EXHIBIT 4.3
POOLING AND SERVICING AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST 200_-__
Among
CHEC FUNDING, LLC,
as Depositor,
CENTEX HOME EQUITY COMPANY, LLC,
as Seller,
CHEC CONDUIT FUNDING, LLC,
as Conduit Seller,
XXXXXXX STREET FUNDING II, LLC,
as Conduit Seller II,
CENTEX HOME EQUITY COMPANY, LLC,
as Servicer,
and
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
Dated as of _________, __, 200_
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. Definitions...................................................2
Section 1.02. Use of Words and Phrases.....................................28
Section 1.03. Captions, Table of Contents..................................28
Section 1.04. Opinions.....................................................28
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01. Establishment of the Trust...................................30
Section 2.02. Office.......................................................30
Section 2.03. Purposes and Powers..........................................30
Section 2.04. Appointment of the Trustee; Declaration of Trust.............30
Section 2.05. Expenses of the Trust........................................30
Section 2.06. Ownership of the Trust.......................................30
Section 2.07. Situs of the Trust...........................................31
Section 2.08. Designation of Interests in REMICs...........................31
Section 2.09. Miscellaneous REMIC Provisions...............................35
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR, THE SERVICER
AND THE SELLERS; COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01. Representations and Warranties of the Depositor..............36
Section 3.02. Representations and Warranties of the Servicer...............38
Section 3.03. Representations and Warranties of the Sellers................40
Section 3.04. Covenants of Sellers to Take Certain Actions with Respect
to the Home Equity Loans in Certain Situations...............43
Section 3.05. Sale Treatment of the Home Equity Loans and Qualified
Replacement Mortgages........................................52
Section 3.06. Acceptance by Trustee; Certain Substitutions of Home
Equity Loans; Certification by Trustee.......................56
Section 3.07. Reserved.....................................................58
Section 3.08. Custodian....................................................58
Section 3.09. Cooperation Procedures.......................................58
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01. Issuance of Certificates.....................................60
Section 4.02. Sale of Certificates.........................................60
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01. Terms........................................................61
Section 5.02. Forms........................................................61
Section 5.03. Execution, Authentication and Delivery.......................61
Section 5.04. Registration and Transfer of Certificates....................62
Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates............64
Section 5.06. Persons Deemed Owners........................................65
Section 5.07. Cancellation.................................................65
Section 5.08. Limitation on Transfer of Ownership Rights...................65
Section 5.09. Assignment of Rights.........................................67
ARTICLE VI
COVENANTS
Section 6.01. Distributions................................................68
Section 6.02. Money for Distributions to be Held in Trust; Withholding.....68
Section 6.03. Protection of Trust Estate...................................69
Section 6.04. Performance of Obligations...................................70
Section 6.05. Negative Covenants...........................................70
Section 6.06. No Other Powers..............................................70
Section 6.07. Limitation of Suits..........................................71
Section 6.08. Unconditional Rights of Owners to Receive Distributions......71
Section 6.09. Rights and Remedies Cumulative...............................71
Section 6.10. Delay or Omission Not Waiver.................................72
Section 6.11. Control by Owners............................................72
Section 6.12. Indemnification by CHEC......................................72
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01. Collection of Money..........................................74
Section 7.02. Establishment of Accounts....................................74
Section 7.03. Flow of Funds................................................74
Section 7.04. Supplemental Interest Reserve Fund...........................77
Section 7.05. Investment of Accounts.......................................78
Section 7.06. Payment of Trust Expenses....................................79
Section 7.07. Eligible Investments.........................................79
Section 7.08. Accounting and Directions by Trustee.........................81
Section 7.09. Reports by Trustee to Owners.................................81
Section 7.10. Reports by Trustee...........................................84
Section 7.11. Allocation of Losses.........................................85
ARTICLE VIII
SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS
Section 8.01. Servicer and Sub-Servicers...................................86
Section 8.02. Collection of Certain Home Equity Loan Payments..............87
Section 8.03. Sub-Servicing Agreements Between Servicer and Sub-Servicers..87
Section 8.04. Successor Sub-Servicers......................................88
Section 8.05. Liability of Servicer; Indemnification.......................88
Section 8.06. No Contractual Relationship Between Sub-Servicer, Trustee
or the Owners................................................89
Section 8.07. Assumption or Termination of Sub-Servicing Agreement
by Trustee...................................................89
Section 8.08. Principal and Interest Account...............................89
Section 8.09. Delinquency Advances and Servicing Advances..................91
Section 8.10. Compensating Interest; Repurchase of Home Equity Loans.......92
Section 8.11. Maintenance of Insurance.....................................93
Section 8.12. Due-on-Sale Clauses; Assumption and Substitution Agreements..94
Section 8.13. Realization Upon Defaulted Home Equity Loans; Workout of
Home Equity Loans............................................94
Section 8.14. Trustee to Cooperate; Release of Files.......................96
Section 8.15. Servicing Compensation.......................................97
Section 8.16. Annual Statement as to Compliance............................97
Section 8.17. Annual Independent Certified Public Accountants' Reports.....98
Section 8.18. Access to Certain Documentation and Information Regarding
the Home Equity Loans........................................98
Section 8.19. Assignment of Agreement......................................98
Section 8.20. Removal of Servicer; Retention of Servicer; Resignation
of Servicer..................................................98
Section 8.21. Inspections; Errors and Omissions Insurance.................103
Section 8.22. Additional Servicing Responsibilities for Second
Mortgage Loans..............................................103
Section 8.23. The Group II Home Equity Loans..............................104
Section 8.24. Merger, Conversion, Consolidation or Succession to
Business of Servicer........................................104
Section 8.25. Notices of Material Events..................................104
Section 8.26. Indemnification by the Servicer.............................105
Section 8.27. Reports on Foreclosure and Abandonment of Properties........105
ARTICLE IX
TERMINATION OF TRUST
Section 9.01. Termination of Trust........................................106
Section 9.02. Termination Upon Option of the Owner of the Class X-IO
Certificates................................................106
Section 9.03. Disposition of Proceeds.....................................108
Section 9.04. Netting of Amounts..........................................108
ARTICLE X
THE TRUSTEE
Section 10.01. Certain Duties and Responsibilities.........................109
Section 10.02. Removal of Trustee for Cause................................111
Section 10.03. Certain Rights of the Trustee...............................112
Section 10.04. Not Responsible for Recitals or Issuance of Certificates....114
Section 10.05. May Hold Certificates.......................................114
Section 10.06. Money Held in Trust.........................................115
Section 10.07. Compensation and Reimbursement..............................115
Section 10.08. Corporate Trustee Required; Eligibility.....................115
Section 10.09. Resignation and Removal; Appointment of Successor...........116
Section 10.10. Acceptance of Appointment by Successor Trustee..............117
Section 10.11. Merger, Conversion, Consolidation or Succession to
Business of the Trustee.....................................117
Section 10.12. Reporting; Withholding......................................118
Section 10.13. Liability of the Trustee....................................118
Section 10.14. Appointment of Co-Trustee or Separate Trustee...............119
Section 10.15. Appointment of Custodians...................................120
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions........................121
Section 11.02. Form of Documents Delivered to the Trustee..................121
Section 11.03. Acts of Owners..............................................122
Section 11.04. Notices, etc................................................122
Section 11.05. Notices and Reports to Owners; Waiver of Notices............123
Section 11.06. Rules by Trustee............................................123
Section 11.07. Successors and Assigns......................................123
Section 11.08. Severability................................................124
Section 11.09. Benefits of Agreement.......................................124
Section 11.10. Legal Holidays..............................................124
Section 11.11. Governing Law; Submission to Jurisdiction...................124
Section 11.12. Counterparts................................................125
Section 11.13. Usury.......................................................125
Section 11.14. Amendment...................................................125
Section 11.15. Paying Agent; Appointment and Acceptance of Duties..........126
Section 11.16. REMIC Status................................................127
Section 11.17. Additional Limitation on Action and Imposition of Tax.......129
Section 11.18. Appointment of Tax Matters Person...........................129
Section 11.19. Notices.....................................................129
Section 11.20. Rule 144A Information.......................................132
SCHEDULE I-A SCHEDULE OF THE GROUP I HOME EQUITY LOANS
SCHEDULE I-B SCHEDULE OF THE GROUP II HOME EQUITY LOANS
SCHEDULE I-C SELLER SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-D CONDUIT SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-E CONDUIT II SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-F INVESTMENT INSTRUCTIONS TO TRUSTEE
EXHIBIT A-1 FORM OF CLASS A-1 CERTIFICATE
EXHIBIT A-2 FORM OF CLASS A-2 CERTIFICATE
EXHIBIT A-3 FORM OF CLASS A-3 CERTIFICATE
EXHIBIT A-4 FORM OF CLASS A-4 CERTIFICATE
EXHIBIT A-5 FORM OF CLASS A-5 CERTIFICATE
EXHIBIT A-6 FORM OF CLASS A-6 CERTIFICATE
EXHIBIT A-7 FORM OF CLASS A-7 CERTIFICATE
EXHIBIT A-8 FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-9 FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-10 FORM OF CLASS B CERTIFICATE
EXHIBIT B FORM OF CLASS X-IO CERTIFICATE
EXHIBIT C FORM OF CLASS R CERTIFICATE
EXHIBIT D FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL
AFTER THE CUT-OFF DATE
EXHIBIT E-1 FORM OF TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-2 FORM OF CUSTODIAN'S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT F FORM OF POOL CERTIFICATION
EXHIBIT G FORM OF DELIVERY ORDER
EXHIBIT H FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT I-1 FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED INVESTOR)
EXHIBIT I-2 FORM OF CERTIFICATE OF TRANSFER (RULE 144A)
EXHIBIT J HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
EXHIBIT K [RESERVED]
EXHIBIT L [RESERVED]
EXHIBIT M FORM OF LETTER REGARDING REPORTING OBLIGATIONS UNDER THE
SECURITIES EXCHANGE ACT OF 1934
EXHIBIT N FORM OF LIQUIDATION REPORT
EXHIBIT O FORM OF REQUEST FOR RELEASE OF DOCUMENTS
POOLING AND SERVICING AGREEMENT, relating to CENTEX HOME EQUITY LOAN TRUST
200_-__, dated as of _________, __, 200_ by and among CHEC FUNDING, LLC, a
Delaware limited liability company, in its capacity as the depositor (the
"Depositor"), CENTEX HOME EQUITY COMPANY, LLC, a Delaware limited liability
company, formerly Centex Credit Corporation, a Nevada corporation ("CHEC") in
its capacities as the seller (in such capacity, the "Seller") and as the
servicer (in such capacity, the "Servicer"), CHEC CONDUIT FUNDING, LLC, a
Delaware limited liability company (the "Conduit Seller"), XXXXXXX STREET
FUNDING II, LLC, a Delaware limited liability company (the "Conduit Seller II";
together with the Conduit Seller, the "Conduit Sellers"; and together with
Seller, the "Sellers") and BANK ONE, NATIONAL ASSOCIATION, a national banking
association, in its capacity as the trustee (the "Trustee").
WHEREAS, the Seller wishes to establish a trust and two subtrusts and
provide for the allocation and sale of the beneficial interests therein and the
maintenance and distribution of the trust estate;
WHEREAS, the Seller and the Conduit Sellers wish to sell to the Depositor,
the Depositor wishes to purchase from the Seller and the Conduit Sellers and to
sell to the Trustee, and the Trustee wishes to purchase, the Home Equity Loans;
WHEREAS, the Servicer has agreed to service the Home Equity Loans, which
constitute the principal assets of the trust estate;
WHEREAS, all things necessary to make the Certificates, when executed and
authenticated by the Trustee, valid instruments, and to make this Agreement a
valid agreement, in accordance with their and its terms, have been done; and
WHEREAS, Bank One, National Association is willing to serve in the capacity
of Trustee hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Depositor, the Seller, the Conduit Sellers, the Servicer,
and the Trustee hereby agree as follows:
CONVEYANCE
The Seller with respect to the Seller Home Equity Loans, the Conduit Seller
with respect to the Conduit Home Equity Loans, and the Conduit Seller II with
respect to the Conduit II Home Equity Loans each hereby bargains, sells,
conveys, assigns and transfers to the Depositor, in trust, without recourse and
for the exclusive benefit of the Owners of the Certificates, all of its right,
title and interest in and to (a) all principal collected and interest due on the
Home Equity Loans on and after the Cut-Off Date and any and all other benefits
accruing from the Home Equity Loans which the Depositor is causing to be
delivered to the Custodian on behalf of the Trustee herewith, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; and (b) proceeds of all the foregoing (including,
but not by way of limitation, all proceeds of any mortgage insurance, flood
insurance, hazard insurance and title insurance policy relating to the Home
Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified herein (the "Home Equity Loan
Assets").
The Depositor, concurrently with the execution and delivery hereof, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Trustee for
the benefit of the Owners of the Certificates, without recourse, all the right,
title and interest of the Depositor in and to the Trust Estate.
The Trustee acknowledges such sale, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein in
accordance with the provisions of the Operative Documents.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. DEFINITIONS.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
"ACCOUNT": Any account established in accordance with Section 7.02 or 8.08
hereof.
"ADJUSTED CERTIFICATE RATE": As of any date of determination thereof, a
rate equal to the sum of (a) the Weighted Average Certificate Rate and (b) any
portion of the Trustee Fee (calculated as a percentage of the outstanding Loan
Balances as of the first day of the related Remittance Period) in each case then
accrued and outstanding.
"AFFILIATE": With respect to any specified Person, 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" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE PRINCIPAL AMOUNT": As to any Distribution Date, the sum of the
Basic Principal Amount for each Home Equity Loan Group.
"AGREEMENT": This Pooling and Servicing Agreement, as it may be amended
from time to time, including the Exhibits and Schedules hereto.
"APPLIED REALIZED LOSS AMOUNTS": As to any Distribution Date, an amount
equal to the excess, if any, of (i) the aggregate of the Certificate Principal
Balances of the Offered Certificates, after giving effect to all distributions
on such Distribution Date over (ii) the Pool Balance as of the last day of the
related Remittance Period.
"APPRAISED VALUE": The appraised value of any Property based upon the
appraisal made at the time of the origination of the related Home Equity Loan,
or, in the case of a Home Equity Loan which is a purchase money mortgage, the
sales price of the Property, if such sales price is less than such appraised
value.
"AUTHORIZED OFFICER": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon such Person; with respect to the
Depositor, the Sellers and the Servicer, initially including those individuals
whose names appear on the lists of Authorized Officers delivered at the Closing;
with respect to the Trustee, any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Agreement or any other officers of the Trustee to whom a
matter arising under this Agreement may be referred.
"BASIC PRINCIPAL AMOUNT": With respect to the related Home Equity Loan
Group and each Distribution Date shall be the sum of (without duplication):
(a) the principal portion of all scheduled monthly payments on the Home
Equity Loans related to the Home Equity Loan Group actually received
by the Servicer during the related Remittance Period and any
Prepayments on the Home Equity Loans made by the Mortgagors of Home
Equity Loans in the related Home Equity Loan Group and actually
received by the Servicer during the related Remittance Period in each
case to the extent the amounts are received by the Trustee on or prior
to the Monthly Remittance Date;
(b) the outstanding principal balance of each Home Equity Loan in the
related Home Equity Loan Group that was purchased or repurchased by
the Seller or purchased by the Servicer on or prior to the related
Monthly Remittance Date in each case to the extent the amounts are
received by the Trustee on or prior to the Monthly Remittance Date;
(c) any Substitution Amounts relating to principal, delivered by the
Seller on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in the related Home Equity Loan
Group, in each case to the extent the amounts are received by the
Trustee on or prior to the Monthly Remittance Date;
(d) all Net Liquidation Proceeds actually collected by or on behalf of the
Servicer with respect to the Home Equity Loans in the related Home
Equity Loan Group during the related Remittance Period (to the extent
the Net Liquidation Proceeds relate to principal) in each case to the
extent the amounts are received by the Trustee on or prior to the
Monthly Remittance Date;
(e) the principal portion of the proceeds received by the Trustee with
respect to the related Home Equity Loan Group upon termination of the
Trust (to the extent the proceeds relate to principal).
"BUSINESS DAY": Any day other than a Saturday, Sunday or a day on which
commercial banking institutions in New York, New York, Dallas, Texas, the city
in which the Corporate Trust Office is located or, with respect to the
obligations of the Custodian hereunder, the State of Texas or any other state
where the principal office of the Custodian is located, are authorized or
obligated by law or executive order to be closed.
"CARRYOVER CERTIFICATE": The Class X-0, Xxxxx X-0, Class M-1, Class M-2 and
Class B Certificates.
"CERTIFICATE": Any one of the Offered Certificates, the Class X-IO
Certificates or the Class R Certificates, each representing the interests and
the rights described in this Agreement.
"CERTIFICATE ACCOUNT": The segregated certificate account established in
accordance with Section 7.02(a) hereof and maintained at the Corporate Trust
Office entitled "Bank One, National Association, as Trustee on behalf of the
Owners of the Centex Home Equity Loan Trust 200_-__, Centex Home Equity Loan
Asset-Backed Certificates." The Certificate Account shall be an Eligible
Account.
"CERTIFICATE PRINCIPAL BALANCE": As of the Startup Day as to each of the
following Classes of Offered Certificates, the principal balances thereof, as
follows:
Class A-l Certificates - $___________
Class A-2 Certificates - $___________
Class A-3 Certificates - $___________
Class A-4 Certificates - $___________
Class A-5 Certificates - $___________
Class A-6 Certificates - $___________
Class A-7 Certificates - $___________
Class M-1 Certificates - $___________
Class M-2 Certificates - $___________
Class B Certificates - $___________
As of any time of determination after the Startup Day, with respect to a
Class of Offered Certificates, the Certificate Principal Balance of such Class
as of the Startup Day less the aggregate of all amounts actually distributed to
such Class in reduction of such Class's Certificate Principal Balance pursuant
to Section 7.03 hereof on all prior Distribution Dates and, in the case of any
Class of Subordinate Certificates, reduced by any Applied Realized Loss Amounts
allocated to such Class on prior Distribution Dates.
The Class X-IO Certificates and the Class R Certificates do not have a
Certificate Principal Balance.
"CERTIFICATE RATE": Any of the Class A-1 Certificate Rate, the Class A-2
Certificate Rate, the Class A-3 Certificate Rate, the Class A-4 Certificate
Rate, the Class A-5 Certificate Rate, the Class A-6 Certificate Rate, the Class
A-7 Certificate Rate, the Class M-1 Certificate Rate, the Class M-2 Certificate
Rate or the Class B Certificate Rate.
"CHEC": Centex Home Equity Company, LLC, a Delaware limited liability
company, formerly Centex Credit Corporation, a Nevada corporation.
"CLASS" Any class of the Offered Certificates or the Class X-IO
Certificates or the Class R Certificates.
"CLASS A-1 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-l Certificate, substantially in the form annexed hereto as
Exhibit A-1 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-1 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-1 Certificates, ____% per annum.
"CLASS A-2 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-2 Certificate, substantially in the form annexed hereto as
Exhibit A-2 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-2 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-2 Certificates, ____% per annum.
"CLASS A-3 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-3 Certificate, substantially in the form annexed hereto as
Exhibit A-3 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-3 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-3 Certificates, ____% per annum.
"CLASS A-4 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-4 Certificate, substantially in the form annexed hereto as
Exhibit A-4 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-4 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-4 Certificates, ____% per annum.
"CLASS A-5 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-5 Certificate, substantially in the form annexed hereto as
Exhibit A-5 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-5 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-5 Certificates, the lesser of (A) ____% per annum (or ____% per annum
for each Interest Period occurring after the Clean-Up Call Date) and (B) the
Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS A-6 CALCULATION PERCENTAGE": For any Distribution Date will be the
fraction, expressed as a percentage, the numerator of which is the Certificate
Principal Balance of the Class A-6 Certificates, and the denominator of which is
the total of the Certificate Principal Balances of the Group I Certificates, in
each case before giving effect to any distributions in reduction of the
Certificate Principal Balances of the Group I Certificates pursuant to Section
7.03 hereof.
"CLASS A-6 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-6 Certificate, substantially in the form annexed hereto as
Exhibit A-6 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-6 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-6 Certificates, ____% per annum.
"CLASS A-6 LOCKOUT DISTRIBUTION AMOUNT": For any Distribution Date will be
an amount equal to the product of (1) the applicable Class A-6 Lockout
Percentage for the Distribution Date, (2) the Class A-6 Calculation Percentage
and (3) the Group I Principal Distribution Amount available for distribution
with respect to the Group I Certificates for the Distribution Date. In no event
shall the Class A-6 Lockout Distribution Amount exceed the outstanding
Certificate Principal Balance of the Class A-6 Certificates or the Group I
Principal Distribution Amount available for distribution applicable to the Group
I Certificates for the Distribution Date.
"CLASS A-6 LOCKOUT PERCENTAGE": For each Distribution Date will be as
follows:
DISTRIBUTION DATE LOCKOUT PERCENTAGE
----------------- ------------------
___________ 20__ through ___________ 20__ 0%
___________ 20__ through ___________ 20__ 45%
___________ 20__ through ___________ 20__ 80%
___________ 20__ through ___________ 20__ 100%
___________ 20__ and thereafter 300%
"CLASS A-7 AVAILABLE FUNDS CAP": With respect to any Interest Period and
the related Distribution Date will be a rate per annum equal to the product of
(a) the weighted average of the Net Coupon Rates on the Group II Home Equity
Loans as of the beginning of the related Remittance Period and (b) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Interest Period, adjusted as appropriate for day-counting
conventions.
"CLASS A-7 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class A-7 Certificate, substantially in the form annexed hereto as
Exhibit A-7 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS A-7 CERTIFICATE RATE": With respect to any Distribution Date and the
Class A-7 Certificates, the lesser of (A) the Class A-7 Formula Rate and (B) the
Class A-7 Available Funds Cap for the Distribution Date.
"CLASS A-7 CERTIFICATEHOLDERS' INTEREST INDEX CARRYOVER": The sum of (A)
the excess of (1) the amount of interest the Class A-7 Certificates would
otherwise be entitled to receive on the Distribution Date had the Class A-7
Certificate Rate been calculated at the Class A-7 Formula Rate for the
Distribution Date over (2) the amount of interest payable on the Class A-7
Certificates at the Class A-7 Available Funds Cap for the Distribution Date and
(B) the excess described in clause A for all previous Distribution Dates
(including any interest accrued thereon at the Class A-7 Formula Rate) not
previously paid to Class A-7 Certificateholders.
"CLASS A-7 FORMULA RATE": For any Distribution Date is the sum of (1) LIBOR
and (2) ____% per annum (or ____% per annum for each Interest Period occurring
after the Clean-Up Call Date).
"CLASS B CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class B Certificate, substantially in the form annexed hereto as
Exhibit A-10 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS B CERTIFICATE RATE": With respect to any Distribution Date and the
Class B Certificates, the lesser of (A) ____% per annum (or ____% per annum for
each Interest Period occurring after the Clean-Up Call Date) and (B) the Fixed
Rate Interest Rate Cap for the Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTION AMOUNT": On any Distribution Date on and
after the Stepdown Date and so long as a Trigger Event is not in effect, an
amount equal to the excess of (1) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after giving effect to the
distribution of the Senior Principal Distribution Amount on such Distribution
Date), (B) the Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Certificate Principal Balance of the
Class M-2 Certificates (after giving effect to the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date) and (D) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) ____% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool Balance as of the
last day of the related Remittance Period minus the OC Floor, provided, however,
that after the Certificate Principal Balances of the Senior, Class M-1 and Class
M-2 Certificates are reduced to zero, the Class B Principal Distribution Amount
for such Distribution Date will equal 100% of the Principal Distribution Amount.
"CLASS INTEREST CARRYOVER SHORTFALL": As to any Class of Offered
Certificates and any Distribution Date, an amount equal to the sum of (i) the
excess of the related Class Monthly Interest Amount for the preceding
Distribution Date and any outstanding Class Interest Carryover Shortfall with
respect to such Class on any preceding Distribution Date, over the amount in
respect of interest that is actually distributed to the Owners of such Class on
such preceding Distribution Date plus (ii) one month's interest on such excess,
to the extent permitted by law, at the related Certificate Rate.
"CLASS M-1 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class M-1 Certificate, substantially in the form annexed hereto as
Exhibit A-8 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS M-1 CERTIFICATE RATE": With respect to any Distribution Date and the
Class M-1 Certificates, the lesser of (A) ____% per annum (or ____% per annum
for each Interest Period occurring after the Clean-Up Call Date) and (B) the
Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date on
or after the Stepdown Date, (x) ____% of the Principal Distribution Amount if
the Certificate Principal Balance of each Class of Senior Certificates has been
reduced to zero and a Trigger Event exists, or, (y) if a Trigger Event is not in
effect, the excess of (1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution Date) and (B) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (2) the lesser of (A) ____% of the Pool Balance as
of the last day of the related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC Floor.
"CLASS M-2 CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class M-2 Certificate, substantially in the form annexed hereto as
Exhibit A-9 authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing an interest designated
as a "regular interest" in REMIC I created hereunder for purposes of the REMIC
Provisions.
"CLASS M-2 CERTIFICATE RATE": With respect to any Distribution Date and the
Class M-2 Certificates, the lesser of (A) ____% per annum (or ____% per annum
for each Interest Period occurring after the Clean-Up Call Date) and (B) the
Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date on
or after the Stepdown Date, (x) ____% of the Principal Distribution Amount if
the aggregate Certificate Principal Balance of each of the Senior and Class M-1
Certificates has been reduced to zero and a Trigger Event exists, or, (y) if a
Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such Distribution Date over (2)
the lesser of (A) ____% of the Pool Balance as of the last day of the related
Remittance Period and (B) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
"CLASS MONTHLY INTEREST AMOUNT": With respect to each Class of Offered
Certificates means, with respect to any Distribution Dates: the aggregate amount
of interest accrued during the related Interest Period at the related
Certificate Rate on the Certificate Principal Balance of the Class of Offered
Certificates.
"CLASS PRINCIPAL CARRYOVER SHORTFALL": As to any Class of Subordinate
Certificates and any Distribution Date, the excess, if any, of (i) the sum of
(x) the amount of the reduction in the Certificate Principal Balance of that
Class of Subordinate Certificates on such Distribution Date as a result of the
application of Applied Realized Loss Amounts and (y) the amount of such
reductions on prior Distribution Dates over (ii) the amount distributed in
respect of the Class Principal Carryover Shortfall to such Class of Subordinate
Certificates on prior Distribution Dates.
"CLASS PRINCIPAL DISTRIBUTION AMOUNT": Either the Group I Principal
Distribution Amount, the Group II Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount or
the Class B Principal Distribution Amount, as the case may be.
"CLASS R CERTIFICATE": Any one of the Certificates designated on the face
thereof as a Class R Certificate, substantially in the form annexed hereto as
Exhibit C, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein. For the purposes of the REMIC Provisions, the
Class R Certificate shall evidence (i) an interest designated as the Class R-1
Certificate which is the "residual interest" in REMIC I and (ii) an interest
designated as the Class R-2 Certificate which is the "residual interest" in
REMIC II. The Owner of the Class R Certificate shall be entitled to separate
such Certificate into its component Class R-1 and Class R-2 parts, as further
described in the Class R Certificate attached hereto as Exhibit C.
"CLASS X-IO CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class X-IO Certificate, substantially in the form annexed
hereto as Exhibit B, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein, and evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for the purposes
of the REMIC Provisions.
"CLASS X-IO DISTRIBUTION AMOUNT": With respect to any Distribution Date,
the lesser of (i) the aggregate funds, if any, remaining after the making of all
applications, transfers and disbursements described in Sections 7.03(b)(A)(1)
through 7.03(b)(C)(10), hereof and (ii) the amounts described in footnote (6) of
Section 2.08(b) for the current and for all prior Distribution Dates less
amounts distributed to the Class X-IO Certificates on prior Distribution Dates
pursuant to Sections 7.03(b)(C)(11) and (16).
"CLEAN-UP CALL DATE": The first Distribution Date following the last day of
the Remittance Period on which the aggregate Loan Balance of all the Home Equity
Loans has declined to less than 20% of the aggregate Loan Balance of the Home
Equity Loans as of the Cut-Off Date.
"CLOSING": As defined in Section 4.02 hereof.
"CODE": The Internal Revenue Code of 1986, as amended.
"COMMISSION": The Securities and Exchange Commission.
"COMPENSATING INTEREST": As defined in Section 8.10(a) hereof.
"CONDUIT HOME EQUITY LOANS": The home equity loans listed on the Conduit
Schedule of Home Equity Loans.
"CONDUIT II HOME EQUITY LOANS": The home equity loans listed on the Conduit
II Schedule of Home Equity Loans.
"CONDUIT SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity Loans
attached as Schedule I-D hereto.
"CONDUIT II SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity
Loans attached as Schedule I-E hereto.
"CONDUIT SELLER": CHEC Conduit Funding, LLC, a Delaware limited liability
company.
"CONDUIT SELLERS": The Conduit Seller and Conduit Seller II.
"CONDUIT SELLER II": Xxxxxxx Street Funding II, LLC, a Delaware limited
liability company.
"CONDUIT SERVICER": CHEC in its capacity as servicer with respect to the
Conduit Warehousing Facility.
"CONDUIT SERVICER II": CHEC in its capacity as servicer with respect to the
Conduit II Warehousing Facility.
"CONDUIT SERVICERS": The Conduit Servicer and Conduit Servicer II.
"CONDUIT WAREHOUSING FACILITY": The Purchase Agreement dated November 16,
1999 among CHEC Conduit Funding, LLC, CHEC, Citibank, N.A., certain investors,
Citicorp North America, Inc., as Investor Agent, Credit Lyonnais New York
Branch, as Investor Agent, and BMO Xxxxxxx Xxxxx Corp., as Investor Agent, and
Citicorp North America, Inc., as Agent, as amended.
"CONDUIT II WAREHOUSING FACILITY": The Mortgage Loan Purchase and Servicing
Agreement dated February 6, 2001 among Xxxxxxx Street Funding II, LLC, CHEC and
Centex Corporation, as amended.
"CORPORATE TRUST OFFICE": The principal office of the Trustee at 1 Bank Xxx
Xxxxx, Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Global Corporate Trust
Services (as of the Startup Day), or at such other address as the Trustee may
designate by notice to the Depositor, the Seller, the Servicer and the Owners,
or the principal office of any successor Trustee hereunder.
"COUPON RATE": The rate of interest borne by each Note from time to time.
"CRAM DOWN LOSS": With respect to a Home Equity Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Loan Balance of such Home Equity Loan, the amount of such
reduction. A "Cram Down Loss" shall be deemed to have occurred on the date of
issuance of such order.
"CUSTODIAL AGREEMENT": The Custodial Agreement dated as of _________, __,
200_ between the Custodian, the Servicer and the Trustee.
"CUSTODIAN": Bank One Trust Company, N.A., as Custodian on behalf of the
Trustee pursuant to the Custodial Agreement and any successor Custodian.
"CUT-OFF DATE": The later of (i) the opening of business on _________, __,
200_ and (ii) the date of origination with respect to a Home Equity Loan, but in
no event later than the Startup Day.
"DELINQUENCY ADVANCE": As defined in Section 8.09(a) hereof.
"DELINQUENCY EVENT": A Delinquency Event shall have occurred and be
continuing if at any time the 60+ Delinquency Percentage (Rolling Three Month)
exceeds 50% of the Senior Enhancement Percentage.
"DELINQUENT": A Home Equity Loan is "Delinquent" if any payment due thereon
is not made by the Mortgagor by the close of business on the related Due Date. A
Home Equity Loan is "30 days Delinquent" if such payment has not been received
by the close of business on the corresponding day of the month immediately
succeeding the month in which such payment was due, or, if there is no such
corresponding day (e.g., as when a 30-day month follows a 31-day month in which
a payment was due on the 31st day of such month) then on the last day of such
immediately succeeding month. Similarly for "60 days Delinquent," "90 days
Delinquent" and so on.
"DELIVERY ORDER": The delivery order in the form set forth as Exhibit G
hereto and delivered by the Depositor to the Trustee on the Startup Day pursuant
to Section 4.01 hereof.
"DEPOSITOR": CHEC Funding, LLC, a Delaware limited liability company, or
any successor thereto.
"DEPOSITORY": The Depository Trust Company, 0 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, and any successor Depository.
"DESIGNATED DEPOSITORY INSTITUTION": With respect to the Principal and
Interest Account, a trust account maintained by the trust department of a
federal or state chartered depository institution, acting in its fiduciary
capacity, having combined capital and surplus of at least $100,000,000;
PROVIDED, HOWEVER, that if the Principal and Interest Account is not maintained
with the Trustee, (i) such institution shall have a long-term debt rating of at
least "A" by Standard & Poor's and "A2" by Xxxxx'x and if rated by Fitch, "A" by
Fitch and (ii) the Servicer shall provide the Trustee with a statement, which
the Trustee will send to the Owners, identifying the location and account
information of the Principal and Interest Account upon a change in the location
of such account.
"DETERMINATION DATE": The 15th day of each month, or if such day is not a
Business Day, the preceding Business Day, commencing in _________ 200_.
"DIRECT PARTICIPANT" or "DTC PARTICIPANT": Any broker-dealer, bank or other
financial institution for which the Depository holds Offered Certificates from
time to time as a securities depository.
"DISQUALIFIED ORGANIZATION": The meaning set forth from time to time in the
definition thereof at Section 860E(e)(5) of the Code (or any successor statute
thereto) and applicable to the Trust.
"DISTRIBUTION DATE": Any date on which the Trustee is required to make
distributions to the Owners, which shall be the 25th day of each month or if
such day is not a Business Day, the next Business Day thereafter, commencing in
the month following the Startup Day. The first Distribution Date will be
_________ __, 20__.
"DUE DATE": With respect to any Home Equity Loan, the date on which the
Monthly Payment with respect to such Home Equity Loan is required to be paid
pursuant to the related Note exclusive of any days of grace.
"ELIGIBLE ACCOUNT": Either (A) a segregated account or accounts maintained
with an institution whose deposits are insured by the FDIC, the unsecured and
uncollateralized debt obligations of which institution shall be rated AA or
higher by Standard & Poor's and, in the case of any institution other than Bank
One, National Association, Aa2 or higher by Xxxxx'x and if rated by Fitch, A- or
F1 or higher by Fitch, (in the case of its long-term obligations), and in the
highest short term rating category by each of Standard & Poor's and Xxxxx'x and
if rated by Fitch, Fitch (in the case of its short-term obligations), and which
is (i) a federal savings and loan association duly organized, validly existing
and in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by each of the
Rating Agencies or (B) a segregated trust account or accounts maintained with
the Corporate Trust Office of the Trustee, or the trust department of a federal
or state chartered depository institution acceptable to each Rating Agency,
having capital and surplus of not less than $100,000,000, acting in its
fiduciary capacity.
"ELIGIBLE INVESTMENTS": Those investments so designated pursuant to Section
7.07 hereof.
"EXCESS INTEREST": As to any Distribution Date, the amounts remaining after
the application of payments pursuant to clauses 1 through 6 of clause C of
Section 7.03(b).
"EXCESS OVERCOLLATERALIZATION AMOUNT": As to any Distribution Date, the
lesser of (i) the Aggregate Principal Amount for such Distribution Date and (ii)
the excess, if any, of (x) the Overcollateralization Amount (assuming 100% of
the Aggregate Principal Amount is distributed on the Offered Certificates) over
(y) the Required Overcollateralization Amount.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"FILE": The documents delivered to the Custodian on behalf of the Trustee
pursuant to Section 3.05(b) hereof pertaining to a particular Home Equity Loan
and any additional documents required to be added to the File pursuant to this
Agreement.
"FINAL CERTIFICATION": As defined in Section 3.06(c) hereof.
"FINAL DETERMINATION": As defined in Section 9.03(a) hereof.
"FINAL RECOVERY DETERMINATION": With respect to any defaulted Home Equity
Loan or REO Property (other than a Home Equity Loan purchased by the Seller, the
Depositor or the Servicer), a determination made by the Servicer that all
recoveries which the Servicer, in its reasonable business judgment, expects to
be finally recoverable in respect thereof have been so recovered or that the
Servicer believes in its reasonable business judgment the cost of obtaining any
additional recoveries therefrom would exceed the amount of such recoveries. The
Servicer shall maintain records of each Final Recovery Determination.
"FINAL SCHEDULED DISTRIBUTION DATE": As set out in Section 2.08(d) hereof
with respect to each Certificate.
"FIRST MORTGAGE LOAN": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to any Property.
"FITCH": Fitch, Inc. or any successor thereto.
"FIXED RATE CERTIFICATES": Any of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class M-1 Certificates, Class M-2
Certificates and Class B Certificates.
"FIXED RATE INTEREST RATE CAP": With respect to any Distribution Date, a
rate per annum equal to the lesser of (x) the weighted average of the Net Coupon
Rates on the Group I Home Equity Loans as of the beginning of the related
Remittance Period and (y) the weighted average of the Net Coupon Rates on the
Home Equity Loans in the aggregate as of the beginning of the related Remittance
Period, adjusted as appropriate for day-counting conventions.
"FNMA": The Federal National Mortgage Association, a federally-chartered
and privately-owned corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor thereof.
"FNMA GUIDE": FNMA's Servicing Guide, as the same may be amended by FNMA
from time to time.
"GROUP I": With respect to the Home Equity Loans, the pool of Home Equity
Loans identified in the related Schedule of Home Equity Loans as having been
assigned to Group I in Schedule I-A hereto, including any Qualified Replacement
Mortgages delivered in replacement thereof. Group I refers, with respect to the
Conduit Home Equity Loans, to the Home Equity Loans listed in the Conduit
Schedule of Home Equity Loans that are also assigned to Group I in Schedule I-A
hereto, with respect to the Conduit II Home Equity Loans, to the Home Equity
Loans listed in the Conduit II Schedule of Home Equity Loans that are also
assigned to Group I in Schedule I-A hereto, and with respect to the Seller Home
Equity Loans, to the Home Equity Loans listed in the Seller Schedule of Home
Equity Loans that are also assigned to Group I in Schedule I-A hereto.
"GROUP I CERTIFICATES": Any of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
A-5 Certificates and the Class A-6 Certificates.
"GROUP I MONTHLY REMITTANCE AMOUNT": As of any Monthly Remittance Date, the
sum, without duplication, of (i) all interest received (including any
Delinquency Advances) during the related Remittance Period with respect to the
Home Equity Loans in Group I (net of the Group I Servicing Fee), (ii) all
Compensating Interest paid by the Servicer on such Monthly Remittance Date with
respect to Group I, (iii) the portion of the Loan Purchase Price amounts, and
Substitution Amounts relating to interest on the Home Equity Loans in Group I
paid by CHEC or the Servicer on or prior to such Monthly Remittance Date, (iv)
the interest portion of all Net Liquidation Proceeds actually collected by the
Servicer with respect to the Home Equity Loans in Group I during the related
Remittance Period, (v) the principal actually collected by the Servicer with
respect to Home Equity Loans in Group I during the related Remittance Period,
(vi) the outstanding principal balance of each Home Equity Loan in Group I that
was purchased from the Trustee on or prior to such Monthly Remittance Date, to
the extent such outstanding principal balance was actually deposited in the
Principal and Interest Account on or prior to such Monthly Remittance Date,
(vii) any Substitution Amounts relating to principal delivered by CHEC in
connection with a substitution of a Home Equity Loan in Group I, to the extent
such Substitution Amounts were actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date, (viii) the principal
portion of all Net Liquidation Proceeds actually collected by the Servicer with
respect to Home Equity Loans in Group I during the related Remittance Period (to
the extent such Net Liquidation Proceeds related to principal) and (ix) the
amount of investment losses required to be deposited pursuant to Section
8.08(b).
"GROUP I PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date, the
excess of (i) the Senior Principal Distribution Amount for such Distribution
Date over (ii) the Group II Principal Distribution Amount for such Distribution
Date.
"GROUP II": With respect to the Home Equity Loans, the pool of Home Equity
Loans identified in the related Schedule of Home Equity Loans as having been
assigned to Group II in Schedule I-B hereto, including any Qualified Replacement
Mortgages delivered in replacement thereof. Group II refers, with respect to the
Conduit Home Equity Loans, to the Home Equity Loans listed in the Conduit
Schedule of Home Equity Loans that are also assigned to Group II in Schedule I-B
hereto, with respect to the Conduit II Home Equity Loans, to the Home Equity
Loans listed in the Conduit II Schedule of Home Equity Loans that are also
assigned to Group II in Schedule I-B hereto, and with respect to the Seller Home
Equity Loans, to the Home Equity Loans listed in the Seller Schedule of Home
Equity Loans that are also assigned to Group II in Schedule I-B hereto.
"GROUP II CERTIFICATES": The Class A-7 Certificates.
"GROUP II MONTHLY REMITTANCE AMOUNT": As of any Monthly Remittance Date,
the sum, without duplication, of (i) all interest received (including any
Delinquency Advances) during the related Remittance Period with respect to the
Home Equity Loans in Group II (net of the Group II Servicing Fee), (ii) all
Compensating Interest paid by the Servicer on such Monthly Remittance Date with
respect to Group II, (iii) the portion of the Loan Purchase Price amounts and
Substitution Amounts relating to interest on the Home Equity Loans in Group II
paid by CHEC or the Servicer on or prior to such Monthly Remittance Date, (iv)
the interest portion of all Net Liquidation Proceeds actually collected by the
Servicer with respect to the Home Equity Loans in Group II during the related
Remittance Period, (v) the principal actually collected by the Servicer with
respect to Home Equity Loans in Group II during the related Remittance Period,
(vi) the outstanding principal balance of each Home Equity Loan in Group II that
was purchased from the Trustee on or prior to such Monthly Remittance Date, to
the extent such outstanding principal balance was actually deposited in the
Principal and Interest Account on or prior to such Monthly Remittance Date,
(vii) any Substitution Amounts relating to principal delivered by CHEC in
connection with a substitution of a Home Equity Loan in Group II, to the extent
such Substitution Amounts were actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date, (viii) the principal
portion of all Net Liquidation Proceeds actually collected by the Servicer with
respect to Home Equity Loans in Group II during the related Remittance Period
(to the extent such Net Liquidation Proceeds related to principal) and (ix) the
amount of investment losses required to be deposited pursuant to Section
8.08(b).
"GROUP II PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date, the
lesser of (A) the greater of (i) the product of (x) the Senior Principal
Distribution Amount for such Distribution Date and (y) a fraction, the numerator
of which is the aggregate Loan Balance of the Group II Home Equity Loans as of
the last day of the related Remittance Period, and the denominator of which is
the aggregate Loan Balance of all the Home Equity Loans as of the last day of
the related Remittance Period, and (ii) the excess, if any, of (x) the
Certificate Principal Balance of the Class A-7 Certificates immediately prior to
such Distribution Date over (y) the aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related Remittance Period or (B) the
Senior Principal Distribution Amount.
"HIGHEST LAWFUL RATE": As defined in Section 11.13 hereof.
"HOME EQUITY LOAN ASSETS": The meaning set forth under the heading
"CONVEYANCE" herein.
"HOME EQUITY LOAN GROUP" or "GROUP": Group I or Group II, as the case may
be. References herein to the related Class of Offered Certificates, when used
with respect to a Home Equity Loan Group, shall mean (A) in the case of Group I,
the Group I Certificates and (B) in the case of Group II, the Group II
Certificates.
"HOME EQUITY LOANS": The Conduit Home Equity Loans, the Conduit II Home
Equity Loans and/or the Seller Home Equity Loans, as applicable, together with
any Qualified Replacement Mortgages substituted therefor in accordance with this
Agreement, as from time to time are held as a part of the Trust Estate. Where
applicable, the term "Home Equity Loan" includes (i) the terms "First Mortgage
Loan" and "Second Mortgage Loan", and (ii) any Home Equity Loan which is
Delinquent, relates to a foreclosure or relates to a Property which is REO
Property prior to such REO Property's disposition by the Trust. Any home equity
loan which, although intended by the parties hereto to have been, and which
purportedly was, transferred and assigned to the Trust by the Depositor, in fact
was not transferred and assigned to the Trust for any reason whatsoever,
including, without limitation, the incorrectness of the statement set forth in
Section 3.04(b)(x) hereof with respect to such home equity loan, shall
nevertheless be considered a "Home Equity Loan" for all purposes of this
Agreement.
"INDIRECT PARTICIPANT": Any financial institution for whom any Direct
Participant holds an interest in an Offered Certificate.
"INSURANCE POLICY": Any hazard, flood, title or primary mortgage insurance
policy relating to a Home Equity Loan plus any amount remitted under Section
8.11 hereof.
"INTEREST PERIOD": With respect to each Distribution Date and (i) the Fixed
Rate Certificates, the period from the first day of the calendar month preceding
the month of the Distribution Date through the last day of the calendar month
with interest accruing on the basis of a 360-day year consisting of twelve
30-day months; and (ii) the Variable Rate Certificates, the period from and
including the preceding Distribution Date (or the Startup Day in the case of the
first Distribution Date) to and including the day preceding the related
Distribution Date with interest accruing on the basis of the actual number of
days elapsed in the related Interest Period and a year of 360 days.
"LIBOR": With respect to any Interest Period for the Class A-7
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loans to leading European banks.
"LIBOR DETERMINATION DATE": With respect to any Interest Period for the
Class A-7 Certificates, the second London Business Day preceding the
commencement of such Interest Period.
"LIQUIDATED LOAN": A Home Equity Loan as to which a Final Recovery
Determination has been made.
"LIQUIDATION PROCEEDS": With respect to any Liquidated Loan, all amounts
(including the proceeds of any Insurance Policy) recovered by the Servicer in
connection with such Liquidated Loan, whether through trustee's sale,
foreclosure sale or otherwise.
"LOAN BALANCE": With respect to each Home Equity Loan and as of any date of
determination, the actual outstanding principal balance thereof on the Cut-Off
Date or relevant Replacement Cut-Off Date with respect to a Qualified
Replacement Mortgage less any principal payments relating to such Home Equity
Loan included in previous Monthly Remittance Amounts, PROVIDED, HOWEVER, that
the Loan Balance for any Home Equity Loan that has become a Liquidated Loan
shall be zero as of the first day of the Remittance Period following the
Remittance Period in which such Home Equity Loan becomes a Liquidated Loan, and
at all times thereafter.
"LOAN PURCHASE PRICE": With respect to any Home Equity Loan purchased from
the Trust on or prior to a Monthly Remittance Date pursuant to Section 3.04,
3.06(b) or 8.10(b) hereof, an amount equal to the outstanding principal balance
of such Home Equity Loan as of the date of purchase (assuming that the Monthly
Remittance Amount remitted by the Servicer on such Monthly Remittance Date has
already been remitted), plus all accrued and unpaid interest on such Home Equity
Loan at the Coupon Rate to but not including the date of such purchase together
with (without duplication) the aggregate amounts of (i) all unreimbursed
Delinquency Advances and Servicing Advances theretofore made with respect to
such Home Equity Loan, (ii) all Delinquency Advances which the Servicer has
theretofore failed to remit with respect to such Home Equity Loan and (iii) all
reimbursed Delinquency Advances and Servicing Advances to the extent that
reimbursement is not made from the Mortgagor.
"LOAN-TO-VALUE RATIO": As of any particular date (i) with respect to any
First Mortgage Loan, the percentage obtained by dividing the Appraised Value
into the original principal balance of the Note relating to such First Mortgage
Loan and (ii) with respect to any Second Mortgage Loan, the percentage obtained
by dividing the Appraised Value as of the date of origination of such Second
Mortgage Loan into an amount equal to the sum of (a) the remaining principal
balance of the Senior Lien relating to such Second Mortgage Loan as of the date
of origination of the related Second Mortgage Loan and (b) the original
principal balance of the Note relating to such Second Mortgage Loan.
"LONDON BUSINESS DAY": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"MANUFACTURED HOME": A unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Mortgagor under the related
Home Equity Loan treated as real estate under applicable state law.
"MAXIMUM RATE": With respect to any Home Equity Loan in Group II, means the
maximum rate at which interest may accrue on such Home Equity Loan.
"MONTHLY PAYMENT": With respect to any Home Equity Loan and any Remittance
Period, the payment of principal, if any, and interest due on the Due Date in
such Remittance Period pursuant to the related Note.
"MONTHLY REMITTANCE AMOUNT": The sum of the Group I Monthly Remittance
Amount and the Group II Monthly Remittance Amount.
"MONTHLY REMITTANCE DATE": The 18th day of each month, or if the 18th day
is not a Business Day, the preceding Business Day.
"MOODY'S": Xxxxx'x Investors Service, Inc. or any successor thereto.
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Note.
"MORTGAGOR": Each obligor on a Note.
"NET COUPON RATE": With respect to any Home Equity Loan in Group I or Group
II, means a rate per annum equal to the Coupon Rate of such Home Equity Loan
minus the sum of (i) the rate at which the Servicing Fee accrues and (ii) the
rate at which the Trustee Fee accrues (expressed as a per annum percentage of
the aggregate Loan Balance of the Home Equity Loans in Group I or Group II, as
applicable).
"NET LIQUIDATION PROCEEDS": As to any Liquidated Loan, Liquidation Proceeds
net of expenses incurred by the Servicer (including unreimbursed Servicing
Advances) in connection with the liquidation of such Home Equity Loan and
unreimbursed Delinquency Advances relating to such Home Equity Loan. In no event
shall Net Liquidation Proceeds with respect to any Liquidated Loan be less than
zero.
"NET RATE CAP CARRYOVER": Is equal to the sum of (A) the excess of (1) the
amount of interest that the Class A-5, Class M-1, Class M-2 or Class B
Certificates, as applicable, would otherwise be entitled to receive on the
Distribution Date had its interest rate been calculated at the respective
Certificate Rate without regard to the Fixed Rate Interest Rate Cap for such
Class and for the Distribution Date over (2) the amount of interest payable on
such Class at the respective Certificate Rate for such Class for the
Distribution Date and (B) the excess described in clause A for all previous
Distribution Dates (including any interest accrued on that amount at the related
Certificate Rate without regard to the Fixed Rate Interest Rate Cap) not
previously paid to the related Class of Certificates.
"NONRECOVERABLE ADVANCE" means with respect to any Home Equity Loan for
which a Final Recovery Determination has been made, any Delinquency Advance or
Servicing Advance previously made and not reimbursed from proceeds on the
related Home Equity Loan or under Section 7.03(b) clause C.15 hereof which the
Servicer has determined, in good faith business judgment, as evidenced by an
Officer's Certificate delivered to the Trustee no later than the Business Day
following such determination, would not be ultimately recovered.
"NOTE": The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Home Equity Loan.
"OC FLOOR": An amount equal to 0.50% of the Pool Balance as of the Cut-Off
Date.
"OFFERED CERTIFICATE": Any one of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
A-5 Certificates, the Class A-6 Certificates, the Class A-7 Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class B Certificates.
"OFFICER'S CERTIFICATE": A certificate signed by any Authorized Officer of
any Person delivering such certificate and delivered to the Trustee.
"OPERATIVE DOCUMENTS": Collectively, this Agreement, the Certificates and
the Custodial Agreement.
"OPINION OF COUNSEL": A written opinion of counsel acceptable, in form and
substance, to the Trustee and delivered to the Trustee and the Rating Agencies.
"ORIGINAL AGGREGATE LOAN BALANCE": The aggregate Loan Balances of all Home
Equity Loans as of the Cut-Off Date, which is $___________.
"OUTSTANDING": With respect to all Certificates of a Class, as of any date
of determination, all such Certificates theretofore executed and delivered
hereunder except:
(i) Certificates theretofore canceled by the Registrar or delivered to
the Registrar for cancellation;
(ii) Certificates or portions thereof for which full and final payment
of money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent in trust for the Owners of such Certificates;
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement,
unless proof satisfactory to the Trustee is presented that any such
Certificates are held by a bona fide purchaser;
(iv) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued as provided for in Section
5.05 hereof; and
(v) Certificates as to which the Trustee has made the final
distribution thereon, whether or not such Certificate is ever returned to
the Trustee.
"OVERCOLLATERALIZATION AMOUNT": With respect to each Distribution Date, the
excess, if any, of (1) the aggregate Loan Balance of the Home Equity Loans as of
the close of business on the last day of the preceding Remittance Period over
(2) the aggregate outstanding Certificate Principal Balances of the Offered
Certificates as of the Distribution Date (after taking into account the payment
of the Principal Distribution Amount on the Distribution Date).
"OWNER" or "CERTIFICATEHOLDER": The Person in whose name a Certificate is
registered in the Register.
"PAYING AGENT": Initially, the Trustee, and thereafter, the Trustee or any
other Person that meets the eligibility standards for the Paying Agent specified
in Section 11.15 hereof and is authorized by the Trustee and the Depositor to
make payments on the Certificates on behalf of the Trustee.
"PERCENTAGE INTEREST": With respect to any Offered Certificates of any
Class, a fraction, expressed as a decimal, the numerator of which is the
principal balance represented by such Offered Certificate as of the Startup Day
and the denominator of which is the Certificate Principal Balance represented by
all the Offered Certificates of such Class as of the Startup Day. With respect
to the Class X-IO or Class R Certificates, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Certificate,
all of which shall total 100% with respect to the related Class.
"PERSON": Any individual, corporation, limited partnership, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"POOL BALANCE": With respect to any date, the aggregate of the Loan
Balances of all Home Equity Loans as of such date.
"PREPAYMENT": Any payment of principal of a Home Equity Loan which is
received by the Servicer which is not a Scheduled Principal Payment and which is
not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment, the portion of Substitution Amounts representing principal,
the portion of the Loan Purchase Price of any Home Equity Loan purchased from
the Trust pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof representing
principal and the proceeds of any Insurance Policy which are to be applied as a
payment of principal on the related Home Equity Loan shall be deemed to be
Prepayments for all purposes of this Agreement.
"PRESERVATION EXPENSES": Expenditures made by the Servicer in connection
with a foreclosed Home Equity Loan prior to the liquidation thereof, including,
without limitation, expenditures for real estate property taxes, hazard
insurance premiums, property restoration or preservation.
"PRINCIPAL AND INTEREST ACCOUNT": The principal and interest account
created by the Servicer pursuant to Section 8.08(a) hereof. The Principal and
Interest Account shall be an Eligible Account.
"PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date, the lesser of
(a) the aggregate Certificate Principal Balances of the Offered Certificates
immediately preceding such Distribution Date and (b) the sum of (i) the
Aggregate Principal Amount for such Distribution Date minus the Excess
Overcollateralization Amount for such Distribution Date and (ii) the
Subordination Increase Amount for such Distribution Date.
"PROHIBITED TRANSACTION": The meaning set forth from time to time in the
definition thereof at Section 860F(a)(2) of the Code (or any successor statute
thereto) and applicable to the Trust.
"PROPERTY": The underlying property securing a Home Equity Loan.
"PROSPECTUS": The Depositor's Prospectus dated _________ __, 20__
constituting part of the Registration Statement.
"PROSPECTUS SUPPLEMENT": The Centex Home Equity Loan Trust 200_-__
Prospectus Supplement dated _________ __, 20__ to the Prospectus.
"QUALIFIED LIQUIDATION": The meaning set forth from time to time in the
definition thereof at Section 860F(a)(4) of the Code (or any successor statute
thereto) and applicable to the Trust.
"QUALIFIED MORTGAGE": The meaning set forth from time to time in the
definition thereof at Section 860G(a)(3) of the Code (or any successor statute
thereto) and applicable to the Trust.
"QUALIFIED REPLACEMENT MORTGAGE": A Home Equity Loan substituted for
another pursuant to Section 3.04 and 3.06(b) hereof, which (i) has a Coupon Rate
at least equal to the Coupon Rate of the Home Equity Loan being replaced, (ii)
is secured by Property that is of the same or better property type as, or is a
single family dwelling and the same or better occupancy status as, the Property
securing the Home Equity Loan being replaced or is a primary residence, (iii)
shall mature no later than the latest Final Scheduled Distribution Date with
respect to the related Home Equity Loan Group, (iv) has a Loan-to-Value Ratio as
of the Replacement Cut-Off Date no higher than the Loan-to-Value Ratio of the
replaced Home Equity Loan at such time, (v) shall be of the same or higher
credit quality classification (determined in accordance with the Seller's credit
underwriting guidelines set forth in the Seller's underwriting manual) as the
Home Equity Loan which such Qualified Replacement Mortgage replaces, (vi) shall
be a First Mortgage Loan if the Home Equity Loan which such Qualified
Replacement Mortgage replaces was a First Mortgage Loan and shall be a First
Mortgage Loan or Second Mortgage Loan if the Home Equity Loan which such
Qualified Replacement Mortgage replaces was a Second Mortgage Loan, (vii) has an
outstanding principal balance as of the related Replacement Cut-Off Date equal
to or less than the outstanding principal balance of the replaced Home Equity
Loan as of such Replacement Cut-Off Date, (viii) shall not provide for a
"balloon" payment if the related Home Equity Loan did not provide for a
"balloon" payment (and if such related Home Equity Loan provided for a "balloon"
payment, such Qualified Replacement Mortgage shall have an original maturity of
not less than the original maturity of such related Home Equity Loan), (ix)
shall be a fixed rate Home Equity Loan if the Home Equity Loan being replaced is
in Group I or an adjustable rate Home Equity Loan if the Home Equity Loan being
replaced is in Group II, (x) satisfies the criteria set forth from time to time
in the definition thereof at Section 860G(a)(4) of the Code (or any successor
statute thereto) and applicable to the Trust, (xi) satisfies the representations
and warranties set forth in Section 3.04(b) hereof, (xii) shall not be 30 days
or more Delinquent and (xiii) if such Home Equity Loan being replaced is in
Group II, shall adjust based on the same index as, have no lower margin than,
have the same interval between adjustment dates as and have a maximum Coupon
Rate no lower than, and a minimum Coupon Rate no lower than, the Home Equity
Loan being replaced.
"RATING AGENCIES": Collectively, Xxxxx'x, Fitch and Standard & Poor's.
"REALIZED LOSS": As to any Liquidated Loan (or, in the case of a Cram Down
Loss, a Home Equity Loan that is not a Liquidated Loan), the amount (not less
than zero), if any, by which (A) the sum of (x) the Loan Balance thereof as of
the date of liquidation, (y) the amount of accrued but unpaid interest thereon
and (z) the amount of any Cram Down Loss with respect thereto is in excess of
(B) the Net Liquidation Proceeds, if any, realized thereon.
"RECORD DATE": With respect to (i) any Distribution Date and each Class of
Fixed Rate Certificates and the Class R Certificates, the last Business Day of
the calendar month immediately preceding the calendar month in which such
Distribution Date occurs and (ii) any Distribution Date and the Variable Rate
Certificates and the Class X-IO Certificates, the Business Day immediately
preceding such Distribution Date, or if definitive Variable Rate Certificates
have been issued, the last Business Day of the calendar month immediately
preceding the calendar month in which such Distribution Date occurs.
"REFERENCE BANKS": Bankers Trust Company, Barclays Bank PLC, The Bank of
Tokyo and National Westminster Bank PLC, PROVIDED that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any leading banks
selected by CHEC which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which are not Affiliates of the Seller, (iii) whose quotations
appear on Telerate Page 3750 on the relevant LIBOR Determination Date and (iv)
which have been designated as such by the Seller.
"REGISTER": The register maintained by the Registrar in accordance with
Section 5.04 hereof, in which the names of the Owners are set forth.
"REGISTRAR": The Trustee, acting in its capacity as Registrar appointed
pursuant to Section 5.04 hereof, or any duly appointed and eligible successor
thereto.
"REGISTRATION STATEMENT": The Registration Statement filed by the Depositor
with the Commission (Registration Number 333-93255), including all amendments
thereto and including the Prospectus and Prospectus Supplement relating to the
Offered Certificates.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC I": The segregated group of assets consisting of all of the assets
of the Trust Estate other than the Supplemental Interest Reserve Account and the
REMIC II Regular Interests (as defined in Section 2.08) hereof and constituting
a REMIC created hereunder.
"REMIC II": The segregated group of assets consisting of the REMIC II
Regular Interests (as defined in Section 2.08 hereof) and constituting a REMIC
created hereunder.
"REMIC OPINION": As defined in Section 3.04 hereof.
"REMIC PROVISIONS": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and revenue rulings promulgated thereunder, as the foregoing may be
in effect from time to time.
"REMITTANCE PERIOD": With respect to each Monthly Remittance Date, the
calendar month immediately preceding such Monthly Remittance Date.
"REO PROPERTY": A Property acquired by the Servicer on behalf of the Trust
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Home Equity Loan.
"REPLACEMENT CUT-OFF DATE": With respect to any Qualified Replacement
Mortgage, the opening of business of the first day of the calendar month in
which such Qualified Replacement Mortgage is conveyed to the Trust.
"REPRESENTATION LETTER": Letters to, or agreements with, the Depository to
effectuate a book-entry system with respect to the Offered Certificates
registered in the Register under the nominee name of the Depository.
"REQUIRED OVERCOLLATERALIZATION AMOUNT": As to the first five Distribution
Dates, $0.00. As to any other Distribution Date (1) prior to the Stepdown Date,
the product of (x) _____% and (y) the Pool Balance as of the Cut-Off Date; and
(2) on and after the Stepdown Date, the greater of (i) the lesser of (x) the
product of ____% and the Pool Balance as of the Cut-Off Date and (y) the product
of ____% and the Pool Balance as of the end of the related Remittance Period and
(ii) the OC Floor; provided, however, that on each Distribution Date during the
continuance of a Trigger Event the Required Overcollateralization Amount will
equal the Required Overcollateralization Amount in effect as of the Distribution
Date immediately preceding the date on which such Trigger Event first occurred.
"SCHEDULE OF HOME EQUITY LOANS": The Conduit Schedule of Home Equity Loans,
the Conduit II Schedule of Home Equity Loans and the Seller Schedule of Home
Equity Loans, Schedule I-A hereto or Schedule I-B hereto, as the context may
require.
"SCHEDULED PRINCIPAL PAYMENT": As of any date of calculation, with respect
to a Home Equity Loan, the then stated scheduled monthly installment of
principal payable thereunder which, if timely paid, would result in the full
amortization of principal over the term thereof (or, in the case of a "balloon"
Note, the term to the nominal maturity date for amortization purposes, without
regard to the actual maturity date), without taking into account any Prepayment
made on such Home Equity Loan during the then-current Remittance Period.
"SECOND MORTGAGE LOAN": A Home Equity Loan which constitutes a second
priority mortgage lien with respect to the related Property.
"SECURITIES ACT": The Securities Act of 1933, as amended.
"SELLER": Centex Home Equity Company, LLC, a Delaware limited liability
company, formerly Centex Credit Corporation, a Nevada corporation.
"SELLER HOME EQUITY LOANS": The home equity loans listed on the Seller
Schedule of Home Equity Loans.
"SELLER SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity Loans
attached as Schedule I-C hereto.
"SELLERS": The Seller, the Conduit Seller and the Conduit Seller II.
"SENIOR CERTIFICATE": Any one of the Class X-0, Xxxxx X-0, Class A-3, Class
A-4, Class A-5, Class A-6 or Class A-7 Certificates.
"SENIOR ENHANCEMENT PERCENTAGE": As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate Certificate Principal Balances of the Subordinate Certificates and
(ii) the Overcollateralization Amount (in each case, after taking into account
the distribution of the Principal Distribution Amount (excluding any
Subordination Increase Amount) on such Distribution Date) and the denominator of
which is the Pool Balance as of the last day of the related Remittance Period.
"SENIOR LIEN": With respect to any Second Mortgage Loan, the home equity
loan relating to the corresponding Property having a first priority lien.
"SENIOR PRINCIPAL DISTRIBUTION AMOUNT": As to (a) any Distribution Date
prior to the Stepdown Date or during the continuance of a Trigger Event, the
lesser of (i) 100% of the Principal Distribution Amount and (ii) the aggregate
Certificate Principal Balances of the Senior Certificates immediately prior to
such Distribution Date, and (b) any other Distribution Date, the lesser of (x)
100% of the Principal Distribution Amount and (y) the excess, if any, of (i) the
aggregate Certificate Principal Balances of the Senior Certificates immediately
prior to such Distribution Date over (ii) the lesser of (x) the product of ____%
and the Pool Balance as of the last day of the related Remittance Period and (y)
the Pool Balance as of the last day of the related Remittance Period minus the
OC Floor.
"SERVICER": Centex Home Equity Company, LLC, a Delaware limited liability
company, formerly Centex Credit Corporation, a Nevada corporation, and its
permitted successors and assigns.
"SERVICER TERMINATION EVENT": As defined in Section 8.20(a) hereof.
"SERVICING ADVANCE": As defined in Section 8.09(b) and Section 8.13(a)
hereof.
"SERVICING FEE": With respect to any Home Equity Loan Group and a
Remittance Period, an amount retained by the Servicer as compensation for
servicing and administration duties relating to the Home Equity Loans in such
Home Equity Loan Group pursuant to Section 8.15 hereof and equal to one month's
interest at 0.50% per annum of the then aggregate outstanding Loan Balance of
such Home Equity Loans as of the first day of each Remittance Period payable on
a monthly basis; provided, however, that if a successor Servicer is appointed
pursuant to Section 8.20 hereof, the Servicing Fee shall be the amount as agreed
upon by the Trustee and the successor Servicer, and the per annum rate at which
the Servicing Fee is calculated shall not exceed 0.50% per annum.
"60-DAY DELINQUENT LOAN": With respect to any Remittance Period, and
without duplication, (i) all REO Properties as of the last day of such
Remittance Period, (ii) each Home Equity Loan with respect to which any portion
of a Monthly Payment is, as of the last day of such Remittance Period, two
months (calculated from Due Date with respect to such Home Equity Loan to Due
Date) or more past due (without giving effect to any grace period), (iii) each
Home Equity Loan in foreclosure as of the last day of such Remittance Period and
(iv) each Home Equity Loan described in clause (ii) that is also in bankruptcy.
"60+ DELINQUENCY PERCENTAGE (ROLLING THREE MONTH)": With respect to any
Distribution Date, the average of the percentage equivalents of the fractions
determined for each of the three immediately preceding Remittance Periods (or
such fewer number of Remittance Periods since the Cut-Off Date, in the case of
the first two Determination Dates) the numerator of each of which is equal to
the sum of (without duplication) the aggregate Loan Balance of 60-Day Delinquent
Loans for such Remittance Period, and the denominator of which is the Loan
Balance of all of the Home Equity Loans as of the end of such Remittance Period.
"STANDARD & POOR'S": Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
"STARTUP DAY": _________, __, 200_.
"STEPDOWN DATE": The later to occur of (1) the earlier to occur of (A) the
Distribution Date in November 2004 and (B) the Distribution Date on which the
aggregate Certificate Principal Balances of the Senior Certificates is reduced
to zero, and (2) the first Distribution Date on which the Senior Enhancement
Percentage (after giving effect to the distribution of the Principal
Distribution Amount on such Distribution Date) is at least equal to ____%.
"SUBORDINATE CERTIFICATES": Any of the Class M-1, Class M-2 or Class B
Certificates.
"SUBORDINATION DEFICIENCY": As to any Distribution Date, the excess, if
any, of (1) the Required Overcollateralization Amount for such Distribution Date
over (2) the Overcollateralization Amount for such Distribution Date after
giving effect to the distribution of the Aggregate Principal Amount on such
Distribution Date.
"SUBORDINATION INCREASE AMOUNT": As to the first five Distribution Dates,
$0.00. As to any subsequent Distribution Date, the lesser of (1) the
Subordination Deficiency and (2) the Excess Interest.
"SUB-SERVICER": Any Person with whom the Servicer has entered into a
Sub-Servicing Agreement and who satisfies any requirements set forth in Section
8.03 hereof in respect of the qualification of a Sub-Servicer.
"SUB-SERVICING AGREEMENT": The written contract between the Servicer and
any Sub-Servicer relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
"SUBSTITUTION AMOUNT": With respect to the substitution of any Qualified
Replacement Mortgage for any Home Equity Loan, as of the related Replacement
Cut-Off Date, the excess, if any, of the outstanding principal balance of such
Home Equity Loan over the outstanding principal balance of the Qualified
Replacement Mortgage, together with the aggregate amount of all unreimbursed
Delinquency Advances and unreimbursed Servicing Advances made, and all accrued
and unpaid interest, with respect to such Home Equity Loan.
"SUPPLEMENTAL INTEREST RESERVE FUND": The Supplemental Interest Reserve
Fund established and maintained as described in Section 7.04.
"TANGIBLE NET WORTH": Shall mean the difference between: (A) the tangible
assets of the Seller or Servicer, as applicable, and its Affiliates calculated
in accordance with generally accepted accounting principles, as reduced by
adequate reserves in each case where a reserve is appropriate; and (B) all
indebtedness, including subordinated debt, of the Seller or Servicer, as
applicable, and its Affiliates; provided, however, that (i) intangible assets
such as patents, trademarks, trade names, copyrights, licenses, good will,
organization costs, advances or loans to, or receivables from, directors,
officers, employees or affiliates, prepaid assets, amounts relating to covenants
not to compete, pension assets, deferred charges or treasury stock of any
securities unless the same are readily marketable in the United States of
America or are entitled to be used as a credit against federal income tax
liabilities, shall not be included in the calculation of (A) above, (ii)
securities included as tangible assets shall be valued at their current market
price or cost, whichever is lower and (iii) any write-up in book value of any
assets shall not be taken into account.
"TAX MATTERS PERSON": The Person designated pursuant to Section 11.18
hereof to act as the Tax Matters Person under the Code (or where the context
requires, the Trustee acting as agent for the Tax Matters Person).
"TELERATE PAGE 3750": The display designated as page "3750" on the Bridge
Telerate Service (or such other page as may replace page 3750 on that report for
the purpose of displaying London interbank offered rates of major banks).
"TERMINATION PRICE": Means, with respect to Sections 9.02 and 9.03 hereof,
and on any date of determination thereof, an amount equal to the sum of (w) the
greater of (A) the outstanding Certificate Principal Balances for the Offered
Certificates and (B) the fair market value of the Home Equity Loans
(disregarding accrued interest), (x) one month's interest on such amount
(calculated at the Adjusted Certificate Rate), (y) all Reimbursement Amounts and
(z) the sum of the aggregate amount of any unreimbursed Delinquency Advances,
unreimbursed Servicing Advances, unreimbursed Compensating Interest and any
Delinquency Advances which the Servicer has theretofore failed to remit.
"TRANSITION EXPENSES": Expenses incurred by the Trustee in connection with
the transfer of servicing upon the termination of the Servicer for a Servicer
Termination Event; provided that the amount shall not exceed $50,000 in any one
calendar year (and no more than $100,000 in the aggregate).
"TRIGGER EVENT": The existence of a Delinquency Event.
"TRUST": Centex Home Equity Loan Trust 200_-__, the trust created under
this Agreement which shall be comprised of two sub-trusts; one for Group I and
any Trust assets allocable to such Group I and the other for Group II and any
Trust assets allocable to such Group II.
"TRUST ESTATE": (a) The Home Equity Loan Assets and (b) such amounts as may
be held by the Trustee in the Certificate Account, together with investment
earnings on such amounts, and such amounts as may be held in the name of the
Trustee in the Principal and Interest Account, if any, inclusive of investment
earnings thereon, whether in the form of cash, instruments, securities or other
properties (including any Eligible Investments held by the Servicer).
"TRUSTEE": Bank One, National Association, a national banking association,
not in its individual capacity but solely as Trustee under this Agreement, and
any successor hereunder.
"TRUSTEE FEE": The fee payable monthly to the Trustee on each Distribution
Date in an amount equal to $1,000.00.
"TRUSTEE REIMBURSABLE EXPENSES": As of any Distribution Date, the sum of
(a) any Trustee Fee and Transition Expenses not paid pursuant to clauses (i) or
(iv) of Section 7.03(b) on such Distribution Date and (b) any amounts owed to
the Trustee pursuant to Sections 2.05, 6.12, 7.06, 8.20(o), 10.07, 10.13 and
11.16(a)(v) hereof, and, if the Trustee is acting as Custodian, any related
custodial fees (including all attorney fees and expenses).
"UNDERWRITERS": Xxxxxxx Xxxxx Xxxxxx Inc., Banc of America Securities LLC,
Credit Suisse First Boston Corporation, and Xxxxxx Brothers Inc.
"VARIABLE RATE CERTIFICATES": The Class A-7 Certificates.
"VOTING RIGHTS": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X-IO
Certificates (such Voting Rights to be allocated among the Owners of
Certificates of such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class R
Certificates in the aggregate, or if separate Class R-1 and Class R-2
Certificates are issued, 0.50% to each such Class (such Voting Rights to be
allocated among the Owners of Certificates of each such Class in accordance with
their respective Percentage Interests), and (c) the remaining Voting Rights
shall be allocated among Owners of the Classes of Offered Certificates in
proportion to the Certificate Principal Balances of their respective Offered
Certificates on such date.
"WAC EXCESS": The sum of (a) the Net Rate Cap Carryover allocable to each
of the Class A-5, Class M-1, Class M-2 and Class B Certificates, respectively,
and (b) the Class A-7 Certificateholders' Interest Index Carryover allocable to
the Class A-7 Certificates.
"WEIGHTED AVERAGE CERTIFICATE RATE": As to the Offered Certificates and any
Distribution Date, the weighted average of the Class A-l Certificate Rate, the
Class A-2 Certificate Rate, the Class A-3 Certificate Rate, the Class A-4
Certificate Rate, the Class A-5 Certificate Rate, the Class A-6 Certificate
Rate, the Class A-7 Certificate Rate, the Class M-1 Certificate Rate, the Class
M-2 Certificate Rate and the Class B Certificate Rate, weighted by,
respectively, the Certificate Principal Balance of each such Class of Offered
Certificates as of such Distribution Date prior to taking into account any
distributions to be made on such Distribution Date.
Section 1.02. USE OF WORDS AND PHRASES.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to this Agreement as a whole and not solely to
the particular section of this Agreement in which any such word is used. The
definitions set forth in Section 1.01 hereof include both the singular and the
plural. Whenever used in this Agreement, any pronoun shall be deemed to include
both singular and plural and to cover all genders.
Section 1.03. CAPTIONS, TABLE OF CONTENTS.
The captions or headings in this Agreement and the Table of Contents are
for convenience only and in no way define, limit or describe the scope and
intent of any provisions of this Agreement.
Section 1.04. OPINIONS.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Certificates may be qualified to the extent that
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general principles of equity (whether considered in a proceeding or action in
equity or at law) and may state that no opinion is expressed on the availability
of the remedy of specific enforcement, injunctive relief or any other equitable
remedy. Any opinion required to be furnished by any Person hereunder must be
delivered by counsel upon whose opinion the addressee of such opinion may
reasonably rely, and such opinion may state that it is given in reasonable
reliance upon an opinion of another, a copy of which must be attached,
concerning the laws of a foreign jurisdiction. Any opinion delivered hereunder
shall be addressed to the Rating Agencies and the Trustee.
END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01. ESTABLISHMENT OF THE TRUST.
The parties hereto do hereby create and establish, pursuant to the laws of
the State of New York and this Agreement, the Trust, which, for convenience,
shall be known as "Centex Home Equity Loan Trust 200_-__" and which shall
contain two subtrusts.
Section 2.02. OFFICE.
The office of the Trust shall be in care of the Trustee, addressed to Bank
One, National Association, at its Corporate Trust Office.
Section 2.03. PURPOSES AND POWERS.
The purpose of the Trust is to engage in the following activities and only
such activities: (i) the issuance of the Certificates and the acquiring, owning
and holding of Home Equity Loans and the Trust Estate in connection therewith;
(ii) activities that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith, including the
investment of moneys in accordance with this Agreement; and (iii) such other
activities as may be required in connection with conservation of the Trust
Estate and distributions to the Owners; PROVIDED, HOWEVER, that nothing
contained herein shall permit the Trustee to take any action which would
adversely affect the status of any REMIC created hereunder.
Section 2.04. APPOINTMENT OF THE TRUSTEE; DECLARATION OF TRUST.
The Depositor hereby appoints the Trustee as trustee of the Trust effective
as of the Startup Day, to have all the rights, powers and duties set forth
herein. The Trustee hereby acknowledges and accepts such appointment, represents
and warrants its eligibility as of the Startup Day to serve as Trustee pursuant
to Section 10.08 hereof and declares that it will hold the Trust Estate in trust
upon and subject to the conditions set forth herein for the benefit of the
Owners.
Section 2.05. EXPENSES OF THE TRUST.
All expenses of the Trust, including (i) the fees and reimbursable expenses
of the Trustee in connection with the performance of its duties hereunder and
(ii) to the extent not set forth herein, any other expenses of the Trustee that
have been reviewed and approved by the Seller, which review shall not be
required in connection with the enforcement of a remedy by the Trustee resulting
from a default under this Agreement, shall be paid pursuant to Section 7.03(b).
Section 2.06. OWNERSHIP OF THE TRUST.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to be evidenced
by sale of the Certificates as described therein. Thereafter, transfer of any
ownership interest shall be governed by Sections 5.04 and 5.08 hereof.
Section 2.07. SITUS OF THE TRUST.
It is the intention of the parties hereto that the Trust constitute a trust
under the laws of the State of New York. The Trust will be created in the State
of New York. The Trust's only office will be at the office of the Trustee as set
forth in Section 2.02 hereof.
Section 2.08. DESIGNATION OF INTERESTS IN REMICS.
(a) The Trustee shall elect that each of REMIC I and REMIC II (which
together constitute the Trust) shall be treated as a REMIC under Section 860D of
the Code. Any inconsistencies or ambiguities in this Agreement or in the
administration of this Agreement shall be resolved in a manner that preserves
the validity of such REMIC elections. The assets of REMIC II shall include the
Home Equity Loans, the Accounts, any REO Property and any proceeds of the
foregoing. The REMIC II Regular Interests shall constitute the assets of REMIC
I.
(b) REMIC II will be evidenced by (x) the Class II-A-1, Class II-A-2, Class
II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7, Class II-M-1,
Class II-M-2, Class II-B, Class II-Q, Class II-S-F and Class II-S-A Interests
(the "REMIC II Regular Interests"), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in REMIC
II and (y) the Class R-2 Certificates, which are hereby designated as the single
"residual interest" in REMIC II (the REMIC II Regular Interests, together with
the Class R-2 Certificates, the "REMIC II Certificates"). The REMIC II Regular
Interests shall be recorded on the records of REMIC II as being issued to and
held by the Trustee on behalf of REMIC I.
Any Subordination Increase Amount for either Group that is used to pay an
amount to the Offered Certificates pursuant to Section 7.03(b)(C)(7) (the "Turbo
Amount") and that is payable from interest on the Home Equity Loans will not be
paid as principal to the REMIC II Regular Interests, but instead a portion of
the interest otherwise payable with respect to the Class II-Q Interest which
equals .01% of the Turbo Amount (and, to the extent .01% of the Turbo Amount
exceeds the interest payable on the Class II-Q Interest, a pro rata portion of
the interest payable on the Class II-S-F and Class II-S-A Interests equal to
such excess) will be payable as a reduction of the principal balances of the
Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class, II-M-1, Class II-M-2 and Class II-B Interests, in
the same manner in which the Turbo Amount is allocated among the Class X-0,
Xxxxx X-0, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class M-1,
Class M-2 and Class B Certificates, respectively, (and will be accrued and added
to principal on the Class II-Q, Class II-S-F and Class II-S-A Interests in the
same proportion as interest otherwise payable on such REMIC II Regular Interests
is used to reduce principal on other REMIC II Regular Interests as just
described).
Principal payments on the Home Equity Loans shall be allocated 99.99% to
the Class II-Q, Class II-S-F, and Class II-S-A Interests, and .01% to the Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class, II-M-1, Class II-M-2 and Class II-B Interests until paid in
full. The aggregate amount of principal allocated to the Class II-A-1, Class
II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7,
Class, II-M-1, Class II-M-2 and Class II-B Interests shall be apportioned among
such REMIC II Regular Interests in the same manner in which principal is payable
with respect to the Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class A-5, Class
A-6, Class A-7 Class M-1, Class M-2 and Class B Certificates, respectively. The
aggregate amount of principal allocated to the Class II-Q, Class II-S-F and
Class II-S-A Interests shall be allocated and apportioned among such Interests
first, to the Class II-S-F and Class II-S-A Interests the least amount of
principal necessary which can be applied to such Interests so that the ratio of
the principal balance of the Class II-S-F Interests to the principal balance of
the Class II-S-A Interests equals the ratio of the Group I Balance to the Group
II Balance (the "Balance Ratio"), and second, to the Class II-Q Interests.
Notwithstanding the above, principal payments on the Home Equity Loans that are
attributable to the Overcollateralization Release Amount shall be allocated to
the Class II-Q, Class II-S-F and Class II-S-A Interests (allocated first to the
Class II-Q Interests until paid in full, and second to the Class II-S-F and
Class II-S-A Interests, apportioned among such Interests such that the Balance
Ratio is maintained, until paid in full).
Realized Losses shall be applied such that after all distributions have
been made on such Distribution Date: (i) the principal balances of the Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class II-M-1, Class II-M-2 and Class II-B Interests are each .01%
of the principal balances of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B Certificates,
respectively; and (ii) the remaining losses shall be allocated to the Class
II-Q, Class II-S-A and Class II-S-F Interests. Losses allocated to the Class
II-Q, Class II-S-F and Class II-S-A Interests shall be applied first, to the
Class II-S-F and Class II-S-A Interests the least amount of Realized Losses
necessary which can be applied to such Interests so that the Balance Ratio is
maintained, and second, to the Class II-Q Interests.
The REMIC II Certificates will have the following designations and
Certificate Rates, and distributions of principal and interest thereon shall be
allocated to the Certificates in the following manner:
REMIC II
CERTIFICATES INITIAL BALANCE CERTIFICATE RATE ALLOCATION OF PRINCIPAL ALLOCATION OF INTEREST
------------ --------------- ---------------- ----------------------- ----------------------
II-A-1 $___________ (1) (4) (5)(6)
II-A-2 (1) (4) (5)(6)
II-A-3 (1) (4) (5)(6)
II-A-4 (1) (4) (5)(6)
II-A-5 (1) (4) (5)(6)
II-A-6 (1) (4) (5)(6)
II-A-7 (1) (4) (5)(6)
II-M-1 (1) (4) (5)(6)
II-M-2 (1) (4) (5)(6)
II-B (1) (4) (5)(6)
II-Q (1) (4) (5)(6)
II-S-F (2) (4) (5)(6)
II-S-A (3) (4) (5)(6)
R-2 0 0% N/A N/A(7)
---------------
(1) The Certificate Rate on this REMIC II Regular Interest shall at
any time of determination equal the weighted average of the Certificate
Rates of the Home Equity Loans.
(2) The Certificate Rate on this REMIC II Regular Interest shall at
any time of determination equal the weighted average of the Certificate
Rates of those Home Equity Loans corresponding to Group I.
(3) The Certificate Rate on this REMIC II Regular Interest shall at
any time of determination equal the weighted average of the Certificate
Rates of those Home Equity Loans corresponding to Group II.
(4) Principal will be allocated to and apportioned among the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class M-1, Class M-2 and Class B Certificates as provided in Section
7.03(b), except that a portion of such principal in an amount equal to the
Overcollateralization Release Amount shall first be allocated to the Class
X-IO Certificates, and all principal will be allocated to the Class X-IO
Certificates after the principal balances of the Certificates have been
reduced to zero.
(5) Except as provided in footnote (6), interest will be allocated
among the Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class M-1, Class M-2 and Class B Certificates in the same
proportion as interest is payable on such Certificates.
(6) Any interest with respect to this REMIC II Certificate in excess
of the product of (i) 10,000 times the weighted average coupon of the REMIC
II Regular Interests where each of the Class II-A-1, Class II-A-2, Class
II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7, Class
II-M-1, Class II-M-2, Class II-B Interests, subject to a cap and floor
equal to the rate on each of Class X-0, Xxxxx X-0, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B
Certificates, respectively and each of the Class II-Q, Class II-S-F and
Class II-S-A Interests, subject to a cap equal to 0% and (ii) the principal
balance of this REMIC II Certificate shall not be allocated to the Offered
Certificates but will be allocated to the Class X-IO Certificates, any
interest so allocated shall not itself bear interest. However, the Class
X-IO Certificates shall be subordinated to the extent provided in Section
7.03.
(7) On each Distribution Date, available funds, if any, remaining in
REMIC II after payments of interest and principal and expenses of the
Trust, as designated above, will be distributed to the Class R-2
Certificate. It is expected that there will not be any significant
distributions on the Class R-2 Certificates.
(c) The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7 and Class X-IO Certificates are hereby designated as "regular
interests" with respect to REMIC I (the "REMIC I Regular Certificates") and the
Class R-1 Certificate is hereby designated as the single "residual interest"
with respect to REMIC I. On each Distribution Date, available funds, if any,
remaining in REMIC I after payments of interest and principal as designated
herein shall be distributed to the Class R-1 Certificates. The beneficial
ownership interest in the REMIC I created hereunder shall be evidenced by the
interests having the following characteristics and terms:
Initial Certificate Final Scheduled
CLASS DESIGNATION PRINCIPAL BALANCE DISTRIBUTION DATE
----------------- ----------------- -----------------
Class A-1 $___________ _________ 25, 20__
Class A-2 $___________ _________ 25, 20__
Class A-3 $___________ _________ 25, 20__
Class A-4 $___________ _________ 25, 20__
Class A-5 $___________ _________ 25, 20__
Class A-6 $___________ _________ 25, 20__
Class A-7 $___________ _________ 25, 20__
Class M-1 $___________ _________ 25, 20__
Class M-2 $___________ _________ 25, 20__
Class B $___________ _________ 25, 20__
Class X-IO (1)
Class R-1 (1)
----------------
(1) The Class X-IO and Class R-1 Certificates do not have a Certificate
Principal Balance.
(d) For federal income tax purposes, the "latest possible maturity date"
for each of the REMIC I Regular Certificates and the REMIC II Regular Interests
is October 25, 2037.
Section 2.09. MISCELLANEOUS REMIC PROVISIONS.
(a) The Startup Day is hereby designated as the "startup day" of each REMIC
created hereunder within the meaning of Section 860G(a)(9) of the Code.
(b) The Owner of the Tax Matters Person Residual Interest in each REMIC
created hereunder is hereby designated as "tax matters person" as defined in the
REMIC Provisions with respect to the REMIC.
(c) The Trust and each REMIC created hereunder shall, for federal income
tax purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(d) The Trustee shall cause each REMIC created hereunder to elect to be
treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of the Trust shall be
resolved in a manner that preserves the validity of such election to be treated
as a REMIC. The Trustee shall report all expenses of the Trust Estate to each
REMIC created hereunder.
(e) For all federal tax law purposes, amounts transferred by the Trustee to
the Owners of the Class R Certificates shall be treated as distributions by each
respective REMIC created hereunder.
(f) The Trustee shall provide to the Internal Revenue Service and to the
person described in Section 860E(e)(3) and (6) of the Code the information
described in Treasury Regulation Section 1.860D-l(b)(5)(ii), or any successor
regulation thereto with respect to each REMIC created hereunder. Such
information will be provided in the manner described in Treasury Regulation
Section 1.860E-2(a)(5), or any successor regulation thereto.
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the Trustee that
as of the Startup Day:
(a) The Depositor is a limited liability company duly formed and validly
existing under the laws governing its creation and existence, is not in
violation of the laws of any state in which any Property or the Depositor is
located or doing business which violation would materially and adversely affect
the condition (financial or other) or the operations of the Depositor or its
properties or the ability of the Trust to collect amounts due on any Home Equity
Loan and is in good standing in each jurisdiction in which the nature of its
business or the properties owned or leased by it make such qualification
necessary. The Depositor has all requisite limited liability company power and
authority to own and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted and to enter into and
discharge its obligations under this Agreement and the other Operative Documents
to which it is a party.
(b) The execution and delivery of this Agreement and the other Operative
Documents to which it is a party by the Depositor and its performance and
compliance with the terms of this Agreement and the other Operative Documents to
which it is a party have been duly authorized by all necessary limited liability
company action on the part of the Depositor and will not violate the Depositor's
certificate of formation or amended and restated limited liability company
agreement or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which the Depositor is a
party or by which the Depositor is bound or violate any statute or any order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Depositor or any of its properties.
(c) This Agreement and the other Operative Documents to which the Depositor
is a party, assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at law).
(d) The Depositor is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default could materially and adversely affect the
condition (financial or other) or operations of the Depositor or its properties
or the consequences of which could materially and adversely affect its
performance hereunder and under the other Operative Documents to which the
Depositor is a party.
(e) No litigation, proceeding or investigation is pending with respect to
which the Depositor has received service of process or, to the best of the
Depositor's knowledge, threatened against the Depositor which litigation,
proceeding or investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the condition (financial or
otherwise) or operations of the Depositor or its properties or might have
consequences that would materially and adversely affect the validity or
enforceability of the Home Equity Loans or the Depositor's performance hereunder
and under the other Operative Documents to which the Depositor is a party.
(f) The statements contained in the Registration Statement which describe
the Depositor or matters or activities for which the Depositor is responsible in
accordance with the Operative Documents or which are attributed to the Depositor
therein are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact with respect
to the Depositor or omit to state a material fact required to be stated therein
or necessary in order to make the statements contained therein with respect to
the Depositor not misleading.
(g) Immediately prior to the sale and assignment by the Depositor to the
Trustee on behalf of the Trust of each Home Equity Loan, the Depositor had good
title to each Home Equity Loan (insofar as such title was conveyed to it by the
Sellers) subject to no prior lien, claim, participation interest, mortgage,
security interest, pledge, charge or other encumbrance or other interest of any
nature (other than liens which will be simultaneously released).
(h) As of the Startup Day, the Depositor has transferred all right, title
and interest in the Home Equity Loans to the Trustee on behalf of the Trust.
(i) The Depositor has not transferred the Home Equity Loans to the Trustee
on behalf of the Trust with any intent to hinder, delay or defraud any of its
creditors.
(j) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Depositor makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and sale of the
Certificates and the execution and delivery by the Depositor of the Operative
Documents to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of the Depositor and the performance by the Depositor of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
The Servicer hereby represents, warrants and covenants to the Depositor,
the Trustee and the Owners that as of the Startup Day:
(a) The Servicer is a limited liability company duly formed and validly
existing under the laws governing its creation and existence, is in compliance
with the laws of each state in which any Property is located to the extent
necessary to enable it to perform its obligations hereunder and is in good
standing in each jurisdiction in which the nature of its business or the
properties owned or leased by it make such qualification necessary. The Servicer
has all requisite limited liability company power and authority to own and
operate its properties, to carry out its business as presently conducted and as
proposed to be conducted and to enter into and discharge its obligations under
this Agreement and the other Operative Documents to which the Servicer is a
party.
(b) The execution and delivery of this Agreement and any other Operative
Document to which it is a party by the Servicer and its performance and
compliance with the terms hereof and thereof have been duly authorized by all
necessary limited liability company action on the part of the Servicer and will
not violate the Servicer's certificate of formation or limited liability company
agreement or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach of,
any material contract, agreement or other instrument to which the Servicer is a
party or by which the Servicer is bound or violate any statute or any order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Servicer or any of its properties.
(c) This Agreement and the other Operative Documents to which the Servicer
is a party, assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Servicer, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at law).
(d) The Servicer is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which default could materially and adversely affect the
condition (financial or otherwise) or operations of the Servicer or its
properties or the consequences of which could materially and adversely affect
its performance hereunder or under the other Operative Documents to which the
Servicer is a party.
(e) No litigation, proceeding or investigation is pending with respect to
which the Servicer has received service of process or, to the best of the
Servicer's knowledge, threatened against the Servicer which litigation,
proceeding or investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect the validity or the
enforceability of the Home Equity Loans or the Servicer's performance hereunder
and under the other Operative Documents to which the Servicer is a party.
(f) The statements contained in the Registration Statement which describe
the Servicer or matters or activities for which the Servicer is responsible in
accordance with the Operative Documents or which are attributed to the Servicer
therein are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact with respect
to the Servicer or omit to state a material fact required to be stated therein
or necessary to make the statements contained therein with respect to the
Servicer not misleading.
(g) The Servicing Fee is a "current (normal) servicing fee rate" as that
term is used in Statement of Financial Accounting Standards No. 65 issued by the
Financial Accounting Standards Board. Neither the Servicer nor any Affiliate
thereof will report on any financial statements any part of the Servicing Fee as
an adjustment to the sales price of the Home Equity Loans.
(h) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and delivery by
the Servicer of the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(i) The collection practices used by the Servicer with respect to the Home
Equity Loans have been, in all material respects, legal, proper, prudent and
customary in the home equity mortgage servicing business.
(j) The transactions contemplated by this Agreement are in the ordinary
course of business of the Servicer.
(k) The Servicer is not in default under any agreement involving financial
obligations or on any outstanding obligation, in any such case which could
materially adversely impact the financial condition or operations of the
Servicer or adversely impact the Servicer's performance of its obligations under
the Operative Documents.
(l) There are no Sub-Servicers as of the Startup Day.
It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive delivery of the Home Equity Loans to
the Trustee.
Upon discovery by any of the Depositor, the Seller, the Servicer, the
Custodian, any Sub-Servicer, any Owner or the Trustee (each, for purposes of
this paragraph, a party) of a breach of any of the representations and
warranties set forth in this Section 3.02 which materially and adversely affects
the interests of the Owners, the party discovering such breach shall give prompt
written notice to the other parties. As promptly as practicable, but in any
event within 60 days of its discovery or its receipt of notice of breach, the
Servicer shall cure such breach in all material respects.
Section 3.03. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Seller and the Conduit Sellers, as applicable, hereby severally
and not jointly represents, warrants and covenants to the Depositor, the Trustee
and the Owners that as of the Startup Day:
(a) In the case of the Seller, the Conduit Seller and the Conduit Seller
II, that each is a limited liability company, duly formed and validly existing
under the laws governing its creation and existence, neither the Seller nor the
Conduit Sellers is in violation of the laws of any state in which any Property
or either of the Seller or the Conduit Sellers, as applicable, is located or
doing business which violation would materially and adversely affect the
condition (financial or otherwise) or operations of the Seller or the Conduit
Sellers, as applicable, or its properties or the ability of the Trust to collect
any amounts on any Home Equity Loan and each of the Seller and the Conduit
Sellers is in good standing in each jurisdiction in which the nature of its
business or the properties owned or leased by it make such qualification
necessary. The Seller or the Conduit Sellers, as applicable, has all requisite
limited liability company power and authority to own and operate its properties,
to carry out its business as presently conducted and as proposed to be conducted
and to enter into and discharge its obligations under this Agreement and the
other Operative Documents to which it is a party.
(b) The execution and delivery of this Agreement and the other Operative
Documents to which the Seller or the Conduit Sellers, as applicable, is a party
and its performance and compliance with the terms of this Agreement and the
other Operative Documents to which it is a party have been duly authorized by
all necessary limited liability company action and will not violate its
certificate of formation or amended and restated limited liability company
agreement, or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which it is a party or by
which it is bound or violate any statute or any order, rule or regulation of any
court, governmental agency or body or other tribunal having jurisdiction over it
or any of its properties.
(c) This Agreement and the other Operative Documents to which the Seller or
the Conduit Sellers, as applicable, is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto, each constitutes
a valid, legal and binding obligation of the Seller or the Conduit Sellers, as
applicable, enforceable hereof and thereof against it in accordance with the
terms hereof and thereof, except as the enforcement hereof and thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law).
(d) Neither the Seller nor the Conduit Sellers, as applicable, is in
default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental agency,
which default could materially and adversely affect the condition (financial or
other) or operations of the Seller or the Conduit Sellers, as applicable, or its
properties or the consequences of which could materially and adversely affect
its performance hereunder and under the other Operative Documents to which it is
a party.
(e) No litigation, proceeding or investigation is pending with respect to
which the Seller or the Conduit Sellers, as applicable, has received service of
process or, to the best of its knowledge, threatened against it which
litigation, proceeding or investigation might have consequences that would
prohibit its entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely affect the condition
(financial or otherwise) or operations of the Seller or the Conduit Sellers, as
applicable, or its properties or might have consequences that would materially
and adversely affect the validity or enforceability of the Home Equity Loans or
its performance hereunder and under the other Operative Documents to which it is
a party.
(f) The statements contained in the Registration Statement which describe
the Seller or the Conduit Sellers, as applicable, or matters or activities for
which it is responsible in accordance with the Operative Documents or which are
attributed to it therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Seller or the Conduit Sellers, as applicable, or omit to
state a material fact required to be stated therein or necessary in order to
make the statements contained therein with respect to the Seller or the Conduit
Sellers, as applicable, not misleading.
(g) [Reserved].
(h) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Seller or the Conduit Sellers, as applicable, makes no
such representation or warranty), that are necessary or advisable in connection
with the purchase and sale of the Certificates and the execution and delivery by
the Seller or the Conduit Sellers, as applicable, of the Operative Documents to
which it is a party, have been duly taken, given or obtained, as the case may
be, are in full force and effect on the date hereof, are not subject to any
pending proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of the Seller or the Conduit Sellers, as applicable, and the
performance by the Seller or the Conduit Sellers, as applicable, of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
(i) The origination practices used by the Seller with respect to the Home
Equity Loans have been, in all material respects, legal, proper, prudent and
customary in the home equity lending business. All of the Home Equity Loans were
originated by the Seller, an Affiliate of the Seller or a broker for
simultaneous assignment to the Seller or were acquired by the Seller from
correspondent lenders and reunderwritten to comply with the Seller's
underwriting standards.
(j) The transactions contemplated by this Agreement are in the ordinary
course of business of the Seller or the Conduit Sellers, as applicable.
(k) The Trustee, the Seller and the Conduit Sellers have no obligation to
register the Trust and the Trust has no obligation to register as an investment
company under the Investment Company Act of 1940, as amended.
(l) The Seller or the Conduit Sellers, as applicable, is not insolvent, nor
will it be made insolvent by the transfer of the Home Equity Loans, nor are the
Seller or the Conduit Sellers, as applicable, aware of any pending insolvency.
(m) The Seller or either of the Conduit Sellers, as applicable, received
fair consideration and reasonably equivalent value in exchange for the sale of
the interests in the Home Equity Loans transferred by it.
(n) The Seller or the Conduit Sellers, as applicable, did not sell any
interest in any Home Equity Loan with any intent to hinder, delay or defraud any
of its creditors.
(o) No material adverse change affecting any security for the Offered
Certificates has occurred prior to delivery of and payment for the Offered
Certificates.
(p) The Seller or the Conduit Sellers, as applicable, is not in default
under any agreement involving financial obligations or on any outstanding
obligation, in any such case which would materially adversely impact the
financial condition or operations of the Seller or the Conduit Sellers, as
applicable, or its obligations under the Operative Documents.
(q) [Reserved].
(r) The sale, transfer, assignment and conveyance of Home Equity Loans by
the Seller or the Conduit Sellers, as applicable, pursuant to this Agreement is
not subject to and will not result in any tax, fee or governmental charge
payable by the Seller or the Conduit Sellers, as applicable, the Depositor or
the Trustee to any federal, state or local government ("Transfer Taxes") other
than Transfer Taxes which have been or will be paid as due by the Seller or the
Conduit Sellers, as applicable. The Seller or the Conduit Sellers, as
applicable, shall pay any and all such Transfer Taxes.
(s) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by the Seller or the Conduit Sellers, as
applicable, contains any untrue statement of a material fact or omits to state
any material fact necessary to make the certificate, statement or report not
misleading.
It is understood and agreed that the representations and warranties set
forth in this Section 3.03 shall survive delivery of the respective Home Equity
Loans to the Trustee.
Section 3.04. COVENANTS OF SELLERS TO TAKE CERTAIN ACTIONS WITH RESPECT TO
THE HOME EQUITY LOANS IN CERTAIN SITUATIONS.
(a) Upon the discovery by the Depositor, the Seller, the Conduit Sellers,
the Servicer, any Sub-Servicer, any Owner, the Custodian or the Trustee (each,
for purposes of this paragraph, a party) that the representations and warranties
set forth in clause (b) below were untrue in any material respect, without
regard to any limitation set forth therein concerning the knowledge of the
Seller or the Servicer as to the facts stated therein, as of the Startup Day (or
in the case of a Qualified Replacement Mortgage, as of the respective
Replacement Cut-Off Date), with the result that the interests of the Owners in
the related Home Equity Loan are, or may be, materially and adversely affected,
the party discovering such breach shall give prompt written notice to the other
parties. Upon the earliest to occur of CHEC's discovery, its receipt of notice
of breach from any one of the other parties or such time as a situation
resulting from an existing statement which is untrue materially and adversely
affects the interests of the Owners, without regard to any limitation set forth
therein concerning the knowledge of CHEC as to the facts stated therein, CHEC
hereby covenants and warrants that it shall promptly cure such breach in all
material respects or that it shall on or before the second Monthly Remittance
Date next succeeding such discovery, receipt of notice or such time (i)
substitute in lieu of each Home Equity Loan which has given rise to the
requirement for action by CHEC a Qualified Replacement Mortgage and deliver the
Substitution Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan from the Trust at a purchase
price equal to the Loan Purchase Price thereof, which purchase price shall be
delivered to the Servicer for deposit in the Principal and Interest Account. It
is understood and agreed that the obligation of CHEC so to substitute or
purchase any Home Equity Loan as to which such a statement set forth below in
this Section 3.04 is untrue in any material respect and has not been remedied
shall constitute the sole remedy respecting a discovery of any such statement
which is untrue in any material respect available to the Owners and the Trustee
on behalf of the Owners. Notwithstanding any provision of this Agreement to the
contrary, with respect to any Home Equity Loan which is not in default or as to
which no default is imminent, no repurchase or substitution pursuant to Section
3.04 or 3.06 shall be made unless CHEC obtains for the Trustee at its expense an
Opinion of Counsel experienced in federal income tax matters to the effect that
such a repurchase or substitution would not constitute a Prohibited Transaction
for the Trust or any REMIC created hereunder or otherwise subject the Trust or
any REMIC created hereunder to tax and would not jeopardize the status of any
REMIC created hereunder as a REMIC (a "REMIC Opinion") addressed to the Trustee
and acceptable to the Trustee. CHEC shall also deliver an Officer's Certificate
to the Trustee concurrently with the delivery of a Qualified Replacement
Mortgage pursuant to Sections 3.04 and 3.06(b) stating that such Home Equity
Loan meets the requirements of the definition of a Qualified Replacement
Mortgage and that all other conditions to the substitution thereof have been
satisfied. Any Home Equity Loan as to which repurchase or substitution was
delayed pursuant to this Section shall be repurchased or substituted for
(subject to compliance with Section 3.04 or 3.06(b), as the case may be) upon
the earlier of (a) the occurrence of a default or imminent default with respect
to such Home Equity Loan and (b) receipt by the Trustee of a REMIC Opinion.
(b) The Seller, with respect to the Seller Home Equity Loans, and the
Servicer, in consideration of its appointment hereunder, with respect to the
Conduit Home Equity Loans and the Conduit II Home Equity Loans, and with respect
to the Home Equity Loans taken as a whole or by Group, hereby represent, warrant
and covenant to the Trustee, the Depositor, the Servicer and the Owners that as
of the Startup Day (or the Replacement Cut-Off Date, with respect to a Qualified
Replacement Mortgage):
(i) The information with respect to each Home Equity Loan set forth in
the related Schedule of Home Equity Loans is true and correct in all
material respects as of the Cut-Off Date;
(ii) Each of the Seller and the Conduit Sellers has transferred good
and marketable title (without any implication of a ready market for the
sale thereof) to the Home Equity Loans (including the related Notes) and
other items of the Trust Estate, and upon receipt of each Home Equity Loan
and other items of the Trust Estate by the Trustee (including the related
Note), the Trust will have good and marketable title (without any
implication of a ready market for the sale thereof) to such Home Equity
Loan (including the related Note) and such items of the Trust Estate, free
and clear of any lien, charge, mortgage, encumbrance or rights of others,
except as permitted under Section 3.04(b)(ix) and except for liens that
will be simultaneously released. All the original or certified
documentation set forth in Section 3.05 (including all material documents
related thereto) with respect to each Home Equity Loan has been delivered
to the Custodian on behalf of the Trustee on the Startup Day or as
otherwise provided in Section 3.05. To the Seller's or the Servicer's best
knowledge, no such documentation contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained therein not misleading;
(iii) Each Home Equity Loan being transferred to the Trust is a
Qualified Mortgage and is a Mortgage;
(iv) Each Property is a fee simple estate in a single parcel of real
property improved by a single family residential dwelling (except 590
Properties that are condominiums, townhouses, manufactured housing,
two-to-four family residential dwellings or PUDs), and no more than ____%
and ____%, respectively, of the aggregate Loan Balance of the Home Equity
Loans in Group I and Group II as of the Cut-Off Date are secured by
Properties that are Manufactured Homes, each of which is considered to be
real property under the applicable local law;
(v) As of the Cut-Off Date or Replacement Cut-Off Date, as applicable,
no Home Equity Loan has a Loan-to-Value Ratio in excess of 100%;
(vi) Each Home Equity Loan is being serviced by the Servicer in
accordance with the terms of this Agreement;
(vii) The Note related to each Home Equity Loan in Group I bears a
current Coupon Rate of at least ____% per annum and the Note related to
each Home Equity Loan in Group II bears a current Coupon Rate of at least
____% per annum;
(viii) Each Note with respect to the Home Equity Loans will provide
for a schedule of substantially level and equal Monthly Payments (or
periodic rate adjustments in the case of the Home Equity Loans in Group
II), which are sufficient to amortize fully the principal balance of such
Note on or before its maturity date, except for _____ Home Equity Loans,
representing approximately ____% of the aggregate Loan Balance of the Home
Equity Loans in Group I as of the Cut-Off Date, which may provide for a
"balloon" payment due at the end of the 15th year, and no Home Equity Loan
is a graduated payment loan;
(ix) As of the Startup Day, each Mortgage is a valid and enforceable
first or second lien of record (or is in the process of being recorded) on
the Property subject in the case of any Second Mortgage Loan only to a
Senior Lien on such Property and subject in all cases to the exceptions to
title set forth in the title insurance policy (or the binding commitment
therefor) or attorney's opinion of title, with respect to the related Home
Equity Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending activities,
and such other exceptions to which similar properties are commonly subject
and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be provided by
such Mortgage;
(x) Immediately prior to the transfer and assignment of the Home
Equity Loans by the Seller, the Conduit Seller or the Conduit Seller II, as
applicable, to the Depositor and by the Depositor to the Trustee herein
contemplated, the Seller, the Conduit Sellers and the Depositor, as the
case may be, each held good and marketable title (without any implication
of a ready market for the sale thereof) to, and was the sole owner of, each
Home Equity Loan (including the related Note) conveyed by the Seller (or
the Conduit Sellers, as applicable) subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in clause
(ix) or other liens which will be released simultaneously with such
transfer and assignment; and immediately upon the transfer and assignment
herein contemplated, the Trustee will hold good and marketable title
(without any implication of a ready market for the sale thereof) to, and be
the sole owner of, each Home Equity Loan subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in
paragraph (ix) or other liens which will be released simultaneously with
such transfer and assignment; (xi) As of the Cut-Off Date, ____% of the
Home Equity Loans are between 30 and ____ days Delinquent and none of the
Home Equity Loans is more than 59 days Delinquent;
(xii) To the best knowledge of the Seller or the Servicer, as
applicable, there is no delinquent tax or assessment lien on any Property,
and each Property is free of substantial damage and is in good repair
(ordinary wear and tear excepted);
(xiii) To the best knowledge of the Seller or the Servicer, as
applicable, there is no valid and enforceable right of offset, claim,
defense or counterclaim to any Note or Mortgage, including the obligation
of the related Mortgagor to pay the unpaid principal of or interest on such
Note, nor has any such claim, defense, offset or counterclaim been
asserted;
(xiv) To the best knowledge of the Seller or the Servicer, as
applicable, there is no mechanics' lien or claim for work, labor or
material affecting any Property which is or may be a lien prior to, or
equal with, the lien of the related Mortgage except those which are insured
against by any title insurance policy referred to in paragraph (xvi) below;
(xv) To the best knowledge of the Seller, each Home Equity Loan at the
time it was made complied in all material respects with applicable state
and federal laws and regulations, including, without limitation, the
federal Truth-in-Lending Act (as amended by the Xxxxxx Community
Development and Regulatory Improvement Act of 1994) and other consumer
protection, usury, equal credit opportunity, disclosure and recording laws;
(xvi) With respect to each Home Equity Loan either (a) if a title
insurance policy is not available in the applicable state, an attorney's
opinion of title has been obtained but no title policy has been obtained,
(b) for certain of the Home Equity Loans the original principal balance of
which was equal to or less than $40,000, a title report and indemnity has
been obtained, or (c) a lender's title insurance policy (or a binding
commitment therefor), issued in standard American Land Title Association
form by a title insurance company authorized to transact business in the
state in which the related Property is situated, in an amount at least
equal to the original balance of such Home Equity Loan together, in the
case of a Second Mortgage Loan, with the then-original principal amount of
the mortgage note relating to the Senior Lien, insuring the mortgagee's
interest under the related Home Equity Loan as the holder of a valid first
or second mortgage lien of record on the real Property described in the
related Mortgage, as the case may be, subject only to exceptions of the
character referred to in paragraph (ix) above, was effective on the date of
the origination of such Home Equity Loan, and, as of the Startup Day, such
policy (or commitment) is valid and thereafter (or upon issuance pursuant
to the commitment) such policy shall continue in full force and effect;
(xvii) The improvements upon each Property are covered by a valid and
existing hazard insurance policy with a carrier generally acceptable to the
Servicer that provides for fire and extended coverage representing coverage
not less than the least of (A) the outstanding principal balance of the
related Home Equity Loan (together, in the case of a Second Mortgage Loan,
with the outstanding principal balance of the Senior Lien), (B) the minimum
amount required to compensate for damage or loss on a replacement cost
basis or (C) the full insurable value of the Property;
(xviii) If any Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Property with a carrier generally acceptable to the
Servicer in an amount representing coverage not less than the least of (A)
the outstanding principal balance of the related Home Equity Loan
(together, in the case of a Second Mortgage Loan, with the outstanding
principal balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;
(xix) Each Mortgage and Note are the legal, valid and binding
obligation of the maker thereof and are enforceable in accordance with
their terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at law),
and all parties to each Home Equity Loan had full legal capacity to execute
all documents relating to such Home Equity Loan and convey the estate
therein purported to be conveyed;
(xx) The Seller or the Servicer, as applicable, has caused and will
cause to be performed any and all acts required to be performed to preserve
the rights and remedies of the Trustee in any Insurance Policies applicable
to any Home Equity Loans delivered by the Seller or the Conduit Sellers
including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of
co-insured, joint loss payee and mortgagee rights in favor of the Trustee;
(xxi) As of the Cut-Off Date, no more than ____% of the aggregate Loan
Balance of the Home Equity Loans in either Home Equity Loan Group is
secured by Properties located within any single zip code area;
(xxii) Each original Mortgage was recorded or is in the process of
being recorded, and all subsequent assignments of the original Mortgage
(other than unrecorded warehouse assignments which are being simultaneously
released in connection with the Closing) have been delivered for
recordation or have been recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as against
creditors of or purchasers from the Seller or the Conduit Sellers (or,
subject to Section 3.05 hereof, are in the process of being recorded); each
Mortgage and assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Property
securing such Mortgage is located;
(xxiii) The terms of each Note and each Mortgage have not been
impaired, waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest
of the Owners and which has been delivered to the Trustee. The substance of
any such waiver, alteration or modification is reflected on the related
Schedule of Home Equity Loans;
(xxiv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of
any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing or recording such Home Equity Loans were paid
and the Mortgagor is not entitled to any refund of any amounts paid or due
under the related Note or Mortgage;
(xxv) The related Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xxvi) No Home Equity Loan has a shared appreciation feature or other
contingent interest feature;
(xxvii) Each Property is located in the state identified in the
respective Schedule of Home Equity Loans and consists of one or more
parcels of real property with a residential dwelling erected thereon;
(xxviii) Each Mortgage contains a provision for the acceleration of
the payment of the unpaid principal balance of the related Home Equity Loan
in the event the related Property is sold without the prior consent of the
mortgagee thereunder;
(xxix) Any advances made after the date of origination of a Home
Equity Loan but prior to the Cut-Off Date have been consolidated with the
outstanding principal amount secured by the related Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the respective Schedule of Home Equity
Loans. The consolidated principal amount does not exceed the original
principal amount of the related Home Equity Loan. No Note permits or
obligates the Servicer to make future advances to the related Mortgagor at
the option of the Mortgagor;
(xxx) To the best knowledge of the Seller or the Servicer, as
applicable, there is no proceeding pending or threatened for the total or
partial condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, water, flood,
earthquake, earth movement or other casualty;
(xxxi) All of the improvements which were included for the purposes of
determining the Appraised Value of any Property lie wholly within the
boundaries and building restriction lines of such Property, and no
improvements on adjoining properties encroach upon such Property, and are
stated in the title insurance policy and affirmatively insured;
(xxxii) To the best knowledge of the Seller or the Servicer, as
applicable, (A) no improvement located on or being part of any Property is
in violation of any applicable zoning law or regulation and (B) all
inspections, licenses and certificates required by applicable law to be
made or issued with respect to all occupied portions of each Property and
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting certificates,
have been made by or obtained from the appropriate authorities and such
Property is lawfully occupied under the applicable law;
(xxxiii) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Owners or the
Trust to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the related Mortgagor;
(xxxiv) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related Property of the benefits of the security,
including (A) in the case of a Mortgage designated as a deed of trust, by
trustee's sale and (B) otherwise by judicial foreclosure. There is no
homestead or other exemption other than any applicable Mortgagor redemption
rights available to the related Mortgagor which would materially interfere
with the right to sell the related Property at a trustee's sale or the
right to foreclose the related Mortgage;
(xxxv) To the best knowledge of the Seller or the Servicer, there is
no default, breach, violation or event of acceleration existing under any
Mortgage or the related Note and no event which, with the passage of time
or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration; and none
of the Servicer, the Seller, the Conduit Sellers nor the Conduit Servicers,
as applicable, has waived any default, breach, violation or event of
acceleration or advanced funds, directly or indirectly, for the payment of
any amount required under any Home Equity Loan;
(xxxvi) No instrument of release or waiver has been executed in
connection with any Home Equity Loan, and no Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement
which has been approved by the primary mortgage guaranty insurer, if any,
and which has been delivered to the Trustee;
(xxxvii) Reserved;
(xxxviii) Each Home Equity Loan was underwritten in accordance with or
reunderwritten to comply with the credit underwriting guidelines of the
Seller as set forth in the Seller's Policies and Procedures Manual, as in
effect on the date hereof, and such Manual conforms in all material
respects to the description thereof set forth in the Registration
Statement;
(xxxix) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject Property;
(xl) The Home Equity Loans were not selected for inclusion in the
Trust on any basis intended to adversely affect the Trust;
(xli) No more than ____% and ____% of the aggregate Loan Balance of
the Home Equity Loans in Group I and Group II, respectively, as of the
Cut-Off Date, are secured by Properties that are non-owner occupied
Properties (I.E., investor-owned and vacation);
(xlii) The Seller or the Servicer, as applicable, has no actual
knowledge that there exist any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and
Recovery Act of 1976, or other federal, state or local environmental
legislation, on any Property, and to the best knowledge of the Seller and
the Servicer, as applicable, no violations of any local, state or federal
environmental law, rule or regulation exist with respect to any Property;
(xliii) The Seller (and, to the best knowledge of the Seller and the
Servicer, as applicable, the originator, if not the Seller) was properly
licensed or otherwise authorized, to the extent required by applicable law,
to originate or purchase each Home Equity Loan; and the consummation of the
transactions herein contemplated, including, without limitation, the
receipt of interest by the Owners and the ownership of the Home Equity
Loans by the Trustee as trustee of the Trust will not involve the violation
of such laws;
(xliv) With respect to each Property subject to a ground lease (i) the
current ground lessor has been identified and all ground rents which have
previously become due and owing have been paid; (ii) the ground lease term
extends, or is automatically renewable, for at least five years beyond the
maturity date of the related Home Equity Loan; (iii) the ground lease has
been duly executed and recorded; (iv) the amount of the ground rent and any
increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent payment
is included in the borrower's monthly payment as an expense item in
determining the qualification of the borrower for such Home Equity Loan;
(vi) the Trust has the right to cure defaults on the ground lease; and
(vii) the terms and conditions of the leasehold do not prevent the free and
absolute marketability of the Property. As of the Cut-Off Date, the Loan
Balance of the Home Equity Loans with related Properties subject to ground
leases does not exceed ____% of the Original Aggregate Loan Balance;
(xlv) As of the Startup Day, with respect to any Second Mortgage Loan,
none of the Seller, the Servicer, the Conduit Sellers nor the Conduit
Servicers, as applicable, has received a notice of default of any Senior
Lien secured by any Property which has not been cured by a party other than
the Seller;
(xlvi) No Home Equity Loan is subject to a rate reduction pursuant to
a buydown program;
(xlvii) Reserved;
(xlviii) The Coupon Rate on each Home Equity Loan is calculated on the
basis of a year of 360 days with twelve 30-day months;
(xlix) Each Home Equity Loan was originated by the Seller, an
Affiliate of the Seller or a broker for simultaneous assignment to the
Seller or was acquired by the Seller from correspondent lenders and
reunderwritten to comply with the Seller's underwriting standards;
(l) Neither the operation of any of the terms of each Note and each
Mortgage nor the exercise of any right thereunder will render either the
Note or the Mortgage unenforceable, in whole or in part, nor subject it to
any right of rescission, claim, set-off, counterclaim or defense,
including, without limitation, the defense of usury;
(li) Any adjustment to the Coupon Rate on a Home Equity Loan in Group
II has been legal, proper and in accordance with the terms of the related
Note;
(lii) No Home Equity Loan in Group II is subject to negative
amortization;
(liii) As of the Cut-Off Date, the FTC holder regulation provided in
16 C.F.R. Part 433 applies to none of the Home Equity Loans;
(liv) As of the Cut-Off Date, a portion of the Home Equity Loans are
"mortgages" as defined in 15 U.S.C. 1602(aa), and with respect to each such
Home Equity Loan, no Mortgagor has or will have a claim or defense under
such law;
(lv) Reserved;
(lvi) The rights with respect to each Home Equity Loan are assignable
by the Seller or the Conduit Sellers, as applicable, without the consent of
any Person other than consents which will have been obtained on or before
the Startup Day;
(lvii) The Seller or the Conduit Sellers, as applicable, has duly
fulfilled all obligations to be fulfilled on the lender's part under or in
connection with the origination, acquisition and assignment of the Home
Equity Loans and the related Mortgage and Note, and has done nothing to
impair the rights of the Trustee or the Owners in payments with respect
thereto;
(lviii) To the Seller's or the Servicer's, as applicable, knowledge,
the documents, instruments and agreements submitted by each Mortgagor for
loan underwriting were not falsified and contain no untrue statement of a
material fact and do not omit to state a material fact required to be
stated therein or necessary to make the information and statements
contained therein not misleading;
(lix) No Home Equity Loan matures later than _____________, 20__;
(lx) The first date on which the applicable Mortgagor must make a
payment on each Home Equity Loan is no later than _________ __, 20__; and
(lxi) With respect to each Home Equity Loan that is a Second Mortgage
Loan:
(1) The related Senior Lien does not provide for negative
amortization.
(2) None of the Servicer, the Seller, the Conduit Seller, the
Conduit Servicer, the Conduit Seller II or the Conduit Servicer II as
applicable, has received, or is aware of, a notice of default of any
Senior Lien which has not been cured.
(3) To the best knowledge of the Seller or the Servicer, as
applicable, no funds provided to the Mortgagor from a Second Mortgage
Loan were concurrently used as a down payment for the Senior Lien.
(c) In the event that any such repurchase pursuant to this Section results
in a prohibited transaction tax as specified in the REMIC Opinion delivered
pursuant to Section 3.04(a), the Trustee shall immediately notify the Seller in
writing thereof and the Seller will, within 10 days of receiving notice thereof
from the Trustee, deposit the amount due from the Trust with the Trustee for the
payment thereof, including any interest and penalties, in immediately available
funds. In the event that any Qualified Replacement Mortgage is delivered by the
Seller to the Trust pursuant to Section 3.04 or Section 3.06 hereof, the Seller
shall be obligated to take the actions described in Section 3.04(a) with respect
to such Qualified Replacement Mortgage upon the discovery by any of the
Depositor, the Owners, the Seller, the Conduit Sellers, the Servicer, any
Sub-Servicer, the Custodian or the Trustee that the statements set forth in
subsection (b) above are untrue in any material respect, without regard to any
limitation set forth therein concerning the knowledge of the Seller or the
Servicer as to facts stated therein, on the date such Qualified Replacement
Mortgage is conveyed to the Trust, such that the interests of the Owners in the
related Qualified Replacement Mortgage are, or may be, materially and adversely
affected; PROVIDED, HOWEVER, that for the purposes of this subsection (c) the
statements in subsection (b) above referring to items "as of the Cut-Off Date"
or "as of the Startup Day" shall be deemed to refer to such items as of the
Replacement Cut-Off Date or as of the date such Qualified Replacement Mortgage
is conveyed to the Trust, respectively. Notwithstanding the fact that a
representation contained in subsection (b) above may be limited to the Seller's
or the Servicer's knowledge, such limitation shall not relieve CHEC of its
substitution or repurchase obligation under this Section and Section 3.06
hereof.
(d) It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.04 shall survive delivery of the
respective Home Equity Loans (including Qualified Replacement Mortgages) to the
Trustee or the Custodian, on behalf of the Trustee.
(e) The Trustee shall have no duty to conduct any affirmative investigation
other than as specifically set forth in this Agreement as to the occurrence of
any condition requiring the repurchase or substitution of any Home Equity Loan
pursuant to this Article III or the eligibility of any Home Equity Loan for the
purpose of this Agreement.
Section 3.05. SALE TREATMENT OF THE HOME EQUITY LOANS AND QUALIFIED
REPLACEMENT MORTGAGES.
(a) The transfer by the Seller and the Conduit Sellers to the Depositor and
by the Depositor to the Trustee of the Home Equity Loans set forth on the
applicable Schedule of Home Equity Loans is absolute and is intended by the
Owners and all parties hereto to be treated as a sale by the Seller, the Conduit
Sellers and the Depositor.
In the event that any such conveyance is deemed to be a loan, the parties
intend that each of the Seller and the Conduit Sellers shall be deemed to have
granted to the Depositor and the Depositor shall be deemed to have granted to
the Trustee a security interest in the Trust Estate, and that this Agreement
shall constitute a security agreement under applicable law.
(b) In connection with the transfer and assignment of the Home Equity
Loans, CHEC agrees to:
(i) deliver without recourse to the Custodian, on behalf of the
Trustee, on the Startup Day with respect to each Home Equity Loan, (A) the
original Note endorsed in blank or to the order of the Trustee ("Pay to the
order of Bank One, National Association, as Trustee for Centex Home Equity
Loan Trust 200_-__, without recourse") and signed by manual signature of
the Seller, the Conduit Seller or the Conduit Seller II, as applicable, (B)
either (1) if the original title insurance policy is not available, the
original title insurance commitment or a copy thereof certified as a true
copy by the closing agent or CHEC, and when available, the original title
insurance policy or a copy certified by the issuer of the title insurance
policy, (2) if title insurance is not available in the applicable state,
the attorney's opinion of title, or (3) for a Home Equity Loan the original
principal balance of which was equal to or less than $40,000, a title
report and indemnity, (C) originals or copies of all intervening
assignments certified as true copies by the closing agent or CHEC, showing
a complete chain of title from origination to the Seller or either of the
Conduit Sellers, if any, including warehousing assignments, if recorded,
(D) originals of all assumption and modification agreements, if any, (E)
either: (1) the original Mortgage, with evidence of recording thereon (if
such original Mortgage has been returned to the Seller or either of the
Conduit Sellers, as applicable, from the applicable recording office), or a
copy of the Mortgage certified as a true copy by the closing agent or an
Authorized Officer of CHEC, or (2) a copy of the Mortgage certified by the
public recording office in those instances where the original recorded
Mortgage has been lost and (F) the original assignments of Mortgages (as
described in clause (b)(ii)) in recordable form and acceptable for
recording in the state or other jurisdiction where the Property is located;
(ii) cause, within 60 days following the Startup Day with respect to
the Home Equity Loans, assignments of the Mortgages from the Seller or
either of the Conduit Sellers, as applicable, to "Bank One, National
Association, as Trustee of Centex Home Equity Loan Trust 200_-__ under the
Pooling and Servicing Agreement dated as of _________, __, 200_" to be
submitted for recording in the appropriate jurisdictions; PROVIDED,
FURTHER, that CHEC shall not be required to record an assignment of a
Mortgage if CHEC furnishes to the Trustee, on or before the Startup Day, at
CHEC's expense, an Opinion of Counsel with respect to the relevant
jurisdiction that such recording is not necessary to perfect the Trustee's
interest in the related Home Equity Loans (in form and substance reasonably
satisfactory to the Trustee and the Rating Agencies); PROVIDED FURTHER,
HOWEVER, notwithstanding the delivery of any legal opinions, each
assignment of Mortgage shall be recorded by the Custodian on behalf of the
Trustee at the expense of CHEC upon the earliest to occur of: (i) the
occurrence of a Servicer Termination Event, (ii) if the Seller is not the
Servicer and with respect to any one assignment of Mortgage, the occurrence
of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under
the related Mortgage, or (iii) the occurrence of a bankruptcy or insolvency
relating to the Seller, the Conduit Seller or the Conduit Seller II, as
applicable;
(iii) deliver the title insurance policy or title searches or reports,
the original Mortgages and such recorded assignments, together with
originals or duly certified copies of any and all prior assignments (other
than unrecorded warehouse assignments), to the Custodian, on behalf of the
Trustee, within 15 days of receipt thereof by CHEC, but in any event, with
respect to any Mortgage as to which original recording information has been
made available to the Seller or the Conduit Sellers, within one year after
the Startup Day; and
(iv) furnish to the Trustee and the Rating Agencies, at CHEC's
expense, an Opinion of Counsel with respect to the sale and perfection of
the Home Equity Loans delivered to the Trust.
In instances where the original recorded Mortgage cannot be delivered by
CHEC to the Custodian on behalf of the Trustee prior to or concurrently with the
execution and delivery of this Agreement due to a delay in connection with
recording, CHEC may in lieu of delivering such original recorded Mortgage,
deliver to the Custodian on behalf of the Trustee a copy thereof, provided that
CHEC certifies that the original Mortgage has been delivered to a title
insurance company for recordation after receipt of its policy of title insurance
or binder therefor. In all such instances, CHEC will deliver or cause to be
delivered the original recorded Mortgage to the Custodian on behalf of the
Trustee promptly upon receipt of the original recorded Mortgage but in no event
later than one year after the Startup Day.
CHEC hereby confirms to the Trustee that it has made the appropriate
entries in its general records to indicate that such Home Equity Loans have been
transferred to the Trustee and constitute part of the Trust Estate in accordance
with the terms of the trust created hereunder.
Notwithstanding anything to the contrary contained in this Section 3.05, in
those instances where the public recording office retains the original Mortgage,
the assignment of a Mortgage or the intervening assignments of the Mortgage
after it has been recorded, the Depositor and each of the Sellers shall be
deemed to have satisfied their obligations hereunder upon delivery to the
Custodian, on behalf of the Trustee, of a copy of such Mortgage, such assignment
or assignments of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.
Not later than ten days following the end of the 60-day period referred in
clause (b)(ii) above, CHEC shall deliver to the Custodian on behalf of the
Trustee, with a copy to the Trustee, a list of all Mortgages for which no
Mortgage assignment has yet been submitted for recording by CHEC, which list
shall state the reason why CHEC has not yet submitted such Mortgage assignments
for recording. With respect to any Mortgage assignment disclosed on such list as
not yet submitted for recording for a reason other than a lack of original
recording information, the Custodian, on behalf of the Trustee, shall make an
immediate demand on CHEC to prepare such Mortgage assignments. Thereafter, the
Custodian, on behalf of the Trustee, shall cooperate in executing any documents
submitted to the Custodian, on behalf of the Trustee in connection with this
provision. Following the expiration of the 60-day period referred to in clause
(b)(ii) above, CHEC shall promptly prepare a Mortgage assignment for any
Mortgage for which original recording information is subsequently received by
CHEC, and shall promptly deliver a copy of such Mortgage assignment to the
Custodian, on behalf of the Trustee. CHEC agrees that it will follow its normal
servicing procedures and attempt to obtain the original recording information
necessary to complete a Mortgage assignment. In the event that CHEC is unable to
obtain such recording information with respect to any Mortgage prior to the end
of the 18th calendar month following the Startup Day and has not provided to the
Custodian, on behalf of the Trustee, a Mortgage assignment with evidence of
recording thereon relating to the assignment of such Mortgage to the Trustee,
the Custodian, on behalf of the Trustee shall notify CHEC of its obligation to
provide a completed assignment (with evidence of recording thereon) on or before
the end of the 20th calendar month following the Startup Day. If no such
completed assignment (with evidence of recording thereon) is provided before the
end of such 20th calendar month, the related Home Equity Loan shall be deemed to
have breached the representation contained in clause (xxii) of Section 3.04(b)
hereof. The requirement to deliver a completed assignment with evidence of
recording thereon will be deemed satisfied upon delivery of a copy of the
completed assignment certified by the applicable public recording office.
Copies of all Mortgage assignments received by the Custodian on behalf of
the Trustee shall be retained in the related File.
All recording required pursuant to this Section 3.05 shall be accomplished
at the expense of CHEC.
(c) In the case of Home Equity Loans which have been prepaid in full on or
after the Cut-Off Date and prior to the Startup Day, CHEC, in lieu of the
foregoing, will deliver within six (6) days after the Startup Day to the Trustee
a certification of an Authorized Officer in the form set forth in Exhibit D.
(d) CHEC shall transfer, assign, set over and otherwise convey, without
recourse, to the Trustee all right, title and interest of CHEC in and to any
Qualified Replacement Mortgage delivered to the Custodian, on behalf of the
Trustee on behalf of the Trust by CHEC pursuant to Section 3.04 or 3.06 hereof
and all its right, title and interest to principal and interest due on such
Qualified Replacement Mortgage on and after the applicable Replacement Cut-Off
Date; PROVIDED, HOWEVER, that CHEC shall reserve and retain all right, title and
interest in and to payments of principal and interest due on such Qualified
Replacement Mortgage prior to the applicable Replacement Cut-Off Date.
(e) As to each Home Equity Loan released from the Trust in connection with
a repurchase thereof or the conveyance of a Qualified Replacement Mortgage
therefor, the Trustee will transfer, assign, set over and otherwise convey
without recourse or representation, on CHEC's order, all of its right, title and
interest in and to such released Home Equity Loan and all the Trust's right,
title and interest to principal and interest due on such released Home Equity
Loan after the applicable repurchase date or Replacement Cut-Off Date, as the
case may be; PROVIDED, HOWEVER, that the Trust shall reserve and or and retain
all right, title and interest in and to payments of principal and interest due
on such released Home Equity Loan prior to such repurchase date or Replacement
Cut-Off Date, as the case may be.
(f) In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Trustee on behalf of the Trust, CHEC agrees to (i)
deliver or cause to be delivered without recourse to the Custodian, on behalf of
the Trustee on the date of delivery of such Qualified Replacement Mortgage the
original Note relating thereto, endorsed in blank or to the order of the
Trustee, (ii) cause promptly to be recorded an assignment in the appropriate
jurisdictions, (iii) deliver or cause to be delivered the original Qualified
Replacement Mortgage and such recorded assignment, together with original or
duly certified copies of any and all prior assignments, to the Custodian, on
behalf of the Trustee within 15 days of receipt thereof by CHEC (but in any
event within 120 days after the date of conveyance of such Qualified Replacement
Mortgage) and (iv) deliver the title insurance policy, or where no such policy
is required to be provided under Section 3.05(b)(i)(B), the other evidence of
title required in Section 3.05(b)(i)(B).
(g) As to each Home Equity Loan released from the Trust in connection with
a repurchase or the conveyance of a Qualified Replacement Mortgage, the
Custodian, on behalf of the Trustee shall deliver on the date of such repurchase
or conveyance of such Qualified Replacement Mortgage and on the order of CHEC
(i) the original Note relating thereto, endorsed, without recourse or
representation, in blank or to the order of CHEC, (ii) the original Mortgage so
released and all assignments relating thereto and (iii) such other documents as
constituted the File with respect thereto.
(h) If a Mortgage assignment is lost during the process of recording, or is
returned from the recorder's office unrecorded due to a defect therein, CHEC
shall prepare or cause to be prepared a substitute assignment or cure such
defect, as the case may be, and thereafter cause each such assignment to be duly
recorded.
Section 3.06. ACCEPTANCE BY TRUSTEE; CERTAIN SUBSTITUTIONS OF HOME EQUITY
LOANS; CERTIFICATION BY TRUSTEE.
(a) The Trustee agrees to execute and deliver and the Trustee agrees to
cause the Custodian to execute and deliver on behalf of the Trustee on the
Startup Day an acknowledgment of receipt of the items delivered by CHEC in the
forms attached as Exhibits E-1 and E-2 hereto, respectively, and declares
through the Custodian that it will hold such documents and any amendments,
replacement or supplements thereto, as well as any other assets included in the
definition of Trust Estate and delivered to the Custodian, on behalf of the
Trustee, as Trustee in trust upon and subject to the conditions set forth herein
for the benefit of the Owners. The Trustee agrees, for the benefit of the
Owners, to cause the Custodian to review such items within 45 days after the
Startup Day (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Replacement
Mortgage, within 45 days after the assignment thereof) and to deliver to the
Depositor, the Seller, the Conduit Sellers, the Servicer and the Trustee a
certification in the form attached hereto as Exhibit F (a "Pool Certification")
to the effect that, as to each Home Equity Loan listed in the Schedule of Home
Equity Loans (other than any Home Equity Loan paid in full or any Home Equity
Loan specifically identified in such Pool Certification as not covered by such
Pool Certification), (i) all documents required to be delivered to it pursuant
to Section 3.05(b)(i) of this Agreement have been executed and are in its
possession and that the Notes have been endorsed as set forth in Section
3.05(b)(i) hereof, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Home Equity Loan and (iii)
based on its examination and only as to the foregoing documents, the information
set forth on the Schedule of Home Equity Loans accurately reflects the
information set forth in the File, except as may be indicated in an exception
report in the form attached hereto as Exhibit J ("Exception Report"), such
Exception Report to be provided electronically concurrently with the delivery of
the Pool Certification to the e-mail addresses specified by the recipients. The
Custodian, on behalf of the Trustee, shall have no responsibility for reviewing
any File except as expressly provided in this subsection 3.06(a). Without
limiting the effect of the preceding sentence, in reviewing any File, the
Custodian, on behalf of the Trustee, shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment is in proper form (except to determine if the Trustee is the
assignee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction or whether a blanket assignment is
permitted in any applicable jurisdiction, but shall only be required to
determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded. The
Custodian, on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face, nor shall the Custodian, on behalf of the Trustee, be under any duty
to determine independently whether there are any intervening assignments or
assumption or modification agreements with respect to any Home Equity Loan.
(b) If the Custodian, on behalf of the Trustee during such 45-day period
finds any document constituting a part of a File which is not executed, has not
been received, or is unrelated to the Home Equity Loans identified in the
Schedule of Home Equity Loans, or that any Home Equity Loan does not conform to
the description thereof as set forth in the Schedule of Home Equity Loans, the
Custodian, on behalf of the Trustee shall promptly so notify the Depositor, CHEC
and the Owners. In performing any such review, the Custodian, on behalf of the
Trustee may conclusively rely on CHEC as to the purported genuineness of any
such document and any signature thereon. It is understood that the scope of the
review of the items delivered by CHEC pursuant to Section 3.05(b)(i) is limited
solely to confirming that the documents listed in Section 3.05(b)(i) have been
executed and received, relate to the Files identified in the Schedule of Home
Equity Loans and conform to the description thereof in the Schedule of Home
Equity Loans. CHEC agrees to use reasonable efforts to remedy a material defect
in a document constituting part of a File of which it is so notified by the
Custodian, on behalf of the Trustee. If, however, within 90 days after such
notice to it respecting such defect CHEC has not remedied the defect and the
defect materially and adversely affects the interest in the related Home Equity
Loan of the Owners, CHEC will (or will cause an Affiliate to) on the next
succeeding Monthly Remittance Date (i) substitute in lieu of such Home Equity
Loan a Qualified Replacement Mortgage and deliver the Substitution Amount to the
Servicer for deposit in the Principal and Interest Account or (ii) purchase such
Home Equity Loan at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be delivered to the Servicer for deposit in the
Principal and Interest Account. In connection with any proposed purchase or
substitution of a Home Equity Loan, CHEC shall cause at its expense to be
delivered to the Trustee an Opinion of Counsel experienced in federal income tax
matters stating whether or not such a proposed purchase or substitution would
constitute a Prohibited Transaction for the Trust or would jeopardize the status
of any REMIC created hereunder as a REMIC, and CHEC shall only be required to
take either such action to the extent such action would not constitute a
Prohibited Transaction for the Trust and would not jeopardize the status of such
REMIC as a REMIC. Any required purchase or substitution, if delayed by the
absence of such opinion, shall nonetheless occur upon the earlier of (i) the
occurrence of a default or imminent default with respect to the Home Equity Loan
or (ii) the delivery of such opinion.
(c) In addition to the foregoing, the Custodian, on behalf of the Trustee
also agrees to make a review during the 12th month after the Startup Day
indicating the current status of the exceptions previously indicated on the
Exception Report delivered electronically concurrently with the Pool
Certification (the "Final Certification") and, by the end of the 12th month
after the Startup Day, deliver electronically to the Depositor, the Seller, the
Conduit Sellers, the Servicer and the Trustee (to the e-mail addresses specified
by the recipients) such Final Certification. After delivery of the Final
Certification, the Custodian, on behalf of the Trustee and the Servicer shall
provide electronically to the Trustee (to the e-mail address specified by the
Trustee) no less frequently than monthly updated certifications indicating the
then current status of exceptions, until all such exceptions have been
eliminated.
Section 3.07. RESERVED.
Section 3.08. CUSTODIAN.
Notwithstanding anything to the contrary in this Agreement, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Files pursuant to Sections
3.05, 3.06, and 8.14 and the related Pool Certification and Final Certification
shall be performed by the Custodian on the Trustee's behalf pursuant to the
Custodial Agreement; provided, however, the Trustee shall remain primarily
liable for such obligations. The fees and expenses of the Custodian will be paid
by the Servicer.
If, pursuant to Section 4.12 of the Custodial Agreement, the Custodian
shall request written instructions from the Trustee, the Trustee hereby agrees
to promptly provide such instructions.
Section 3.09. COOPERATION PROCEDURES. CHEC shall, in connection with the
delivery of each Qualified Replacement Mortgage to the Custodian, on behalf of
the Trustee, provide the Trustee with information set forth in the Schedule of
Home Equity Loans with respect to such Qualified Replacement Mortgage.
(a) The Seller, the Conduit Sellers, the Depositor, the Servicer and the
Trustee covenant to provide each other with all data and information required to
be provided by them hereunder at the times required hereunder, and additionally
covenant reasonably to cooperate with each other in providing any additional
information required to be obtained by any of them in connection with their
respective duties hereunder.
(b) The Servicer shall maintain such accurate and complete accounts,
records and computer systems pertaining to each File as shall enable it and the
Trustee to comply with this Agreement. In performing its recordkeeping duties
the Servicer shall act in accordance with the servicing standards set forth in
this Agreement. The Servicer shall conduct, or cause to be conducted, periodic
audits of its accounts, records and computer systems as set forth in Sections
8.16 and 8.17 hereof. The Servicer shall promptly report in writing to the
Trustee any failure on its part to maintain its accounts, records and computer
systems herein provided and promptly take appropriate action to remedy any such
failure.
(c) CHEC further confirms to the Trustee that it has caused the portions of
the electronic ledger relating to the Home Equity Loans to be clearly and
unambiguously marked to indicate that such Home Equity Loans have been sold,
transferred, assigned and conveyed through the Depositor to the Trustee and
constitute part of the Trust Estate in accordance with the terms of the trust
created hereunder.
END OF ARTICLE III
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01. ISSUANCE OF CERTIFICATES.
On the Startup Day, upon the Trustee's receipt from the Depositor of an
executed Delivery Order in the form set forth as Exhibit G hereto, the Trustee
shall authenticate and deliver the Certificates on behalf of the Trust.
Section 4.02. SALE OF CERTIFICATES.
At 11:00 a.m. New York City time on the Startup Day, at the offices of
Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at
such other location acceptable to the Seller), the Seller and the Conduit
Sellers will sell and convey the Home Equity Loans and the money, instruments
and other property related thereto to the Depositor and the Depositor will
convey the Home Equity Loans and the money, instruments and other property
related thereto to the Trustee and the Trustee will deliver (i) to the
Underwriters (as designee of the Depositor), the Offered Certificates with an
aggregate Percentage Interest in each Class equal to 100% registered in the name
of Cede & Co. or in such other names as the Underwriters shall direct, against
payment to the Depositor of the purchase price thereof by wire transfer of
immediately available funds to the Trustee as designee of the Depositor and (ii)
to the respective registered owners thereof (as designees of the Depositor, the
Seller and the Conduit Sellers), Class R Certificates registered in the name of
CHEC Residual, LLC, a Delaware limited liability company, and the Class X-IO
Certificates, registered in the name of CHEC Residual, LLC, a Delaware limited
liability company (all such events shall be referred to herein as the
"Closing").
END OF ARTICLE IV
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01. TERMS.
(a) The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references herein or therein with
respect to the Certificates as to "principal" and "interest" thereof, no debt of
any Person is represented thereby, nor are the Certificates or the underlying
Notes guaranteed by any Person (except that the Notes may be recourse to the
Mortgagors thereof to the extent permitted by law and the terms of the related
Note). The Offered Certificates are payable solely from payments received on or
with respect to the Home Equity Loans (net of the Servicing Fees and Trustee
Fees), from moneys in the Principal and Interest Account, except as otherwise
provided herein and from earnings on moneys and the proceeds of property held as
a part of the Trust Estate. Each Certificate entitles the Owner thereof to
receive monthly on each Distribution Date, in order of priority of distributions
with respect to such Class of Certificates as set forth in Section 7.03, a
specified portion of such payments with respect to the Home Equity Loans.
(b) Each Owner is required, and hereby agrees, to return to the Trustee,
any Certificate prior to the Trustee making the final distribution due thereon.
Any such Certificate as to which the Trustee has made the final distribution
thereon shall be deemed canceled and shall no longer be Outstanding for any
purpose of this Agreement.
Section 5.02. FORMS.
The Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class A-7 Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, the Class B Certificates, the Class X-IO Certificates
and the Class R Certificates shall be in substantially the forms set forth in
Exhibits X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-00, X and C hereof,
respectively.
Section 5.03. EXECUTION, AUTHENTICATION AND DELIVERY.
Each Certificate shall be executed on behalf of the Trust, by the manual
signature of one of the Trustee's Authorized Officers at the written direction
of the Servicer. In addition, each Certificate shall be authenticated by the
manual signature of one of the Trustee's Authorized Officers at the written
direction of the Servicer.
Certificates bearing the manual signature of individuals who were at any
time the proper officers of the Trustee shall, upon proper authentication by the
Trustee, bind the Trust, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the execution and delivery of such
Certificates or did not hold such offices at the date of authentication of such
Certificates.
The initial Certificates shall be dated as of the Startup Day and delivered
at the Closing to the parties specified in Section 4.02 hereof. Subsequently
issued Certificates will be dated as of the issuance of the Certificate.
No Certificate shall be valid until executed and authenticated as set forth
above.
Section 5.04. REGISTRATION AND TRANSFER OF CERTIFICATES.
(a) The Trustee shall cause to be kept a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and the registration of
transfer of Certificates. The Trustee is hereby initially appointed Registrar
for the purpose of registering Certificates and transfers of Certificates as
herein provided. The Depositor, the Owners and the Trustee shall have the right
to inspect the Register upon reasonable notice during the Trustee's normal hours
and to obtain copies thereof, and the Trustee shall have the right to rely upon
a certificate executed on behalf of the Registrar by an Authorized Officer
thereof as to the names and addresses of the Owners of the Certificates and the
principal amounts and numbers of such Certificates.
If a Person other than the Trustee is appointed as Registrar by the Owners
of a majority of the aggregate Voting Rights represented by the Certificates
then Outstanding, such Owners shall give the Trustee and the Owners prompt
written notice of the appointment of such Registrar and of the location, and any
change in the location, of the Register. In connection with any such appointment
the reasonable fees of the Registrar shall be paid, as expenses of the Trust,
pursuant to Section 7.06 hereof.
(b) Subject to the provisions of Section 5.08 hereof, upon surrender for
registration of transfer of any Certificate at the office designated as the
location of the Register, upon the direction of the Registrar, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class and in the aggregate
outstanding principal amount or Percentage Interest of the Certificate so
surrendered.
(c) At the option of any Owner, Certificates of any Class owned by such
Owner may be exchanged for other Certificates authorized of like Class and tenor
and a like aggregate outstanding principal amount or Percentage Interest and
bearing numbers not contemporaneously outstanding, upon surrender of the
Certificates to be exchanged at the office designated as the location of the
Register. Whenever any Certificate is so surrendered for exchange, upon the
direction of the Registrar, the Trustee shall execute, authenticate and deliver
the Certificate or Certificates which the Owner making the exchange is entitled
to receive.
(d) All Certificates issued upon any registration of transfer or exchange
of Certificates shall be valid evidence of the same ownership interests in the
Trust and entitled to the same benefits under this Agreement as the Certificates
surrendered upon such registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Owner
thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any registration of
transfer or exchange of Certificates, but the Registrar or Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates; any other expenses in connection with such transfer or exchange
shall be an expense of the Trust.
(g) It is intended that the Offered Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Offered Certificates shall, except as otherwise provided
in Subsection (h), be initially issued in the form of a single fully registered
Offered Certificate of such Class. Upon initial issuance, the ownership of each
such Offered Certificate shall be registered in the Register in the name of Cede
& Co., or any successor thereto, as nominee for the Depository.
On the Startup Day, the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B Certificates shall
be issued in denominations of $25,000 and integral multiples of $1,000 in excess
thereof.
The Depositor and the Trustee are hereby authorized to execute and deliver
the Representation Letter with the Depository in the form provided to the
Trustee by the Depositor.
With respect to the Offered Certificates registered in the Register in the
name of Cede & Co., as nominee of the Depository, the Depositor, the Servicer,
the Seller and the Trustee shall have no responsibility or obligation to Direct
or Indirect Participants or beneficial owners for which the Depository holds
Offered Certificates from time to time as a Depository. Without limiting the
immediately preceding sentence, the Depositor, the Servicer, the Sellers and the
Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to the ownership interest in the Offered Certificates,
(ii) the delivery to any Direct or Indirect Participant or any other Person,
other than a registered Owner of an Offered Certificate as shown in the
Register, of any notice with respect to the Offered Certificates or (iii) the
payment to any Direct or Indirect Participant or any other Person, other than a
registered Owner of an Offered Certificate as shown in the Register, of any
amount with respect to any distribution of principal or interest on the Offered
Certificates. No Person other than a registered Owner of an Offered Certificate
as shown in the Register shall receive a certificate evidencing such Offered
Certificate.
Upon delivery by the Depository to the Trustee of written notice to the
effect that the Depository has determined to substitute a new nominee in place
of Cede & Co., and subject to the provisions hereof with respect to the payment
of interest by the mailing of checks or drafts to the registered Owners of
Offered Certificates appearing as registered Owners in the registration books
maintained by the Trustee at the close of business on a Record Date, the name
"Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(h) In the event that (i) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Offered Certificates and either of CHEC or the Trustee is unable to locate a
qualified successor or (ii) the Depositor at its sole option elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of a
Servicer Termination Event, the beneficial owners of each Class of Offered
Certificates representing Percentage Interests aggregating not less than 51% of
such Class advises the Trustee and Depository through the Direct or Indirect
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Owners is no longer in the best interests of the
Owners, the Offered Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. In the case of (i) and (ii) above, CHEC may determine
that the Offered Certificates shall be registered in the name of and deposited
with a successor depository operating a global book-entry system, as may be
acceptable to the CHEC and at the expense of CHEC, or such depository's agent or
designee but, if CHEC does not select such alternative global book-entry system
and in the case of (iii) above, the Offered Certificates may be registered in
whatever name or names registered Owners of Offered Certificates transferring
Offered Certificates shall designate, in accordance with the provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the contrary,
so long as any Offered Certificate is registered in the name of Cede & Co., as
nominee of the Depository, all distributions of principal or interest on such
Offered Certificates and all notices with respect to such Offered Certificates
shall be made and given, respectively, in the manner provided in the
Representation Letter.
Section 5.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) in the case of any mutilated Certificate, such
mutilated Certificate shall first be surrendered to the Trustee, and in the case
of any destroyed, lost or stolen Certificate, there shall be first delivered to
the Trustee such security or indemnity as may be reasonably required by it to
hold the Trustee harmless (PROVIDED, THAT with respect to an Owner which is an
institutional investor, a letter of indemnity furnished by it shall be
sufficient for this purpose), then, in the absence of written notice to the
Trustee or the Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute on behalf of the Trust and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and aggregate principal amount, bearing a number not
contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section, the Registrar
or Trustee may require the payment from the transferor or transferee of the
related Certificate of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto; any other expenses in connection
with such issuance shall be an expense of the Trust.
Every new Certificate issued pursuant to this Section in exchange for or in
lieu of any mutilated, destroyed, lost or stolen Certificate shall constitute
evidence of a substitute interest in the Trust, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all other
Certificates of the same Class duly issued hereunder and such mutilated,
destroyed, lost or stolen Certificate shall not be valid for any purpose.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.06. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Certificate,
the Trustee and any agent of the Trustee may treat the Person in whose name any
Certificate is registered as the Owner of such Certificate for the purpose of
receiving distributions with respect to such Certificate and for all other
purposes whatsoever, and neither the Trustee nor any agent of the Trustee shall
be affected by notice to the contrary.
Section 5.07. CANCELLATION.
All Certificates surrendered for registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate canceled as provided
in this Section, except as expressly permitted by this Agreement. All canceled
Certificates may be held by the Trustee in accordance with its standard
retention policy in effect from time to time.
Section 5.08. LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS.
(a) No sale or other transfer of record or beneficial ownership of a Class
R Certificate (whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agreement or otherwise) shall be made to a
Disqualified Organization or an agent of a Disqualified Organization. The
transfer, sale or other disposition of a Class R Certificate (whether pursuant
to a purchase, a transfer resulting from a default under a secured lending
agreement or otherwise) to a Disqualified Organization shall be deemed to be of
no legal force or effect whatsoever and such transferee shall not be deemed to
be an Owner for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Class R Certificate. Furthermore, in no event
shall the Trustee accept surrender for transfer, registration of transfer, or
register the transfer, of any Class R Certificate nor authenticate and make
available any new Class R Certificate unless the Trustee has received an
affidavit from the proposed transferee in the form attached hereto as Exhibit H.
Each holder of a Class R Certificate by his acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this Section 5.08(a).
(b) No other sale or other transfer of record or beneficial ownership of a
Class X-IO or Class R Certificate shall be made unless such transfer is exempt
from the registration requirements of the Securities Act, and any applicable
state securities laws or is made in accordance with said Securities Act and
laws. In the event of any such transfer: (i) in the case of transfers for which
an investment letter in the form of Exhibit I-1 or I-2 is provided by the
transferee to the Trustee, the Trustee or the Depositor shall require a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Depositor and the Trustee to the effect that such transfer may be made pursuant
to an exemption, describing the applicable exemption and the basis therefor,
from said Securities Act or is being made pursuant to said Securities Act, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Trust Estate; and (ii) in the case of transfers for which an investment letter
in the form of Exhibit I-1 or I-2 is provided, the investment letter shall not
be an expense of the Depositor, the Trustee or the Trust Estate. The Owner of a
Class X-IO or Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Depositor and the Sellers
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) No transfer of a Class X-IO or Class R Certificate shall be made unless
the Trustee shall have received either: (i) a representation letter from the
transferee of such Class X-IO or Class R Certificate, acceptable to and in form
and substance satisfactory to the Trustee (which may be combined with the
investment letter required by subsection (b) above), to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA nor a
plan or other arrangement subject to Section 406 of ERISA nor a plan or other
arrangement subject to Section 4975 of the Code (collectively, a "Plan"), nor is
acting on behalf of any Plan nor using the assets of any Plan to effect such
transfer or (ii) in the event that any Class X-IO or Class R Certificate is
purchased by a Plan, or by a person or entity acting on behalf of any Plan or
using the assets of any Plan to effect such transfer (including the assets of
any Plan held in an insurance company separate or general account), an Opinion
of Counsel, acceptable to and in form and substance satisfactory to the Trustee,
which Opinion of Counsel shall not be at the expense of either the Depositor,
the Trustee or the Trust Estate, to the effect that the purchase or holding of
any Class X-IO or Class R Certificates will not result in any non-exempt
prohibited transaction under ERISA and/or Section 4975 of the Code, and will not
subject the Trustee to any obligation or liability in addition to those
expressly undertaken under this Agreement. Notwithstanding anything else to the
contrary herein, any purported transfer of a Certificate to or on behalf of any
Plan without the delivery to the Trustee of an Opinion of Counsel as described
above shall be null and void and of no effect.
(d) Reserved.
(e) No sale or other transfer of any Class X-IO Certificates or Class R
Certificate may be made to the Depositor, to any Person that was, at any time,
an owner of a Home Equity Loan, or to any Seller except in connection with (1)
with respect to the Depositor, the initial issuance of such Certificates by the
Trust to the Depositor and, with respect to CHEC and the Conduit Sellers, the
payment in partial consideration for the Home Equity Loans sold by the
applicable Seller or in payment of any deferred purchase price under the Conduit
Warehousing Facility or Conduit II Warehousing Facility by the Conduit Sellers
to CHEC on the Startup Day and (2) the contemporaneous transfer of such
Certificates to CHEC Residual, LLC, a Delaware limited liability company.
(f) Notwithstanding anything to the contrary contained in this Section
5.08, the Class R Certificates and Class X-IO Certificates may be transferred to
CHEC Residual, LLC, a Delaware limited liability company and wholly-owned
subsidiary of the Seller, without regard to Sections 5.08(b), (c) or (e) above.
Section 5.09. ASSIGNMENT OF RIGHTS.
Other than with respect to any Class R Certificates (unless the Trustee
shall have received a satisfactory Opinion of Counsel to the effect that such
action with respect to a Class R Certificate will not have an adverse effect on
the status of any REMIC created hereunder as a "REMIC") an Owner may pledge,
encumber, hypothecate or assign all or any part of its right to receive
distributions hereunder, but such pledge, encumbrance, hypothecation or
assignment shall not constitute a transfer of an ownership interest sufficient
to render the transferee an Owner of the Trust without compliance with the
provisions of Section 5.04 and Section 5.08 hereof.
END OF ARTICLE V
ARTICLE VI
COVENANTS
Section 6.01. DISTRIBUTIONS.
On each Distribution Date, the Trustee will withdraw amounts from the
Certificate Account and make the distributions with respect to the Certificates
in accordance with the terms of the Certificates and this Agreement. Such
distributions shall be made (i) in the case of the Offered Certificates
registered in the name of the Depository, by wire transfer to the Depository or
(ii) in each other case, by check or draft mailed on each Distribution Date or,
if requested by any Owner (other than the Depository) of (A) an Offered
Certificate having an original principal balance of not less than $1,000,000 or
(B) a Class X-IO or Class R Certificate having a Percentage Interest of not less
than 10% in writing not later than one Business Day prior to the applicable
Record Date (which request does not have to be repeated unless it has been
withdrawn), to such Owner by wire transfer to an account within the United
States designated no later than five Business Days prior to the related Record
Date, in each case to each Owner of record on the immediately preceding Record
Date.
Section 6.02. MONEY FOR DISTRIBUTIONS TO BE HELD IN TRUST; WITHHOLDING.
(a) All payments of amounts due and payable with respect to any Certificate
that are to be made from amounts withdrawn from the Certificate Account shall be
made by and on behalf of the Trustee or by a Paying Agent, and no amounts so
withdrawn from the Certificate Account for payments of Certificates shall be
paid over to the Trustee except as provided in this Section.
(b) If CHEC has appointed a Paying Agent pursuant to Section 11.15 hereof,
the Trustee will, on the Business Day immediately preceding each Distribution
Date, deposit with such Paying Agent in immediately available funds an aggregate
sum sufficient to pay the amounts then becoming due on the Certificates (to the
extent funds are then available for such purpose in the Certificate Account for
the Class to which such amounts are due) such sum to be held in trust for the
benefit of the Owners entitled thereto.
(c) CHEC may at any time direct any Paying Agent to pay to the Trustee all
sums held in trust by such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which the sums were held by such Paying
Agent; and upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(d) CHEC shall require the Paying Agent, including the Trustee on behalf of
the Trust, to comply with all requirements of the Code and applicable state and
local law with respect to the withholding from any distributions made by it to
any Owner of any applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection therewith, and the
Trustee and Paying Agent agree to comply with such requirements.
(e) Any money held by the Trustee or a Paying Agent in trust for the
payment of any amount due with respect to any Offered Certificate remaining
unclaimed by the Owner of such Certificate for the period then specified in the
escheat laws of the State of New York after such amount has become due and
payable shall be discharged from such trust and be paid, upon delivery to the
Trustee of an Opinion of Counsel that such payment is permitted by applicable
law, to the Depositor; and the Owner of such Offered Certificate shall
thereafter, as an unsecured general creditor, look only to the Depositor for
payment thereof (but only to the extent of the amounts so paid to the Depositor)
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying
Agent before being required to make any such payment, may at the expense of the
Trust cause to be published once, in the eastern edition of THE WALL STREET
JOURNAL, notice that such money remains unclaimed and that, after a date
specified therein, which shall be not fewer than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be paid to
the Depositor. The Trustee shall, at the written direction of CHEC, also adopt
and employ, at the expense of CHEC, any other reasonable means of notification
of such payment (including but not limited to mailing notice of such payment to
Owners whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Registrar, the Trustee or any Paying Agent,
at the last address of record for each such Owner).
Section 6.03. PROTECTION OF TRUST ESTATE.
(a) The Trustee will hold the Trust Estate in trust for the benefit of the
Owners and at the request of the Depositor, will from time to time execute and
deliver all such supplements and amendments hereto pursuant to Section 11.14
hereof and all instruments of further assurance and other instruments, and will
take such other action upon such request from the Depositor, to:
(i) more effectively hold in trust all or any portion of the Trust
Estate;
(ii) perfect, publish notice of, or protect the validity of any grant
made or to be made by this Agreement;
(iii) enforce any of the Home Equity Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Trustee, and the ownership interests of the Owners represented thereby,
in such Trust Estate against the claims of all Persons and parties.
To the extent not covered by the indemnity or other security contemplated
by 10.01(e) and 10.01(g), the Trustee shall be reimbursed for any costs or
expenses associated with this section pursuant to Section 7.03(b) clause C.14.
(b) The Trustee shall have the power to enforce, and shall enforce the
obligations and rights of the other parties to this Agreement, and of the
Owners, by action, suit or proceeding at law or equity, and shall also have the
power to enjoin, by action or suit in equity, any acts or occurrences which may
be unlawful or in violation of the rights of the Owners as such rights are set
forth in this Agreement; PROVIDED, HOWEVER, that nothing in this Section shall
require any action by the Trustee unless the Trustee shall first (i) have been
furnished indemnity satisfactory to it and (ii) when required by this Agreement,
have been requested by the Owners of a majority of the Voting Rights represented
by the Certificates then Outstanding.
(c) The Trustee shall execute any instrument required pursuant to this
Section so long as such instrument does not conflict with this Agreement or with
the Trustee's fiduciary duties, or adversely affect its rights, indemnities and
immunities hereunder.
Section 6.04. PERFORMANCE OF OBLIGATIONS.
The Trustee will not take any action that would release any Person from any
of such Person's covenants or obligations under any instrument or document
relating to the Certificates or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or document, except as
expressly provided in this Agreement or such other instrument or document.
The Trustee may contract with other Persons to assist it in performing its
duties hereunder pursuant to Section 10.03(g); provided, that the Trustee shall
remain liable for the performance of any such duties notwithstanding any such
contractual arrangement.
Section 6.05. NEGATIVE COVENANTS.
The Trustee will not:
(i) sell, transfer, exchange or otherwise dispose of any of the Trust
Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the distributions
payable in respect of, the Certificates (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Owner by reason of the payment of any taxes levied or
assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty, on behalf of the Trust, any
indebtedness of any Person except pursuant to this Agreement;
(iv) dissolve or liquidate the Trust in whole or in part, except
pursuant to Article IX hereof; or (A) permit the validity or effectiveness
of this Agreement to be impaired, or permit any Person to be released from
any covenant or obligation with respect to the Trust or to the Certificates
under this Agreement, except as may be expressly permitted hereby or (B)
permit any lien, charge, adverse claim, security interest, mortgage or
other encumbrance to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof.
Section 6.06. NO OTHER POWERS.
The Trustee will not permit the Trust to engage in any business activity or
transaction other than those activities permitted by Section 2.03 hereof.
Section 6.07. LIMITATION OF SUITS.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Agreement, or for the appointment of a receiver
or trustee of the Trust, or for any other remedy with respect to an event of
default hereunder, unless:
(1) such Owner has previously given written notice to the Seller and the
Trustee of such Owner's intention to institute such proceeding;
(2) the Owners of not less than 51% of the Voting Rights represented by
the Certificates then Outstanding shall have made written request to
the Trustee to institute such proceeding in its own name as Trustee
establishing the Trust;
(3) such Owner or Owners have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Owners of a majority of
the Voting Rights represented by the Certificates then Outstanding;
IT BEING UNDERSTOOD AND INTENDED THAT NO ONE OR MORE OWNERS SHALL HAVE ANY RIGHT
IN ANY MANNER WHATEVER BY VIRTUE OF, OR BY AVAILING THEMSELVES OF, ANY PROVISION
OF THIS AGREEMENT TO AFFECT, DISTURB OR PREJUDICE THE RIGHTS OF ANY OTHER OWNER
OF THE SAME CLASS OR TO OBTAIN OR TO SEEK TO OBTAIN PRIORITY OR PREFERENCE OVER
ANY OTHER OWNER OF THE SAME CLASS OR TO ENFORCE ANY RIGHT UNDER THIS AGREEMENT,
EXCEPT IN THE MANNER HEREIN PROVIDED AND FOR THE EQUAL AND RATABLE BENEFIT OF
ALL THE OWNERS OF THE SAME CLASS.
Section 6.08. UNCONDITIONAL RIGHTS OF OWNERS TO RECEIVE DISTRIBUTIONS.
Notwithstanding any other provision in this Agreement, the Owner of any
Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.
Section 6.09. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided herein, no right or remedy herein conferred
upon or reserved to the Trustee or to the Owners is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
Except as otherwise provided herein, the assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10. DELAY OR OMISSION NOT WAIVER.
No delay of the Trustee or any Owner of any Certificate to exercise any
right or remedy under this Agreement shall impair any such right or remedy or
constitute a waiver of such right or remedy. Every right and remedy given by
this Article VI or by law to the Trustee or to the Owners may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Owners, as the case may be.
Section 6.11. CONTROL BY OWNERS.
The Owners of a majority of the Voting Rights represented by the
Certificates then Outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with respect
to the Certificates or exercising any trust or power conferred on the Trustee
with respect to the Certificates or the Trust Estate, including, but not limited
to, those powers set forth in Section 6.03 and Section 8.20 hereof, PROVIDED
THAT:
(1) such direction shall not be in conflict with any rule of law or with
this Agreement;
(2) the Trustee shall have been provided with indemnity satisfactory to
it; and
(3) the Trustee may take any other action deemed proper by the Trustee, as
the case may be, which is not inconsistent with such direction;
PROVIDED, HOWEVER, that the Trustee need not take any action which it
determines might involve it in liability or may be unjustly
prejudicial to the Owners not so directing.
Section 6.12. INDEMNIFICATION BY CHEC.
CHEC agrees to indemnify and hold the Trustee, the Depositor and each Owner
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Trustee, the Depositor and any Owner sustain in any way related to the
failure of Sellers to perform their duties in compliance with the terms of this
Agreement. CHEC shall immediately notify the Trustee, the Depositor and each
Owner if a claim is made by a third party that the Servicer has failed to
perform its obligations to service and administer the Home Equity Loans in
compliance with the terms of this Agreement, and CHEC shall assume (with the
consent of the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Depositor, the Servicer, the Sellers, the Trustee and/or Owner in respect of
such claim. The Trustee shall, in accordance with instructions received from
CHEC, reimburse CHEC only from amounts otherwise distributable on the Class X-IO
and the Class R Certificates for all amounts advanced by it pursuant to the
preceding sentence, except when a final nonappealable adjudication determines
that the claim relates directly to the failure of the Sellers to perform their
duties in compliance with the terms of this Agreement. The provisions of this
Section 6.12 shall survive the termination of this Agreement, the resignation or
removal of the Trustee and the payment of the outstanding Certificates.
END OF ARTICLE VI
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01. COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Trustee shall demand
payment or delivery of all money and other property payable to or receivable by
the Trustee pursuant to this Agreement, including all payments due on the Home
Equity Loans in accordance with the respective terms and conditions of such Home
Equity Loans and required to be paid over to the Trustee by the Servicer or by
any Sub-Servicer. The Trustee shall hold all such money and property received by
it as part of the Trust Estate and shall apply it as provided in this Agreement.
Section 7.02. ESTABLISHMENT OF ACCOUNTS.
(a) The Depositor shall cause the Certificate Account and the Supplemental
Interest Reserve Fund to be established on the Startup Day, and the Trustee
shall maintain each of the Certificate Account and the Supplemental Interest
Reserve Fund, at the Corporate Trust Office as an Eligible Account to be held by
the Trustee in the name of the Trust on behalf of (i) in the case of the
Certificate Account, the Owners of the Certificates; and (ii) in the case of the
Supplemental Interest Reserve Fund, the Owners of the Class A-5, Class A-7 and
Subordinate Certificates.
(b) On each Determination Date the Trustee shall determine (subject to the
terms of Section 10.03(j) hereof, based solely on information provided to it
electronically or in writing by the Servicer) with respect to the immediately
following Distribution Date, the amounts that are expected to be on deposit in
the Certificate Account as of such Distribution Date.
Section 7.03. FLOW OF FUNDS.
(a) (i) The Trustee shall deposit in the Certificate Account without
duplication, upon receipt, with respect to Group I, the proceeds of any
liquidation of the assets of the Trust insofar as such assets relate to
Group I, all remittances made to the Trustee pursuant to Sections 8.08(e)
and 8.09 with respect to Group I and the Group I Monthly Remittance Amount
remitted by the Servicer.
(ii) The Trustee shall deposit in the Certificate Account without
duplication, upon receipt, with respect to Group II, the proceeds of any
liquidation of the assets of the Trust insofar as such assets relate to
Group II, all remittances made to the Trustee pursuant to Sections 8.08(e)
and 8.09 with respect to Group II and the Group II Monthly Remittance
Amount remitted by the Servicer.
(b) On each Distribution Date, the Trustee shall make the following
allocations, disbursements and transfers (based solely on information provided
by the Servicer in writing), from amounts deposited in the Certificate Account
pursuant to subsection (a) in the following order of priority, and each such
allocation, transfer and disbursement shall be treated as having occurred only
after all preceding allocations:
A. With respect to amounts in the Certificate Account received with
respect to Group I:
1. To the Trustee, the Trustee Fee and any Transition Expenses for
Group I.
2. Concurrently, to each Class of Group I Certificates, the related
Class Monthly Interest Amount and any related Class Interest Carryover
Shortfall for the Distribution Date, allocated among each such Class
of Group I Certificates on a pro rata basis based on each Group I
Certificate's Class Monthly Interest Amount and Class Interest
Carryover Shortfall without priority among such Group I Certificates.
3. The remaining amount pursuant to clause C. below.
B. With respect to amounts in the Certificate Account received with
respect to Group II:
1. To the Trustee, the Trustee Fee and any Transition Expenses for
Group II.
2. To the Class A-7 Certificates, the related Class Monthly Interest
Amount and any related Class Interest Carryover Shortfall for the
Distribution Date.
3. The remaining amount pursuant to clause C. below
C. With respect to any remaining amounts in the Certificate Account
received with respect to Group I and Group II:
1. Concurrently, to the Senior Certificates in both Certificate
Groups, the related Class Monthly Interest Amount and any related
Class Interest Carryover Shortfall to the extent not paid pursuant to
clauses A. and B. above on the applicable Distribution Date, allocated
among each such class of Senior Certificates pro rata based on the
amount that would have been distributed to each such Class in the
absence of such shortfall.
2. Sequentially, to the Class M-1, Class M-2 and Class B Certificates,
in that order, the related Class Monthly Interest Amount for the
Distribution Date.
3. To the Senior Certificates, an amount up to the Senior Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, concurrently as
follows:
(i) To the Group I Certificates, the Group I Principal
Distribution Amount allocated in the following order of
priority:
(a) To the Class A-6 Certificates, an amount equal to the
Class A-6 Lockout Distribution Amount; and
(b) Sequentially, to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, and Class A-6 Certificates, in
that order, until the respective Certificate Principal
Balances of such Certificates have been reduced to
zero.
(ii) To the Group II Certificates, the Group II Principal
Distribution Amount until the Certificate Principal Balance
of such Certificates has been reduced to zero.
4. To the Class M-1 Certificates, the Class M-1 Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal
Balance thereof is reduced to zero.
5. To the Class M-2 Certificates, the Class M-2 Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal
Balance thereof is reduced to zero.
6. To the Class B Certificates, the Class B Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal
Balance thereof is reduced to zero.
7. To the Offered Certificates, the Subordination Increase Amount for
the applicable Distribution Date, allocated in the order of priority
set forth in clauses 3 through 6 of clause C, above.
8. To the Class M-1 Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
9. To the Class M-2 Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
10. To the Class B Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
11. To the Class X-IO Certificates, for deposit to the Supplemental
Interest Reserve Fund, the lesser of (a) the Class X-IO Distribution
Amount and (b) the WAC Excess.
12. To the Class A-7 Certificates, the amount of any Class A-7
Certificateholders' Interest Index Carryover to be paid from and to
the extent of funds on deposit in the Supplemental Interest Reserve
Fund.
13. Sequentially to the Class A-5, Class M-1, Class M-2 and Class B
Certificates, in that order, the related Net Rate Cap Carryover to be
paid from and to the extent of funds on deposit in the Supplemental
Interest Reserve Fund.
14. To the Trustee as reimbursement for all Trustee Reimbursable
Expenses incurred in connection with its duties and obligations under
this Agreement, to the extent not paid as Trustee Fees or Transition
Expenses pursuant to clauses A.1 and B.1 above.
15. To the Servicer to the extent of any unreimbursed Delinquency
Advances, unreimbursed Servicing Advances and unreimbursed
Compensating Interest.
16. To the Class X-IO Certificates, an amount equal to the Class X-IO
Distribution Amount less any amounts thereof applied pursuant to
clauses C.11 through C.15 above; provided, however, that on any
Distribution Date on which the Class X-IO Distribution Amount is
distributable pursuant to Section 9.02(d), any Class X-IO Distribution
Amount shall instead be distributed to the Classes of Offered
Certificates, such amounts to be applied in reduction of the
Certificate Principal Balance of such Classes in the same order of
priority as the principal distribution amounts are to be applied for
such related Offered Certificates pursuant to clauses 3 through 6 of
clause C. above.
17. To the Class R Certificates, the remainder.
(c) Notwithstanding any of the foregoing provisions, the aggregate amounts
distributed on all Distribution Dates to the Owners of the related Offered
Certificates on account of principal pursuant to Section 7.03(b) shall not
exceed the original Certificate Principal Balance of the related Offered
Certificates.
The rights of the Owners to receive distributions from the proceeds of the
Trust Estate, and all ownership interests of the Owners in such distributions,
shall be as set forth in this Agreement. In this regard, all rights of the
Owners of the Class X-IO and Class R Certificates to receive distributions in
respect of the Class X-IO and Class R Certificates shall be subject and
subordinate to the preferential rights of the holders of the Offered
Certificates to receive distributions thereon and the ownership interests of
such Owners in such distributions, as described herein. In accordance with the
foregoing, the ownership interests of the Owners of the Class X-IO and Class R
Certificates in amounts deposited in the Accounts from time to time shall not
vest unless and until such amounts are distributed in respect of the Class X-IO
and Class R Certificates in accordance with the terms of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, the Owners
of the Class X-IO and Class R Certificates shall not be required to refund any
amount properly distributed on the Class X-IO and Class R Certificates pursuant
to this Section 7.03.
Section 7.04. SUPPLEMENTAL INTEREST RESERVE FUND. On the Startup Day, the
holders of the Class X-IO Certificates will deposit, or cause to be deposited,
into the Supplemental Interest Reserve Fund, $10,000. On each Distribution Date
as to which there is WAC Excess, the Trustee has been directed to, and shall
therefore, deposit into the Supplemental Interest Reserve Account an amount
equal to the WAC Excess which is payable pursuant to Section 7.03(b) clause C.12
and 7.03(b) clause C.13. If no WAC Excess is payable on a Distribution Date, the
Trustee shall deposit into the Supplemental Interest Reserve Fund on behalf of
the Class X-IO Certificateholders an amount such that when added to other
amounts already on deposit in the fund, the aggregate amount on deposit therein
is equal to $10,000. For federal and state income tax purposes, the Class X-IO
Certificateholders will be deemed to be the owners of the Supplemental Interest
Reserve Fund and all amounts deposited into the Supplemental Interest Reserve
Fund (other than the initial $10,000 deposit) shall be treated as amounts
distributed by REMIC II with respect to the Class X-IO Distribution Amount.
Amounts held in the Supplemental Interest Reserve Fund and not distributable to
the Carryover Certificateholders on any Distribution Date will be invested by
the Trustee in investments designated by the Class X-IO Certificateholders
having maturities on or prior to the next succeeding Distribution Date on which
such amounts will be distributable to the Carryover Certificateholders. Upon the
termination of the Trust, or the payment in full of the Carryover Certificates,
all amounts remaining on deposit in the Supplemental Interest Reserve Fund will
be released from the lien of the Trust and distributed to the Class X-IO
Certificateholders or their designees. The Supplemental Interest Reserve Fund
will be part of the Trust but not part of any REMIC created hereunder and any
payments to the Carryover Certificates of WAC Excess and will not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860G(a)(1).
Section 7.05. INVESTMENT OF ACCOUNTS.
(a) Consistent with any requirements of the Code, all or a portion of any
Account held by the Trustee for the benefit of the Owners may (i) remain
uninvested or (ii) be invested and reinvested by the Trustee as directed in
writing by the Servicer in the name of the Trustee for the benefit of the Owners
in one or more Eligible Investments bearing interest or sold at a discount. The
bank serving as Trustee or any Affiliate thereof may be the obligor on any
investment which otherwise qualifies as an Eligible Investment. No investment in
any Account shall mature later than the Business Day immediately preceding the
next Distribution Date. Amounts held in the Certificate Account shall be
invested in Eligible Investments, which Eligible Investments shall mature no
later than the Business Day preceding the immediately following Distribution
Date or, if such Eligible Investments are an obligation of the Trustee or are
money market funds for which the Trustee or any Affiliate is the manager or the
adviser, such Eligible Investments shall mature no later than the following
Distribution Date.
(b) If any amounts are needed for disbursement from any Account held by the
Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
as directed in writing by the Servicer a sufficient amount of the investments in
such Account. No investments will be liquidated prior to maturity unless the
proceeds thereof are needed for disbursement.
(c) All income or other gain from investment in the Certificate Account
held by the Trustee shall be withdrawn by the Trustee and remitted to the
Servicer (except with respect to all income or other gain from investment earned
on the Business Day immediately preceding a Distribution Date, which amounts
shall be retained by the Trustee). Any investment losses on amounts held in the
Certificate Account shall, promptly upon realization of such loss, be
contributed by the Servicer to the Trustee for deposit in the Certificate
Account.
Section 7.06. PAYMENT OF TRUST EXPENSES.
(a) With respect to the Certificate Account the Trustee shall receive all
income and other gains from investments as described in Section 7.05(c).
(b) The Seller shall pay directly on the Startup Day the reasonable fees
and expenses of counsel to the Trustee.
Section 7.07. ELIGIBLE INVESTMENTS.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and unconditionally
guaranteed as to the timely payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States, FHLMC senior debt
obligations, and FNMA senior debt obligations, but excluding any of such
securities whose terms do not provide for payment of a fixed dollar amount upon
maturity or call for redemption;
(b) Federal Housing Administration debentures;
(c) FHLMC participation certificates which guaranty timely payment of
principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home Loan Banks;
(e) FNMA mortgage-backed securities (other than stripped mortgage
securities) and senior debt obligations;
(f) Federal funds, certificates of deposit, time deposits, and bankers'
acceptances (having original maturities of not more than 365 days) of any
domestic bank, the short-term debt obligations of which have been rated A-l by
Standard & Poor's and P-l by Moody's and if rated by Fitch, F1+ by Fitch;
provided that any such certificates of deposit must be secured at all times by
collateral described in clause (a) or (b) above, such collateral must be held by
a third party and the Trustee must have a perfected first priority security
interest in such collateral;
(g) Deposits of any bank or savings and loan association (the long-term
deposit rating of which is A2 or better by Moody's and BBB or better by Standard
& Poor's and if rated by Fitch, AA- or better by Fitch) which has combined
capital, surplus and undivided profits of at least $50,000,000 which deposits
are insured by the FDIC and held up to the limits insured by the FDIC;
(h) Repurchase agreements collateralized by securities described in clause
(a), (c), or (e) above with any registered broker/dealer subject to the
Securities Investors Protection Corporation's jurisdiction and subject to
applicable limits therein promulgated by Securities Investors Protection
Corporation or any commercial bank, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed short-term or long term obligation rated
P-l or Aa2, respectively, or better by Moody's and A-1+ or AA, respectively, or
better by Standard & Poor's, and if rated by Fitch, AA- or F1+, respectively, or
better by Fitch provided:
a. A master repurchase agreement or specific written repurchase
agreement governs the transaction;
b. The securities are held free and clear of any lien by the Trustee
or an independent third party acting solely as agent for the Trustee, and
such third party is (a) a Federal Reserve Bank or (b) a bank which is a
member of the FDIC and which has combined capital, surplus and undivided
profits of not less than $125,000,000 or (c) a bank approved in writing for
such purpose by the Trustee, and the Trustee shall have received written
confirmation from such third party that it holds such securities, free and
clear of any lien, as agent for the Trustee;
c. A perfected first security interest under the Uniform Commercial
Code, or book-entry procedures prescribed at 31 CFR 306.1 ET SEQ. or 31 CFR
350.0 ET SEQ., in such securities is created for the benefit of the
Trustee;
d. The repurchase agreement has a term of thirty days or less and the
Trustee will value the collateral securities no less frequently than weekly
marked-to-market at current market price plus interest and will liquidate
the collateral securities if any deficiency in the required collateral
percentage is not restored within two business days of such valuation; and
e. The fair market value of the collateral securities in relation to
the amount of the repurchase obligation, including principal and interest,
is equal to at least ____%.
(i) Commercial paper (having original maturities of not more than 270 days)
rated in the highest short-term rating categories of Standard & Poor's and
Moody's and if rated by Fitch, Fitch;
(j) Any money market fund rated AAAm or AAAm-G by Standard & Poor's and Aaa
by Moody's and if rated by Fitch, AA by Fitch which funds are registered under
the Investment Company Act of 1940 and whose shares are registered under the
Securities Act, including any such fund that is managed by the Trustee or any
Affiliate of the Trustee or for which the Trustee or any of its Affiliates acts
as an adviser; and
(k) Any other investment permitted by each of the Rating Agencies;
PROVIDED THAT NO INSTRUMENT DESCRIBED ABOVE SHALL EVIDENCE EITHER THE RIGHT TO
RECEIVE (A) ONLY INTEREST WITH RESPECT TO THE OBLIGATIONS UNDERLYING SUCH
INSTRUMENT OR (B) BOTH PRINCIPAL AND INTEREST PAYMENTS DERIVED FROM OBLIGATIONS
UNDERLYING SUCH INSTRUMENT AND THE INTEREST AND PRINCIPAL PAYMENTS WITH RESPECT
TO SUCH INSTRUMENT PROVIDED A YIELD TO MATURITY AT PAR GREATER THAN 120% OF THE
YIELD TO MATURITY AT PAR OF THE UNDERLYING OBLIGATIONS; AND PROVIDED, FURTHER,
THAT ALL INSTRUMENTS DESCRIBED HEREUNDER SHALL MATURE AT PAR ON OR PRIOR TO THE
NEXT SUCCEEDING DISTRIBUTION DATE UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT
AND THAT NO INSTRUMENT DESCRIBED HEREUNDER MAY BE PURCHASED AT A PRICE GREATER
THAN PAR IF SUCH INSTRUMENT MAY BE PREPAID OR CALLED AT A PRICE LESS THAN ITS
PURCHASE PRICE PRIOR TO STATED MATURITY.
Section 7.08. ACCOUNTING AND DIRECTIONS BY TRUSTEE.
By 12:00 noon New York time, on each Distribution Date (or such earlier
period as shall be agreed by the Seller and the Trustee), the Trustee shall
notify (subject to the terms of Section 10.03(j) hereof, based solely on
information provided to the Trustee by the Servicer and upon which the Trustee
may conclusively rely) the Seller, the Depositor and each Owner, of the
following information with respect to such Distribution Date (which notification
may be given by facsimile, or by telephone promptly confirmed in writing):
(1) The aggregate amount on deposit in the Certificate Account as of the
related Determination Date;
(2) The Class Principal Distribution Amount, with respect to each Class
individually, and all Classes in the aggregate on the next
Distribution Date;
(3) The amount of any Excess Interest;
(4) The application of the amounts described in clauses (1) and (3) above
to be made on such Distribution Date in accordance with Section 7.03
hereof;
(5) The Certificate Principal Balance of each Class, the aggregate amount
of the principal of each Class of the Offered Certificates to be paid
on such Distribution Date and the remaining Certificate Principal
Balance of each Class of Offered Certificates following any such
payment;
(6) The amount, if any, of any Realized Losses for each Home Equity Loan
Group for the related Remittance Period and any Applied Realized Loss
Amounts with respect to the Subordinate Certificates for the related
Distribution Date; and
(7) The amount of any Subordination Increase Amount, any Excess
Overcollateralization Amount and the Required Overcollateralization
Amount, in each case for the relevant Distribution Date.
Section 7.09. REPORTS BY TRUSTEE TO OWNERS.
(a) On each Distribution Date the Trustee shall transmit a report in
writing to each Owner, the Underwriters, the Depositor, Standard & Poor's,
Xxxxx'x and Fitch setting forth:
(i) the amount of the distribution with respect to such Owner's
Certificates (based on a Certificate in the original principal amount of
$1,000);
(ii) the amount of such Owner's distributions allocable to principal,
separately identifying the aggregate amount of any Prepayments in full or
other Prepayments or other recoveries of principal included therein (based
on a Certificate in the original principal amount of $1,000) and any
related Subordination Increase Amount;
(iii) the amount of such Owner's distributions allocable to interest
(based on a Certificate in the original principal amount of $1,000);
(iv) any Class Interest Carryover Shortfall for any Class of Offered
Certificates for such Distribution Date;
(v) any Class Principal Carryover Shortfall for any Class of
Subordinate Certificates for such Distribution Date;
(vi) the principal amount of each Class of Offered Certificate which
will be Outstanding and the aggregate Loan Balance of each Group, after
giving effect to any payment of principal on such Distribution Date;
(vii) the Overcollateralization Amount and Required
Overcollateralization Amount, if any, remaining after giving effect to all
distributions and transfers on such Distribution Date;
(viii) based upon information furnished by the Servicer, such
information as may be required by Section 6049(d)(7)(C) of the Code and the
regulations promulgated thereunder to assist the Owners in computing their
market discount;
(ix) the total of any Substitution Amounts and any Loan Purchase Price
amounts included in such distribution with respect to each Group;
(x) the weighted average Coupon Rate of the Home Equity Loans in each
Group;
(xi) [Reserved];
(xii) such other information as any Owner may reasonably request with
respect to Delinquent Home Equity Loans;
(xiii) the weighted average gross margin of the Home Equity Loans in
Group II;
(xiv) the largest Loan Balance outstanding in each Group;
(xv) [Reserved];
(xvi) the Class A-7 Certificateholders' Interest Index Carryover and
the Net Rate Cap Carryover paid to the Owners of each Class of Carryover
Certificates for such Distribution Date and any Class A-7
Certificateholders' Interest Index Carryover and Net Rate Cap Carryover
remaining unpaid;
(xvii) the related Certificate Rate for each Class for the related
Distribution Date;
(xviii) the Fixed Rate Interest Rate Cap and the Class A-7 Available
Funds Cap for such Distribution Date; and
(xix) the amount of any Applied Realized Loss Amounts applied with
respect to each Class of Subordinate Certificates; and
(xx) the occurrence of the Stepdown Date.
The Servicer shall provide to the Trustee the information described in
Section 8.08(f) and in clause (b) below to enable the Trustee to perform its
reporting obligations under this Section, and such obligations of the Trustee
under this Section are conditioned upon such information being received and the
information provided in clauses (ii), (ix) and (x) above shall be based solely
upon information contained in the monthly servicing report provided by the
Servicer to the Trustee pursuant to Section 8.08 hereof.
(b) In addition, on each Distribution Date the Trustee will distribute to
each Owner, the Underwriters, Standard & Poor's, Xxxxx'x and Fitch, together
with the information described in subsection (a) preceding, the following
information with respect to each Home Equity Loan Group and for both Groups in
the aggregate which is hereby required to be prepared by the Servicer and
furnished to the Trustee for such purpose on or prior to the related Monthly
Remittance Date:
(i) the number and aggregate Loan Balances of Home Equity Loans (a)
30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90 or more days
Delinquent, as of the close of business on the last Business Day of the
calendar month immediately preceding the Distribution Date, (d) the number
and aggregate Loan Balances of all Home Equity Loans as of such
Distribution Date after giving effect to any payment of principal on the
last day of the Remittance Period immediately preceding the Distribution
Date and (e) the percentage that each of the amounts represented by clauses
(a), (b) and (c) represent as a percentage of the respective amounts in
clause (d);
(ii) the status and the number and dollar amounts of all Home Equity
Loans in foreclosure proceedings as of the close of business on the last
Business Day of the calendar month immediately preceding such Distribution
Date, separately stating, for this purpose, all Home Equity Loans with
respect to which foreclosure proceedings were commenced in the immediately
preceding calendar month;
(iii) the number of Mortgagors and the Loan Balances of (a) the
related Home Equity Loans involved in bankruptcy proceedings as of the
close of business on the last Business Day of the calendar month
immediately preceding such Distribution Date and (b) Home Equity Loans that
are "balloon" loans;
(iv) the existence and status of any REO Properties, as of the close
of business on the last Business Day of the calendar month immediately
preceding the Distribution Date;
(v) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month immediately preceding the
Distribution Date;
(vi) cumulative Realized Losses incurred on the Home Equity Loans from
the Startup Day to and including the Remittance Period immediately
preceding the Distribution Date;
(vii) the amount of Net Liquidation Proceeds realized on the Home
Equity Loans during the Remittance Period immediately preceding the
Distribution Date; and
(viii) the 60+ Delinquency Percentage (Rolling Three Month) with
respect to such Distribution Date; and
(ix) whether a Trigger Event has occurred.
The Trustee shall forward such report (together with the information
described in (a) above) concurrently with each distribution to the
Certificateholders and the Rating Agencies.
(c) The Trustee shall, on behalf of the Trust, cause to be filed with the
Commission any periodic reports required to be filed on behalf of the Trust
under the provisions of the Exchange Act, and the rules and regulations of the
Commission thereunder. Upon the request of the Trustee, each of the Seller, the
Servicer and the Depositor shall cooperate with the Trustee in the preparation
of any such report and shall provide to the Trustee in a timely manner all such
information or documentation as is in the possession of such Person and that the
Trustee may reasonably request in connection with the performance of its duties
and obligations under this Section.
The Trustee shall file with the Commission a Form 15 with respect to the
Trust as soon as practicable following the first date on which the conditions to
filing thereof have been satisfied. Following the filing of such Form 15, the
Trustee will submit a certificate addressed to an officer of the Depositor
certifying that all filings under the Exchange Act have been made and shall
attach a copy of acceptance slips for such filings. On the Startup Day, the
Depositor shall provide the Trustee with a letter at Closing, substantially in
the form attached hereto as Exhibit M, instructing the Trustee, as filing agent,
to comply with the reporting obligations for the Trust under the Exchange Act.
Section 7.10. REPORTS BY TRUSTEE.
(a) The Trustee shall report to the Depositor, the Seller and each Owner,
with respect to the amount on deposit in the Certificate Account (including the
amount therein relating to each Group) and the identity of the investments
included therein, as the Depositor, the Seller or any Owner may from time to
time reasonably request. Without limiting the generality of the foregoing, the
Trustee shall, at the reasonable request of the Depositor, the Seller or any
Owner, transmit promptly to the Depositor, the Seller and any Owner copies of
all accountings of receipts in respect of the Home Equity Loans furnished to it
by the Servicer and shall notify the Seller if any Monthly Remittance Amount has
not been received by the Trustee when due.
(b) The Trustee shall report to each Owner with respect to any written
notices it may from time to time receive which provide an Authorized Officer
with actual knowledge that any of the statements set forth in Section 3.04(b)
hereof are inaccurate.
(c) The Trustee will make the report referred to in Section 7.09 herein
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders and other parties
to this Agreement via the Trustee's internet website, which is presently located
at xxx.xxx.xxxxxxx.xxx. Persons that are unable to use the above website are
entitled to have a paper copy mailed to them via first Class mail by calling the
Trustee at 0-000-000-0000. The Trustee shall have the right to change the way
the report referred to in Section 7.09 herein is distributed in order to make
such distribution more convenient and/or more accessible to the above parties
and to the Certificateholders. The Trustee shall provide timely and adequate
notification to all above parties and to the Certificateholders regarding any
such change.
Section 7.11. ALLOCATION OF LOSSES. On each Distribution Date, the Trustee
shall determine the total of the Applied Realized Loss Amounts for such
Distribution Date. The Applied Realized Loss Amount for any Distribution Date
shall be applied by reducing, on a dollar for dollar basis, the Certificate
Principal Balance of each Class of Subordinate Certificates beginning with the
Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Certificate Principal
Balance thereof is reduced to zero. Any Applied Realized Loss Amount allocated
to a Class of Subordinate Certificates shall be allocated among the Subordinate
Certificates of such Class in proportion to their respective Percentage
Interests.
END OF ARTICLE VII
ARTICLE VIII
SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS
Section 8.01. SERVICER AND SUB-SERVICERS.
Acting directly or through one or more Sub-Servicers as provided in Section
8.03, the Servicer shall service and administer the Home Equity Loans in
accordance with this Agreement and the terms of the respective Home Equity
Loans, and with prudent and reasonable care, using the degree of skill and
attention that the Servicer exercises with respect to comparable home equity
loans that it services for itself or others and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable but without regard to: (i) any relationship that the Servicer, any
Sub-Servicer or any Affiliate of the Servicer or any Sub-Servicer may have with
the related Mortgagor; (ii) the ownership of any Certificate by the Servicer or
any Affiliate of the Servicer; (iii) the Servicer's obligation to make
Delinquency Advances or Servicing Advances; or (iv) the Servicer's or any
Sub-Servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction.
Subject to Section 8.03 hereof, the Servicer may, and is hereby authorized
to, perform any of its servicing responsibilities with respect to all or certain
of the Home Equity Loans through a Sub-Servicer as it may from time to time
designate, but no such designation of a Sub-Servicer shall serve to release the
Servicer from any of its obligations under this Agreement. Such Sub-Servicer
shall have the rights and powers of the Servicer which have been delegated to
such Sub-Servicer with respect to such Home Equity Loans under this Agreement.
Without limiting the generality of the foregoing, but subject to Sections
8.13 and 8.14, the Servicer in its own name or in the name of a Sub-Servicer is
hereby authorized and empowered (i) to execute and deliver, on behalf of itself,
the Owners and the Trustee 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 Home Equity Loans and with
respect to the Properties, (ii) to institute foreclosure proceedings or obtain a
deed in lieu of foreclosure so as to effect ownership of any Property in the
name of the Servicer on behalf of the Trustee, and (iii) to hold title to any
Property upon such foreclosure or deed in lieu of foreclosure on behalf of the
Trustee; PROVIDED, HOWEVER, that Section 8.13(a) and Section 8.14(a) shall each
constitute a revocable power of attorney from the Trustee to the Servicer to
execute an instrument of satisfaction (or assignment of Mortgage without
recourse) with respect to any Home Equity Loan held by the Trustee hereunder
paid in full or foreclosed (or with respect to which payment in full has been
escrowed). Revocation of the power of attorney created by the proviso of the
preceding sentence shall take effect upon (i) the receipt by the Servicer of
written notice thereof from the Trustee or (ii) a Servicer Termination Event or
(iii) the termination of the Trust. The Trustee shall at the written direction
of the Servicer execute any documentation furnished to it by the Servicer for
recordation by the Servicer in the appropriate jurisdictions, as shall be
necessary to effectuate the foregoing. Subject to Sections 8.13 and 8.14, the
Trustee shall, if necessary, execute a limited power of attorney in the form
reasonably acceptable to the Trustee to the Servicer or any Sub-Servicer and
furnish them with any other documents as the Servicer or such Sub-Servicer shall
reasonably request to enable the Servicer and such Sub-Servicer to carry out
their respective servicing and administrative duties hereunder.
Upon the request of the Trustee, the Servicer shall send to the Trustee,
the details concerning the servicing of the Home Equity Loans on computer
generated tape, diskette or other machine readable format which is mutually
agreeable.
The Servicer shall give prompt written notice to the Trustee of any action,
of which the Servicer has actual knowledge, to (i) assert a claim against the
Trust or (ii) assert jurisdiction over the Trust.
Servicing Advances incurred by the Servicer or any Sub-Servicer in
connection with the servicing of the Home Equity Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges on
any Property) shall be recoverable by the Servicer or such Sub-Servicer to the
extent described in Section 8.09(b) hereof.
The Servicer will exercise its discretion consistent with customary
servicing procedures and the terms of this Agreement, with respect to the
enforcement and servicing of defaulted Home Equity Loans in such manner as will
maximize the receipt of principal and interest with respect thereto, including
but not limited to the sale of such Home Equity Loans to a third party, the
modification of such Home Equity Loans, or foreclosure upon the related Property
and disposition thereof.
Section 8.02. COLLECTION OF CERTAIN HOME EQUITY LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Home Equity Loans, and shall, to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable Insurance Policy, follow collection procedures for
all Home Equity Loans at least as rigorous as those described in the FNMA Guide.
Consistent with the foregoing, the Servicer may in its discretion waive or
permit to be waived any late payment charge, prepayment charge, assumption fee
or any penalty interest in connection with the prepayment of a Home Equity Loan
or any other fee or charge which the Servicer would be entitled to retain
hereunder as servicing compensation. In the event the Servicer shall consent to
the deferment of the due dates for payments due on a Note, the Servicer shall
nonetheless make payment of any required Delinquency Advance with respect to the
payments so extended to the same extent as if such installment were due, owing
and Delinquent and had not been deferred, and shall be entitled to reimbursement
therefor in accordance with Section 8.09(a) hereof.
Section 8.03. SUB-SERVICING AGREEMENTS BETWEEN SERVICER AND SUB-SERVICERS.
The Servicer may, with the prior written consent of the Trustee, enter into
Sub-Servicing Agreements for any servicing and administration of Home Equity
Loans with any institution which is acceptable to the Trustee and which (x) is
in compliance with the laws of each state necessary to enable it to perform its
obligations under such Sub-Servicing Agreement, (y) has experience servicing
home equity loans that are similar to the Home Equity Loans and (z) has equity
of not less than $5,000,000 (as determined in accordance with generally accepted
accounting principles). The Servicer shall give written notice to the Trustee,
the Owners and the Rating Agencies of the appointment of any Sub-Servicer (and
shall receive the confirmation of the Rating Agencies that such Sub-Servicer
shall not result in a withdrawal or downgrading by any Rating Agency of the
rating or the shadow rating of the Offered Certificates). For purposes of this
Agreement, the Servicer shall be deemed to have received payments on Home Equity
Loans when any Sub-Servicer has received such payments. Each Sub-Servicer shall
be required to service the Home Equity Loans in accordance with this Agreement
and any such Sub-Servicing Agreement shall be consistent with and not violate
the provisions of this Agreement. Each Sub-Servicing Agreement shall provide
that the Trustee (if acting as successor Servicer) or any other successor
Servicer shall have the option to terminate such agreement without payment of
any fees if the original Servicer is terminated or resigns. The Servicer shall
deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instrument.
Section 8.04. SUCCESSOR SUB-SERVICERS.
The Servicer shall be entitled to terminate any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement and to
either itself directly service the related Home Equity Loans or enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 8.03.
Section 8.05. LIABILITY OF SERVICER; INDEMNIFICATION.
(a) The Servicer shall not be relieved of its obligations under this
Agreement notwithstanding any Sub-Servicing Agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer and the Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Home Equity Loans. The Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Servicer by
such Sub-Servicer and nothing contained in such Sub-Servicing Agreement shall be
deemed to limit or modify this Agreement.
(b) The Servicer agrees to indemnify and hold the Trustee, the Depositor
and each Owner harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee, the Depositor and any Owner may sustain in any
way related to the failure of the Servicer to perform its duties and service the
Home Equity Loans in compliance with the terms of this Agreement. The Servicer
shall immediately notify the Trustee, the Depositor and each Owner if a claim is
made by a third party with respect to this Agreement, and the Servicer shall
assume (with the consent of the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee, the Depositor and/or Owner in respect of such
claim. The Trustee shall, in accordance with written instructions received from
the Servicer, reimburse the Servicer only from amounts otherwise distributable
on the Class R Certificates for all amounts advanced by it pursuant to the
preceding sentence, except when a final nonappealable adjudication determines
that the claim relates directly to the failure of the Servicer to perform its
duties in compliance with the Agreement. The provisions of this Section 8.05(b)
shall survive the termination of this Agreement, the resignation or removal of
the Trustee, and the payment of the outstanding Certificates.
Section 8.06. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICER, TRUSTEE OR
THE OWNERS.
Any Sub-Servicing Agreement and any other transactions or services relating
to the Home Equity Loans involving a Sub-Servicer shall be deemed to be between
the Sub-Servicer and the Servicer alone and the Trustee and the Owners shall not
be deemed parties thereto and shall have no claims, rights, obligations, duties
or liabilities with respect to any Sub-Servicer except as set forth in Section
8.07.
Section 8.07. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENT BY
TRUSTEE.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Servicer hereunder by
the Trustee pursuant to Section 8.20 or another successor Servicer, it is
understood and agreed that the Servicer's rights and obligations under any
Sub-Servicing Agreement then in force between the Servicer and a Sub-Servicer
shall be assumed simultaneously by the Trustee or another successor Servicer
without act or deed on part of the Trustee or such successor servicer PROVIDED,
HOWEVER, that the Trustee (if acting as successor Servicer) or any other
successor Servicer may terminate the Sub-Servicer as provided in Section 8.03.
The Servicer shall, upon the reasonable request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party documents and records
relating to each Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
Section 8.08. PRINCIPAL AND INTEREST ACCOUNT.
(a) The Servicer shall establish and maintain at one or more Designated
Depository Institutions the Principal and Interest Account, which shall be an
Eligible Account. The Principal and Interest Account shall be identified on the
records of the Designated Depository Institution as follows: Bank One, National
Association, as Trustee on behalf of the Owners of the Centex Home Equity Loan
Trust 200_-__ Home Equity Loan Asset-Backed Certificates. If the institution at
any time holding the Principal and Interest Account ceases to be eligible as a
Designated Depository Institution hereunder, then the Servicer shall immediately
be required to name a successor institution meeting the requirements for a
Designated Depository Institution hereunder. If the Servicer fails to name such
a successor institution, then the Principal and Interest Account shall
thenceforth be held as a trust account at the Corporate Trust Office of the
Trustee. The Servicer shall notify the Trustee and the Owners if there is a
change in the name, account number or institution holding the Principal and
Interest Account.
Subject to Subsection (c) below, the Servicer shall deposit all receipts
required pursuant to Subsection (c) below and related to the Home Equity Loans
to the Principal and Interest Account on a daily basis (but no later than the
second Business Day after receipt).
(b) All funds in the Principal and Interest Account shall be held (i)
uninvested up to the amount insured by the FDIC or (ii) invested in Eligible
Investments. Any investments of funds in the Principal and Interest Account
shall mature or be withdrawable at par on or prior to the immediately succeeding
Monthly Remittance Date. The Principal and Interest Account shall be held in
trust in the name of the Trust for the benefit of the Owners. The Trust shall be
divided into two separate sub-trusts; one for Group I and any Trust assets
allocable to Group I and the other for Group II and any Trust assets allocable
to Group II. Any investment earnings on funds held in the Principal and Interest
Account shall be for the account of the Servicer and may only be withdrawn from
the Principal and Interest Account by the Servicer immediately following the
remittance of the Monthly Remittance Amount by the Servicer in accordance with
the terms hereof. Any investment losses on amounts held in the Principal and
Interest Account shall be for the account of the Servicer and promptly upon the
realization of such loss shall be contributed by the Servicer to the Principal
and Interest Account. Any references herein to amounts on deposit in the
Principal and Interest Account shall refer to amounts net of such investment
earnings.
(c) The Servicer shall deposit to the Principal and Interest Account no
later than the second Business Day after receipt, all principal collected and
interest due on the Home Equity Loans (net of the Servicing Fee related to such
Home Equity Loans) on and after the Cut-Off Date and the Replacement Cut-Off
Date, as applicable, including any Prepayments and Net Liquidation Proceeds,
other recoveries or amounts related to the Home Equity Loans received by the
Servicer and any income from REO Properties, but net of (i) Net Liquidation
Proceeds to the extent such Net Liquidation Proceeds exceed the sum of (A) the
Loan Balance of the related Home Equity Loan immediately prior to liquidation,
plus (B) accrued and unpaid interest on such Home Equity Loan (net of the
related Servicing Fee) plus (C) any unrecovered Cram Down Losses, (ii)
reimbursements for unreimbursed Delinquency Advances and unreimbursed Servicing
Advances (but in each case solely from amounts received on the related Home
Equity Loan) as provided in Section 8.09 and (iii) reimbursements for amounts
deposited in the Principal and Interest Account representing payments of
principal and/or interest on a Note by a Mortgagor which are subsequently
returned by a depository institution as unpaid.
(d) The Servicer may make withdrawals from the Principal and Interest
Account, with respect to each Home Equity Loan Group, for the following
purposes:
(A) on each Monthly Remittance Date, to pay itself the related
Servicing Fees to the extent such Servicing Fees are not retained by
the Servicer;
(B) to withdraw investment earnings on amounts on deposit in the
Principal and Interest Account;
(C) to withdraw amounts that have been deposited to the Principal
and Interest Account in error;
(D) to reimburse itself for unreimbursed Delinquency Advances and
for unreimbursed Servicing Advances (in each case, solely from amounts
recovered on the related Home Equity Loan) as provided in Section
8.09;
(E) to reimburse itself pursuant to Section 8.09(a) for
Nonrecoverable Advances; and
(F) to clear and terminate the Principal and Interest Account
following the termination of the Trust pursuant to Article IX.
(e) The Servicer shall (i) remit to the Trustee for deposit in the
Certificate Account by wire transfer, or otherwise make funds available in
immediately available funds, without duplication, the Monthly Remittance Amount
allocable to a Remittance Period not later than the related Monthly Remittance
Date, and (ii) on each Monthly Remittance Date, deliver to the Trustee and the
Depositor, a monthly servicing report, with respect to each Home Equity Loan
Group, containing (without limitation) the following information: principal and
interest collected in respect of the Home Equity Loans, scheduled principal and
interest that was due on the Home Equity Loans, relevant information with
respect to Liquidated Loans, if any, summary and detailed delinquency reports,
Liquidation Proceeds and other similar information concerning the servicing of
the Home Equity Loans. In addition, the Servicer shall inform the Trustee on
each Monthly Remittance Date, with respect to each Home Equity Loan Group, of
the amounts of any Loan Purchase Prices or Substitution Amounts so remitted
during the related Remittance Period, and of the Loan Balance of the Home Equity
Loan having the largest Loan Balance as of such date.
(f) The Servicer shall provide to the Trustee the information described in
Section 8.08(e)(ii) and in Section 7.09(b) to enable the Trustee to perform its
reporting requirements under Section 7.09 and to make the allocations and
disbursements set forth in Sections 7.02 and 7.03.
Section 8.09. DELINQUENCY ADVANCES AND SERVICING ADVANCES.
(a) On or before each Monthly Remittance Date, the Servicer shall be
required to remit to the Trustee for deposit to the Certificate Account out of
the Servicer's own funds or from collections on any Home Equity Loans that are
not required to be distributed on the Distribution Date occurring during the
month in which such remittance is made (all or any portion of such amount to be
replaced on future Monthly Remittance Dates to the extent required for
distribution) any Delinquent payment of interest with respect to each Delinquent
Home Equity Loan, which payment was not received on or prior to the last day of
the related Remittance Period. Such amounts of the Servicer's own funds so
deposited are "Delinquency Advances".
The Servicer shall be permitted to reimburse itself on any Business Day for
any Delinquency Advances paid from the Servicer's own funds (i) from late
collections on the related Home Equity Loan or (ii) as otherwise provided in
Section 7.03(b).
Notwithstanding the foregoing, in the event that the Servicer determines in
its reasonable business judgment in accordance with the servicing standards set
out herein that any proposed Delinquency Advance would not be recoverable, the
Servicer shall not be required to make Delinquency Advances with respect to such
Home Equity Loan. To the extent that the Servicer previously has made
Delinquency Advances with respect to a Home Equity Loan that the Servicer
subsequently determines are Nonrecoverable Advances, the Servicer shall be
entitled to reimbursement for such aggregate Nonrecoverable Advances from
collections on any Home Equity Loan on deposit in the Principal and Interest
Account. The Servicer shall deliver an Officer's Certificate of such
determination as to why such amount would not be recoverable to the Trustee; the
Trustee shall promptly furnish a copy of such notice to the Owners of the Class
R Certificates upon request; PROVIDED, FURTHER, that the Servicer shall be
entitled to recover any unreimbursed Delinquency Advances from Liquidation
Proceeds for the related Home Equity Loan.
(b) The Servicer will pay all "out-of-pocket" costs and expenses incurred
in the performance of its servicing obligations, including, but not limited to,
(i) Preservation Expenses, (ii) the cost of any enforcement or judicial
proceedings, including foreclosures, (iii) the cost of the management and
liquidation of REO Property, (iv) advances required by Section 8.13(a), and (v)
expenses incurred pursuant to Section 8.22, except to the extent that such
amounts are determined by the Servicer in its reasonable business judgment not
to be recoverable. Such costs will constitute "Servicing Advances". The Servicer
may recover a Servicing Advance (x) from the Mortgagors to the extent permitted
by the Home Equity Loans or, if not theretofore recovered from the Mortgagor on
whose behalf such Servicing Advance was made, from Liquidation Proceeds realized
upon the liquidation of the related Home Equity Loan and (y) as provided in
Section 7.03(b) clause C.15. The Servicer shall be entitled to recover the
Servicing Advances from the Liquidation Proceeds on the related Home Equity Loan
prior to the payment of the Liquidation Proceeds to any other party to this
Agreement. In no case may the Servicer recover Servicing Advances from the
principal and interest payments on any other Home Equity Loan except as provided
in Section 7.03(b) clause C.15.
Section 8.10. COMPENSATING INTEREST; REPURCHASE OF HOME EQUITY LOANS.
(a) If any Prepayment in full of a Home Equity Loan occurs during any
calendar month, any shortfall between (x) the interest collected from the
Mortgagor in connection with such payoff, and (y) the full month's interest at
the Coupon Rate that would be due on the related Due Date for such Home Equity
Loan ("Compensating Interest") (but not in excess of the aggregate Servicing Fee
for the related Remittance Period) shall be deposited by the Servicer to the
Principal and Interest Account (or if such difference is an excess, the Servicer
shall retain such excess) on the next succeeding Monthly Remittance Date and
shall be included in the Monthly Remittance Amount to be made available to the
Trustee on such Monthly Remittance Date. The Servicer may recover any
unreimbursed payments of Compensating Interest from collections on any Home
Equity Loan on deposit in the Principal and Interest Account, as provided in
Section 7.03(b) clause C.15.
(b) Subject to clause (c) below, the Servicer has the right and the option,
but not the obligation, to purchase for its own account any Home Equity Loan
which is 60 days or more Delinquent, or any Home Equity Loan as to which
enforcement proceedings have been brought by the Servicer pursuant to Section
8.13; PROVIDED, HOWEVER, that the Servicer may not purchase any such Home Equity
Loan unless the Servicer has delivered to the Trustee at the Servicer's expense,
an Opinion of Counsel acceptable to the Trustee to the effect that such a
purchase would not constitute a Prohibited Transaction for the Trust or
otherwise subject the Trust to tax and would not jeopardize the status of any
REMIC created hereunder as REMICs. Any such Home Equity Loan so purchased shall
be purchased by the Servicer on or prior to a Monthly Remittance Date at a
purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be deposited in the Principal and Interest Account.
(c) [Reserved]
(d) The Net Liquidation Proceeds from the disposition of any REO Property
shall be deposited in the Principal and Interest Account and remitted to the
Trustee as part of the Monthly Remittance Amount remitted by the Servicer to the
Trustee.
Section 8.11. MAINTENANCE OF INSURANCE.
(a) (i) The Servicer shall cause to be maintained with respect to each Home
Equity Loan a hazard insurance policy with a carrier generally acceptable to the
Servicer that provides for fire and extended coverage, and which provides for a
recovery by the Trust of insurance proceeds relating to such Home Equity Loan in
an amount not less than the least of (A) the outstanding principal balance of
the Home Equity Loan (plus the related Senior Lien loan, if any), (B) the
minimum amount required to compensate for damage or loss on a replacement cost
basis and (C) the full insurable value of the premises. The Servicer shall
maintain the insurance policies required hereunder in the name of the mortgagee,
its successors and assigns, and shall be named as loss payee. The policies shall
require the insurer to provide the mortgagee with 30 days' notice prior to any
cancellation or as otherwise required by law.
(ii) As an alternative to maintaining a hazard insurance policy with
respect to each Home Equity Loan as described in clause (i) above, the
Servicer may maintain a blanket hazard insurance policy or policies if the
insurer or insurers of such policies are rated investment grade by Xxxxx'x
and Standard & Poor's, and if rated by Fitch, Fitch.
(b) If the Home Equity Loan at the time of origination (or if required by
federal law, at any time thereafter) relates to a Property in an area identified
in the Federal Register by the Federal Emergency Management Agency as having
special flood hazards, the Servicer will cause to be maintained with respect
thereto a flood insurance policy in a form meeting the requirements of the then
current guidelines of the Federal Insurance Administration with a carrier
generally acceptable to the Servicer in an amount representing coverage, and
which provides for a recovery by the Trust of insurance proceeds relating to
such Home Equity Loan of not less than the least of (i) the outstanding
principal balance of the Home Equity Loan (plus the related Senior Lien loan, if
any), (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973. The Servicer shall
indemnify the Trust out of the Servicer's own funds for any loss to the Trust
resulting from the Servicer's failure to advance premiums for such insurance
required by this Section when so permitted by the terms of the Mortgage as to
which such loss relates.
(c) Amounts collected by the Servicer under any Insurance Policy shall be
deposited into the Principal and Interest Account.
Section 8.12. DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION AGREEMENTS.
When a Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall (except as provided below), to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Home Equity Loan under any "due-on-sale" clause
contained in the related Mortgage or Note; PROVIDED, HOWEVER, that the Servicer
shall not exercise any such right if the "due-on-sale" clause, in the reasonable
belief of the Servicer, is not enforceable under applicable law, or the
Servicer, in a manner consistent with reasonable commercial practice, and only
if the Servicer reasonably believes assumption by the purchaser would not
materially and adversely affect the interests of the Owners, permits the
purchaser of the related Property to assume such Home Equity Loan. An Opinion of
Counsel, provided at the expense of the Servicer, to the foregoing effect shall
conclusively establish the reasonableness of such belief. In such event, the
Servicer shall enter into an assumption and modification agreement with the
person to whom such Property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Note and, unless prohibited by
applicable law or the Mortgage documents, the Mortgagor remains liable thereon.
If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as Mortgagor and becomes liable under the Note. The Home
Equity Loan, as assumed, shall conform in all material respects to the
requirements, representations and warranties of this Agreement. The Servicer
shall notify the Trustee in writing that any such assumption or substitution
agreement has been completed by forwarding to the Custodian on the Trustee's
behalf the original copy of such assumption or substitution agreement
(indicating the File to which it relates) which copy shall be added by the
Trustee or by the Custodian on the Trustee's behalf to the related File and
which shall, for all purposes, be considered a part of such File to the same
extent as all other documents and instruments constituting a part thereof. The
Servicer shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement, no
material term of the Home Equity Loan (including, without limitation, the
required monthly payment on the related Home Equity Loan, the stated maturity,
the outstanding principal amount or the Coupon Rate) shall be changed nor shall
any required monthly payments of principal or interest be deferred or forgiven.
Any fee collected by the Servicer or the Sub-Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Home Equity Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 8.13. REALIZATION UPON DEFAULTED HOME EQUITY LOANS; WORKOUT OF HOME
EQUITY LOANS.
(a) The Servicer shall foreclose upon or otherwise comparably effect the
ownership in the name of the Trustee on behalf of the Trust of Properties
relating to defaulted Home Equity Loans as to which no satisfactory arrangements
can be made for collection of Delinquent payments and which the Servicer has not
purchased pursuant to Section 8.10(b). In connection with such foreclosure or
other conversion, the Servicer shall exercise such of the rights and powers
vested in it hereunder, and use the same degree of care and skill in their
exercise or use, as prudent mortgage lenders would exercise or use under the
circumstances in the conduct of their own affairs and consistent with the
servicing standards set forth in the FNMA Guide, including, but not limited to,
advancing funds for the payment of taxes, amounts due with respect to Senior
Liens, and insurance premiums. Any amounts so advanced shall constitute
"Servicing Advances" within the meaning of Section 8.09(b) hereof. The Servicer
shall sell any REO Property within 35 months from the close of the taxable year
of its acquisition by the Trust, at such price as the Servicer in good xxxxx
xxxxx necessary to comply with this covenant unless the Servicer obtains for the
Trustee, an Opinion of Counsel (the expense of which opinion shall be a
Servicing Advance) experienced in federal income tax matters acceptable to the
Trustee, addressed to the Trustee and the Servicer, to the effect that the
holding by the Trust of such REO Property for any greater period will not result
in the imposition of taxes on "Prohibited Transactions" of the Trust or any
REMIC as defined in Section 860F of the Code or cause any REMIC to fail to
qualify as a REMIC under the REMIC Provisions at any time that any Certificates
are Outstanding. Notwithstanding the generality of the foregoing provisions, the
Servicer shall manage, conserve, protect and operate each REO Property for the
Owners solely for the purpose of its prompt disposition and sale in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by any REMIC created hereunder of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Owners, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the Owners
for the period prior to the sale of such REO Property. The Servicer shall take
into account the existence of any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976, or other federal, state or local environmental legislation, on a
Property in determining whether to foreclose upon or otherwise comparably
convert the ownership of such Property. If the Servicer has actual knowledge of
any environmental or hazardous waste risk with respect to the Property that the
Servicer is contemplating acquiring in foreclosure or deed in lieu of
foreclosure, the Servicer will cause an environmental inspection of the Property
in accordance with the servicing standards set forth in this Agreement.
(b) The Servicer shall determine, with respect to each defaulted Home
Equity Loan, when it has recovered, whether through trustee's sale, foreclosure
sale or otherwise, all amounts it expects to recover from or on account of such
defaulted Home Equity Loan, whereupon such Home Equity Loan shall become a
"Liquidated Loan" and the Servicer shall promptly submit a liquidation report to
the Trustee in substantially the form of Exhibit N hereto, provided that such
form is acceptable to the Trustee.
(c) The Servicer shall not agree to any modification, waiver or amendment
of any provision of any Home Equity Loan unless, in the Servicer's good faith
judgment, such modification, waiver or amendment would minimize the loss that
might otherwise be experienced with respect to such Home Equity Loan and only in
the event of a payment default with respect to such Home Equity Loan or in the
event that a payment default with respect to such Home Equity Loan is reasonably
foreseeable by the Servicer; PROVIDED, HOWEVER, that no such modification,
waiver or amendment shall extend the maturity date of such Home Equity Loan
beyond the date that is six months after the Final Scheduled Distribution Date
of the latest Class of Offered Certificates remaining in the Trust.
Notwithstanding anything set out in this Section 8.13(c) or elsewhere in this
Agreement to the contrary, the Servicer shall be permitted to modify, waive or
amend any provision of a Home Equity Loan if required by statute or a court of
competent jurisdiction to do so.
(d) The Servicer has no intent to foreclose on any Mortgage based on the
delinquency characteristics as of the Startup Day; provided, that the foregoing
does not prevent the Servicer from initiating foreclosure proceedings on any
date hereafter if the facts and circumstances of such Mortgage including
delinquency characteristics in the Servicer's discretion so warrant such action.
Section 8.14. TRUSTEE TO COOPERATE; RELEASE OF FILES.
(a) Upon the payment in full of any Home Equity Loan (including any
liquidation of such Home Equity Loan through foreclosure or otherwise), or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Servicer shall deliver to the
Custodian, on behalf of the Trustee, a written request of the Servicer, in the
form attached hereto as Exhibit O, signed by an Authorized Officer which states
the purpose of the release of a File. Upon receipt of such written request, the
Custodian, on behalf of the Trustee shall promptly release the related File, in
trust, in its reasonable discretion to (i) the Servicer, (ii) an escrow agent or
(iii) any employee, agent or attorney of the Trustee. Upon any such payment in
full, or the receipt of such notification that such funds have been placed in
escrow, the Servicer is authorized to give, as attorney-in-fact for the Trustee
and the mortgagee under the Mortgage which secured the Note, an instrument of
satisfaction (or assignment of Mortgage without recourse) regarding the Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed that
no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Principal and
Interest Account or to the Trustee.
(b) The Servicer shall have the right to accept applications of Mortgagors
for consent to (i) partial releases of Mortgages, (ii) alterations and (iii)
removal, demolition or division of Properties subject to Mortgages. No
application for approval shall be considered by the Servicer unless: (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Loan-to-Value Ratio and debt-to-income ratio after any release does not exceed
the Loan-to-Value Ratio and debt-to-income ratio of such Note on the Cut-Off
Date or Replacement Cut-Off Date, as applicable, and any increase in the
Loan-to-Value Ratio shall not exceed 5%; and (z) the lien priority of the
related Mortgage is not affected. Upon receipt by the Trustee of an Officer's
Certificate executed on behalf of the Servicer setting forth the action proposed
to be taken in respect of a particular Home Equity Loan and certifying that the
criteria set forth in the immediately preceding sentence have been satisfied,
the Trustee shall execute and deliver to the Servicer the consent or partial
release so requested by the Servicer. A proposed form of consent or partial
release, as the case may be, shall accompany any Officer's Certificate delivered
by the Servicer pursuant to this paragraph.
(c) From time to time and as appropriate in the servicing of any Home
Equity Loan, including, without limitation, foreclosure or other comparable
conversion of a Home Equity Loan or collection under any applicable Insurance
Policy, the Custodian, on behalf of the Trustee, shall release the related File
to the Servicer, promptly upon a written request of the Servicer, in the form
attached hereto as Exhibit O, signed by an Authorized Officer, which states the
purpose of the release of a File. Such receipt shall obligate the Servicer to
return the File to the Custodian, on behalf of the Trustee, when the need
therefor by the Servicer no longer exists.
(d) In all cases where the Servicer directs the Custodian, on behalf of the
Trustee, to sign any document or to release a File within a particular period of
time, the Servicer shall notify an Authorized Officer of the Trustee by
telephone of such need and the Trustee shall thereon use its best efforts to
comply with the Servicer's needs, but in any event will comply within two
Business Days of such request.
(e) No costs associated with the procedures described in this Section 8.14
shall be an expense of the Trust.
Section 8.15. SERVICING COMPENSATION.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Home
Equity Loan Group. Additional servicing compensation in the form of prepayment
charges, release fees, bad check charges, assumption fees, late payment charges,
prepayment penalties, or any other servicing-related fees, Net Liquidation
Proceeds not required to be deposited in the Principal and Interest Account
pursuant to Section 8.08(c)(i) and similar items may, to the extent collected
from Mortgagors, be retained by the Servicer, unless a successor Servicer is
appointed pursuant to Section 8.20 hereof, in which case the successor Servicer
shall be entitled to such fees as are agreed upon by the Trustee and the
successor Servicer.
The right to receive the Servicing Fee may not be transferred in whole or
in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement.
Section 8.16. ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer, at its own expense, will deliver to the Trustee, the
Depositor, and the Rating Agencies, on or before July 31 of each year,
commencing in 200_, an Officer's Certificate stating, as to each signer thereof,
that (i) a review of the activities of the Servicer during such preceding
calendar year and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
any such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Servicer to
remedy such default.
The Servicer shall deliver to the Trustee, the Depositor and the Rating
Agencies, promptly after having obtained knowledge thereof but in no event later
than five Business Days thereafter, written notice by means of an Officer's
Certificate of any event which with the giving of notice or the lapse of time
would become a Servicer Termination Event.
Section 8.17. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORTS.
On or before July 31 of each year, commencing in 200_, the Servicer, at its
own expense (or if the Trustee is then acting as Servicer, at the expense of the
Seller), shall cause to be delivered to the Trustee, the Depositor, and the
Rating Agencies a letter or letters of a firm of independent, nationally
recognized certified public accountants stating that such firm has examined the
Servicer's overall servicing operations in accordance with the requirements of
the Uniform Single Attestation Program for Mortgage Bankers, and stating such
firm's conclusions relating thereto. In the event such firm requires the Trustee
to agree to the procedures performed by such firm, the Servicer shall direct the
Trustee in writing to so agree; it being understood and agreed that the Trustee
will deliver such letter of agreement in conclusive reliance upon the direction
of the Servicer, and the Trustee makes no independent inquiry or investigation
as to, and shall have no obligation or liability in respect of, the sufficiency,
validity, or correctness of such procedures.
Section 8.18. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
HOME EQUITY LOANS.
The Servicer shall provide to the Trustee access to the documentation
regarding the Home Equity Loans and the Trust, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer designated by it.
Upon any change in the format of the computer tape maintained by the
Servicer in respect of the Home Equity Loans, the Servicer shall deliver a copy
of such computer tape to the Trustee and in addition shall provide a copy of
such computer tape to the Trustee at such other times as the Trustee may
reasonably request.
Section 8.19. ASSIGNMENT OF AGREEMENT.
Other than with respect to entering into Sub-Servicing Agreements pursuant
to Section 8.03 hereof, the Servicer may not assign its obligations under this
Agreement, in whole or in part, unless it shall have first obtained the written
consent of the Trustee, which such consent shall not be unreasonably withheld;
PROVIDED, HOWEVER, that any assignee must meet the eligibility requirements set
forth in Section 8.20(h) hereof for a successor Servicer.
Section 8.20. REMOVAL OF SERVICER; RETENTION OF SERVICER; RESIGNATION OF
SERVICER.
(a) The Trustee or the Owners of at least a 51% Percentage Interest in all
of the Certificates may remove the Servicer upon the occurrence of any of the
following events (each a "Servicer Termination Event"):
(i) The Servicer shall (I) apply for or consent to the appointment of
a receiver, trustee, liquidator or custodian or similar entity with respect
to itself or its property, (II) admit in writing its inability to pay its
debts generally as they become due, (III) make a general assignment for the
benefit of creditors, (IV) be adjudicated a bankrupt or insolvent, (V)
commence a voluntary case under the federal bankruptcy laws of the United
States of America or any state bankruptcy law or similar laws or file a
voluntary petition or answer seeking reorganization, an arrangement with
creditors or an order for relief or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization or insolvency
proceeding or (VI) take corporate, limited liability company or other
entity action, as applicable, for the purpose of effecting any of the
foregoing; or
(ii) If without the application, approval or consent of the Servicer,
a proceeding shall be instituted in any court of competent jurisdiction,
under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking in respect of the Servicer an order for relief or an
adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment of
debts, the appointment of a trustee, receiver, liquidator or custodian or
similar entity with respect to the Servicer or of all or any substantial
part of its assets, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being contested by
the Servicer in good faith, the same shall (A) result in the entry of an
order for relief or any such adjudication or appointment or (B) continue
undismissed or pending and unstayed for any period of seventy-five (75)
consecutive days; or
(iii) The Servicer shall fail to perform any one or more of its
obligations hereunder and shall continue in default thereof for a period of
thirty (30) days (one (1) Business Day in the case of a delay in making a
payment or deposit required of the Servicer under this Agreement) which
failure materially and adversely affects the Owners after the earlier of
(a) actual knowledge of an officer of the Servicer or (b) receipt of notice
from the Trustee of said failure;
(iv) The Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 3.02 or in the other
Operative Documents which materially and adversely affects the interests of
the Owners which remains unremedied for a period of sixty (60) days after
the earlier of the Servicer's discovery or receipt of notice thereof; or
(v) The merger, consolidation or other combination of the Servicer
with or into any other entity, unless (1) the Servicer or an Affiliate of
the Servicer is the surviving entity of such combination or (2) the
surviving entity (A) is servicing at least $300,000,000 of home equity
loans that are similar to the Home Equity Loans, (B) has Tangible Net Worth
of not less than $70,000,000 (as determined in accordance with generally
accepted accounting principles), and (C) agrees to assume the Servicer's
obligations hereunder;
(vi) The Servicer shall be declared in default of its credit facility
by its credit facility provider, which default, if left uncured, would
result in termination or acceleration of amounts owed thereunder; or
(vii) Centex Corporation or its successors shall fail to own, directly
or indirectly, at least 51% of the Servicer unless the Servicer shall be
rated at least investment grade by each of Standard & Poor's and Xxxxx'x
and if rated by Fitch, by Fitch.
(b) Upon the occurrence of a Servicer Termination Event, the Servicer shall
continue to act as Servicer under this Agreement until removed as set forth in
this Section 8.20 and a successor Servicer has assumed the servicing
obligations. After the occurrence of a Servicer Termination Event, the Trustee
or the Owners of at least 51% Percentage Interest in all the Certificates may
remove the Servicer by written notice to the Servicer. Such termination shall be
effective on the date specified in such notice, provided that a successor
Servicer or the Trustee has assumed the servicing obligations. Upon the
effective date of termination of the Servicer, the Trustee shall assume the
servicing obligations hereunder. Notwithstanding the foregoing, the parties
hereto agree that the Trustee, in its capacity as successor Servicer,
immediately will assume all of the obligations of the Servicer to make
Delinquency Advances and the Trustee will assume the other duties of the
Servicer as soon as practicable, but in no event later than 90 days after the
Trustee becomes successor Servicer pursuant to the preceding sentence.
Notwithstanding the foregoing, the Trustee, in its capacity as successor
Servicer, shall not be responsible for the lack of information and or documents
that it cannot obtain through reasonable efforts. Until a successor Servicer has
been appointed, the Trustee shall be the successor Servicer in all respects
without further action, and all authority and power of the Servicer under this
Agreement shall pass to and be vested in the Trustee on and after the effective
date of termination. Notwithstanding anything herein to the contrary, in no
event shall the Trustee be liable for any Servicing Fee or for any differential
in the amount of the Servicing Fee paid hereunder and the amount necessary to
induce any successor Servicer to act as successor Servicer under this Agreement
and the transactions set forth or provided for herein.
(c) Reserved.
(d) The Servicer shall not resign from the obligations and duties hereby
imposed on it, except upon (i) determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer at the date of this Agreement or (ii) written consent of the
Trustee. Any such determination under clause (i) shall be evidenced by an
Opinion of Counsel acceptable to the Trustee at the expense of the Servicer to
such effect which shall be delivered to the Trustee.
(e) No removal or resignation of the Servicer shall become effective until
the Trustee or a successor Servicer shall have assumed the Servicer's
responsibilities and obligations in accordance with this Section.
(f) Upon removal or resignation of the Servicer, the Servicer at its own
expense also shall promptly deliver or cause to be delivered to a successor
Servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Home Equity Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Servicer's possession.
(g) Any collections due to the Trust then being held by the Servicer prior
to its removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Trustee and remitted directly and
immediately to the Trustee or the successor Servicer.
(h) Upon removal or resignation of the Servicer, the Trustee (A) may,
solicit bids for a successor Servicer as described below and (B) until such time
as another successor Servicer is appointed by the Trustee, shall assume the
duties and obligations of the Servicer hereunder. The Trustee agrees to act as
Servicer during the solicitation process and shall assume all duties and
obligations of the Servicer. The Trustee shall, if it is unable to obtain a
qualifying bid and is prevented by law from acting as Servicer, appoint, or
petition a court of competent jurisdiction to appoint, any housing and home
finance institution, bank or mortgage servicing institution which has been
designated as an approved seller-servicer by FNMA or FHLMC for first and second
home equity loans and having equity of not less than $5,000,000, as determined
in accordance with generally accepted accounting principles, act 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. The
compensation of any successor Servicer (other than the Trustee in its capacity
as successor Servicer) so appointed shall be the amount agreed to between the
successor Servicer and the Trustee (up to a maximum of 0.50% per annum on the
outstanding principal balance of each Home Equity Loan), together with the other
servicing compensation in the form of assumption fees, late payment charges or
otherwise as provided in Sections 8.08 and 8.15; PROVIDED, HOWEVER, that if the
Trustee becomes the successor Servicer it shall receive as its compensation the
same compensation paid to the Servicer immediately prior to the Servicer's
removal or resignation; PROVIDED, FURTHER, HOWEVER, that the predecessor
Servicer agrees to pay to the Trustee or other successor Servicer at such time
that it becomes such successor Servicer a set-up fee of twenty-five dollars
($25) for each Home Equity Loan then included in the Trust Estate. The amount
payable in excess of twenty-five dollars ($25) per Home Equity Loan, if any,
shall be payable to the successor Servicer and reimbursable pursuant to Section
7.03(b)(x) hereof. The Trustee shall be obligated to serve as successor Servicer
whether or not the fee described in this section is paid by the Servicer, but
shall in any event be entitled to receive, and to enforce payment of, such fee
from the Servicer.
(i) In the event the Trustee elects to solicit bids as provided above, the
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor Servicer shall be entitled to servicing compensation in accordance
with clause (h) above, together with the other servicing compensation in the
form of assumption fees, late payment charges or otherwise as provided in
Sections 8.08 and 8.15. Within thirty days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid as to the price it will pay to obtain
servicing. The Trustee shall deduct from any sum received by the Trustee from
the successor to the Servicer in respect of such sale, transfer and assignment
all costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder. After such
deductions, the remainder of such sum less any amounts due the Trustee or the
Trust from the Servicer shall be paid by the Trustee to the predecessor Servicer
at the time of such sale, transfer and assignment to the Servicer's successor.
(j) The Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession, including the notification to all Mortgagors of the transfer of
servicing. The predecessor Servicer agrees to cooperate with the Trustee and any
successor Servicer in effecting the termination of the predecessor Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee or such successor
Servicer, as applicable, all amounts which then have been or should have been
deposited in the Principal and Interest Account by the Servicer or which are
thereafter received with respect to the Home Equity Loans. Any amounts and
documents which are property of the Trust held by the predecessor Servicer shall
be held in trust on behalf of the Trustee until transferred to the successor
Servicer or Trustee. Neither the Trustee nor any other successor Servicer shall
be held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer. If the Servicer resigns or is replaced hereunder, the
Servicer agrees to reimburse the Trust and the Owners for the costs and expenses
associated with the transfer of servicing to the replacement Servicer, but
subject to a maximum reimbursement to all such parties in the amount of
twenty-five dollars ($25) for each Home Equity Loan then included in the Trust
Estate. The amount payable in excess of twenty-five dollars ($25) per Home
Equity Loan, if any, shall be payable to the successor Servicer and reimbursable
pursuant to Section 7.03(b)(x) hereof.
(k) The Trustee or any other successor Servicer, upon assuming the duties
of Servicer hereunder, shall immediately (i) record all assignments of Home
Equity Loans not previously recorded in the name of the Trustee pursuant to
Section 3.05(b)(ii) as a result of an Opinion of Counsel and (ii) make all
Delinquency Advances and Compensating Interest payments and deposit them to the
Principal and Interest Account which the Servicer has theretofore failed to
remit with respect to the Home Equity Loans.
(l) The Servicer which is being removed or is resigning shall give notice
to the Mortgagors and to the Rating Agencies of the transfer of the servicing to
the successor.
(m) The Trustee shall give notice to the Depositor, the Owners, the Seller,
and the Rating Agencies of the occurrence of any event described in paragraph
(a) above of which the Trustee is aware.
(n) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities of the predecessor Servicer including,
but not limited to, the maintenance of the hazard insurance policy(ies), the
fidelity bond and an errors and omissions policy pursuant to Section 8.21(b) and
shall be entitled to the Servicing Fee and all of the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement. The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer (including, without limitation, any deductible under an
insurance policy) nor shall any successor Servicer be liable for any acts or
omissions of the predecessor Servicer or for any breach by such Servicer of any
of its representations or warranties contained herein or in any related document
or agreement.
(o) The Trustee shall be entitled to be reimbursed pursuant to Sections
7.03(b) for all Transition Expenses (other than amounts reimbursed pursuant to
paragraph (j) above), including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Home Equity Loans properly and
effectively.
Section 8.21. INSPECTIONS; ERRORS AND OMISSIONS INSURANCE.
(a) At any reasonable time and from time to time upon reasonable notice,
the Trustee, any Owner of a Class X-IO or Class R Certificate, or any agents
thereof may inspect the Servicer's servicing operations and discuss the
servicing operations of the Servicer during the Servicer's normal business hours
with any of its officers or directors; PROVIDED, HOWEVER, that the costs and
expenses incurred by the Servicer or its agents or representatives in connection
with any such examinations or discussions shall be paid by the Servicer.
(b) The Servicer (including the Trustee if it shall become the Servicer
hereunder) agrees to maintain errors and omissions coverage and a fidelity bond,
each at least to the extent required by Section 305 of Part I of FNMA Guide or
any successor provision thereof; PROVIDED, HOWEVER, that in the event that the
fidelity bond or the errors and omissions coverage is no longer in effect, the
Servicer shall notify the Trustee and the Owners.
Section 8.22. ADDITIONAL SERVICING RESPONSIBILITIES FOR SECOND MORTGAGE
LOANS.
The Servicer shall file (or cause to be filed) a request for notice of any
action by a superior lienholder under a superior lien for the protection of the
Trustee's interest, where permitted by local law and whenever applicable state
law does not require that a junior lienholder be named as a party defendant in
foreclosure proceedings in order to foreclose such junior lienholder's equity of
redemption.
If the Servicer is notified that any superior lienholder has accelerated or
intends to accelerate the obligations under a Senior Lien, or has declared or
intends to declare a default under the mortgage or the promissory note secured
thereby, or has filed or intends to file an election to have the mortgaged
property sold or foreclosed, the Servicer shall take, on behalf of the Trust,
whatever actions are necessary to protect the interests of the Owners, and/or to
preserve the security of the related Home Equity Loan, subject to the
application of the REMIC Provisions. The Servicer shall advance the necessary
funds to cure the default or reinstate the Senior Lien, if such advance is in
the best interests of the Owners; PROVIDED, HOWEVER, that no such additional
advance need be made if such advance would be nonrecoverable from Liquidation
Proceeds on the related Home Equity Loan. The Servicer shall thereafter take
such action as is necessary to recover the amount so advanced. Any expenses
incurred by the Servicer pursuant to this Section 8.22 shall be Servicing
Advances.
Section 8.23. THE GROUP II HOME EQUITY LOANS.
The Servicer shall enforce each Home Equity Loan in Group II in accordance
with its terms and shall timely calculate, record, report and apply all interest
rate adjustments in accordance with the related Note. The Servicer's records
shall, at all times, reflect the then Coupon Rate and monthly payment and the
Servicer shall timely notify the Mortgagor of any changes to the Coupon Rate or
the Mortgagor's monthly payment. If the Servicer fails to make either a timely
or accurate adjustment to the Coupon Rate or monthly payment or to notify the
Mortgagor of such adjustments, upon the Servicer's discovery of such error and
such continued failure, the Servicer shall pay from its own funds any shortage.
If the Servicer's continued failure after notice thereof to make a scheduled
change affects the Trust's rights to make future adjustments under the terms of
such Home Equity Loan, the Servicer shall repurchase such Home Equity Loan in
accordance with the provisions hereof. Any amounts paid by the Servicer pursuant
to this Section shall not be an advance and shall not be reimbursable from the
proceeds of any Home Equity Loan.
Section 8.24. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
OF SERVICER. Any corporation, limited liability company or other entity into
which the Servicer may be merged or converted or with which it may be
consolidated, or any corporation, limited liability company or other entity
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party or any corporation, limited liability company or other entity
succeeding to all or substantially all of the business 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 provided that
such corporation, limited liability company or other entity meets the
qualifications set forth in Section 8.20(h) and the resulting corporation,
limited liability company or other entity has a Tangible Net Worth of at least
$35,000,000.
Section 8.25. NOTICES OF MATERIAL EVENTS. The Servicer shall give prompt
notice to the Trustee and the Rating Agencies of the occurrence of any of the
following events:
(a) Any default or any fact or event of which the Servicer has knowledge
which results, or which with notice or the passage of time, or both, would
result in the occurrence of a default by the Seller or the Servicer under any
Operative Document or would constitute a material breach of a representation,
warranty or covenant under any Operative Document;
(b) The submission of any claim or the initiation of any legal process,
litigation or administrative or judicial investigation against the Seller or the
Servicer to which the Servicer has knowledge in any federal, state or local
court or before any governmental body or agency or before any arbitration board
or any such proceedings threatened by any governmental agency, which, if
adversely determined, would have a material adverse effect upon any of the
Seller's or the Servicer's ability to perform its obligations under any
Operative Document;
(c) The commencement of any proceedings by or against the Seller or the
Servicer under any applicable bankruptcy, reorganization, liquidation,
insolvency or other similar law now or hereafter in effect or of any proceeding
in which a receiver, liquidator, trustee or other similar official shall have
been, or may be, appointed or requested for the Seller or the Servicer; and
(d) The receipt of notice from any agency or governmental body having
authority over the conduct of any of the Seller's or the Servicer's business
that the Seller or the Servicer is to cease or desist, or to undertake, any
practice, program, procedure or policy employed by the Seller or the Servicer in
the conduct of the business of any of them, and such cessation or undertaking
will materially and adversely affect the conduct of the Seller's or the
Servicer's business or its ability to perform under the Operative Documents or
materially and adversely affect the financial affairs of the Seller or the
Servicer.
Section 8.26. INDEMNIFICATION BY THE SERVICER. The Servicer agrees to
indemnify and hold the Trustee, the Depositor and each Owner harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor and any Owner may sustain in any way related to the
failure of the Servicer to perform its duties and service the Home Equity Loans
in compliance with the terms of this Agreement. A party against whom a claim is
brought shall immediately notify the other parties and the Rating Agencies if a
claim is made by a third party with respect to this Agreement, and the Servicer
shall assume (with the consent of the Trustee) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee and/or Owner in respect of such claim.
Section 8.27. REPORTS ON FORECLOSURE AND ABANDONMENT OF PROPERTIES. On or
before February 28th of each year beginning in 200_, the Servicer shall file the
reports of foreclosures and abandonments of any Property required by Code
Section 6050J with the Internal Revenue Service and provide a copy of such
filing to the Trustee. The reports from the Servicer shall be in a form and
substance sufficient to meet the reporting requirements imposed by such Section
6050J.
END OF ARTICLE VIII
ARTICLE IX
TERMINATION OF TRUST
Section 9.01. TERMINATION OF TRUST.
The Trust created hereunder and all obligations created by this Agreement
will terminate upon the payment to the Owners of all Certificates from amounts
held by the Trustee and required to be paid to such Owners pursuant to this
Agreement upon the later to occur of (a) the final payment or other liquidation
(or any advance made with respect thereto) of the last Home Equity Loan in the
Trust Estate, (b) the disposition of all property acquired in respect of any
Home Equity Loan remaining in the Trust Estate and (c) at any time if a
Qualified Liquidation of both Home Equity Loan Groups within the Trust is
effected as described in Section 9.02. In no event, however, will the Trust
created by this Agreement continue beyond the expiration of twenty-one (21)
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the United Kingdom, living
on the date hereof. The Trustee shall give written notice of termination of the
Agreement to each Owner in the manner set forth in Section 11.05.
Section 9.02. TERMINATION UPON OPTION OF THE OWNER OF THE CLASS X-IO
CERTIFICATES.
(a) On any Distribution Date on or after the Clean-Up Call Date, the Owner
of the Class X-IO Certificates may cause the purchase from the Trust of all (but
not fewer than all) Home Equity Loans and all property theretofore acquired in
respect of any Home Equity Loan by foreclosure, deed in lieu of foreclosure, or
otherwise then remaining in the Trust Estate (i) on terms agreed upon among the
Servicer and the Owners of the Class X-IO and Class R Certificates (if such
terms result in payment to the Owners of the Offered and Class X-IO Certificates
of their entire principal balance and interest at their Certificate Rate (and
any Class Interest Carryover Shortfall)), or (ii) in the absence of such an
agreement, at a price equal to the Termination Price. In connection with such
purchase, the Servicer shall remit to the Trustee all amounts then on deposit in
the Principal and Interest Account for deposit to the Certificate Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 8.08 (d)),
which deposit shall be deemed to have occurred immediately preceding such
purchase.
(b) In the event that the Owner of the Class X-IO Certificates purchases
all Home Equity Loans remaining in the Trust Estate pursuant to Section 9.02(a),
the Trust Estate shall be terminated in accordance with the following additional
requirements:
(i) The Trustee shall specify the first day in the 90-day liquidation
period in a statement attached to the final tax return of the REMICs
created hereunder pursuant to Treasury regulation Section 1.860F-1 and
shall satisfy all requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder;
(ii) During such 90-day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Trustee shall
sell all of the Home Equity Loans to the Owner of the Class X-IO
Certificates for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Owners of the Class X-IO and Class R
Certificates all cash on hand in the Trust Estate (other than cash retained
to meet claims), and the Trust Estate shall terminate at that time.
(c) If the Owner of the Class X-IO Certificates does not repurchase all of
the Home Equity Loans pursuant to clause (a) of this Section 9.02 above on the
Clean-Up Call Date, then on the following Distribution Date the Trustee shall
begin a process for soliciting bids in connection with an auction of the Home
Equity Loans. The Owner of the Class X-IO Certificates may submit a bid in
connection with the auction, however neither of the Sellers nor the Depositor
shall be permitted to submit a bid or otherwise purchase any or all of the Home
Equity Loans in connection with the auction. The Trustee shall provide the Owner
of the Class X-IO Certificates written notice of such auction at least ten (10)
Business Days prior to the date bids must be received in such auction (the
"Auction Date"). The auction shall be conducted as follows:
(i) If at least two bids are received, the Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid
remains or the remaining bidders decline to resubmit bids. The Trustee
shall accept the highest of such remaining bids if it is equal to or in
excess of the Termination Price, consummate the sale and end the auction.
If less than two bids are received or the highest bid after the
resolicitation process is completed is not equal to or in excess of the
Termination Price, the Trustee shall not consummate such sale. To determine
if a bid meeting the Termination Price is received, the Trustee may, and if
so requested by the Owner of the Class X-IO Certificates shall, prior to
accepting such bid, consult with a financial advisor, which may be an
Underwriter of the Certificates, to determine if the fair market value of
the Home Equity Loans and related property has been offered.
(ii) If the first auction conducted by the Trustee does not produce
any bid at least equal to the Termination Price, then the Trustee shall,
beginning on the Distribution Date occurring approximately three months
after the first Auction Date, commence another auction in accordance with
the requirements of this subsection (c). If such second auction does not
produce any bid at least equal to the Termination Price, then the Trustee
shall, beginning on the Distribution Date occurring approximately three
months after the second Auction Date, commence another auction in
accordance with the requirements of this subsection (c), and shall continue
to conduct similar auctions approximately every three months thereafter
until the earliest of (A) the exercise by the Owner of the Class X-IO
Certificates of its repurchase option pursuant to clause (a) of this
Section 9.02 above, (B) receipt by the Trustee of a bid meeting the
conditions specified in the preceding paragraph, or (C) the Distribution
Date on which the Loan Balance of all the Home Equity Loans is reduced to
zero.
(iii) If the Trustee receives a bid meeting the conditions specified
in this subsection (c), then the Trustee's written acceptance of such bid
shall constitute a plan of complete liquidation within the meaning of
Section 860F of the Code, and the Trustee shall release to the winning
bidder, upon payment of the bid purchase price, the Files pertaining to the
Home Equity Loans being purchased and take such other actions as the
winning bidder may reasonably request to effect the transfer of the Home
Equity Loans to the winning bidder.
(d) If the Owner of the Class X-IO Certificates does not repurchase all of
the Home Equity Loans pursuant to clause (a) of this Section 9.02 on the
Clean-Up Call Date, then on the third Distribution Date following the Clean-Up
Call Date and each Distribution Date thereafter the Owners of the Offered
Certificates shall be entitled to receive the Class X-IO Distribution Amount,
distributable pursuant to Section 7.03(b) C.16 hereof, allocated among the
Classes of Offered Certificates in the order of priority set forth in Section
7.03(b) C.16 hereof.
(e) By their acceptance of the Certificates, the Owners thereof hereby
agree to authorize the Trustee to specify the first day in the 90-day
liquidation period in a statement attached to the Trust Estate's final tax
return, which shall be binding upon all successor Owners.
(f) In connection with any purchase pursuant to Section 9.02(a) or (c), the
Owner of the Class X-IO Certificates or other purchaser of the Home Equity
Loans, as the case may be, shall provide to the Trustee at the expense of the
Owner of the Class X-IO Certificates or other purchaser of the Home Equity
Loans, as the case may be, an Opinion of Counsel experienced in federal income
tax matters acceptable to the Trustee to the effect that such purchase and
liquidation constitutes a Qualified Liquidation of all of the REMICs created
hereunder.
(g) Promptly following any purchase described in Section 9.02(a) or (c),
the Trustee will release the Files to the Owner of the Class X-IO Certificates
or other purchaser of the Home Equity Loans, as the case may be, or otherwise
upon their order, in a manner similar to that described in Section 8.14 hereof.
The Owner of the Class X-IO Certificates or other purchaser of the Home Equity
Loans, as the case may be, will promptly prepare and record assignments of
Mortgages from the Trustee to the appropriate person.
Section 9.03. DISPOSITION OF PROCEEDS.
The Trustee shall, upon receipt thereof, deposit the proceeds of any
Termination Price or other liquidation of the Trust Estate pursuant to this
Article IX to the Certificate Account for distribution in accordance with the
priorities set forth in Section 7.03(b) hereof; provided, however, that any
amounts representing unreimbursed Delinquency Advances and Servicing Advances
theretofore funded by the Servicer from the Servicer's own funds shall be paid
by the Trustee to the Servicer from the proceeds of the Trust Estate.
Notwithstanding the foregoing, no distribution of the proceeds of any
Termination Price shall be made to the Owners of the Class X-IO and Class R
Certificates until all such amounts have been applied in reduction of any
outstanding Class A-7 Certificateholders' Interest Index Carryover and Net Rate
Cap Carryover.
Section 9.04. NETTING OF AMOUNTS.
If any Person paying the Termination Price would receive a portion of the
amount to be paid, such Person may net any such amount against the Termination
Price otherwise payable.
END OF ARTICLE IX
ARTICLE X
THE TRUSTEE
Section 10.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee (i) (A) undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Trustee and (B) the
banking institution that is the Trustee shall serve as the Trustee at all times
under this Agreement, and (ii) in the absence of bad faith on its part, may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions or any other
resolutions, statements, reports, documents, orders or other instruments
furnished pursuant to and conforming to the requirements of this Agreement; but
in the case of any such certificates or opinions or any other resolutions,
statements, reports, documents, orders or other instruments which by any
provision hereof are specifically required to be furnished to the Trustee, shall
be under a duty to examine the same to determine whether or not on their face
they conform to the requirements of this Agreement; PROVIDED, HOWEVER, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer, the Sellers or the Depositor hereunder.
Notwithstanding the foregoing, if a Servicer Termination Event of which an
Authorized Officer of the Trustee shall have actual knowledge has occurred and
has not been cured or waived, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Notwithstanding the appointment of the Servicer hereunder, the Trustee
is hereby empowered to perform the duties of the Servicer it being expressly
understood, however, that the foregoing describes a power and not an obligation
of the Trustee (unless the Servicer shall have resigned or been terminated and a
successor Servicer shall not have been appointed pursuant to the terms of this
Agreement), and that all parties hereto agree that, prior to any termination of
the Servicer, the Servicer and, thereafter, the Trustee or any other successor
Servicer shall perform such duties. Specifically, and not in limitation of the
foregoing, the Trustee shall upon termination or resignation of the Servicer,
and pending the appointment of any other Person as successor Servicer have the
power and duty during its performance as successor Servicer:
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Home Equity Loans;
(iii) to enforce due-on-sale clauses and to enter into assumption and
substitution agreements as permitted by Section 8.12 hereof;
(iv) to deliver instruments of satisfaction pursuant to Section 8.14;
(v) to enforce the Home Equity Loans;
(vi) to make Delinquency Advances and Servicing Advances and to pay
Compensating Interest; and
(vii) to conduct an auction of the Home Equity Loans pursuant to
Section 9.02.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) This subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) The Trustee shall not be personally liable for any error of
judgment made in good faith by an Authorized Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Owners of a majority in Percentage Interest of the Certificates of
the affected Class or Classes relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement relating to such Certificates;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default unless an Authorized Officer of the
Trustee shall have received written notice thereof or an Authorized Officer
shall have actual knowledge thereof. In the absence of receipt of such
notice, the Trustee may conclusively assume that there is no default; and
(v) Subject to the other provisions of this Agreement and without
limiting the generality of this Section l0.01, the Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this Agreement
or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any lien or encumbrance of any kind owing
with respect to, assessed or levied against, any part of the Trust Estate.
(d) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
(e) No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or indemnity reasonably satisfactory to it against such risk or liability
is not reasonably assured to it. None of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
(f) The permissive right of the Trustee to take actions enumerated in this
Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its own negligence or willful misconduct.
(g) The Trustee shall be under no obligation to institute any suit, or to
take any remedial proceeding under this Agreement, or to take any steps in the
execution of the trusts hereby created or in the enforcement of any rights and
powers hereunder until it shall be indemnified to its satisfaction against any
and all costs and expenses, outlays and counsel fees and other reasonable
disbursements and against all liability, except liability which is adjudicated
to have resulted from its negligence or willful misconduct, in connection with
any action so taken.
(h) The Trustee shall have no duty hereunder with respect to any complaint,
claim, demand, notice, or other document it may receive or which may be alleged
to have been delivered to or served upon it by third parties as a consequence of
the assignment of any of the Home Equity Loans hereunder or may otherwise
pertain to its interests in any of the Properties; provided, however, that the
Trustee shall use commercially reasonable efforts to deliver to the Servicer any
such complaint, claim, demand, notice, or other document which is delivered to
the Corporate Trust Office of the Trustee and contains sufficient information to
enable an Authorized Officer of the Trustee to identify it as pertaining to a
Mortgage or a Property.
Section 10.02. REMOVAL OF TRUSTEE FOR CAUSE.
(a) The Trustee may be removed pursuant to paragraph (b) hereof upon the
occurrence of any of the following events (whatever the reason for such event
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(1) the Trustee shall fail to distribute to the Owners entitled
hereto on any Distribution Date any amounts available for distribution
that it has received in accordance with the terms hereof; (PROVIDED,
HOWEVER, that any such failure which is due to circumstances beyond
the control of the Trustee shall not be a cause for removal
hereunder); or
(2) the Trustee shall fail in the performance of, or breach, any
covenant or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in
any certificate or other writing delivered pursuant hereto or in
connection herewith shall prove to be incorrect in any material
respect as of the time when the same shall have been made, and such
failure or breach shall continue or not be cured for a period of 30
days after there shall have been given, by registered or certified
mail, to the Trustee by the Seller or by the Owners of at least 25% of
the aggregate Percentage Interests represented by the Offered
Certificates then Outstanding, or, if there are no Offered
Certificates then Outstanding, by such Percentage Interests
represented by the Class X-IO Certificates, or if there are no Class
X-IO Certificates then Outstanding, by such Percentage Interests
represented by the Class R Certificates, a written notice specifying
such failure or breach and requiring it to be remedied; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Trustee, and such decree or order shall have remained in
force undischarged or unstayed for a period of 75 days; or
(4) a conservator or receiver or liquidator or sequestrator or
custodian of the property of the Trustee is appointed in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Trustee or
relating to all or substantially all of its property; or
(5) the Trustee shall become insolvent (however insolvency is
evidenced), generally fail to pay its debts as they come due, file or
consent to the filing of a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations, or take corporate action for the purpose of any of the
foregoing.
The Depositor shall give to the Rating Agencies notice of the occurrence of
any such event of which the Depositor is aware.
(b) If any event described an Paragraph (a) occurs and is continuing, then
and in every such case the Depositor and the Owners of a majority of the
Percentage Interests represented by the Offered Certificates then Outstanding or
if there are no Offered Certificates then Outstanding by such majority of the
Percentage Interests represented by the Class X-IO Certificates or if there are
no Class X-IO Certificates then Outstanding by such majority of the Percentage
Interests represented by the Class R Certificates, may, whether or not the
Trustee resigns pursuant to Section l0.09(b) hereof, immediately, concurrently
with the giving of notice to the Trustee, and without delaying the 30 days
required for notice therein, appoint a successor Trustee pursuant to the terms
of Section l0.09 hereof.
Section 10.03. CERTAIN RIGHTS OF THE TRUSTEE.
Except as otherwise provided in Section 10.01 hereof:
(a) the Trustee (acting as Trustee or Tax Matters Person) may request and
may conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, note or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Depositor, the Seller, or the Owners of
any Class of Certificates mentioned herein shall be sufficiently evidenced in
writing;
(c) whenever in the administration of this Agreement the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate;
(d) the Trustee may consult with counsel, and the advice of such counsel or
any opinion of counsel (selected in good faith by the Trustee) shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reasonable reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement at the request or direction of any of
the Owners pursuant to this Agreement, unless such Owners shall have offered to
the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document, unless requested in writing to do so by the Owners; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition precedent to taking any such action;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
nominees or custodians and shall not be responsible for any willful misconduct
or gross negligence on the part of any agent, attorney, custodian or nominee
appointed with due care;
(h) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person and within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication of the
Certificates;
(i) the right of the Trustee to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of such act;
(j) pursuant to the terms of this Agreement, the Servicer is required to
furnish to the Trustee from time to time certain information and make various
calculations which are relevant to the performance of the Trustee's duties under
the Agreement. The Trustee shall be entitled to rely in good faith on any such
information and calculations in the performance of its duties hereunder, (i)
unless and until an Authorized Officer of the Trustee has actual knowledge, or
is advised by any Owner of a Certificate (either in writing or orally with
prompt written or telecopy confirmations), that such information or calculations
is or are incorrect, or (ii) unless there is a manifest error in any such
information;
(k) the Trustee shall not be required to give any bond or surety in respect
of the execution of the Trust Estate created hereby or the powers granted
hereunder;
(l) In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity. The Trustee shall invest and reinvest
amounts held in the Certificate Account in Eligible Investments as set forth in
Schedule I-F hereto; and
(m) In the event that the Trustee is also acting as Registrar, transfer
agent or Paying Agent hereunder, the rights and protections afforded to the
Trustee pursuant to this section shall also be afforded to the Registrar,
transfer agent and Paying Agent.
Section 10.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF CERTIFICATES.
The recitals and representations contained herein and in the Certificates,
except the execution and authentication of the Certificates, shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
their correctness (other than with respect to such execution and
authentication). The Trustee makes no representation as to the validity or
sufficiency of this Agreement, the Certificates or any Home Equity Loan or
document related thereto other than as to validity and sufficiency of its
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor, the Sellers or the Servicer in respect of the Home Equity
Loans or deposited into or withdrawn from the Principal and Interest Account or
the Certificate Account by the Depositor, the Servicer or the Sellers, and shall
have no responsibility for filing any financing or continuation statement in any
public office at any time or otherwise to perfect or maintain the perfection of
any security interest or lien or except as otherwise provided herein to prepare
or file any tax returns or Commission filings for the Trust or to record this
Agreement. The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any default unless an Authorized Officer of the Trustee
shall have received written notice thereof or an Authorized Officer has actual
knowledge thereof. In the absence of receipt of such notice, the Trustee may
conclusively assume that no default has occurred.
Section 10.05. MAY HOLD CERTIFICATES.
The Trustee, any Paying Agent, Registrar or any other agent of the Trust,
in its individual or any other capacity, may become an Owner or pledgee of
Certificates and may otherwise deal with the Trust and the other parties hereto
with the same rights it would have if it were not Trustee, any Paying Agent,
Registrar or such other agent.
Section 10.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other trust funds except to the extent required herein or required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Depositor and except to the extent
of income or other gain on investments which are deposits in or certificates of
deposit of the Trustee in its commercial capacity and income or other gain
actually received by the Trustee on Eligible Investments.
Section 10.07. COMPENSATION AND REIMBURSEMENT.
As compensation for its services hereunder, the Trustee shall be entitled
to receive the Trustee Fee, any investment income or other benefit derived from
funds or Eligible Investments in the Certificate Account to the extent permitted
by Section 7.05(c), and such other amounts as separately agreed with the Seller.
Except as otherwise provided in this Agreement, the Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Trust and
held harmless against any loss, liability, or "unanticipated out-of-pocket"
expense incurred or paid to third parties (which expenses shall not include
salaries paid to employees, or allocable overhead, of the Trustee) in connection
with or any claim or legal action or any pending or threatened claim or legal
action arising out of or in connection with the acceptance or administration of
its trusts hereunder or the Certificates, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. All such amounts described in the preceding
sentence shall constitute Trustee Reimbursable Expenses. It is understood by the
parties hereto that a "claim" as used in this paragraph includes any claim for
indemnification made by the Custodian under the applicable provisions of the
Custodial Agreement. The Trustee and any director, officer, employee or agent of
the Trustee shall be indemnified by the Seller and held harmless against any
loss, liability or reasonable expenses incurred by the Trustee in performing its
duties as Tax Matters Person for the REMICs created under this Agreement, other
than any loss, liability or expense incurred by reason of willful misfeasance,
negligence or bad faith. When the Trustee incurs expenses or provides services
after the occurrence of a default and the commencement of a voluntary or
involuntary case under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law involving any
of the Sellers or the Servicer, the expenses and fees for such services are
intended to constitute expenses of administration under such laws. The
provisions of this Section 10.07 shall survive the resignation or removal of the
Trustee and the termination of this Agreement.
Section 10.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 subject to supervision or examination by the United States of
America, or any state and having a deposit rating of at least A- by Standard &
Poor's and A2 by Moody's and if rated by Fitch, A by Fitch. If such Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
or association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article X.
Section 10.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor Trustee under Section 10.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may resign
at any time by giving written notice of resignation to the Depositor and the
Seller and by mailing notice of resignation by first-class mail, postage
prepaid, to the Owners at their addresses appearing on the Register. A copy of
such notice shall be sent by the resigning Trustee to the Rating Agencies. Upon
receiving notice of resignation, the Depositor shall promptly appoint a
successor Trustee or Trustees by written instrument, in duplicate, executed on
behalf of the Trust by an Authorized Officer of the Depositor, one copy of which
instrument shall be delivered to the Trustee so resigning and one copy to the
successor Trustee or Trustees. If no successor Trustee shall have been appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Owner may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and appropriate, appoint a successor
Trustee.
(c) If at any time the Trustee shall cease to be eligible under Section
10.08 hereof and shall fail to resign after written request therefor by the
Depositor, the Depositor may remove the Trustee and appoint a successor Trustee
by written instrument, in duplicate, executed on behalf of the Trust by an
Authorized Officer of the Depositor, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor Trustee.
(d) The Owners of a majority of the Voting Rights represented by the
Offered Certificates, or, if there are no Offered Certificates then Outstanding,
by such majority of the Voting Rights represented by the Class X-IO and Class R
Certificates, may at any time remove the Trustee and appoint a successor Trustee
by delivering to the Trustee to be removed, to the successor Trustee so
appointed, to the Depositor and to the Servicer, copies of the record of the act
taken by the Owners, as provided for in Section 11.03 hereof.
(e) [Reserved].
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause, the
Depositor shall promptly appoint a successor Trustee. If within one year after
such resignation, removal or incapability or the occurrence of such vacancy, a
successor Trustee shall be appointed by act of the Owners of a majority of the
Percentage Interests represented by the Offered Certificates then Outstanding,
the successor Trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor Trustee and supersede the successor Trustee
appointed by the Depositor. If no successor Trustee shall have been so appointed
by the Depositor or the Owners and shall have accepted appointment in the manner
hereinafter provided, any Owner may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor Trustee.
(g) The Servicer shall give notice of any removal of the Trustee by mailing
notice of such event by first-class mail, postage prepaid, to the Rating
Agencies and to the Owners as their names and addresses appear in the Register.
Each notice shall include the name of the successor Trustee and the address of
its corporate trust office.
Section 10.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Depositor on behalf of the Trust and to its predecessor Trustee
an instrument accepting such appointment hereunder and stating its eligibility
to serve as Trustee hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor hereunder; but, on
request of the Depositor or the successor Trustee, such predecessor Trustee
shall, upon payment of its charges then unpaid, execute and deliver an
instrument transferring to such successor Trustee all of the rights, powers and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such Trustee so
ceasing to act hereunder. Upon request of any such successor Trustee, the
Depositor on behalf of the Trust shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Depositor shall mail notice thereof by first-class mail, postage
prepaid, to the Owners at their last addresses appearing upon the Register. The
Depositor shall send a copy of such notice to the Rating Agencies. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Trust.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor shall be qualified and eligible under this
Article X.
Section 10.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
OF THE TRUSTEE.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; PROVIDED, HOWEVER,
that such corporation or association shall be otherwise qualified and eligible
under this Article X. In case any Certificates have been executed, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such Trustee may adopt such execution and deliver the
Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.
Section 10.12. REPORTING; WITHHOLDING.
(a) The Trustee shall timely provide to the Owners the Internal Revenue
Service's Form 1099 and any other statement required by applicable Treasury
regulations as determined by the Tax Matters Person, and shall withhold, as
required by applicable law, federal, state or local taxes, if any, applicable to
distributions to the Owners, including but not limited to backup withholding
under Section 3406 of the Code and the withholding tax on distributions to
foreign investors under Sections 1441 and 1442 of the Code.
(b) As required by law or upon request of the Tax Matters Person and except
as otherwise specifically set forth in (a) preceding, the Trustee shall timely
file all reports prepared by the Seller and required to be filed by the Trust,
including other reports that must be filed with the Owners, such as the Internal
Revenue Service's Form 1066 and Schedule Q. The Trustee shall, upon written
request of the Seller, collect any forms or reports from the Owners determined
by the Seller to be required under applicable federal, state and local tax laws.
(c) Except as otherwise provided, the Trustee shall have the responsibility
for preparation and execution of those returns, forms, reports and other
documents referred to in this Section.
(d) The Seller covenants and agrees that it shall provide to the Trustee
any information necessary to enable the Trustee to meet its obligations under
subsections (a), (b) and (c) above.
Section 10.13. LIABILITY OF THE TRUSTEE.
The Trustee shall be liable in accordance herewith only to the extent of
the obligations specifically imposed upon and undertaken by the Trustee herein.
Neither the Trustee nor any of the directors, officers, employees or agents of
the Trustee shall be under any liability on any Certificate or otherwise to the
Certificate Account, the Depositor, the Sellers, the Servicer or any Owner 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 Trustee, its directors, officers, employees
or agents or any such Person against any liability which would otherwise be
imposed by reason of negligent action, negligent failure to act or willful
misconduct in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Subject to the foregoing sentence, the Trustee
shall not be liable for losses on investments of amounts in the Certificate
Account (except for any losses on obligations on which the bank serving as
Trustee is the obligor). In addition, the Depositor and CHEC covenant and agree
to indemnify the Trustee and the Servicer (if the Servicer is also the Trustee)
and their officers, directors, agents and employees from, and hold it harmless
against, any and all losses, liabilities, damages, claims or expenses (including
legal fees and expenses) of whatsoever kind arising out of or in connection with
the performance of its duties hereunder other than those resulting from
negligence or bad faith. The Trustee and any director, officer, employee or
agent of the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting in good faith on any certificate, notice or
other document of any kind PRIMA FACIE properly executed and submitted by the
Authorized Officer of any Person respecting any matters arising hereunder. The
provisions of this Section 10.13 shall survive the resignation or removal of the
Trustee, termination of this Agreement and the payment of the outstanding
Certificates. When the Trustee incurs expenses or provides services after the
occurrence of a default and the commencement of a voluntary or involuntary case
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or similar law involving the Sellers or the
Servicer, the expenses and fees for such services are intended to constitute
expenses of administration under such laws.
Section 10.14. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Estate or Property may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-Trustee or co-Trustees, jointly with the Trustee, of all or any
part of the Trust Estate or separate Trustee or separate Trustees of any part of
the Trust Estate, and to vest in such Person or Persons, in such capacity and
for the benefit of the Owners, such title to the Trust Estate, or any part
thereof, and, subject to the other provisions of this Section 10.14, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in the case any event indicated in Section 8.20(a) shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-Trustee or separate Trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 10.08 and no notice to Owner of
the appointment of any co-Trustee or separate Trustee shall be required under
Section 10.09.
Every separate Trustee and co-Trustee shall, to the extent permitted, be
appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate Trustee or co-Trustee jointly
(it being understood that such separate Trustee or co-Trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate Trustee or co-Trustee, but solely at
the direction of the Trustee;
(ii) No co-Trustee hereunder shall be held personally liable by reason
of any act or omission of any other co-Trustee hereunder; and
(iii) The Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate Trustee or co-Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Section 10.14. Each separate Trustee and co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate Trustee or co-Trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 10.15. APPOINTMENT OF CUSTODIANS.
The Trustee may appoint one or more Custodians to hold all or a portion of
the Files as agent for the Trustee, by entering into a Custodial Agreement.
Subject to this Article X, the Trustee agrees to comply with the terms of the
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Owners of the Certificates.
END OF ARTICLE X
ARTICLE XI
MISCELLANEOUS
Section 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Depositor, the Sellers or the Owners
to the Trustee to take any action under any provision of this Agreement, the
Depositor, each of the Sellers or the Owners, as the case may be, shall furnish
to the Trustee a certificate stating that all conditions precedent, if any,
provided for in this Agreement relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate need be furnished.
Except as otherwise specifically provided herein, each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Agreement (including one furnished pursuant to specific requirements of
this Agreement relating to a particular application or request) shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 11.02. FORM OF DOCUMENTS DELIVERED TO THE TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Trustee may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such Authorized Officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of an Authorized
Officer of the Trustee or any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, one or more Authorized Officers of the Depositor, either of the Sellers or
the Servicer, stating that the information with respect to such factual matters
is in the possession of the Depositor, either of the Sellers or the Servicer,
unless such Authorized Officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel may also be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an Authorized Officer of the Trustee, stating that
the information with respect to such matters is in the possession of the
Trustee, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 11.03. ACTS OF OWNERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by the Owners
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Owners in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Seller. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Owners signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such execution is
by an officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Owner of any Certificate shall bind the Owner of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Certificates.
Section 11.04. NOTICES, ETC. TO TRUSTEE.
Any request, demand, authorization, direction, notice, consent, waiver or
act of the Owners under this Agreement or other documents provided or permitted
by this Agreement to be made upon, given or furnished to, or filed with the
Trustee by any Owner, the Depositor, either of the Sellers or the Servicer shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with and received by the Trustee at its Corporate Trust Office as
set forth in Section 2.02 hereof.
Section 11.05. NOTICES AND REPORTS TO OWNERS; WAIVER OF NOTICES.
Where this Agreement provides for notice to Owners of any event or the
mailing of any report to Owners, such notice or report shall be sufficiently
given (unless otherwise herein expressly provided) if mailed, first-class
postage prepaid, to each Owner affected by such event or to whom such report is
required to be mailed, at the address of such Owner as it appears on the
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Owners is mailed in the manner provided
above, neither the failure to mail such notice or report nor any defect in any
notice or report so mailed to any particular Owner shall affect the sufficiency
of such notice or report with respect to other Owners, and any notice or report
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given or provided. Notwithstanding the foregoing, if the Servicer
is removed or resigned or the Trust is terminated, notice of any such events
shall be made by overnight courier, registered mail or telecopy followed by a
telephone call.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Owners shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Owners when such notice is required to be given pursuant
to any provision of this Agreement, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
Where this Agreement provides for notice to any Rating Agency that rated
any Certificates, failure to give such notice shall not affect any other rights
or obligations created hereunder.
Section 11.06. RULES BY TRUSTEE.
The Trustee may make reasonable rules for any meeting of Owners.
Section 11.07. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by any party hereto shall
bind its successors and assigns, whether so expressed or not.
Section 11.08. SEVERABILITY.
In case any provision in this Agreement or in the Certificates shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.09. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Owners and the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
Section 11.10. LEGAL HOLIDAYS.
In any case where the date of any Distribution Date, any other date on
which any distribution to any Owner is proposed to be paid, or any date on which
a notice is required to be sent to any Person pursuant to the terms of this
Agreement (with the exception of any Monthly Remittance Date) shall not be a
Business Day, then (notwithstanding any other provision of the Certificates or
this Agreement) payment or mailing need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made or mailed on the nominal date of any such Distribution Date, or such other
date for the payment of any distribution to any Owner or the mailing of such
notice, as the case may be, and no interest shall accrue for the period from and
after any such nominal date, provided such payment is made in full on such next
succeeding Business Day. In any case where the date of any Monthly Remittance
Date shall not be a Business Day, then payment or mailing need not be made on
such date, but must be made on the preceding Business Day.
Section 11.11. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) In view of the fact that Owners are expected to reside in many states
and outside the United States and the desire to establish with certainty that
this Agreement will be governed by and construed and interpreted in accordance
with the law of a state having a well-developed body of commercial and financial
law relevant to transactions of the type contemplated herein, this Agreement and
each Certificate shall be construed in accordance with and governed by the laws
of the State of New York applicable to agreements made and to be performed
therein, without giving effect to the conflicts of law principles thereof.
(b) The parties hereto hereby irrevocably submit to the jurisdiction of the
United States District Court for the Southern District of New York and any court
in the State of New York located in the City and County of New York, and any
appellate court from any thereof, in any action, suit or proceeding brought
against it or in connection with this Agreement or any of the related documents
or the transactions contemplated hereunder or for recognition or enforcement of
any judgment, and the parties hereto hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
or determined in such New York state court or, to the extent permitted by law,
in such federal court. The parties hereto agree that a final judgment in any
such action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. To
the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not be
litigated in or by such courts.
(c) Each of the Depositor, the Sellers and the Servicer hereby irrevocably
appoints and designates the Trustee as its true and lawful attorney and duly
authorized agent for acceptance of service of legal process with respect to any
action, suit or proceeding set forth in paragraph (b) hereof. Each of the
Depositor, the Sellers and the Servicer agrees that service of such process upon
the Trustee shall constitute personal service of such process upon it.
(d) Nothing contained in this Agreement shall limit or affect the right of
the Depositor, any of the Sellers or the Servicer, as the case may be, to serve
process in any other manner permitted by law or to start legal proceedings
relating to any of the Home Equity Loans against any Mortgagor in the courts of
any jurisdiction.
Section 11.12. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.13. USURY.
The amount of interest payable or paid on any Certificate under the terms
of this Agreement shall be limited to an amount which shall not exceed the
maximum nonusurious rate of interest allowed by the applicable laws of the State
of New York or any applicable law of the United States permitting a higher
maximum nonusurious rate that preempts such applicable New York laws, which
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Certificate exceeds the
Highest Lawful Rate, the Trust stipulates that such excess amount will be deemed
to have been paid to the Owner of such Certificate as a result of an error on
the part of the Trustee acting on behalf of the Trust and the Owner receiving
such excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Trustee on behalf of the Trust, refund the amount of such
excess or, at the option of such Owner, apply the excess to the payment of
principal of such Certificate, if any, remaining unpaid. In addition, all sums
paid or agreed to be paid to the Trustee for the benefit of Owners of
Certificates for the use, forbearance or detention of money shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Certificates.
Section 11.14. AMENDMENT.
(a) The Trustee, the Depositor, the Sellers and the Servicer may, at any
time and from time to time, without the giving of notice to or the receipt of
the consent of the Owners, amend this Agreement, and the Trustee shall consent
to the amendment for the purposes of (i) if accompanied by an approving Opinion
of Counsel experienced in federal income tax matters, and an Officer's
Certificate, which shall not be at the expense of the Trustee, removing the
restriction against the transfer of a Class R Certificate to a Disqualified
Organization, (ii) complying with the requirements of the Code including any
amendments necessary to maintain REMIC status of each REMIC, (iii) curing any
ambiguity, (iv) correcting or supplementing any provisions of this Agreement
which are inconsistent with any other provisions of this Agreement or (v) for
any other purpose, provided that in the case of clause (v), such amendment shall
not adversely affect in any material respect any Owner. Any such amendment shall
be deemed not to adversely affect in any material respect any Owner if such
Owner shall have consented thereto in writing or if there is delivered to the
Trustee written notification from each Rating Agency that such amendment will
not cause such Rating Agency to reduce its then current rating assigned to the
Offered Certificates. Notwithstanding anything to the contrary, no such
amendment shall (a) change in any manner the amount of, or delay the timing of,
payments which are required to be distributed to any Owner without the consent
of such Owner or (b) change the percentages of Percentage Interest which are
required to consent to any such amendments, without the consent of the Owners of
all Certificates of the Class or Classes affected then outstanding. The Trustee
shall not be required to execute any amendment or supplement if it affects its
rights, duties, immunities or indemnities.
(b) The Rating Agencies shall be provided by the Seller and the Depositor
with copies of any amendments to this Agreement, together with copies of any
opinions or other documents or instruments executed in connection therewith.
(c) Notwithstanding any contrary provisions of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) to the effect that such amendment will not result in the imposition
of any tax on the Trust pursuant to the REMIC Provisions or cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any of the
Certificates are outstanding.
Section 11.15. PAYING AGENT; APPOINTMENT AND ACCEPTANCE OF DUTIES.
The Trustee is hereby appointed Paying Agent. The Seller may, if such
Person meets the eligibility requirements for the Trustee set forth in Section
10.08 hereof, appoint one or more other Paying Agents or successor Paying
Agents.
Each Paying Agent, immediately upon such appointment shall signify its
acceptance of the duties and obligations imposed upon it by this Agreement by
written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of Section 6.02, that such Paying Agent will:
(a) allocate all sums received for distribution to the Owners of
Certificates of each Class for which it is acting as Paying Agent on each
Distribution Date among such Owners in the proportion specified by the Trustee;
and
(b) hold all sums held by it for the distribution of amounts due with
respect to the Certificates in trust for the benefit of the Owners entitled
thereto until such sums shall be paid to such Owners or otherwise disposed of as
herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least sixty (60) days written notice to the Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent and signed
by the Trustee.
In the event of the resignation or removal of any Paying Agent other than
the Trustee such Paying Agent shall pay over, assign and deliver any moneys held
by it as Paying Agent to its successor, or if there be no successor, to the
Trustee.
Upon the appointment, removal or notice of resignation of any Paying Agent,
the Trustee shall notify the Owners by mailing notice thereof at their addresses
appearing on the Register.
Section 11.16. REMIC STATUS.
(a) The parties hereto intend that each REMIC created hereunder shall
constitute, and that the affairs of each REMIC created hereunder shall be
conducted so as to qualify it as a REMIC in accordance with the REMIC
Provisions. In furtherance of such intention, Bank One, National Association, or
such other person designated pursuant to Section 11.18 hereof shall act as agent
for the Trust and as Tax Matters Person for the Trust and that in such capacity
it shall: (i) prepare or cause to be prepared and filed, at its own expense, in
a timely manner, annual tax returns and any other tax return required to be
filed by each REMIC created hereunder using a calendar year as the taxable year
for such REMIC; (ii) in the related first such tax return, make (or cause to be
made) an election satisfying the requirements of the REMIC Provisions, on behalf
of each REMIC created hereunder, for it to be treated as a REMIC; (iii) at the
Tax Matters Person's expense, prepare and forward, or cause to be prepared and
forwarded, to the Owners all information, reports or tax returns required with
respect to each REMIC created hereunder, including Schedule Q to Form 1066, as,
when and in the form required to be provided to the Owners, and to the Internal
Revenue Service and any other relevant governmental taxing authority in
accordance with the REMIC Provisions and any other applicable federal, state or
local laws, including without limitation information reports relating to
"original issue discount" as defined in the Code based upon the prepayment
assumption and calculated by using the "Issue Price" (within the meaning of
Section 1273 of the Code) of the Certificates of the related Class; provided
that the tax return filed on Schedule Q to Form 1066 shall be prepared and
forwarded to the Owners of the Class R Certificates no later than 50 days after
the end of the period to which such tax return was due; (iv) not take any action
or omit to take any action that would cause the termination of the REMIC status
of any REMIC created hereunder, except as provided under this Agreement; (v)
represent the Trust or each REMIC created hereunder in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to a taxable year of
the Trust or each REMIC created hereunder, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of the Trust or each REMIC created hereunder, and otherwise act on
behalf of the Trust or each REMIC created hereunder in relation to any tax
matter involving the Trust or each REMIC created hereunder (the legal expenses
and costs of any such action described in this subsection (v) and any liability
resulting therefrom shall constitute expenses of the Trust and shall constitute
Trustee Reimbursable Expenses, unless such legal expenses and costs are incurred
by reason of the Trustee's willful misfeasance, bad faith or negligence); (vi)
comply with all statutory or regulatory requirements with regard to its conduct
of activities pursuant to the foregoing clauses of this Section 11.16,
including, without limitation, providing all notices and other information to
the Internal Revenue Service and Owners of Class R Certificates required of a
"tax matters person" pursuant to subtitle F of the Code and the Treasury
Regulations thereunder; (vii) make available information necessary for the
computation of any tax imposed (A) on transfer of residual interests to certain
Disqualified Organizations or (B) on pass-through entities, any interest in
which is held by a Disqualified Organization; and (viii) acquire and hold the
Tax Matters Person Residual Interest. The obligations of the Trustee or such
other designated Tax Matters Person pursuant to this Section 11.16 shall survive
the termination or discharge of this Agreement.
(b) The Sellers, the Depositor, the Trustee and the Servicer covenant and
agree for the benefit of the Owners (i) to take no action which would result in
the termination of REMIC status for any REMIC created hereunder, (ii) not to
engage in any "prohibited transaction", as such term is defined in Section
860F(a)(2) of the Code, (iii) not to engage in any other action which may result
in the imposition on the Trust of any other taxes under the Code and (iv) to
cause the Servicer not to take or engage in any such action, to the extent that
either of the Sellers is aware of any such proposed action by the Servicer.
(c) Each REMIC created hereunder shall, for federal income tax purposes,
maintain books on a calendar year basis and report income on an accrual basis.
(d) Except as otherwise permitted by Section 7.05(b), no Eligible
Investment shall be sold prior to its stated maturity (unless sold pursuant to a
plan of liquidation in accordance with Article IX hereof).
(e) None of the Depositor, the Sellers or the Trustee shall enter into any
arrangement by which the Trustee will receive a fee or other compensation for
services rendered pursuant to this Agreement, other than as expressly
contemplated by this Agreement.
(f) Notwithstanding the foregoing clauses (d) and (e), the Trustee or
either of the Sellers may engage in any of the transactions prohibited by such
clauses, provided that the Trustee shall have received an Opinion of Counsel
experienced in federal income tax matters to the effect that such transaction
does not result in a tax imposed on the Trust or cause a termination of REMIC
status for any REMIC created hereunder; PROVIDED, HOWEVER, that such transaction
is otherwise permitted under this Agreement.
(g) In the event that any tax is imposed on "prohibited transactions" of
the Trust created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of the Trust as defined in Section
860G(c) of the Code, on any contributions to the Trust after the Startup Date
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee if such tax arises out of or results from the
willful misfeasance, bad faith or negligence in performance by the Trustee of
any of its obligations under Article X, or (ii) to the Servicer if such tax
arises out of or results from a breach by the Servicer of any of its obligations
under Article VIII or otherwise.
Section 11.17. ADDITIONAL LIMITATION ON ACTION AND IMPOSITION OF TAX.
Any provision of this Agreement to the contrary notwithstanding, the
Trustee shall not, without having obtained an Opinion of Counsel experienced in
federal income tax matters at the expense of the party seeking to take such
action but in no event at the expense of the Trust to the effect that such
transaction does not result in a tax imposed on the Trust or any REMIC created
hereunder or cause a termination of REMIC status for any REMIC created
hereunder, (i) sell any assets in the Trust Estate, (ii) accept any contribution
of assets after the Startup Day, (iii) allow the Servicer to foreclose upon any
Home Equity Loan if such foreclosure would result in a tax on the Trust or any
REMIC created hereunder or cause termination of REMIC status for any REMIC
created hereunder or (iv) agree to any modification of this Agreement. To the
extent that sufficient amounts cannot be so retained to pay or provide for the
payment of such tax, the Trustee is hereby authorized to and shall segregate,
into a separate non-interest bearing account, the net income from any such
Prohibited Transactions of each REMIC created hereunder and use such income, to
the extent necessary, to pay such tax; PROVIDED THAT, to the extent that any
such income is paid to the Internal Revenue Service, the Trustee shall retain an
equal amount from future amounts otherwise distributable to the Owners of Class
R Certificates and shall distribute such retained amounts to the Owners of
Offered Certificates to the extent they are fully reimbursed and then to the
Owners of the Class R Certificates. If any tax, including interest penalties or
assessments, additional amounts or additions to tax, is imposed on the Trust,
such tax shall be charged against amounts otherwise distributable to the owners
of the Class R Certificates on a PRO RATA basis. The Trustee is hereby
authorized to and shall retain from amounts otherwise distributable to the
Owners of the Class R Certificates sufficient funds to pay or provide for the
payment of, and to actually pay, such tax as is legally owed by the Trust (but
such authorization shall not prevent the Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings).
Section 11.18. APPOINTMENT OF TAX MATTERS PERSON.
A Tax Matters Person will be appointed for each REMIC created hereunder for
all purposes of the Code and such Tax Matters Person will perform, or cause to
be performed, such duties and take, or cause to be taken, such actions as are
required to be performed or taken by the Tax Matters Person under the Code. The
Tax Matters Person for each REMIC created hereunder shall be the Trustee as long
as it owns a Class R Certificate. If the Trustee does not own a Class R
Certificate, the Tax Matters Person will be the holder of the largest percentage
interest in the Class R Certificates. The Trustee is hereby irrevocably
appointed to act as the agent of the Tax Matters Person for all purposes of the
Code and regulations thereunder.
Section 11.19. NOTICES.
All notices hereunder shall be given as follows, until any superseding
instructions are given to all other Persons listed below:
THE TRUSTEE: Bank One, National Association
Bank Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Office
Tel: (000) 000-0000
Fax: (000) 000-0000
THE DEPOSITOR: CHEC Funding, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE SELLER: Centex Home Equity Company, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE CONDUIT SELLER: CHEC Conduit Funding, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE CONDUIT SELLER II: Xxxxxxx Street Funding II, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE SERVICER: Centex Home Equity Company, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE CUSTODIAN: Bank One Trust Company, N.A.
0000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax: (972) 785-534
Confirmation: (000) 000-0000
THE UNDERWRITERS: ________________________
________________________
________________________
________________________
Attention: _______________
Tel: ____________________
Fax: ____________________
________________________
________________________
________________________
________________________
Attention: _______________
Tel: ____________________
Fax: ____________________
________________________
________________________
________________________
________________________
Attention: _______________
Tel: ____________________
Fax: ____________________
________________________
________________________
________________________
________________________
Attention: _______________
Tel: ____________________
Fax: ____________________
STANDARD & POOR'S: Standard & Poor's Ratings Service,
a division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage Group
Tel: (000) 000-0000
Fax: (000) 000-0000
MOODY'S: Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: The Residential Mortgage
Monitoring Department
Tel: (000) 000-0000
Fax: (000) 000-0000
FITCH: Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Section 11.20. RULE 144A INFORMATION. For so long as any of the Class R or
Class X-IO Certificates are "restricted securities" within the meaning of Rule
144A under the Securities Act, the Servicer (or if the Trustee is then acting as
Servicer, CHEC) agrees to provide to any Owner of the Class R or Class X-IO
Certificate and to any prospective purchaser of Class R or Class X-IO
Certificates designated by such an Owner, upon the request of such Owner or
prospective purchaser, the information specified below which is intended to
satisfy the conditions set forth in Rule 144A(d)(4) under the Securities Act;
PROVIDED that this Section 11.20 shall require, as to the Trustee or CHEC, only
that the Servicer (or if the Trustee is then acting as Servicer, CHEC) provide
publicly available information regarding it or the Trustee in response to any
such request; and PROVIDED FURTHER that the Servicer (or if the Trustee is then
acting as Servicer, CHEC) shall be obligated to provide only such basic,
material information concerning the structure of the Class R or Class X-IO
Certificates and distributions thereon, the nature, performance and servicing of
the Home Equity Loans supporting the Certificates, and any credit enhancement
mechanism, if any, associated with the Certificates. Any recipient of
information provided pursuant to this Section 11.20 shall agree that such
information shall not be disclosed or used for any purpose other than the
evaluation of the Class R or Class X-IO Certificates by the prospective
purchaser. The Trustee shall have no responsibility for the sufficiency under
Rule 144A of any information so provided by the Servicer or CHEC to any Owner or
prospective purchaser of Class R or Class X-IO Certificates.
END OF ARTICLE XI
IN WITNESS WHEREOF, the Depositor, the Sellers, the Servicer and the
Trustee have caused this Agreement to be duly executed their respective officers
thereunto duly authorized, all as of the day and year first above written.
CHEC FUNDING, LLC,
as Depositor
By:_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CENTEX HOME EQUITY COMPANY, LLC, as Seller
By:_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CHEC CONDUIT FUNDING, LLC as Conduit Seller
By:_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
XXXXXXX STREET FUNDING II, LLC, as Conduit
Seller II
By: CENTEX HOME EQUITY COMPANY, LLC,
as Manager
By:_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CENTEX HOME EQUITY COMPANY, LLC,
as Servicer
By:_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:_______________________________
Name: __________________
Title: __________________
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the ___ day of __________ 200_, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of CHEC Funding, LLC, a
Delaware limited liability agreement; and that he signed his name thereto by
order of the sole member of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
_______________________________
Notary Public
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the ___ day of __________ 200_, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation, and that he signed his name thereto by order of the sole
member of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
_______________________________
Notary Public
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the ___ day of __________ 200_, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation and that he signed his name thereto by order of Centex Home
Equity Company, LLC, as manager of Xxxxxxx Street Funding II, LLC.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
_______________________________
Notary Public
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the ___ day of __________ 200_, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of CHEC Conduit Funding, LLC, a
Delaware limited liability company, and that he signed his name thereto by order
of the sole member of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
_______________________________
Notary Public
STATE OF ________________ )
: ss.:
COUNTY OF ______________ )
On the ___ day of __________ 200_, before me personally came
__________________, to me known that she is a __________________ of Bank One,
National Association, described in and that she executed the above instrument as
Trustee; and that she signed her name thereto by order of the Board of Directors
of said bank.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARIAL SEAL
_______________________________
Notary Public
SCHEDULE I-A
GROUP I SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Servicer.
SCHEDULE I-B
GROUP II SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Servicer.
SCHEDULE I-C
SELLER SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Servicer.
SCHEDULE I-D
CONDUIT SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Servicer.
SCHEDULE I-E
CONDUIT II SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate Trust
Office and by the Servicer.
SCHEDULE I-F
INVESTMENT INSTRUCTIONS TO TRUSTEE
ACCOUNT ELIGIBLE INVESTMENT
(1) Certificate Account One Group Institutional Prime Fund
(2) Supplemental Interest Reserve Fund One Group Institutional Prime Fund
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-1
(____% CERTIFICATE RATE)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-1-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-1 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-1 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-1 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________ __, 20__ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class A-1 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________ __, 20__ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-2 (the "Class A-2 Certificates"), Class A-3
(the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class
A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-1 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-1 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-1 Certificates. The Percentage Interest of each Class
A-1 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-1 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-1 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-1 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-1 Certificates are exchangeable for new Class A-1 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-2
(____% CERTIFICATE RATE)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-2-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-2 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-2 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-2 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class A-2 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-2 (the "Class A-2 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-3
(the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class
A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-2 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates, on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-2 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-2 Certificates. The Percentage Interest of each Class
A-2 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-2 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-2 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-2 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-2 Certificates are exchangeable for new Class A-2 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-3
(____%CERTIFICATE RATE)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-3-1 ____________
CUSIP
$___________ _________ 25, 20__Date _________ 25, 20__
Original Class A-3 Certificate Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-3 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-3 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class A-3 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-3 (the "Class A-3 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class
A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-3 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-3 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-3 Certificates. The Percentage Interest of each Class
A-3 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-3 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-3 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-3 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-3 Certificates are exchangeable for new Class A-3 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-4
(____% CERTIFICATE RATE)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-4-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-4 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-4 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-4 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date) be less than the original
Certificate Principal Balance of the Class A-4 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-4 (the "Class A-4 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-4 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-4 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-4 Certificates. The Percentage Interest of each Class
A-4 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-4 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-4 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-4 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-4 Certificates are exchangeable for new Class A-4 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-5
(____%CERTIFICATE RATE (OR ____% FOR EACH INTEREST PERIOD OCCURRING AFTER THE
DATE ON WHICH AN AFFILIATE OF THE SERVICER FIRST FAILS TO EXERCISE ITS
CLEAN-UP CALL OPTION), SUBJECT TO FIXED RATE INTEREST RATE CAP)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-5-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-5 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-5 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-5 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class A-5 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-5 (the "Class A-5 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-6 (the "Class A-6 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-5 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-5 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-5 Certificates. The Percentage Interest of each Class
A-5 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-5 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-5 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-5 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-5 Certificates are exchangeable for new Class A-5 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-6
(____% CERTIFICATE RATE)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-6-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-6 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-6 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-6 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date),be less than the original
Certificate Principal Balance of the Class A-6 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-6 (the "Class A-6 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-6 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-6 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-6 Certificates. The Percentage Interest of each Class
A-6 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-6 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-6 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-6 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-6 Certificates are exchangeable for new Class A-6 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-7
(VARIABLE CERTIFICATE RATE, WITH AN INCREASE IN MARGIN ON OR AFTER THE CLEAN-UP
CALL DATE)
(SUBJECT TO AVAILABLE FUNDS CAP)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: A-7-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class A-7 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class A-7 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class A-7 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class A-7 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class A-7 (the "Class A-7 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class M-1 (the "Class M-1
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-7 Certificates as of
the close of business on the last Business Day immediately preceding a
Distribution Date, or if Definitive Certificates have been issued, as of the
close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-7 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class A-7 Certificates. The Percentage Interest of each Class
A-7 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
A-7 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class A-7 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class A-7 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class A-7 Certificates are exchangeable for new Class A-7 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-8
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS M-1
(____%CERTIFICATE RATE (OR ____% FOR EACH INTEREST PERIOD OCCURRING AFTER THE
DATE ON WHICH AN AFFILIATE OF THE SERVICER FIRST FAILS TO EXERCISE ITS
CLEAN-UP CALL OPTION), SUBJECT TO FIXED RATE INTEREST RATE CAP)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: M-1-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class M-1 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class M-1 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class M-1 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class M-1 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class M-1 (the "Class M-1 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class M-1 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class M-1 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class M-1 Certificates. The Percentage Interest of each Class
M-1 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
M-1 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class M-1 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class M-1 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class M-1 Certificates are exchangeable for new Class M-1 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: _______________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-9
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS M-2
(____%CERTIFICATE RATE (OR ____% FOR EACH INTEREST PERIOD OCCURRING AFTER THE
DATE ON WHICH AN AFFILIATE OF THE SERVICER FIRST FAILS TO EXERCISE ITS
CLEAN-UP CALL OPTION), SUBJECT TO FIXED RATE INTEREST RATE CAP)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: M-2-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class M-2 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class M-2 Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class M-2 Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class M-2 Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class M-2 (the "Class M-2 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class B (the Class B
Certificates"), Class X-IO (the "Class X-IO Certificates"), and Class R-1 and
Class R-2 (together, the "Class R Certificates"). The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the Class
A-7 Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class M-2 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class M-2 Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class M-2 Certificates. The Percentage Interest of each Class
M-2 Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class
M-2 Certificate on the Startup Day by the aggregate Certificate Principal
Balance of the Class M-2 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class M-2 Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class M-2 Certificates are exchangeable for new Class M-2 Certificates of
authorized denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT A-10
FORM OF CLASS B CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS B
(____%CERTIFICATE RATE (OR ____% FOR EACH INTEREST PERIOD OCCURRING AFTER THE
DATE ON WHICH AN AFFILIATE OF THE SERVICER FIRST FAILS TO EXERCISE ITS
CLEAN-UP CALL OPTION), SUBJECT TO FIXED RATE INTEREST RATE CAP)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer ("Centex
Home Equity Loan Trust 200_-__") or its agent for registration of transfer,
exchange, or payment and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
NO: B-1 ____________
CUSIP
$___________ _________ 25, 20__ _________ 25, 20__
Original Class B Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
The Owner hereof is entitled to principal payments on each Distribution
Date, as hereinafter described, which will fully amortize such original
Certificate Principal Balance of the Class B Certificates over the period from
the date of initial issuance of the Certificates to the Final Scheduled
Distribution Date for the Class B Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
_________, __, 200_ (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class B Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is required
to send this Certificate to the Trustee. The Pooling and Servicing Agreement
provides that, in any event, upon the making of the final distribution due on
this Certificate, this Certificate shall be deemed canceled for all purposes
under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS. THEREFORE,
THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON ANY DATE
SUBSEQUENT TO _________, __, 200_ (THE FIRST DISTRIBUTION DATE) BE LESS THAN ITS
ORIGINAL CERTIFICATE PRINCIPAL BALANCE.
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class B (the "Class B Certificates") and issued under
and subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of _________, __, 200_ (the "Pooling and Servicing
Agreement") by and among Centex Home Equity Company, LLC, in its capacity as a
seller (the "Seller") and as the Servicer (the "Servicer"), CHEC Funding, LLC,
in its capacity as Depositor (the "Depositor"), CHEC Conduit Funding, LLC, as
Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit Seller II and Bank
One, National Association, in its capacity as the Trustee (the "Trustee"), to
which Pooling and Servicing Agreement the Owner of this Certificate by virtue of
acceptance hereof assents and by which such Owner is bound. Also issued under
the Pooling and Servicing Agreement are Certificates designated as Centex Home
Equity Loan Trust 200_-__ Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class
M-1 Certificates"), Class M-2 (the "Class M-2 Certificates"), Class X-IO (the
"Class X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class A-5 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class B Certificate will be entitled to receive
such Owner's Percentage Interest in the amounts due on such Distribution Date to
the Owners of the Class B Certificates. The Percentage Interest of each Class B
Certificate as of any date of determination will be equal to the percentage
obtained by dividing the original Certificate Principal Balance of such Class B
Certificate on the Startup Day by the aggregate Certificate Principal Balance of
the Class B Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans and
amounts on deposit in the Certificate Account and the Principal and Interest
Account (except as otherwise provided in the Pooling and Servicing Agreement),
as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class B Certificates are issuable only as registered Certificates in
minimum denominations of $25,000 original Certificate Principal Balance and in
integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class B Certificates are exchangeable for new Class B Certificates of authorized
denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT B
FORM OF CLASS X-IO CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN
(INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO EMPLOYEE BENEFIT PLANS AND
OTHER RETIREMENT ARRANGEMENTS).
TRANSFER OF THIS CLASS X-IO CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
CENTEX HOME EQUITY LOAN TRUST 200_-__
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS X-IO
(REGULAR INTEREST)
Representing Certain Interests Relating to two Pools of
Home Equity Loans Sold and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This Certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC (the "Depositor"), CHEC Conduit Funding, LLC (the "Conduit Seller"), Xxxxxxx
Street Funding II, LLC (the "Conduit Seller II") or Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation (the "Seller" or the "Servicer"). This Certificate represents
a fractional ownership interest in the Group I and Group II Home Equity Loans
and certain other property held by the Trust.)
NO: X-IO-1
Date: _________ __, 20__
Percentage Interest _____%
CHEC RESIDUAL, LLC
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit Sellers are causing to be delivered to the Depositor and
the Depositor is causing to be delivered to the Trustee, together with the
related Home Equity Loan documents and the Depositor's interest in any Property,
and all payments thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing; (b) such amounts as may be held by the Trustee in
the Certificate Account, together with investment earnings on such amounts, and
such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, inclusive of investment earnings thereon, whether in
the form of cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer); and (c) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds of any mortgage
insurance, flood insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment
of any and every kind, and other forms of obligations and receivables which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
NOTWITHSTANDING REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY
PERSON IS REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class X-IO (the "Class X-IO Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of _________, __, 200_ (the "Pooling
and Servicing Agreement") by and among Centex Home Equity Company, LLC, in its
capacity as a seller (the "Seller") and as the Servicer (the "Servicer"), CHEC
Funding, LLC, in its capacity as Depositor (the "Depositor"), CHEC Conduit
Funding, LLC, as Conduit Seller, Xxxxxxx Street Funding II, LLC, as Conduit
Seller II and Bank One, National Association, in its capacity as the Trustee
(the "Trustee"), to which Pooling and Servicing Agreement the Owner of this
Certificate by virtue of acceptance hereof assents and by which such Owner is
bound. Also issued under the Pooling and Servicing Agreement are Certificates
designated as Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), and Class R-1 and Class
R-2 (together, the "Class R Certificates"). The Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates,
the Class A-5 Certificates, the Class A-6 Certificates, the Class A-7
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates shall be together referred to as the "Offered Certificates"
and the Offered Certificates, the Class X-IO Certificates and the Class R
Certificates are together referred to herein as the "Certificates." Terms
capitalized herein and not otherwise defined herein shall have the respective
meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, the Owners of the Class X-IO Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the amount distributable pursuant to Section
7.03(b) C.16 of the Pooling and Servicing Agreement relating to such
Certificates on such Distribution Date. Distributions will be made in
immediately available funds to Owners of Class X-IO Certificates having an
aggregate Percentage Interest of at least 10% (by wire transfer or otherwise) to
the account of an Owner at a domestic bank or other entity having appropriate
facilities therefor, if such Owner has so notified the Trustee, or by check
mailed to the address of the person entitled thereto as it appears on the
Register.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC, or Centex Home Equity
Company, LLC or any of their Affiliates. This Certificate is limited in right of
payment to certain collections and recoveries relating to the Home Equity Loans,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Trust Estate will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, and
the Servicer at any time and from time to time, without the consent of the
Owners; provided, that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendment. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class X-IO Certificates are issuable only as registered Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class X-IO Certificates are exchangeable for new
Class X-IO Certificates evidencing the same Percentage Interest as the Class
X-IO Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT C
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
EACH OF THE SOLE CLASSES OF "RESIDUAL INTERESTS" IN TWO "REAL ESTATE MORTGAGE
INVESTMENT CONDUITS" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN
(INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO EMPLOYEE BENEFIT PLANS AND
OTHER RETIREMENT ARRANGEMENTS).
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(E)(5) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH TERM INCLUDES THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY
OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE
ORGANIZATION FURNISHING ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO
PERSONS IN RURAL AREAS, OR ANY ORGANIZATION (OTHER THAN A XXXXXX'X COOPERATIVE)
THAT IS EXEMPT FROM FEDERAL INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX ON UNRELATED BUSINESS INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE
WILL BE REGISTERED BY THE CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE
HAS DELIVERED AN AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED
TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R
CERTIFICATE FOR THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM
OF AFFIDAVIT REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM
THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE TO A
SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT ACTING
FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R CERTIFICATE
AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY TAXABLE YEAR
GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE PRODUCT OF
(A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF THIS
CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS CLASS R CERTIFICATE REPRESENTS A RESIDUAL INTEREST IN EACH OF REMIC I
AND REMIC II FOR FEDERAL INCOME TAX PURPOSES.
CENTEX HOME EQUITY LOAN TRUST 200_-__ HOME EQUITY LOAN ASSET-BACKED
CERTIFICATE CLASS R (RESIDUAL INTEREST)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX HOME EQUITY COMPANY, LLC
(This certificate does not represent an interest in, or an obligation of,
nor are the underlying Home Equity Loans insured or guaranteed by, CHEC Funding,
LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company, LLC, a
Delaware limited liability company, formerly Centex Credit Corporation, a Nevada
corporation. This Certificate represents a fractional ownership interest in the
Trust Estate as defined below.)
NO: R-__
Date: _________, __, 200_
Percentage Interest _____%
CHEC Residual, LLC
Registered Owner
The registered Owner named above is the registered beneficial Owner of a
fractional interest in (a) the Home Equity Loans listed in SCHEDULE I-A and
SCHEDULE I-B to the Pooling and Servicing Agreement which the Seller and the
Conduit Sellers are causing to be delivered to the Depositor and the Depositor
is causing to be delivered to the Trustee, together with the related Home Equity
Loan documents and the Seller's interest in any Property which secured a Home
Equity Loan but which has been acquired by foreclosure or deed in lieu of
foreclosure, and all payments thereon and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (b) such amounts as may be held by the Trustee
in the Certificate Account, together with investment earnings on such amounts,
and such amounts as may be held in the name of the Trustee in the Principal and
Interest Account, if any, exclusive of investment earnings thereon (except as
otherwise provided in the Pooling and Servicing Agreement), whether in the form
of cash, instruments, securities or other properties (including any Eligible
Investments held by the Servicer); and (c) proceeds of all the foregoing
(including, but not by way of limitation, all proceeds of any mortgage
insurance, hazard insurance and title insurance policy relating to the Home
Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing) to pay the Certificates as specified in the Pooling and Servicing
Agreement ((a) - (c) above shall be collectively referred to herein as the
"Trust Estate").
THIS CERTIFICATE IS AN ASSET-BACKED CERTIFICATE ONLY AND, NOTWITHSTANDING
REFERENCES HEREIN TO PRINCIPAL AND INTEREST, NO DEBT OF ANY PERSON IS
REPRESENTED HEREBY.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 200_-__, Home Equity Loan
Asset-Backed Certificates, Class R-__ and issued under and subject to the terms,
provisions and conditions of that certain Pooling and Servicing Agreement dated
as of _________, __, 200_ (the "Pooling and Servicing Agreement") by and among
Centex Home Equity Company, LLC, in its capacity as a seller (the "Seller") and
as the Servicer (the "Servicer"), CHEC Funding, LLC, in its capacity as
Depositor (the "Depositor"), CHEC Conduit Funding, LLC, as Conduit Seller,
Xxxxxxx Street Funding II, LLC, as Conduit Seller II and Bank One, National
Association, in its capacity as the Trustee (the "Trustee"), to which Pooling
and Servicing Agreement the Owner of this Certificate by virtue of acceptance
hereof assents and by which such Owner is bound. Also issued under the Pooling
and Servicing Agreement are Certificates designated as Centex Home Equity Loan
Trust 200_-__ Home Equity Loan Asset-Backed Certificates, Class A-1 (the "Class
A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class A-3 (the
"Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"), Class A-5
(the "Class A-5 Certificates"), Class A-6 (the "Class A-6 Certificates"), Class
A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class M-1 Certificates"),
Class M-2 (the "Class M-2 Certificates"), Class B (the Class B Certificates"),
Class X-IO (the "Class X-IO Certificates"), and Class R-__ (together with Class
R-__, the "Class R Certificates"). The Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
A-5 Certificates, the Class A-6 Certificates, the Class A-7 Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class B Certificates
shall be together referred to as the "Offered Certificates" and the Offered
Certificates, the Class X-IO Certificates and the Class R Certificates are
together referred to herein as the "Certificates." Terms capitalized herein and
not otherwise defined herein shall have the respective meanings set forth in the
Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day, then
the next succeeding Business Day (each such day being a "Distribution Date")
commencing _________, __, 200_, each owner of a Class R Certificate as of the
close of business on the last day of the calendar month immediately preceding
the calendar month in which a Distribution Date occurs (the "Record Date") will
be entitled to receive the amounts distributable pursuant to Section 7.03(b)
C.17 of the Pooling and Servicing Agreement, relating to such Certificates on
such Distribution Date. Distributions will be made in immediately available
funds to Owners of Class R Certificates having an aggregate Percentage Interest
of at least 10% (by wire transfer or otherwise) to the account of an Owner at a
domestic bank or other entity having appropriate facilities therefor, if such
Owner has so notified the Trustee, or by check mailed to the address of the
person entitled thereto as it appears on the Register.
The Trustee or any duly-appointed Paying Agent will duly and punctually pay
distributions with respect to this Certificate in accordance with the terms
hereof and the Pooling and Servicing Agreement. Amounts properly withheld under
the Code by any Person from a distribution to any Owner shall be considered as
having been paid by the Trustee to such Owner for all purposes of the Pooling
and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of, or an
interest in, nor are the underlying Home Equity Loans insured or guaranteed by,
CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex Home Equity Company,
LLC or any of their Affiliates. This Certificate is limited in right of payment
to certain collections and recoveries relating to the Home Equity Loans, all as
more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations created
thereby will terminate upon the payment to the Owners of all Certificates of all
amounts held by the Trustee and required to be paid to such Owners pursuant to
the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the Owner of
the Class X-IO Certificates may, at its option, purchase from the Trust all
remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Class R Certificates evidence ownership in the "residual interest" in
REMIC I and the "residual interest" in REMIC II. The registered Owner of a Class
R Certificate will be entitled to separate such Certificate into such component
parts. The Trustee shall, upon delivery to it of this Class R Certificate and a
written request of the registered Owner thereof to separate such Certificate
into its component parts, issued to such registered Owner in exchange for such
Class R Certificate (i) a separately transferable, certified and fully
registered security (a "Class R-1 Certificate") that will, from the date of its
issuance, represent the Owner's Percentage Interest in the residual interest in
REMIC I and (ii) a separately transferable, certified and fully registered
security (a "Class R-2 Certificate") that will, from the date of its issuance,
represent the Owner's Percentage Interest in the residual interest in REMIC II.
The Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with such exchange of this Class R
Certificate.
The Trustee shall give written notice of termination of the Pooling and
Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by the
Offered Certificates have the right to exercise any trust or power set forth in
Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth and referred to on the face hereof, the transfer
of this Certificate is registrable in the Register upon surrender of this
Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Trust Estate will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions as
therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided, that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendment. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each Distribution
Date to the Owner of this Certificate, as more fully described in the Pooling
and Servicing Agreement.
The Class R Certificates are issuable only as registered Certificates. As
provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class R Certificates are exchangeable for new
Class R Certificates evidencing the same Percentage Interest as the Class R
Certificates exchanged.
No service charge will be made for any such registration of transfer or
exchange, but the Registrar or Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Trustee and any agent of the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Trustee nor any such agent shall be affected by notice to the contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Title: ____________________________
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
By: _______________________________
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL AFTER CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, ______________________ of Centex Home Equity
Company, LLC, a Delaware limited liability company, formerly Centex Credit
Corporation, a Nevada corporation ("Centex"), hereby certify that between the
"Cut-Off Date" (as defined in the Pooling and Servicing Agreement dated as of
_________, __, 200_ among CHEC Funding, LLC, as Depositor, Centex, as a seller
and Servicer, Xxxxxxx Street Funding II, LLC, as a seller, CHEC Conduit Funding,
LLC, as a seller and Bank One, National Association, as Trustee) and the
"Startup Day," the following schedule of "Home Equity Loans" (each as defined in
the Pooling and Servicing Agreement) have been prepaid in full.
Account Original Current Date
NUMBER NAME AMOUNT BALANCE PAID OFF
Dated: _________, __, 200_
By: _______________________________
Title: ____________________________
EXHIBIT E-1
FORM OF TRUSTEE'S RECEIPT
TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
Reference is made to that certain Pooling and Servicing Agreement dated as
of _________, __, 200_ (the "Pooling and Servicing Agreement") among CHEC
Funding, LLC, as depositor, Xxxxxxx Street Funding II, LLC, as a seller, CHEC
Conduit Funding, LLC, as a seller, Centex Home Equity Company, LLC, a Delaware
limited liability company, formerly Centex Credit Corporation, a Nevada
corporation, as a seller and servicer, and Bank One, National Association, as
trustee (the "Trustee"). Capitalized terms used herein but not defined herein
have the meaning assigned to them in the Pooling and Servicing Agreement.
The Trustee hereby acknowledges the receipt of the sum of $___________,
representing the net proceeds disbursed from the Underwriters.
Dated: _________, __, 200_
BANK ONE NATIONAL ASSOCIATION
as Trustee
By: _______________________________
Name:
Title:
EXHIBIT E-2
FORM OF CUSTODIAN'S ACKNOWLEDGMENT OF RECEIPT
CUSTODIAN'S ACKNOWLEDGMENT OF RECEIPT
Bank One Trust Company, N.A., in its capacity as custodian (the
"Custodian") under the Custodial Agreement dated as of _________, __, 200_,
among the Custodian and Bank One, National Association, in its capacity as
trustee (the "Trustee") under that certain Pooling and Servicing Agreement dated
as of _________, __, 200_ (the "Pooling and Servicing Agreement") among CHEC
Funding, LLC, as depositor (the "Depositor"), Xxxxxxx Street Funding II, LLC, as
a seller, CHEC Conduit Funding, LLC, as a seller, Centex Home Equity Company,
LLC, a Delaware limited liability company, formerly Centex Credit Corporation, a
Nevada corporation, as seller and servicer ("Centex"), and the Trustee, as
trustee, hereby acknowledges receipt (subject to review as required by Section
3.06(a) of the Pooling and Servicing Agreement) of the items delivered to it by
Centex with respect to the Home Equity Loans pursuant to Section 3.05(b)(i) of
the Pooling and Servicing Agreement.
The Schedule of Home Equity Loans is attached to this receipt as Schedule
I.
The Custodian hereby additionally acknowledges that it shall review such
items as required by Section 3.06(a) of the Pooling and Servicing Agreement and
shall otherwise comply with Section 3.06(b) and 3.06(c) of the Pooling and
Servicing Agreement as required thereby.
BANK ONE TRUST COMPANY, N.A.
as Custodian
By:
Name:
Title:
Dated: _________, __, 200_
EXHIBIT F
FORM OF POOL CERTIFICATION
POOL CERTIFICATION
WHEREAS, the undersigned is an Authorized Officer of Bank One Trust
Company, N.A., in its capacity as custodian (the "Custodian") under the
Custodial Agreement dated _________, __, 200_, between the Custodian and Bank
One, National Association, acting in its capacity as trustee (the "Trustee") of
a certain pool of home equity loans heretofore conveyed in trust to the Trustee,
pursuant to that certain Pooling and Servicing Agreement dated as of _________,
__, 200_, (the "Pooling and Servicing Agreement") among CHEC Funding, LLC, as
depositor, Centex Home Equity Company, LLC, a Delaware limited liability
company, formerly Centex Credit Corporation, a Nevada corporation, as a seller
and servicer, Xxxxxxx Street Funding II, LLC, as a seller, CHEC Conduit Funding,
LLC, as a seller and the Trustee, as trustee; and
WHEREAS, the Custodian is required, pursuant to Section 3.06(a) of the
Pooling and Servicing Agreement, to review the Files relating to the Home Equity
Loans within a specified period following the Startup Day and to notify the
Seller promptly of any defects with respect to the Home Equity Loans, and the
Seller is required to remedy such defects or take certain other action, all as
set forth in Section 3.06(b) of the Pooling and Servicing Agreement; and
WHEREAS, Section 3.06(a) of the Pooling and Servicing Agreement requires
the Custodian to deliver this Pool Certification upon the satisfaction of
certain conditions set forth therein.
NOW, THEREFORE, the Custodian hereby certifies that it has determined that
all required documents (or certified copies of documents listed in Section 3.05
of the Pooling and Servicing Agreement) have been executed or received, and that
such documents relate to the Home Equity Loans identified in the Schedule of
Home Equity Loans pursuant to Section 3.06(a) of the Pooling and Servicing
Agreement or, in the event that such documents have not been executed and
received or do not so relate to such Home Equity Loans, any remedial action by
the Seller pursuant to Section 3.06(b) of the Pooling and Servicing Agreement
has been completed. The Custodian makes no certification hereby, however, with
respect to any intervening assignments or assumption and modification
agreements.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Pooling and Servicing Agreement.
BANK ONENATIONAL ASSOCIATION
as Custodian
By: _______________________________
Name:
Title:
Dated: _________________
EXHIBIT G
FORM OF DELIVERY ORDER
DELIVERY ORDER
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement, dated as
of _________, __, 200_ (the "Pooling and Servicing Agreement") among CHEC
Funding, LLC, as Depositor, Centex Home Equity Company, LLC, a Delaware limited
liability company, formerly Centex Credit Corporation, a Nevada corporation, as
a seller and servicer, Xxxxxxx Street Funding II, LLC, as a seller, CHEC Conduit
Funding, LLC, as a seller and Bank One, National Association, as Trustee (the
"Trustee"), THE DEPOSITOR HEREBY CERTIFIES that all conditions precedent to the
issuance of the Centex Home Equity Loan Trust 200_-__ Home Equity Loan
Asset-Backed Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class B, Class X-IO and Class R
(the "Certificates"), HAVE BEEN SATISFIED, and HEREBY REQUESTS YOU TO
AUTHENTICATE AND DELIVER said Certificates, and to RELEASE said Certificates to
the owners thereof, or otherwise upon their order. Instructions regarding the
registration of the Certificates are attached hereto.
Very truly yours,
CHEC FUNDING, LLC
By: _______________________________
Title: ____________________________
Dated: _________, __, 200_
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION860E(e) OF THE INTERNAL REVENUECODE OF
1986, AS AMENDED
STATE OF )
: ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
That he is [Title of Officer] of [Name of Investor] (the "Investor"), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of _________] [the United States], on behalf of which he makes
this affidavit.
That (i) the Investor is not a "disqualified organization" and will not be
a "disqualified organization" as of [date of transfer] (For this purpose, a
"disqualified organization" means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any
agency or instrumentality of any of the foregoing (other than certain taxable
instrumentalities), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas, or any organization
(other than a farmers' cooperative) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business income.);
(ii) it is not acquiring the Class R Certificate for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Trustee (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Class R
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Class R Certificate unless (a)
it has received from the transferee an affidavit in substantially the same form
as this affidavit containing these same four representations and (b) as of the
time of the transfer, it does not have actual knowledge that such affidavit is
false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ___ day of __________, 200_.
[NAME OF INVESTOR]
By: _______________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
Attest:
_______________________________
[Assistant] Secretary
_______________________________
Personally appeared before me the above-named [Name of Officer], known or
proved to be the same person who executed the foregoing instrument and to be the
[Title of Officer] of the Investor, and acknowledged to me that he executed the
same as his free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this __ day of ____________, 200_.
_______________________________
NOTARY PUBLIC
COUNTY OF _______________________________
STATE OF
_______________________________
My commission expires the _ day of _______________, 20__.
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER
(ACCREDITED INVESTOR)
[DATE]
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 200_-__
Home Equity Loan Asset-Backed Certificates, Class ___
("CERTIFICATES")
Gentlemen:
In connection with our purchase on the date hereof of the above-referenced
Certificates from ___________________ ("Seller"), [PURCHASER] (the "Purchaser")
hereby certifies that:
1. The Purchaser is acquiring the Certificates for [investment purposes
only for]1 the Purchaser's own account and not with a view to or for sale or
transfer in connection with any distribution thereof in any manner which would
violate Section 5 of the Securities Act of 1933, as amended (the "Act"),
provided that the disposition of its property shall at all times be and remain
within its control;
2. The Purchaser understands that the Certificates have not been and will
not be registered under the Act and may not be resold or transferred unless they
are (a) registered pursuant to the Act or (b) sold or transferred in
transactions which are exempt from registration;
3. The Purchaser has received a copy of the Pooling and Servicing Agreement
dated as of _________, __, 200_ (the "Pooling and Servicing Agreement") pursuant
to which the Certificates are being sold, and such other documents and
information concerning the Certificates and the home equity loans in which the
Certificates represent interests which it has requested;
4. The Purchaser believes it has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates and that it is able to bear the economic risks of
such an investment;
______________________
1 Not required if the Purchaser is a broker/dealer.
5. The Purchaser (i) is not an employee benefit plan subject to Section 406
of ERISA nor a plan or other arrangement subject to Section 406 of ERISA nor a
plan or other arrangement subject to Section 4975 of the Code (collectively, a
"Plan"), nor is acting on behalf of any Plan nor using the assets of any Plan to
effect such purchase or (ii) in the event that any Class X-IO or Class R
Certificate is purchased by a Plan, or by a person or entity acting on behalf of
any Plan or using the assets of any Plan to effect such purchase (including the
assets of any Plan held in an insurance company separate or general account), is
delivering herewith an Opinion of Counsel, acceptable to and in form and
substance satisfactory to the Trustee, which Opinion of Counsel shall not be at
the expense of either the Trustee or the Trust, to the effect that the purchase
or holding of any Class X-IO or Class R Certificates will not result in a
prohibited transaction under ERISA and/or Section 4975 of the Code, and will not
subject the Trustee to any obligation or liability in addition to those
expressly undertaken under the Pooling and Servicing Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of a Certificate to
or on behalf of any Plan without the delivery to the Trustee of an Opinion of
Counsel as described above shall be null and void and no effect;
6. If the Purchaser sells any of the Certificates, it will (i) obtain from
any investor that purchases any Certificate from it a letter substantially in
the form of Exhibit I-1 or I-2 to the Pooling and Servicing Agreement and (ii)
to the extent required by the Pooling and Servicing Agreement, cause an Opinion
of Counsel to be delivered, addressed and satisfactory to the Seller and the
Trustee, to the effect that such sale is in compliance with all applicable
federal and state securities laws; and
7. For purposes of the Certificate Register, its address, including
telecopier number and telephone number, is as follows:
_______________________________
_______________________________
_______________________________
_______________________________
telecopier: ___________________
telephone: ___________________
8. The purchase of the Certificates by the Purchaser does not violate the
provisions of the first sentence of Section 5.08(c) of the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this letter to be executed by
its signatory, duly authorized, as of the date first above written.
[PURCHASER]
By: _______________________________
Name: _____________________________
Title: ____________________________
EXHIBIT I-2
FORM OF CERTIFICATE REGARDING TRANSFER
(Rule 144A)
[Date]
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 200_-__
Home Equity Loan Asset-Backed Certificates,
Class ___-_____ ("Certificates")
Dear Gentlemen or Ladies:
In connection with our purchase on the date hereof of the above-referenced
Certificates from ______________________ ("Seller"), we hereby certify that:
1 We are acquiring the Certificates for our own account for investment and
not with a view to or for sale or transfer in connection with any distribution
thereof in any manner which would violate the Securities Act of 1933, as amended
(the "Act"), provided that the disposition of our property shall at all times be
and remain within our control;
2 We understand that the Certificates have not been and will not be
registered under the Act and may not be resold or transferred unless they are
(a) registered pursuant to the Act or (b) sold or transferred in transactions
which are exempt from registration;
3 We have received a copy of the Pooling and Servicing Agreement dated as
of _________, __, 200_ (the "Pooling and Servicing Agreement") pursuant to which
the Certificates are being sold, and such other documents and information
concerning the Certificates and the home equity loans in which the Certificates
represent interests which we have requested;
4 We believe we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates and that we are able to bear the economic risks
of such an investment;
5 If we sell any of the Certificates, at our option, we will either (i)
obtain from any institutional investor that purchases any Certificate from us a
certificate containing the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 4 and this paragraph 5 or (ii)
deliver an Opinion of Counsel to such institutional investor, addressed and
satisfactory to the Seller and the Trustee, to the effect that such sale is in
compliance with all applicable federal and state securities laws;
6 We are acquiring the Certificates for our own account and the source of
funds is not an employee benefit plan subject to Section 406 of ERISA nor a plan
or other arrangement subject to Section 406 of ERISA nor a plan or other
arrangement subject to Section 4975 of the Code (collectively, a "Plan"), nor
are we acting on behalf of any Plan nor using the assets of any Plan to effect
such acquisition or (ii) in the event that any Class X-IO or Class R Certificate
is purchased by a Plan, or by a person or entity acting on behalf of any Plan or
using the assets of any Plan to effect such purchase (including the assets of
any Plan held in an insurance company separate or general account), we are
delivering herewith an Opinion of Counsel, acceptable to and in form and
substance satisfactory to the Trustee, which Opinion of Counsel shall not be at
the expense of either the Trustee or the Trust, to the effect that the purchase
or holding of any Class X-IO or Class R Certificates will not result in a
prohibited transaction under ERISA and/or Section 4975 of the Code, and will not
subject the Trustee to any obligation or liability in addition to those
expressly undertaken under the Pooling and Servicing Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of a Certificate to
or on behalf of any Plan without the delivery to the Trustee of an Opinion of
Counsel as described above shall be null and void and no effect;
7 For purposes of the Certificate Register, our address, including
telecopier number and telephone number, is as follows:
_______________________________
_______________________________
_______________________________
_______________________________
telecopier: ___________________
telephone: ___________________
8 If we sell any of the Certificates, we will obtain from any purchaser
from us the same representations contained in the foregoing paragraph 6 and this
paragraph 8; and
9 Our purchase of the Certificates does not violate the provisions of the
first sentence of Section 5.08(c) of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, we have signed this certificate as of the date first
written above.
By: __________________________________
Name:
Title:
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
LOAN NUMBER BORROWER NAME ORIGINAL LOAN AMOUNT EXCEPTION
EXHIBIT M
FORM OF LETTER REGARDING REPORTING OBLIGATIONS UNDER
THE SECURITIES EXCHANGE ACT OF 1934
________, 200_
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Re: Centex Home Equity Loan Trust 200_-__
Home Equity Loan Asset-Backed Certificates,
SERIES 200_-__
Ladies and Gentlemen:
Pursuant to and in reference to Section 7.09(c) of the Pooling and
Servicing Agreement dated as of _________, __, 200_ relating to the above
referenced Certificates, please note the following:
(a) CIK Number for Centex Home Equity Loan Trust 200_-__ (the "Trust"):
(b) CCC for the Trust:
In order to comply with the reporting obligations for the Trust under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Trustee
must file within 15 days following each Distribution Date a copy of the report
distributed by the Trustee to the Certificateholders in a current report on Form
8-K. Such reports provide all current information ordinarily of interest to the
Certificateholders. The Trustee must also report on a current report on Form 8-K
any significant occurrences during the reporting period that would be reportable
under Item 1, Item 2, Item 4 and Item 5. In addition, the Trustee should cause
the filing of an annual report on Form 10-K within 90 days following the end of
the Trust's fiscal year containing the following information:
Part I, Item 3. A description of any material pending litigation;
Part I, Item 4. A description of any matters submitted to vote of
Certificateholders;
Part II, Item 5. A statement of the number of Certificateholders and
the principal market, if any, in which the
Certificates trade;
Part II, Item 9. A statement as to any changes in or disagreements
with the independent public accountants for the
Trust;
Part IV, Item 14. A copy of the annual
certificate of compliance by an officer of
the Servicer and any Subservicer, and the
audit of the servicing by the independent
accounting firm.
The Trustee shall timely file the Form 10-K, and the Trustee should file a Form
15 in accordance with Section 7.09(c) of the Pooling and Servicing Agreement,
deregistering the Trust and terminating the reporting obligations under the
Exchange Act.
All filings must be made through the Xxxxx System and all acceptance slips from
the filings should be saved as they will be needed for the annual certificate.
CHEC FUNDING, LLC
By: _______________________________
Name:
Title:
EXHIBIT N
FORM OF LIQUIDATION REPORT
(1) Issue Name: $_______________
(2) Customer Name: $_______________
Loan Number: $_______________
Lien Position: $_______________
(3) Original Mortgage Amount: $_______________
Current Mortgage Amount: $_______________
(4) Interest Paid Through Date:
(5) Liquidation Date:
(6) Original Appraised Value: $_______________
(7) Most Recent Appraised Value: $_______________
Recent Appraisal Date:
(8) Interest Rate: [ ]% $_______________
(9) Sale Price: $_______________
(10) Interest Carry: $_______________
(11) Taxes Advances $_______________
(12) Maintenance Costs $_______________
(13) Legal Expenses: $_______________
(14) Miscellaneous Expenses $_______________
(15) Net Proceeds: $_______________
(16) Loss Severity Percentage: [ ]% $_______________
EXHIBIT O
REQUEST FOR RELEASE OF DOCUMENTS
TO: o
RE: Custodial Agreement, dated as of _________, __, 200_, by and among Bank
One, National Association, not individually, but solely as trustee (the
"Trustee"), Centex Home Equity Company, LLC (the "Servicer") and Bank
One Trust Company, N.A. (together with any successor in interest or any
successor appointed hereunder, the "Custodian").
In connection with the administration of Home Equity Loans held by you as
Custodian for the Trustee, we request the release, and acknowledge receipt, of
the Note for the Home Equity Loan described below, for the reason indicated. The
Servicer hereby acknowledges that the Note or other documents released will be
held by it in trust for the benefit of the Trustee on behalf of the Trust. The
Servicer agrees that it will return to the Custodian the Note and other
documents when its need for such Note or other documents no longer exists but in
any event within any time period required by the Pooling and Servicing
Agreement.
Mortgagor's Name, Address and Zip Code:
HOME EQUITY LOAN NUMBER:
REASON FOR REQUESTING DOCUMENT: (CHECK ONE)
__ 1. Home Equity Loan Paid in Full.
(The Servicer hereby certifies that all amounts received in connection
therewith have been finally received by and credited to the Trust as required by
the Pooling and Servicing Agreement and Custodial Agreement).
__ 2. Home Equity Loan Repurchased.
(The Servicer hereby certifies that the repurchase price has been finally
received by and credited to the Trust as required by the Pooling and Servicing
Agreement and Custodial Agreement).
__ 3. Mortgage Loan Liquidation by ___________________________
(The Servicer hereby certifies that all proceeds of foreclosure, insurance
or other liquidation have been finally received and credited to the Trust as
required by the Pooling and Servicing Agreement and the Custodial Agreement).
__ 4. Mortgage Loan in Foreclosure.
__ 5. Other (explain) _________________________________________
_________________________________________
If box 1, 2 or 3 above is checked, and if the Note was previously released
to us, please release to us our previous receipt on file.
If box 4 or 5 above is checked, upon our return of the Note to you as
Custodian, please acknowledge your receipt by signing in the space indicated
below, and returning this form.
[Servicer]
________________________________________________
Name:
Title:
Documents returned to Custodian:
[BANK ONE TRUST COMPANY, NA]
______________________________
Name:
