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EXECUTION COPY
POOLING AND SERVICING AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST 2000-D
Among
CHEC FUNDING, LLC,
as Depositor,
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION,
as Seller,
CHEC CONDUIT FUNDING, LLC,
as Conduit Seller,
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION,
as Servicer,
and
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
Dated as of December 1, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. Definitions.................................................................................2
Section 1.02. Use of Words and Phrases...................................................................29
Section 1.03. Captions; Table of Contents................................................................30
Section 1.04. Opinions...................................................................................30
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01. Establishment of the Trust.................................................................31
Section 2.02. Office.....................................................................................31
Section 2.03. Purposes and Powers........................................................................31
Section 2.04. Appointment of the Trustee; Declaration of Trust...........................................31
Section 2.05. Expenses of the Trust......................................................................31
Section 2.06. Ownership of the Trust.....................................................................32
Section 2.07. Situs of the Trust.........................................................................32
Section 2.08. Designation of Interests in REMICS.........................................................32
Section 2.09. Miscellaneous REMIC Provisions.............................................................35
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR, THE SERVICER AND THE SELLER; COVENANT OF
SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01. Representations and Warranties of the Depositor............................................37
Section 3.02. Representations and Warranties of the Servicer.............................................39
Section 3.03. Representations and Warranties of the Sellers..............................................41
Section 3.04. Covenants of Sellers to Take Certain Actions with Respect to the Home Equity Loans
in Certain Situations......................................................................44
Section 3.05. Sale Treatment of the Home Equity Loans and Qualified Replacement Mortgages................54
Section 3.06. Acceptance by Trustee; Certain Substitutions of Home Equity Loans; Certification
by Trustee.................................................................................58
Section 3.07. Reserved...................................................................................60
Section 3.08. Custodian..................................................................................60
Section 3.09. Cooperation Procedures.....................................................................60
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES
Section 4.01. Issuance of Certificates...................................................................62
Section 4.02. Sale of Certificates.......................................................................62
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ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01. Terms......................................................................................63
Section 5.02. Forms......................................................................................63
Section 5.03. Execution, Authentication and Delivery.....................................................63
Section 5.04. Registration and Transfer of Certificates..................................................64
Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates..........................................66
Section 5.06. Persons Deemed Owners......................................................................67
Section 5.07. Cancellation...............................................................................67
Section 5.08. Limitation on Transfer of Ownership Rights.................................................67
Section 5.09. Assignment of Rights.......................................................................69
ARTICLE VI COVENANTS
Section 6.01. Distributions..............................................................................70
Section 6.02. Money for Distributions to be Held in Trust; Withholding...................................70
Section 6.03. Protection of Trust Estate.................................................................71
Section 6.04. Performance of Obligations.................................................................72
Section 6.05. Negative Covenants.........................................................................72
Section 6.06. No Other Powers............................................................................73
Section 6.07. Limitation of Suits........................................................................73
Section 6.08. Unconditional Rights of Owners to Receive Distributions....................................74
Section 6.09. Rights and Remedies Cumulative.............................................................74
Section 6.10. Delay or Omission Not Waiver...............................................................74
Section 6.11. Control by Owners..........................................................................74
Section 6.12. Indemnification by CHEC....................................................................75
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01. Collection of Money........................................................................76
Section 7.02. Establishment of Accounts..................................................................76
Section 7.03. Flow of Funds..............................................................................76
Section 7.04. Supplemental Interest Reserve Fund.........................................................80
Section 7.05. Investment of Accounts.....................................................................81
Section 7.06. Payment of Trust Expenses..................................................................81
Section 7.07. Eligible Investments.......................................................................82
Section 7.08. Accounting and Directions by Trustee.......................................................83
Section 7.09. Reports by Trustee to Owners and Certificate Insurer.......................................84
Section 7.10. Reports by Trustee.........................................................................87
ARTICLE VIII SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS
Section 8.01. Servicer and Sub-Servicers.................................................................89
Section 8.02. Collection of Certain Home Equity Loan Payments............................................90
Section 8.03. Sub-Servicing Agreements Between Servicer and Sub-Servicers................................91
Section 8.04. Successor Sub-Servicers....................................................................91
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Section 8.05. Liability of Servicer; Indemnification.....................................................91
Section 8.06. No Contractual Relationship Between Sub-Servicer, Trustee or the Owners....................92
Section 8.07. Assumption or Termination of Sub-Servicing Agreement by Trustee............................92
Section 8.08. Principal and Interest Account.............................................................92
Section 8.09. Delinquency Advances and Servicing Advances................................................95
Section 8.10. Compensating Interest; Repurchase of Home Equity Loans.....................................96
Section 8.11. Maintenance of Insurance...................................................................96
Section 8.12. Due-on-Sale Clauses; Assumption and Substitution Agreements................................97
Section 8.13. Realization Upon Defaulted Home Equity Loans; Workout of Home Equity Loans.................98
Section 8.14. Trustee to Cooperate; Release of Files....................................................100
Section 8.15. Servicing Compensation....................................................................101
Section 8.16. Annual Statement as to Compliance.........................................................101
Section 8.17. Annual Independent Certified Public Accountants' Reports..................................102
Section 8.18. Access to Certain Documentation and Information Regarding the Home Equity Loans...........102
Section 8.19. Assignment of Agreement...................................................................102
Section 8.20. Removal of Servicer; Retention of Servicer; Resignation of Servicer.......................103
Section 8.21. Inspections by Certificate Insurer; Errors and Omissions Insurance........................108
Section 8.22. Additional Servicing Responsibilities for Second Mortgage Loans...........................108
Section 8.23. The Group II Home Equity Loans............................................................109
Section 8.24. Merger, Conversion, Consolidation or Succession to Business of Servicer...................109
Section 8.25. Notices of Material Events................................................................109
Section 8.26. Indemnification by the Servicer...........................................................110
Section 8.27. Reports on Foreclosure and Abandonment of Properties......................................110
ARTICLE IX TERMINATION OF TRUST
Section 9.01. Termination of Trust......................................................................111
Section 9.02. Termination Upon Option of the Owner of the Class X-IO Certificates.......................111
Section 9.03. Termination Upon Loss of REMIC Status.....................................................113
Section 9.04. Disposition of Proceeds...................................................................115
Section 9.05. Netting of Amounts........................................................................115
ARTICLE X THE TRUSTEE
Section 10.01. Certain Duties and Responsibilities.......................................................116
Section 10.02. Removal of Trustee for Cause..............................................................118
Section 10.03. Certain Rights of the Trustee.............................................................120
Section 10.04. Not Responsible for Recitals or Issuance of Certificates..................................121
Section 10.05. May Hold Certificates.....................................................................122
Section 10.06. Money Held in Trust.......................................................................122
Section 10.07. Compensation and Reimbursement............................................................122
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Section 10.08. Corporate Trustee Required; Eligibility...................................................123
Section 10.09. Resignation and Removal; Appointment of Successor.........................................123
Section 10.10. Acceptance of Appointment by Successor Trustee............................................124
Section 10.11. Merger, Conversion, Consolidation or Succession to Business of the Trustee................125
Section 10.12. Reporting; Withholding....................................................................125
Section 10.13. Liability of the Trustee..................................................................126
Section 10.14. Appointment of Co-Trustee or Separate Trustee.............................................127
Section 10.15. Appointment of Custodians.................................................................128
ARTICLE XI MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions......................................................129
Section 11.02. Form of Documents Delivered to the Trustee................................................129
Section 11.03. Acts of Owners............................................................................130
Section 11.04. Notices, etc. to Trustee.................................................................131
Section 11.05. Notices and Reports to Owners; Waiver of Notices..........................................131
Section 11.06. Rules by Trustee..........................................................................131
Section 11.07. Successors and Assigns....................................................................132
Section 11.08. Severability..............................................................................132
Section 11.09. Benefits of Agreement.....................................................................132
Section 11.10. Legal Holidays............................................................................132
Section 11.11. Governing Law; Submission to Jurisdiction.................................................132
Section 11.12. Counterparts..............................................................................133
Section 11.13. Usury.....................................................................................133
Section 11.14. Amendment.................................................................................134
Section 11.15. Paying Agent; Appointment and Acceptance of Duties........................................134
Section 11.16. REMIC Status..............................................................................135
Section 11.17. Additional Limitation on Action and Imposition of Tax.....................................137
Section 11.18. Appointment of Tax Matters Person.........................................................138
Section 11.19. The Certificate Insurer...................................................................138
Section 11.20. Reserved..................................................................................138
Section 11.21. Third Party Rights........................................................................138
Section 11.22. Notices...................................................................................138
Section 11.23. Rule 144A Information.....................................................................141
ARTICLE XII CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 12.01. Trust Estate and Accounts Held for Benefit of the Certificate Insurer.....................143
Section 12.02. Claims Upon the Policy; Policy Payments Account...........................................143
Section 12.03. Effect of Payments by the Certificate Insurer; Subrogation................................144
Section 12.04. Notices to the Certificate Insurer........................................................145
Section 12.05. Third-Party Beneficiary...................................................................145
Section 12.06. Rights to the Certificate Insurer To Exercise Rights of Owners............................145
Section 12.07. Trustee to Hold the Certificate Insurance Policy..........................................145
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Section 12.08. Trustee to Act Solely with Consent of the Certificate Insurer.............................145
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 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 B FORM OF CLASS X-IO CERTIFICATE
EXHIBIT C FORM OF CLASS R CERTIFICATE
EXHIBIT D [INTENTIONALLY OMITTED]
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 DEFINITION OF GROUP II TARGET OVERCOLLATERALIZATION AMOUNT
EXHIBIT L DEFINITION OF GROUP I TARGET OVERCOLLATERALIZATION AMOUNT
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
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POOLING AND SERVICING AGREEMENT, relating to CENTEX HOME EQUITY LOAN
TRUST 2000-D, dated as of December 1, 2000 by and among CHEC FUNDING, LLC, a
Delaware limited liability company, in its capacity as the depositor (the
"Depositor"), CENTEX CREDIT CORPORATION d/b/a CENTEX HOME EQUITY 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"; together with the 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 Seller wish to sell to the
Depositor, the Depositor wishes to purchase from the Seller and the Conduit
Seller 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;
WHEREAS, Bank One, National Association is willing to serve in the
capacity of Trustee hereunder; and
WHEREAS, Financial Security Assurance Inc. (the "Certificate
Insurer") is intended to be a third-party beneficiary of this Agreement and
is hereby recognized by the parties hereto to be a third-party beneficiary
of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Sellers, the Servicer, and
the Trustee hereby agree as follows:
CONVEYANCE
The Seller with respect to the Seller Home Equity Loans, and the
Conduit Seller with respect to the Conduit 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 and the Certificate Insurer, 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
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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 and the Certificate
Insurer, without recourse, all the right, title and interest of the Depositor
in and to the Trust Estate.
In addition to the foregoing, the Depositor shall cause the
Certificate Insurer to deliver a Certificate Insurance Policy to the Trustee
for the benefit of the Owners of the Class A Certificates.
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 Premium Amount (calculated as a percentage of the
then outstanding principal amount of the Class A Certificates) and 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.
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"AGREEMENT": This Pooling and Servicing Agreement, as it may be
amended from time to time, including the Exhibits and Schedules hereto.
"ANNUAL LOSS PERCENTAGE (ROLLING TWELVE MONTH)": As of any date of
determination thereof, a fraction, expressed as a percentage, the numerator of
which is the aggregate of the Realized Losses as of the last day of the calendar
month of each Remittance Period for the twelve immediately preceding Remittance
Periods and the denominator of which is the aggregate of the Loan Balances as of
the first day of the first such 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 or with
respect to which the Property was sold within 12 months preceding the time of
origination, 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.
"AVAILABLE FUNDS": As to each Home Equity Loan Group and Distribution
Date, the amount on deposit in the Certificate Account with respect to such Home
Equity Loan Group on the Distribution Date, disregarding the amounts of any
Insured Payments to be made on the Distribution Date.
"AVAILABLE FUNDS SHORTFALL": As to each Home Equity Loan Group and
Distribution Date, an amount equal to the excess, if any, of (x) the aggregate
of the amounts required to be distributed pursuant to clauses (ii) and (iii) of
Section 7.03(b) over (y) the Available Funds for such payments for such related
Home Equity Loan Group and Distribution Date.
"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 California, are authorized
or obligated by law or executive order to be closed.
"CARRY-FORWARD AMOUNT": With respect to any Class of Class A
Certificates and any Distribution Date, an amount equal to the sum of (1) the
amount, if any, by which (x) the Current Interest for such Class for the
immediately preceding Distribution Date exceeded (y) the amount
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of the actual distribution made to Owners of such Class with respect to
interest on such Class on the immediately preceding Distribution Date and (2)
interest on such excess for the related Interest Period at the related
Certificate Rate for the Class of Class A Certificates.
"CERTIFICATE": Any one of the Class A 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 2000-D, Centex Home Equity Loan
Asset-Backed Certificates." The Certificate Account shall be an Eligible
Account.
"CERTIFICATE INSURANCE POLICY": The Financial Guaranty Insurance
Policy (number: 51017-N) dated December 14, 2000 with respect to the Class A
Certificates and all endorsements thereto, issued by the Certificate Insurer
for the benefit of the Owners of the Class A Certificates.
"CERTIFICATE INSURER": Financial Security Assurance Inc., a stock
insurance company organized under the laws of the State of New York and any
successor thereto.
"CERTIFICATE INSURER DEFAULT": The existence and continuance of any
of the following:
(a) the Certificate Insurer fails to make a payment
required under the Certificate Insurance Policy in accordance with its terms;
or
(b) the Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or chapter
of the United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for relief
entered against it under the United States Bankruptcy Code, the New York
State Insurance law or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation, or reorganization that
is final and nonappealable; or
(c) a court of competent jurisdiction, the New York
Department of Insurance or any other competent regulatory authority shall
have entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for the Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Certificate Insurer or of all or any material portion of its
property.
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"CERTIFICATE PRINCIPAL BALANCE": As of the Startup Day as to each
of the following Classes of Class A Certificates, the principal balances
thereof, as follows:
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Class A-l Certificates - $108,700,000
Class A-2 Certificates - $50,000,000
Class A-3 Certificates - $56,100,000
Class A-4 Certificates - $67,500,000
Class A-5 Certificates - $34,500,000
Class A-6 Certificates - $35,200,000
Class A-7 Certificates - $48,000,000
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As of any time of determination after the Startup Day, with respect
to a Class of Class A 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' Certificate Principal
Balance pursuant to Section 7.03 hereof on all prior Distribution Dates;
PROVIDED, HOWEVER, that solely for the purposes of determining the
Certificate Insurer's rights, as subrogee, the Certificate Principal Balance
of a Class shall not be reduced by any principal amounts paid to the Owners
thereof from Insured Payments.
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 or the Class A-7 Certificate Rate.
"CHEC": Centex Credit Corporation d/b/a Centex Home Equity
Corporation.
"CIVIL RELIEF ACT INTEREST SHORTFALLS": With respect to any
Remittance Period, for any Home Equity Loans as to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Remittance Period as a result of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended, the amount, if any, by which (i) interest
collectible on such Home Equity Loans during the most recently ended
Remittance Period is less than (ii) interest accrued thereon for such
Remittance Period pursuant to the Note at the related Coupon Rate.
"CLASS": Any class of the Class A Certificates or the Class X-IO
Certificates or the Class R Certificates.
"CLASS A CERTIFICATE": Any one of the Group I Certificates or Group
II 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
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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": 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-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-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-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-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-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-1 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-1 Certificates, 7.03% per annum.
"CLASS A-2 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-2 Certificates, 6.74% per annum.
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"CLASS A-3 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-3 Certificates, 6.82% per annum.
"CLASS A-4 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-4 Certificates, 7.05% per annum.
"CLASS A-5 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-5 Certificates, the lesser of (A) 7.17% per annum (or 7.67%
per annum for each Interest Period occurring after the Clean-Up Call Date)
and (B) the Group I Net WAC Cap for the Distribution Date.
"CLASS A-6 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-6 Certificates, the lesser of (A) 6.93% per annum and (B) the
Group I Net WAC 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 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 Class A 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 Class A 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:
<TABLE>
<CAPTION>
DISTRIBUTION DATE LOCKOUT PERCENTAGE
----------------- ------------------
<S> <C>
January 2001 through December 2003 0%
January 2004 through December 2005 45%
January 2006 through December 2006 80%
January 2007 through December 2007 100%
January 2008 and thereafter 300%
</TABLE>
"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
fraction, expressed as a percentage, the numerator of which is the product of
(a) the weighted average of the Net Coupon Rates (minus the Minimum Spread)
on the Group II Home Equity Loans as of the beginning of the related
Remittance Period and (b) the aggregate Loan Balance of the Group II Home
Equity Loans as of the beginning of the related Remittance Period, and the
denominator of which is the outstanding Certificate Principal Balance of the
Class A-7 Certificates (before giving effect to payments of
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<PAGE>
principal on the Distribution Date) (adjusted to an effective rate,
calculated by multiplying such fraction by 30 and dividing by the actual
number of days elapsed in the related Interest Period, reflecting accrued
interest calculated on the basis of a 360-day year and the actual number of
days elapsed).
"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 Class A-7 Certificateholders' Interest Index Carryover for all
previous Distribution Dates not previously paid to Class A-7
Certificateholders (including any interest accrued thereon at the Class A-7
Formula Rate).
"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 FORMULA RATE": For any Distribution Date is the sum of
(1) LIBOR and (2) 0.25%per annum (or 0.50% per annum for each Interest Period
occurring after the Clean-Up Call Date).
"CLASS A DISTRIBUTION AMOUNT": For each Home Equity Loan Group and
Distribution Date shall be the sum of (x) Current Interest for the Class A
Certificates related to the Home Equity Loan Group and (y) the Class A
Principal Distribution Amount for the Home Equity Loan Group and all other
amounts distributed in reduction of the Certificate Principal Balances of the
related Class A Certificates pursuant to Section 7.03(b) hereof.
"CLASS A PRINCIPAL DISTRIBUTION AMOUNT": With respect to the Class A
Certificates of the related Home Equity Loan Group and each Distribution Date
shall equal the excess, if any, of
(1) 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
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;
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<PAGE>
(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;
(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 amount of any Collateralization Deficit
with respect to the related Home Equity Loan Group for the
Distribution Date; and
(F) 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); over
(2) the amount of any Overcollateralization Release
Amount with respect to the related Home Equity Loan Group for
the Distribution Date;
provided, however, on the Final Scheduled Distribution Date for each
Class of Class A Certificates, the related Class A Principal
Distribution Amount payable to such Class shall be no less than the
Certificate Principal Balance for such Class of Class A Certificates.
"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. 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 for the purposes
of the REMIC Provisions. The Owner of the Class R Certificate shall be
entitled to separate such Certificate into its component Class R-1 and Class
R-2 Certificate 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 Available Funds, if any, remaining
after the making of all applications, transfers and disbursements described
in Sections 7.03(b)(i) through 7.03(b)(viii) hereof and (ii) the sum of the
amounts described in footnotes (5) and (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 (including amounts described in
Section 7.03(b)(ix)).
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<PAGE>
"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.
"COLLATERALIZATION DEFICIT": With respect to either Home Equity Loan
Group and any Distribution Date, the amount, if any, by which (x) the related
aggregate of the Certificate Principal Balances with respect to such Home
Equity Loan Group, after taking into account the payment of all distributions
with respect to such Home Equity Loan Group on such Distribution Date
(without regard to any Insured Payment to be made on such Distribution Date
in respect of any Collateralization Deficit and except for any distributions
in respect of the Collateralization Deficit with respect to such Home Equity
Loan Group), exceeds (y) the aggregate Loan Balances of the Home Equity Loans
in such Home Equity Loan Group as of the close of business on the last day of
the related Remittance Period.
"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 SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home
Equity Loans attached as Schedule I-D hereto.
"CONDUIT SELLER": CHEC Conduit Funding, LLC, a Delaware limited
liability company.
"CONDUIT SERVICER": CHEC in its capacity as servicer with respect
to the Conduit Warehousing Facility.
"CONDUIT WAREHOUSING FACILITY": The Purchase Agreement dated
November 16, 1999 among CHEC Conduit Funding, LLC, Centex Credit Corporation,
Citibank, N.A., certain investors, Citicorp North America, Inc., as Investor
Agent, Credit Lyonnais New York Branch, as Investor Agent, and BMO Nesbitt
Burns Corp., as Investor Agent, and Citicorp North America, Inc., as Agent,
as amended.
"CORPORATE TRUST OFFICE": The principal office of the Trustee at 1
Bank One Plaza, Suite IL1-0126, Chicago, Illinois 60670-0126, 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, the Owners and the Certificate Insurer, or the principal office of
any successor Trustee hereunder.
"COUPON RATE": The rate of interest borne by each Note from time to
time.
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<PAGE>
"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.
"CUMULATIVE LOSS PERCENTAGE": As of any date of determination
thereof, the aggregate of all Realized Losses since the Startup Day as a
percentage of the Original Aggregate Loan Balance.
"CURRENT INTEREST": With respect to each Class of Class A
Certificates means, with respect to any Distribution Date: (1) 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 Class A
Certificates plus (2) the Carry-Forward Amount, if any, with respect to the
Class of Class A Certificates; provided, however, that with respect to each
Class of Class A Certificates, the amount described in clause (1) above will
be reduced by the Class' pro rata share of any Civil Relief Act Interest
Shortfalls (based on the amount of interest otherwise due to such Class for
such Interest Period) relating to such Home Equity Loan Group during the
related Remittance Period.
"CURRENT WAC EXCESS": With respect to any Distribution Date, the
portion of Current Interest being distributed with respect to the Class A-7
Certificates equal to interest accrued thereon at a rate equal to the excess
of the Class A-7 Certificate Rate over the Group II Net WAC Cap.
"CUSTODIAL AGREEMENT": The Custodial Agreement dated as of December
1, 2000 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 December
1, 2000 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.
"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.
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<PAGE>
"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, 7 Hanover Square, New
York, New York, 10004, 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 acceptable to the
Certificate Insurer, 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 Moody's and if rated by Fitch, "A" by Fitch and (ii) the
Servicer shall provide the Trustee and the Certificate Insurer 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, on the preceding Business Day, commencing in January 2001.
"DIRECT PARTICIPANT" or "DTC PARTICIPANT": Any broker-dealer, bank or
other financial institution for which the Depository holds Class A 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 January 25, 2001.
"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 Moody's (in the
case of its long-term obligations), and if rated by Fitch, A- or F1 or higher
by Fitch, and in the highest short term rating category by each of Standard &
Poor's and Moody's and if rated by Fitch, Fitch (in the case of its
short-term obligations), and which is (i) a federal savings and loan
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<PAGE>
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 the Certificate Insurer
and 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 and the Certificate Insurer, 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.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"EXTRA PRINCIPAL DISTRIBUTION AMOUNT": Means as to either the Group
I or Group II Certificates and any Distribution Date, the lesser of (1) the
related Target Deficiency and (2) the related Net Monthly Excess Cashflow.
"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(c)
hereof with respect to each Class A Certificate.
"FIRST MORTGAGE LOAN": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to any Property.
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<PAGE>
"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 and Class A-6 Certificates.
"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, 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 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).
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<PAGE>
"GROUP I NET WAC CAP": With respect to any Distribution Date, a rate
per annum equal to the weighted average of the Net Coupon Rates on the Group
I Home Equity Loans as of the beginning of the related Remittance Period.
"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; 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 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 NET WAC CAP": With respect to any Distribution Date will
be the rate per annum equal to the product of (i) the weighted average Net
Coupon Rates of the Group II Home Equity Loans as of the beginning of the
related Remittance Period minus the Minimum Spread and (ii) a fraction, the
numerator of which is 30, and the denominator of which is the actual number
of days in the related Interest Period.
"GUARANTEED DISTRIBUTION" means, with respect to each Distribution
Date, the distribution to be made to Owners under the Certificate Insurance
Policy in an aggregate amount equal to the sum of the Current Interest and
the sum of the Collateralization Deficits (net of any portion of
15
<PAGE>
such Collateralization Deficit that would have been paid on such Distribution
Date in the absence of a payment under the Certificate Insurance Policy) with
respect to each of the Group I and Group II Certificates and, without
duplication, on the Final Scheduled Distribution Date for each class, the
then outstanding principal balance of such Class of Certificates, in
accordance with the original terms of the Certificates when issued and
without regard to any amendment or modification of the Certificates or this
Agreement except amendments or modifications to which the Certificate Insurer
has given its prior written consent.
"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 Class A 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 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.
"INDEMNIFICATION AGREEMENT": The Indemnification Agreement dated as
of December 14, 2000 among the Certificate Insurer, the Seller, the Depositor
and the Underwriters.
"INDIRECT PARTICIPANT": Any financial institution for whom any
Direct Participant holds an interest in a Class A Certificate.
"INSURANCE AGREEMENT": The Insurance and Indemnity Agreement dated as
of December 14, 2000 among the Depositor, the Seller, and the Certificate
Insurer, as it may be amended from time to time.
"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.
"INSURED PAYMENT": Means as of any Distribution Date, any Guaranteed
Distribution.
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<PAGE>
"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.
"LATE PAYMENT RATE": As defined in the Insurance Agreement.
"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 (or in the case of the initial Interest
Period, December 12, 2000).
"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.
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<PAGE>
"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.
"MINIMUM SPREAD": A percentage per annum equal to 0% for
Distribution Dates which occur prior to January 2002 and 0.50% for
Distribution Dates which occur in January 2002 or thereafter.
"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": Moody's Investors Service, Inc. or any successor thereto.
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<PAGE>
"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,
(ii) the rate at which the Trustee Fee accrues and (iii) the applicable
Premium Amount (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 MONTHLY EXCESS CASHFLOW": With respect to each Home Equity Loan
Group and Distribution Date, the Available Funds remaining for such Home
Equity Loan Group, if any, after the application of clauses (i) through (vi)
of Section 7.03(b).
"90-DAY DELINQUENT LOAN": With respect to any Determination Date,
(i) all REO Properties and (ii) each Home Equity Loan with respect to which
any portion of a Monthly Payment is, as of the last day of the prior
Remittance Period, three 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).
"90+ DELINQUENCY PERCENTAGE (ROLLING THREE MONTH)": With respect to
any Determination 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) (i) the aggregate Loan
Balance of 90-Day Delinquent Loans, and (ii) the aggregate outstanding
principal balance of Home Equity Loans in foreclosure and the denominator of
which is the Loan Balance of all of the Home Equity Loans as of the end of
such Remittance Period.
"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)(xi) hereof which the
Servicer has determined, in good faith business judgment, as evidenced by an
Officer's Certificate delivered to the Certificate Insurer and 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.
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<PAGE>
"OFFICER'S CERTIFICATE": A certificate signed by any Authorized
Officer of any Person delivering such certificate and delivered to the
Trustee and the Certificate Insurer.
"OPERATIVE DOCUMENTS": Collectively, this Agreement, the Certificate
Insurance Policy, the Certificates, the Custodial Agreement, the
Indemnification Agreement and the Insurance Agreement.
"OPINION OF COUNSEL": A written opinion of counsel acceptable, in form
and substance, to the Trustee and the Certificate Insurer and delivered to the
Trustee, the Rating Agencies and the Certificate Insurer.
"ORIGINAL AGGREGATE LOAN BALANCE": The aggregate Loan Balances of
all Home Equity Loans as of the Cut-Off Date, which is $400,000,674.60.
"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 Home Equity
Loan Group and Distribution Date, the excess, if any, of (x) the aggregate
Loan Balance of the Home Equity Loans in the Home Equity Loan Group as of the
close of business on the last day of the preceding Remittance Period over (y)
the aggregate outstanding Certificate Principal Balances of the related Class
A Certificates as of the Distribution Date (after taking into account the
payment of the Class A Principal Distribution Amount related to the Home
Equity Loan Group on the Distribution Date).
"OVERCOLLATERALIZATION RELEASE AMOUNT": As to either the Group I or
Group II Certificates and any Distribution Date (i) prior to the third
Distribution Date following the Clean-Up Call Date, the lesser of (1) the sum
of the amount calculated pursuant to clauses (1)(A), (1)(B), (1)(C), (1)(D)
and (1)(F) of the definition of Class A Principal Distribution Amount for
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<PAGE>
such Home Equity Loan Group and Distribution Date to the extent of the
related Available Funds remaining after distribution pursuant to clauses (i)
and (ii) of Section 7.03(b) for such related Distribution Date and (2) the
excess, if any, of (A) the related Overcollateralization Amount over (B) the
related Target Overcollateralization Amount and (ii) on and after the third
Distribution Date following the Clean-Up Call Date, zero.
"OWNER" or "CERTIFICATEHOLDER": The Person in whose name a
Certificate is registered in the Register, and the Certificate Insurer, to
the extent described in Section 12.06 hereof.
"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 a Class of Class A
Certificates, a fraction, expressed as a decimal, the numerator of which is
the principal balance represented by such Class A Certificate as of the
Startup Day and the denominator of which is the Certificate Principal Balance
represented by all the Class A 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.
"POLICY PAYMENTS ACCOUNT": The policy payments account maintained by
the Trustee pursuant to Section 12.02(b) hereof. The Policy Payments Account
shall be an Eligible Account.
"PREMIUM AMOUNT": With respect to each Group and each Distribution
Date, the percentage for such Group set forth in the letter dated the Startup
Date from the Certificate Insurer to the Seller setting forth the arrangement
for the premium on the Certificate Insurance Policy and certain related
expense arrangements multiplied by one-twelfth of the outstanding Certificate
Principal Balance of the related Classes of Class A Certificates as of such
Distribution 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.
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<PAGE>
"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.
"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 December 6, 2000
constituting part of the Registration Statement.
"PROSPECTUS SUPPLEMENT": The Centex Home Equity Loan Trust 2000-D
Prospectus Supplement dated December 6, 2000 to the Prospectus.
"PURCHASE OPTION PERIOD": As defined in Section 9.03(a) hereof.
"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
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<PAGE>
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. In
the event that one or more home equity loans are proposed to be substituted
for one or more Home Equity Loans, the Certificate Insurer may allow the
foregoing tests to be met on a weighted average basis or other aggregate
basis acceptable to the Certificate Insurer, as evidenced by a written
approval delivered to the Trustee by the Certificate Insurer, except that the
requirements of clauses (i), (iii), (iv), (ix), (x), (xi) and (xii) hereof
must be satisfied as to each Qualified Replacement Mortgage.
"RATING AGENCIES": Collectively, Moody's, 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.
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"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 Class A Certificates.
"REIMBURSEMENT AMOUNT": With respect to each Home Equity Loan Group
and any Distribution Date, the sum of (x)(i) all Insured Payments previously
paid to the Trustee by the Certificate Insurer and not previously repaid to
the Certificate Insurer pursuant to Section 7.03(b) hereof plus (ii) interest
accrued on each such Insured Payment not previously repaid calculated at the
Late Payment Rate and (y)(i) any amounts then due and owing to the
Certificate Insurer under the Insurance Agreement (including, without
limitation, any unpaid Premium Amount relating to such Distribution Date or
an earlier Distribution Date) plus (ii) interest on such amounts at the Late
Payment Rate. The Certificate Insurer shall notify the Trustee, the Depositor
and the Seller in writing of the amount of any Reimbursement Amount.
"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 the REMIC II
Regular Interests as defined in Section 2.08 hereof and constituting a REMIC
created hereunder.
"REMIC II": The segregated pool of assets consisting of all the
assets of the Trust Estate other than the Supplemental Interest Reserve
Account and the REMIC II Regular Interests and constituting a REMIC created
hereunder. Expenses and fees of the Trust shall be paid from REMIC II.
"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.
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"REPRESENTATION LETTER": Letters to, or agreements with, the
Depository to effectuate a book-entry system with respect to the Class A
Certificates registered in the Register under the nominee name of the
Depository.
"RESIDUAL NET MONTHLY EXCESS CASHFLOW": With respect to any
Distribution Date, the aggregate Available Funds, if any, remaining after the
making of all applications, transfers and disbursements described in Sections
7.03(b)(i) through 7.03(b)(xii) hereof. It is anticipated that there will not
be any Residual Net Monthly Excess Cashflow.
"SCHEDULE OF HOME EQUITY LOANS": The Conduit Schedule of Home Equity
Loans, 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 Credit Corporation d/b/a Centex Home Equity
Corporation, a Nevada corporation.
"SELLER HOME EQUITY LOANS": The home equity loans listed on the
Seller Schedule of Home Equity Loans.
"SELLERS": The Seller and the Conduit Seller.
"SELLER SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity
Loans attached as Schedule I-C hereto.
"SENIOR LIEN": With respect to any Second Mortgage Loan, the home
equity loan relating to the corresponding Property having a first priority
lien.
"SERVICER": Centex Credit Corporation d/b/a Centex Home Equity
Corporation, a Nevada corporation, and its permitted successors and assigns.
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"SERVICER LOSS TEST": The Servicer Loss Test for any period set out
below is satisfied if the Cumulative Loss Percentage for such period does not
exceed the percentage set out for such period below:
<TABLE>
<CAPTION>
PERIOD CUMULATIVE LOSS PERCENTAGE
------ --------------------------
<S> <C>
January 2001 - December 2001 1.65%
January 2002 - December 2002 2.30%
January 2003 - December 2003 3.20%
January 2004 - December 2004 4.10%
January 2005 - December 2005 4.95%
January 2006 and thereafter 6.25%
</TABLE>
Notwithstanding anything contained herein to the contrary, the
Certificate Insurer and the Servicer may agree, without the giving of notice
to or the receipt of the consent of the Owners, to modify this definition of
Servicer Loss Test for the purpose of changing the percentages set out above
for any period or periods or eliminating, in whole or in part, the definition
hereof, provided, that the Trustee and the Rating Agencies shall have been
notified in writing of such modification prior to the effective date of such
modification and such modification shall not have resulted in a downgrading
of the then-current ratings of the Class A Certificates, without regard to
the Certificate Insurance Policy.
"SERVICER TERMINATION EVENT": As defined in Section 8.20(a) hereof.
"SERVICER TERMINATION TEST": The Servicer Termination Test is
satisfied for any date of determination thereof, if (x) the 90+ Delinquency
Percentage (Rolling Three Month) is less than or equal to 15.0%, (y) the
Servicer Loss Test is satisfied and (z) the Annual Loss Percentage (Rolling
Twelve Month) for the twelve month period immediately preceding the date of
determination thereof is less than or equal to 0.95% for the first through
eighteenth Remittance Periods, less than or equal to 1.50% for the nineteenth
through twenty-fourth Remittance Periods, less than or equal to 2.50% for the
twenty-fifth through forty-eighth Remittance Periods or less than or equal to
2.10% for the forty-ninth Remittance Period and thereafter.
Notwithstanding anything contained herein to the contrary, the
Certificate Insurer and the Servicer may agree, without the giving of notice
to or the receipt of the consent of the Owners, to modify this definition of
Servicer Termination Test for the purpose of changing the percentages set out
above for any period or periods or eliminating, in whole or in part, the
definition hereof, provided, that the Trustee and the Rating Agencies shall
have been notified in writing of such modification prior to the effective
date of such modification and such modification shall not have resulted in a
downgrading of the then-current ratings of the Class A Certificates, without
regard to the Certificate Insurance Policy.
"SERVICING ADVANCE": As defined in Section 8.09(b) and Section
8.13(a) hereof.
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"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, the Certificate Insurer
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 Determination Date,
(i) all REO Properties and (ii) each Home Equity Loan with respect to which
any portion of a Monthly Payment is, as of the last day of the prior
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).
"STANDARD & POOR'S": Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc. or any successor thereto.
"STARTUP DAY": December 14, 2000.
"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 7.02(a).
"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
27
<PAGE>
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.
"TARGET DEFICIENCY": As to either the Group I or Group II
Certificates and any Distribution Date, the excess, if any, of (1) the
related Target Overcollateralization Amount for such Distribution Date over
(2) the related Overcollateralization Amount for such Distribution Date after
giving effect to the distribution of the related Class A Principal
Distribution Amount on such Distribution Date but prior to any distributions
of Extra Principal Distribution Amount; provided, however, that in no event
will the Target Deficiency be less than zero.
"TARGET OVERCOLLATERALIZATION AMOUNT": The required level of the
Overcollateralization Amount for each Home Equity Loan Group with respect to
a Distribution Date. The Target Overcollateralization Amount for Group I is
set forth in Exhibit L hereof. The Target Overcollateralization Amount for
Group II is set forth in Exhibit K hereof.
"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 NOTICE": As defined in Section 9.03(a) hereof.
"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 Balance for
the Class A 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).
"TRUST": Centex Home Equity Loan Trust 2000-D, 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.
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"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": Salomon Smith Barney Inc., Banc of America
Securities LLC and Chase Securities 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 Class A Certificates
in proportion to the Certificate Principal Balances of their respective Class
A Certificates on such date.
"WEIGHTED AVERAGE CERTIFICATE RATE": As to the Class A 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 and the Class A-7 Certificate Rate, weighted by,
respectively, the Certificate Principal Balance of each such Class of Class A
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
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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, the Certificate Insurer and the Trustee.
END OF ARTICLE I
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<PAGE>
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 2000-D" 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 either REMIC I or
REMIC II as a REMIC.
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 and the Certificate Insurer.
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).
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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 and Class II-M-2 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 Net Monthly Excess Cashflow for either Group that is used to pay
an amount to the Class A Certificates pursuant to Section 7.03(b) (vii),
(viii) and (xii) (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 payable with respect to the
Class II-M-1 Interest which equals .01% of the Turbo Amount that is applied
to Group I Certificates 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 and Class II-A-6 Interests, in the same manner in which the Turbo
Amount is allocated among the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates, respectively, and a portion of the
interest payable with respect to the Class II-M-2 Interest which equals .01%
of the Turbo Amount that is applied to the Group II Certificates will be
payable as a reduction of the principal balance of the Class II-A-7 Interests
(and will be accrued and added to principal on the Class II-M-1 and Class
II-M-2 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 Group I shall be
allocated 99.99% to the Class II-M-1 Interest, and .01% to the Class II-A-1,
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<PAGE>
Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5 and Class II-A-6
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 and
Class II-A-6 Interests shall be apportioned among such REMIC II Regular
Interests in the same manner in which principal from Group I is payable with
respect to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-6 Certificates, respectively. Notwithstanding the above, principal
payments on Group I that are attributable to the Overcollateralization
Release Amount shall be allocated 100% to the Class II-M-1 Interest.
Principal payments on Group II shall be allocated 99.99% to the Class II-M-2
Interest and .01% to the Class II-A-7 Interests until paid in full.
Notwithstanding the above, the principal payments on Group II that are
attributable to the Overcollateralization Release Amount shall be allocated
100% to the Class II-M-2 Interest. 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 and Class II-A-7 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 and Class A-7 Certificates, respectively; (ii) the
principal balance of the Class II-M-1 Interest is equal to the aggregate Loan
Balance of Group I less the sum 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 and Class
II-A-6 Interests; and (iii) the principal balance of the Class II-M-2
Interest is equal to the aggregate Loan Balance of Group II less the
principal balance of the Class II-A-7 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:
<TABLE>
<CAPTION>
REMIC II Allocation of Allocation of
Certificates Initial Balance Certificate Rate Principal Interest
------------ --------------- ---------------- --------- --------
<S> <C> <C> <C> <C>
II-A-1 $10,870 (1) (3) (4)(5)
II-A-2 $5,000 (1) (3) (4)(5)
II-A-3 $5,610 (1) (3) (4)(5)
II-A-4 $6,750 (1) (3) (4)(5)
II-A-5 $3,450 (1) (3) (4)(5)
II-A-6 $3,520 (1) (3) (4)(5)
II-A-7 $4,800 (2) (3) (4)(6)
II-M-1 $351,965,028.30 (1) (3) (4)(5)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
REMIC II Allocation of Allocation of
Certificates Initial Balance Certificate Rate Principal Interest
------------ --------------- ---------------- --------- --------
<S> <C> <C> <C> <C>
II-M-2 $47,995,646.30 (2) (3) (4)(6)
R-2 0% N/A N/A(7)
</TABLE>
---------------
(1) The Certificate Rate on this REMIC II Regular Interest shall at
any time of determination equal the weighted average of the Net Coupon Rates
of the Home Equity Loans in Group I.
(2) The Certificate Rate on this REMIC II Regular Interest shall at
any time of determination equal the weighted average of the Net Coupon Rates
of the Home Equity Loans in Group II.
(3) 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 and Class A-7
Certificates in the same proportion as principal from the Home Equity Loans
is payable with respect to such Certificates, 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 Group I and Group II Certificates have been reduced to zero.
(4) Except as provided in footnotes (5) and (6), interest will be
allocated among the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6 and Class A-7 Certificates in the same proportion as interest is
payable on such Certificates.
(5) 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 Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6
and Class II-M-1 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 Interests is subject
to a cap and floor equal to the rate on each of Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5 and Class A-6 Certificates, respectively and the
Class II-M-1 Interest is subject to a cap equal to 0% and (ii) the principal
balance of this REMIC II Certificate, shall not be allocated to the Group I
or Group II Certificates but will be allocated to the Class X-IO
Certificates. However, the Class X-IO Certificates shall be subordinated to
the extent provided in Section 7.03.
(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 Class
II-A-7 and Class II-M-2 Interests, where the Class II-A-7 Interest is subject
to a cap and floor equal to the lesser of the Class A-7 Certificate Rate or
the Group II Net WAC Cap, and the Class II-M-2 Interest is subject to a cap
equal to 0% and (ii) the principal balance of this REMIC II Certificate,
shall not be allocated to the Group I or Group II Certificates, but will be
allocated to the Class X-IO Certificates.
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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:
<TABLE>
<CAPTION>
Initial Certificate Final Scheduled
Class Designation Principal Balance Distribution Date
----------------- ----------------- -----------------
<S> <C> <C>
Class A-1 $108,700,000 November 25, 2015
Class A-2 $50,000,000 August 25, 2021
Class A-3 $56,100,000 February 25, 2026
Class A-4 $67,500,000 August 25, 2029
Class A-5 $34,500,000 January 25, 2031
Class A-6 $35,200,000 January 25, 2031
Class A-7 $48,000,000 January 25, 2031
Class X-IO (1)
Class R-1 (1)
</TABLE>
----------------
(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 January 25, 2035.
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.
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(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
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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 and the Certificate Insurer 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
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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
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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, the Certificate Insurer and the Owners that as of the
Startup Day:
(a) The Servicer is a corporation 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 corporate 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 corporate action on the part of the Servicer and will not
violate the Servicer's articles of incorporation or by-laws 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
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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
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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.
(m) The Servicer will terminate any Sub-Servicer within ninety (90)
days after being directed by the Certificate Insurer to do so.
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, the Certificate Insurer, 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 or of the
Certificate Insurer, 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 and, upon the
Servicer's continued failure to cure such breach, may thereafter be removed
by the Certificate Insurer or by the Trustee with the written consent of the
Certificate Insurer pursuant to Section 8.20 hereof; PROVIDED, HOWEVER, that
if the Servicer can establish to the reasonable satisfaction of the
Certificate Insurer that it is diligently pursuing remedial action, then the
cure period may be extended for an additional 90 days with the written
approval of the Certificate Insurer.
Section 3.03. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Seller and the Conduit Seller, as applicable, hereby
severally and not jointly represents, warrants and covenants to the
Depositor, the Trustee, the Certificate Insurer and the Owners that as of the
Startup Day:
(a) In the case of the Seller, that it is a corporation, and in the
case of the Conduit Seller, that it is a limited liability company, duly
formed and validly existing under the laws governing its creation and
existence, neither the Seller nor the Conduit Seller is in violation of the
laws of any state in which any Property or either of the Seller or Conduit
Seller, as applicable, is located or doing business which violation would
materially and adversely affect the condition (financial or otherwise) or
operations of either of the Seller or Conduit Seller, 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 Seller 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 Seller, as applicable, has all requisite corporate or limited
liability company, as applicable, 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.
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(b) The execution and delivery of this Agreement and the other
Operative Documents to which the Seller or the Conduit Seller, 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 corporate action and will not violate its
articles of incorporation or by-laws, in the case of the Seller, or by all
necessary limited liability company action and will not violate its amended
and restated limited liability company agreement or certificate of formation,
in the case of the Conduit Seller, 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 Seller, 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 Seller, 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 Seller, 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 Seller, 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 Seller, 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 Seller, 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 Seller, 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
Seller, 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 Seller, as applicable, not misleading.
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(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
Seller, 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
Seller, 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 Seller, as applicable, and the performance by
the Seller or the Conduit Seller, 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 Seller, as
applicable.
(k) The Trustee, the Seller and the Conduit Seller 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 Seller, as applicable, is not
insolvent, nor will it be made insolvent by the transfer of the Home Equity
Loans, nor is the Seller or the Conduit Seller, as applicable, aware of any
pending insolvency.
(m) The Seller or the Conduit Seller, 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 Seller, as applicable, did not sell
any interest in any Home Equity Loan with any intent to hinder, delay or
defraud any of its creditors.
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(o) To the best knowledge of the Seller and the Conduit Seller, as
applicable, no material adverse change affecting any security for the Class A
Certificates has occurred prior to delivery of and payment for the Class A
Certificates.
(p) The Seller or the Conduit Seller, 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
Seller, as applicable, or its obligations under the Operative Documents.
(q) To the best knowledge of the Seller or the Conduit Seller, as
applicable, there has been no material adverse change in any information
submitted by the Seller or the Conduit Seller, as applicable, in writing to
the Certificate Insurer with respect to the transactions contemplated by this
Agreement (unless such information was subsequently supplemented in writing
to the Certificate Insurer).
(r) The sale, transfer, assignment and conveyance of Home Equity
Loans by the Seller or the Conduit Seller, 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 Seller, 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 Seller, as applicable. The
Seller or the Conduit Seller, as applicable, shall pay, and otherwise
indemnify and hold the Certificate Insurer harmless, on an after-tax basis,
from and against any and all such Transfer Taxes (it being understood that
the Certificate Insurer shall have no obligation to pay 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
Seller, 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
Seller, the Servicer, the Certificate Insurer, 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 or of the Certificate Insurer 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
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parties or such time as a situation resulting from an existing statement
which is untrue materially and adversely affects the interests of the Owners
or of the Certificate Insurer, 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; PROVIDED, HOWEVER, that if CHEC can establish to the reasonable
satisfaction of the Certificate Insurer that it is diligently pursuing
remedial action, the period of time in which CHEC must substitute a Qualified
Replacement Mortgage or purchase such Home Equity Loan may be extended with
the written approval of the Certificate Insurer. 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, the Trustee on behalf of the Owners
and the Certificate Insurer. 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 and
the Certificate Insurer 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
either REMIC created hereunder or otherwise subject the Trust or either REMIC
created hereunder to tax and would not jeopardize the status of either REMIC
created hereunder as a REMIC (a "REMIC Opinion") addressed to the Trustee and
the Certificate Insurer and acceptable to the Certificate Insurer and the
Trustee. CHEC shall also deliver an Officer's Certificate to the Trustee and
the Certificate Insurer 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
and the Certificate Insurer 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 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, the Certificate Insurer and the Owners
that as of the Startup Day (or the Replacement Cut-Off Date, with respect to
a Qualified Replacement Mortgage):
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(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 Seller 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 517 Properties that are condominiums, townhouses, manufactured
housing, two-to-four family residential dwellings or PUDs), and no more
than 1.10% and 0.97%, 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 7.00% per annum and the Note
related to each Home Equity Loan in Group II bears a current Coupon
Rate of at least 7.80% 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 579 Home Equity Loans, representing approximately 12.25% of the
aggregate Loan Balance of the
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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 or the Conduit Seller, as applicable,
to the Depositor and by the Depositor to the Trustee herein
contemplated, the Seller, the Conduit Seller 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 Seller, 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, 0.2% of the Home Equity Loans are
between 30 and 46 days Delinquent and none of the Home Equity Loans is
more than 46 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
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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 Riegle
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, or (b) 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
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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 Seller 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 0.23% 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 Seller (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 the Certificate Insurer 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;
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(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;
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(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
Seller nor the Conduit Servicer, 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 or the
Certificate Insurer;
(xli) No more than 2.54% and 2.50% 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
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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 2.0% 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 Seller nor
the Conduit Servicer, 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
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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 Seller, 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 Seller, 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, the Certificate
Insurer 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 December 1, 2030.
(lx) The first date on which the applicable Mortgagor must
make a payment on each Home Equity Loan is no later than January 1,
2001; and
(lxi) With respect to each Home Equity Loan that is a Second
Mortgage Loan:
(a) The related Senior Lien does not provide for
negative amortization.
(b) None of the Servicer, the Seller, the Conduit
Seller or the Conduit Servicer, as applicable, has received,
or is aware of, a notice of default of any Senior Lien which
has not been cured.
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(c) 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 Seller, the Servicer, the Certificate Insurer, 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 or the Certificate Insurer 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 Seller 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 Seller 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 Seller shall be deemed
to have granted to the Depositor and the
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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 2000-D, without recourse") and signed by
manual signature of the Seller or the Conduit Seller, 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 or (2) if title insurance is not available
in the applicable state, the attorney's opinion of title, (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 the Conduit Seller, 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 the Conduit Seller, 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 the Conduit Seller, as applicable, to "Bank One, National
Association, as Trustee of Centex Home Equity Loan Trust 2000-D under
the Pooling and Servicing Agreement dated as of December 1, 2000" 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 and the Certificate Insurer,
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,
the Certificate Insurer 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)
reasonable direction by the Certificate Insurer, (ii) the occurrence of
a Servicer Termination Event, (iii) 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
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Mortgage, or (iv) the occurrence of a bankruptcy or insolvency relating
to the Seller or the Conduit Seller, as applicable;
(iii) deliver the title insurance policy or title searches,
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 Conduit
Seller, within one year after the Startup Day; and
(iv) furnish to the Trustee, the Certificate Insurer 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 form and substance satisfactory to the Certificate Insurer.
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, and shall inform the Certificate Insurer, in writing, of its
failure to prepare such Mortgage assignments. Thereafter, the Custodian, on
behalf of the Trustee, shall
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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. A copy
of such notice shall be sent by the Custodian, on behalf of the Trustee to
the Certificate Insurer and the Trustee. 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;
PROVIDED, HOWEVER, that if as of the end of such 20th calendar month CHEC
demonstrates to the satisfaction of the Certificate Insurer that it is
exercising its best efforts to obtain such completed assignment and, during
each month thereafter until such completed assignment is delivered to the
Custodian, on behalf of the Trustee, CHEC continues to demonstrate to the
satisfaction of the Certificate Insurer that it is exercising its best
efforts to obtain such completed assignment, the related Home Equity Loan
will not be deemed to have breached such representation. 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) [reserved].
(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
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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 and the Certificate Insurer. The Trustee
agrees, for the benefit of the Owners and the Certificate Insurer,
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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 Seller, the Servicer, the Trustee and the Certificate
Insurer 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, the Owners and the Certificate Insurer. 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
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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 or the Certificate Insurer, 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 and to the Certificate Insurer 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 either REMIC I or REMIC II 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 either REMIC I or REMIC II 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 Seller, the Servicer, the Trustee and the Certificate Insurer (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 Certificate
Insurer and the Trustee (to the e-mail addresses specified by the recipients)
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.
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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 Seller, 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
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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 & Lavan LLP, 180 Maiden Lane, New York, New York 10038
(or at such other location acceptable to the Seller), the Seller and the
Conduit Seller 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 Depositor will cause
the Certificate Insurance Policy to be delivered to the Trustee and the
Trustee will deliver (i) to the Underwriters (as designee of the Depositor),
the Class A 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
Seller), Class R Certificates registered in the name of CHEC Residual
Corporation, a Nevada corporation, and the Class X-IO Certificates,
registered in the name of CHEC Residual Corporation, a Nevada corporation
(all such events shall be referred to herein as the "Closing").
END OF ARTICLE IV
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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 and except for the rights of the Trustee on behalf
of the Owners of the Class A Certificates with respect to the Certificate
Insurance Policy). The Class A Certificates are payable solely from payments
received on or with respect to the Home Equity Loans (net of the Servicing
Fees, Trustee Fees, and Premium Amounts), from moneys in the Principal and
Interest Account, except as otherwise provided herein, from earnings on
moneys and the proceeds of property held as a part of the Trust Estate and,
upon the occurrence of certain events, from Insured Payments. 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, and certain related
Insured Payments, PRO RATA in accordance with such Owner's Percentage
Interest.
(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 X-IO
Certificates and the Class R Certificates shall be in substantially the forms
set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, B 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.
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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 Certificate Insurer, 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 with the consent of the Certificate Insurer,
such Owners shall give the Trustee, the Certificate Insurer 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.
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(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 Class A Certificates be registered so as
to participate in a global book-entry system with the Depository, as set
forth herein. Each Class of Class A Certificates shall, except as otherwise
provided in Subsection (h), be initially issued in the form of a single fully
registered Class A Certificate of such Class. Upon initial issuance, the
ownership of each such Class A 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 and Class A-7 Certificates shall be issued in
denominations of $1,000 and integral multiples of $1 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 Class A Certificates registered in the Register
in the name of Cede & Co., as nominee of the Depository, the Depositor, the
Servicer, the Seller, the Certificate Insurer and the Trustee shall have no
responsibility or obligation to Direct or Indirect Participants or beneficial
owners for which the Depository holds Class A Certificates from time to time
as a Depository. Without limiting the immediately preceding sentence, the
Depositor, the Servicer, the Sellers, the Certificate Insurer 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 Class A
Certificates, (ii) the delivery to any Direct or Indirect Participant or any
other Person, other than a registered Owner of a Class A Certificate as shown
in the Register, of any notice with respect to the Class A Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a registered Owner of a Class A Certificate as shown in the
Register, of any amount with respect to any distribution of principal or
interest on the Class A Certificates. No Person other than a registered Owner
of a Class A Certificate as shown in the Register shall receive a certificate
evidencing such Class A 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 Class A 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.
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(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 Class A 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 Class A 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 Class A
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
Class A 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 Class A Certificates may be
registered in whatever name or names registered Owners of Class A
Certificates transferring Class A Certificates shall designate, in accordance
with the provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Class A Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Class A Certificates and all notices with respect to such
Class A 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 and the Certificate Insurer 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.
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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 Certificate Insurer, 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 Certificate Insurer, 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).
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(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 and the Certificate Insurer, the
Trustee or the Depositor shall require a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Depositor, the
Trustee and the Certificate Insurer 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 and laws or is being made pursuant
to said Securities Act and laws, which Opinion of Counsel shall not be an
expense of the Depositor, the Trustee, the Trust Estate or the Certificate
Insurer; 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, the Trust Estate or the
Certificate Insurer. 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 Certificate Insurer, 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 and the Certificate
Insurer (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 and the
Certificate Insurer, which Opinion of Counsel shall not be at the expense of
either the Depositor, the Trustee, the Certificate Insurer 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 and the Certificate Insurer 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 Seller,
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the payment in partial consideration for the Home Equity Loans sold by the
applicable Seller or in payment of the Deferred Purchase Price (as defined in
the Conduit Warehouse Facility) by the Conduit Seller to CHEC on the Startup
Day and (2) the contemporaneous transfer of such Certificates to CHEC
Residual Corporation, a Nevada corporation.
(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 Corporation, a Nevada corporation 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 either REMIC I or REMIC II 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
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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 Class A
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) a Class A 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 or from Insured Payments 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 and no Insured Payment 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.
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(e) Any money held by the Trustee or a Paying Agent in trust for the
payment of any amount due with respect to any Class A 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, first to the Certificate Insurer on account of any
Reimbursement Amount and second to the Depositor; and the Owner of such Class
A Certificate shall thereafter, as an unsecured general creditor, look only
to the Depositor and not to the Certificate Insurer 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 Certificate Insurer on account of any Reimbursement Amount or 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 the Certificate Insurer and, upon written request of the
Certificate Insurer or, with the consent of the Certificate Insurer, 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 (with the consent of the
Certificate Insurer) or the Certificate Insurer, 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)(x).
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(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
Certificate Insurer or 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 Certificate Insurer or 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 Certificate Insurer or the Owners of a majority of the
Voting Rights represented by the Certificates then Outstanding with the
consent of the Certificate Insurer (unless a Certificate Insurer Default
under clause (a) of the definition thereof has occurred and is continuing);
PROVIDED, FURTHER, HOWEVER, that if there is a dispute with respect to
payments under the Certificate Insurance Policy the Trustee's first
responsibility is to the Owners.
(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;
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(iv) dissolve or liquidate the Trust in whole or in part,
except pursuant to Article IX hereof; or
(v) (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 the Certificate Insurance
Policy, 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;
(5) as long as any Class A Certificates are Outstanding or any
Reimbursement Amounts are owed to the Certificate Insurer, the
Certificate Insurer has consented in writing thereto (unless a
Certificate Insurer Default as defined in clause (a) of the
definition thereof has occurred and is continuing); and
(6) 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
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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.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Owners, each representing
less than a majority of the applicable Class of Certificates and each
conforming to paragraphs (1)-(6) of this Section 6.07, the Certificate
Insurer in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provision of this Agreement.
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, the Certificate Insurer 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, the Certificate Insurer 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, the
Certificate Insurer or to the Owners may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee, the Certificate Insurer,
or by the Owners, as the case may be.
Section 6.11. CONTROL BY OWNERS.
The Certificate Insurer or the Owners of a majority of the Voting
Rights represented by the Certificates then Outstanding with the consent of
the Certificate Insurer 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:
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(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 (and which does not require Certificate Insurer
consent or direction pursuant to the terms of this Agreement);
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, the
Certificate Insurer 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, the Certificate Insurer 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, the Certificate Insurer 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, the Certificate Insurer 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
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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 or the Certificate
Insurance Policy, including (a) 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 and (b) Insured Payments. 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 the Certificate Insurer; and (ii) in the case of the Supplemental
Interest Reserve Fund, the Owners of the Class A-7 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), for each Home Equity Loan Group from
amounts deposited in the Certificate Account pursuant to subsection (a) for
the related Home Equity Loan Group in the following order of priority, and
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each such allocation, transfer and disbursement shall be treated as having
occurred only after all preceding allocations:
(i) Concurrently, to the Trustee and the Certificate Insurer,
the Trustee Fee and any Transition Expenses for the related Home Equity
Loan Group to the Trustee and, provided that no Certificate Insurer
Default as defined in clause (a) of the definition thereof has occurred
and is continuing, the Premium Amount for the related Classes of Class
A Certificates for the Distribution Date to the Certificate Insurer.
(ii) To the related Classes of Class A Certificates, the
related Current Interest for the Classes (on a pro rata basis based on
each Class A Certificate's Current Interest without priority among the
Class A Certificates) for the Distribution Date.
(iii) To the related Classes of Class A Certificates, an
amount up to the related Class A Principal Distribution Amount in the
following order of priority:
(A) With respect to the Home Equity Loan Group
relating to the Group I Certificates, the Class A Principal
Distribution Amount applicable to the Group I Certificates
shall be distributed as follows:
(1) To the Certificateholders of the Class
A-6 Certificates, an amount equal to the Class A-6
Lockout Distribution Amount until the Certificate
Principal Balance of the Class A-6 Certificates has
been reduced to zero; and
(2) The remainder as follows: first, to the
Class A-1 Certificateholders until the Certificate
Principal Balance of the Class A-1 Certificates is
reduced to zero; second, to the Class A-2
Certificateholders until the Certificate Principal
Balance of the Class A-2 Certificates is reduced to
zero; third, to the Class A-3 Certificateholders
until the Certificate Principal Balance of the Class
A-3 Certificates is reduced to zero; fourth, to the
Class A-4 Certificateholders until the Certificate
Principal Balance of the Class A-4 Certificates is
reduced to zero; fifth, to the Class A-5
Certificateholders until the Certificate Principal
Balance of the Class A-5 Certificates is reduced to
zero; and sixth to the Class A-6 Certificateholders
until the Certificate Principal Balance of the Class
A-6 Certificates has been reduced to zero;
provided, however, during the continuance of a Certificate
Insurer Default, if there is a Collateralization Deficit with
respect to the Group I Certificates, then the Class A
Principal Distribution Amount applicable to the Group I
Certificates shall be distributed pro rata to the
Certificateholders of the Group I Certificates.
(B) With respect to the Home Equity Loan Group
relating to the Group II Certificates, the Class A Principal
Distribution Amount applicable to the Group
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II Certificates shall be distributed to the Certificateholders
of the Class A-7 Certificates, until the Certificate Principal
Balance of the Class A-7 Certificates is reduced to zero.
(iv) Concurrently, to the Trustee and the Certificate Insurer,
any unpaid Trustee Fee and any unpaid Transition Expenses for the
unrelated Home Equity Loan Group to the Trustee and, provided that no
Certificate Insurer Default as defined in clause (a) of the definition
thereof has occurred and is continuing, any unpaid Premium Amount for
the unrelated Class or Classes of Class A Certificates for the
Distribution Date to the Certificate Insurer.
(v) To the Classes of Class A Certificates with respect to the
unrelated Home Equity Loan Group, the amount of the Available Funds
Shortfall with respect to the unrelated Home Equity Loan Group,
allocated to Current Interest on such Classes (on the same pro rata
basis as provided in clause (ii) above), to the extent of any shortfall
in Current Interest, and then to principal (allocated in the same order
of priority as provided in clause (iii) above);.
(vi) To the Certificate Insurer, in the following order of
priority, the sum of:
(1) Any Reimbursement Amount owed to the Certificate
Insurer with respect to the related Classes of Class A
Certificates; provided that if a Certificate Insurer Default
as defined in clause (a) of the definition thereof has
occurred and is continuing, then the priority of this
allocation shall follow immediately after clause (vii) below;
and
(2) Any unpaid Reimbursement Amount owed to the
Certificate Insurer with respect to the unrelated Classes of
Class A Certificates; provided that if a Certificate Insurer
Default as defined in clause (a) of the definition thereof has
occurred and is continuing, then the priority of this
allocation shall follow immediately after clause (viii) below.
(vii) To the Classes of Class A Certificates with respect to
the related Home Equity Loan Group, an amount up to the Extra Principal
Distribution Amount for the related Home Equity Loan Group, until the
related Target Overcollateralization Amount is reached, such amounts to
be applied in reduction of the related Certificate Principal Balances
in the same order of priority as the Class A Principal Distribution
Amount is to be so applied for such related Home Equity Loan Group
pursuant to clause (iii) above.
(viii) To the Classes of Class A Certificates with respect to
the unrelated Home Equity Loan Group, an amount equal to any Target
Deficiency for such unrelated Home Equity Loan Group remaining after
the distributions above with respect to the unrelated Home Equity Loan
Group, such amounts to be applied in reduction of the related
Certificate Principal Balances in the same order of priority as the
Class A Principal
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Distribution Amount is to be so applied for such unrelated Home Equity
Loan Group pursuant to clause (iii) above.
(ix) To the Class X-IO Certificate, the lesser of the Class
X-IO Distribution Amount and the Class A-7 Certificateholders' Interest
Index Carryover, provided that, pursuant to Section 7.04 hereof, on any
Distribution Date as to which there is any unpaid Class A-7
Certificateholders' Interest Index Carryover, the Trustee will
transfer, from amounts that would otherwise be distributable to the
Class X-IO Certificates pursuant to this clause, the amount of any
Class A-7 Certificateholders' Interest Index Carryover into the
Supplemental Interest Reserve Fund, for immediate transfer pursuant to
this clause to the Class A-7 Certificates as payment of the Class A-7
Certificateholders' Interest Index Carryover.
(x) 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 (i) or (iv) above.
(xi) To the Servicer to the extent of any unreimbursed
Delinquency Advances, unreimbursed Servicing Advances and unreimbursed
Compensating Interest.
(xii) To the Class X-IO Certificates, an amount equal to the
Class X-IO Distribution Amount less any amounts thereof applied
pursuant to clause (ix) 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 Class A
Certificates of the related Home Equity Loan Group, such amounts to be
applied in reduction of the Certificate Principal Balance of such
Classes in the same order of priority as the Class A Principal
Distribution Amount is to be applied for such related Home Equity Loan
Group pursuant to clause (iii) above, and then to the Classes of Class
A Certificates of the unrelated Home Equity Loan Group, such amounts to
be applied in reduction of the Certificate Principal Balance of such
Classes in the same order of priority as the Class A Principal
Distribution Amount is to be applied for such unrelated Home Equity
Loan Group pursuant to clause (iii) above.
(xiii) To the Class R Certificates, the remainder.
(c) Reserved.
(d) Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Distribution Dates to the Owners of the related
Class A Certificates on account of principal pursuant to Section 7.03(b)
shall not exceed the original Certificate Principal Balance of the related
Class A Certificates.
(e) Upon receipt of Insured Payments from the Certificate Insurer on
behalf of Owners of the Class A Certificates, the Trustee shall deposit such
Insured Payments in the Policy Payments Account. On each Distribution Date,
pursuant to Section 12.02(b) hereof, such
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amounts will be transferred from the Policy Payments Account to the
Certificate Account and the Trustee shall distribute such Insured Payments,
or the proceeds thereof, to the Owners of such Class A Certificates, first,
to the payment of any unpaid Current Interest for such Class or Classes of
Class A Certificates on a pro rata basis, and second, any remaining
Guaranteed Distributions shall be applied to the related Class A Principal
Distribution Amount on the related Distribution Date, in the same order of
priority as described in Section 7.03(b)(iii).
(f) The Trustee or Paying Agent shall (i) receive for each Owner of
the Class A Certificates any Insured Payment from the Certificate Insurer and
(ii) disburse the same to the Owners of the related Class A Certificates as
set forth in Section 7.03(e). Insured Payments disbursed by the Trustee or
Paying Agent from proceeds of the Certificate Insurance Policy shall not be
considered payments by the Trust, nor shall such payments discharge the
obligation of the Trust with respect to such Class A Certificates and the
Certificate Insurer shall be entitled to receive the Reimbursement Amount
pursuant to Section 7.03(b) hereof. Nothing contained in this paragraph shall
be construed so as to impose duties or obligations on the Trustee that are
different from or in addition to those expressly set forth in this Agreement.
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
Class A 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 Current WAC Excess or Class A-7
Certificateholders' Interest Index Carryover, the Trustee has been directed
to, and shall therefore, deposit into the Supplemental Interest Reserve
Account an amount equal to the Current WAC Excess of the Current Interest on
the Class A-7 Certificates which is payable pursuant to Section 7.03(b)(ii),
and/or the Class A-7 Certificateholders' Interest Index Carryover pursuant to
Section 7.03(b)(ix). If no Current WAC Excess or Class A-7
Certificateholders' Interest Index Carryover 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)
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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 Class A-7 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 Class A-7 Certificateholders. Upon the termination of the Trust, or
the payment in full of the Class A-7 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 either REMIC I or REMIC II and any payments to the
Class A-7 Certificates of Current WAC Excess and Class A-7
Certificateholders' Interest Index Carryover 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 and the Certificate Insurer 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).
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(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:
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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, (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 Certificate Insurer, 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 106%.
(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
and the Certificate Insurer;
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.
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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, each Owner and the
Certificate Insurer, 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 A Distribution Amount, with respect to each Class
individually, and all Classes in the aggregate on the next
Distribution Date;
(3) The amount of any Extra Principal Distribution Amount for
each Group;
(4) The amount of any Insured Payment to be made by the
Certificate Insurer on such Distribution Date;
(5) The application of the amounts described in clauses (1), (3)
and (4) above to be made on such Distribution Date in
accordance with Section 7.03 hereof;
(6) The Certificate Principal Balance of each Class, the aggregate
amount of the principal of each Class of the Class A
Certificates to be paid on such Distribution Date and the
remaining Certificate Principal Balance of each Class of Class
A Certificates following any such payment;
(7) The amount, if any, of any Realized Losses for each Group for
the related Remittance Period; and
(8) The amount of any Collateralization Deficit, any
Overcollateralization Release Amount and the Target
Overcollateralization Amount for each Group.
Section 7.09. REPORTS BY TRUSTEE TO OWNERS AND CERTIFICATE INSURER.
(a) On each Distribution Date the Trustee shall transmit a report in
writing to each Owner, the Underwriters, the Depositor, the Certificate Insurer,
Standard & Poor's, Moody's 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 with respect to Group I and Group II (based
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on a Certificate in the original principal amount of $1,000) and any
related Extra Principal Distribution 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) if the distribution to the Owners of any Class of the
Class A Certificates on such Distribution Date was less than the
related Class A Distribution Amount on such Distribution Date, the
related Carry-Forward Amount and the allocation thereof to the related
Classes of Class A Certificates resulting therefrom;
(v) the amount of any Insured Payment included in the amounts
distributed to the Owners of Class A Certificates on such Distribution
Date;
(vi) the principal amount of each Class of Class A 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, Target
Overcollateralization Amount and Collateralization Deficit for each
Group, 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 the Certificate Insurer or 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) the Class A-7 Certificate Rate for the related
Distribution Date;
(xvi) the Class A-7 Certificateholders' Interest Index
Carryover paid to the Owners of the Class A-7 Certificates for such
Distribution Date and any Class A-7 Certificateholders' Interest Index
Carryover remaining unpaid;
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(xvii) the Class A-1 Certificate Rate for the related
Distribution Date;
(xviii) the Class A-2 Certificate Rate for the related
Distribution Date;
(xix) the Class A-3 Certificate Rate for the related
Distribution Date;
(xx) the Class A-4 Certificate Rate for the related
Distribution Date;
(xxi) the Class A-5 Certificate Rate for the related
Distribution Date;
(xxii) the Class A-6 Certificate Rate for the related
Distribution Date;
(xxiii) the Group I Net WAC Cap, the Group II Net WAC Cap and
the Class A-7 Available Funds Cap for such Distribution Date; and
(xxiv) the Reimbursement Amount, if any, for such
Distribution 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 Certificate Insurer, the Underwriters, Standard
& Poor's, Moody's 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;
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(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;
(viii) the Annual Loss Percentage (Rolling Twelve Month) with
respect to such Distribution Date; and
(ix) the 90+ Delinquency Percentage (Rolling Three Month)
with respect to such Distribution Date.
The Trustee shall forward such report (together with the information
described in (a) above) concurrently with each distribution to the
Certificateholders, the Rating Agencies and the Certificate Insurer.
(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.
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Section 7.10. REPORTS BY TRUSTEE.
(a) The Trustee shall report to the Depositor, the Seller, the
Certificate Insurer 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, any Owner or the Certificate Insurer 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, any Owner or the
Certificate Insurer, transmit promptly to the Depositor, the Seller, any
Owner and the Certificate Insurer copies of all accountings of receipts in
respect of the Home Equity Loans furnished to it by the Servicer and shall
notify the Seller and the Certificate Insurer if any Monthly Remittance
Amount has not been received by the Trustee when due.
(b) The Trustee shall report to the Certificate Insurer and 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 www.abs.bankone.com. 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 1-800-524-9472.
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.
END OF ARTICLE VII
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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
to the extent any instrument described in clause (i) preceding would be
delivered by the Servicer outside of its usual procedures for home equity
loans held in its own portfolio the Servicer shall, prior to executing and
delivering such instrument, obtain the prior written consent of the
Certificate Insurer, and PROVIDED, FURTHER, 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 final proviso of the preceding sentence shall take effect upon
(i) the receipt by the Servicer of written notice thereof from the Trustee,
(ii) a Servicer Termination Event or (iii) the termination of the Trust. The
Trustee shall at the written
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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 and, if requested by the Certificate Insurer, the Certificate
Insurer, 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 and the
Certificate Insurer 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.
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 (i) notify the Certificate Insurer
on a monthly basis of all Home Equity Loans for which any deferment has been
granted and the terms of such deferment and the number of times that
particular Home Equity Loan has been deferred to date (including the current
deferment) and (ii) 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. The Servicer shall not consent to any such deferment with
respect to the same Note more than once in any 12 month period or more than 3
times during the life of the Home Equity Loan unless the Certificate Insurer
has been given written notice of such proposed action and its consent has
been obtained or it has failed to object within ten days of receipt.
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Section 8.03. SUB-SERVICING AGREEMENTS BETWEEN SERVICER AND
SUB-SERVICERS.
The Servicer may, with the prior written consent of the Certificate
Insurer and the Trustee, enter into Sub-Servicing Agreements for any
servicing and administration of Home Equity Loans with any institution which
is acceptable to the Certificate Insurer and 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, the Certificate Insurer 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 Class A 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 and the Certificate Insurer 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, the Certificate Insurer 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, the Certificate Insurer 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
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compliance with the terms of this Agreement. The Servicer shall immediately
notify the Trustee, the Depositor, the Certificate Insurer 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 and the Certificate
Insurer) 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, the Certificate Insurer 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, with the consent of
the Certificate Insurer, and shall, at the direction of the Certificate
Insurer, 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 Financial
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Security Assurance Inc. and the Owners of the Centex Home Equity Loan Trust
2000-D 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,
the Certificate Insurer 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 and
the Certificate Insurer. 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.
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(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, the Depositor and the Certificate Insurer, 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 and any other information requested by the Certificate Insurer
(including, without limitation, a liquidation report with respect to each
Liquidated Loan). In addition, the Servicer shall inform the Trustee and the
Certificate Insurer 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. The Servicer shall deliver copies of the monthly statement for
the Principal and Interest Account to the Certificate Insurer promptly upon
receipt thereof.
(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.
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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 and the Certificate Insurer; 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)(xi). 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)(xi).
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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 as provided in
Section 7.03(b)(xi).
(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 (i) the aggregate principal balance of all such
Home Equity Loans so repurchased would not exceed 5% of the Original
Aggregate Loan Balance (unless otherwise consented to in writing by the
Certificate Insurer) and (ii) the Servicer has delivered to the Trustee and
the Certificate Insurer at the Servicer's expense, an Opinion of Counsel
acceptable to the Certificate Insurer and 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
REMIC I or REMIC II 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) If a Home Equity Loan to be purchased by the Servicer pursuant
to clause (b) above is the greatest number of days Delinquent of all then
Delinquent Home Equity Loans (including Home Equity Loans relating to REO
Property), the Servicer may purchase such Home Equity Loan without having
first notified the Certificate Insurer of such purchase. In all other cases,
the Servicer must notify the Certificate Insurer and the Trustee, in writing,
of its intent to purchase a Home Equity Loan pursuant to clause (b) above and
the Servicer may not purchase such Home Equity Loan without the written
consent of the Certificate Insurer.
(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
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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 Moody's 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 and the
Certificate Insurer out of the Servicer's own funds for any loss to the Trust
or the Certificate Insurer 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 or of the Certificate Insurer, 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
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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; PROVIDED, HOWEVER, that to the
extent any such substitution of liability agreement would be delivered by the
Servicer outside of its usual procedures for home equity loans held in its
own portfolio the Servicer shall, prior to executing and delivering such
agreement, obtain the prior written consent of the Certificate Insurer. 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
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such price as the Servicer in good faith deems necessary to comply with this
covenant unless the Servicer obtains for the Certificate Insurer and 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 Certificate Insurer and the Trustee, addressed to the Certificate
Insurer, 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 either REMIC
as defined in Section 860F of the Code or cause either 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 either 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. The Servicer shall not take any such action with respect to any
Property known by the Servicer to contain such wastes or substances or to be
within one mile of the site of such wastes or substances, without the prior
written consent of the Certificate Insurer.
(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 Certificate Insurer in substantially the form of
Exhibit N hereto, provided that such form is acceptable to the Certificate
Insurer.
(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
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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 Class A
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 (upon receiving the prior
written consent of the Certificate Insurer) 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% unless approved in writing by the
Certificate Insurer; 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
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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. The Servicer shall notify the
Certificate Insurer and the Rating Agencies if an application is approved
under clause (y) above without approval in writing by the Certificate Insurer.
(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;
provided, however, that no more than 5% of the outstanding Home Equity Loans
(by number) shall be released to the Servicer at any time without the consent
of the Certificate Insurer. 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, the Certificate Insurer 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
Certificate Insurer, the Depositor, and the Rating Agencies, on or before
July 31 of each year, commencing in 2001, an Officer's Certificate stating,
as to each signer thereof, that (i) a review of the activities
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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, the
Certificate Insurer 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 2001, 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
Certificate Insurer, the Depositor, and the Rating Agencies a letter or
letters of a firm of independent, nationally recognized certified public
accountants reasonably acceptable to the Certificate Insurer 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 and the Certificate
Insurer 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 and the Certificate Insurer at such
other times as the Trustee or the Certificate Insurer 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 and the Certificate Insurer,
which such consent shall not be unreasonably withheld; PROVIDED, HOWEVER,
that any
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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 Certificate Insurer or the Trustee (with the prior written
consent of the Certificate Insurer) 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 action 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) after the earlier of (a) actual knowledge of an officer of
the Servicer or (b) receipt of notice from the Trustee or the
Certificate Insurer of said failure; PROVIDED, HOWEVER, that if the
Servicer can demonstrate to the reasonable satisfaction of the
Certificate Insurer that it is diligently pursuing remedial action,
then the cure period may be extended with the written approval of the
Certificate Insurer; or
(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 or the Certificate Insurer which remains
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unremedied for a period of sixty (60) days after the earlier of the
Servicer's discovery or receipt of notice thereof; PROVIDED, HOWEVER,
that if the Servicer can demonstrate to the reasonable satisfaction of
the Certificate Insurer that it is diligently pursuing remedial action,
then the cure period may be extended with the written approval of the
Certificate Insurer; 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 $15,000,000 (as determined in
accordance with generally accepted accounting principles), (C) is
consented to by the Certificate Insurer (such consent not to be
unreasonably withheld) and (D) agrees to assume the Servicer's
obligations hereunder; or
(vi) The Certificate Insurer notifies the Trustee of an
Event of Default under the Insurance Agreement; or
(vii) 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
(viii) Centex Corporation or its successors shall fail to own,
directly or indirectly, at least 51% of the Servicer unless (a) the
Servicer shall be rated at least investment grade by each of Standard &
Poor's and Moody's and if rated by Fitch, by Fitch or (b) the Servicer
shall have at all times committed financing capacity in a total amount
of at least three times the Servicer's average loan originations funded
during the immediately preceding three calendar months.
(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 Certificate Insurer or the Trustee (with the prior written consent of the
Certificate Insurer) 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, or on the last day of the servicing term as provided in subsection
(c), the Trustee (or another successor Servicer appointed by the Certificate
Insurer) 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. The
Certificate Insurer may appoint
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a successor Servicer other than the Trustee. Until a successor Servicer has
been appointed by the Certificate Insurer, 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) Following the Servicer's receipt of written notice of the
occurrence of a Servicer Termination Event or the failure of the Servicer to
satisfy the Servicer Termination Test, the Servicer shall act as the Servicer
hereunder for a term commencing on the date the Servicer has received notice
from the Certificate Insurer of such failure and expiring on the date that is
the last day of the calendar quarter in which such notice is received by the
Servicer (the "Initial Term"). Thereafter, the Initial Term shall be
extendible in the sole discretion of the Certificate Insurer by written
notice (each, a "Servicer Extension Notice") of the Certificate Insurer (or
the Trustee if a Certificate Insurer Default then exists) for successive
terms of one calendar quarter. Each such term is subject to termination in
accordance with Section 8.20(b) hereof. Each Servicer Extension Notice shall
be delivered by the Certificate Insurer to the other parties to this
Agreement. The Servicer hereby agrees that upon the receipt of any Servicer
Extension Notice, the Servicer shall be bound for the duration of the term
covered by any Servicer Extension Notice to act as the Servicer, subject to
and in accordance with this Agreement. The Trustee agrees that if, as of the
fifteenth day prior to the last day of any servicing term, the Trustee shall
not have received a Servicer Extension Notice from the Certificate Insurer,
the Trustee shall, within five days thereafter, give written notice of such
non-receipt to the Certificate Insurer and the Servicer. The failure of the
Certificate Insurer to deliver a Servicer Extension Notice by the end of any
servicing term shall result in automatic termination of the Servicer.
(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 Certificate Insurer and the Trustee. Any such
determination under clause (i) shall be evidenced by an Opinion of Counsel
acceptable to the Trustee and the Certificate Insurer at the expense of the
Servicer to such effect which shall be delivered to the Trustee and the
Certificate Insurer.
(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,
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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 or the expiration of
a servicing term pursuant to subsection (c) hereof, the Trustee (A) may,
unless the Certificate Insurer has appointed a successor Servicer other than
the Trustee, solicit bids for a successor Servicer as described below and (B)
until such time as another successor Servicer is appointed by the Certificate
Insurer, 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 Certificate
Insurer may appoint a successor Servicer other than the Trustee. If the
Certificate Insurer fails to appoint a successor 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 (or such lower level as may be acceptable to the Certificate
Insurer), as determined in accordance with generally accepted accounting
principles, and acceptable to the Certificate Insurer 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, the Certificate Insurer 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
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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 provided that the Certificate
Insurer has given its prior written consent. 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,
the Owners and the Certificate Insurer 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.
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(m) The Trustee shall give notice to the Certificate Insurer, 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 BY CERTIFICATE INSURER; ERRORS AND
OMISSIONS INSURANCE.
(a) At any reasonable time and from time to time upon reasonable
notice, the Trustee, the Certificate Insurer, 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, the Certificate
Insurer 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.
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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 the Certificate Insurer, 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 Certificate Insurer and 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 into which the Servicer may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party or any corporation 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 meets
the qualifications set forth in Section 8.20(h) and the resulting corporation
has a Tangible Net Worth of at least $15,000,000.
Section 8.25. NOTICES OF MATERIAL EVENTS. The Servicer shall
give prompt notice to the Certificate Insurer, 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
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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, the Certificate Insurer 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, the Certificate Insurer
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 Certificate Insurer, 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 2001, 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
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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 other than those available under the Certificate Insurance
Policy of all amounts held by the Trustee and required to be paid to such
Owners pursuant to this Agreement and payment in full of all amounts owed to
the Certificate Insurer 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 Joseph P. Kennedy, 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 between the Certificate Insurer, 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 Class A Certificates of their entire principal balance and
interest at their Certificate Rate (and any Carry-Forward Amount other than
any Class A-7 Certificateholders' Interest Index Carryover)), 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;
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(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 and payment of all amounts owed to the Certificate
Insurer, 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
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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
Class A Certificates shall be entitled to receive the Class X-IO Distribution
Amount, distributable pursuant to Section 7.03(b) (xii) hereof, allocated
among the Classes of Class A Certificates in the order of priority set forth
in Section 7.03(b) (xii) 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 and the
Certificate Insurer 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 Certificate Insurer and the Trustee to the effect that such purchase and
liquidation constitutes a Qualified Liquidation of REMIC I and REMIC II.
(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. TERMINATION UPON LOSS OF REMIC STATUS.
(a) Following a final determination by the Internal Revenue Service
or by a court of competent jurisdiction, in either case from which no appeal
is taken within the permitted time for such appeal, or if any appeal is
taken, following a final determination of such appeal from which no further
appeal can be taken, to the effect that either REMIC created hereunder does
not and will no longer qualify as a REMIC pursuant to Section 860D of the
Code (the "Final Determination"), at any time on or after the date which is
30 calendar days following such Final
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Determination (i) the Certificate Insurer or the Owners of a majority in
Percentage Interests represented by the Class A Certificates then Outstanding
with the consent of the Certificate Insurer may direct the Trustee on behalf
of the Trust to adopt a plan of complete liquidation, as contemplated by
Section 860F(a)(4) of the Code and (ii) the Certificate Insurer may notify
the Trustee of the Certificate Insurer's determination to purchase from the
Trust all (but not fewer than all) Home Equity Loans and all property
theretofore acquired by foreclosure, deed in lieu of foreclosure, or
otherwise in respect of any Home Equity Loan then remaining in the Trust
Estate at a price equal to the Termination Price.
Upon receipt of such direction from the Certificate Insurer, the
Trustee shall notify the Owners of the Class R Certificates of such election
to liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Owners of a majority of the Percentage Interest of
the Class R Certificates then Outstanding may, within 60 days from the date
of receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from the Trust all (but not fewer than all) Home Equity
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Home Equity Loan then remaining
in the Trust Estate at a purchase price equal to the Termination Price. If,
during the Purchase Option Period, the Owners of the Class R Certificates
have not exercised the option described in the immediately preceding
paragraph, then upon the expiration of the Purchase Option Period (i) in the
event that the Certificate Insurer or the Owners of the Class A Certificates
with the consent of the Certificate Insurer have given the Trustee the
direction described in clause (a)(i) above, the Trustee shall sell the Home
Equity Loans and distribute the proceeds of the liquidation of the Trust
Estate, each in accordance with the plan of complete liquidation, such that,
if so directed, the liquidation of the Trust Estate, the distribution of the
proceeds of the liquidation and the termination of this Agreement occur no
later than the close of the 60th day, or such later day as the Certificate
Insurer or the Owners of the Class A Certificates with the consent of the
Certificate Insurer shall permit or direct in writing, after the expiration
of the Purchase Option Period and (ii) in the event that the Certificate
Insurer has given the Trustee notice of the Certificate Insurer's
determination to purchase the Trust Estate described in clause (a)(ii)
preceding the Certificate Insurer shall, within 60 days, purchase all (but
not fewer than all) Home Equity Loans and all property theretofore acquired
by foreclosure, deed in lieu of foreclosure or otherwise in respect of any
Home Equity Loan then remaining in the Trust Estate. 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) Following a Final Determination, the Owners of a majority of the
Percentage Interest of the Class R Certificates then Outstanding may, at
their option and upon delivery to the Certificate Insurer of an Opinion of
Counsel experienced in federal income tax matters, acceptable to the
Certificate Insurer and selected by the Owners of the Class R Certificates,
which opinion shall be reasonably satisfactory in form and substance to the
Certificate Insurer, to the effect that the effect of the Final Determination
is to increase substantially the probability that the gross income of the
Trust will be subject to federal taxation, purchase from the Trust all (but
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not fewer than all) Home Equity Loans and all property theretofore acquired
by foreclosure, deed in lieu of foreclosure, or otherwise in respect of any
Home Equity Loan then remaining in the Trust Estate at a purchase 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.
The foregoing opinion shall be deemed satisfactory unless the Certificate
Insurer gives the Owners of a majority of the Percentage Interest of the
Class R Certificates notice that such opinion is not satisfactory within
thirty days after receipt by the Certificate Insurer of such opinion.
Section 9.04. 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.
Section 9.05. 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
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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 Certificate Insurer, the Sellers or the Depositor hereunder. If
any such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the Certificate
Insurer if it cannot be timely corrected. 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;
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(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 Certificate Insurer or of the Owners
of a majority in Percentage Interest of the Certificates of
the affected Class or Classes and the Certificate Insurer
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.
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(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.
(i) The Trustee hereby agrees to disclose the Premium Amount to
any Person upon request.
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
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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, the Certificate Insurer, or by the Owners of at
least 25% of the aggregate Percentage Interests represented by the
Class A Certificates then Outstanding, or, if there are no Class A
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 Certificate Insurer and 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 (i) the Certificate Insurer or (ii)
with the prior written consent (which shall not be unreasonably withheld) of
the Certificate Insurer, the Depositor and the Owners of a majority of the
Percentage Interests represented by the Class A Certificates then Outstanding
or if there are no Class A 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
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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,
the Certificate Insurer, 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;
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(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 or
the Certificate Insurer (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-E 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, the Certificate
Insurance Policy 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 Certificate Insurer, the Seller 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 Seller, 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
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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, the
Certificate Insurer 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
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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, acceptable to the Certificate Insurer 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, upon
the request of the Certificate Insurer, 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 Certificate Insurer and 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 acceptable to the Certificate Insurer 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 or by the Certificate Insurer, the Certificate Insurer or
the Depositor with the written consent of the Certificate Insurer may
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remove the Trustee and appoint a successor Trustee acceptable to the
Certificate Insurer 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 Class A Certificates with the prior written consent of the Certificate
Insurer, or, if there are no Class A 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 acceptable to the Certificate Insurer by delivering to the Trustee to
be removed, to the successor Trustee so appointed, to the Depositor, to the
Servicer and to the Certificate Insurer, copies of the record of the act
taken by the Owners, as provided for in Section 11.03 hereof.
(e) If the Trustee fails to perform its duties in accordance
with the terms of this Agreement, or becomes ineligible pursuant to Section
10.08 to serve as Trustee, the Certificate Insurer may remove the Trustee and
appoint a successor Trustee by written instrument, in triplicate, signed by
the Certificate Insurer duly authorized, one complete set of which
instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor Trustee so appointed.
(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 acceptable to
the Certificate Insurer. 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 Certificate Insurer or the Owners of a majority of
the Percentage Interests represented by the Class A Certificates then
Outstanding with the consent of the Certificate Insurer, 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
Certificate Insurer, 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, to the
Certificate Insurer 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
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vested with all the rights, powers, trusts, duties and obligations of its
predecessor hereunder; but, on request of the Depositor, the Certificate
Insurer 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 and to the Certificate Insurer. 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
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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 Certificate Insurer, 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.
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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 and reasonably acceptable to the Certificate Insurer 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 and the Certificate Insurer, 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 subject to
reasonable approval of the Certificate Insurer 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, the Certificate Insurer 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
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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 and the Certificate Insurer.
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 acceptable to the Certificate Insurer. 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 and the Certificate Insurer.
END OF ARTICLE X
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ARTICLE XI
MISCELLANEOUS
Section 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Depositor, the Sellers, the
Certificate Insurer or the Owners to the Trustee to take any action under any
provision of this Agreement, the Depositor, each of the Sellers, the
Certificate Insurer 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
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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.
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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 Certificate Insurer, 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.
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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, the Certificate
Insurer 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
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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, Seller, the Conduit Seller 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, either of the Sellers, the Servicer or the
Certificate Insurer or third-party beneficiary hereunder, 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
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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, with the prior written approval of the
Certificate Insurer but 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 Class A Certificates without regard to the Certificate
Insurance Policy. 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, (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 or (c) affect in any manner the terms or provisions of the
Certificate Insurance Policy. The Trustee shall not be required to execute
any amendment or supplement if it affects its rights, duties, immunities or
indemnities.
(b) The Certificate Insurer and 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
either 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, including, without
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limitation, the prior written consent of the Certificate Insurer, 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 Certificate Insurer and 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
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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
either 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 and the Certificate Insurer
(i) to take no action which would result in the termination of REMIC status
for either 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.
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(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, either of 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 acceptable to the
Certificate Insurer to the effect that such transaction does not result in a
tax imposed on the Trust or cause a termination of REMIC status for either
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 acceptable to the Certificate Insurer 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 either REMIC created hereunder or cause a
termination of REMIC status for either 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 either REMIC
created hereunder or cause termination of REMIC status for either 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 Class A 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,
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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. THE CERTIFICATE INSURER.
Any right conferred to the Certificate Insurer hereunder (except for
the Certificate Insurer's right of prior approval of amendments to this
Agreement that affect the Certificate Insurer's right to receive payments or
the priority of such payments to the Certificate Insurer under Section 7.03),
including but not limited to consent rights, shall be suspended and shall run
to the benefit of the Owners and shall be exercisable by a vote of Owners
holding Certificates representing at least a 51% Percentage Interest of all
Class A Certificates during any period in which there exists a Certificate
Insurer Default; PROVIDED, that the right of the Certificate Insurer to
receive the Premium Amount or any Reimbursement Amounts shall not be
suspended if such Certificate Insurer Default was a default other than a
default under clause (a) of the definition thereof. If a Certificate Insurer
Default shall cease to exist, the rights of the Certificate Issuer shall be
immediately restored. At such time as the Class A Certificates are no longer
Outstanding hereunder and the Certificate Insurer has received all
Reimbursement Amounts, the Certificate Insurer's rights hereunder shall
terminate.
Section 11.20. RESERVED.
Section 11.21. THIRD PARTY RIGHTS.
The Trustee, the Sellers, the Servicer, the Depositor and the Owners
agree that the Certificate Insurer shall be deemed a third-party beneficiary
of this Agreement as if it were a party hereto.
Section 11.22. NOTICES.
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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
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Office
Tel: (312) 407-8810
Fax: (312) 407-1708
THE DEPOSITOR: CHEC Funding, LLC
2728 North Harwood
Dallas, Texas 75201
Attention: Jeffrey B. Upperman
Tel: (214) 981-6811
Fax: (214) 756-4580
Attention: Anne E. Sutherland
Tel: (214) 758-7045
Fax: (214) 758-7868
THE SELLER: Centex Credit Corporation d/b/a Centex Home
Equity Corporation
2828 North Harwood
Dallas, Texas 75201
Attention: Jeffrey B. Upperman
Tel: (214) 981-6811
Fax: (214) 756-4580
Attention: Anne E. Sutherland
Tel: (214) 758-7045
Fax: (214) 758-7868
THE CONDUIT SELLER: CHEC Conduit Funding, LLC
2728 North Harwood
Dallas, Texas 75201
Attention: Jeffrey B. Upperman
Tel: (214) 981-6811
Fax: (214) 756-4580
Attention: Anne E. Sutherland
Tel: (214) 758-7045
Fax: (214) 758-7868
THE SERVICER: Centex Credit Corporation d/b/a Centex Home
Equity Corporation
2828 North Harwood
Dallas, Texas 75201
Attention: Jeffrey B. Upperman
Tel: (214) 981-6811
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Fax: (214) 756-4580
Attention: Anne E. Sutherland
Tel: (214) 758-7045
Fax: (214) 758-7868
THE CUSTODIAN: Bank One Trust Company, N.A.
2220 Chemsearch Blvd., Suite 150
Irving, Texas 75062
Attention: Gloria Sadler
Fax: (972) 785-5342
Confirmation: (972) 785-5215
THE CERTIFICATE
INSURER: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Re: Centex Home Equity Loan Trust 2000-B
Tel: (212) 826-0100
Fax: (212) 339-3518 or (212) 339-3529
(in each case in which notice or other
communication to the Certificate Insurer
refers to a Servicer Termination Event, a
claim on the Certificate Insurance Policy or
with respect to which failure on the part of
the Certificate Insurer to respond shall be
deemed to constitute consent or acceptance,
then a copy should also be sent to the
attention of each of the General Counsel and
the Head-Financial Guaranty Group and shall
be marked to indicate "URGENT MATERIAL
ENCLOSED.")
THE UNDERWRITERS: Salomon Smith Barney Inc.
390 Greenwich Street
6th Floor
New York, NY 10013
Attention: Paul Humphrey
Tel: (212) 723-9548
Fax: (212) 723-8591
Banc of America Securities LLC
100 North Tryon Street
11th Floor
NC1-007-11-07
Charlotte, NC 28255
Attention: Michael Schoffelen
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Tel: (704) 386-0932
Fax: (704) 388-9668
Chase Securities Inc.
270 Park Avenue, 7th Floor
New York, New York 10017
Attention: Paul C. Scialabba
Tel: (212) 834-5173
Fax: (212) 834-6564
MOODY'S: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: The Residential Mortgage
Monitoring Department
Tel: (212) 553-0300
Fax: (212) 553-0355
STANDARD & POOR'S: Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies,
Inc.
55 Water Street
41st Floor
New York, New York 10041
Attention: Residential Mortgage Group
Tel: (212) 438-2000
Fax: (212) 438-2661
FITCH: Fitch, Inc.
One State Street Plaza
New York, NY 10004
Section 11.23. 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 11.23 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
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provided pursuant to this Section 11.23 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
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ARTICLE XII
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 12.01. TRUST ESTATE AND ACCOUNTS HELD FOR BENEFIT OF THE
CERTIFICATE INSURER.
The Trustee shall hold the Trust Estate for the benefit of the
related Owners and the Certificate Insurer and all references in this
Agreement and in the Certificates to the benefit of Owners of the
Certificates shall be deemed to include the Certificate Insurer. The Trustee
shall cooperate in all reasonable respects with any reasonable request by the
Certificate Insurer for action to preserve or enforce the Certificate
Insurer's rights or interests under this Agreement and the Certificates.
The Servicer hereby acknowledges and agrees that it shall service
and administer the Home Equity Loans and any REO Properties, and shall
maintain the Principal and Interest Account, for the benefit of the Owners
and for the benefit of the Certificate Insurer, and all references in this
Agreement to the benefit of or actions on behalf of the Owners shall be
deemed to include the Certificate Insurer. Unless a Certificate Insurer
Default exists, the Servicer shall not terminate any Sub-Servicing Agreements
without the prior consent of the Certificate Insurer.
Section 12.02. CLAIMS UPON THE POLICY; POLICY PAYMENTS ACCOUNT
(a) In the event that an Insured Payment becomes due pursuant to the
terms of the Certificate Insurance Policy, the Trustee shall submit a Notice
(in the form attached to the Certificate Insurance Policy) in accordance with
the terms of the Certificate Insurance Policy and in sufficient time that
payment will be made under the Certificate Insurance Policy on the related
Distribution Date.
(b) The Trustee shall establish and maintain a separate special
purpose trust account for the benefit of the Owners of the Class A
Certificates and the Certificate Insurer referred to herein as the "Policy
Payments Account" over which the Trustee shall have exclusive control and
sole right of withdrawal. The Policy Payments Account shall be an Eligible
Account. The Trustee shall deposit any amount paid under the Certificate
Insurance Policy into the Policy Payments Account and distribute such amount
only for purposes of payment to the Owners of the related Class A
Certificates of the Insured Payments for which a claim was made and such
amount may not be applied to satisfy any costs, expenses or liabilities of
the Servicer, the Seller, the Depositor, the Custodian, the Trustee or the
Trust. Amounts paid under the Certificate Insurance Policy shall be
transferred to the Certificate Account in accordance with the next succeeding
paragraph and disbursed by the Trustee to Owners of the related Class A
Certificates in accordance with Section 7.03(e). It shall not be necessary
for such payments to be made by checks or wire transfers separate from the
checks or wire transfers used to pay the Insured Payments with other funds
available to make such payment. However, the amount of any payment of
principal of or interest on the related Class A Certificates to be paid from
funds transferred from the Policy Payments Account shall be noted as provided
in paragraph (c) below in the Register and in the statement to be furnished
to Owners of the Class A Certificates
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pursuant to Section 7.08. Funds held in the Policy Payments Account shall not
be invested by the Trustee.
On any Distribution Date with respect to which a claim has been made
under the Certificate Insurance Policy, the amount of funds received by the
Trustee as a result of any claim under the Certificate Insurance Policy, to
the extent required to make the Insured Payment on such Distribution Date
shall be withdrawn from the Policy Payments Account and deposited in the
Certificate Account and applied by the Trustee, directly to the payment in
full of the Insured Payment due on the related Class of Class A Certificates
in accordance with Section 7.03(e). Funds received by the Trustee as a result
of any claim under the Certificate Insurance Policy shall be deposited by the
Trustee in the Policy Payments Account and used solely for payment to the
Owners of the Class A Certificates and may not be applied to satisfy any
costs, expenses or liabilities of the Servicer, the Seller, the Depositor,
the Custodian, the Trustee or the Trust. Any funds remaining in the Policy
Payments Account on the first Business Day following a Distribution Date
shall be remitted to the Certificate Insurer, pursuant to the instructions of
the Certificate Insurer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A Certificate
from moneys received under the Certificate Insurance Policy. The Certificate
Insurer shall have the right to inspect such records at reasonable times
during normal business hours upon one Business Day's prior notice to the
Trustee.
(d) The Trustee shall promptly notify the Certificate Insurer and
Fiscal Agent (as defined in the Certificate Insurance Policy) of any
proceeding or the institution of any action, of which an Authorized Officer
of the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law
(a "Preference Claim") of any distribution made with respect to the Class A
Certificates. Each Owner of a Class A Certificate, by its purchase of such
Certificate, the Servicer and the Trustee hereby agree that the Certificate
Insurer (so long as no Certificate Insurer Default exists) may at any time
during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without limitation
of the foregoing, the Certificate Insurer shall be subrogated to the rights
of the Servicer, the Trustee and each Owner of a Class A Certificate in the
conduct of any such Preference Claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any
court order issued in connection with any such Preference Claim.
Section 12.03. EFFECT OF PAYMENTS BY THE CERTIFICATE INSURER;
SUBROGATION.
Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Class A Certificates which
is made with moneys received pursuant to the terms of the Certificate
Insurance Policy shall not be considered payment of such Certificates from
the Trust and shall not result in the payment of or the provision for the
payment of the
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principal of or interest on such Certificates within the meaning of Section
7.03. The Depositor, the Servicer and the Trustee acknowledge, and each Owner
by its acceptance of a Certificate agrees, that without the need for any
further action on the part of the Certificate Insurer, the Depositor, the
Servicer, the Trustee or the Registrar (a) to the extent the Certificate
Insurer makes payments, directly or indirectly, on account of principal of or
interest on any Class A Certificates to the Owners of such Certificates, the
Certificate Insurer will be fully subrogated to the rights of such holders to
receive such principal and interest from the Trust and (b) the Certificate
Insurer shall be paid such principal and interest but only from the sources
and in the manner provided herein for the payment of such principal and
interest.
The Trustee, the Sellers, the Depositor and the Servicer shall
cooperate in all respects with any reasonable request by the Certificate
Insurer for action to preserve or enforce the Certificate Insurer's rights or
interests under this Agreement without limiting the rights or affecting the
interests of the Owners as otherwise set forth herein.
Section 12.04. NOTICES TO THE CERTIFICATE INSURER.
All notices, statements, reports, certificates or opinions required
by this Agreement to be sent to any other party hereto or to any of the
Owners shall also be sent to the Certificate Insurer.
Section 12.05. THIRD-PARTY BENEFICIARY.
The Certificate Insurer shall be a third-party beneficiary of this
Agreement, entitled to enforce the provisions hereof as if a party hereto.
Section 12.06. RIGHTS TO THE CERTIFICATE INSURER TO EXERCISE RIGHTS
OF OWNERS.
By accepting its Certificate, each Owner of a Class A Certificate
agrees that unless a Certificate Insurer Default exists, the Certificate
Insurer shall have the right to exercise all rights of the Owners of the
Class A Certificates as specified under this Agreement without any further
consent of the Owners of the Class A Certificates and that the Owners of
Class A Certificates may not exercise such rights except with the written
consent of the Certificate Insurer.
Section 12.07. TRUSTEE TO HOLD THE CERTIFICATE INSURANCE POLICY.
The Trustee will hold the Certificate Insurance Policy in trust as
agent for the Owners of the Class A Certificates for the purpose of making
claims thereon and distributing the proceeds thereof. Neither the Certificate
Insurance Policy nor the amounts paid on the Certificate Insurance Policy
will constitute part of the Trust created by this Agreement. Each Owner of
Class A Certificates, by accepting its Class A Certificates, appoints the
Trustee as attorney-in-fact for the purpose of making claims on the
Certificate Insurance Policy.
Section 12.08. TRUSTEE TO ACT SOLELY WITH CONSENT OF THE
CERTIFICATE INSURER.
Unless a Certificate Insurer Default exists, the Trustee shall not,
without the Certificate Insurer's consent or unless directed by the
Certificate Insurer:
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(a) terminate the rights and obligations of the Servicer as
Servicer pursuant to Section 8.20 hereof;
(b) agree to any amendment pursuant to Section 11.14 hereof; or
(c) undertake any litigation with respect to the Trust.
END OF ARTICLE XII
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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: /s/ Jeffrey B. Upperman
--------------------------------------
Name: Jeffrey B. Upperman
Title: Vice President
CENTEX CREDIT CORPORATION d/b/a
CENTEX HOME EQUITY CORPORATION,
as Seller
By: /s/ Jeffrey B. Upperman
--------------------------------------
Name: Jeffrey B. Upperman
Title: Vice President
CHEC CONDUIT FUNDING, LLC
as Conduit Seller
By: /s/ Jeffrey B. Upperman
--------------------------------------
Name: Jeffrey B. Upperman
Title: Vice President
CENTEX CREDIT CORPORATION d/b/a
CENTEX HOME EQUITY CORPORATION,
as Servicer
By: /s/ Jeffrey B. Upperman
--------------------------------------
Name: Jeffrey B. Upperman
Title: Vice President
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BANK ONE, NATIONAL ASSOCIATION
as Trustee
By: /s/ Melissa G. Weisman
--------------------------------------
Name: Melissa G. Weisman
Title: Vice President
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14th day of December, 2000, before me personally came Jeffrey
B. Upperman 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
/s/ Amy Mellon
-----------------------------------
Notary Public
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14th day of December 2000, before me personally came Jeffrey
B. Upperman to me known that he is a Vice President of Centex Credit
Corporation d/b/a Centex Home Equity Corporation, a Nevada corporation and
that he signed his name thereto by order of the respective Boards of
Directors of said corporation.
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
/s/ Amy Mellon
------------------------------------
Notary Public
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14th day of December, 2000, before me personally came Jeffrey
B. Upperman to me known that he is a Vice President of CHEC Conduit Funding,
LLC, a Delaware limited liability corporation and that he signed his name
thereto by order of Centex Credit Corporation d/b/a Centex Home Equity
Corporation, the sole member of CHEC Conduit Funding, 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
/s/ Amy Mellon
----------------------------------
Notary Public
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STATE OF NEW YORK )
: ss.:
NEW YORK COUNTY )
On the 14th day of December, 2000, before me personally came Melissa
G. Weisman, to me known that she is a Vice President 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
/s/ Amy Mellon
----------------------------------
Notary Public
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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.
1-A-1
<PAGE>
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.
1-B-1
<PAGE>
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.
I-C-1
<PAGE>
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.
I-D-1
<PAGE>
SCHEDULE I-E
INVESTMENT INSTRUCTIONS TO TRUSTEE
<TABLE>
<CAPTION>
Account Eligible Investment
------- -------------------
<S> <C>
(1) Certificate Account One Group Institutional Prime Fund
(2) Supplemental Interest Reserve Fund One Group Institutional Prime Fund
</TABLE>
I-E-1
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-1
(7.03% CERTIFICATE RATE)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in the Group I 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 2000-D") 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 152314 CV0
----------
CUSIP
A-1-1
<PAGE>
$108,700,000 November 25, 2015
Original Class A-1 Certificate December 14, 2000 Final Scheduled
Principal Balance Date 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 in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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.
A-1-2
<PAGE>
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JANUARY 25, 2001 (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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A 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.
A-1-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy to make Insured Payments available to the
Trustee on or prior to the related Distribution Date for distribution to the
Owners provided that timely notice has been given to the Certificate Insurer
by the Trustee. "Insured Payments" shall have the meaning as provided
therefor in the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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.
A-1-4
<PAGE>
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 Owner of this
Certificate, by its acceptance hereof, agrees, however, that to the extent
the Certificate Insurer makes Insured Payments, either directly or indirectly
(as by paying through the Trustee or Paying Agent), to the Owners of such
Class A-1 Certificates, the Certificate Insurer will be subrogated to the
rights of such Owners of Class A-1 Certificates with respect to such Insured
Payment, shall be deemed to the extent of the payments so made to be a
registered Owner of such Class A-1 Certificates and shall receive all future
distributions of the Class A Distribution Amount relating to such
Certificates until all such Insured Payments by the Certificate Insurer have
been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-1-5
<PAGE>
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-1-6
<PAGE>
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:
------------------------------------
Title:
---------------------------------
A-1-7
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-2
(6.74% CERTIFICATE RATE)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in the Group I 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 2000-D") 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 152314 CW8
----------
CUSIP
A-2-1
<PAGE>
$50,000,000 August 25, 2021
Original Class A-2 Certificate December 14, 2000 Final Scheduled
Principal Balance Date 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 in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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.
A-2-2
<PAGE>
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JANUARY 25, 2001 (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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A 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
A-2-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the related Distribution Date for distribution to the
Owners provided that timely notice has been given to the Certificate Insurer
by the Trustee. "Insured Payments" shall have the meaning as provided
therefor in the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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
A-2-4
<PAGE>
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 Owner of this Certificate, by its acceptance
hereof, agrees, however, that to the extent the Certificate Insurer makes
Insured Payments, either directly or indirectly (as by paying through the
Trustee or Paying Agent), to the Owners of such Class A-2 Certificates, the
Certificate Insurer will be subrogated to the rights of such Owners of Class
A-2 Certificates with respect to such Insured Payment, shall be deemed to the
extent of the payments so made to be a registered Owner of such Class A-2
Certificates and shall receive all future distributions of the Class A
Distribution Amount relating to such Certificates until all such Insured
Payments by the Certificate Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-2-5
<PAGE>
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-2-6
<PAGE>
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:
------------------------------------
Title:
---------------------------------
A-2-7
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-3
(6.82% CERTIFICATE RATE)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in the Group I 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 2000-D") 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 152314 CX6
----------
CUSIP
$56,100,000 February 25, 2026
Original Class A-3 Certificate December 14, 2000 Final Scheduled
Principal Balance Date Distribution Date
A-3-1
<PAGE>
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner
of a fractional interest in (a) the Home Equity Loans in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) (which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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 JANUARY 25, 2001 (THE
A-3-2
<PAGE>
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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A 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
A-3-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the related Distribution Date for distribution to the
Owners provided that timely notice has been given to the Certificate Insurer
by the Trustee. "Insured Payments" shall have the meaning as provided
therefor in the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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
A-3-4
<PAGE>
not be impaired without the consent of such Owner. The Owner of this
Certificate, by its acceptance hereof, agrees, however, that to the extent
the Certificate Insurer makes Insured Payments, either directly or indirectly
(as by paying through the Trustee or Paying Agent), to the Owners of such
Class A-3 Certificates, the Certificate Insurer will be subrogated to the
rights of such Owners of Class A-3 Certificates with respect to such Insured
Payment, shall be deemed to the extent of the payments so made to be a
registered Owner of such Class A-3 Certificates and shall receive all future
distributions of the Class A Distribution Amount relating to such
Certificates until all such Insured Payments by the Certificate Insurer have
been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-3-5
<PAGE>
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-3-6
<PAGE>
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:
-------------------------------
Title:
----------------------------
A-3-7
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-4
(7.05% CERTIFICATE RATE)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in the Group I 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 2000-D") 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 152314 CY4
----------
CUSIP
$67,500,000 August 25, 2029
Original Class A-4 Certificate December 14, 2000 Final Scheduled
Principal Balance Date Distribution Date
A-4-1
<PAGE>
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner
of a fractional interest in (a) the Home Equity Loans in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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 JANUARY 25, 2001 (THE
A-4-2
<PAGE>
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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A 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
A-4-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the Distribution Date for distribution to the Owners
provided that timely notice has been given to the Certificate Insurer by the
Trustee. "Insured Payments" shall have the meaning as provided therefor in
the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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
A-4-4
<PAGE>
not be impaired without the consent of such Owner. The Owner of this
Certificate, by its acceptance hereof, agrees, however, that to the extent
the Certificate Insurer makes Insured Payments, either directly or indirectly
(as by paying through the Trustee or Paying Agent), to the Owners of such
Class A-4 Certificates, the Certificate Insurer will be subrogated to the
rights of such Owners of Class A-4 Certificates with respect to such Insured
Payment, shall be deemed to the extent of the payments so made to be a
registered Owner of such Class A-4 Certificates and shall receive all future
distributions of the Class A Distribution Amount relating to such
Certificates until all such Insured Payments by the Certificate Insurer have
been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-4-5
<PAGE>
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-4-6
<PAGE>
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:
------------------------------------
Title:
---------------------------------
A-4-7
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-5
(7.17% CERTIFICATE RATE (OR 7.67% 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 GROUP I NET WAC CAP)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in Group I 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 2000-D") 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 152314 CZ1
----------
CUSIP
A-5-1
<PAGE>
$34,500,000 January 25, 2031
Original Class A-5 Certificate December 14, 2000 Final Scheduled
Principal Balance Date 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 in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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.
A-5-2
<PAGE>
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JANUARY 25, 2001 (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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A 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
A-5-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the related Distribution Date for distribution to the
Owners provided that timely notice has been given to the Certificate Insurer
by the Trustee. "Insured Payments" shall have the meaning as provided
therefor in the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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
A-5-4
<PAGE>
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 Owner of this Certificate, by its acceptance
hereof, agrees, however, that to the extent the Certificate Insurer makes
Insured Payments, either directly or indirectly (as by paying through the
Trustee or Paying Agent), to the Owners of such Class A-5 Certificates, the
Certificate Insurer will be subrogated to the rights of such Owners of Class
A-5 Certificates with respect to such Insured Payment, shall be deemed to the
extent of the payments so made to be a registered Owner of such Class A-5
Certificates and shall receive all future distributions of the Class A
Distribution Amount relating to such Certificates until all such Insured
Payments by the Certificate Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-5-5
<PAGE>
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-5-6
<PAGE>
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:
------------------------------------
Title:
---------------------------------
A-5-7
<PAGE>
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 2000-D
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-6
(6.93% CERTIFICATE RATE SUBJECT TO GROUP I NET WAC CAP)
Representing Certain Interests in a Pool of Group I Home Equity
Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in Group I 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 2000-D") 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 152314 DA5
----------
CUSIP
$35,200,000 January 25, 2031
Original Class A-6 Certificate December 14, 2000 Final Scheduled
Principal Balance Date Distribution Date
A-6-1
<PAGE>
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner
of a fractional interest in (a) the Home Equity Loans in Group I listed in
SCHEDULE I-A to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group I 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 January 25, 2001 (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 JANUARY 25, 2001 (THE
A-6-2
<PAGE>
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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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 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 and the Class A-7 Certificates shall
be together referred to as the "Class A Certificates" and the Class A
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 January 25, 2001, 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 A 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
A-6-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the related Distribution Date for distribution to the
Owners provided that timely notice has been given to the Certificate Insurer
by the Trustee. "Insured Payments" shall have the meaning as provided
therefor in the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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
A-6-4
<PAGE>
not be impaired without the consent of such Owner. The Owner of this
Certificate, by its acceptance hereof, agrees, however, that to the extent
the Certificate Insurer makes Insured Payments, either directly or indirectly
(as by paying through the Trustee or Paying Agent), to the Owners of such
Class A-6 Certificates, the Certificate Insurer will be subrogated to the
rights of such Owners of Class A-6 Certificates with respect to such Insured
Payment, shall be deemed to the extent of the payments so made to be a
registered Owner of such Class A Certificates and shall receive all future
distributions of the Class A Distribution Amount relating to such
Certificates until all such Insured Payments by the Certificate Insurer have
been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-6-5
<PAGE>
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-6-6
<PAGE>
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:
------------------------------------
Title:
---------------------------------
A-6-7
<PAGE>
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 2000-D
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 in a Pool of Group II
Home Equity Loans Sold and Serviced by
CENTEX CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
Corporation (the "Seller" or the "Servicer"). This Certificate represents a
fractional ownership interest in the 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 2000-D") 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.
<TABLE>
<CAPTION>
NO: A-7-1 152314 DB3
----------
CUSIP
<S> <C> <C> <C>
A-7-1
<PAGE>
$48,000,000 January 25, 2031
Original Class A-7 Certificate December 14, 2000 Final Scheduled
Principal Balance Date Distribution Date
CEDE & CO.
Registered Owner
</TABLE>
The registered Owner named above is the registered beneficial Owner
of a fractional interest in (a) the Home Equity Loans in Group II listed in
SCHEDULE I-B to the Pooling and Servicing Agreement (as defined below) which
the Seller and the Conduit Seller 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
allocable to Group II 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 January 25, 2001 (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.
A-7-2
<PAGE>
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JANUARY 25, 2001 (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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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
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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class A 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 January 25, 2001, 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 A
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.
A-7-3
<PAGE>
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 Certificate Insurer is required, subject to the terms of the
Certificate Insurance Policy, to make Insured Payments available to the
Trustee on or prior to the Distribution Date for distribution to the Owners
provided that timely notice has been given to the Certificate Insurer by the
Trustee. "Insured Payments" shall have the meaning as provided therefor in
the Certificate Insurance Policy.
Upon receipt of amounts under the Certificate Insurance Policy on
behalf of the Owners of the Class A Certificates, the Trustee shall
distribute in accordance with the Pooling and Servicing Agreement such
amounts (directly or through a Paying Agent) to the Owners of the appropriate
Class of the Class A Certificates.
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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) and payments
received by the Trustee pursuant to the Certificate Insurance Policy, 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.
A-7-4
<PAGE>
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 Owner of this
Certificate, by its acceptance hereof, agrees, however, that to the extent
the Certificate Insurer makes Insured Payments, either directly or indirectly
(as by paying through the Trustee or Paying Agent), to the Owners of such
Class A-7 Certificates, the Certificate Insurer will be subrogated to the
rights of such Owners of Class A-7 Certificates with respect to such Insured
Payment, shall be deemed to the extent of the payments so made to be a
registered Owner of such Class A-7 Certificates and shall receive all future
distributions of the Class A Distribution Amount until all such Insured
Payments by the Certificate Insurer have been fully reimbursed.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time if a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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.
A-7-5
<PAGE>
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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 $1,000 original Certificate
Principal Balance. 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
A-7-6
<PAGE>
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:
----------------------------------------
Title:
----------------------------------------
A-7-7
<PAGE>
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.
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 2000-D
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 CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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") or Centex Credit Corporation d/b/a Centex Home Equity
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: December 14, 2000
B-1
<PAGE>
Percentage Interest _____%
CHEC RESIDUAL CORPORATION
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 Seller 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 2000-D, 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 December 1, 2000 (the
"Pooling and Servicing Agreement") by and among Centex Credit Corporation
d/b/a Centex Home Equity Corporation, in its capacity as the 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, 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 2000-D 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") 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 and the Class A-7
Certificates shall be together referred to as the "Class A Certificates" and
the Class
B-2
<PAGE>
A 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 January 25, 2001, 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
Class X-IO Distribution Amount 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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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.
B-3
<PAGE>
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time when a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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 Class A 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 Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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
B-4
<PAGE>
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, with the prior
written approval of the Certificate Insurer and 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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
B-5
<PAGE>
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: --------------------------------
Title:
--------------------------------
B-6
<PAGE>
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.
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 FARMER'S 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
C-1
<PAGE>
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.
C-2
<PAGE>
CENTEX HOME EQUITY LOAN TRUST 2000-D
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 CREDIT CORPORATION D/B/A CENTEX HOME EQUITY CORPORATION
(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, CHEC Conduit Funding, LLC or Centex Credit Corporation
d/b/a Centex Home Equity Corporation. This Certificate represents a
fractional ownership interest in the Trust Estate as defined below.)
NO: R-1_
Date: December 14, 2000
Percentage Interest _____%
CHEC Residual Corporation
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 Seller 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.
C-3
<PAGE>
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 2000-D, Home Equity Loan
Asset-Backed Certificates, Class R (the "Class R Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of December 1, 2000 (the "Pooling
and Servicing Agreement") by and among Centex Credit Corporation d/b/a Centex
Home Equity Corporation, in its capacity as the 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,
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 2000-D 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"), and Class X-IO (the "Class X-IO 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 and the Class A-7 Certificates shall be together
referred to as the "Class A Certificates" and the Class A 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 January 25, 2001, 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 Residual Net Monthly
Excess Cashflow 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-
C-4
<PAGE>
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, CHEC Conduit Funding, LLC or Centex Credit
Corporation d/b/a Centex Home Equity Corporation 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 (from amounts other than those available under the Certificate
Insurance Policy) of all amounts held by the Trustee and required to be paid
to such Owners pursuant to the Pooling and Servicing Agreement and payment in
full of all amounts owed to the Certificate Insurer upon the latest 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 or (c) at any time when a Qualified Liquidation
of the Trust Estate is effected as described below. To effect a termination
of the Pooling and Servicing Agreement pursuant to clause (c) above, the
Trustee and the Certificate Insurer shall be provided an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate
Insurer and the Trustee to the effect that such liquidation constitutes a
Qualified Liquidation, and the Trustee shall distribute the proceeds of the
liquidation of the Trust Estate, to the Owners of the Certificates, so that
the liquidation of the Trust Estate, the distribution of any proceeds of the
liquidation and the termination of the Pooling and Servicing Agreement occur
no later than the close of the 90th day after the date of adoption of the
plan of liquidation and such liquidation qualifies as a Qualified Liquidation.
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
C-5
<PAGE>
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 Class A
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 Certificate Insurer or the Owners of the majority of the
Percentage Interests represented by the Class A Certificates with the prior
written consent of the Certificate Insurer 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, with
the prior written approval of the Certificate Insurer and 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
C-6
<PAGE>
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 or any such agent shall be affected by
notice to the contrary, except as may otherwise be specifically provided in
the Pooling and Servicing Agreement with respect to the Certificate Insurer.
C-7
<PAGE>
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:
------------------------------------
Title:
---------------------------------
C-8
<PAGE>
EXHIBIT D
[Intentionally Omitted]
D-1
<PAGE>
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 December 1, 2000 (the "Pooling and Servicing Agreement") among
CHEC Funding, LLC, as depositor, CHEC Conduit Funding, LLC, as conduit
seller, Centex Credit Corporation d/b/a Centex Home Equity Corporation, as
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,
and the Financial Guaranty Insurance Policy (number: 51017-N) dated December
14, 2000, issued by Financial Security Assurance Inc.
Dated: December 14, 2000
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Name:
Title:
E-1
<PAGE>
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 December 1, 2000,
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 December 1, 2000 (the "Pooling and Servicing Agreement") among
CHEC Funding, LLC, as depositor (the "Depositor"), CHEC Conduit Funding, LLC,
as a seller, Centex Credit Corporation d/b/a Centex Home Equity 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: December 14, 2000
E-2
<PAGE>
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 December 1, 2000, 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
December 1, 2000, (the "Pooling and Servicing Agreement") among CHEC Funding,
LLC, as depositor, Centex Credit Corporation d/b/a Centex Home Equity
Corporation, as seller and servicer, 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.
F-1-1
<PAGE>
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
BANK ONE TRUST COMPANY, N.A., as
Custodian
By:
-----------------------------------
Name:
Title
Dated: January 31, 2001
F-1-2
<PAGE>
EXHIBIT G
FORM OF DELIVERY ORDER
DELIVERY ORDER
Bank One, National Association
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement,
dated as of December 1, 2000 (the "Pooling and Servicing Agreement") among
CHEC Funding, LLC, as Depositor, Centex Credit Corporation d/b/a Centex Home
Equity Corporation, a Nevada corporation, as Seller and Servicer, 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 2000-D Home
Equity Loan Asset-Backed Certificates, Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, 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: December 14, 2000
G-1
<PAGE>
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION
860E(e) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. 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.
2. 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.
H-1-1
<PAGE>
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 __________, 2000.
[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 ____________, 2000.
-----------------
NOTARY PUBLIC
COUNTY OF __________________
STATE OF ____________________
My commission expires the _ day of _______________, 2000.
H-1-2
<PAGE>
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER
(ACCREDITED INVESTOR)
[DATE]
Bank One, National Association
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 2000-D
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 December 1, 2000 (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.
I-1
<PAGE>
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 and the
Certificate Insurer, which Opinion of Counsel shall not be at the expense of
either the Trustee, the Certificate Insurer 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 and the Certificate Insurer 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.
I-1-2
<PAGE>
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:
----------------------------------
I-1-3
<PAGE>
EXHIBIT I-2
FORM OF CERTIFICATE REGARDING TRANSFER
(Rule 144A)
[Date]
Bank One, National Association
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 2000-D
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 December 1, 2000 (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;
I-2-1
<PAGE>
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
and the Certificate Insurer, which Opinion of Counsel shall not be at the
expense of either the Trustee, the Certificate Insurer 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 and the Certificate Insurer 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.
I-2-2
<PAGE>
IN WITNESS WHEREOF, we have signed this certificate as of the date
first written above.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE>
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
<TABLE>
Loan Number Borrower Name Original Loan Amount Exception
----------- ------------- -------------------- ---------
<S> <C> <C> <C>
</TABLE>
J-1-1
<PAGE>
EXHIBIT K
DEFINITION OF GROUP II TARGET OVERCOLLATERALIZATION AMOUNT
(AND RELATED DEFINITIONS)
"GROUP II DELINQUENCY AMOUNT" means the sum of (without duplication)
(i) the aggregate Loan Balance of the Home Equity Loans in Group II which are
90-Day Delinquent Loans and (ii) the aggregate Loan Balance of Home Equity
Loans in Group II in foreclosure.
"GROUP II INITIAL TARGET OVERCOLLATERALIZATION AMOUNT" means the
Group II Target Percentage times the Original Group II Pool Balance.
"GROUP II TARGET OVERCOLLATERALIZATION AMOUNT" means:
(a) for any Distribution Date occurring during the period commencing
on the Startup Day and ending on the thirtieth Distribution Date following
the Startup Day, the greater of: (i) the Group II Initial Target
Overcollateralization Amount, and (ii) if the Step-Up Test is not satisfied,
90% of the Group II Delinquency Amount.
(b) for any Distribution Date occurring after the end of the period
in clause (a) above, (x) if the Step-Down Test is satisfied the greatest of
(i) 11.50% of the aggregate Loan Balance of the Home Equity Loans in Group
II, (ii) 0.50% of the Original Group II Pool Balance, (iii) the Group II
Initial Target Overcollateralization Amount less the product of (A) the
excess of the Group II Initial Target Overcollateralization Amount over the
amount set forth in clause (b)(x)(i) and (B) a fraction (not to exceed 1.0),
the numerator of which is a whole number equal to the number of Distribution
Dates since the most recent of the 30th Distribution Date and the most recent
Distribution Date on which the Step-Down Test was not met and the denominator
of which is 3 and (y) if the Step-Down Test is not met, the amount set forth
in clause (a).
Notwithstanding anything contained in the Agreement to the contrary,
the Certificate Insurer may, in its sole discretion, modify this definition
of Group II Target Overcollateralization Amount (and any related definitions
in this Exhibit K) for the purpose of reducing the overcollateralization
amounts hereof or eliminating, in whole or in part, the definitions hereof,
provided the Trustee and the Rating Agencies shall have been notified in
writing of such modification prior to the related Distribution Date and such
modification has not resulted in a downgrading of the then-current ratings of
the Class A Certificates, without regard to the Certificate Insurance Policy.
Notwithstanding any contrary provisions of the Agreement, no modification of
this definition shall be effective unless the Certificate Insurer shall have
received an Opinion of Counsel (provided by the Person requesting such
modification) to the effect that such modification will not result in the
imposition of any tax on the Trust pursuant to the REMIC
K-1
<PAGE>
Provisions or cause either REMIC created hereunder to fail to qualify as a
REMIC at any time that any of the Certificates are outstanding.
"GROUP II TARGET PERCENTAGE" means 5.75%.
"ORIGINAL GROUP II POOL BALANCE" means the aggregate Loan Balance of
the Home Equity Loans in Group II as of the Cut-Off Date.
"STEP-DOWN LOSS TEST" is satisfied for any period set out below, if
the Cumulative Loss Percentage for such period does not exceed the percentage
set out for such period below:
<TABLE>
<CAPTION>
Period Cumulative Loss Percentage
------ --------------------------
<S> <C>
June 2003 - May 2004 2.00%
June 2004 - May 2005 2.65%
June 2005 - May 2006 3.30%
June 2006 - thereafter 4.00%
</TABLE>
"STEP-DOWN TEST" is satisfied for any date of determination
thereof, if (x) the 90+ Delinquency Percentage (Rolling Three Month) is less
than or equal to 9.50%, (y) the Step-Down Loss Test is satisfied, and (z) the
Annual Loss Percentage (Rolling 12 Month) for the twelve month period
immediately preceding the date of determination is less than or equal to
1.50% for the thirtieth through forty-eighth Remittance Periods, less than or
equal to 1.35% for the forty-ninth through seventy-second Remittance Periods,
or less than or equal to 1.25% for the seventy-third Remittance Period and
thereafter.
"STEP-UP LOSS TEST" is satisfied for any period set out below, if
the Cumulative Loss Percentage for such period does not exceed the percentage
set out for such period below:
<TABLE>
<CAPTION>
Period Cumulative Loss Percentage
------ --------------------------
<S> <C>
January 2001 - December 2001 1.40%
January 2002 - December 2002 1.95%
January 2003 - December 2003 2.70%
January 2004 - December 2004 3.45%
January 2005 - December 2005 4.20%
January 2006 - thereafter 4.90%
</TABLE>
"STEP-UP TEST" is satisfied for any date of determination
thereof, if (x) the 90+ Delinquency Percentage (Rolling Three Month) is less
than or equal to 12.00%, (y) the Step-Up Loss Test is satisfied, and (z) the
Annual Loss Percentage (Rolling 12 Month) for the twelve month period
immediately preceding the date of determination thereof is less than or equal
to
K-2
<PAGE>
0.75% for the first through eighteenth Remittance Periods, less than or equal
to 1.25% for the nineteenth through twenty-fourth Remittance Periods, less
than or equal to 1.75% for the twenty-fifth through forty-eighth Remittance
Periods or less than or equal to 1.40% for the forty-ninth Remittance Period
and thereafter.
K-3
<PAGE>
EXHIBIT L
DEFINITION OF GROUP I TARGET OVERCOLLATERALIZATION AMOUNT
(AND RELATED DEFINITIONS)
"GROUP I DELINQUENCY AMOUNT" means the sum (with duplication) of (i)
the aggregate Loan Balance of the Home Equity Loans in Group I which are
90-Day Delinquent Loans and (ii) the aggregate Loan Balance of the Home
Equity Loans in Group I in foreclosure.
"GROUP I INITIAL TARGET OVERCOLLATERALIZATION AMOUNT" means the
Group I Target Percentage times the Original Group I Pool Balance.
"GROUP I TARGET OVERCOLLATERALIZATION AMOUNT" means:
(a) for any Distribution Date occurring during the period commencing
on the Startup Day and ending on the thirtieth Distribution Date following
the Startup Day, the greater of: (i) the Group I Initial Target
Overcollateralization Amount, and (ii) if the Step-Up Test is not satisfied,
90% of the Group I Delinquency Amount.
(b) for any Distribution Date occurring after the end of the period
in clause (a) above, (x) if the Step Down Test is satisfied the greatest of
(i) 5.80% of the aggregate Loan Balance of the Home Equity Loans in Group I,
(ii) 0.50% of the Original Group I Pool Balance, and (iii) the Group I
Initial Target Overcollateralization Amount less the product of (A) the
excess of the Group I Initial Target Overcollateralization Amount over the
amount set forth in clause (b)(x)(i) and (B) a fraction (not to exceed 1.0),
the numerator of which is a whole number equal to the number of Distribution
Dates since the most recent of the 30th Distribution Date and the most recent
Distribution Date on which the Step-Down Test was not met and the denominator
of which is 3 and (y) if the Step-Down Test is not met, the amount set forth
in clause (a).
Notwithstanding anything contained in the Agreement to the contrary,
the Certificate Insurer may, in its sole discretion, modify the definition of
Group I Target Overcollateralization Amount (and any related definitions in
this Exhibit L) for the purpose of reducing the overcollateralization amounts
hereof or eliminating, in whole or in part, the definitions hereof, provided
the Trustee and the Rating Agencies have been notified in writing of such
modification prior to the related Distribution Date and such modification has
not resulted in a downgrading of the then-current ratings of the Class A
Certificates, without regard to the Certificate Insurance Policy.
Notwithstanding any contrary provisions of the Agreement, no modification of
this definition shall be effective unless the Certificate Insurer shall have
received an Opinion of Counsel (provided by the Person requesting such
modification) to the effect that such modification will not result in the
imposition of any tax on the Trust pursuant to the REMIC Provisions or cause
either REMIC created hereunder to fail to qualify as a REMIC at any time that
any of the Certificates are outstanding.
"GROUP I TARGET PERCENTAGE" means 2.90%.
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"ORIGINAL GROUP I POOL BALANCE" means the aggregate Loan Balance of
the Home Equity Loans in Group I as of the Cut-Off Date.
"STEP-DOWN LOSS TEST" is as defined in Exhibit K.
"STEP-DOWN TEST" is as defined in Exhibit K.
"STEP-UP LOSS TEST" is as defined in Exhibit K.
"STEP-UP TEST" is as defined in Exhibit K.
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EXHIBIT M
FORM OF LETTER REGARDING REPORTING OBLIGATIONS UNDER THE
SECURITIES EXCHANGE ACT OF 1934
________, 200_
Bank One, National Association
1 Bank One Plaza, Suite IL1-0126
Chicago, Illinois 60670
Re: Centex Home Equity Loan Trust 2000-D
Home Equity Loan Asset-Backed Certificates,
SERIES 2000-D
-------------------------------------------
Ladies and Gentlemen:
Pursuant to and in reference to Section 7.09(c) of the Pooling and
Servicing Agreement dated as of December 1, 2000 relating to the above
referenced Certificates, please note the following:
(a) CIK Number for Centex Home Equity Loan Trust 2000-D (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;
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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 Edgar 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:
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EXHIBIT N
<TABLE>
<CAPTION>
FORM OF LIQUIDATION REPORT
<S> <C> <C>
(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: [ ]% $_______________
</TABLE>
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EXHIBIT O
REQUEST FOR RELEASE OF DOCUMENTS
_____________________,
TO:
RE: Custodial Agreement, dated as of December 1, 2000, by and among Bank
One, National Association, not individually, but solely as trustee (the
"Trustee"), Centex Credit Corporation d/b/a Centex Home Equity
Corporation (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 twenty-one (21) days
if such Note remains outstanding.
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.
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(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).
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<PAGE>
__ 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:
