rating of P-1 or a long-term debt rating of at least A2 by
Xxxxx'x, or
(ii) the Servicer obtains a letter of credit, surety bond or insurance
policy (the "Servicer Letter of Credit") under which demands for payment
will be made to secure timely remittance of monthly collections to the
Collection Account and the Trustees are provided with a letter from each
Rating Agency to the effect that the utilization of such alternative
remittance schedule and any amendment required to be made to this Agreement
in connection therewith will not result in a qualification, reduction or
withdrawal of its then-current rating of the Notes or Certificates,
the Servicer may make the deposits to the Collection Account specified in
subsection 5.05(a) on a monthly basis, but not later than the Deposit Date
immediately preceding the Distribution Date following the last day of the Due
Period within which such payments were processed by the Servicer, in an amount
equal to the net amount of such deposits and payments which would have been made
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to the Collection Account during such Due Period but for the provisions of this
subsection 5.02(b). In the event that the Servicer is permitted to make
remittances of collections to the Collection Account pursuant to Section
5.02(b)(ii), this Agreement may be modified, to the extent necessary, without
the consent of any Securityholder.
(c) Amounts Not Required to be Deposited. The Servicer will not be required
to deposit in the Collection Account amounts relating to the Contracts
attributable to the following:
(i) amounts received with respect to each Contract (or property
acquired in respect thereof) that has been purchased by CITSF or the
Servicer pursuant to this Agreement and that are not required to be
distributed to Securityholders,
(ii) net investment earnings on funds deposited in the Collection
Account, the Certificate Distribution Account, the Note Distribution
Account and the Cash Collateral Account,
(iii) amounts received as Late Fees,
(iv) amounts received in respect of Post Cut-off Date Insurance
Add-ons,
(v) any repossession profits on Liquidated Contracts,
(vi) amounts received as liquidation proceeds, to the extent the
Servicer is entitled to reimbursement of liquidation expenses relating
thereto pursuant to Section 4.03, and
(vii) amounts to be reimbursed to the Servicer in respect of
Nonrecoverable Advances.
(e) Permitted Withdrawals from the Collection Account. The Indenture
Trustee will, from time to time as provided herein, make withdrawals from the
Collection Account of amounts deposited in said account pursuant to this
Agreement that are attributable to the Contracts for the following purposes:
(i) to make payments and distributions in the amounts and in the
manner provided for in Section 5.05;
(ii) to pay to CITSF or the Servicer with respect to each Contract or
property acquired in respect thereof that has been purchased pursuant to
Section 3.02, 4.02, 4.07, 11.01 or 11.02, all amounts received thereon and
not required to be distributed to Noteholders and Certificateholders;
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(iii) to withdraw any amount deposited in the Collection Account that
was not required to be deposited therein; and
(iv) to reimburse the Servicer out of liquidation proceeds for
liquidation expenses incurred by it, to the extent such reimbursement is
permitted under Section 4.03 and to the extent such expenses have not
otherwise been reimbursed.
Since, in connection with withdrawals pursuant to clauses (ii) and (iv) of this
subsection 5.02(d), CITSF's entitlement thereto is limited to collections or
other recoveries on the related Contract, the Servicer shall keep and maintain
separate accounting, on a Contract by Contract basis, for the purpose of
justifying any withdrawal from the Collection Account pursuant to such clauses.
The Servicer shall keep and maintain an accounting for the purpose of justifying
any withdrawal from the Collection Account pursuant to clause (iii) of this
subsection 5.02(d).
Section 5.03 Monthly Advances. With respect to each Contract as to which
there has been an Interest Shortfall during the related Due Period (other than
an Interest Shortfall arising from either (i) a Principal Prepayment in Full of
a Contract or (ii) a Contract which has been subject to a Relief Act Reduction
during such Due Period), the Servicer shall make a Monthly Advance in the amount
of such Interest Shortfall, but only to the extent the Servicer, in its good
faith judgment, expects to recoup such Monthly Advance from subsequent payments
of interest by or on behalf of the Obligors, Net Liquidation Proceeds or
proceeds from Insurance Policies with respect to the related Contract. The
Servicer shall not be obligated to make any advance to the Trust in respect of
the principal component of scheduled payments on any Contract which is not paid
during the Due Period in which they are due.
The Servicer shall deposit any such Monthly Advance into the Collection
Account in next-day funds or immediately available funds no later than 12:00
noon, New York time, on the related Deposit Date. The Servicer shall be
reimbursed for any such Monthly Advance by subsequent collections in respect of
interest on such Contract made by or on behalf of the Obligor, and Net
Liquidation Proceeds or proceeds from Insurance Policies with respect to such
Contract. If an unreimbursed Monthly Advance shall become a Nonrecoverable
Advance, the Servicer shall be reimbursed from collections on all the Contracts
in the Trust in the order of priority set forth in Section 5.05 hereof.
Section 5.04 A Non-Reimbursable Payments. On each Deposit Date, the
Servicer shall make a deposit (a "Non-Reimbursable Payment") to the Collection
Account in respect of each Contract for which there has been an Interest
Shortfall during the preceding Due Period arising either from a Principal
Prepayment in Full or a Relief Act Reduction in respect of such Contract during
such Due Period, in an amount equal to the Interest Shortfall.
The Servicer shall deposit the aggregate amount of Non-Reimbursable
Payments in respect of a Due Period into the Collection Account at the time and
in the manner specified in Section 5.03. The Servicer shall not be entitled to
reimbursement for any Non-Reimbursable Payment.
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Section 5.04 Additional Deposits. CITSF and the Servicer, as the case may
be, shall deposit into the Collection Account the aggregate Purchase Price
pursuant to Sections 3.02, 4.02, 4.07, 11.01 and 11.02, as applicable. All
remittances shall be made to the Collection Account, in next-day funds or
immediately available funds, no later than 12:00 noon, New York time, on the
related Deposit Date.
Section 5.05 Distributions.
(a) On or before the Determination Date preceding a Distribution Date, the
Servicer will make a determination and inform the Indenture Trustee and the
Owner Trustee of the following amounts with respect to the preceding Due Period:
(i) the aggregate amount of collections on the Contracts; (ii) the aggregate
amount of Monthly Advances to be remitted by the Servicer; (iii) the aggregate
Purchase Price of Contracts to be purchased by CITSF or the Servicer; (iv) the
aggregate amount to be distributed as principal and interest on the Notes on the
related Distribution Date; (v) the aggregate amount to be distributed as
principal and interest on the Certificates on the related Distribution Date;
(vi) the Servicing Fee; (vii) the aggregate amount of Non-Reimbursable Payments;
(viii) the amounts required to be withdrawn from the Cash Collateral Account for
such Distribution Date in accordance with Sections 5.05(b) and 5.06 hereof and
the applicable provisions of the Cash Collateral Agreement; (ix) any amounts to
be deposited into the Cash Collateral Account pursuant to Sections 5.05(b)(viii)
and 5.06 hereof and the applicable provisions of the Cash Collateral Agreement
and (x) the aggregate amount of unreimbursed Monthly Advances to be reimbursed
to the Servicer.
(b) On each Distribution Date the Indenture Trustee, based on the
instruction provided by the Servicer in subsection (a) above, will withdraw the
Amount Available from the Collection Account to make the following payments (to
the extent sufficient funds are available therefor) in the following order and
priority:
(i) the aggregate amount of any unreimbursed Monthly Advances made by
the Servicer (and which are then due to be reimbursed to the Servicer) will
be paid to the Servicer;
(ii) the Servicer Payment (to the extent not previously retained by
the Servicer) will be paid to the Servicer;
(iii) the Class A Interest Distribution Amount, including any
Outstanding Class A Interest, will be deposited into the Note Distribution
Account, for payment to the Noteholders;
(iv) on and prior to the Cross-over Date, the Principal Distribution
Amount, including any unpaid principal due on prior Distribution Dates,
will be deposited into the Note Distribution Account, for payment to the
Noteholders;
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(v) the Certificate Interest Distribution Amount, including any
Outstanding Certificate Interest, will be deposited into the Certificate
Distribution Account, for payment to the Certificateholders;
(vi) prior to the Cross-over Date, the Principal Liquidation Loss
Amount, if any, will be deposited into the Certificate Distribution
Account, for payment to the Certificateholders;
(vii) on and after the Cross-over Date, the Principal Distribution
Amount (to the extent not paid to Noteholders on the Cross-over Date),
including any unpaid principal due on prior Distribution Dates, will be
deposited into the Certificate Distribution Account, for payment to the
Certificateholders;
(viii) an amount equal to the lesser of (a) the balance, if any,
remaining after the payments in clauses (i) through (vii) above and (b) the
sum of (1) the amount by which the Required Cash Collateral Amount with
respect to the following Distribution Date exceeds the amount on deposit in
the Cash Collateral Account (exclusive of Investment Earnings on amounts on
deposit therein) on the current Distribution Date after giving effect to
any withdrawals therefrom on such Distribution Date, and (2) the amount, if
any, by which (I) the amount of payments of principal and interest required
to be made on the Loan on such Distribution Date pursuant to the Cash
Collateral Agreement exceeds (II) the Investment Earnings accrued on the
Cash Collateral Account since the preceding Deposit Date and any Cash
Collateral Account Surplus (prior to taking into account any deposits to be
made into the Cash Collateral Account on such Distribution Date), will be
deposited in the Cash Collateral Account, for payment to the
Certificateholders, the Cash Collateral Depositor and the holder of the GP
Interest in accordance with the provisions of Section 5.06 hereof and the
Cash Collateral Agreement; and
(ix) the balance, if any, remaining after the payments in clauses (i)
through (viii) above shall be distributed to the holder of the GP Interest.
(c) On each Distribution Date, the Indenture Trustee and the Owner Trustee
shall distribute all amounts in the Note Distribution Account and the
Certificate Distribution Account, respectively, to the Noteholders and the
Certificateholders, respectively as provided in the Indenture and Trust
Agreement respectively.
Section 5.06 Cash Collateral Account. (a) The Owner Trustee shall, on the
Closing Date, deposit or cause to be deposited in the Cash Collateral Account by
wire transfer of immediately available funds the Initial Cash Collateral Amount
from the proceeds of the loan to be made on the Closing Date by the Cash
Collateral Depositor under the Cash Collateral Agreement. On each Distribution
Date, the Owner Trustee shall deposit or cause to be deposited into the Cash
Collateral Account by wire transfer of immediately available funds any amount it
receives pursuant to Section 5.05(b)(viii) of this Agreement, which amount shall
be designated as being for
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deposit in the Cash Collateral Account. The Owner Trustee shall have the sole
right to make withdrawals from the Cash Collateral Account and to exercise all
rights with respect to the Cash Collateral Account Property. Amounts withdrawn
from the Cash Collateral Account and paid to the Certificateholders, the Cash
Collateral Depositor or the holder of the GP Interest, as provided herein and in
the Cash Collateral Agreement, shall not be required to be reimbursed to the
Cash Collateral Account by the Trustees, the Securityholders, the Cash
Collateral Depositor, any Paying Agent or any transferee thereof.
(b) In the event that the sum of the Certificate Interest Distribution
Amount (including any Outstanding Certificate Interest), Principal Liquidation
Loss Amount and Principal Distribution Amount to be distributed to the
Certificateholders for any Distribution Date exceeds the amount deposited in the
Certificate Distribution Account pursuant to Sections 5.05(b)(v), 5.05(b)(vi)
and 5.05(b)(vii) of this Agreement, respectively, on such Distribution Date, the
Servicer shall instruct the Owner Trustee in writing to withdraw or cause to be
withdrawn from the Cash Collateral Account on or before the related Deposit Date
the lesser of the amount of such excess and the Available Cash Collateral Amount
(the "Draw Amount"). The Owner Trustee shall deposit such amount, or cause such
amount to be deposited, into the Certificate Distribution Account no later than
12:00 noon, New York City time, on such Deposit Date.
(c) On or before the Deposit Date immediately preceding the Certificate
Final Distribution Date, the Servicer shall instruct the Owner Trustee to
withdraw or cause to be withdrawn from the Cash Collateral Account an amount
(the "Final Draw Amount") equal to the lesser of (i) the Certificate Balance on
the Certificate Final Distribution Date, after giving effect to distributions of
the Principal Distribution Amount to Certificateholders on the Certificate Final
Distribution Date pursuant to Section 5.05(b)(vii) of this Agreement and (ii)
the amount on deposit in the Cash Collateral Account, excluding Investment
Earnings with respect thereto, after giving effect to any withdrawal from the
Cash Collateral Account pursuant to clause (b) of this Section 5.06. The Owner
Trustee shall deposit such amount, or cause such amount to be deposited, into
the Certificate Distribution Account no later than 12:00 noon, New York City
time, on such Deposit Date.
(d) Investment Earnings on amounts on deposit in the Cash Collateral
Account and Cash Collateral Account Surplus on deposit in the Cash Collateral
Account shall be distributed to the Cash Collateral Depositor to the extent
required by Sections 3(a) and (b) of the Cash Collateral Agreement.
(e) On each Distribution Date, the Owner Trustee shall pay to the holder of
the GP Interest any amounts which remain on deposit in the Cash Collateral
Account after making the payments contemplated by the foregoing subparagraphs
(b) and (d), and which are in excess of the Required Cash Collateral Amount (as
determined by the Servicer) for the following Distribution Date. On the
Certificate Final Distribution Date, the Owner Trustee shall pay to the holder
of the GP Interest any amounts remaining on deposit in the Cash Collateral
Account after paying the Final Draw Amount to the Certificateholders as
contemplated by subparagraph (c) above and paying the outstanding principal and
57
interest payable to the Cash Collateral Depositor pursuant to Section 3(c) of
the Cash Collateral Agreement.
(f) If at any time the Cash Collateral Account ceases to be maintained at
an Eligible Institution as required by Section 5.01(a), the Owner Trustee shall
within 10 Business Days (or such longer period not to exceed 30 calendar days,
as to which each Rating Agency may consent) establish a new Cash Collateral
Account meeting the conditions specified in Section 5.01(a) and shall transfer
any and all cash and investments in the Cash Collateral Account to such new Cash
Collateral Account.
Section 5.07 Net Deposits. CITSF (in whatever capacity) may make the
remittances required pursuant to this Agreement, net of amounts to be retained
by it or distributed to it (also in whatever capacity), pursuant to this
Agreement, for so long as (a) it shall be the Servicer and (b) it will be
entitled, pursuant to Section 5.02, to make deposits on a monthly basis, rather
than a daily basis. Nonetheless, the Servicer shall account for all of the
above-described amounts as if such amounts were deposited and distributed
separately.
Section 5.08 Statements to Securityholders. On each Distribution Date, the
Servicer shall prepare and will include with the distribution to each
Securityholder, the Monthly Report, setting forth for the related Due Period the
following information:
(i) the amount of collections on the Contracts during the immediately
preceding Due Period;
(ii) the Amount Available for payment of all amounts distributable in
respect of the Securities and the Servicer Payment;
(iii) the amount of the distribution allocable to principal of the
Notes and to the Certificate Balance of the Certificates, including any
overdue principal;
(iv) the amount of the distribution allocable to interest on or with
respect to each class of Securities, including any overdue interest;
(v) the Pool Balance, the Note Pool Factor and the Certificate Pool
Factor as of the end of the related Due Period;
(vi) the Servicer Payment for such Distribution Date;
(vii) the amount of Monthly Advances and Non-Reimbursable Payments on
such date;
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(viii) the amount, if any, withdrawn from the Cash Collateral Account
and distributed to the Certificateholders with respect to such Distribution
Date;
(ix) the Available Cash Collateral Amount, after giving effect to any
deposit to or withdrawal from the Cash Collateral Account with respect to
such Distribution Date, and such amount expressed as a percentage of the
Pool Balance;
(x) the aggregate principal balance of all Contracts which were
delinquent 30, 60 and 90 days or more as of the last day of the related Due
Period;
(xi) the amount of investment earnings, net of losses and investment
expenses on amounts on deposit in the Collection Account;
(xii) during the Funding Period, the amount of funds on deposit in the
Pre-Funding Account;
(xiii) during the Funding Period, the number and aggregate principal
balance of Subsequent Contracts;
(xiv) during the Funding Period, the number and aggregate principal
balance of Subsequent Contracts purchased by the Trust on the related
Distribution Date;
(xv) during the Funding Period, the amount, if any, withdrawn from the
Capitalized Interest Account to make payments of interest on the
Securities;
(xvi) during the Funding Period, the amount remaining on deposit in
the Capitalized Interest Account;
(xvii) during the Funding Period, the amount investment earnings, net
of losses and investment expenses on amounts on deposit in the Pre-Funding
Account;
(xviii) during the Funding Period, the amount investment earnings, net
of losses and investment expenses on amounts on deposit in the Capitalized
Interest Account;
(xix) on the Distribution Date immediately following the end of the
Funding Period (or if the Funding Period ends on a Distribution Date on
such Distribution Date), the aggregate principal amount and percentage of
each of the Notes and Certificates which are being redeemed;
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(xx) the aggregate principal balance of all Contracts which became
Defaulted Contracts during the related Due Period;
(xxi) the number and aggregate principal amount of Contracts which
were prepaid, in part or in whole, during the related Due Period;
(xxii) the aggregate outstanding principal balance of the Notes as of
such Distribution Date after giving effect to any distributions on such
Distribution Date;
(xxiii) the Certificate Balance as of such Distribution Date after
giving effect to any distributions thereon and reductions thereto on such
Distribution Date;
(xxiv) the amount, if any, by which the amount due to be distributed
to Noteholders and Certificateholders exceeds the actual amount distributed
on the related Distribution Date to Noteholders and Certificateholders,
respectively;
(xxv) the Draw Amount, if any, and the Final Draw Amount (if
applicable) with respect to such Distribution Date;
(xxvi) the Required Cash Collateral Amount;
(xxvii) the amount of the surplus to be distributed to the holder of
the GP Interest after all payments have been made in respect of the
Securities and the Servicer Payment has been paid.
Within a reasonable period of time after the end of each calendar year, but
not later than the latest date permitted by law, the Servicer shall furnish or
cause to be furnished to each Person who at any time during the calendar year
was a Securityholder a statement containing the information with respect to
interest accrued and principal paid on its Securities during such calendar year.
Such obligation shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided to the Securityholders
pursuant to any requirements of the Code as from time to time in force.
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ARTICLE VI
[Reserved]
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ARTICLE VII
The Company
Section 7.01 Representations of Company.
The Company hereby makes the following representations as to itself on
which the Owner Trustee and the Indenture Trustee on behalf of the Trust shall
rely in accepting the Contracts in trust and authenticating the Certificates and
the Notes, respectively. The representations shall speak as of the execution and
delivery of this Agreement, and shall survive the sale of the Contracts to the
Trust.
(i) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Company or on the Certificates or the transactions
contemplated by this Agreement.
(ii) Authorization; Binding Obligations. The Company has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(iii) No Consent Required. The Company is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement the failure of
which so to obtain would have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of the Company or
on the Certificates or the transactions contemplated by this Agreement.
(iv) No Violations. The execution, delivery and performance of this
Agreement by the Company will not violate any provision of any existing law
or regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of the Company, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Company
62
is a party or by which the Company may be bound.
(v) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Company have a material
adverse effect on the transactions contemplated by this Agreement.
Section 7.02 Merger or Consolidation of Company.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company, shall
be the successor of the Company hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Company shall promptly notify each
Rating Agency of any such merger to which it is a party and such merger shall
satisfy the Rating Agency Condition.
Section 7.03 Limitation on Liability of the Company and Others.
(a) Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; notwithstanding anything herein to
the contrary, no party to this Agreement shall have any recourse against the
Company for any actions taken, or failed to be taken, by the Company.
(b) The Company and any director, officer, employee or agent of the Company
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
(c) The Company shall not be under any obligation to appear in, prosecute
or defend any legal action which arises under this Agreement.
Section 7.04 The Company May Own Securities.
The Company and any Person controlling, controlled by, or under common
control with the Company may in its individual or any other capacity become the
owner or pledgee of Notes or Certificates with the same rights as it would have
if it were not the Company or an Affiliate thereof, except as otherwise provided
in the definition of "Noteholder" or "Certificateholder", respectively. Notes
and Certificates so owned by or pledged to the Company or such controlling or
commonly controlled Person shall have an equal and proportionate benefit under
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the provisions of this Agreement, without preference, priority or distinction as
among all of the Notes and Certificates.
Section 7.05 Indebtedness of and Sale of Assets by the Company.
(a) The Company will not incur any material indebtedness (other than
indebtedness which is contemporaneously repaid upon the issuance of securities
by the Company or by selling any assets in connection therewith to the extent
permitted by its Certificate of Incorporation) nor will it sell all or
substantially all of its assets, if either such action would result in the
downgrading by Xxxxx'x of any outstanding securities of the Company or any trust
or other entity of which the Company is the settlor or depositor, which
securities are then rated by Xxxxx'x; provided, however, nothing contained in
this Agreement shall prohibit the Company from issuing any securities or acting
as the settlor or depositor of any trust or other entity (or selling any assets
in connection therewith) to the extent permitted by its Certificate of
Incorporation.
(b) Prior to the issuance of any securities by the Company, the Company
shall give at least 5 days' prior written notice to Xxxxx'x with a copy of the
Prospectus or Preliminary Prospectus Supplement and, on the issuance date, a
copy of the agreements pertaining to such securities of the type in the
definition of Basic Documents.
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ARTICLE VIII
The Servicer; Representations and Indemnities
Section 8.01 Representations of CITSF.
CITSF hereby makes the following representations on which the Owner Trustee
and the Indenture Trustee on behalf of the Trust shall rely in accepting the
Contracts in trust and authenticating the Certificates and the Notes,
respectively. The representations shall speak as of the execution and delivery
of this Agreement, and shall survive the sale of the Contracts to the Trust.
(i) Organization and Good Standing. CITSF is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. CITSF
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of CITSF or on the Certificates or the transactions contemplated
by the Agreement.
(ii) Authorization; Binding Obligations. CITSF has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of CITSF
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
(iii) No Consent Required. CITSF is not required to obtain the consent
of any other party or any consent, license, approval or authorization from,
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement the failure of which so to obtain would
have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of CITSF or on the Certificates or the
transactions contemplated by the Agreement.
(iv) No Violations. The execution, delivery and performance of this
Agreement by CITSF will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of
Incorporation or Bylaws of CITSF, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which CITSF is a party
or by which CITSF may be bound.
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(v) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to
the knowledge of CITSF threatened, against CITSF or any of its properties
or with respect to this Agreement or the Certificates which, if adversely
determined, would in the opinion of CITSF have a material adverse effect on
the transactions contemplated by this Agreement.
Section 8.02 Liability of Servicer, Indemnities.
The Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Servicer, CITSF or the Company
under the Basic Documents and shall have no other obligations or liabilities
hereunder.
(i) The Servicer shall defend, indemnify, and hold harmless the Owner
Trustee, the Indenture Trustee, the Trust, the Certificateholders and the
Noteholders from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from the negligent use
or operation by the Servicer of a Financed Vehicle, to the extent such loss
is not reimbursed pursuant to any Insurance Policy, the Servicer's Errors
and Omission Policy or any fidelity bond.
(ii) Subject to Section 8.04(a), the Servicer will defend and
indemnify the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from
any negligent action taken, or negligently failed to be taken, by the
Servicer with respect to any Financed Vehicle, to the extent such loss is
not reimbursed pursuant to any Insurance Policy, the Servicer's Errors and
Omission Policy or any fidelity bond.
(iii) The Servicer agrees to pay, and shall indemnify, defend, and
hold harmless the Owner Trustee, the Indenture Trustee, the Trust, the
Certificateholders and the Noteholders from and against, any taxes that may
at any time be asserted with respect to, and as of the date of, the
transfer of the Contracts to the Trust, including, without limitation, any
sales, gross receipts, personal or real property, privilege or license
taxes (but not including any federal, state or other taxes arising out of
the creation of the Trust and the issuance of the Notes and Certificates or
distributions with respect thereto) and costs, expenses and reasonable
counsel fees in defending against the same.
(iv) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, the Indenture Trustee, the Trust, the Certificateholders and the
Noteholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss,
claim, damage, or liability arose out of, or was imposed upon such Persons,
through the willful misfeasance, negligence, or bad faith of the Servicer
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in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(v) The Servicer shall indemnify, defend, and hold harmless from and
against, and pay to the Trustees all costs, expenses, losses, claims,
damages, and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties herein contained in
accordance with the terms and conditions herein and in the Indenture and
the Trust Agreement, as the case may be, except to the extent that such
cost, expense, loss, claim, damage or liability: (a) shall be due to the
willful misfeasance, gross negligence or bad faith of such Trustee; (b)
relates to any tax other than the taxes with respect to which the Company
shall be required to indemnify such Trustee pursuant to this Agreement; (c)
shall arise from such Trustee's breach of any of its representations or
warranties set forth in the Trust Agreement or the Indenture, as
applicable; (d) shall be one as to which the Company is required to
indemnify such Trustee or (e) shall arise out of or be incurred in
connection with the acceptance or performance by such Trustee of the duties
of successor Servicer hereunder.
Indemnification under this Section 8.02 shall include reasonable fees and
expenses of counsel in any litigation appointed by the Servicer and reasonably
satisfactory to the indemnitee, provided that the Servicer shall only be
required to pay the fees and expenses of one counsel in any single litigation
(or related proceedings) for all indemnitees; provided, however, if in the
written opinion of counsel reasonably satisfactory to the Servicer, the
interests of the Servicer and either of the Trustees conflict such that the
Servicer and such Trustee may not both be represented by such counsel, upon ten
days prior written notice to the Servicer, such Trustee may hire one other
counsel, and the Indemnification under this Section 8.02 shall also include the
reasonable fees and expenses of such other counsel. If the Servicer or the
Company shall have made any indemnity payments pursuant to this Section 8.02 and
the recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts to the Servicer and/or the Company, without
interest. The indemnities under this Section 8.02 shall survive the resignation
or removal of the Trustees, or the termination of the Trust Agreement and this
Agreement.
Section 8.03 Merger or Consolidation of Servicer.
Any person into which the Servicer may be merged or consolidated, or any
corporation or other entity resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer (which Person assumes the obligations of the
Servicer), shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Servicer shall satisfy
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify each Rating Agency of any such merger to which it is a
party.
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Section 8.04 Limitation on Liability of Servicer and Others.
(a) Neither the Servicer nor the Company, nor any of the directors,
officers, employees or agents of the Servicer or the Company shall be under any
liability to the Trustees, the Trust or the Securityholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer, the Company or any such Person against any
breach of warranties or representations made herein, or failure to perform its
or his obligations in compliance with any standard of care set forth in this
Agreement, or any liability which otherwise would be imposed by reason of any
breach of the terms and conditions of this Agreement.
(b) The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
(c) Except as arises from its duties as Servicer hereunder, the Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which arises under this Agreement and which in its opinion may involve it
in any expenses or liability; provided, however, that the Servicer and the
Company may in its discretion undertake any such action which it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Trust payable from the Collection Account and the Servicer and the
Company shall be entitled to be reimbursed therefor out of the Collection
Account.
Section 8.05 Servicer Not To Resign. The Servicer shall not resign from its
obligations and duties under this Agreement except upon determination that the
performance of its duties shall no longer be permissible under applicable law,
compliance with which could not be realized without material adverse impact on
the Servicer's financial condition. Notice of any such determination permitting
the resignation of the Servicer shall be communicated to the Trustees and the
Rating Agencies at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable time)
and any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Indenture Trustee or a
successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 9.02.
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ARTICLE IX
Default
Section 9.01 Events of Termination.
"Event of Termination" means the occurrence of any of the following:
(a) Any failure by the Servicer to make any deposit into an account
required to be made hereunder and the continuance of such failure for a period
of five Business Days after the Servicer has become aware that such deposit was
required;
(b) Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than pursuant to
Section 9.01(a)), which failure continues unremedied for 30 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Indenture Trustee, the Owner
Trustee or the Company or to the Servicer, the Company and the Trustees by
Holders of Notes or Certificates evidencing not less than 25% of the aggregate
outstanding principal balance of the Notes, or the outstanding Certificate
Balance, respectively;
(c) Any assignment or delegation by the Servicer of its duties or rights
hereunder except as specifically permitted hereunder, or any attempt to make
such an assignment or delegation;
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
(e) The Servicer shall have commenced a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
have consented to the entry of an order for relief in an involuntary case under
any such law, or shall have consented to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Servicer or for any substantial part of its
property, or shall have made any general assignment for the benefit of its
creditors, or shall have failed to, or admitted in writing its inability to, pay
its debts as they become due, or shall have taken any corporate action in
furtherance of the foregoing; or
(f) The failure of the Servicer to be an Eligible Servicer.
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If an Event of Termination has occurred and is continuing, the Indenture
Trustee may or at the written direction of Holders of Notes evidencing a
majority of the aggregate outstanding principal balance of the Notes (or, if the
Notes have been paid in full and the Indenture has been discharged in accordance
with its terms, by the Owner Trustee or Holders of Certificates evidencing a
majority or more of the Certificate Balance) shall, unless prohibited by
applicable law, terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service Transfer"). On receipt of such notice (or, if
later, on a date designated therein), all authority and power of the Servicer
under this Agreement, whether with respect to the Contracts, the Contract Files
or otherwise (except with respect to the Collection Account, the transfer of
which shall be governed by Section 9.06), shall pass to and be vested in the
Indenture Trustee pursuant to and under this Section 9.01 (however, if all of
the Notes have been paid in full and the Indenture has been discharged in
accordance with its terms, such authority shall pass to and be vested in the
Owner Trustee pursuant to and under this Section 9.01); and, without limitation,
such Trustee is authorized and empowered to execute and deliver on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments (including, without limitation, documents required to make such
Trustee or a successor servicer the sole lienholder or legal title holder of
record of each Financed Vehicle), and to do any and all acts or things necessary
or appropriate to effect the purposes of such notice of termination. Each of
CITSF and the Servicer agrees to cooperate with such Trustee in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to such Trustee for administration
by it of all cash amounts which shall at the time be held by the Servicer for
deposit, or have been deposited by the Servicer, in the Collection Account, or
for its own account in connection with its services hereafter or thereafter
received with respect to the Contracts and the execution of any documents
required to make such Trustee or a successor Servicer the sole lienholder or
legal title holder of record in respect of each Financed Vehicle. The Servicer
shall be entitled to receive any other amounts which are payable to the Servicer
under this Agreement, at the time of the termination of its activities as
Servicer, to the extent that funds in the Collection Account are available for
the payment thereof without reducing the amount of distributions that would be
made to Holders of the Notes and Certificates. The Servicer shall transfer to
the new Servicer (i) the Servicer's records relating to the Contracts in such
electronic form as the new Servicer may reasonably request and (ii) the
Contracts and any of the Contract Files in the Servicer's possession.
Section 9.02 Indenture Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 9.01 or a notice of determination pursuant to Section 8.05,
the Indenture Trustee shall be the successor in all respects to the Servicer in
its capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and the Servicer shall be relieved of such responsibilities, duties and
liabilities arising after such Service Transfer; provided, however, that (i) the
Indenture Trustee will not assume any obligations of CITSF pursuant to Section
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3.02 or be obligated to deposit any net loss on an investment directed by a
predecessor Servicer pursuant to Section 5.01(b), and (ii) the Indenture Trustee
shall not be liable for any acts or omissions of the Servicer occurring prior to
such Service Transfer or for any breach by CITSF of any of its representations
and warranties contained herein or in any related document or agreement. The
Indenture Trustee and any successor Servicer shall have no responsibility for
failure of CITSF and any predecessor Servicer to deliver to the Indenture
Trustee or such successor Servicer any property or funds belonging to the Trust,
including but not limited to the funds, records, Contracts and Contract Files.
As compensation therefor, the Indenture Trustee shall, except as provided in
this Section 9.02, be entitled to such compensation as the Servicer would have
been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction to appoint, an Eligible Servicer as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Pending
appointment of a successor to the Servicer hereunder, unless the Indenture
Trustee is prohibited by law from so acting, the Indenture Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Indenture Trustee may make such arrangements for the
compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such compensation shall,
without the written consent of 100% of the Securityholders, be in excess of the
Servicing Fee. The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
Section 9.03 Notification to Securityholders.
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustees, the Cash Collateral
Depositor (so long as the Loan under the Cash Collateral Agreement is still
outstanding) and the Securityholders at their respective addresses appearing on
the Certificate Register and the Note Register and to each Rating Agency.
(b) Within 10 days following any termination or appointment of a successor
to the Servicer pursuant to this Article IX, the Trustees shall give written
notice thereof to the Cash Collateral Depositor (so long as the Loan under the
Cash Collateral Agreement is still outstanding) and to the Certificateholders
and Noteholders at their respective addresses appearing on the Certificate
Register and the Note Register.
(c) The Indenture Trustee shall give written notice to each Rating Agency
at least 30 days prior to the date upon which any Eligible Servicer (other than
the Indenture Trustee) is to assume the responsibilities of Servicer pursuant to
Section 9.02, naming such successor Servicer.
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Section 9.04 Rights to Direct Trustees and Waiver of Events of
Termination.
Holders of Notes or Certificates evidencing not less than 25% of the
aggregate outstanding principal amount of the Notes or 25% of the Certificate
Balance, respectively, shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Indenture
Trustee or the Owner Trustee, respectively, or exercising any trust or power
conferred on the Trustees; provided, however, that, subject to Section 10.01,
the Trustees shall have the right to decline to follow any such direction which
such Trustee (being advised by counsel) determines that the action so directed
may not lawfully be taken, or if such Trustee in good faith shall, by a
Responsible Officer or Officers of such Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Noteholders or Certificateholders not parties to
such direction; provided further that nothing in this Agreement shall impair the
right of the Trustees to take any action deemed proper by such Trustee and which
is not inconsistent with such direction by the Noteholders or
Certificateholders.
Holders of Notes evidencing not less than a majority of the aggregate
outstanding principal balance of the Notes (or, if all of the Notes have been
paid in full and the Indenture has been discharged in accordance with its terms,
Certificates evidencing not less than a majority of the Certificate Balance)
may, on behalf of the Noteholders and Certificateholders, waive any past Event
of Termination hereunder and its consequences (except a continuing failure to
make any required deposits to or payments from the Collection Account and the
other accounts contemplated herein in accordance with this Agreement, which
default cannot be waived without the consent of all Securityholders) and, upon
any such waiver, such Event of Termination shall cease to exist and shall be
deemed to have been cured for every purpose of this Agreement; but no such
waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon.
Section 9.05 Effect of Transfer.
(a) After the Service Transfer, the Indenture Trustee or new Servicer may
notify the Obligors to make payments directly to the new Servicer that are due
under the Contracts after the effective date of the Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no further
obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer shall remain liable for any
liability of the replaced Servicer hereunder that was already accrued at the
time of the Service Transfer and except that the replaced Servicer will transmit
or cause to be transmitted directly to the new Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts
(properly endorsed where required for the new Servicer to collect them) received
as payments upon or otherwise in connection with the Contracts.
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(c) A Service Transfer shall not affect the rights and duties
of the parties hereunder (including but not limited to the indemnities and other
agreements of the Servicer and CITSF) other than those relating to the
management, administration, servicing or collection of the Contracts.
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ARTICLE X
[Reserved]
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ARTICLE XI
Optional Purchase and Auction Sale
Section 11.01 Optional Purchase of All Contracts.
On any Distribution Date, following any Record Date as of which the Pool
Balance is 10% or less of the Initial Pool Balance, CITSF shall have the option
to purchase the Contracts (including the Defaulted Contracts), any Financed
Vehicles in the Trust relating to Defaulted Contracts and all rights relating to
the Contracts under all Insurance Policies. To exercise such option, CITSF shall
notify the Trustees and the Depository, if any, in writing, no later than the
20th day of the month preceding the month as of which such purchase is to be
effected occurs; provided, however, that CITSF shall not effect any such
purchase if the long-term unsecured obligations of its parent are rated less
than Baa3 by Moody's or less than BBB by Standard & Poor's, unless the Trustees
shall have received an Opinion of Counsel acceptable to them that payment of the
purchase price to the Securityholders will not constitute a voidable preference
or a fraudulent transfer under the United States Bankruptcy Code. CITSF shall
effect such purchase by depositing, in accordance with Section 5.04, the
aggregate Purchase Price of the Contracts (less any other amounts deposited, or
to be deposited, by the Servicer in the Collection Account with respect to the
Contract pursuant to Section 5.02) plus the appraised value of any other
property held by the Trust and purchased by CITSF (less liquidation expenses) in
the Collection Account on the Deposit Date immediately following the month in
which such purchase is to be effected; provided, however, in no event shall the
amount so deposited, when added to the amounts on deposit in the Collection
Account on such date and available for distribution to Securityholders on the
next Distribution Date, be less than the amount required to pay all accrued and
unpaid interest on the Notes, the remaining principal balance of the Notes,
accrued and unpaid interest on the Certificates and the Certificate Balance,
after giving effect to the reimbursement of the Servicer for all unpaid Monthly
Advances and the Servicer Payment. The effective date of such purchase shall be
the last day of the Due Period which ends in the month referred to in the
preceding sentence.
Section 11.02 Mandatory Sale of all Contracts. In accordance with the
procedures and schedule set forth in Exhibit H hereto (the "Auction
Procedures"), the Indenture Trustee (or, if the Notes have been paid in full and
the Indenture shall have been discharged in accordance with its terms, the Owner
Trustee) shall conduct an auction (the "Auction") of the Contracts remaining in
the Trust (such Contracts hereinafter referred to as the "Auction Property") in
order to effect a termination of the Trust pursuant to Section 7.1 of the Trust
Agreement on the second Distribution Date succeeding the Record Date on which
the Pool Balance is 5% or less of the Initial Pool Balance. Such Auction shall
be conducted within 10 days following the Distribution Date following the Record
Date on which the Pool Balance is 5% or less of the Initial Pool Balance. CITSF
and the Company may, but shall not be required to, bid at the Auction. Such
Trustee shall sell and transfer the Auction Property to the highest bidder
therefor at the Auction provided that:
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(i) the Auction has been conducted in accordance with the Auction
Procedures;
(ii) such Trustee has received good faith bids for the Auction
Property from two prospective purchasers that are considered by such
Trustee, in its sole discretion, to be competitive participants in the
market for recreational vehicle retail installment sale contracts;
(iii) a financial advisor, as advisor to such Trustee (in such
capacity, the "Advisor"), shall have advised such Trustee in writing that
at least two of such bidders (including the winning bidder) are
participants in the market for recreational vehicle retail installment sale
contracts willing and able to purchase the Auction Property;
(iv) the highest bid in respect of the Auction Property is not less
than the aggregate fair market value of the Auction Property (as determined
by such Trustee in its sole discretion);
(v) any bid submitted by CITSF, the Company or any affiliate of either
of them shall reasonably represent the fair market value of the Auction
Property, as independently verified and represented in writing by a
qualified independent third party evaluator (which may include the Advisor
or an investment banking firm) selected by such Trustee; and
(vi) the highest bid would result in proceeds from the sale of the
Auction Property which will be at least equal to the sum of (A) the greater
of (1) the aggregate Purchase Price for the Contracts (including Defaulted
Contracts), plus the appraised value of any other property held by the
Trust (less liquidation expenses) or (2) an amount that, when added to
amounts on deposit in the Collection Account and available for distribution
to Securityholders on the second Distribution Date following the
consummation of such sale (the "Liquidation Distribution Date"), would
result in proceeds sufficient to distribute to Securityholders the amounts
of interest due to the Securityholders for such Distribution Date and any
unpaid interest payable to the Securityholders with respect to one or more
prior Distribution Dates and the outstanding principal amount of the Notes
and the Certificate Balance, and (B) the sum of (1) an amount sufficient to
reimburse the Servicer for any unreimbursed Monthly Advances for which it
is entitled to reimbursement and (2) the Servicing Fee payable on such
second Distribution Date, including any unpaid Servicing Fees with respect
to one or more prior Due Periods.
Provided that all of the conditions set forth in clauses (i) through (vi)
have been met, such Trustee shall sell and transfer the Auction Property,
without representation, warranty or recourse, to such highest bidder in
accordance with and upon completion of the Auction Procedures. Such Trustee
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shall deposit the purchase price for the Auction Property in the Collection
Account at least one Business Day prior to such second succeeding Distribution
Date. In addition, the Auction must stipulate that the Servicer be retained to
service the Contracts on terms substantially similar to those in the Agreement.
In the event that any of such conditions are not met or such highest bidder
fails or refuses to comply with any of the Auction Procedures, such Trustee
shall decline to consummate such sale and transfer. In the event such sale and
transfer is not consummated in accordance with the foregoing, however, such
Trustee may from time to time in the future, but shall not under any further
obligation to, solicit bids for sale of the assets of the Trust Fund upon the
same terms and conditions as set forth above.
If any of the foregoing conditions are not met, such Trustee shall decline
to consummate such sale and shall not be under any obligation to solicit any
further bids or otherwise negotiate any further sale of Contracts remaining in
the Trust. In such event, however, such Trustee may from time to time solicit
bids in the future for the purchase of such Contracts pursuant to this Section
11.02.
If applicable, the Indenture Trustee shall provide notice to the Owner
Trustee of the termination of the Trust pursuant to this Section 11.02 as soon
as practicable upon the consummation of the mandatory sale of the Contracts
pursuant to this Section 11.02.
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ARTICLE XII
Miscellaneous Provisions
Section 12.01 Amendment. This Agreement may be amended in writing by the
Company, the Servicer and the Owner Trustee (and, in the event such amendments
affect the Indenture Trustee, the Indenture Trustee) without prior notice to or
the consent of any of the Securityholders, and in the case of clauses (v) and
(vi), upon satisfaction of the Rating Agency Condition, (i) to correct manifest
error or cure any ambiguity, (ii) to correct or supplement any provisions herein
or therein which may be inconsistent with any other provisions herein or
therein, as the case may be, (iii) to add or amend any provisions as requested
by Moody's or Standard & Poor's in order to maintain or improve any rating of
the Notes or Certificates (it being understood that, after the Closing Date,
neither the Owner Trustee, the Indenture Trustee, the Company nor CITSF is
obligated to maintain or improve such rating); (iv) to add to the covenants,
restrictions or obligations of the Company, the Servicer, the Owner Trustee or
the Indenture Trustee; (v) to evidence and provide for the acceptance of the
appointment of a successor trustee with respect to the Owner Trust Estate and
add to or change any provisions as shall be necessary to facilitate the
administration of the trusts under the Trust Agreement by more than one trustee
pursuant to Article VI of the Trust Agreement or (vi) to add, change or
eliminate any other provisions provided that an amendment pursuant to this
clause (vi), shall not, as evidenced by an Opinion of Counsel for the Servicer
or the Company, adversely affect in any material respect the interests of the
Trust, any Noteholder or any Certificateholder.
This Agreement may also be amended in writing from time to time by the
Company, the Servicer and the Owner Trustee (and, in the event such amendments
affect the Indenture Trustee, the Indenture Trustee), with the consent of
Holders of Certificates evidencing not less than a majority of the Certificate
Balance and the consent of Holders of Notes evidencing not less than a majority
of the aggregate outstanding principal balance of the Notes, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Certificateholders or Noteholders, respectively; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments of Contracts, or
distributions that shall be required to be made on any Certificate or Note,
respectively, the Contract Rate, the Pass-Through Rate or the Class A Rate or
(ii) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all Certificates and Notes then
outstanding.
Notwithstanding the foregoing, no amendment materially affecting the rights
of the Cash Collateral Depositor shall be made without the consent of the Cash
Collateral Depositor (so long as the Loan under the Cash Collateral Agreement is
still outstanding).
Promptly after the execution of any amendment or consent pursuant to this
Section, the Owner Trustee shall furnish written notification of the substance
of such amendment to each Certificateholder and each Noteholder (but only if
such amendment is pursuant to the second paragraph of this Section 12.01) and
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(so long as the Loan under the Cash Collateral Agreement is still outstanding)
the Cash Collateral Depositor and, in all cases, to each Rating Agency, which
notification will be prepared by the Servicer and delivered to such Trustee.
It shall not be necessary for the consent of the Certificateholders, the
Noteholders or the Cash Collateral Depositor pursuant to this Section 12.01 to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders, the Noteholders or the Cash Collateral Depositor,
as the case may be, shall be subject to such reasonable requirements as such
Trustee may prescribe.
Such Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Trustee's own rights, duties or immunities under
this Agreement or otherwise. However, no such amendment shall be permitted
without the consent of the Trustee whose rights, duties or immunities are being
modified.
In connection with any amendment pursuant to this Section 12.01, the Owner
Trustee shall be entitled to receive an Opinion of Counsel to the Servicer to
the effect that such amendment is authorized or permitted by the Agreement.
Upon the execution of any amendment or consent pursuant to this Section
12.01, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every Holder of Securities theretofore or thereafter issued hereunder shall be
bound thereby.
Section 12.02 Protection of Title to Trust. (a) On or prior to the Closing
Date, the Servicer shall deliver the following fully executed UCC-1 financing
statements to the Trustees for filing:
(i) UCC-1 financing statement executed by CITCF-NY as debtor, naming
CITSF as secured party and filed in New Jersey and Oklahoma City to perfect
the sale from CITCF-NY to CITSF;
(ii) UCC-1 financing statement executed by CITSF as debtor, naming the
Company as secured party and filed in New Jersey and Oklahoma City to
perfect the sale from CITSF to the Company;
(iii) UCC-1 financing statement executed by the Company as debtor,
naming the Owner Trustee as secured party and filed in New Jersey and
Oklahoma City to perfect the sale from the Company to the Owner Trustee;
and
(iv) UCC-1 financing statement executed by the Owner Trustee as
debtor, naming the Indenture Trustee as secured party and filed in New
Jersey, Oklahoma City, and Delaware to perfect the security interest
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granted in the Collateral by the Indenture.
The Servicer shall cause to be filed all necessary continuation statements
of the UCC-1 financing statements referred to in the previous sentence on which
it is the debtor.
From time to time the Servicer shall, subject to the following sentence,
take and cause to be taken such actions and execute such documents as are
necessary to perfect and protect the Noteholders' and Certificateholders'
interests in the Contracts and their proceeds against all other persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title.
The Servicer will maintain the Trust's perfected first priority security
interest in each Financed Vehicle so long as the related Contract is the
property of the Trust; provided, however, that because of the expense and
administrative inconvenience involved, the Servicer will not amend any
certificate of title to name CITSF, the Company or the Trust as the lienholder,
and neither the Servicer nor the Company will deliver any certificate of title
to the Trust or note thereon the Trust's interest.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Noteholders' and Certificateholders' right, title and
interest in and to the Contracts (including, without limitation, the security
interest in the Financed Vehicles granted thereby).
(b) During the term of this Agreement, neither the Company nor CITSF shall
change its name, identity or structure or relocate its chief executive office
without first giving notice thereof to the Trustees and the Servicer. In
addition, following any such change in the name, identity, structure or location
of the chief executive office of the Company or CITSF, the Company or CITSF, as
appropriate, shall give written notice thereof to each Rating Agency.
If any change in the Company's, the Servicer's or CITSF's name, identity or
structure or the relocation of its chief executive office would make any
financing or continuation statement or notice of lien filed under this Agreement
seriously misleading within the meaning of applicable provisions of the UCC or
any title statute or would cause any such financing or continuation statement or
notice of lien to become unperfected (whether immediately or with lapse of
time), the Servicer no later than five days after the effective date of such
change, shall (subject to the proviso in the final sentence of the last
paragraph of Section 12.01(a)) file, or cause to be filed, such amendments or
financing statements as may be required to preserve, perfect and protect the
Noteholders' and Certificateholders' interests in the Contracts and proceeds
thereof and in the Financed Vehicles.
(c) During the term of this Agreement, the Company and CITSF will maintain
their respective chief executive offices in one of the States of the United
States.
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(d) The Servicer shall maintain accounts and records as to each Contract
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Contract, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Contract and the amounts from time to
time deposited in the Collection Account in respect of such Contract.
(e) Each of the Company and the Servicer shall maintain its computer
systems so that, from and after the time of sale under this Agreement of the
Contracts to the Trust, the master computer records of the Company and the
Servicer (including archives) that shall refer to a Contract indicate clearly
that such Contract is owned by the Trust. Indication of the Trust's ownership of
a Contract shall be deleted from or modified on the Company's and the Servicer's
computer systems when, and only when, the Contract shall have been paid in full,
repurchased or assigned pursuant hereto.
(f) At all times during the term hereof, the Servicer shall afford the
Trust and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trust or its authorized
agents. The examination referred to in this Section 12.01(f) will be conducted
in a manner which does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination the Trust may make, the Trust or its authorized agents
may, using generally accepted audit procedures, verify the status of each
Contract and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article V and compliance with
the standards represented to exist as to each Contract in this Agreement.
Nothing in this Section 12.01(f) shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section
12.01(f).
(g) Upon request, the Servicer shall furnish to the Trust, within five
Business Days, a list of all Contracts by contract number and name of Obligor as
of the end of the most recent Due Period held as part of the Trust, together
with a reconciliation of such list to the List of Contracts and to each of the
Servicer Certificates indicating removal of Contracts from the Trust.
At all times during the term hereof, the Servicer shall keep available a
copy of the List of Contracts at its principal executive office for inspection
by Securityholders.
(h) The Servicer shall, to the extent required by applicable law, cause the
Notes and Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities Exchange
Act of 1934 within the time periods specified in such sections.
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Section 12.03 Limitation on Rights of Securityholders.
The death or incapacity of any Securityholder shall not operate to
terminate this Agreement or the Trust, nor entitle the Securityholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations, and liabilities of the parties to
this Agreement or any of them.
No Securityholder shall have any right to vote (except as provided in
Sections 9.04 and this Section 12.02) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties to this
Agreement, nor shall anything set forth in this Agreement or contained in the
terms of the Securities, be construed so as to constitute the Holders as
partners or members of an association; nor shall any Securityholder be under any
liability to any third person by reason of any action taken pursuant to any
provision of this Agreement.
No Securityholder shall have any right by virtue or by availing itself of
any provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement, except as
provided in Section 10.03(b); no one or more Holders of Securities shall have
any right in any manner whatever by virtue or by availing itself or themselves
of any provisions of this Agreement to affect, disturb, or prejudice the rights
of the Holders of any other of the Securities, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner provided in this Agreement and for
the equal, ratable and common benefit of all Securityholders. For the protection
and enforcement of the provisions of this Section 12.02, each Securityholder and
the Trust shall be entitled to such relief as can be given either at law or in
equity.
Section 12.04 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to its conflict-of-laws provisions.
Section 12.05 Notices. All communications and notices pursuant hereto to
the Company, the Servicer, Moody's and Standard & Poor's shall be in writing and
delivered or mailed to it at the appropriate following address:
If to the Company:
The CIT Group Securitization Corporation II
000 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
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If to the Servicer:
The CIT Group/Sales Financing, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
If to Standard & Poor's:
Standard & Poor's Corporation
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Group/Market Surveillance
If to Moody's:
Xxxxx'x Investors Service Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder or a
Noteholder shall be in writing and delivered or mailed at the address shown in
the Certificate Register or Note Register, respectively.
Copies of all communications and notices required hereunder to be given to
the Owner Trustee shall be sent to The Bank of New York (Delaware) at Xxxxx Xxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates and Notes or the rights of the Holders thereof.
Section 12.07 Submission to Jurisdiction; Venue. The parties hereto with
respect to any action or claim brought against or by the Trust submit to
jurisdiction in the state or federal courts in New York, New York, and agree to
New York, New York as the venue for any such claim or action.
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Section 12.08 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 12.09. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
Section 12.10 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of February
1, 1996.
THE CIT GROUP/SALES FINANCING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
THE CIT GROUP SECURITIZATION
CORPORATION II
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
CIT RV OWNER TRUST 1996-A
By: THE BANK OF NEW YORK (DELAWARE)
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
Acknowledged and Accepted:
XXXXXX TRUST AND SAVINGS BANK,
not in its individual capacity but
solely as Indenture Trustee,
By: /s/ E. Xxx Xxxxxxxxx
Name: E. Xxx Xxxxxxxxx
Title: Vice President
EXHIBIT A
LIST OF INITIAL CONTRACTS
EXHIBIT B
SUBSEQUENT PURCHASE AGREEMENT
This Subsequent Purchase Agreement dated as of __________ __, 1996 (the
"Agreement"), is between THE CIT GROUP SECURITIZATION CORPORATION II, as
purchaser (the "Purchaser"), and THE CIT GROUP/SALES FINANCING, INC., as seller
(the "Seller").
Reference is hereby made to the Purchase Agreement dated as of February 1,
1996 between the parties hereto (the "Purchase Agreement") pursuant to which the
Purchaser purchased from the Seller the recreational vehicle installment sales
contracts set forth on Exhibit A thereto (the "Initial Contracts"). The
Purchaser sold the Initial Contracts to the trust established pursuant to the
Trust Agreement dated as of February 1, 1996 between the Purchaser and The Bank
of New York (Delaware), as trustee (the "Owner Trustee").
Pursuant to the Sale and Servicing Agreement dated as of February 1, 1996
between the CIT RV Owner Trust 1996-A (the "Trust"), the Purchaser and the
Seller, the Purchaser agreed to purchase from the Seller and the Seller agreed
to sell to the Purchaser, subject to the terms and conditions set forth in
Section _____ of the Sale and Servicing Agreement, Subsequent Contracts for the
fixed purchase price specified in the Sale and Servicing Agreement for delivery
on the date specified herein. The purchase price for any Subsequent Contract
will be funded from money on deposit in the Pre-Funding Account during the
Funding Period. The purchase of any Subsequent Contract by the Purchaser must be
evidenced by the execution and delivery of a Subsequent Purchase Agreement
substantially in the form of Exhibit B to the Sale and Servicing Agreement.
Accordingly, subject to the terms hereof and the Sale and Servicing Agreement,
the Seller agrees to sell, and the Purchaser agrees to purchase, the
recreational vehicle installment sales contracts set forth on Exhibit A hereto
(collectively, the "Subsequent Contracts"), having an aggregate outstanding
principal balance as of ________ __, 1996 (the "Subsequent Cut-Off Date") of
$______________.
The Purchaser and the Seller wish to prescribe the terms and conditions of
the purchase by the Purchaser of the Subsequent Contracts and the servicing and
administration of the Subsequent Contracts.
In consideration of the premises and the mutual agreements hereinafter set
forth, the Purchaser and the Seller agree as follows:
ARTICLE
DEFINITIONS
SECTION 1.1.Definitions. Certain capitalized terms used in this Agreement
shall have the respective meanings assigned to them in the Sale and Servicing
Agreement. All references in this Agreement to Articles, Sections, subsections
and exhibits are to the same contained in or attached to this Agreement unless
otherwise specified.
ARTICLE
SALE AND CONVEYANCE OF SUBSEQUENT CONTRACTS;
CONTRACT FILES
SECTION 0.0.Xxxx and Conveyance of Contracts. On _________ __, 1996 (the
"Subsequent Transfer Date"), subject to the terms and conditions hereof, the
Seller shall sell, transfer, assign absolutely, set over and otherwise convey to
the Purchaser as of the Subsequent Transfer Date (i) all the right, title and
interest of the Company in and to the Subsequent Contracts and all the rights,
benefits, and obligations arising from and in connection with each Subsequent
Contract, (ii) the security interests in the Subsequent Financed Vehicles
granted by the Obligors pursuant to the Subsequent Contracts, (iii) all payments
received by the Company on or with respect to the Subsequent Contracts on or
after the Subsequent Cut-off Date (exclusive of payments with respect to Post
Cut-off Date Insurance Add-Ons), (iv) the interest of the Company in any
Subsequent Financed Vehicle (including any right to receive future Net
Liquidation Proceeds) that secures the Subsequent Contracts and that shall have
been repossessed by the Servicer by or on behalf of the Trust; (v) all rights of
the Company to proceeds of Insurance Policies covering the Obligors and the
Subsequent Contracts, (vi) the proceeds from any Servicer's Errors and Omissions
Protection Policy, any fidelity bond and any blanket hazard policy, to the
extent such proceeds relate to any Subsequent Financed Vehicle, (vii) all rights
of recourse against any cosigner or under any personal guarantee with respect to
the Subsequent Contracts (other than any right as against a Dealer under a
Dealer Agreement), (viii) all proceeds in any way derived from any of the
foregoing items, and (ix) all documents contained or required to be contained in
the Contract Files relating to the Subsequent Contracts. The parties intend and
agree that the conveyance of the Seller's right, title and interest in and to
the Subsequent Contracts (and all rights, entitlements and amounts listed above)
pursuant to this Agreement shall constitute an absolute sale.
SECTION 2.2. Purchase Price; Payments on the Subsequent Contracts.
The purchase price for the Subsequent Contracts shall be an amount equal to
$_______________, which is the aggregate outstanding principal balance of the
Subsequent Contracts transferred pursuant to this Agreement as of the Subsequent
Cut-off Date, and the Seller hereby acknowledges receipt of such amount in
respect of the sale of the Subsequent Contracts hereunder. Such purchase price
B-2
shall be payable in immediately available funds on the Subsequent Transfer Date
from funds on deposit in the Pre-Funding Account.
The Purchaser shall be entitled to all payments of principal and interest
received on or after the Subsequent Cut-off Date. All payments of principal and
interest received before the Subsequent Cut-off Date shall belong to the Seller.
The Seller shall hold in trust for the Purchaser and shall promptly remit to the
Purchaser, any payments on the Subsequent Contracts received by the Seller that
belong to the Purchaser under the terms of this Agreement.
SECTION 2.3.Conditions to Sale of Subsequent Contracts. The Purchaser's
obligations hereunder are subject to the following conditions:
1.The Purchaser shall have received:
a. the Sale and Servicing Agreement executed by all the parties
thereto,
b. the documents listed in Section 3.01D of the Sale and
Servicing Agreement, and
c. such other opinions and documents as the Purchaser may
reasonably require in connection with the purchase of the
Subsequent Contracts hereunder or the sale of the Notes and
Certificates;
2.The representations and warranties with respect to the Subsequent
Contracts of (i) the Seller and the Servicer made in the Sale and Servicing
Agreement and (ii) the Seller made in the Purchase Agreement and this
Agreement shall be true and correct with respect to the Subsequent
Contracts on the Subsequent Transfer Date; and
3. The conditions for transfer of the Subsequent Contracts from the
Purchaser to the Trust set forth in Section 3.01D of the Sale and Servicing
Agreement have been fulfilled.
SECTION 2.4.Examination of Files. The Seller will make the Contract Files
with respect to the Subsequent Contracts available to the Purchaser or its agent
for examination at the Trust's offices or such other location as otherwise shall
be agreed upon by the Purchaser and the Seller.
SECTION 2.5.Transfer of Subsequent Contracts. Pursuant to the Sale and
Servicing Agreement, the Purchaser will assign all of its right, title and
interest in and to the Subsequent Contracts to the Trust for the benefit of the
Securityholders. The Purchaser has the right to assign its interest under this
Agreement as may be required to effect the purposes of the Sale and Servicing
Agreement, by written notice to the Seller and without the consent of the
Seller, and the assignee shall succeed to the rights and obligations hereunder
of the Purchaser.
B-3
ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.1.Representations and Warranties of the Seller.
1. The representations and warranties of the Seller contained in Article
III of the Sale and Servicing Agreement with respect to the Subsequent Contracts
are incorporated herein, and are made to the Purchaser on the Subsequent
Transfer Date, as if set forth herein and as if made to the Purchaser on the
date hereof. The Seller will make such representations and warranties in the
Sale and Servicing Agreement directly to the Trust and will become obligated in
respect of such representations and warranties pursuant to Article III of the
Sale and Servicing Agreement. On the Subsequent Transfer Date, the Seller shall
deliver to the Purchaser an Officers' Certificate, dated the Subsequent Transfer
Date, to the effect that the representations and warranties made in the Sale and
Servicing Agreement with respect to the Subsequent Contracts by the Seller are
true and correct as of the Subsequent Transfer Date.
2. It is understood and agreed that the representations and warranties
incorporated by reference in this Agreement by Section 3.1(1) hereof shall
remain operative and in full force and effect, shall survive the transfer and
conveyance of the Subsequent Contracts by the Seller to the Purchaser and by the
Purchaser to the Trust, and shall inure to the benefit of the Purchaser, the
Trust and their successors and permitted assignees.
3. The Seller shall indemnify the Purchaser and the Servicer and hold the
Purchaser and the Servicer harmless against any loss, penalties, fines,
forfeitures, legal fees and related costs, judgments and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller's representations and
warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.1 to indemnify the Purchaser and the Servicer as provided in this
Section 3.1 constitutes the sole remedy of the Purchaser and the Servicer
respecting a breach of the foregoing representations and warranties. The Trust
shall also have the remedies provided in the Sale and Servicing Agreement.
4. Each indemnified party shall give prompt notice to the Seller of any
action commenced against it with respect to which indemnity may be sought
hereunder but failure to so notify an indemnifying party shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement, unless the failure to notify materially prejudices the rights and
condition of the Seller. The Seller shall be entitled to participate in any such
action, and to assume the defense thereof, and after notice from the Seller to
an indemnified party of its election to assume the defense thereof, the Seller
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof.
B-4
5. Any cause of action against the Seller or relating to or arising out of
the breach of any representations and warranties made or incorporated by
reference in this Section 3.1 shall accrue as to any Subsequent Contract upon
discovery of such breach by the Purchaser or the Servicer or notice thereof by
the Seller to the Purchaser and the Servicer, failure by the Seller to cure such
breach and demand upon the Seller by the Purchaser for all amounts payable in
respect of such Subsequent Contract.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.1.Amendment. This Agreement may be amended from time to time by
the Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser.
SECTION 4.2.Counterparts. For the purpose of facilitating the execution of
this Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 4.3.Termination. The Seller's obligations under this Agreement
shall survive the sale of the Subsequent Contracts to the Purchaser.
SECTION 4.4.Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
SECTION 4.5. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed by
first class mail, postage prepaid, to in the case of the Seller, The CIT
Group/Sales Financing, Inc., 000 XXX Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
Attention: President, or such other address as may hereafter be furnished to
Purchaser in writing by the Seller, or in the case of the Purchaser, The CIT
Group Securitization Corporation II, 000 XXX Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, Attention: President, or such other address as may hereafter be furnished
to the Seller by the Purchaser.
SECTION 4.6.Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
B-5
SECTION 4.7.Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Seller and the Purchaser and their respective
successors and assigns, as may be permitted hereunder.
SECTION 4.8.Opinion. The Counsel to the Seller shall deliver to the
Purchaser and the Trustees an opinion in the form of Exhibit B hereto.
B-6
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
THE CIT GROUP SECURITIZATION
CORPORATION II,
as Purchaser
By:
---------------------------
Name:
-------------------------
Title:
------------------------
THE CIT GROUP/SALES FINANCING, INC.,
as Seller
By:
---------------------------
Name:
-------------------------
Title:
------------------------
B-7
EXHIBIT A
List of Subsequent Contracts
B-8
EXHIBIT B
FORM OF OPINION OF COUNSEL
[Date]
Xxxxxx Trust and Savings Bank,
solely in its capacity as Indenture Trustee
under the Sale and Servicing agreement referred
to herein
000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
The Bank of New York (Delaware),
solely in its capacity as Owner Trustee
under the Sale and Servicing Agreement
Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Dear Sirs,
I have acted as counsel to The CIT Group/Sales Financing, Inc. ("CITSF")
and The CIT Group Securitization Corporation II, a Delaware corporation (the
"Company"), in connection with the sale of CIT RV Owner Trust 1996-A, Class A
5.40% Asset Backed Notes (the "Notes") and 5.85% Asset Backed Certificates (the
"Certificates" and, collectively with the Notes, the "Securities"). The Notes
represent obligations of, and the Certificates represent interests in, a trust,
the CIT RV Owner Trust 1996-A (the "Trust"), consisting of a pool of installment
sale contracts secured by new and used recreational vehicles (collectively, the
"Contracts") and certain related property. The Company purchased certain of the
Contracts from CITSF (the "Initial Contracts") pursuant to a Purchase Agreement,
dated as of February 1, 1996, by and between CITSF and the Company. Additional
Contracts are being purchased by the Company from CITSF (the "Subsequent
Contracts") pursuant to the Subsequent Purchase Agreement dated as of ________
__, 1996 (the "Subsequent Purchase Agreement"). Pursuant to a Sale and Servicing
Agreement, dated as of February 1, 1996 (the "Sale and Servicing Agreement"),
among the Company, CITSF and the Trust, the Company transferred the Initial
Contracts to the Trust. The Company will also transfer, pursuant to the Sale and
Servicing Agreement, the Subsequent Contracts to the Trust, the corpus of which
will consist of each of the Initial Contracts and the Subsequent Contracts and
certain other property transferred by the Company to the Trust.
B-9
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Subsequent Purchase Agreement.
In rendering the following opinions, I have examined (i) the Subsequent
Purchase Agreement; (ii) the Sale and Servicing Agreement; (iii) the Certificate
of Incorporation of each of CITSF and the Company; (iv) the By-Laws of each of
CITSF and the Company; (v) copies of certain unanimous consents adopted by the
Board of Directors of the Company authorizing the issuance and sale of the
Securities and the purchase of the Contracts; and (vi) copies of certain
unanimous written consents of the Board of Directors of CITSF. I have also
examined such other documents and made such investigations of law as I have
considered necessary and appropriate for the purposes of the opinions expressed
herein. I have assumed the authenticity of signatures on original documents and
the conformity to the original of all documents submitted to me as certified,
conformed or photostatic copies and have relied as to all matters of fact on
certificates, representations or statements by officers of the Company or CITSF.
In making my examination of agreements, instruments and other documents and
in giving opinions herein, I have assumed that the Trustees have and had the
power and capacity to execute and deliver such agreements, instruments and other
documents and to perform all of their obligations thereunder and that such
agreements, instruments and other documents were duly authorized by all
requisite action by or on behalf of the Trustees were duly executed,
acknowledged, as necessary, and delivered by or on behalf of and are the legal,
valid and binding obligations of, and are enforceable in accordance with their
terms against, the Trustees.
Based upon, and subject to, the foregoing I am of the opinion that:
1. The Subsequent Purchase Agreement has been duly authorized, executed and
delivered by each of CITSF and the Company and constitutes the legal, valid and
binding agreement of each of CITSF and the Company, and is enforceable against
each of CITSF and the Company in accordance with its terms; the Subsequent
Purchase Agreement is effective to transfer all of CITSF's right, title and
interest in and to the Subsequent Contracts and other property described in
Section 2.1 of the Subsequent Purchase Agreement to the Company; the Sale and
Servicing Agreement is effective to transfer all of the Company's right, title
and interest in and to such Subsequent Contracts and other property to the Trust
subject to no prior liens or encumbrances.
2. No consent, approval, authorization or order of, registration or filing
with, or notice to any governmental authority or court is required under federal
laws or the laws of the State of Delaware for the execution, delivery and
performance by the Company of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by the Company,
except for those which have been obtained or except such as may be required
under the Securities Act of 1933, as amended or the regulations promulgated
thereunder or state securities or Blue Sky laws of any jurisdiction.
B-10
3. No consent, approval, authorization or order of, registration or filing
with, or notice to, any governmental authority or court is required under
federal laws or the laws of the State of Delaware for the execution, delivery
and performance by CITSF of the Subsequent Purchase Agreement or the
consummation of any other transaction contemplated thereby by CITSF except for
those which have been obtained or except such as may be required under the
Securities Act of 1933, as amended or the regulations promulgated thereunder or
state securities or Blue Sky laws of any jurisdiction.
I am furnishing this opinion to you solely for your benefit. This opinion
is not to be used, circulated, quoted or otherwise referred to or relied on by
any other person or for any other purpose.
The foregoing opinion is given on the express understanding that the
undersigned is an officer of the Company and CITSF and shall in no event incur
any personal liability in connection with the said opinion.
Very truly yours,
B-11
EXHIBIT C
FORM OF SUBSEQUENT TRANSFER AGREEMENT
The CIT Group Securitization Corporation II, as Seller, and the CIT RV
Owner Trust 1996-A (the "Trust"), as Purchaser, pursuant to the Sale and
Servicing Agreement, dated as of February 1, 1996, among the Seller, The CIT
Group/Sales Financing, Inc., as Servicer and the Trust (the "Sale and Servicing
Agreement"), hereby confirm their understanding with respect to the sale by the
Seller and the purchase by the Purchaser of those Recreational Vehicle Contracts
listed on the attached List of Subsequent Contracts (the "Subsequent
Contracts").
Conveyance of Subsequent Contracts. The Seller shall sell, transfer, assign
absolutely, set over and otherwise convey to the Purchaser as of the Subsequent
Transfer Date (i) all the right, title and interest of the Seller in and to the
Subsequent Contracts and all the rights, benefits, and obligations arising from
and in connection with each Subsequent Contract, (ii) the security interests in
the Subsequent Financed Vehicles granted by the Obligors pursuant to the
Subsequent Contracts, (iii) all payments received by the Seller on or with
respect to the Subsequent Contracts on or after the Subsequent Cut-off Date
(exclusive of payments with respect to Post Cut-off Date Insurance Add-Ons),
(iv) the interest of the Seller in any Subsequent Financed Vehicle (including
any right to receive future Net Liquidation Proceeds) that secures the
Subsequent Contracts and that shall have been repossessed by the Servicer by or
on behalf of the Trust; (v) all rights of the Seller to proceeds of Insurance
Policies covering the Obligors and the Subsequent Contracts, (vi) the proceeds
from any Servicer's Errors and Omissions Protection Policy, any fidelity bond
and any blanket hazard policy, to the extent such proceeds relate to any
Subsequent Financed Vehicle, (vii) all rights of recourse against any cosigner
or under any personal guarantee with respect to the Subsequent Contracts (other
than any right as against a Dealer under a Dealer Agreement), (viii) all
proceeds in any way derived from any of the foregoing items and (ix) all
documents contained or required to be contained in the Contract Files relating
to the Subsequent Contracts. The parties intend and agree that the conveyance of
the Seller's right, title and interest in and to the Subsequent Contracts (and
all rights, entitlements and amounts listed above) pursuant to this Agreement
shall constitute an absolute sale.
The costs relating to the delivery of the documents specified in this
Subsequent Transfer Agreement and the Sale and Servicing Agreement shall be
borne by the Seller.
The Seller hereby affirms the representations and warranties set forth in
the Sale and Servicing Agreement that relate to the Subsequent Contracts as of
the date hereof. The Seller hereby confirms that it has delivered notice of the
sale of the Subsequent Contracts pursuant to the Sale and Servicing Agreement
and that each of the conditions relating to the transfer of the Subsequent
Contracts, set forth in the Sale and Servicing Agreement, have been satisfied as
of the date hereof.
All terms and conditions of the Sale and Servicing Agreement are hereby
ratified, confirmed and incorporated herein, provided that in the event of any
conflict the provisions of this Subsequent Transfer Agreement shall control over
the conflicting provisions of the Sale and Servicing Agreement.
Terms capitalized herein and not defined herein shall have their respective
meanings as set forth in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer
Agreement to be duly executed as of this ____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II, as Seller
By:
---------------------------
Name:
Title:
THE CIT RV OWNER TRUST 1996-A
By: THE BANK OF NEW YORK (DELAWARE),
as Owner Trustee
By:
---------------------------
Name:
Title:
C-2
EXHIBIT D
FORM OF ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement") dated
as of February 1, 1996, among The CIT Group/Sales Financing, Inc. ("CITSF"), The
CIT Group Securitization Corporation II (the "Company"), and the CIT RV Owner
Trust 1996-A (the "Trust"), the Company does hereby sell, transfer, assign, set
over and otherwise convey to the Trust created by the Trust Agreement, (i) all
right, title and interest of the Company in and to the Initial Contracts and all
the rights, benefits and obligations arising from and in connection with each
Initial Contract, (ii) the security interests in the Initial Financed Vehicles
granted by the Obligors pursuant to the Initial Contracts, (iii) all payments
received by the Company on or with respect to the Initial Contracts on or after
the Initial Cut-off Date (exclusive of payments with respect to Post Cut-off
Date Insurance Add-Ons), (iv) the interest of the Company in any Initial
Financed Vehicle (including any right to receive future Net Liquidation
Proceeds) that secures the Initial Contracts and that shall have been
repossessed by the Servicer by or on behalf of the Trust; (v) all rights of the
Company to proceeds of Insurance Policies covering the Obligors and the Initial
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket hazard policy, to the extent such
proceeds relate to any Initial Financed Vehicle, (vii) all rights of recourse
against any cosigner or under any personal guarantee with respect to the Initial
Contracts (other than any right as against a Dealer under a Dealer Agreement),
(viii) all amounts held for the Trust in the Collection Account, (ix) all
amounts held for the Trust in the Pre-Funding Account, (x) all amounts held for
the Trust in the Capitalized Interest Account, (xi) all proceeds in any way
derived from any of the foregoing items and (xii) all documents contained or
required to be contained in the Contract Files relating to the Initial
Contracts. The parties intend and agree that the conveyance of the Company's
right, title and interest in and to the Initial Contracts (and all rights,
entitlements and amounts listed above) pursuant to this Agreement shall
constitute an absolute sale.
All capitalized terms used herein without definition have the meanings
ascribed to such terms in the Agreement. This Assignment is made pursuant to the
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this ___ day of ________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II
By:
---------------------------
Name:
Title:
FORM OF ASSIGNMENT OF SUBSEQUENT CONTRACTS
For good and valuable consideration in the amount of $______________ paid
by the CIT RV Owner Trust 1996-A (the "Purchaser"), to The CIT Group
Securitization Corporation II (the "Seller"), the Seller does hereby sell,
transfer, assign absolutely, set over and otherwise convey to the Purchaser as
of the Subsequent Transfer Date (i) all the right, title and interest of the
Seller in and to the Subsequent Contracts and all the rights, benefits, and
obligations arising from and in connection with each Subsequent Contract, (ii)
the security interests in the Subsequent Financed Vehicles granted by the
Obligors pursuant to the Subsequent Contracts, (iii) all payments received by
the Seller on or with respect to the Subsequent Contracts on or after the
Subsequent Cut-off Date (exclusive of payments with respect to Post Cut-off Date
Insurance Add-Ons), (iv) the interest of the Seller in any Subsequent Financed
Vehicle (including any right to receive future Net Liquidation Proceeds) that
secures the Subsequent Contracts and that shall have been repossessed by the
Servicer by or on behalf of the Trust; (v) all rights of the Seller to proceeds
of Insurance Policies covering the Obligors and the Subsequent Contracts, (vi)
the proceeds from any Servicer's Errors and Omissions Protection Policy, any
fidelity bond and any blanket hazard policy, to the extent such proceeds relate
to any Subsequent Financed Vehicle, (vii) all rights of recourse against any
cosigner or under any personal guarantee with respect to the Subsequent
Contracts (other than any right as against a Dealer under a Dealer Agreement),
(viii) all proceeds in any way derived from any of the foregoing items, and (ix)
all documents contained or required to be contained in the Contract Files
relating to the Subsequent Contracts. The parties intend and agree that the
conveyance of the Seller's right, title and interest in and to the Subsequent
Contracts (and all rights, entitlements and amounts listed above) pursuant to
this Agreement shall constitute an absolute sale. Certain capitalized terms used
in this Assignment shall have the respective meanings assigned to them in the
Sale and Servicing Agreement, dated as of February 1, 1996, among The CIT Group
Securitization Corporation II, CITSF and the CIT RV Owner Trust 1996-A.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of __________, 1996.
THE CIT GROUP SECURITIZATION
CORPORATION II,
By:
---------------------------
Name:
D-2
EXHIBIT E
FORM OF OWNER TRUSTEE'S ACKNOWLEDGMENT AND CERTIFICATION
The Bank of New York (Delaware), a Delaware banking association, acting as
Owner Trustee (the "Owner Trustee") of the Trust created pursuant to the Trust
Agreement, dated as of February 1, 1996, between The CIT Group Securitization
Corporation II (the "Company") and the Owner Trustee, to the best of its
knowledge acknowledges pursuant to the Sale and Servicing Agreement dated as of
February 1, 1996 among the Company, The CIT Group/Sales Financing, Inc. and the
Owner Trustee (the "Agreement"), that the Owner Trustee has received, and holds
in trust thereunder the following through the Servicer as custodian: (i) all the
right, title and interest of the Company in and to the [Initial] [Subsequent]
Contracts and all the rights, benefits, and obligations arising from and in
connection with each [Initial] [Subsequent] Contract, (ii) the security
interests in the [Initial] [Subsequent] Financed Vehicles granted by the
Obligors pursuant to the [Initial] [Subsequent] Contracts, (iii) all payments
received by the Company on or with respect to the [Initial] [Subsequent]
Contracts on or after the [Initial] [Subsequent] Cut-off Date (exclusive of
payments with respect to Post Cut-off Date Insurance Add-Ons), (iv) the interest
of the Company in any [Initial] [Subsequent] Financed Vehicle (including any
right to receive future Net Liquidation Proceeds) that secures the [Initial]
[Subsequent] Contracts and that shall have been repossessed by the Servicer by
or on behalf of the Trust; (v) all rights of the Company to proceeds of
Insurance Policies covering the Obligors and the [Initial] [Subsequent]
Contracts, (vi) the proceeds from any Servicer's Errors and Omissions Protection
Policy, any fidelity bond and any blanket hazard policy, to the extent such
proceeds relate to any [Initial] [Subsequent] Financed Vehicle, (vii) all rights
of recourse against any cosigner or under any personal guarantee with respect to
the [Initial] [Subsequent] Contracts (other than any right as against a Dealer
under a Dealer Agreement), (viii) all proceeds in any way derived from any of
the foregoing items, (ix) all documents contained or required to be contained in
the Contract Files relating to the [Initial] [Subsequent] Contracts, (x) the
Collection Account, (xi) the Pre-Funding Account, and (xii) the Capitalized
Interest Account. [The Owner Trustee shall issue to, or upon the written order
of, the Company Certificates representing ownership of a beneficial interest in
100% of the Trust and Notes representing obligations of the Trust.] Capitalized
terms used herein have the meanings given them in the Agreement.
IN WITNESS WHEREOF, The Bank of New York, as Co-Trustee, has caused this
acknowledgment to be executed by its duly authorized officer as of this ___ day
of ________, 1996.
THE BANK OF NEW YORK,
as Co-Trustee
By:
---------------------------
Name:
Title:
E-2
EXHIBIT F
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is the [title], of The CIT Group/Sales
Financing, Inc., a corporation organized under the laws of Delaware ("CITSF"),
and that as such he is duly authorized to execute and deliver this certificate
on behalf of CITSF pursuant to Section 4.09 of the Sale and Servicing Agreement,
dated as of February 1, 1996 (the "Agreement"), among CITSF, The CIT Group
Securitization Corporation II and The Bank of New York (Delaware), as Owner
Trustee (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement), and further certifies that:
1. The Monthly Report for the period from _________ to _______ attached to
this certificate is complete and accurate in accordance with the requirements of
Sections 4.09 and 5.08 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with notice
or lapse of time or both would become an Event of Termination has occurred. [If
an Event of Termination has occurred, such Event of Termination shall be
specified and its current status reported.]
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ____ day
of _____, 199_.
THE CIT GROUP/SALES FINANCING, INC.
By:
---------------------------
Name:
Title:
EXHIBIT G
THE CIT RV OWNER TRUST 1996-A
CLASS A 5.40% ASSET BACKED NOTES
5.85% ASSET BACKED CERTIFICATES
MONTHLY REPORT
DISTRIBUTION DATE: __________, 199_
Amount Available $
--------------
Amount of collections on Contracts $
--------------
Distribution Amounts
1. Aggregate Note distribution $
--------------
2. Aggregate Certificate distribution $
--------------
Interest
3. Aggregate amount of Interest
a. Notes $
--------------
b. Certificates $
--------------
4. Total distribution in respect of interest
a. Notes $
--------------
b. Certificates $
--------------
Principal
5. Principal Distribution Amount $
--------------
6. Distribution made in respect of Principal
a. Notes $
--------------
b. Certificates $
--------------
7. Outstanding Principal Balance of Notes: $
--------------
8. Certificate Balance $
--------------
Contract Pool
9. Pool Balance $
--------------
10. Note Pool Factor $
--------------
11. Certificate Pool Factor $
--------------
Delinquency Information
Aggregate Principal
Number Balance
-----------------------------------
12. Delinquent Contracts
a. 30-59 days $
-------- ------------------
b. 60-89 days $
-------- ------------------
c. 90 days or more $
-------- ------------------
13. Repossessed Contracts $
-------- ------------------
14. Repossessed Contracts
Remaining in Inventory $
-------- ------------------
Miscellaneous
15. Monthly Servicing Fee $
--------------
16. Amount of Servicer Fee Paid $
--------------
17. Amount withdrawn from the Cash Collateral $
Account and Delivered to Certificateholders --------------
18. Available Cash Collateral Amount after %
any withdrawal or deposit to the Cash --------------
Collateral Account divided by the Pool
Balance
19. Required Cash Collateral Amount $
--------------
20. Amount of Investment Earnings (net of losses $
--------------
G-2
and investment expenses) on amounts on deposit
in the Collection Account
21. Amount of Funds on deposit in the $
Pre-Funding Account --------------
22. Amount of Investment Earnings (net of losses $
and investment expenses) on amounts on deposit --------------
in the Pre-Funding Account
23. Amount of Funds on deposit in the $
Capitalized Interest Account --------------
24. Amount of Investment Earnings (net of losses $
and investment expenses) on amounts on deposit --------------
in the Capitalized Interest Account
25. Weighted average Contract Rate of all %
outstanding Contracts --------------
26. Number of Subsequent Contracts
--------------
27. Aggregate principal balance of $
Subsequent Contracts --------------
28. Number of Subsequent Contracts Purchased
since the preceding Distribution Date --------------
29. Aggregate Stated Principal Balance of the $
Subsequent Contracts purchased --------------
since the preceding Distribution Date
30. Amount of funds withdrawn from the $
Capitalized Interest Account to make payments --------------
of interest in respect of the Securities
31. Amount of Monthly Advances by Servicer $
--------------
32. Amount of Non-Reimbursable Payments by $
Servicer --------------
33. Amount by which the amount due to be $
distributed to Noteholders exceeds the actual --------------
amount distributed to Noteholders
G-3
34. Amount by which the amount due to be $
distributed to Certificateholders exceeds the actual --------------
amount distributed to Certificateholders
35. Aggregate Principal Balance of all Contracts $
which became Defaulted Contracts --------------
36. Number of Contracts which were prepaid,
in part or in whole --------------
37. Aggregate principal amount of $
Contracts which were prepaid, in part or --------------
in whole
38. Amount to be distributed to the holder of the $
GP Interest --------------
G-4
EXHIBIT H
TERMINATION - AUCTION PROCEDURES
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 11.02 of the Sale and
Servicing Agreement (the "Agreement"), dated as of February 1, 1996, between The
CIT Group Securitization Corporation II, the CIT Group/Sales Financing, Inc. and
The Bank of New York (Delaware), as Owner Trustee. Capitalized terms used herein
that are not otherwise defined shall have the meanings described thereto in the
Agreement. All references herein to "Trustee" shall be references to Xxxxxx
Trust and Savings Bank, as Indenture Trustee, pursuant to an Indenture, dated as
of February 1, 1996, between the Owner Trustee and the Indenture Trustee.
However, if the Notes have been paid in full, and the Indenture has been
discharged in accordance with its terms, all references herein to "Trustee"
shall be references to the Owner Trustee.
I. Pre-Auction Process
(a) Upon receiving notice of the Auction Date, the Advisor will initiate
its general Auction procedures consisting of the following: (i) with
the assistance of the Servicer, prepare a general solicitation package
along with a confidentiality agreement; (ii) derive a list of
qualified bidders, in a commercially reasonable manner; (iii) initiate
contact with all qualified bidders; (iv) send a confidentiality
agreement to all qualified bidders; (v) upon receipt of a signed
confidentiality agreement, send solicitation packages to all
interested bidders on behalf of the Trustee; and (vi) notify the
Servicer of all potential bidders and anticipated timetable.
(b) The general solicitation package will include: (i) the prospectus from
the public offering of the Notes and Certificates; (ii) a copy of all
monthly servicing reports or a copy of all annual servicing reports
and the prior year's monthly servicing reports; (iii) a form of a
Purchase Agreement and Sale and Servicing Agreement; (iv) a
description of the minimum purchase price required to cause the
Trustee to sell the Auction Property as set forth in Section 11.02 of
the Agreement; (v) a formal bidsheet; (vi) a detailed timetable; and
(vii) a preliminary data tape of the Pool Scheduled Principal Balance
as of the related Distribution Date reflecting the same data
attributes used to create the Initial Cut-off Date tables for the
prospectus dated February __, 1996 relating to the public offering of
the Notes and Certificates.
(c) The Trustee, with the assistance of the Servicer and the Advisor, will
maintain an auction package beginning at the time of closing of the
transaction, which will contain terms (i)-(iii) listed in the
preceding paragraph. If the Advisor is unable to perform its role as
advisor to the Trustee, the Servicer acting in its capacity under the
Agreement will select a successor Advisor and inform the Trustee of
its actions.
(d) The Advisor will send solicitation packages to all bidders at least 15
business days before the Auction Date. Bidders will be required to
submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 business days
before the Auction Date. The Servicer and the Advisor will be required
to satisfy all relevant questions at least five Business Days prior to
the Auction Date and distribute the questions and answers to all
bidders.
II. Auction Process
(a) ______________________, in its role as Advisor to the Trustee, will be
allowed to bid in the Auction, but will not be required to do so.
(b) The Servicer will also be allowed to bid in the Auction if it deems
appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the offices
of the Trustee by 1:00 p.m. New York City time, with the winning
bidder to be notified by 2:00 p.m. New York City time. All acceptable
bids (as described in Section 11.02 of the Agreement) will be due on a
conforming basis on the bid sheet contained in the solicitation
package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for recreational vehicle retail installment
sale contract willing and able to purchase the Auction Property, the
Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Balance will be required to be wired to
the Trustee upon acceptance of the bid. This deposit, along with any
interest income attributable to it, will be credited to the purchase
price but will not be refundable. The Trustee will establish a
separate account for the acceptance of the good faith deposit, until
such time as the account is fully funded and all monies are
transferred into the Collection Account, such time not to exceed one
Business Day before the related Distribution Date (as described
above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Purchase Agreement, Sale and Servicing Agreement and Servicer's
Representations and Warranties (which shall be substantially identical
to the representations and warranties set forth in Section 8.01 of the
Agreement).
(g) ____________, in its capacity as Advisor to the Trustee, will provide
to the Trustee a letter concluding whether or not the winning bid is a
H-2
fair market value bid. _________________ will also provide such letter
if it is the winning bidder. In the case where __________ or the
Servicer is the winning bidder it will in its letter provide for
market comparable and valuations.
(h) The Auction will stipulate that the Servicer be retained to service
the Contracts sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
H-3
EXHIBIT I
THE CIT GROUP/SALES FINANCING, INC.
CERTIFICATE OF OFFICER
The undersigned certifies that the undersigned is the ____________________
of The CIT Group/Sales Financing, Inc., a corporation organized under the laws
of Delaware ("CITSF"), and that as such is duly authorized to execute and
deliver this certificate on behalf of CITSF in connection with the Sale and
Servicing Agreement, dated as of February 1, 1996 (the "Agreement"), among
CITSF, The CIT Group Securitization Corporation II and the CIT RV Owner Trust
1996-A (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement), and further certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of the
Articles of Incorporation of CITSF, together with all amendments thereto as
in effect on the date hereof;
(ii) attached hereto as Exhibit II is a true and correct copy of the
By-Laws of CITSF, as amended, as in effect on the date hereof;
(iii) the representations and warranties of CITSF contained in
Sections 8.01 and 3.01C of the Agreement are true and correct on and as of
the date hereof and, to the best of his knowledge, the representations and
warranties of CITSF contained in Sections 3.01A and 3.01B of the Agreement
are true and correct on and as of the date hereof;
(iv) no event with respect to CITSF has occurred and is continuing
which would constitute an Event of Termination or an event that, with
notice or lapse of time or both, would become an Event of Termination under
the Agreement; and
(v) each of the agreements and conditions of CITSF to be performed on
or before the date hereof pursuant to the Agreement have been performed in
all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this __ day of
_______________, 1996.
----------------------------
Name:
Title:
