PURCHASE AGREEMENT
This Purchase Agreement dated as of July 1, 1997 (the
"Agreement"), is between THE CIT GROUP/CONSUMER FINANCE, INC., as seller (the
"Seller"), and THE CIT GROUP/SECURITIZATION CORPORATION III, as purchaser (the
"Purchaser ").
Subject to the terms hereof, the Seller agrees to sell, and
the Purchaser agrees to purchase, the home equity mortgage loans set forth on
Exhibit A (collectively, the "Mortgage Loans"), having an aggregate outstanding
principal balance as of July 1, 1997(the "Cut-off Date") of approximately
$500,068,599.83.
It is the intention of the Seller and the Purchaser that the
Purchaser shall sell the Mortgage Loans to The Bank of New York, as trustee (the
"Trustee"), and shall enter into a Pooling and Servicing Agreement, dated as of
the date hereof (the "Pooling and Servicing Agreement"), with The CIT
Group/Consumer Finance, Inc., as seller and master servicer and the Trustee,
pursuant to which Home Equity Loan Asset Backed Certificates, Series 1997-1(the
"Certificates"), evidencing ownership interests in the Mortgage Loans, will be
issued.
The Purchaser and the Seller wish to prescribe the terms and
conditions of the purchase by the Purchaser of the Mortgage Loans.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Purchaser and the Seller agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Certain capitalized terms used in
this Agreement shall have the respective meanings assigned to them in the
Pooling and Servicing Agreement. All references in this Purchase Agreement to
Articles, Sections, subsections and exhibits are to the same contained in or
attached to this Purchase Agreement unless otherwise specified.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
SECTION 2.01. Sale and Conveyance of Mortgage Loans. On the
Closing Date, subject to the terms and conditions hereof, the Seller shall, and
by execution of this Agreement hereby does, sell, transfer, assign absolutely,
set over and otherwise convey to the Purchaser without recourse, except for the
terms of this Agreement, and the Purchaser shall, and by execution of this
Agreement hereby does, purchase (i) all the right, title and interest of the
Seller in and to the Mortgage Loans, including, without limitation, the security
interests
in the related Mortgaged Properties and any related Mortgages and Notes, the
Seller's interest in any related Mortgaged Property which has been acquired by
foreclosure or deed in lieu of foreclosure, and all payments thereon and
proceeds of the conversion thereof, voluntary or involuntary, and all interest
and principal received by the Seller on or with respect to the Mortgage Loans on
and after the Cut-off Date, (ii) all rights under any Hazard Insurance Policy
relating to a Mortgaged Property securing a Mortgage Loan for the benefit of the
creditor of such Mortgage Loan, (iii) the proceeds from any Errors and Omissions
Protection Policy and all rights under any blanket hazard insurance policy to
the extent they relate to the Mortgage Loan or the Mortgaged Properties related
thereto, (iv) all documents contained in the Files with respect to the Mortgage
Loans, (v) all rights under the CITCF-NY Purchase Agreement and the CITSF
Purchase Agreement and (vi) all proceeds in any way derived from any of the
foregoing. The parties intend and agree that the conveyance of the Seller's
right, title and interest in and to the Mortgage Loans pursuant to this
Agreement shall constitute an absolute sale.
The Seller hereby declares and covenants that it shall at no
time have any legal, equitable or beneficial interest in, or any right,
including without limitation any reversionary or offset right, to the
Certificate 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
Certificateholders and shall immediately endorse over to the Trust any such
amount it receives.
SECTION 2.02. Purchase Price; Payments on the Mortgage Loans.
(a) The purchase price for the Mortgage Loans shall be an
amount equal to $500,068,599.83. Such purchase price shall be payable in
immediately available funds on the Closing Date.
(b) The Purchaser shall be entitled to all payments of
principal and interest received on or after the Cut-off Date. All payments of
principal and interest received before the Cut-off Date shall belong to the
Seller. The Seller shall hold in trust for the Purchaser and shall promptly
remit to the Purchaser, any payments on the Mortgage Loans received by the
Seller that belong to the Purchaser under the terms of this Agreement.
SECTION 2.03. Transfer of Mortgage Loans. Pursuant to the
Pooling and Servicing Agreement, the Purchaser will assign all of its right,
title and interest in and to the Mortgage Loans to the Trustee for the benefit
of the Certificateholders. The Purchaser shall assign its interest under this
Agreement to the Trustee under and pursuant to the Pooling and Servicing
Agreement and the Trustee shall succeed to the rights and obligations hereunder
of the Purchaser.
SECTION 2.04. Examination of Files. The Seller will make the
Files with respect to the Mortgage Loans available to the Purchaser, its agent
and its assignees and their agents for examination at the Trust's offices or
such other location as otherwise shall be agreed upon by the Purchaser and the
Seller.
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SECTION 2.05 Conditions to Sale of Mortgage Loans. The
Purchaser's obligations hereunder are subject to the following conditions:
(a) The Purchaser shall have received (i) the Pooling and
Servicing Agreement executed by all the parties thereto, (ii) all documents
required by the Pooling and Servicing Agreement and (iii) such other opinions
and documents as the Purchaser may reasonably require in connection with the
purchase of the Mortgage Loans hereunder or the sale of the Certificates;
(b) The representations and warranties of the Seller and the
Master Servicer made in the Pooling and Servicing Agreement shall be true and
correct on the Closing Date; and
(c) The Purchaser shall have received from counsel to the
Seller a letter stating that the Purchaser may rely on such counsel's opinion
delivered pursuant to the Pooling and Servicing Agreement and such counsel's
opinions to Xxxxx'x Investors Service, Inc. and Standard and Poor's Ratings
Service in respect of the sale of the Mortgage Loans to the Purchaser by the
Seller, or such opinions may be addressed and delivered to the Purchaser.
SECTION 2.06 Recordation of Mortgages. Upon request of the
Trustee or the Master Servicer under the Pooling and Servicing Agreement, at the
Seller's expense, the Seller shall use its best efforts and cooperate in the
preparation, execution and recording of assignments of Mortgages related to the
Mortgage Loans required to protect the interests of the Trustee in the Mortgage
Loans and the Mortgaged Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE OF MORTGAGE LOANS
SECTION 3.01 Representations and Warranties of the Seller.
(a) The representations and warranties of the Seller contained
in the Pooling and Servicing Agreement are incorporated herein, and are made to
the Purchaser on the date hereof, as if set forth herein and as if made to the
Purchaser on the date hereof. The Seller will make such representations and
warranties in the Pooling and Servicing Agreement directly to the Trust and will
be obligated in respect of such representations and warranties pursuant to the
Pooling and Servicing Agreement. On the Closing Date, the Seller shall deliver
to the Purchaser an Officer's Certificate, dated the Closing Date, to the effect
that the representations and warranties made in the Pooling and Servicing
Agreement by the Seller are true and correct as of the Closing Date.
(b) It is understood and agreed that the representations and
warranties incorporated by reference in this Agreement by Section 3.01(a) hereof
shall remain operative and in full force and effect, shall survive the transfer
and conveyance of the Mortgage Loans 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.
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(c) The Seller shall indemnify the Purchaser and the Master
Servicer and hold the Purchaser and Master Servicer harmless against any loss,
penalties, fines, forfeitures, legal fees and related costs, judgments and other
costs and expenses resulting form any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Seller's representations
and warranties contained or incorporated by reference in this Agreement. It is
understood and agreed that the obligation of the Seller set forth in this
Section 3.01 to indemnify the Purchaser and the Master Servicer as provided in
this Section 3.01 constitutes the sole remedy of the Purchaser and the Master
Servicer respecting a breach of the foregoing representations and warranties.
The Trust shall also have the remedies provided in the Pooling and Servicing
Agreement.
(d) Each indemnified party shall give prompt notice to the
Seller of any action commenced against it with respect to which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement, unless the failure to notify materially prejudices the
rights and condition of the Seller. The Seller shall be entitled to participate
in any such action, and to assume the defense thereof, and after notice form the
Seller to an indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof.
(e) Any cause of action against the Seller or relating to or
arising out of the breach of any representations and warranties made or
incorporated by reference in this Section 3.01 shall accrue as to any Mortgage
Loan upon (i) discovery of such breach by the Purchaser or the Master Servicer
or notice thereof by the Seller to the Purchaser and the Master Servicer, (ii)
failure by the Seller to cure such breach and (iii) demand upon the Seller by
the Purchaser for all amounts payable in respect of such Mortgage Loan.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.01. Amendment. This Agreement may be amended from
time to time by the Seller and the Purchaser by written agreement signed by the
Seller, the Purchaser and the Trustee.
SECTION 4.02. Counterparts. For the purpose of facilitating
the execution of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 4.03. Termination. The Seller's obligations under this
Agreement shall survive the sale of the Mortgage Loans to the Purchaser.
SECTION 4.04. Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
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SECTION 4.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed by first class mail, postage prepaid, to (i) in the case of the
Purchaser, The CIT Group/Consumer Finance, Inc., 000 XXX Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000, Attention: President, or such other address as may hereafter be
furnished to Seller in writing by the Purchaser or (ii) in the case of the
Seller, The CIT Group/Consumer Finance, Inc. (NY), 000 XXX Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: President, or such other address as may hereafter
be furnished to the Purchaser by the Seller.
SECTION 4.06. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 4.07. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Seller and the Purchaser and
their respective successors and assigns, as may be permitted hereunder. The
Seller and the Purchaser agree that the Trustee is an intended third party
beneficiary of this Agreement, and that the Trustee has the right to enforce
this Agreement as if it were a party to this Agreement.
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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/CONSUMER FINANCE, INC.,
as Seller
By: /s/ XXXXX XXXXXX
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE CIT GROUP SECURITIZATION
CORPORATION III,
as Purchaser
By: /s/ XXXXX XXXXXX
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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EXHIBIT A
List of Mortgage Loans
