<PAGE>
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: Centex Home Equity Loan Trust 2000-C POLICY NUMBER: 330990
Centex Home Equity Loan
Asset-Backed Certificates, Series 2000-C
$97,000,000 Class A-1 Certificates
$47,000,000 Class A-2 Certificates
$46,000,000 Class A-3 Certificates
$63,000,000 Class A-4 Certificates
$23,840,000 Class A-5 Certificates
$31,000,000 Class A-6 Certificates (the "Obligations")
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete
Insured Payment (as described below) will be received from the Insurer by
Bank One, National Association, or its successors, as trustee for the Owners
(the "Trustee"), on behalf of the Owners, for distribution by the Trustee to
each Owner of each Owner's proportionate share of the Insured Payment. The
Insurer's obligations hereunder with respect to a particular Insured Payment
shall be discharged to the extent funds equal to the applicable Insured
Payment are received by the Trustee, whether or not such funds are properly
applied by the Trustee. Insured Payments shall be made only at the time set
forth in this Policy and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations unless such acceleration is
at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, any REMIC or
the Trustee for withholding taxes, if any (including interest and penalties
in respect of any such liability). This Policy does not cover, and Insured
Payments shall not include, any Civil Relief Act Interest Shortfalls or any
reduction in interest on the Class A-5 or Class A-6 Certificates due to the
application of the Group I Net WAC Cap. This Policy does not cover the Group
II Certificates.
The Insurer will pay any Insured Payment that is a Preference Amount
(as described below) on the Business Day (as described below) following
receipt on a Business Day by the Fiscal Agent (as described below) of (a) a
certified copy of the order requiring the return of a preference payment, (b)
an opinion of counsel satisfactory to the Insurer that such order is final
and not subject to appeal, (c) an assignment in such form as is reasonably
required by the Insurer, irrevocably assigning to the Insurer all rights and
claims of the Owner relating to or arising under the Obligations against the
debtor which made such preference payment or otherwise with respect to such
preference payment and (d) appropriate instruments to effect the appointment
of the Insurer as agent for such Owner in any legal proceeding related to
such preference payment, such instruments being in a form satisfactory to the
Insurer, provided that if such documents are received after 12:00 noon, New
York City time, on such Business Day, they will be deemed to be received on
the following Business Day. Such payments shall be disbursed to the receiver
or trustee in bankruptcy named in the final order of the court exercising
jurisdiction on behalf of the Owner and not to any Owner directly unless such
Owner has returned principal or interest paid on the Obligations to such
receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the third Business Day following receipt
in New York, New York on a Business Day by State Street Bank and Trust Company,
N.A., as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below), provided that
if such Notice is received after 12:00 noon, New York City time, on such
Business Day, it will be deemed to be received on the following Business Day. If
any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee, and the Trustee may submit an amended Notice.
<PAGE>
Insured Payments due hereunder unless otherwise stated herein will
be disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by
wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts,
any amount held by the Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal
Agent shall in no event be liable to Owners for any acts of the Fiscal Agent
or any failure of the Insurer to deposit or cause to be deposited sufficient
funds to make payments due under this Policy.
As used herein, the following terms shall have the following
meanings:
"AGREEMENT" means the Pooling and Servicing Agreement, dated as of
September 1, 2000, among CHEC Funding, LLC, as Depositor, Centex Credit
Corporation d/b/a Centex Home Equity Corporation, as Seller and as Servicer,
CHEC Conduit Funding, LLC, as Seller, and the Trustee, as trustee, without
regard to any amendment or supplement thereto, unless such amendment or
supplement has been approved in writing by the Insurer.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday
or (b) a day on which banking institutions in New York, New York, Dallas,
Texas, the State of Maryland or the city in which the Corporate Trust Office
of the Trustee is located or the city in which the Certificate Insurer is
located are authorized or obligated by law or executive order to be closed.
"CLASS PRINCIPAL BALANCE" means "Certificate Principal Balance" as
defined in the Agreement.
"DEFICIENCY AMOUNT" means as of any Distribution Date, the excess,
if any, of (a) the sum of (1) the Current Interest for the related
Obligations for such Distribution Date and (2) the Group I Guaranteed
Principal Amount for the Distribution Date over (b) the Total Available Funds
for such Distribution Date (net of the Premium Amount with respect to the
Group I Certificates, the Trustee Fee and Transition Expenses, if any, with
respect to Group I and after giving effect to the cross-collateralization
provisions of the Agreement).
"GROUP I GUARANTEED PRINCIPAL AMOUNT" means (a) with respect to any
Distribution Date other than the Distribution Date in October 2030, the
Collateralization Deficit with respect to Group I for the Distribution Date
and (b) with respect to the Distribution Date in October 2030, the Class
Principal Balance of the Group I Certificates after giving effect to
distributions thereon on the Distribution Date (including Insured Payments
distributed in respect of clause (a) above but excluding any other Insured
Payment).
"INSURED PAYMENT" means (a) as of any Distribution Date, any
Deficiency Amount and (b) any Preference Amount.
"NOTICE" means the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A
attached hereto, the original of which is subsequently delivered by
registered or certified mail, from the Trustee specifying the Insured Payment
which shall be due and owing on the applicable Distribution Date.
"OWNER" means each such Owner (as defined in the Agreement) of an
Obligation who, on the applicable Distribution Date, is entitled under the
terms of the applicable Obligations to payment thereunder.
"PREFERENCE AMOUNT" means any amount previously distributed to an
Owner on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
"TOTAL AVAILABLE FUNDS" means, as to each Distribution Date and with
respect to Group I, the sum of (x) the amount on deposit in the Certificate
Account with respect to Group I and (y) any amounts on deposit in the
Certificate Account with respect to Group II to be applied to the Available
Funds Shortfall with respect to Group I
2
<PAGE>
pursuant to the Agreement on the Distribution Date (disregarding the amount
of any Insured Payment to be made on the Distribution Date).
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment
to or modification of the Agreement unless such amendment or modification has
been approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may
be made at the address listed below for the Fiscal Agent or such other
address as the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway,
New York, New York 10006 Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason, including payment, or provision
being made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be
executed and attested this 15th day of September, 2000.
MBIA INSURANCE CORPORATION
By /s/ Gary C. Stanton
--------------------------------------
President
Attest:
/s/ Lisa A. Wahl
--------------------------------------
Assistant Secretary
3
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 330990
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 330990
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
330990 (the "Policy") issued by the Insurer in respect of the Centex Home
Equity Loan Trust 2000-C Centex Home Equity Loan Asset-Backed Certificates,
Series 2000-C, $97,000,000 Class A-1 Certificates $47,000,000 Class A-2
Certificates $46,000,000 Class A-3 Certificates $63,000,000 Class A-4
Certificates $23,840,000 Class A-5 Certificates $31,000,000 Class A-6
Certificates that:
(i) the Trustee is the trustee under the Pooling and Servicing
Agreement, dated as of September 1, 2000, among CHEC Funding, LLC, as
Depositor, Centex Credit Corporation d/b/a Centex Home Equity Corporation, as
Seller and as Servicer, CHEC Conduit Funding LLC, as Seller, and the Trustee, as
trustee for the Owners;
the amount under clause (a)(1) of the definition of Deficiency Amount
for the Distribution Date occurring on __________ (the "Applicable
Distribution Date") is $__________;
the amount under clause (a)(2) of the definition of Deficiency Amount
for the Applicable Distribution Date is $__________;
(iv) the sum of the amounts under paragraphs (ii) and (iii) above
is $__________;
(v) the amount under clause (b) of the definition of Deficiency Amount
for the Applicable Distribution Date is $__________;
(vi) the excess of the amount under paragraph (iv) above over the
amount under paragraph (v) above is $__________ (the "Deficiency Amount");
(vii) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the Bankruptcy Code in
accordance with a final nonappealable order of a court having competent
jurisdiction is $__________ (the "Preference Amount");
<PAGE>
(viii) the total Insured Payment due is $__________, which amount
equals the sum of the Deficiency Amount and the Preference Amount;
(ix) the Trustee is making a claim under and pursuant to the terms
of the Policy for the dollar amount of the Insured Payment set forth in (vi)
above to be applied to the payment of the Deficiency Amount for the
Applicable Distribution Date in accordance with the Agreement and for the
dollar amount of the Insured Payment set forth in (vii) above to be applied
to the payment of any Preference Amount; and
(x) the Trustee directs that payment of the Insured Payment be made
to the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE
COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS, FOR THE
PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO,
COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME, AND SHALL ALSO BE
SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED
VALUE OF THE CLAIM FOR EACH SUCH VIOLATION.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [_____] day of [__________], [_____].
[NAME OF TRUSTEE], as Trustee
By
----------------------------------
Title
-------------------------------
A-2
<PAGE>
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: Centex Home Equity Loan Trust 2000-C POLICY NUMBER: 331000
Centex Home Equity Loan
Asset-Backed Certificates, Series 2000-C
$92,160,000 Class A-7 Certificates (the "Obligations")
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment (as described below) will be received from the Insurer by Bank One,
National Association, or its successors, as trustee for the Owners (the
"Trustee"), on behalf of the Owners, for distribution by the Trustee to each
Owner of each Owner's proportionate share of the Insured Payment. The Insurer's
obligations hereunder with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured Payment are
received by the Trustee, whether or not such funds are properly applied by the
Trustee. Insured Payments shall be made only at the time set forth in this
Policy and no accelerated Insured Payments shall be made regardless of any
acceleration of the Obligations unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, any REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). This Policy does not cover, and Insured Payments
shall not include, any Civil Relief Act Interest Shortfalls, any Class A-7
Certificateholders' Interest Index Carryover or any reduction in interest on the
Class A-7 Certificates due to the Class A-7 Available Funds Cap. This Policy
does not cover the Group I Certificates.
The Insurer will pay any Insured Payment that is a Preference Amount
(as described below) on the Business Day (as described below) following receipt
on a Business Day by the Fiscal Agent (as described below) of (a) a certified
copy of the order requiring the return of a preference payment, (b) an opinion
of counsel satisfactory to the Insurer that such order is final and not subject
to appeal, (c) an assignment in such form as is reasonably required by the
Insurer, irrevocably assigning to the Insurer all rights and claims of the Owner
relating to or arising under the Obligations against the debtor which made such
preference payment or otherwise with respect to such preference payment and (d)
appropriate instruments to effect the appointment of the Insurer as agent for
such Owner in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to the Insurer, provided that if such
documents are received after 12:00 noon, New York City time, on such Business
Day, they will be deemed to be received on the following Business Day. Such
payments shall be disbursed to the receiver or trustee in bankruptcy named in
the final order of the court exercising jurisdiction on behalf of the Owner and
not to any Owner directly unless such Owner has returned principal or interest
paid on the Obligations to such receiver or trustee in bankruptcy, in which case
such payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the third Business Day following receipt
in New York, New York on a Business Day by State Street Bank and Trust Company,
N.A., as Fiscal Agent for the Insurer or any successor fiscal agent appointed by
the Insurer (the "Fiscal Agent") of a Notice (as described below), provided that
if such Notice is received after 12:00 noon, New York City time, on such
Business Day, it will be deemed to be received on the following Business Day. If
any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee, and the Trustee may submit an amended Notice.
Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured
<PAGE>
Payment less, in respect of Insured Payments related to Preference Amounts,
any amount held by the Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal
Agent shall in no event be liable to Owners for any acts of the Fiscal Agent
or any failure of the Insurer to deposit or cause to be deposited sufficient
funds to make payments due under this Policy.
As used herein, the following terms shall have the following
meanings:
"AGREEMENT" means the Pooling and Servicing Agreement, dated as of
September 1, 2000, among CHEC Funding, LLC, as Depositor, Centex Credit
Corporation d/b/a Centex Home Equity Corporation, as Seller and as Servicer,
CHEC Conduit Funding, LLC, as Seller, and the Trustee, as trustee, without
regard to any amendment or supplement thereto, unless such amendment or
supplement has been approved in writing by the Insurer.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday
or (b) a day on which banking institutions in New York, New York, Dallas,
Texas, the State of Maryland or the city in which the Corporate Trust Office
of the Trustee is located or the city in which the Certificate Insurer is
located are authorized or obligated by law or executive order to be closed.
"CLASS PRINCIPAL BALANCE" means "Certificate Principal Balance" as
defined in the Agreement.
"DEFICIENCY AMOUNT" means as of any Distribution Date, the excess,
if any, of (a) the sum of (1) the Current Interest for the related
Obligations for such Distribution Date and (2) the Group II Guaranteed
Principal Amount for the Distribution Date over (b) the Total Available Funds
for such Distribution Date (net of the Premium Amount with respect to the
Group II Certificates, the Trustee Fee and Transition Expenses, if any, with
respect to Group II and after giving effect to the cross-collateralization
provisions of the Agreement).
"GROUP II GUARANTEED PRINCIPAL AMOUNT" means (a) with respect to any
Distribution Date other than the Distribution Date in October 2030, the
Collateralization Deficit with respect to Group II for the Distribution Date
and (b) with respect to the Distribution Date in October 2030, the Class
Principal Balance of the Group II Certificates after giving effect to
distributions thereon on the Distribution Date (including Insured Payments
distributed in respect of clause (a) above but excluding any other Insured
Payment).
"INSURED PAYMENT" means (a) as of any Distribution Date, any
Deficiency Amount and (b) any Preference Amount.
"NOTICE" means the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A
attached hereto, the original of which is subsequently delivered by
registered or certified mail, from the Trustee specifying the Insured Payment
which shall be due and owing on the applicable Distribution Date.
"OWNER" means each such Owner (as defined in the Agreement) of an
Obligation who, on the applicable Distribution Date, is entitled under the
terms of the applicable Obligations to payment thereunder.
"PREFERENCE AMOUNT" means any amount previously distributed to an
Owner on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
"TOTAL AVAILABLE FUNDS" means, as to each Distribution Date and with
respect to Group II, the sum of (x) the amount on deposit in the Certificate
Account with respect to Group II and (y) any amounts on deposit in the
Certificate Account with respect to Group I to be applied to the Available
Funds Shortfall with respect to Group II pursuant to the Agreement on the
Distribution Date (disregarding the amount of any Insured Payment to be made
on the Distribution Date)
2
<PAGE>
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment
to or modification of the Agreement unless such amendment or modification has
been approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may
be made at the address listed below for the Fiscal Agent or such other
address as the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway,
New York, New York 10006 Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason, including payment, or provision
being made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be
executed and attested this 15th day of September, 2000.
MBIA INSURANCE CORPORATION
By /s/ Gary C. Stanton
--------------------------------------
President
Attest:
/s/ Lisa A. Wahl
--------------------------------------
Assistant Secretary
3
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 331000
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 331000
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
331000 (the "Policy") issued by the Insurer in respect of the Centex Home Equity
Loan Trust 2000-C Centex Home Equity Loan Asset-Backed Certificates, Series
2000-C, $92,160,000 Class A-7 Certificates, that:
(ii) the Trustee is the trustee under the Pooling and
Servicing Agreement, dated as of September 1, 2000, among CHEC
Funding, LLC, as Depositor, Centex Credit Corporation d/b/a
Centex Home Equity Corporation, as Seller and as Servicer, CHEC
Conduit Funding LLC, as Seller, and the Trustee, as trustee for
the Owners;
the amount under clause (a) (1) of the definition of
Deficiency Amount for the Distribution Date occurring on __________
(the "Applicable Distribution Date") is $__________;
the amount under clause (a)(2) of the definition of
Deficiency Amount for the Applicable Distribution Date is $__________;
the sum of the amounts under paragraphs (ii) and (iii) above
is $__________;
the amount under clause (b) of the definition of Deficiency
Amount for the Applicable Distribution Date is $__________;
the excess of the amount under paragraph (iv) above over the
amount under paragraph (v) above is $__________ (the "Deficiency
Amount");
the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of
a court having competent jurisdiction is $__________ (the "Preference
Amount");
<PAGE>
the total Insured Payment due is $__________, which amount
equals the sum of the Deficiency Amount and the Preference Amount;
the Trustee is making a claim under and pursuant to the terms
of the Policy for the dollar amount of the Insured Payment set forth in
(vi) above to be applied to the payment of the Deficiency Amount for
the Applicable Distribution Date in accordance with the Agreement and
for the dollar amount of the Insured Payment set forth in (vii) above
to be applied to the payment of any Preference Amount; and
the Trustee directs that payment of the Insured Payment be
made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of
the Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE
COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS, FOR THE
PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO,
COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME, AND SHALL ALSO BE
SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED
VALUE OF THE CLAIM FOR EACH SUCH VIOLATION.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [_____] day of [__________], [_____].
[NAME OF TRUSTEE], as Trustee
By
----------------------------------
Title
-------------------------------
A-2
