EXECUTION COPY
POOLING AND SERVICING AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST 2001-B
Among
CHEC FUNDING, LLC,
as Depositor,
CENTEX CREDIT CORPORATION d/b/a CENTEX HOME EQUITY CORPORATION,
as Seller,
XXXXXXX STREET FUNDING II, 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 June 1, 2001
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. Definitions............................................2
Section 1.02. Use of Words and Phrases..............................28
Section 1.03. Captions, Table of Contents...........................28
Section 1.04. Opinions..............................................28
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01. Establishment of the Trust............................29
Section 2.02. Office................................................29
Section 2.03. Purposes and Powers...................................29
Section 2.04. Appointment of the Trustee; Declaration of Trust......29
Section 2.05. Expenses of the Trust.................................29
Section 2.06. Ownership of the Trust................................29
Section 2.07. Situs of the Trust....................................30
Section 2.08. Designation of Interests in REMICs....................30
Section 2.09. Miscellaneous REMIC Provisions........................37
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......39
Section 3.02. Representations and Warranties of the Servicer.......41
Section 3.03. Representations and Warranties of the Sellers........43
Section 3.04. Covenants of Sellers to Take Certain Actions with
Respect to the Home Equity Loans in
Certain Situations...................................46
Section 3.05. Sale Treatment of the Home Equity Loans and
Qualified Replacement Mortgages......................55
Section 3.06. Acceptance by Trustee; Certain Substitutions of Home
Equity Loans; Certification by Trustee.59
Section 3.07. Reserved.............................................61
Section 3.08. Custodian............................................61
Section 3.09. Cooperation Procedures...............................61
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01. Issuance of Certificates.............................63
Section 4.02. Sale of Certificates.................................63
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01. Terms................................................64
Section 5.02. Forms................................................64
Section 5.03. Execution, Authentication and Delivery...............64
Section 5.04. Registration and Transfer of Certificates............65
Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates....67
Section 5.06. Persons Deemed Owners................................68
Section 5.07. Cancellation.........................................68
Section 5.08. Limitation on Transfer of Ownership Rights...........68
Section 5.09. Assignment of Rights.................................70
ARTICLE VI
COVENANTS
Section 6.01. Distributions........................................71
Section 6.02. Money for Distributions to be Held in Trust;
Withholding..........................................71
Section 6.03. Protection of Trust Estate...........................72
Section 6.04. Performance of Obligations...........................73
Section 6.05. Negative Covenants...................................73
Section 6.06. No Other Powers......................................73
Section 6.07. Limitation of Suits..................................74
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.........................75
Section 6.11. Control by Owners....................................75
Section 6.12. Indemnification by CHEC..............................75
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01. Collection of Money..................................77
Section 7.02. Establishment of Accounts............................77
Section 7.03. Flow of Funds........................................77
Section 7.04. Supplemental Interest Reserve Fund...................80
Section 7.05. Investment of Accounts...............................82
Section 7.06. Payment of Trust Expenses............................82
Section 7.07. Eligible Investments.................................82
Section 7.08. Accounting and Directions by Trustee.................84
Section 7.09. Reports by Trustee to Owners.........................85
Section 7.10. Reports by Trustee...................................88
Section 7.11. Allocation of Losses.................................88
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....................................90
Section 8.04. Successor Sub-Servicers..............................91
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..........94
Section 8.10. Compensating Interest; Repurchase of Home
Equity Loans.........................................95
Section 8.11. Maintenance of Insurance.............................96
Section 8.12. Due-on-Sale Clauses; Assumption and
Substitution Agreements..............................96
Section 8.13. Realization Upon Defaulted Home Equity Loans;
Workout of Home Equity Loans.........................97
Section 8.14. Trustee to Cooperate; Release of Files...............99
Section 8.15. Servicing Compensation..............................100
Section 8.16. Annual Statement as to Compliance...................100
Section 8.17. Annual Independent Certified Public Accountants'
Reports.............................................101
Section 8.18. Access to Certain Documentation and Information
Regarding the Home Equity Loans.....................101
Section 8.19. Assignment of Agreement.............................101
Section 8.20. Removal of Servicer; Retention of Servicer;
Resignation of Servicer.............................101
Section 8.21. Inspections; Errors and Omissions Insurance.........106
Section 8.22. Additional Servicing Responsibilities for Second
Mortgage Loans......................................106
Section 8.23. The Group II Home Equity Loans......................107
Section 8.24. Merger, Conversion, Consolidation or Succession to
Business of Servicer................................107
Section 8.25. Notices of Material Events..........................107
Section 8.26. Indemnification by the Servicer.....................108
Section 8.27. Reports on Foreclosure and Abandonment of
Properties..........................................108
ARTICLE IX
TERMINATION OF TRUST
Section 9.01. Termination of Trust.................................109
Section 9.02. Termination Upon Option of the Owner of the Class
X-IO Certificates....................................109
Section 9.03. Disposition of Proceeds..............................111
Section 9.04. Netting of Amounts...................................112
ARTICLE X
THE TRUSTEE
Section 10.01. Certain Duties and Responsibilities..................113
Section 10.02. Removal of Trustee for Cause.........................115
Section 10.03. Certain Rights of the Trustee........................116
Section 10.04. Not Responsible for Recitals or Issuance of
Certificates.........................................118
Section 10.05. May Hold Certificates................................118
Section 10.06. Money Held in Trust..................................119
Section 10.07. Compensation and Reimbursement.......................119
Section 10.08. Corporate Trustee Required; Eligibility..............119
Section 10.09. Resignation and Removal; Appointment of Successor....120
Section 10.10. Acceptance of Appointment by Successor Trustee.......121
Section 10.11. Merger, Conversion, Consolidation or Succession to
Business of the Trustee..............................121
Section 10.12. Reporting; Withholding...............................122
Section 10.13. Liability of the Trustee.............................122
Section 10.14. Appointment of Co-Trustee or Separate Trustee........123
Section 10.15. Appointment of Custodians............................124
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.................125
Section 11.02. Form of Documents Delivered to the Trustee...........125
Section 11.03. Acts of Owners.......................................126
Section 11.04. Notices, etc.........................................126
Section 11.05. Notices and Reports to Owners; Waiver of Notices.....127
Section 11.06. Rules by Trustee.....................................127
Section 11.07. Successors and Assigns...............................127
Section 11.08. Severability.........................................128
Section 11.09. Benefits of Agreement................................128
Section 11.10. Legal Holidays.......................................128
Section 11.11. Governing Law; Submission to Jurisdiction............128
Section 11.12. Counterparts.........................................129
Section 11.13. Usury................................................129
Section 11.14. Amendment............................................129
Section 11.15. Paying Agent; Appointment and Acceptance of Duties...130
Section 11.16. REMIC Status.........................................131
Section 11.17. Additional Limitation on Action and Imposition of
Tax..................................................133
Section 11.18. Appointment of Tax Matters Person....................133
Section 11.19. Notices..............................................133
Section 11.20. Rule 144A Information................................136
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
SCHEDULE I-F FIFTY REMIC IIIs
EXHIBIT A-1 FORM OF CLASS A-1 CERTIFICATE
EXHIBIT A-2 FORM OF CLASS A-2 CERTIFICATE
EXHIBIT A-3 FORM OF CLASS A-3 CERTIFICATE
EXHIBIT A-4 FORM OF CLASS A-4 CERTIFICATE
EXHIBIT A-5 FORM OF CLASS A-5 CERTIFICATE
EXHIBIT A-6 FORM OF CLASS A-6 CERTIFICATE
EXHIBIT A-7 FORM OF CLASS A-7 CERTIFICATE
EXHIBIT A-8 FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-9 FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-10 FORM OF CLASS B CERTIFICATE
EXHIBIT B FORM OF CLASS X-IO CERTIFICATE
EXHIBIT C FORM OF CLASS R CERTIFICATE
EXHIBIT D FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN
FULL AFTER THE CUT-OFF DATE
EXHIBIT E-1 FORM OF TRUSTEE'S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-2 FORM OF CUSTODIAN'S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT F FORM OF POOL CERTIFICATION
EXHIBIT G FORM OF DELIVERY ORDER
EXHIBIT H FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT I-1 FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED
INVESTOR)
EXHIBIT I-2 FORM OF CERTIFICATE OF TRANSFER (RULE 144A)
EXHIBIT J HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
EXHIBIT K [RESERVED]
EXHIBIT L [RESERVED]
EXHIBIT M FORM OF LETTER REGARDING REPORTING OBLIGATIONS UNDER
THE SECURITIES EXCHANGE ACT OF 1934
EXHIBIT N FORM OF LIQUIDATION REPORT
EXHIBIT O FORM OF REQUEST FOR RELEASE OF DOCUMENTS
POOLING AND SERVICING AGREEMENT, relating to CENTEX HOME EQUITY LOAN
TRUST 2001-B, dated as of June 1, 2001 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"), XXXXXXX
STREET FUNDING II, 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; and
WHEREAS, Bank One, National Association is willing to serve in the
capacity of Trustee hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Seller, the Conduit Seller, 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, all of its right, title and interest in and to (a) all principal
collected and interest due on the Home Equity Loans on and after the Cut-Off
Date and any and all other benefits accruing from the Home Equity Loans which
the Depositor is causing to be delivered to the Custodian on behalf of the
Trustee herewith, together with the related Home Equity Loan documents and the
Depositor's interest in any Property, and all payments thereon and proceeds of
the conversion, voluntary or involuntary, of the foregoing; and (b) proceeds of
all the foregoing (including, but not by way of limitation, all proceeds of any
mortgage insurance, flood insurance, hazard insurance and title insurance policy
relating to the Home Equity Loans, cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing) to pay the Certificates as specified herein (the "Home
Equity Loan Assets").
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the benefit of the Owners of the Certificates, without recourse, all the
right, title and interest of the Depositor in and to the Trust Estate.
The Trustee acknowledges such sale, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein in
accordance with the provisions of the Operative Documents.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. DEFINITIONS.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
"ACCOUNT": Any account established in accordance with Section 7.02 or
8.08 hereof.
"ADJUSTED CERTIFICATE RATE": As of any date of determination thereof, a
rate equal to the sum of (a) the Weighted Average Certificate Rate and (b) any
portion of the Trustee Fee (calculated as a percentage of the outstanding Loan
Balances as of the first day of the related Remittance Period) in each case then
accrued and outstanding.
"AFFILIATE": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE PRINCIPAL AMOUNT": As to any Distribution Date, the sum of
the Basic Principal Amount for each Home Equity Loan Group.
"AGREEMENT": This Pooling and Servicing Agreement, as it may be
amended from time to time, including the Exhibits and Schedules hereto.
"APPLIED REALIZED LOSS AMOUNTS": As to any Distribution Date, an
amount equal to the excess, if any, of (i) the aggregate of the Certificate
Principal Balances of the Offered Certificates, after giving effect to all
distributions on such Distribution Date over (ii) the Pool Balance as of the
last day of the related Remittance Period.
"APPRAISED VALUE": The appraised value of any Property based upon the
appraisal made at the time of the origination of the related Home Equity Loan,
or, in the case of a Home Equity Loan which is a purchase money mortgage, the
sales price of the Property, if such sales price is less than such appraised
value.
"AUTHORIZED OFFICER": With respect to any Person, any officer of such
Person who is authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon such Person; with respect to the
Depositor, the Sellers and the Servicer, initially including those individuals
whose names appear on the lists of Authorized Officers delivered at the Closing;
with respect to the Trustee, any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, Assistant Secretary or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Agreement or any other officers of the Trustee to whom a
matter arising under this Agreement may be referred.
"BASIC PRINCIPAL AMOUNT": With respect to the related Home Equity Loan
Group and each Distribution Date shall be the sum of (without duplication):
(a) the principal portion of all scheduled monthly payments on the Home
Equity Loans related to the Home Equity Loan Group actually received
by the Servicer during the related Remittance Period and any
Prepayments on the Home Equity Loans made by the Mortgagors of Home
Equity Loans in the related Home Equity Loan Group and actually
received by the Servicer during the related Remittance Period in each
case to the extent the amounts are received by the Trustee on or prior
to the Monthly Remittance Date;
(b) the outstanding principal balance of each Home Equity Loan in the
related Home Equity Loan Group that was purchased or repurchased by
the Seller or purchased by the Servicer (other than in the case of any
purchase pursuant to the Optional Limited Purchase, the amount of any
premium relating thereto) on or prior to the related Monthly
Remittance Date in each case to the extent the amounts are received by
the Trustee on or prior to the Monthly Remittance Date;
(c) any Substitution Amounts relating to principal, delivered by the
Seller on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in the related Home Equity Loan
Group, in each case to the extent the amounts are received by the
Trustee on or prior to the Monthly Remittance Date;
(d) all Net Liquidation Proceeds actually collected by or on behalf of the
Servicer with respect to the Home Equity Loans in the related Home
Equity Loan Group during the related Remittance Period (to the extent
the Net Liquidation Proceeds relate to principal) in each case to the
extent the amounts are received by the Trustee on or prior to the
Monthly Remittance Date;
(e) the principal portion of the proceeds received by the Trustee with
respect to the related Home Equity Loan Group upon termination of the
Trust (to the extent the proceeds relate to principal).
"BUSINESS DAY": Any day other than a Saturday, Sunday or a day on which
commercial banking institutions in New York, New York, Dallas, Texas, the city
in which the Corporate Trust Office is located or, with respect to the
obligations of the Custodian hereunder, the State of California, are authorized
or obligated by law or executive order to be closed.
"CARRYOVER CERTIFICATE": The Class X-0, Xxxxx X-0, Class M-1, Class
M-2 and Class B Certificates.
"CERTIFICATE": Any one of the Offered Certificates, the Class X-IO
Certificates or the Class R Certificates, each representing the interests and
the rights described in this Agreement.
"CERTIFICATE ACCOUNT": The segregated certificate account established
in accordance with Section 7.02(a) hereof and maintained at the Corporate Trust
Office entitled "Bank One, National Association, as Trustee on behalf of the
Owners of the Centex Home Equity Loan Trust 2001-B, Centex Home Equity Loan
Asset-Backed Certificates." The Certificate Account shall be an Eligible
Account.
"CERTIFICATE PRINCIPAL BALANCE": As of the Startup Day as to each of
the following Classes of Offered Certificates, the principal balances thereof,
as follows:
Class A-l Certificates - $134,074,000
Class A-2 Certificates - $57,096,000
Class A-3 Certificates - $59,251,000
Class A-4 Certificates - $39,093,000
Class A-5 Certificates - $28,871,000
Class A-6 Certificates - $35,376,000
Class A-7 Certificates - $56,639,000
Class M-1 Certificates - $28,800,000
Class M-2 Certificates - $21,600,000
Class B Certificates - $19,200,000
As of any time of determination after the Startup Day, with respect to
a Class of Offered Certificates, the Certificate Principal Balance of such Class
as of the Startup Day less the aggregate of all amounts actually distributed to
such Class in reduction of such Class's Certificate Principal Balance pursuant
to Section 7.03 hereof on all prior Distribution Dates and, in the case of any
Class of Subordinate Certificates, reduced by any Applied Realized Loss Amounts
allocated to such Class on prior Distribution Dates.
The Class X-IO Certificates and the Class R Certificates do not have a
Certificate Principal Balance.
"CERTIFICATE RATE": Any of the Class A-1 Certificate Rate, the Class
A-2 Certificate Rate, the Class A-3 Certificate Rate, the Class A-4 Certificate
Rate, the Class A-5 Certificate Rate, the Class A-6 Certificate Rate, the Class
A-7 Certificate Rate, the Class M-1 Certificate Rate, the Class M-2 Certificate
Rate or the Class B Certificate Rate.
"CHEC": Centex 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 Offered Certificates or the Class X-IO
Certificates or the Class R Certificates.
"CLASS A-1 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-l Certificate, substantially in the form annexed
hereto as Exhibit A-1 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-1 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-1 Certificates, 4.93% per annum.
"CLASS A-2 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-2 Certificate, substantially in the form annexed
hereto as Exhibit A-2 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-2 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-2 Certificates, 5.35% per annum.
"CLASS A-3 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-3 Certificate, substantially in the form annexed
hereto as Exhibit A-3 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-3 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-3 Certificates, 5.77% per annum.
"CLASS A-4 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-4 Certificate, substantially in the form annexed
hereto as Exhibit A-4 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-4 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-4 Certificates, 6.41% per annum.
"CLASS A-5 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-5 Certificate, substantially in the form annexed
hereto as Exhibit A-5 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-5 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-5 Certificates, the lesser of (A) 6.83% per annum (or 7.33% per
annum for each Interest Period occurring after the Clean-Up Call Date) and (B)
the Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS A-6 CALCULATION PERCENTAGE": For any Distribution Date will be
the fraction, expressed as a percentage, the numerator of which is the
Certificate Principal Balance of the Class A-6 Certificates, and the denominator
of which is the total of the Certificate Principal Balances of the Group I
Certificates, in each case before giving effect to any distributions in
reduction of the Certificate Principal Balances of the Group I Certificates
pursuant to Section 7.03 hereof.
"CLASS A-6 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-6 Certificate, substantially in the form annexed
hereto as Exhibit A-6 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-6 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-6 Certificates, 6.36% per annum.
"CLASS A-6 LOCKOUT DISTRIBUTION AMOUNT": For any Distribution Date
will be an amount equal to the product of (1) the applicable Class A-6 Lockout
Percentage for the Distribution Date, (2) the Class A-6 Calculation Percentage
and (3) the Group I Principal Distribution Amount available for distribution
with respect to the Group I Certificates for the Distribution Date. In no event
shall the Class A-6 Lockout Distribution Amount exceed the outstanding
Certificate Principal Balance of the Class A-6 Certificates or the Group I
Principal Distribution Amount available for distribution applicable to the Group
I Certificates for the Distribution Date.
"CLASS A-6 LOCKOUT PERCENTAGE": For each Distribution Date will be as
follows:
DISTRIBUTION DATE LOCKOUT PERCENTAGE
----------------- ------------------
July 2001 through June 2004 0%
July 2004 through June 2006 45%
July 2006 through June 2007 80%
July 2007 through June 2008 100%
July 2008 and thereafter 300%
"CLASS A-7 AVAILABLE FUNDS CAP": With respect to any Interest Period
and the related Distribution Date will be a rate per annum equal to the product
of (a) the weighted average of the Net Coupon Rates on the Group II Home Equity
Loans as of the beginning of the related Remittance Period and (b) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the related Interest Period, reflecting accrued interest calculated
on the basis of a 360-day year and the actual number of days elapsed.
"CLASS A-7 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class A-7 Certificate, substantially in the form annexed
hereto as Exhibit A-7 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS A-7 CERTIFICATE RATE": With respect to any Distribution Date
and the Class A-7 Certificates, the lesser of (A) the Class A-7 Formula Rate and
(B) the Class A-7 Available Funds Cap for the Distribution Date.
"CLASS A-7 CERTIFICATEHOLDERS' INTEREST INDEX CARRYOVER": The sum of
(A) the excess of (1) the amount of interest the Class A-7 Certificates would
otherwise be entitled to receive on the Distribution Date had the Class A-7
Certificate Rate been calculated at the Class A-7 Formula Rate for the
Distribution Date over (2) the amount of interest payable on the Class A-7
Certificates at the Class A-7 Available Funds Cap for the Distribution Date and
(B) the excess described in clause A for all previous Distribution Dates
(including any interest accrued thereon at the Class A-7 Formula Rate) not
previously paid to Class A-7 Certificateholders.
"CLASS A-7 FORMULA RATE": For any Distribution Date is the sum of (1)
LIBOR and (2) 0.23% per annum (or 0.46% per annum for each Interest Period
occurring after the Clean-Up Call Date).
"CLASS B CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class B Certificate, substantially in the form annexed hereto
as Exhibit A-10 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS B CERTIFICATE RATE": With respect to any Distribution Date and
the Class B Certificates, the lesser of (A) 7.81% per annum (or 8.31% per annum
for each Interest Period occurring after the Clean-Up Call Date) and (B) the
Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTION AMOUNT": On any Distribution Date on
and after the Stepdown Date and so long as a Trigger Event is not in effect, an
amount equal to the excess of (1) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after giving effect to the
distribution of the Senior Principal Distribution Amount on such Distribution
Date), (B) the Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Certificate Principal Balance of the
Class M-2 Certificates (after giving effect to the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date) and (D) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 96% of the Pool Balance as of the
last day of the related Remittance Period and (B) the Pool Balance as of the
last day of the related Remittance Period minus the OC Floor, provided, however,
that after the Certificate Principal Balances of the Senior, Class M-1 and Class
M-2 Certificates are reduced to zero, the Class B Principal Distribution Amount
for such Distribution Date will equal 100% of the Principal Distribution Amount.
"CLASS INTEREST CARRYOVER SHORTFALL": As to any Class of Offered
Certificates and any Distribution Date, an amount equal to the sum of (i) the
excess of the related Class Monthly Interest Amount for the preceding
Distribution Date and any outstanding Class Interest Carryover Shortfall with
respect to such Class on any preceding Distribution Date, over the amount in
respect of interest that is actually distributed to the Owners of such Class on
such preceding Distribution Date plus (ii) one month's interest on such excess,
to the extent permitted by law, at the related Certificate Rate.
"CLASS M-1 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class M-1 Certificate, substantially in the form annexed
hereto as Exhibit A-8 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS M-1 CERTIFICATE RATE": With respect to any Distribution Date
and the Class M-1 Certificates, the lesser of (A) 6.92% per annum (or 7.42% per
annum for each Interest Period occurring after the Clean-Up Call Date) and (B)
the Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date
on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if
the Certificate Principal Balance of each Class of Senior Certificates has been
reduced to zero and a Trigger Event exists, or, (y) if a Trigger Event is not in
effect, the excess of (1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution Date) and (B) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (2) the lesser of (A) 79% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool Balance as of the
last day of the related Remittance Period minus the OC Floor.
"CLASS M-2 CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class M-2 Certificate, substantially in the form annexed
hereto as Exhibit A-9 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each evidencing an interest
designated as a "regular interest" in REMIC I created hereunder for purposes of
the REMIC Provisions.
"CLASS M-2 CERTIFICATE RATE": With respect to any Distribution Date
and the Class M-2 Certificates, the lesser of (A) 7.36% per annum (or 7.86% per
annum for each Interest Period occurring after the Clean-Up Call Date) and (B)
the Fixed Rate Interest Rate Cap for the Distribution Date.
"CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date
on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if
the aggregate Certificate Principal Balance of each of the Senior and Class M-1
Certificates has been reduced to zero and a Trigger Event exists, or, (y) if a
Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such Distribution Date over (2)
the lesser of (A) 88% of the Pool Balance as of the last day of the related
Remittance Period and (B) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
"CLASS MONTHLY INTEREST AMOUNT": With respect to each Class of Offered
Certificates means, with respect to any Distribution Dates: the aggregate amount
of interest accrued during the related Interest Period at the related
Certificate Rate on the Certificate Principal Balance of the Class of Offered
Certificates; provided, however, that with respect to each Class of Offered
Certificates, such amount 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) during the related Remittance
Period.
"CLASS PRINCIPAL CARRYOVER SHORTFALL": As to any Class of Subordinate
Certificates and any Distribution Date, the excess, if any, of (i) the sum of
(x) the amount of the reduction in the Certificate Principal Balance of that
Class of Subordinate Certificates on such Distribution Date as a result of the
application of Applied Realized Loss Amounts and (y) the amount of such
reductions on prior Distribution Dates over (ii) the amount distributed in
respect of the Class Principal Carryover Shortfall to such Class of Subordinate
Certificates on prior Distribution Dates.
"CLASS PRINCIPAL DISTRIBUTION AMOUNT": Either the Group I Principal
Distribution Amount, the Group II Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount or
the Class B Principal Distribution Amount, as the case may be.
"CLASS R CERTIFICATE": Any one of the Certificates designated on the
face thereof as a Class R Certificate, substantially in the form annexed hereto
as Exhibit C, authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein. For the purposes of the REMIC Provisions,
the Class R Certificate shall evidence (i) an interest designated as the Class
R-1 Certificate which is the "residual interest" in REMIC I and (ii) an interest
designated as the Class R-2 Certificate which is the "residual interest" in
REMIC II and (iii) 50 interests designated as the Class III-1-R through Class
III-50-R Certificates which are the "residual interests" in the Fifty REMIC IIIs
("Fifty Class III-R Certificates") . The Owner of the Class R Certificate shall
be entitled to separate such Certificate into its component Class R-1, Class R-2
and Fifty Class III-R 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 funds, if any, remaining after the making
of all applications, transfers and disbursements described in Sections
7.03(b)(A)(1) through 7.03(b)(C)(10) pursuant to Sections 703(b)(A)(14) and
(15), 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
pursuant to Sections 7.03(b)(C)(11) and (16).
"CLEAN-UP CALL DATE": The first Distribution Date following the last
day of the Remittance Period on which the aggregate Loan Balance of all the Home
Equity Loans has declined to less than 20% of the aggregate Loan Balance of the
Home Equity Loans as of the Cut-Off Date.
"CLOSING": As defined in Section 4.02 hereof.
"CODE": The Internal Revenue Code of 1986, as amended.
"COMMISSION": The Securities and Exchange Commission.
"COMPENSATING INTEREST": As defined in Section 8.10(a) hereof.
"CONDUIT HOME EQUITY LOANS": The home equity loans listed on the
Conduit Schedule of Home Equity Loans.
"CONDUIT WAREHOUSING FACILITY": The Mortgage Loan Purchase and
Servicing Agreement dated February 6, 2001 among Xxxxxxx Street Funding II, LLC,
Centex Credit Corporation d/b/a Centex Home Equity Corporation and Centex
Corporation, as amended.
"CONDUIT SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity
Loans attached as Schedule I-D
hereto.
"CONDUIT SELLER": Xxxxxxx Street Funding II, LLC, a Delaware limited
liability company.
"CONDUIT SERVICER": CHEC in its capacity as servicer with respect to
the Conduit Warehousing Facility.
"CORPORATE TRUST OFFICE": The principal office of the Trustee at 1
Bank Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attn: Global
Corporate Trust Services (as of the Startup Day), or at such other address as
the Trustee may designate by notice to the Depositor, the Seller, the Servicer
and the Owners, or the principal office of any successor Trustee hereunder.
"COUPON RATE": The rate of interest borne by each Note from time to
time.
"CRAM DOWN LOSS": With respect to a Home Equity Loan, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Loan Balance of such Home Equity Loan, the amount of such
reduction. A "Cram Down Loss" shall be deemed to have occurred on the date of
issuance of such order.
"CUSTODIAL AGREEMENT": The Custodial Agreement dated as of June 1,
2001 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 June 1,
2001 and (ii) the date of origination with respect to a Home Equity Loan, but in
no event later than the Startup Day.
"DELINQUENCY ADVANCE": As defined in Section 8.09(a) hereof.
"DELINQUENCY EVENT": A Delinquency Event shall have occurred and be
continuing if at any time the 60+ Delinquency Percentage (Rolling Three Month)
exceeds 50% of the Senior Enhancement Percentage.
"DELINQUENT": A Home Equity Loan is "Delinquent" if any payment due
thereon is not made by the Mortgagor by the close of business on the related Due
Date. A Home Equity Loan is "30 days Delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days Delinquent," "90
days Delinquent" and so on.
"DELIVERY ORDER": The delivery order in the form set forth as Exhibit
G hereto and delivered by the Depositor to the Trustee on the Startup Day
pursuant to Section 4.01 hereof.
"DEPOSITOR": CHEC Funding, LLC, a Delaware limited liability company,
or any successor thereto.
"DEPOSITORY": The Depository Trust Company, 0 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, and any successor Depository.
"DESIGNATED DEPOSITORY INSTITUTION": With respect to the Principal and
Interest Account, a trust account maintained by the trust department of a
federal or state chartered depository institution, acting in its fiduciary
capacity, having combined capital and surplus of at least $100,000,000;
provided, however, that if the Principal and Interest Account is not maintained
with the Trustee, (i) such institution shall have a long-term debt rating of at
least "A" by Standard & Poor's and "A2" by Xxxxx'x and if rated by Fitch, "A" by
Fitch and (ii) the Servicer shall provide the Trustee with a statement, which
the Trustee will send to the Owners, identifying the location and account
information of the Principal and Interest Account upon a change in the location
of such account.
"DETERMINATION DATE": The 15th day of each month, or if such day is
not a Business Day, the preceding Business Day, commencing in July 2001.
"DIRECT PARTICIPANT" or "DTC Participant": Any broker-dealer, bank or
other financial institution for which the Depository holds Offered Certificates
from time to time as a securities depository.
"DISQUALIFIED ORGANIZATION": The meaning set forth from time to time
in the definition thereof at Section 860E(e)(5) of the Code (or any successor
statute thereto) and applicable to the Trust.
"DISTRIBUTION DATE": Any date on which the Trustee is required to make
distributions to the Owners, which shall be the 25th day of each month or if
such day is not a Business Day, the next Business Day thereafter, commencing in
the month following the Startup Day. The first Distribution Date will be July
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, in the case of any institution other than Bank One, National Association,
Aa2 or higher by Xxxxx'x (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 Xxxxx'x and if rated by Fitch, Fitch (in the case of its
short-term obligations), and which is (i) a federal savings and loan association
duly organized, validly existing and in good standing under the federal banking
laws, (ii) an institution duly organized, validly existing and in good standing
under the applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing under the
federal banking laws, (iv) a principal subsidiary of a bank holding company, or
(v) approved in writing by each of the Rating Agencies or (B) a segregated trust
account or accounts maintained with the Corporate Trust Office of the Trustee,
or the trust department of a federal or state chartered depository institution
acceptable to each Rating Agency, having capital and surplus of not less than
$100,000,000, acting in its fiduciary capacity.
"ELIGIBLE INVESTMENTS": Those investments so designated pursuant to
Section 7.07 hereof.
"EXCESS INTEREST": As to any Distribution Date, the amounts remaining
after the application of payments pursuant to clauses 1 through 6 of clause C of
Section 7.03(b).
"EXCESS OVERCOLLATERALIZATION AMOUNT": As to any Distribution Date,
the lesser of (i) the Aggregate Principal Amount for such Distribution Date and
(ii) the excess, if any, of (x) the Overcollateralization Amount (assuming 100%
of the Aggregate Principal Amount is distributed on the Offered Certificates)
over (y) the Required Overcollateralization Amount.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the Emergency Home
Finance Act of 1970, as amended, or any successor thereof.
"FIFTY REMIC IIIs": The segregated pool of assets allocable to each of
fifty lower-tier REMIC IIIs as identified on Schedule I-F, consisting of all the
assets of the Trust Estate other than the Supplemental Interest Reserve Account,
Repurchase Reserve Fund and the REMIC III Regular Interests and REMIC II Regular
Interests and each constituting a REMIC created hereunder. Expenses and fees of
the Trust shall be paid from the Fifty REMIC IIIs and apportioned among them pro
rata based on the aggregate Loan Balances of each of the Fifty REMIC IIIs.
"FILE": The documents delivered to the Custodian on behalf of the
Trustee pursuant to Section 3.05(b) hereof pertaining to a particular Home
Equity Loan and any additional documents required to be added to the File
pursuant to this Agreement.
"FINAL CERTIFICATION": As defined in Section 3.06(c) hereof.
"FINAL DETERMINATION": As defined in Section 9.03(a) hereof.
"FINAL RECOVERY DETERMINATION": With respect to any defaulted Home
Equity Loan or REO Property (other than a Home Equity Loan purchased by the
Seller, the Depositor or the Servicer), a determination made by the Servicer
that all recoveries which the Servicer, in its reasonable business judgment,
expects to be finally recoverable in respect thereof have been so recovered or
that the Servicer believes in its reasonable business judgment the cost of
obtaining any additional recoveries therefrom would exceed the amount of such
recoveries. The Servicer shall maintain records of each Final Recovery
Determination.
"FINAL SCHEDULED DISTRIBUTION DATE": As set out in Section 2.08(d)
hereof with respect to each Certificate.
"FIRST MORTGAGE LOAN": A Home Equity Loan which constitutes a first
priority mortgage lien with respect to any Property.
"FITCH": Fitch, Inc. or any successor thereto.
"FIXED RATE CERTIFICATES": Any of the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class M-1 Certificates, Class M-2
Certificates and Class B Certificates.
"FIXED RATE INTEREST RATE CAP": With respect to any Distribution Date,
a rate per annum equal to the lesser of (x) the weighted average of the Net
Coupon Rates on the Group I Home Equity Loans as of the beginning of the related
Remittance Period and (y) the weighted average of the Net Coupon Rates on the
Home Equity Loans in the aggregate as of the beginning of the related Remittance
Period.
"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, the
Repurchase Price amounts and Substitution Amounts relating to interest on the
Home Equity Loans in Group I paid by CHEC or the Servicer on or prior to such
Monthly Remittance Date, (iv) the interest portion of all Net Liquidation
Proceeds actually collected by the Servicer with respect to the Home Equity
Loans in Group I during the related Remittance Period, (v) the principal
actually collected by the Servicer with respect to Home Equity Loans in Group I
during the related Remittance Period, (vi) the outstanding principal balance of
each Home Equity Loan in Group I (including the portion of the Repurchase Price
relating to principal) 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); but excluding any Premium Amount.
"GROUP I PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date,
the excess of (i) the Senior Principal Distribution Amount for such Distribution
Date over (ii) the Group II Principal Distribution Amount for such Distribution
Date.
"GROUP II": With respect to the Home Equity Loans, the pool of Home
Equity Loans identified in the related Schedule of Home Equity Loans as having
been assigned to Group II in Schedule I-B hereto, including any Qualified
Replacement Mortgages delivered in replacement thereof. Group II refers, with
respect to the Conduit Home Equity Loans, to the Home Equity Loans listed in the
Conduit Schedule of Home Equity Loans that are also assigned to Group II in
Schedule I-B hereto; 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, the
Repurchase Price amounts and Substitution Amounts relating to interest on the
Home Equity Loans in Group II paid by CHEC or the Servicer on or prior to such
Monthly Remittance Date, (iv) the interest portion of all Net Liquidation
Proceeds actually collected by the Servicer with respect to the Home Equity
Loans in Group II during the related Remittance Period, (v) the principal
actually collected by the Servicer with respect to Home Equity Loans in Group II
during the related Remittance Period, (vi) the outstanding principal balance of
each Home Equity Loan in Group II (including the portion of the Repurchase Price
relating to principal) 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); but excluding any Premium Amount.
"GROUP II PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date,
the lesser of (A) the greater of (i) the product of (x) the Senior Principal
Distribution Amount for such Distribution Date and (y) a fraction, the numerator
of which is the aggregate Loan Balance of the Group II Home Equity Loans as of
the last day of the related Remittance Period, and the denominator of which is
the aggregate Loan Balance of all the Home Equity Loans as of the last day of
the related Remittance Period, and (ii) the excess, if any, of (x) the
Certificate Principal Balance of the Class A-7 Certificates immediately prior to
such Distribution Date over (y) the aggregate Loan Balance of the Home Equity
Loans in Group II as of the last day of the related Remittance Period or (B) the
Senior Principal Distribution Amount.
"HIGHEST LAWFUL RATE": As defined in Section 11.13 hereof.
"HOME EQUITY LOAN ASSETS": The meaning set forth under the heading
"CONVEYANCE" herein.
"HOME EQUITY LOAN GROUP" or "GROUP": Group I or Group II, as the case
may be. References herein to the related Class of Offered Certificates, when
used with respect to a Home Equity Loan Group, shall mean (A) in the case of
Group I, the Group I Certificates and (B) in the case of Group II, the Group II
Certificates.
"HOME EQUITY LOANS": The Conduit Home Equity Loans and/or the Seller
Home Equity Loans, as applicable, together with any Qualified Replacement
Mortgages substituted therefor in accordance with this Agreement, as from time
to time are held as a part of the Trust Estate. Where applicable, the term "Home
Equity Loan" includes (i) the terms "First Mortgage Loan" and "Second Mortgage
Loan", and (ii) any Home Equity Loan which is Delinquent, relates to a
foreclosure or relates to a Property which is REO Property prior to such REO
Property's disposition by the Trust. Any home equity loan which, although
intended by the parties hereto to have been, and which purportedly was,
transferred and assigned to the Trust by the Depositor, in fact was not
transferred and assigned to the Trust for any reason whatsoever, including,
without limitation, the incorrectness of the statement set forth in Section
3.04(b)(x) hereof with respect to such home equity loan, shall nevertheless be
considered a "Home Equity Loan" for all purposes of this Agreement.
"INDIRECT PARTICIPANT": Any financial institution for whom any Direct
Participant holds an interest in an Offered Certificate.
"INSURANCE POLICY": Any hazard, flood, title or primary mortgage
insurance policy relating to a Home Equity Loan plus any amount remitted under
Section 8.11 hereof.
"INTEREST PERIOD": With respect to each Distribution Date and (i) the
Fixed Rate Certificates, the period from the first day of the calendar month
preceding the month of the Distribution Date through the last day of the
calendar month with interest accruing on the basis of a 360-day year consisting
of twelve 30-day months; and (ii) the Variable Rate Certificates, the period
from and including the preceding Distribution Date (or the Startup Day in the
case of the first Distribution Date) to and including the day preceding the
related Distribution Date with interest accruing on the basis of the actual
number of days elapsed in the related Interest Period and a year of 360 days.
"LIBOR": With respect to any Interest Period for the Class A-7
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loans to leading European banks.
"LIBOR DETERMINATION DATE": With respect to any Interest Period for
the Class A-7 Certificates, the second London Business Day preceding the
commencement of such Interest Period.
"LIQUIDATED LOAN": A Home Equity Loan as to which a Final Recovery
Determination has been made.
"LIQUIDATION PROCEEDS": With respect to any Liquidated Loan, all
amounts (including the proceeds of any Insurance Policy) recovered by the
Servicer in connection with such Liquidated Loan, whether through trustee's
sale, foreclosure sale or otherwise.
"LOAN BALANCE": With respect to each Home Equity Loan and as of any
date of determination, the actual outstanding principal balance thereof on the
Cut-Off Date or relevant Replacement Cut-Off Date with respect to a Qualified
Replacement Mortgage less any principal payments relating to such Home Equity
Loan included in previous Monthly Remittance Amounts, provided, however, that
the Loan Balance for any Home Equity Loan that has become a Liquidated Loan
shall be zero as of the first day of the Remittance Period following the
Remittance Period in which such Home Equity Loan becomes a Liquidated Loan, and
at all times thereafter.
"LOAN PURCHASE PRICE": With respect to any Home Equity Loan purchased
from the Trust on or prior to a Monthly Remittance Date pursuant to Section
3.04, 3.06(b) or 8.10(b) hereof, an amount equal to the outstanding principal
balance of such Home Equity Loan as of the date of purchase (assuming that the
Monthly Remittance Amount remitted by the Servicer on such Monthly Remittance
Date has already been remitted), plus all accrued and unpaid interest on such
Home Equity Loan at the Coupon Rate to but not including the date of such
purchase together with (without duplication) the aggregate amounts of (i) all
unreimbursed Delinquency Advances and Servicing Advances theretofore made with
respect to such Home Equity Loan, (ii) all Delinquency Advances which the
Servicer has theretofore failed to remit with respect to such Home Equity Loan
and (iii) all reimbursed Delinquency Advances and Servicing Advances to the
extent that reimbursement is not made from the Mortgagor.
"LOAN-TO-VALUE RATIO": As of any particular date (i) with respect to
any First Mortgage Loan, the percentage obtained by dividing the Appraised Value
into the original principal balance of the Note relating to such First Mortgage
Loan and (ii) with respect to any Second Mortgage Loan, the percentage obtained
by dividing the Appraised Value as of the date of origination of such Second
Mortgage Loan into an amount equal to the sum of (a) the remaining principal
balance of the Senior Lien relating to such Second Mortgage Loan as of the date
of origination of the related Second Mortgage Loan and (b) the original
principal balance of the Note relating to such Second Mortgage Loan.
"LONDON BUSINESS DAY": Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
"MANUFACTURED HOME": A unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Mortgagor under the related
Home Equity Loan treated as real estate under applicable state law.
"MAXIMUM RATE": With respect to any Home Equity Loan in Group II,
means the maximum rate at which interest may accrue on such Home Equity Loan.
"MONTHLY PAYMENT": With respect to any Home Equity Loan and any
Remittance Period, the payment of principal, if any, and interest due on the Due
Date in such Remittance Period pursuant to the related Note.
"MONTHLY REMITTANCE AMOUNT": The sum of the Group I Monthly Remittance
Amount and the Group II Monthly Remittance Amount.
"MONTHLY REMITTANCE DATE": The 18th day of each month, or if the 18th
day is not a Business Day, the preceding Business Day.
"MOODY'S": Xxxxx'x Investors Service, Inc. or any successor thereto.
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Note.
"MORTGAGOR": Each obligor on a Note.
"NET COUPON RATE": With respect to any Home Equity Loan in Group I or
Group II, means a rate per annum equal to the Coupon Rate of such Home Equity
Loan minus the sum of (i) the rate at which the Servicing Fee accrues and (ii)
the rate at which the Trustee Fee accrues (expressed as a per annum percentage
of the aggregate Loan Balance of the Home Equity Loans in Group I or Group II,
as applicable).
"NET LIQUIDATION PROCEEDS": As to any Liquidated Loan, Liquidation
Proceeds net of expenses incurred by the Servicer (including unreimbursed
Servicing Advances) in connection with the liquidation of such Home Equity Loan
and unreimbursed Delinquency Advances relating to such Home Equity Loan. In no
event shall Net Liquidation Proceeds with respect to any Liquidated Loan be less
than zero.
"NET RATE CAP CARRYOVER": Is equal to the sum of (A) the excess of (1)
the amount of interest that the Class A-5, Class M-1, Class M-2 or Class B
Certificates, as applicable, would otherwise be entitled to receive on the
Distribution Date had its interest rate been calculated at the respective
Certificate Rate without regard to the Fixed Rate Interest Rate Cap for such
Class and for the Distribution Date over (2) the amount of interest payable on
such Class at the respective Certificate Rate for such Class for the
Distribution Date and (B) the excess described in clause A for all previous
Distribution Dates (including any interest accrued on that amount at the related
Certificate Rate without regard to the Fixed Rate Interest Rate Cap)not
previously paid to the related Class of Certificates.
"NONRECOVERABLE ADVANCE" means with respect to any Home Equity Loan
for which a Final Recovery Determination has been made, any Delinquency Advance
or Servicing Advance previously made and not reimbursed from proceeds on the
related Home Equity Loan or under Section 7.03(b) clause C.15 hereof which the
Servicer has determined, in good faith business judgment, as evidenced by an
Officer's Certificate delivered to the Trustee no later than the Business Day
following such determination, would not be ultimately recovered.
"NOTE": The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Home Equity Loan.
"OC FLOOR": An amount equal to 0.50% of the Pool Balance as of the
Cut-Off Date.
"OFFERED CERTIFICATE": Any one of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates,
the Class A-5 Certificates, the Class A-6 Certificates, the Class A-7
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class B Certificates.
"OFFICER'S CERTIFICATE": A certificate signed by any Authorized
Officer of any Person delivering such certificate and delivered to the Trustee.
"OPERATIVE DOCUMENTS": Collectively, this Agreement, the Certificates
and the Custodial Agreement.
"OPINION OF COUNSEL": A written opinion of counsel acceptable, in form
and substance, to the Trustee and delivered to the Trustee and the Rating
Agencies.
"OPTIONAL LIMITED PURCHASE": The limited purchase of Home Equity Loans
by the Servicer pursuant to Section 7.04A.
"ORIGINAL AGGREGATE LOAN BALANCE": The aggregate Loan Balances of all
Home Equity Loans as of the Cut-Off Date, which is $480,002,550.56.
"OUTSTANDING": With respect to all Certificates of a Class, as of any
date of determination, all such Certificates theretofore executed and delivered
hereunder except:
(i) Certificates theretofore canceled by the Registrar or
delivered to the Registrar for cancellation;
(ii) Certificates or portions thereof for which full and final
payment of money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent in trust for the Owners
of such Certificates;
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this
Agreement, unless proof satisfactory to the Trustee is presented that
any such Certificates are held by a bona fide purchaser;
(iv) Certificates alleged to have been destroyed, lost or stolen
for which replacement Certificates have been issued as provided for in
Section 5.05 hereof; and
(v) Certificates as to which the Trustee has made the final
distribution thereon, whether or not such Certificate is ever returned
to the Trustee.
"OVERCOLLATERALIZATION AMOUNT": With respect to each Distribution
Date, the excess, if any, of (1) the aggregate Loan Balance of the Home Equity
Loans as of the close of business on the last day of the preceding Remittance
Period over (2) the aggregate outstanding Certificate Principal Balances of the
Offered Certificates as of the Distribution Date (after taking into account the
payment of the Principal Distribution Amount on the Distribution Date).
"OWNER" or "CERTIFICATEHOLDER": The Person in whose name a Certificate
is registered in the Register.
"PAYING AGENT": Initially, the Trustee, and thereafter, the Trustee or
any other Person that meets the eligibility standards for the Paying Agent
specified in Section 11.15 hereof and is authorized by the Trustee and the
Depositor to make payments on the Certificates on behalf of the Trustee.
"PERCENTAGE INTEREST": With respect to a Class of Offered
Certificates, a fraction, expressed as a decimal, the numerator of which is the
principal balance represented by such Offered Certificate as of the Startup Day
and the denominator of which is the Certificate Principal Balance represented by
all the Offered Certificates of such Class as of the Startup Day. With respect
to the Class X-IO or Class R Certificates, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Certificate,
all of which shall total 100% with respect to the related Class.
"PERSON": Any individual, corporation, limited partnership, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"POOL BALANCE": With respect to any date, the aggregate of the Loan
balances of all Home Equity Loans as of such date.
"PREPAYMENT": Any payment of principal of a Home Equity Loan which is
received by the Servicer which is not a Scheduled Principal Payment and which is
not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment, the portion of Substitution Amounts representing principal,
the portion of the Repurchase Price representing principal (excluding any
Premium Amount), the portion of the Loan Purchase Price of any Home Equity Loan
purchased from the Trust pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof
representing principal and the proceeds of any Insurance Policy which are to be
applied as a payment of principal on the related Home Equity Loan shall be
deemed to be Prepayments for all purposes of this Agreement.
"PRESERVATION EXPENSES": Expenditures made by the Servicer in
connection with a foreclosed Home Equity Loan prior to the liquidation thereof,
including, without limitation, expenditures for real estate property taxes,
hazard insurance premiums, property restoration or preservation.
"PRINCIPAL AND INTEREST ACCOUNT": The principal and interest account
created by the Servicer pursuant to Section 8.08(a) hereof. The Principal and
Interest Account shall be an Eligible Account.
"PRINCIPAL DISTRIBUTION AMOUNT": As to any Distribution Date, the
lesser of (a) the aggregate Certificate Principal Balances of the Offered
Certificates immediately preceding such Distribution Date and (b) the sum of (i)
the Aggregate Principal Amount for such Distribution Date minus the Excess
Overcollateralization Amount for such Distribution Date and (ii) the
Subordination Increase Amount for such Distribution Date.
"PROHIBITED TRANSACTION": The meaning set forth from time to time in
the definition thereof at Section 860F(a)(2) of the Code (or any successor
statute thereto) and applicable to the Trust.
"PROPERTY": The underlying property securing a Home Equity Loan.
"PROSPECTUS": The Depositor's Prospectus dated June 6, 2001
constituting part of the Registration Statement.
"PROSPECTUS SUPPLEMENT": The Centex Home Equity Loan Trust 2001-B
Prospectus Supplement dated June 6, 2001 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 of such Replacement Cut-Off Date, (viii) shall not provide for a
"balloon" payment if the related Home Equity Loan did not provide for a
"balloon" payment (and if such related Home Equity Loan provided for a "balloon"
payment, such Qualified Replacement Mortgage shall have an original maturity of
not less than the original maturity of such related Home Equity Loan), (ix)
shall be a fixed rate Home Equity Loan if the Home Equity Loan being replaced is
in Group I or an adjustable rate Home Equity Loan if the Home Equity Loan being
replaced is in Group II, (x) satisfies the criteria set forth from time to time
in the definition thereof at Section 860G(a)(4) of the Code (or any successor
statute thereto) and applicable to the Trust, (xi) satisfies the representations
and warranties set forth in Section 3.04(b) hereof, (xii) shall not be 30 days
or more Delinquent and (xiii) if such Home Equity Loan being replaced is in
Group II, shall adjust based on the same index as, have no lower margin than,
have the same interval between adjustment dates as and have a maximum Coupon
Rate no lower than, and a minimum Coupon Rate no lower than, the Home Equity
Loan being replaced.
"RATING AGENCIES": Collectively, Xxxxx'x and Fitch.
"REALIZED LOSS": As to any Liquidated Loan (or, in the case of a Cram
Down Loss, a Home Equity Loan that is not a Liquidated Loan), the amount (not
less than zero), if any, by which (A) the sum of (x) the Loan Balance thereof as
of the date of liquidation, (y) the amount of accrued but unpaid interest
thereon and (z) the amount of any Cram Down Loss with respect thereto is in
excess of (B) the Net Liquidation Proceeds, if any, realized thereon.
"RECORD DATE": With respect to (i) any Distribution Date and each
Class of Fixed Rate Certificates and the Class R Certificates, the last Business
Day of the calendar month immediately preceding the calendar month in which such
Distribution Date occurs and (ii) any Distribution Date and the Variable Rate
Certificates and the Class X-IO Certificates, the Business Day immediately
preceding such Distribution Date, or if definitive Variable Rate Certificates
have been issued, the last Business Day of the calendar month immediately
preceding the calendar month in which such Distribution Date occurs.
"REFERENCE BANKS": Bankers Trust Company, Barclays Bank PLC, The Bank
of Tokyo and National Westminster Bank PLC, provided that if any of the
foregoing banks are not suitable to serve as a Reference Bank, then any leading
banks selected by CHEC which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of
business in London, (ii) which are not Affiliates of the Seller, (iii) whose
quotations appear on Telerate Page 3750 on the relevant LIBOR Determination Date
and (iv) which have been designated as such by the Seller.
"REGISTER": The register maintained by the Registrar in accordance
with Section 5.04 hereof, in which the names of the Owners are set forth.
"REGISTRAR": The Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.04 hereof, or any duly appointed and eligible
successor thereto.
"REGISTRATION STATEMENT": The Registration Statement filed by the
Depositor with the Commission (Registration Number 333-93255), including all
amendments thereto and including the Prospectus and Prospectus Supplement
relating to the Offered Certificates.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The segregated group of assets consisting of the REMIC II
Regular Interests as defined in Section 2.08 hereof and constituting an
upper-tier REMIC created hereunder.
"REMIC II": The segregated group of assets consisting of the Fifty
REMIC III Regular Interests (as defined in Section 2.08 hereof) and constituting
a middle-tier REMIC created hereunder.
"REMIC OPINION": As defined in Section 3.04 hereof.
"REMIC PROVISIONS": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and revenue rulings promulgated thereunder, as the foregoing may
be in effect from time to time.
"REMITTANCE PERIOD": With respect to each Monthly Remittance Date, the
calendar month immediately preceding such Monthly Remittance Date.
"REO PROPERTY": A Property acquired by the Servicer on behalf of the
Trust through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Home Equity Loan.
"REPLACEMENT CUT-OFF DATE": With respect to any Qualified Replacement
Mortgage, the opening of business of the first day of the calendar month in
which such Qualified Replacement Mortgage is conveyed to the Trust.
"REPRESENTATION LETTER": Letters to, or agreements with, the
Depository to effectuate a book-entry system with respect to the Offered
Certificates registered in the Register under the nominee name of the
Depository.
"REQUIRED OVERCOLLATERALIZATION AMOUNT": As to the first four
Distribution Dates, $0.00. As to any other Distribution Date (1) prior to the
Stepdown Date, the product of (x) 2.00% and (y) the Pool Balance as of the
Cut-Off Date; and (2) on and after the Stepdown Date, the greater of (i) the
lesser of (x) the product of 2.00% and the Pool Balance as of the Cut-Off Date
and (y) the product of 4.00% and the Pool Balance as of the end of the related
Remittance Period and (ii) the OC Floor; provided, however, that on each
Distribution Date during the continuance of a Trigger Event the Required
Overcollateralization Amount will equal the Required Overcollateralization
Amount in effect as of the Distribution Date immediately preceding the date on
which such Trigger Event first occurred.
"SCHEDULE OF HOME EQUITY LOANS": The Conduit Schedule of Home Equity
Loans and the Seller Schedule of Home Equity Loans, Schedule I-A hereto or
Schedule I-B hereto, as the context may require.
"SCHEDULED PRINCIPAL PAYMENT": As of any date of calculation, with
respect to a Home Equity Loan, the then stated scheduled monthly installment of
principal payable thereunder which, if timely paid, would result in the full
amortization of principal over the term thereof (or, in the case of a "balloon"
Note, the term to the nominal maturity date for amortization purposes, without
regard to the actual maturity date), without taking into account any Prepayment
made on such Home Equity Loan during the then-current Remittance Period.
"SECOND MORTGAGE LOAN": A Home Equity Loan which constitutes a second
priority mortgage lien with respect to the related Property.
"SECURITIES ACT": The Securities Act of 1933, as amended.
"SELLER": Centex 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.
"SELLER SCHEDULE OF HOME EQUITY LOANS": The Schedule of Home Equity
Loans attached as Schedule I-C hereto.
"SELLERS": The Seller and the Conduit Seller.
"SENIOR CERTIFICATE": Any one of the Class X-0, Xxxxx X-0, Class A-3,
Class A-4, Class A-5, Class A-6 or Class A-7 Certificates.
"SENIOR ENHANCEMENT PERCENTAGE": As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate Certificate Principal Balances of the Subordinate Certificates and
(ii) the Overcollateralization Amount (in each case, after taking into account
the distribution of the Principal Distribution Amount (excluding any
Subordination Increase Amount) on such Distribution Date) and the denominator of
which is the Pool Balance as of the last day of the related Remittance Period.
"SENIOR LIEN": With respect to any Second Mortgage Loan, the home
equity loan relating to the corresponding Property having a first priority lien.
"SENIOR PRINCIPAL DISTRIBUTION AMOUNT": As to (a) any Distribution
Date prior to the Stepdown Date or during the continuance of a Trigger Event,
the lesser of (i) 100% of the Principal Distribution Amount and (ii) the
aggregate Certificate Principal Balances of the Senior Certificates immediately
prior to such Distribution Date, and (b) any other Distribution Date, the lesser
of (x) 100% of the Principal Distribution Amount and (y) the excess, if any, of
(i) the aggregate Certificate Principal Balances of the Senior Certificates
immediately prior to such Distribution Date over (ii) the lesser of (x) the
product of 67.00% and the Pool Balance as of the last day of the related
Remittance Period and (y) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
"SERVICER": Centex Credit Corporation d/b/a Centex Home Equity
Corporation, a Nevada corporation, and its permitted successors and assigns.
"SERVICER TERMINATION EVENT": As defined in Section 8.20(a) hereof.
"SERVICING ADVANCE": As defined in Section 8.09(b) and Section 8.13(a)
hereof.
"SERVICING FEE": With respect to any Home Equity Loan Group and a
Remittance Period, an amount retained by the Servicer as compensation for
servicing and administration duties relating to the Home Equity Loans in such
Home Equity Loan Group pursuant to Section 8.15 hereof and equal to one month's
interest at 0.50% per annum of the then aggregate outstanding Loan Balance of
such Home Equity Loans as of the first day of each Remittance Period payable on
a monthly basis; provided, however, that if a successor Servicer is appointed
pursuant to Section 8.20 hereof, the Servicing Fee shall be the amount as agreed
upon by the Trustee and the successor Servicer, and the per annum rate at which
the Servicing Fee is calculated shall not exceed 0.50% per annum.
"60-DAY DELINQUENT LOAN": With respect to any Remittance Period, and
without duplication, (i) all REO Properties as of the last day of such
Remittance Period, (ii) each Home Equity Loan with respect to which any portion
of a Monthly Payment is, as of the last day of such Remittance Period, two
months (calculated from Due Date with respect to such Home Equity Loan to Due
Date) or more past due (without giving effect to any grace period), (iii) each
Home Equity Loan in foreclosure as of the last day of such Remittance Period and
(iv) each Home Equity Loan described in clause (ii) that is also in bankruptcy.
"60+ DELINQUENCY PERCENTAGE (ROLLING THREE MONTH)": With respect to
any Distribution Date, the average of the percentage equivalents of the
fractions determined for each of the three immediately preceding Remittance
Periods (or such fewer number of Remittance Periods since the Cut-Off Date, in
the case of the first two Determination Dates) the numerator of each of which is
equal to the sum of (without duplication) the aggregate Loan Balance of 60-Day
Delinquent Loans for such Remittance Period, and the denominator of which is the
Loan Balance of all of the Home Equity Loans as of the end of such Remittance
Period.
"STARTUP DAY": June 15, 2001.
"STEPDOWN DATE": The later to occur of (1) the earlier to occur of (A)
the Distribution Date in July 2004 and (B) the Distribution Date on which the
aggregate Certificate Principal Balances of the Senior Certificates is reduced
to zero, and (2) the first Distribution Date on which the Senior Enhancement
Percentage (after giving effect to the distribution of the Principal
Distribution Amount on such Distribution Date) is at least equal to 33%.
"SUBORDINATE CERTIFICATES": Any of the Class M-1, Class M-2 or Class B
Certificates.
"SUBORDINATION DEFICIENCY": As to any Distribution Date, the excess,
if any, of (1) the Required Overcollateralization Amount for such Distribution
Date over (2) the Overcollateralization Amount for such Distribution Date after
giving effect to the distribution of the Aggregate Principal Amount on such
Distribution Date.
"SUBORDINATION INCREASE AMOUNT": As to the first four Distribution
Dates, $0.00. As to any subsequent Distribution Date, the lesser of (1) the
Subordination Deficiency and (2) the Excess Interest.
"SUB-SERVICER": Any Person with whom the Servicer has entered into a
Sub-Servicing Agreement and who satisfies any requirements set forth in Section
8.03 hereof in respect of the qualification of a Sub-Servicer.
"SUB-SERVICING AGREEMENT": The written contract between the Servicer
and any Sub-Servicer relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
"SUBSTITUTION AMOUNT": With respect to the substitution of any
Qualified Replacement Mortgage for any Home Equity Loan, as of the related
Replacement Cut-Off Date, the excess, if any, of the outstanding principal
balance of such Home Equity Loan over the outstanding principal balance of the
Qualified Replacement Mortgage, together with the aggregate amount of all
unreimbursed Delinquency Advances and unreimbursed Servicing Advances made, and
all accrued and unpaid interest, with respect to such Home Equity Loan.
"SUPPLEMENTAL INTEREST RESERVE FUND": The Supplemental Interest
Reserve Fund established and maintained as described in Section 7.04.
"TANGIBLE NET WORTH": Shall mean the difference between: (A) the
tangible assets of the Seller or Servicer, as applicable, and its Affiliates
calculated in accordance with generally accepted accounting principles, as
reduced by adequate reserves in each case where a reserve is appropriate; and
(B) all indebtedness, including subordinated debt, of the Seller or Servicer, as
applicable, and its Affiliates; provided, however, that (i) intangible assets
such as patents, trademarks, trade names, copyrights, licenses, good will,
organization costs, advances or loans to, or receivables from, directors,
officers, employees or affiliates, prepaid assets, amounts relating to covenants
not to compete, pension assets, deferred charges or treasury stock of any
securities unless the same are readily marketable in the United States of
America or are entitled to be used as a credit against federal income tax
liabilities, shall not be included in the calculation of (A) above, (ii)
securities included as tangible assets shall be valued at their current market
price or cost, whichever is lower and (iii) any write-up in book value of any
assets shall not be taken into account.
"TAX MATTERS PERSON": The Person designated pursuant to Section 11.18
hereof to act as the Tax Matters Person under the Code (or where the context
requires, the Trustee acting as agent for the Tax Matters Person).
"TELERATE PAGE 3750": The display designated as page "3750" on the
Bridge Telerate Service (or such other page as may replace page 3750 on that
report for the purpose of displaying London interbank offered rates of major
banks).
"TERMINATION PRICE": Means, with respect to Sections 9.02 and 9.03
hereof, and on any date of determination thereof, an amount equal to the sum of
(w) the greater of (A) the outstanding Certificate Principal Balances for the
Offered Certificates and (B) the fair market value of the Home Equity Loans
(disregarding accrued interest), (x) one month's interest on such amount
(calculated at the Adjusted Certificate Rate), (y) all Reimbursement Amounts and
(z) the sum of the aggregate amount of any unreimbursed Delinquency Advances,
unreimbursed Servicing Advances, unreimbursed Compensating Interest and any
Delinquency Advances which the Servicer has theretofore failed to remit.
"TRANSITION EXPENSES": Expenses incurred by the Trustee in connection
with the transfer of servicing upon the termination of the Servicer for a
Servicer Termination Event; provided that the amount shall not exceed $50,000 in
any one calendar year (and no more than $100,000 in the aggregate).
"TRIGGER EVENT": The existence of a Delinquency Event.
"TRUST": Centex Home Equity Loan Trust 2001-B, the trust created under
this Agreement which shall be comprised of two sub-trusts; one for Group I and
any Trust assets allocable to such Group I and the other for Group II and any
Trust assets allocable to such Group II.
"TRUST ESTATE": (a) The Home Equity Loan Assets and (b) such amounts
as may be held by the Trustee in the Certificate Account, together with
investment earnings on such amounts, and such amounts as may be held in the name
of the Trustee in the Principal and Interest Account, if any, inclusive of
investment earnings thereon, whether in the form of cash, instruments,
securities or other properties (including any Eligible Investments held by the
Servicer).
"TRUSTEE": Bank One, National Association, a national banking
association, not in its individual capacity but solely as Trustee under this
Agreement, and any successor hereunder.
"TRUSTEE FEE": The fee payable monthly to the Trustee on each
Distribution Date in an amount equal to $1,000.00.
"TRUSTEE REIMBURSABLE EXPENSES": As of any Distribution Date, the sum
of (a) any Trustee Fee and Transition Expenses not paid pursuant to clauses (i)
or (iv) of Section 7.03(b) on such Distribution Date and (b) any amounts owed to
the Trustee pursuant to Sections 2.05, 6.12, 7.06, 8.20(o), 10.07, 10.13 and
11.16(a)(v) hereof, and, if the Trustee is acting as Custodian, any related
custodial fees (including all attorney fees and expenses).
"UNDERWRITERS": Xxxxxx Brothers Inc., Banc of America Securities LLC,
Credit Suisse First Boston Corporation, and Xxxxxxx Xxxxx Barney Inc.
"VARIABLE RATE CERTIFICATES": The Class A-7 Certificates.
"VOTING RIGHTS": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X-IO
Certificates (such Voting Rights to be allocated among the Owners of
Certificates of such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class R
Certificates in the aggregate, or if separate Class R-1 and Class R-2
Certificates are issued, 0.50% to each such Class (such Voting Rights to be
allocated among the Owners of Certificates of each such Class in accordance with
their respective Percentage Interests), and (c) the remaining Voting Rights
shall be allocated among Owners of the Classes of Offered Certificates in
proportion to the Certificate Principal Balances of their respective Offered
Certificates on such date.
"WAC EXCESS": The sum of (a) the Net Rate Cap Carryover allocable to
each of the Class A-5, Class M-1, Class M-2 and Class B Certificates,
respectively, and (b) the Class A-7 Certificateholders' Interest Index Carryover
allocable to the Class A-7 Certificates.
"WEIGHTED AVERAGE CERTIFICATE RATE": As to the Offered Certificates
and any Distribution Date, the weighted average of the Class A-l Certificate
Rate, the Class A-2 Certificate Rate, the Class A-3 Certificate Rate, the Class
A-4 Certificate Rate, the Class A-5 Certificate Rate, the Class A-6 Certificate
Rate, the Class A-7 Certificate Rate, the Class M-1 Certificate Rate, the Class
M-2 Certificate Rate and the Class B Certificate Rate, weighted by,
respectively, the Certificate Principal Balance of each such Class of Offered
Certificates as of such Distribution Date prior to taking into account any
distributions to be made on such Distribution Date.
Section 1.02. USE OF WORDS AND PHRASES.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to this Agreement as a whole and
not solely to the particular section of this Agreement in which any such word is
used. The definitions set forth in Section 1.01 hereof include both the singular
and the plural. Whenever used in this Agreement, any pronoun shall be deemed to
include both singular and plural and to cover all genders.
Section 1.03. CAPTIONS, TABLE OF CONTENTS.
The captions or headings in this Agreement and the Table of Contents
are for convenience only and in no way define, limit or describe the scope and
intent of any provisions of this Agreement.
Section 1.04. OPINIONS.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Certificates may be qualified to the extent that
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general principles of equity (whether considered in a proceeding or action in
equity or at law) and may state that no opinion is expressed on the availability
of the remedy of specific enforcement, injunctive relief or any other equitable
remedy. Any opinion required to be furnished by any Person hereunder must be
delivered by counsel upon whose opinion the addressee of such opinion may
reasonably rely, and such opinion may state that it is given in reasonable
reliance upon an opinion of another, a copy of which must be attached,
concerning the laws of a foreign jurisdiction. Any opinion delivered hereunder
shall be addressed to the Rating Agencies and the Trustee.
END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01. ESTABLISHMENT OF THE TRUST.
The parties hereto do hereby create and establish, pursuant to the
laws of the State of New York and this Agreement, the Trust, which, for
convenience, shall be known as "Centex Home Equity Loan Trust 2001-B" and which
shall contain two subtrusts.
Section 2.02. OFFICE.
The office of the Trust shall be in care of the Trustee, addressed to
Bank One, National Association, at its Corporate Trust Office.
Section 2.03. PURPOSES AND POWERS.
The purpose of the Trust is to engage in the following activities and
only such activities: (i) the issuance of the Certificates and the acquiring,
owning and holding of Home Equity Loans and the Trust Estate in connection
therewith; (ii) activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith,
including the investment of moneys in accordance with this Agreement; and (iii)
such other activities as may be required in connection with conservation of the
Trust Estate and distributions to the Owners; provided, however, that nothing
contained herein shall permit the Trustee to take any action which would
adversely affect the status of any REMIC created hereunder.
Section 2.04. APPOINTMENT OF THE TRUSTEE; DECLARATION OF TRUST.
The Depositor hereby appoints the Trustee as trustee of the Trust
effective as of the Startup Day, to have all the rights, powers and duties set
forth herein. The Trustee hereby acknowledges and accepts such appointment,
represents and warrants its eligibility as of the Startup Day to serve as
Trustee pursuant to Section 10.08 hereof and declares that it will hold the
Trust Estate in trust upon and subject to the conditions set forth herein for
the benefit of the Owners.
Section 2.05. EXPENSES OF THE TRUST.
All expenses of the Trust, including (i) the fees and reimbursable
expenses of the Trustee in connection with the performance of its duties
hereunder and (ii) to the extent not set forth herein, any other expenses of the
Trustee that have been reviewed and approved by the Seller, which review shall
not be required in connection with the enforcement of a remedy by the Trustee
resulting from a default under this Agreement, shall be paid pursuant to Section
7.03(b).
Section 2.06. OWNERSHIP OF THE TRUST.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to be evidenced
by sale of the Certificates as described therein. Thereafter, transfer of any
ownership interest shall be governed by Sections 5.04 and 5.08 hereof.
Section 2.07. SITUS OF THE TRUST.
It is the intention of the parties hereto that the Trust constitute a
trust under the laws of the State of New York. The Trust will be created in the
State of New York. The Trust's only office will be at the office of the Trustee
as set forth in Section 2.02 hereof.
Section 2.08. DESIGNATION OF INTERESTS IN REMICS.
(a) The Trustee shall elect that each of REMIC I, REMIC II and each of
the Fifty REMIC IIIs described in subsection (b) (which together with the assets
of the Supplemental Interest Reserve Fund 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 the
Fifty REMIC IIIs shall include the Home Equity Loans, the Accounts, any REO
Property allocable to each of such Fifty REMIC IIIs and any proceeds of the
foregoing. The separate assets of each of the Fifty REMIC IIIs are separately
identified on Schedule I-F attached hereto. The Fifty REMIC III Regular
Interests shall constitute the assets of REMIC II Regular Interests. The REMIC
II Regular Interests shall constitute the assets of REMIC I.
(b) Fifty (50) lower-tier REMICs (the "Fifty REMIC IIIs" and each a
"REMIC III") will be established and evidenced by (x) the one hundred classes of
REMIC III numbered REMIC regular interest certificates listed below (together,
the "REMIC III Regular Interests"), which will be uncertificated and
non-transferable, and will hereby designated as the "regular interests" in each
of the Fifty REMIC IIIs and (y) the fifty classes of REMIC III numbered REMIC
residual interest certificates listed below which are hereby designated as the
single "residual interest" in each of the Fifty REMIC IIIs. Principal payments
and losses realized on mortgages in each of the Fifty REMIC IIIs will be paid or
allocated to the REMIC III Regular Interest that is issued by the appropriate
REMIC III with the pool designation corresponding to the mortgage's pool.
REMIC IIIs REMIC IIIs REMIC IIIs REMIC IIIs
Regular Interest Regular Interest Regular Interest Residual Interest
Certificate Certificate Initial Certificates Certificate
REMIC IIIs Designations Balances Pass-Through Rates Designations (2)
III-1 III-1-Q-F 8,895,540.95 (1) III-1-R
III-1-Q-A 1,021,471.88 (1)
III-2 III-2-Q-F 8,012,306.63 (1) III-2-R
III-2-Q-A 1,016,751.34 (1)
III-3 III-3-Q-F 7,276,283.93 (1) III-3-R
III-3-Q-A 1,244,379.55 (1)
III-4 III-4-Q-F 8,962,738.77 (1) III-4-R
III-4-Q-A 1,262,622.70 (1)
III-5 III-5-Q-F 8,415,603.20 (1) III-5-R
III-5-Q-A 1,072,909.50 (1)
III-6 III-6-Q-F 9,160,253.97 (1) III-6-R
III-6-Q-A 985,086.33 (1)
III-7 III-7-Q-F 8,859,443.96 (1) III-7-R
III-7-Q-A 1,090,084.29 (1)
III-8 III-8-Q-F 7,762,123.02 (1) III-8-R
III-8-Q-A 1,108,064.49 (1)
III-9 III-9-Q-F 7,925,276.22 (1) III-9-R
III-9-Q-A 1,020,024.85 (1)
III-10 III-10-Q-F 8,813,480.02 (1) III-10-R
III-10-Q-A 1,032,679.60 (1)
III-11 III-11-Q-F 8,672,692.49 (1) III-11-R
III-11-Q-A 1,334,334.78 (1)
III-12 III-12-Q-F 8,667,384.54 (1) III-12-R
III-12-Q-A 1,205,836.50 (1)
III-13 III-13-Q-F 7,777,586.20 (1) III-13-R
III-13-Q-A 1,120,545.33 (1)
III-14 III-14-Q-F 9,031,535.18 (1) III-14-R
III-14-Q-A 1,170,982.71 (1)
III-15 III-15-Q-F 8,724,146.74 (1) III-15-R
III-15-Q-A 991,831.85 (1)
III-16 III-16-Q-F 8,026,275.49 (1) III-16-R
III-16-Q-A 1,099,549.20 (1)
III-17 III-17-Q-F 8,528,451.31 (1) III-17-R
III-17-Q-A 1,099,755.52 (1)
III-18 III-18-Q-F 8,794,550.00 (1) III-18-R
III-18-Q-A 1,100,581.21 (1)
III-19 III-19-Q-F 8,119,821.04 (1) III-19-R
III-19-Q-A 1,125,702.21 (1)
III-20 III-20-Q-F 7,796,704.26 (1) III-20-R
III-20-Q-A 1,599,760.40 (1)
III-21 III-21-Q-F 9,514,754.43 (1) III-21-R
III-21-Q-A 1,132,146.41 (1)
III-22 III-22-Q-F 7,894,090.13 (1) III-22-R
III-22-Q-A 1,401,863.03 (1)
III-23 III-23-Q-F 9,464,112.79 (1) III-23-R
III-23-Q-A 1,093,105.05 (1)
III-24 III-24-Q-F 8,106,557.79 (1) III-24-R
III-24-Q-A 1,117,949.27 (1)
III-25 III-25-Q-F 8,359,756.70 (1) III-25-R
III-25-Q-A 1,402,814.54 (1)
III-26 III-26-Q-F 7,972,777.12 (1) III-26-R
III-26-Q-A 1,004,769.29 (1)
III-27 III-27-Q-F 7,904,647.16 (1) III-27-R
III-27-Q-A 986,908.12 (1)
III-28 III-28-Q-F 8,036,926.42 (1) III-28-R
III-28-Q-A 1,245,496.09 (1)
III-29 III-29-Q-F 8,506,372.62 (1) III-29-R
III-29-Q-A 1,139,151.17 (1)
III-30 III-30-Q-F 8,671,558.33 (1) III-30-R
III-30-Q-A 868,023.99 (1)
III-31 III-31-Q-F 8,491,949.44 (1) III-31-R
III-31-Q-A 1,157,902.63 (1)
III-32 III-32-Q-F 7,692,522.83 (1) III-32-R
III-32-Q-A 1,455,550.75 (1)
III-33 III-33-Q-F 8,419,003.67 (1) III-33-R
III-33-Q-A 873,918.50 (1)
III-34 III-34-Q-F 8,577,585.79 (1) III-34-R
III-34-Q-A 1,151,239.75 (1)
III-35 III-35-Q-F 9,054,316.97 (1) III-35-R
III-35-Q-A 1,490,194.71 (1)
III-36 III-36-Q-F 7,659,994.49 (1) III-36-R
III-36-Q-A 1,658,597.72 (1)
III-37 III-37-Q-F 7,896,629.03 (1) III-37-R
III-37-Q-A 1,174,773.29 (1)
III-38 III-38-Q-F 9,900,885.32 (1) III-38-R
III-38-Q-A 853,614.68 (1)
III-39 III-39-Q-F 8,211,086.97 (1) III-39-R
III-39-Q-A 896,335.88 (1)
III-40 III-40-Q-F 8,125,758.79 (1) III-40-R
III-40-Q-A 1,157,483.06 (1)
III-41 III-41-Q-F 8,249,136.90 (1) III-41-R
III-41-Q-A 1,235,239.65 (1)
III-42 III-42-Q-F 8,357,586.08 (1) III-42-R
III-42-Q-A 1,175,444.41 (1)
III-43 III-43-Q-F 9,305,818.86 (1) III-43-R
III-43-Q-A 1,235,083.17 (1)
III-44 III-44-Q-F 8,599,748.05 (1) III-44-R
III-44-Q-A 832,328.73 (1)
III-45 III-45-Q-F 8,721,039.78 (1) III-45-R
III-45-Q-A 856,279.02 (1)
III-46 III-46-Q-F 7,677,529.61 (1) III-46-R
III-46-Q-A 1,126,238.60 (1)
III-47 III-47-Q-F 8,664,325.93 (1) III-47-R
III-47-Q-A 1,106,565.35 (1)
III-48 III-48-Q-F 9,629,173.61 (1) III-48-R
III-48-Q-A 1,272,113.41 (1)
III-49 III-49-Q-F 9,375,080.78 (1) III-49-R
III-49-Q-A 833,106.58 (1)
III-50 III-50-Q-F 8,100,582.51 (1) III-50-R
III-50-Q-A 1,001,852.65 (1)
---------------
(1) The Certificate Rate on these REMIC III Regular
Interests shall at any time of determination equal the weighted
average of the Net Coupon Rates of the Home Equity Loans in the
specific REMIC III in which such Regular Interest evidences an
interest, with those REMIC III Regular Interests designated "Q-F"
corresponding to Group I and those REMIC III Regular Interests
designated "Q-A" corresponding to Group II.
(2) This REMIC III residual interest does not have a
Certificate Principal Balance and will not pay interest.
(c) REMIC II will be evidenced by (x) the Class II-A-1, Class II-A-2,
Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7, Class
II-M-1, Class II-M-2, Class II-B, Class II-Q, Class II-S-F and Class II-S-A
Interests (the "REMIC II Regular Interests"), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in REMIC
II and (y) the Class R-2 Certificates, which are hereby designated as the single
"residual interest" in REMIC II (the REMIC II Regular Interests, together with
the Class R-2 Certificates, the "REMIC II Certificates"). The REMIC II Regular
Interests shall be recorded on the records of REMIC II as being issued to and
held by the Trustee on behalf of REMIC I.
Any Net Monthly Excess Cashflow for either Group that is used to pay
an amount to the Offered Certificates pursuant to Section 7.03(b)(C)(7) (the
"Turbo Amount") and that is payable from interest on the REMIC II Regular
Interests will not be paid as principal to the REMIC II Regular Interests, but
instead a portion of the interest otherwise payable with respect to the Class
II-Q Interest which equals .01% of the Turbo Amount (and, to the extent .01% of
the Turbo Amount exceeds the interest payable on the Class II-Q Interest, a pro
rata portion of the interest payable on the Class II-S-F and Class II-S-A
Interests equal to such excess) will be payable as a reduction of the principal
balances of the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class
II-A-5, Class II-A-6, Class II-A-7, Class, II-M-1, Class II-M-2 and Class II-B
Interests, in the same manner in which the Turbo Amount is allocated among the
Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class M-1, Class M-2 and Class B Certificates, respectively, (and will be
accrued and added to principal on the Class II-Q, Class II-S-F and Class II-S-A
Interests in the same proportion as interest otherwise payable on such REMIC II
Regular Interests is used to reduce principal on other REMIC II Regular
Interests as just described).
Principal payments on the REMIC III Regular Interests shall be
allocated 99.99% to the Class II-Q, Class II-S-F, and Class II-S-A Interests,
and .01% to the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class
II-A-5, Class II-A-6, Class II-A-7, Class, II-M-1, Class II-M-2 and Class II-B
Interests until paid in full. The aggregate amount of principal allocated to the
Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class, II-M-1, Class II-M-2 and Class II-B Interests shall
be apportioned among such REMIC II Regular Interests in the same manner in which
principal is payable with respect to the Class X-0, Xxxxx X-0, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7 Class M-1, Class M-2 and Class B
Certificates, respectively. The aggregate amount of principal allocated to the
Class II-Q, Class II-S-F and Class II-S-A Interests shall be allocated and
apportioned among such Interests first, to the Class II-S-F and Class II-S-A
Interests the least amount of principal necessary which can be applied to such
Interests so that the ratio of the principal balance of the Class II-S-F
Interests to the principal balance of the Class II-S-A Interests equals the
ratio of the Group I Balance to the Group II Balance (the "Balance Ratio"), and
second, to the Class II-Q Interests. Notwithstanding the above, principal
payments on REMIC III Regular Interests that are attributable to the
Overcollateralization Release Amount shall be allocated to the Class II-Q, Class
II-S-F and Class II-S-A Interests (allocated first to the Class II-Q Interests
until paid in full, and second to the Class II-S-F and Class II-S-A Interests,
apportioned among such Interests such that the Balance Ratio is maintained,
until paid in full).
Realized losses shall be applied such that after all distributions
have been made on such Distribution Date: (i) the principal balances of the
Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class
II-A-6, Class II-A-7, Class II-M-1, Class II-M-2 and Class II-B Interests are
each .01% of the principal balances of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B
Certificates, respectively; and (ii) the remaining losses shall be allocated to
the Class II-Q, Class II-S-A and Class II-S-F Interests. Losses allocated to the
Class II-Q, Class II-S-F and Class II-S-A Interests shall be applied first, to
the Class II-S-F and Class II-S-A Interests the least amount of realized losses
necessary which can be applied to such Interests so that the Balance Ratio is
maintained, and second, to the Class II-Q Interests.
The REMIC II Certificates will have the following designations and
Certificate Rates, and distributions of principal and interest thereon shall be
allocated to the Certificates in the following manner:
REMIC II
Certificates Initial Balance Certificate Rate Allocation of Principal Allocation of Interest
------------ --------------- ---------------- ----------------------- ----------------------
II-A-1 $13,407.40 (1) (4) (5)(6)
II-A-2 5,709.60 (1) (4) (5)(6)
II-A-3 5,925.10 (1) (4) (5)(6)
II-A-4 3,909.30 (1) (4) (5)(6)
II-A-5 2,887.10 (1) (4) (5)(6)
II-A-6 3,537.60 (1) (4) (5)(6)
II-A-7 5,663.90 (1) (4) (5)(6)
II-M-1 2,880.00 (1) (4) (5)(6)
II-M-2 2,160.00 (1) (4) (5)(6)
II-B 1,920.00 (1) (4) (5)(6)
II-Q 479,903,999.74 (1) (4) (5)(6)
II-S-F 42,336.36 (2) (4) (5)(6)
II-S-A 5,663.90 (3) (4) (5)(6)
R-2 0 0% N/A N/A(7)
---------------
(1) The Certificate Rate on this REMIC II Regular
Interest shall at any time of determination equal the
weighted average of the Pass-Through Rates of the one
hundred REMIC III Regular Interests.
(2) The Certificate Rate on this REMIC II Regular
Interest shall at any time of determination equal the
weighted average of the Pass-Through Rates of those fifty
REMIC III Regular Interests issued by REMIC IIIs designated
"Q-F" corresponding to Group I.
(3) The Certificate Rate on this REMIC II Regular
Interest shall at any time of determination equal the
weighted average of the Pass-Through Rates of those fifty
REMIC III Regular Interests issued by REMIC IIIs designated
"Q-A" corresponding to Group II.
(4) Principal will be allocated to and apportioned
among the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B
Certificates as provided in Section 7.03(b), except that a
portion of such principal in an amount equal to the
Overcollateralization Release Amount shall first be
allocated to the Class X-IO Certificates, and all principal
will be allocated to the Class X-IO Certificates after the
principal balances of the Certificates have been reduced to
zero.
(5) Except as provided in footnotes (6), interest will
be allocated among the Class X-0, Xxxxx X-0, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class M-1, Class
M-2 and Class B Certificates in the same proportion as
interest is payable on such Certificates.
(6) Any interest with respect to this REMIC II
Certificate in excess of the product of (i) 10,000 times the
weighted average coupon of the Class II-A-1, Class II-A-2,
Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class II-M-1, Class II-M-2, Class II-B
Interests where each of the Class II-A-1, Class II-A-2,
Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6,
Class II-A-7, Class II-M-1, Class II-M-2 and Class II-B
Interests is subject to a cap and floor equal to the rate on
each of Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B
Certificates, respectively and each of the Class II-Q, Class
II-S-F and Class II-S-A Interests is subject to a cap equal
to 0% and (ii) the principal balance of this REMIC II
Certificate shall not be allocated to the Offered
Certificates but will be allocated to the Class X-IO
Certificates, any interest so allocated shall not itself
bear interest. However, the Class X-IO Certificates shall be
subordinated to the extent provided in Section 7.03.
(7) On each Distribution Date, available funds, if any,
remaining in REMIC II after payments of interest and
principal and expenses of the Trust, as designated above,
will be distributed to the Class R-2 Certificate. It is
expected that there will not be any significant
distributions on the Class R-2 Certificates.
(d) The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
X-0, Xxxxx X-0, Class M-1, Class M-2, Class B and Class X-IO Certificates are
hereby designated as "regular interests" with respect to REMIC I (the "REMIC I
Regular Certificates") and the Class R-1 Certificate is hereby designated as the
single "residual interest" with respect to REMIC I. On each Distribution Date,
available funds, if any, remaining in REMIC I after payments of interest and
principal as designated herein shall be distributed to the Class R-1
Certificates. The beneficial ownership interest in the REMIC I created hereunder
shall be evidenced by the interests having the following characteristics and
terms:
Initial Certificate Final Scheduled
Class Designation Principal Balance Distribution Date
Class A-1 $134,074,000 November 25, 2016
Class A-2 $57,096,000 October 25, 2022
Class A-3 $59,251,000 November 25, 2027
Class A-4 $39,093,000 February 25, 2030
Class A-5 $28,871,000 July 25, 2032
Class A-6 $35,376,000 July 25, 2032
Class A-7 $56,639,000 July 25, 2032
Class M-1 $28,800,000 July 25, 2032
Class M-2 $21,600,000 July 25, 2032
Class B $19,200,000 July 25, 2032
Class X-IO (1) July 25, 2032
Class R-1 (1) July 25, 2032
----------------
(1) The Class X-IO and Class R-1 Certificates do not have a
Certificate Principal Balance.
(e) For federal income tax purposes, the "latest possible maturity
date" for each of the REMIC I Regular Certificates, the REMIC II Regular
Interests and the REMIC III Regular Interests is July 25, 2036.
Section 2.09. MISCELLANEOUS REMIC PROVISIONS.
(a) The Startup Day is hereby designated as the "startup day" of each
REMIC created hereunder within the meaning of Section 860G(a)(9) of the Code.
(b) The Owner of the Tax Matters Person Residual Interest in each
REMIC created hereunder is hereby designated as "tax matters person" as defined
in the REMIC Provisions with respect to the REMIC.
(c) The Trust and each REMIC created hereunder shall, for federal
income tax purposes, maintain books on a calendar year basis and report income
on an accrual basis.
(d) The Trustee shall cause each REMIC created hereunder to elect to
be treated as a REMIC under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of the Trust shall be
resolved in a manner that preserves the validity of such election to be treated
as a REMIC. The Trustee shall report all expenses of the Trust Estate to each
REMIC created hereunder.
(e) For all federal tax law purposes, amounts transferred by the
Trustee to the Owners of the Class R Certificates shall be treated as
distributions by each respective REMIC created hereunder.
(f) The Trustee shall provide to the Internal Revenue Service and to
the person described in Section 860E(e)(3) and (6) of the Code the information
described in Treasury Regulation Section 1.860D-l(b)(5)(ii), or any successor
regulation thereto with respect to each REMIC created hereunder. Such
information will be provided in the manner described in Treasury Regulation
Section 1.860E-2(a)(5), or any successor regulation thereto.
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the Trustee
that as of the Startup Day:
(a) The Depositor is a limited liability company duly formed and
validly existing under the laws governing its creation and existence, is not in
violation of the laws of any state in which any Property or the Depositor is
located or doing business which violation would materially and adversely affect
the condition (financial or other) or the operations of the Depositor or its
properties or the ability of the Trust to collect amounts due on any Home Equity
Loan and is in good standing in each jurisdiction in which the nature of its
business or the properties owned or leased by it make such qualification
necessary. The Depositor has all requisite limited liability company power and
authority to own and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted and to enter into and
discharge its obligations under this Agreement and the other Operative Documents
to which it is a party.
(b) The execution and delivery of this Agreement and the other
Operative Documents to which it is a party by the Depositor and its performance
and compliance with the terms of this Agreement and the other Operative
Documents to which it is a party have been duly authorized by all necessary
limited liability company action on the part of the Depositor and will not
violate the Depositor's certificate of formation or amended and restated limited
liability company agreement or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or result
in a breach of, any material contract, agreement or other instrument to which
the Depositor is a party or by which the Depositor is bound or violate any
statute or any order, rule or regulation of any court, governmental agency or
body or other tribunal having jurisdiction over the Depositor or any of its
properties.
(c) This Agreement and the other Operative Documents to which the
Depositor is a party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid, legal and binding
obligation of the Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or at law).
(d) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default could materially and adversely
affect the condition (financial or other) or operations of the Depositor or its
properties or the consequences of which could materially and adversely affect
its performance hereunder and under the other Operative Documents to which the
Depositor is a party.
(e) No litigation, proceeding or investigation is pending with respect
to which the Depositor has received service of process or, to the best of the
Depositor's knowledge, threatened against the Depositor which litigation,
proceeding or investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the condition (financial or
otherwise) or operations of the Depositor or its properties or might have
consequences that would materially and adversely affect the validity or
enforceability of the Home Equity Loans or the Depositor's performance hereunder
and under the other Operative Documents to which the Depositor is a party.
(f) The statements contained in the Registration Statement which
describe the Depositor or matters or activities for which the Depositor is
responsible in accordance with the Operative Documents or which are attributed
to the Depositor therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Depositor or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein
with respect to the Depositor not misleading.
(g) Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Home Equity Loan, the Depositor had
good title to each Home Equity Loan (insofar as such title was conveyed to it by
the Sellers) subject to no prior lien, claim, participation interest, mortgage,
security interest, pledge, charge or other encumbrance or other interest of any
nature (other than liens which will be simultaneously released).
(h) As of the Startup Day, the Depositor has transferred all right,
title and interest in the Home Equity Loans to the Trustee on behalf of the
Trust.
(i) The Depositor has not transferred the Home Equity Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud any
of its creditors.
(j) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Depositor makes no such representation or warranty),
that are necessary or advisable in connection with the purchase and sale of the
Certificates and the execution and delivery by the Depositor of the Operative
Documents to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative Documents on
the part of the Depositor and the performance by the Depositor of its
obligations under this Agreement and such of the other Operative Documents to
which it is a party.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
The Servicer hereby represents, warrants and covenants to the
Depositor, the Trustee and the Owners that as of the Startup Day:
(a) The Servicer is a 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 would prohibit its
entering into this Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect the validity or the
enforceability of the Home Equity Loans or the Servicer's performance hereunder
and under the other Operative Documents to which the Servicer is a party.
(f) The statements contained in the Registration Statement which
describe the Servicer or matters or activities for which the Servicer is
responsible in accordance with the Operative Documents or which are attributed
to the Servicer therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of a material fact
with respect to the Servicer or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein with
respect to the Servicer not misleading.
(g) The Servicing Fee is a "current (normal) servicing fee rate" as
that term is used in Statement of Financial Accounting Standards No. 65 issued
by the Financial Accounting Standards Board. Neither the Servicer nor any
Affiliate thereof will report on any financial statements any part of the
Servicing Fee as an adjustment to the sales price of the Home Equity Loans.
(h) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution and delivery by
the Servicer of the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(i) The collection practices used by the Servicer with respect to the
Home Equity Loans have been, in all material respects, legal, proper, prudent
and customary in the home equity mortgage servicing business.
(j) The transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer.
(k) The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation, in any such case which
could materially adversely impact the financial condition or operations of the
Servicer or adversely impact the Servicer's performance of its obligations under
the Operative Documents.
(l) There are no Sub-Servicers as of the Startup Day.
It is understood and agreed that the representations and warranties
set forth in this Section 3.02 shall survive delivery of the Home Equity Loans
to the Trustee.
Upon discovery by any of the Depositor, the Seller, the Servicer, the
Custodian, any Sub-Servicer, any Owner or the Trustee (each, for purposes of
this paragraph, a party) of a breach of any of the representations and
warranties set forth in this Section 3.02 which materially and adversely affects
the interests of the Owners, the party discovering such breach shall give prompt
written notice to the other parties. As promptly as practicable, but in any
event within 60 days of its discovery or its receipt of notice of breach, the
Servicer shall cure such breach in all material respects.
Section 3.03. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each of the Seller and the Conduit Seller, as applicable, hereby
severally and not jointly represents, warrants and covenants to the Depositor,
the Trustee and the Owners that as of the Startup Day:
(a) In the case of the Seller, 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 the Conduit Seller, as
applicable, is located or doing business which violation would materially and
adversely affect the condition (financial or otherwise) or operations of the
Seller or the Conduit 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.
(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, limited liability company or other action, as
applicable, 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.
(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 are
the Seller or the Conduit Seller, as applicable, aware of any pending
insolvency.
(m) The Seller or either of 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.
(o) No material adverse change affecting any security for the Offered
Certificates has occurred prior to delivery of and payment for the Offered
Certificates.
(p) The Seller or the Conduit 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) [Reserved].
(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 any and all such Transfer Taxes.
(s) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Seller or the Conduit
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, any Sub-Servicer, any Owner, the Custodian or the Trustee
(each, for purposes of this paragraph, a party) that the representations and
warranties set forth in clause (b) below were untrue in any material respect,
without regard to any limitation set forth therein concerning the knowledge of
the Seller or the Servicer as to the facts stated therein, as of the Startup Day
(or in the case of a Qualified Replacement Mortgage, as of the respective
Replacement Cut-Off Date), with the result that the interests of the Owners in
the related Home Equity Loan are, or may be, materially and adversely affected,
the party discovering such breach shall give prompt written notice to the other
parties. Upon the earliest to occur of CHEC's discovery, its receipt of notice
of breach from any one of the other parties or such time as a situation
resulting from an existing statement which is untrue materially and adversely
affects the interests of the Owners, without regard to any limitation set forth
therein concerning the knowledge of CHEC as to the facts stated therein, CHEC
hereby covenants and warrants that it shall promptly cure such breach in all
material respects or that it shall on or before the second Monthly Remittance
Date next succeeding such discovery, receipt of notice or such time (i)
substitute in lieu of each Home Equity Loan which has given rise to the
requirement for action by CHEC a Qualified Replacement Mortgage and deliver the
Substitution Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan from the Trust at a purchase
price equal to the Loan Purchase Price thereof, which purchase price shall be
delivered to the Servicer for deposit in the Principal and Interest Account. It
is understood and agreed that the obligation of CHEC so to substitute or
purchase any Home Equity Loan as to which such a statement set forth below in
this Section 3.04 is untrue in any material respect and has not been remedied
shall constitute the sole remedy respecting a discovery of any such statement
which is untrue in any material respect available to the Owners and the Trustee
on behalf of the Owners. Notwithstanding any provision of this Agreement to the
contrary, with respect to any Home Equity Loan which is not in default or as to
which no default is imminent, no repurchase or substitution pursuant to Section
3.04 or 3.06 shall be made unless CHEC obtains for the Trustee at its expense an
Opinion of Counsel experienced in federal income tax matters to the effect that
such a repurchase or substitution would not constitute a Prohibited Transaction
for the Trust or any REMIC created hereunder or otherwise subject the Trust or
any REMIC created hereunder to tax and would not jeopardize the status of any
REMIC created hereunder as a REMIC (a "REMIC Opinion") addressed to the Trustee
and acceptable to the Trustee. CHEC shall also deliver an Officer's Certificate
to the Trustee concurrently with the delivery of a Qualified Replacement
Mortgage pursuant to Sections 3.04 and 3.06(b) stating that such Home Equity
Loan meets the requirements of the definition of a Qualified Replacement
Mortgage and that all other conditions to the substitution thereof have been
satisfied. Any Home Equity Loan as to which repurchase or substitution was
delayed pursuant to this Section shall be repurchased or substituted for
(subject to compliance with Section 3.04 or 3.06(b), as the case may be) upon
the earlier of (a) the occurrence of a default or imminent default with respect
to such Home Equity Loan and (b) receipt by the Trustee of a REMIC Opinion.
(b) The Seller, with respect to the Seller Home Equity Loans, and the
Servicer, in consideration of its appointment hereunder, with respect to the
Conduit Home Equity Loans, and with respect to the Home Equity Loans taken as a
whole or by Group, hereby represent, warrant and covenant to the Trustee, the
Depositor, the Servicer and the Owners that as of the Startup Day (or the
Replacement Cut-Off Date, with respect to a Qualified Replacement Mortgage):
(i) The information with respect to each Home Equity Loan set
forth in the related Schedule of Home Equity Loans is true and correct
in all material respects as of the Cut-Off Date;
(ii) Each of the Seller and the Conduit 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
570 Properties that are condominiums, townhouses, manufactured
housing, two-to-four family residential dwellings or PUDs), and no
more than 1.10% and 0.40%, 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 5.65% per annum and the Note related
to each Home Equity Loan in Group II bears a current Coupon Rate of at
least 6.65% 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 688 Home Equity Loans, representing approximately 12.27% of the
aggregate Loan Balance of the Home Equity Loans in Group I as of the
Cut-Off Date, which may provide for a "balloon" payment due at the end
of the 15th year, and no Home Equity Loan is a graduated payment loan;
(ix) As of the Startup Day, each Mortgage is a valid and
enforceable first or second lien of record (or is in the process of
being recorded) on the Property subject in the case of any Second
Mortgage Loan only to a Senior Lien on such Property and subject in
all cases to the exceptions to title set forth in the title insurance
policy (or the binding commitment therefor) or attorney's opinion of
title, with respect to the related Home Equity Loan, which exceptions
are generally acceptable to banking institutions in connection with
their regular mortgage lending activities, and such other exceptions
to which similar properties are commonly subject and which do not
individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such Mortgage;
(x) Immediately prior to the transfer and assignment of the Home
Equity Loans by the Seller 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, 1.77% of the Home Equity Loans are
between 30 and 59 days Delinquent and none of the Home Equity Loans is
more than 59 days Delinquent;
(xii) To the best knowledge of the Seller or the Servicer, as
applicable, there is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is in
good repair (ordinary wear and tear excepted);
(xiii) To the best knowledge of the Seller or the Servicer, as
applicable, there is no valid and enforceable right of offset, claim,
defense or counterclaim to any Note or Mortgage, including the
obligation of the related Mortgagor to pay the unpaid principal of or
interest on such Note, nor has any such claim, defense, offset or
counterclaim been asserted;
(xiv) To the best knowledge of the Seller or the Servicer, as
applicable, there is no mechanics' lien or claim for work, labor or
material affecting any Property which is or may be a lien prior to, or
equal with, the lien of the related Mortgage except those which are
insured against by any title insurance policy referred to in paragraph
(xvi) below;
(xv) To the best knowledge of the Seller, each Home Equity Loan
at the time it was made complied in all material respects with
applicable state and federal laws and regulations, including, without
limitation, the federal Truth-in-Lending Act (as amended by the Xxxxxx
Community Development and Regulatory Improvement Act of 1994) and
other consumer protection, usury, equal credit opportunity, disclosure
and recording laws;
(xvi) With respect to each Home Equity Loan either (a) if a title
insurance policy is not available in the applicable state, an
attorney's opinion of title has been obtained but no title policy has
been obtained, (b) for certain of the Home Equity Loans the original
principal balance of which was equal to or less than $40,000, a title
report and indemnity has been obtained, or (c) a lender's title
insurance policy (or a binding commitment therefor), issued in
standard American Land Title Association form by a title insurance
company authorized to transact business in the state in which the
related Property is situated, in an amount at least equal to the
original balance of such Home Equity Loan together, in the case of a
Second Mortgage Loan, with the then-original principal amount of the
mortgage note relating to the Senior Lien, insuring the mortgagee's
interest under the related Home Equity Loan as the holder of a valid
first or second mortgage lien of record on the real Property described
in the related Mortgage, as the case may be, subject only to
exceptions of the character referred to in paragraph (ix) above, was
effective on the date of the origination of such Home Equity Loan,
and, as of the Startup Day, such policy (or commitment) is valid and
thereafter (or upon issuance pursuant to the commitment) such policy
shall continue in full force and effect;
(xvii) The improvements upon each Property are covered by a valid
and existing hazard insurance policy with a carrier generally
acceptable to the Servicer that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Home Equity Loan
(together, in the case of a Second Mortgage Loan, with the outstanding
principal balance of the Senior Lien), (B) the minimum amount required
to compensate for damage or loss on a replacement cost basis or (C)
the full insurable value of the Property;
(xviii) If any Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Property with a
carrier generally acceptable to the Servicer in an amount representing
coverage not less than the least of (A) the outstanding principal
balance of the related Home Equity Loan (together, in the case of a
Second Mortgage Loan, with the outstanding principal balance of the
Senior Lien), (B) the minimum amount required to compensate for damage
or loss on a replacement cost basis or (C) the maximum amount of
insurance that is available under the Flood Disaster Protection Act of
1973;
(xix) Each Mortgage and Note are the legal, valid and binding
obligation of the maker thereof and are enforceable in accordance with
their terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether considered in a proceeding or
action in equity or at law), and all parties to each Home Equity Loan
had full legal capacity to execute all documents relating to such Home
Equity Loan and convey the estate therein purported to be conveyed;
(xx) The Seller or the Servicer, as applicable, has caused and
will cause to be performed any and all acts required to be performed
to preserve the rights and remedies of the Trustee in any Insurance
Policies applicable to any Home Equity Loans delivered by the Seller
or the Conduit 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 0.24% 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 which has been delivered to the
Trustee. The substance of any such waiver, alteration or modification
is reflected on the related Schedule of Home Equity Loans;
(xxiv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to
make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or
recording such Home Equity Loans were paid and the Mortgagor is not
entitled to any refund of any amounts paid or due under the related
Note or Mortgage;
(xxv) The related Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xxvi) No Home Equity Loan has a shared appreciation feature or
other contingent interest feature;
(xxvii) Each Property is located in the state identified in the
respective Schedule of Home Equity Loans and consists of one or more
parcels of real property with a residential dwelling erected thereon;
(xxviii) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the related Home
Equity Loan in the event the related Property is sold without the
prior consent of the mortgagee thereunder;
(xxix) Any advances made after the date of origination of a Home
Equity Loan but prior to the Cut-Off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the respective Schedule of
Home Equity Loans. The consolidated principal amount does not exceed
the original principal amount of the related Home Equity Loan. No Note
permits or obligates the Servicer to make future advances to the
related Mortgagor at the option of the Mortgagor;
(xxx) To the best knowledge of the Seller or the Servicer, as
applicable, there is no proceeding pending or threatened for the total
or partial condemnation of any Property, nor is such a proceeding
currently occurring, and each Property is undamaged by waste, fire,
water, flood, earthquake, earth movement or other casualty;
(xxxi) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie wholly
within the boundaries and building restriction lines of such Property,
and no improvements on adjoining properties encroach upon such
Property, and are stated in the title insurance policy and
affirmatively insured;
(xxxii) To the best knowledge of the Seller or the Servicer, as
applicable, (A) no improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation
and (B) all inspections, licenses and certificates required by
applicable law to be made or issued with respect to all occupied
portions of each Property and with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy and
fire underwriting certificates, have been made by or obtained from the
appropriate authorities and such Property is lawfully occupied under
the applicable law;
(xxxiii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Owners or the Trust to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
related Mortgagor;
(xxxiv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure. There is no homestead or other exemption other
than any applicable Mortgagor redemption rights available to the
related Mortgagor which would materially interfere with the right to
sell the related Property at a trustee's sale or the right to
foreclose the related Mortgage;
(xxxv) To the best knowledge of the Seller or the Servicer, there
is no default, breach, violation or event of acceleration existing
under any Mortgage or the related Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration; and none of the Servicer, the Seller, the Conduit 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;
(xli) No more than 2.39% and 2.47% of the aggregate Loan Balance
of the Home Equity Loans in Group I and Group II, respectively, as of
the Cut-Off Date, are secured by Properties that are non-owner
occupied Properties (i.e., investor-owned and vacation);
(xlii) The Seller or the Servicer, as applicable, has no actual
knowledge that there exist any hazardous substances, hazardous wastes
or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource
Conservation and Recovery Act of 1976, or other federal, state or
local environmental legislation, on any Property, and to the best
knowledge of the Seller and the Servicer, as applicable, no violations
of any local, state or federal environmental law, rule or regulation
exist with respect to any Property;
(xliii) The Seller (and, to the best knowledge of the Seller and
the Servicer, as applicable, the originator, if not the Seller) was
properly licensed or otherwise authorized, to the extent required by
applicable law, to originate or purchase each Home Equity Loan; and
the consummation of the transactions herein contemplated, including,
without limitation, the receipt of interest by the Owners and the
ownership of the Home Equity Loans by the Trustee as trustee of the
Trust will not involve the violation of such laws;
(xliv) With respect to each Property subject to a ground lease
(i) the current ground lessor has been identified and all ground rents
which have previously become due and owing have been paid; (ii) the
ground lease term extends, or is automatically renewable, for at least
five years beyond the maturity date of the related Home Equity Loan;
(iii) the ground lease has been duly executed and recorded; (iv) the
amount of the ground rent and any increases therein are clearly
identified in the lease and are for predetermined amounts at
predetermined times; (v) the ground rent payment is included in the
borrower's monthly payment as an expense item in determining the
qualification of the borrower for such Home Equity Loan; (vi) the
Trust has the right to cure defaults on the ground lease; and (vii)
the terms and conditions of the leasehold do not prevent the free and
absolute marketability of the Property. As of the Cut-Off Date, the
Loan Balance of the Home Equity Loans with related Properties subject
to ground leases does not exceed 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 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 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 June 15, 2031.
(lx) The first date on which the applicable Mortgagor must make a
payment on each Home Equity Loan is no later than July 1, 2001; and
(lxi) With respect to each Home Equity Loan that is a Second
Mortgage Loan:
(1) The related Senior Lien does not provide for negative
amortization.
(2) None of the Servicer, the Seller, the Conduit Seller 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.
(3) To the best knowledge of the Seller or the Servicer, as
applicable, no funds provided to the Mortgagor from a Second
Mortgage Loan were concurrently used as a down payment for the
Senior Lien.
(c) In the event that any such repurchase pursuant to this Section
results in a prohibited transaction tax as specified in the REMIC Opinion
delivered pursuant to Section 3.04(a), the Trustee shall immediately notify the
Seller in writing thereof and the Seller will, within 10 days of receiving
notice thereof from the Trustee, deposit the amount due from the Trust with the
Trustee for the payment thereof, including any interest and penalties, in
immediately available funds. In the event that any Qualified Replacement
Mortgage is delivered by the Seller to the Trust pursuant to Section 3.04 or
Section 3.06 hereof, the Seller shall be obligated to take the actions described
in Section 3.04(a) with respect to such Qualified Replacement Mortgage upon the
discovery by any of the Depositor, the Owners, the Seller, the Conduit Seller,
the Servicer, any Sub-Servicer, the Custodian or the Trustee that the statements
set forth in subsection (b) above are untrue in any material respect, without
regard to any limitation set forth therein concerning the knowledge of the
Seller or the Servicer as to facts stated therein, on the date such Qualified
Replacement Mortgage is conveyed to the Trust, such that the interests of the
Owners in the related Qualified Replacement Mortgage are, or may be, materially
and adversely affected; provided, however, that for the purposes of this
subsection (c) the statements in subsection (b) above referring to items "as of
the Cut-Off Date" or "as of the Startup Day" shall be deemed to refer to such
items as of the Replacement Cut-Off Date or as of the date such Qualified
Replacement Mortgage is conveyed to the Trust, respectively. Notwithstanding the
fact that a representation contained in subsection (b) above may be limited to
the Seller's or the Servicer's knowledge, such limitation shall not relieve CHEC
of its substitution or repurchase obligation under this Section and Section 3.06
hereof.
(d) It is understood and agreed that the representations, warranties
and covenants set forth in this Section 3.04 shall survive delivery of the
respective Home Equity Loans (including Qualified Replacement Mortgages) to the
Trustee or the Custodian, on behalf of the Trustee.
(e) The Trustee shall have no duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the
occurrence of any condition requiring the repurchase or substitution of any Home
Equity Loan pursuant to this Article III or the eligibility of any Home Equity
Loan for the purpose of this Agreement.
Section 3.05. SALE TREATMENT OF THE HOME EQUITY LOANS AND QUALIFIED
REPLACEMENT MORTGAGES.
(a) The transfer by the Seller and the Conduit 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 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 2001-B, 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, (2) if title insurance is
not available in the applicable state, the attorney's opinion of
title, or (3) for a Home Equity Loan the original principal balance of
which was equal to or less than $40,000, a title report and indemnity,
(C) originals or copies of all intervening assignments certified as
true copies by the closing agent or CHEC, showing a complete chain of
title from origination to the Seller or 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 2001-B under
the Pooling and Servicing Agreement dated as of June 1, 2001" to be
submitted for recording in the appropriate jurisdictions; provided,
further, that CHEC shall not be required to record an assignment of a
Mortgage if CHEC furnishes to the Trustee, on or before the Startup
Day, at CHEC's expense, an Opinion of Counsel with respect to the
relevant jurisdiction that such recording is not necessary to perfect
the Trustee's interest in the related Home Equity Loans (in form and
substance reasonably satisfactory to the Trustee and the Rating
Agencies); provided further, however, notwithstanding the delivery of
any legal opinions, each assignment of Mortgage shall be recorded by
the Custodian on behalf of the Trustee at the expense of CHEC upon the
earliest to occur of: (i) the occurrence of a Servicer Termination
Event, (ii) if the Seller is not the Servicer and with respect to any
one assignment of Mortgage, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage,
or (iii) the occurrence of a bankruptcy or insolvency relating to the
Seller or the Conduit Seller, as applicable;
(iii) deliver the title insurance policy or title searches or
reports, the original Mortgages and such recorded assignments,
together with originals or duly certified copies of any and all prior
assignments (other than unrecorded warehouse assignments), to the
Custodian, on behalf of the Trustee, within 15 days of receipt thereof
by CHEC, but in any event, with respect to any Mortgage as to which
original recording information has been made available to the Seller
or the Conduit Seller, within one year after the Startup Day; and
(iv) furnish to the Trustee and the Rating Agencies, at CHEC's
expense, an Opinion of Counsel with respect to the sale and perfection
of the Home Equity Loans delivered to the Trust.
In instances where the original recorded Mortgage cannot be delivered
by CHEC to the Custodian on behalf of the Trustee prior to or concurrently with
the execution and delivery of this Agreement due to a delay in connection with
recording, CHEC may in lieu of delivering such original recorded Mortgage,
deliver to the Custodian on behalf of the Trustee a copy thereof, provided that
CHEC certifies that the original Mortgage has been delivered to a title
insurance company for recordation after receipt of its policy of title insurance
or binder therefor. In all such instances, CHEC will deliver or cause to be
delivered the original recorded Mortgage to the Custodian on behalf of the
Trustee promptly upon receipt of the original recorded Mortgage but in no event
later than one year after the Startup Day.
CHEC hereby confirms to the Trustee that it has made the appropriate
entries in its general records to indicate that such Home Equity Loans have been
transferred to the Trustee and constitute part of the Trust Estate in accordance
with the terms of the trust created hereunder.
Notwithstanding anything to the contrary contained in this Section
3.05, in those instances where the public recording office retains the original
Mortgage, the assignment of a Mortgage or the intervening assignments of the
Mortgage after it has been recorded, the Depositor and each of the Sellers shall
be deemed to have satisfied their obligations hereunder upon delivery to the
Custodian, on behalf of the Trustee, of a copy of such Mortgage, such assignment
or assignments of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.
Not later than ten days following the end of the 60-day period
referred in clause (b)(ii) above, CHEC shall deliver to the Custodian on behalf
of the Trustee, with a copy to the Trustee, a list of all Mortgages for which no
Mortgage assignment has yet been submitted for recording by CHEC, which list
shall state the reason why CHEC has not yet submitted such Mortgage assignments
for recording. With respect to any Mortgage assignment disclosed on such list as
not yet submitted for recording for a reason other than a lack of original
recording information, the Custodian, on behalf of the Trustee, shall make an
immediate demand on CHEC to prepare such Mortgage assignments. Thereafter, the
Custodian, on behalf of the Trustee, shall cooperate in executing any documents
submitted to the Custodian, on behalf of the Trustee in connection with this
provision. Following the expiration of the 60-day period referred to in clause
(b)(ii) above, CHEC shall promptly prepare a Mortgage assignment for any
Mortgage for which original recording information is subsequently received by
CHEC, and shall promptly deliver a copy of such Mortgage assignment to the
Custodian, on behalf of the Trustee. CHEC agrees that it will follow its normal
servicing procedures and attempt to obtain the original recording information
necessary to complete a Mortgage assignment. In the event that CHEC is unable to
obtain such recording information with respect to any Mortgage prior to the end
of the 18th calendar month following the Startup Day and has not provided to the
Custodian, on behalf of the Trustee, a Mortgage assignment with evidence of
recording thereon relating to the assignment of such Mortgage to the Trustee,
the Custodian, on behalf of the Trustee shall notify CHEC of its obligation to
provide a completed assignment (with evidence of recording thereon) on or before
the end of the 20th calendar month following the Startup Day. If no such
completed assignment (with evidence of recording thereon) is provided before the
end of such 20th calendar month, the related Home Equity Loan shall be deemed to
have breached the representation contained in clause (xxii) of Section 3.04(b)
hereof. The requirement to deliver a completed assignment with evidence of
recording thereon will be deemed satisfied upon delivery of a copy of the
completed assignment certified by the applicable public recording office.
Copies of all Mortgage assignments received by the Custodian on behalf
of the Trustee shall be retained in the related File.
All recording required pursuant to this Section 3.05 shall be
accomplished at the expense of CHEC. (c) In the case of Home Equity Loans which
have been prepaid in full on or after the Cut-Off Date and prior to the Startup
Day, CHEC, in lieu of the foregoing, will deliver within six (6) days after the
Startup Day to the Trustee a certification of an Authorized Officer in the form
set forth in Exhibit D.
(d) CHEC shall transfer, assign, set over and otherwise convey,
without recourse, to the Trustee all right, title and interest of CHEC in and to
any Qualified Replacement Mortgage delivered to the Custodian, on behalf of the
Trustee on behalf of the Trust by CHEC pursuant to Section 3.04 or 3.06 hereof
and all its right, title and interest to principal and interest due on such
Qualified Replacement Mortgage on and after the applicable Replacement Cut-Off
Date; provided, however, that CHEC shall reserve and retain all right, title and
interest in and to payments of principal and interest due on such Qualified
Replacement Mortgage prior to the applicable Replacement Cut-Off Date.
(e) As to each Home Equity Loan released from the Trust in connection
with a repurchase thereof or the conveyance of a Qualified Replacement Mortgage
therefor, the Trustee will transfer, assign, set over and otherwise convey
without recourse or representation, on CHEC's order, all of its right, title and
interest in and to such released Home Equity Loan and all the Trust's right,
title and interest to principal and interest due on such released Home Equity
Loan after the applicable repurchase date or Replacement Cut-Off Date, as the
case may be; provided, however, that the Trust shall reserve and or and retain
all right, title and interest in and to payments of principal and interest due
on such released Home Equity Loan prior to such repurchase date or Replacement
Cut-Off Date, as the case may be.
(f) In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Trustee on behalf of the Trust, CHEC agrees to (i)
deliver or cause to be delivered without recourse to the Custodian, on behalf of
the Trustee on the date of delivery of such Qualified Replacement Mortgage the
original Note relating thereto, endorsed in blank or to the order of the
Trustee, (ii) cause promptly to be recorded an assignment in the appropriate
jurisdictions, (iii) deliver or cause to be delivered the original Qualified
Replacement Mortgage and such recorded assignment, together with original or
duly certified copies of any and all prior assignments, to the Custodian, on
behalf of the Trustee within 15 days of receipt thereof by CHEC (but in any
event within 120 days after the date of conveyance of such Qualified Replacement
Mortgage) and (iv) deliver the title insurance policy, or where no such policy
is required to be provided under Section 3.05(b)(i)(B), the other evidence of
title required in Section 3.05(b)(i)(B).
(g) As to each Home Equity Loan released from the Trust in connection
with a repurchase or the conveyance of a Qualified Replacement Mortgage, the
Custodian, on behalf of the Trustee shall deliver on the date of such repurchase
or conveyance of such Qualified Replacement Mortgage and on the order of CHEC
(i) the original Note relating thereto, endorsed, without recourse or
representation, in blank or to the order of CHEC, (ii) the original Mortgage so
released and all assignments relating thereto and (iii) such other documents as
constituted the File with respect thereto.
(h) If a Mortgage assignment is lost during the process of recording,
or is returned from the recorder's office unrecorded due to a defect therein,
CHEC shall prepare or cause to be prepared a substitute assignment or cure such
defect, as the case may be, and thereafter cause each such assignment to be duly
recorded.
Section 3.06. ACCEPTANCE BY TRUSTEE; CERTAIN SUBSTITUTIONS OF HOME
EQUITY LOANS; CERTIFICATION BY TRUSTEE.
(a) The Trustee agrees to execute and deliver and the Trustee agrees
to cause the Custodian to execute and deliver on behalf of the Trustee on the
Startup Day an acknowledgment of receipt of the items delivered by CHEC in the
forms attached as Exhibits E-1 and E-2 hereto, respectively, and declares
through the Custodian that it will hold such documents and any amendments,
replacement or supplements thereto, as well as any other assets included in the
definition of Trust Estate and delivered to the Custodian, on behalf of the
Trustee, as Trustee in trust upon and subject to the conditions set forth herein
for the benefit of the Owners. The Trustee agrees, for the benefit of the
Owners, to cause the Custodian to review such items within 45 days after the
Startup Day (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Replacement
Mortgage, within 45 days after the assignment thereof) and to deliver to the
Depositor, the Seller, the Conduit Seller, the Servicer and the Trustee a
certification in the form attached hereto as Exhibit F (a "Pool Certification")
to the effect that, as to each Home Equity Loan listed in the Schedule of Home
Equity Loans (other than any Home Equity Loan paid in full or any Home Equity
Loan specifically identified in such Pool Certification as not covered by such
Pool Certification), (i) all documents required to be delivered to it pursuant
to Section 3.05(b)(i) of this Agreement have been executed and are in its
possession and that the Notes have been endorsed as set forth in Section
3.05(b)(i) hereof, (ii) such documents have been reviewed by it and have not
been mutilated, damaged or torn and relate to such Home Equity Loan and (iii)
based on its examination and only as to the foregoing documents, the information
set forth on the Schedule of Home Equity Loans accurately reflects the
information set forth in the File, except as may be indicated in an exception
report in the form attached hereto as Exhibit J ("Exception Report"), such
Exception Report to be provided electronically concurrently with the delivery of
the Pool Certification to the e-mail addresses specified by the recipients. The
Custodian, on behalf of the Trustee, shall have no responsibility for reviewing
any File except as expressly provided in this subsection 3.06(a). Without
limiting the effect of the preceding sentence, in reviewing any File, the
Custodian, on behalf of the Trustee, shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment is in proper form (except to determine if the Trustee is the
assignee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction or whether a blanket assignment is
permitted in any applicable jurisdiction, but shall only be required to
determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded. The
Custodian, on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face, nor shall the Custodian, on behalf of the Trustee, be under any duty
to determine independently whether there are any intervening assignments or
assumption or modification agreements with respect to any Home Equity Loan.
(b) If the Custodian, on behalf of the Trustee during such 45-day
period finds any document constituting a part of a File which is not executed,
has not been received, or is unrelated to the Home Equity Loans identified in
the Schedule of Home Equity Loans, or that any Home Equity Loan does not conform
to the description thereof as set forth in the Schedule of Home Equity Loans,
the Custodian, on behalf of the Trustee shall promptly so notify the Depositor,
CHEC and the Owners. In performing any such review, the Custodian, on behalf of
the Trustee may conclusively rely on CHEC as to the purported genuineness of any
such document and any signature thereon. It is understood that the scope of the
review of the items delivered by CHEC pursuant to Section 3.05(b)(i) is limited
solely to confirming that the documents listed in Section 3.05(b)(i) have been
executed and received, relate to the Files identified in the Schedule of Home
Equity Loans and conform to the description thereof in the Schedule of Home
Equity Loans. CHEC agrees to use reasonable efforts to remedy a material defect
in a document constituting part of a File of which it is so notified by the
Custodian, on behalf of the Trustee. If, however, within 90 days after such
notice to it respecting such defect CHEC has not remedied the defect and the
defect materially and adversely affects the interest in the related Home Equity
Loan of the Owners, CHEC will (or will cause an Affiliate to) on the next
succeeding Monthly Remittance Date (i) substitute in lieu of such Home Equity
Loan a Qualified Replacement Mortgage and deliver the Substitution Amount to the
Servicer for deposit in the Principal and Interest Account or (ii) purchase such
Home Equity Loan at a purchase price equal to the Loan Purchase Price thereof,
which purchase price shall be delivered to the Servicer for deposit in the
Principal and Interest Account. In connection with any proposed purchase or
substitution of a Home Equity Loan, CHEC shall cause at its expense to be
delivered to the Trustee an Opinion of Counsel experienced in federal income tax
matters stating whether or not such a proposed purchase or substitution would
constitute a Prohibited Transaction for the Trust or would jeopardize the status
of any REMIC created hereunder as a REMIC, and CHEC shall only be required to
take either such action to the extent such action would not constitute a
Prohibited Transaction for the Trust and would not jeopardize the status of such
REMIC as a REMIC. Any required purchase or substitution, if delayed by the
absence of such opinion, shall nonetheless occur upon the earlier of (i) the
occurrence of a default or imminent default with respect to the Home Equity Loan
or (ii) the delivery of such opinion.
(c) In addition to the foregoing, the Custodian, on behalf of the
Trustee also agrees to make a review during the 12th month after the Startup Day
indicating the current status of the exceptions previously indicated on the
Exception Report delivered electronically concurrently with the Pool
Certification (the "Final Certification") and, by the end of the 12th month
after the Startup Day, deliver electronically to the Depositor, the Seller, the
Conduit Seller, the Servicer and the Trustee (to the e-mail addresses specified
by the recipients) such Final Certification. After delivery of the Final
Certification, the Custodian, on behalf of the Trustee and the Servicer shall
provide electronically to the Trustee (to the e-mail address specified by the
Trustee) no less frequently than monthly updated certifications indicating the
then current status of exceptions, until all such exceptions have been
eliminated.
Section 3.07. RESERVED.
Section 3.08. CUSTODIAN.
Notwithstanding anything to the contrary in this Agreement, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Files pursuant to Sections
3.05, 3.06, and 8.14 and the related Pool Certification and Final Certification
shall be performed by the Custodian on the Trustee's behalf pursuant to the
Custodial Agreement; provided, however, the Trustee shall remain primarily
liable for such obligations. The fees and expenses of the Custodian will be paid
by the Servicer.
If, pursuant to Section 4.12 of the Custodial Agreement, the Custodian
shall request written instructions from the Trustee, the Trustee hereby agrees
to promptly provide such instructions.
Section 3.09. COOPERATION PROCEDURES. CHEC shall, in connection with
the delivery of each Qualified Replacement Mortgage to the Custodian, on behalf
of the Trustee, provide the Trustee with information set forth in the Schedule
of Home Equity Loans with respect to such Qualified Replacement Mortgage.
(a) The Seller, the Conduit 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
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01. ISSUANCE OF CERTIFICATES.
On the Startup Day, upon the Trustee's receipt from the Depositor of
an executed Delivery Order in the form set forth as Exhibit G hereto, the
Trustee shall authenticate and deliver the Certificates on behalf of the Trust.
Section 4.02. SALE OF CERTIFICATES.
At 11:00 a.m. New York City time on the Startup Day, at the offices of
Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at
such other location acceptable to the Seller), the Seller and the Conduit 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 Trustee will deliver (i) to the Underwriters (as designee of
the Depositor), the Offered Certificates with an aggregate Percentage Interest
in each Class equal to 100% registered in the name of Cede & Co. or in such
other names as the Underwriters shall direct, against payment to the Depositor
of the purchase price thereof by wire transfer of immediately available funds to
the Trustee as designee of the Depositor and (ii) to the respective registered
owners thereof (as designees of the Depositor, the Seller and the Conduit
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
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01. TERMS.
(a) The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references herein or therein with
respect to the Certificates as to "principal" and "interest" thereof, no debt of
any Person is represented thereby, nor are the Certificates or the underlying
Notes guaranteed by any Person (except that the Notes may be recourse to the
Mortgagors thereof to the extent permitted by law and the terms of the related
Note). The Offered Certificates are payable solely from payments received on or
with respect to the Home Equity Loans (net of the Servicing Fees and Trustee
Fees), from moneys in the Principal and Interest Account, except as otherwise
provided herein and from earnings on moneys and the proceeds of property held as
a part of the Trust Estate. Each Certificate entitles the Owner thereof to
receive monthly on each Distribution Date, in order of priority of distributions
with respect to such Class of Certificates as set forth in Section 7.03, a
specified portion of such payments with respect to the Home Equity Loans.
(b) Each Owner is required, and hereby agrees, to return to the
Trustee, any Certificate prior to the Trustee making the final distribution due
thereon. Any such Certificate as to which the Trustee has made the final
distribution thereon shall be deemed canceled and shall no longer be Outstanding
for any purpose of this Agreement.
Section 5.02. FORMS.
The Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class A-7 Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, the Class B Certificates, the Class X-IO Certificates
and the Class R Certificates shall be in substantially the forms set forth in
Exhibits X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-00, X and C hereof,
respectively.
Section 5.03. EXECUTION, AUTHENTICATION AND DELIVERY.
Each Certificate shall be executed on behalf of the Trust, by the
manual signature of one of the Trustee's Authorized Officers at the written
direction of the Servicer. In addition, each Certificate shall be authenticated
by the manual signature of one of the Trustee's Authorized Officers at the
written direction of the Servicer.
Certificates bearing the manual signature of individuals who were at
any time the proper officers of the Trustee shall, upon proper authentication by
the Trustee, bind the Trust, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of authentication of
such Certificates.
The initial Certificates shall be dated as of the Startup Day and
delivered at the Closing to the parties specified in Section 4.02 hereof.
Subsequently issued Certificates will be dated as of the issuance of the
Certificate.
No Certificate shall be valid until executed and authenticated as set
forth above.
Section 5.04. REGISTRATION AND TRANSFER OF CERTIFICATES.
(a) The Trustee shall cause to be kept a register (the "Register") in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and the registration of
transfer of Certificates. The Trustee is hereby initially appointed Registrar
for the purpose of registering Certificates and transfers of Certificates as
herein provided. The Depositor, the Owners and the Trustee shall have the right
to inspect the Register upon reasonable notice during the Trustee's normal hours
and to obtain copies thereof, and the Trustee shall have the right to rely upon
a certificate executed on behalf of the Registrar by an Authorized Officer
thereof as to the names and addresses of the Owners of the Certificates and the
principal amounts and numbers of such Certificates.
If a Person other than the Trustee is appointed as Registrar by the
Owners of a majority of the aggregate Voting Rights represented by the
Certificates then Outstanding, such Owners shall give the Trustee and the Owners
prompt written notice of the appointment of such Registrar and of the location,
and any change in the location, of the Register. In connection with any such
appointment the reasonable fees of the Registrar shall be paid, as expenses of
the Trust, pursuant to Section 7.06 hereof.
(b) Subject to the provisions of Section 5.08 hereof, upon surrender
for registration of transfer of any Certificate at the office designated as the
location of the Register, upon the direction of the Registrar, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class and in the aggregate
outstanding principal amount or Percentage Interest of the Certificate so
surrendered.
(c) At the option of any Owner, Certificates of any Class owned by
such Owner may be exchanged for other Certificates authorized of like Class and
tenor and a like aggregate outstanding principal amount or Percentage Interest
and bearing numbers not contemporaneously outstanding, upon surrender of the
Certificates to be exchanged at the office designated as the location of the
Register. Whenever any Certificate is so surrendered for exchange, upon the
direction of the Registrar, the Trustee shall execute, authenticate and deliver
the Certificate or Certificates which the Owner making the exchange is entitled
to receive.
(d) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same ownership interests
in the Trust and entitled to the same benefits under this Agreement as the
Certificates surrendered upon such registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by
the Owner thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to an Owner for any registration
of transfer or exchange of Certificates, but the Registrar or Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates; any other expenses in connection with such transfer or
exchange shall be an expense of the Trust.
(g) It is intended that the Offered Certificates be registered so as
to participate in a global book-entry system with the Depository, as set forth
herein. Each Class of Offered Certificates shall, except as otherwise provided
in Subsection (h), be initially issued in the form of a single fully registered
Offered Certificate of such Class. Upon initial issuance, the ownership of each
such Offered Certificate shall be registered in the Register in the name of Cede
& Co., or any successor thereto, as nominee for the Depository.
On the Startup Day, the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class M-1, Class M-2 and Class B Certificates
shall be issued in denominations of $25,000 and integral multiples of $1,000 in
excess thereof.
The Depositor and the Trustee are hereby authorized to execute and
deliver the Representation Letter with the Depository in the form provided to
the Trustee by the Depositor.
With respect to the Offered Certificates registered in the Register in
the name of Cede & Co., as nominee of the Depository, the Depositor, the
Servicer, the Seller and the Trustee shall have no responsibility or obligation
to Direct or Indirect Participants or beneficial owners for which the Depository
holds Offered Certificates from time to time as a Depository. Without limiting
the immediately preceding sentence, the Depositor, the Servicer, the Sellers and
the Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to the ownership interest in the Offered Certificates,
(ii) the delivery to any Direct or Indirect Participant or any other Person,
other than a registered Owner of an Offered Certificate as shown in the
Register, of any notice with respect to the Offered Certificates or (iii) the
payment to any Direct or Indirect Participant or any other Person, other than a
registered Owner of an Offered Certificate as shown in the Register, of any
amount with respect to any distribution of principal or interest on the Offered
Certificates. No Person other than a registered Owner of an Offered Certificate
as shown in the Register shall receive a certificate evidencing such Offered
Certificate.
Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the registered Owners
of Offered Certificates appearing as registered Owners in the registration books
maintained by the Trustee at the close of business on a Record Date, the name
"Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(h) In the event that (i) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Offered Certificates and either of CHEC or the Trustee is unable to locate a
qualified successor or (ii) the Depositor at its sole option elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of a
Servicer Termination Event, the beneficial owners of each Class of Offered
Certificates representing Percentage Interests aggregating not less than 51% of
such Class advises the Trustee and Depository through the Direct or Indirect
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Owners is no longer in the best interests of the
Owners, the Offered Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co. (or a successor nominee) as
nominee of the Depository. In the case of (i) and (ii) above, CHEC may determine
that the Offered Certificates shall be registered in the name of and deposited
with a successor depository operating a global book-entry system, as may be
acceptable to the CHEC and at the expense of CHEC, or such depository's agent or
designee but, if CHEC does not select such alternative global book-entry system
and in the case of (iii) above, the Offered Certificates may be registered in
whatever name or names registered Owners of Offered Certificates transferring
Offered Certificates shall designate, in accordance with the provisions hereof.
(i) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Offered Certificate is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or interest on
such Offered Certificates and all notices with respect to such Offered
Certificates shall be made and given, respectively, in the manner provided in
the Representation Letter.
Section 5.05. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) in the case of any mutilated Certificate, such
mutilated Certificate shall first be surrendered to the Trustee, and in the case
of any destroyed, lost or stolen Certificate, there shall be first delivered to
the Trustee such security or indemnity as may be reasonably required by it to
hold the Trustee harmless (provided, that with respect to an Owner which is an
institutional investor, a letter of indemnity furnished by it shall be
sufficient for this purpose), then, in the absence of written notice to the
Trustee or the Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute on behalf of the Trust and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and aggregate principal amount, bearing a number not
contemporaneously outstanding.
Upon the issuance of any new Certificate under this Section, the
Registrar or Trustee may require the payment from the transferor or transferee
of the related Certificate of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto; any other expenses
in connection with such issuance shall be an expense of the Trust.
Every new Certificate issued pursuant to this Section in exchange for
or in lieu of any mutilated, destroyed, lost or stolen Certificate shall
constitute evidence of a substitute interest in the Trust, and shall be entitled
to all the benefits of this Agreement equally and proportionately with any and
all other Certificates of the same Class duly issued hereunder and such
mutilated, destroyed, lost or stolen Certificate shall not be valid for any
purpose.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.
Section 5.06. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any
Certificate, the Trustee and any agent of the Trustee may treat the Person in
whose name any Certificate is registered as the Owner of such Certificate for
the purpose of receiving distributions with respect to such Certificate and for
all other purposes whatsoever, and neither the Trustee nor any agent of the
Trustee shall be affected by notice to the contrary.
Section 5.07. CANCELLATION.
All Certificates surrendered for registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate canceled as provided
in this Section, except as expressly permitted by this Agreement. All canceled
Certificates may be held by the Trustee in accordance with its standard
retention policy in effect from time to time.
Section 5.08. LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS.
(a) No sale or other transfer of record or beneficial ownership of a
Class R Certificate (whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agreement or otherwise) shall be made to a
Disqualified Organization or an agent of a Disqualified Organization. The
transfer, sale or other disposition of a Class R Certificate (whether pursuant
to a purchase, a transfer resulting from a default under a secured lending
agreement or otherwise) to a Disqualified Organization shall be deemed to be of
no legal force or effect whatsoever and such transferee shall not be deemed to
be an Owner for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Class R Certificate. Furthermore, in no event
shall the Trustee accept surrender for transfer, registration of transfer, or
register the transfer, of any Class R Certificate nor authenticate and make
available any new Class R Certificate unless the Trustee has received an
affidavit from the proposed transferee in the form attached hereto as Exhibit H.
Each holder of a Class R Certificate by his acceptance thereof, shall be deemed
for all purposes to have consented to the provisions of this Section 5.08(a).
(b) No other sale or other transfer of record or beneficial ownership
of a Class X-IO or Class R Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act, and any
applicable state securities laws or is made in accordance with said Securities
Act and laws. In the event of any such transfer: (i) in the case of transfers
for which an investment letter in the form of Exhibit I-1 or I-2 is provided by
the transferee to the Trustee, the Trustee or the Depositor shall require a
written Opinion of Counsel acceptable to and in form and substance satisfactory
to the Depositor and the Trustee to the effect that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Securities Act 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 or the Trust Estate; and (ii) in the case of transfers
for which an investment letter in the form of Exhibit I-1 or I-2 is provided,
the investment letter shall not be an expense of the Depositor, the Trustee or
the Trust Estate. The Owner of a Class X-IO or Class R Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Sellers against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
(c) No transfer of a Class X-IO or Class R Certificate shall be made
unless the Trustee shall have received either: (i) a representation letter from
the transferee of such Class X-IO or Class R Certificate, acceptable to and in
form and substance satisfactory to the Trustee (which may be combined with the
investment letter required by subsection (b) above), to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA nor a
plan or other arrangement subject to Section 406 of ERISA nor a plan or other
arrangement subject to Section 4975 of the Code (collectively, a "Plan"), nor is
acting on behalf of any Plan nor using the assets of any Plan to effect such
transfer or (ii) in the event that any Class X-IO or Class R Certificate is
purchased by a Plan, or by a person or entity acting on behalf of any Plan or
using the assets of any Plan to effect such transfer (including the assets of
any Plan held in an insurance company separate or general account), an Opinion
of Counsel, acceptable to and in form and substance satisfactory to the Trustee,
which Opinion of Counsel shall not be at the expense of either the Depositor,
the Trustee or the Trust Estate, to the effect that the purchase or holding of
any Class X-IO or Class R Certificates will not result in any non-exempt
prohibited transaction under ERISA and/or Section 4975 of the Code, and will not
subject the Trustee to any obligation or liability in addition to those
expressly undertaken under this Agreement. Notwithstanding anything else to the
contrary herein, any purported transfer of a Certificate to or on behalf of any
Plan without the delivery to the Trustee of an Opinion of Counsel as described
above shall be null and void and of no effect.
(d) Reserved.
(e) No sale or other transfer of any Class X-IO Certificates or Class
R Certificate may be made to the Depositor, to any Person that was, at any time,
an owner of a Home Equity Loan, or to any Seller except in connection with (1)
with respect to the Depositor, the initial issuance of such Certificates by the
Trust to the Depositor and, with respect to CHEC and the Conduit Seller, the
payment in partial consideration for the Home Equity Loans sold by the
applicable Seller or in payment of any deferred purchase price under the Conduit
Warehousing Facility 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 any REMIC created hereunder as a "REMIC") an Owner may
pledge, encumber, hypothecate or assign all or any part of its right to receive
distributions hereunder, but such pledge, encumbrance, hypothecation or
assignment shall not constitute a transfer of an ownership interest sufficient
to render the transferee an Owner of the Trust without compliance with the
provisions of Section 5.04 and Section 5.08 hereof.
END OF ARTICLE V
ARTICLE VI
COVENANTS
Section 6.01. DISTRIBUTIONS.
On each Distribution Date, the Trustee will withdraw amounts from the
Certificate Account and make the distributions with respect to the Certificates
in accordance with the terms of the Certificates and this Agreement. Such
distributions shall be made (i) in the case of the Offered Certificates
registered in the name of the Depository, by wire transfer to the Depository or
(ii) in each other case, by check or draft mailed on each Distribution Date or,
if requested by any Owner (other than the Depository) of (A) an Offered
Certificate having an original principal balance of not less than $1,000,000 or
(B) a Class X-IO or Class R Certificate having a Percentage Interest of not less
than 10% in writing not later than one Business Day prior to the applicable
Record Date (which request does not have to be repeated unless it has been
withdrawn), to such Owner by wire transfer to an account within the United
States designated no later than five Business Days prior to the related Record
Date, in each case to each Owner of record on the immediately preceding Record
Date.
Section 6.02. MONEY FOR DISTRIBUTIONS TO BE HELD IN TRUST;
WITHHOLDING.
(a) All payments of amounts due and payable with respect to any
Certificate that are to be made from amounts withdrawn from the Certificate
Account shall be made by and on behalf of the Trustee or by a Paying Agent, and
no amounts so withdrawn from the Certificate Account for payments of
Certificates shall be paid over to the Trustee except as provided in this
Section.
(b) If CHEC has appointed a Paying Agent pursuant to Section 11.15
hereof, the Trustee will, on the Business Day immediately preceding each
Distribution Date, deposit with such Paying Agent in immediately available funds
an aggregate sum sufficient to pay the amounts then becoming due on the
Certificates (to the extent funds are then available for such purpose in the
Certificate Account for the Class to which such amounts are due) such sum to be
held in trust for the benefit of the Owners entitled thereto.
(c) CHEC may at any time direct any Paying Agent to pay to the Trustee
all sums held in trust by such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which the sums were held by such Paying
Agent; and upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(d) CHEC shall require the Paying Agent, including the Trustee on
behalf of the Trust, to comply with all requirements of the Code and applicable
state and local law with respect to the withholding from any distributions made
by it to any Owner of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith, and
the Trustee and Paying Agent agree to comply with such requirements.
(e) Any money held by the Trustee or a Paying Agent in trust for the
payment of any amount due with respect to any Offered Certificate remaining
unclaimed by the Owner of such Certificate for the period then specified in the
escheat laws of the State of New York after such amount has become due and
payable shall be discharged from such trust and be paid, upon delivery to the
Trustee of an Opinion of Counsel that such payment is permitted by applicable
law, to the Depositor; and the Owner of such Offered Certificate shall
thereafter, as an unsecured general creditor, look only to the Depositor for
payment thereof (but only to the extent of the amounts so paid to the Depositor)
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Trustee or such Paying
Agent before being required to make any such payment, may at the expense of the
Trust cause to be published once, in the eastern edition of The Wall Street
Journal, notice that such money remains unclaimed and that, after a date
specified therein, which shall be not fewer than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be paid to
the Depositor. The Trustee shall, at the written direction of CHEC, also adopt
and employ, at the expense of CHEC, any other reasonable means of notification
of such payment (including but not limited to mailing notice of such payment to
Owners whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Registrar, the Trustee or any Paying Agent,
at the last address of record for each such Owner).
Section 6.03. PROTECTION OF TRUST ESTATE.
(a) The Trustee will hold the Trust Estate in trust for the benefit of
the Owners and at the request of the Depositor, will from time to time execute
and deliver all such supplements and amendments hereto pursuant to Section 11.14
hereof and all instruments of further assurance and other instruments, and will
take such other action upon such request from the Depositor, to:
(i) more effectively hold in trust all or any portion of the
Trust Estate;
(ii) perfect, publish notice of, or protect the validity of any
grant made or to be made by this Agreement;
(iii) enforce any of the Home Equity Loans; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Trustee, and the ownership interests of the Owners represented
thereby, in such Trust Estate against the claims of all Persons and
parties.
To the extent not covered by the indemnity or other security
contemplated by 10.01(e) and 10.01(g), the Trustee shall be reimbursed for any
costs or expenses associated with this section pursuant to Section 7.03(b)
clause C.14.
(b) The Trustee shall have the power to enforce, and shall enforce the
obligations and rights of the other parties to this Agreement, and of the
Owners, by action, suit or proceeding at law or equity, and shall also have the
power to enjoin, by action or suit in equity, any acts or occurrences which may
be unlawful or in violation of the rights of the Owners as such rights are set
forth in this Agreement; provided, however, that nothing in this Section shall
require any action by the Trustee unless the Trustee shall first (i) have been
furnished indemnity satisfactory to it and (ii) when required by this Agreement,
have been requested by the Owners of a majority of the Voting Rights represented
by the Certificates then Outstanding.
(c) The Trustee shall execute any instrument required pursuant to this
Section so long as such instrument does not conflict with this Agreement or with
the Trustee's fiduciary duties, or adversely affect its rights, indemnities and
immunities hereunder.
Section 6.04. PERFORMANCE OF OBLIGATIONS.
The Trustee will not take any action that would release any Person
from any of such Person's covenants or obligations under any instrument or
document relating to the Certificates or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or document, except as
expressly provided in this Agreement or such other instrument or document.
The Trustee may contract with other Persons to assist it in performing
its duties hereunder pursuant to Section 10.03(g); provided, that the Trustee
shall remain liable for the performance of any such duties notwithstanding any
such contractual arrangement.
Section 6.05. NEGATIVE COVENANTS.
The Trustee will not:
(i) sell, transfer, exchange or otherwise dispose of any of the
Trust Estate except as expressly permitted by this Agreement;
(ii) claim any credit on or make any deduction from the
distributions payable in respect of, the Certificates (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Owner by reason of the payment
of any taxes levied or assessed upon any of the Trust Estate;
(iii) incur, assume or guaranty, on behalf of the Trust, any
indebtedness of any Person except pursuant to this Agreement;
(iv) dissolve or liquidate the Trust in whole or in part, except
pursuant to Article IX hereof; or (A) permit the validity or
effectiveness of this Agreement to be impaired, or permit any Person
to be released from any covenant or obligation with respect to the
Trust or to the Certificates under this Agreement, except as may be
expressly permitted hereby or (B) permit any lien, charge, adverse
claim, security interest, mortgage or other encumbrance to be created
on or extend to or otherwise arise upon or burden the Trust Estate or
any part thereof or any interest therein or the proceeds thereof.
Section 6.06. NO OTHER POWERS.
The Trustee will not permit the Trust to engage in any business
activity or transaction other than those activities permitted by Section 2.03
hereof.
Section 6.07. LIMITATION OF SUITS.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Agreement, or for the appointment of a receiver
or trustee of the Trust, or for any other remedy with respect to an event of
default hereunder, unless:
(1) such Owner has previously given written notice to the Seller and
the Trustee of such Owner's intention to institute such
proceeding;
(2) the Owners of not less than 51% of the Voting Rights represented
by the Certificates then Outstanding shall have made written
request to the Trustee to institute such proceeding in its own
name as Trustee establishing the Trust;
(3) such Owner or Owners have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Owners of a
majority of the Voting Rights represented by the Certificates
then Outstanding;
IT BEING UNDERSTOOD AND INTENDED THAT NO ONE OR MORE OWNERS SHALL HAVE ANY RIGHT
IN ANY MANNER WHATEVER BY VIRTUE OF, OR BY AVAILING THEMSELVES OF, ANY PROVISION
OF THIS AGREEMENT TO AFFECT, DISTURB OR PREJUDICE THE RIGHTS OF ANY OTHER OWNER
OF THE SAME CLASS OR TO OBTAIN OR TO SEEK TO OBTAIN PRIORITY OR PREFERENCE OVER
ANY OTHER OWNER OF THE SAME CLASS OR TO ENFORCE ANY RIGHT UNDER THIS AGREEMENT,
EXCEPT IN THE MANNER HEREIN PROVIDED AND FOR THE EQUAL AND RATABLE BENEFIT OF
ALL THE OWNERS OF THE SAME CLASS.
Section 6.08. UNCONDITIONAL RIGHTS OF OWNERS TO RECEIVE DISTRIBUTIONS.
Notwithstanding any other provision in this Agreement, the Owner of
any Certificate shall have the right, which is absolute and unconditional, to
receive distributions to the extent provided herein and therein with respect to
such Certificate or to institute suit for the enforcement of any such
distribution, and such right shall not be impaired without the consent of such
Owner.
Section 6.09. RIGHTSAND REMEDIES CUMULATIVE.
Except as otherwise provided herein, no right or remedy herein
conferred upon or reserved to the Trustee or to the Owners is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. Except as otherwise provided herein, the assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.10. DELAY OR OMISSION NOT WAIVER.
No delay of the Trustee or any Owner of any Certificate to exercise
any right or remedy under this Agreement shall impair any such right or remedy
or constitute a waiver of such right or remedy. Every right and remedy given by
this Article VI or by law to the Trustee or to the Owners may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Owners, as the case may be.
Section 6.11. CONTROL BY OWNERS.
The Owners of a majority of the Voting Rights represented by the
Certificates then Outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with respect
to the Certificates or exercising any trust or power conferred on the Trustee
with respect to the Certificates or the Trust Estate, including, but not limited
to, those powers set forth in Section 6.03 and Section 8.20 hereof, provided
that:
(1) such direction shall not be in conflict with any rule of law or
with this Agreement;
(2) the Trustee shall have been provided with indemnity satisfactory
to it; and
(3) the Trustee may take any other action deemed proper by the
Trustee, as the case may be, which is not inconsistent with such
direction; provided, however, that the Trustee need not take any
action which it determines might involve it in liability or may
be unjustly prejudicial to the Owners not so directing.
Section 6.12. INDEMNIFICATION BY CHEC.
CHEC agrees to indemnify and hold the Trustee, the Depositor and each
Owner harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee, the Depositor and any Owner sustain in any way
related to the failure of Sellers to perform their duties in compliance with the
terms of this Agreement. CHEC shall immediately notify the Trustee, the
Depositor and each Owner if a claim is made by a third party that the Servicer
has failed to perform its obligations to service and administer the Home Equity
Loans in compliance with the terms of this Agreement, and CHEC shall assume
(with the consent of the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Depositor, the Servicer, the Sellers, the Trustee and/or Owner in
respect of such claim. The Trustee shall, in accordance with instructions
received from CHEC, reimburse CHEC only from amounts otherwise distributable on
the Class X-IO and the Class R Certificates for all amounts advanced by it
pursuant to the preceding sentence, except when a final nonappealable
adjudication determines that the claim relates directly to the failure of the
Sellers to perform their duties in compliance with the terms of this Agreement.
The provisions of this Section 6.12 shall survive the termination of this
Agreement, the resignation or removal of the Trustee and the payment of the
outstanding Certificates.
END OF ARTICLE VI
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 7.01. COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Trustee shall demand
payment or delivery of all money and other property payable to or receivable by
the Trustee pursuant to this Agreement, including all payments due on the Home
Equity Loans in accordance with the respective terms and conditions of such Home
Equity Loans and required to be paid over to the Trustee by the Servicer or by
any Sub-Servicer. The Trustee shall hold all such money and property received by
it as part of the Trust Estate and shall apply it as provided in this Agreement.
Section 7.02. ESTABLISHMENT OF ACCOUNTS.
(a) The Depositor shall cause the Certificate Account and the
Supplemental Interest Reserve Fund to be established on the Startup Day, and the
Trustee shall maintain each of the Certificate Account, the Repurchase Reserve
Fund 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 and the Repurchase Reserve
Fund, the Owners of the Certificates; and (ii) in the case of the Supplemental
Interest Reserve Fund, the Owners of the Class A-5, Class A-7 and Subordinate
Certificates.
(b) On each Determination Date the Trustee shall determine (subject to
the terms of Section 10.03(j) hereof, based solely on information provided to it
electronically or in writing by the Servicer) with respect to the immediately
following Distribution Date, the amounts that are expected to be on deposit in
the Certificate Account as of such Distribution Date.
Section 7.03. FLOW OF FUNDS.
(a) (i) The Trustee shall deposit in the Certificate Account without
duplication, upon receipt, with respect to Group I, the proceeds of any
liquidation of the assets of the Trust insofar as such assets relate to
Group I, all remittances made to the Trustee pursuant to Sections
8.08(e) and 8.09 with respect to Group I and the Group I Monthly
Remittance Amount remitted by the Servicer.
(ii) The Trustee shall deposit in the Certificate Account without
duplication, upon receipt, with respect to Group II, the proceeds of
any liquidation of the assets of the Trust insofar as such assets
relate to Group II, all remittances made to the Trustee pursuant to
Sections 8.08(e) and 8.09 with respect to Group II and the Group II
Monthly Remittance Amount remitted by the Servicer.
(b) On each Distribution Date, the Trustee shall make the following
allocations, disbursements and transfers (based solely on information provided
by the Servicer in writing), from amounts deposited in the Certificate Account
pursuant to subsection (a) in the following order of priority, and each such
allocation, transfer and disbursement shall be treated as having occurred only
after all preceding allocations:
A. With respect to amounts in the Certificate Account received with
respect to Group I:
1. To the Trustee, the Trustee Fee and any Transition Expenses for
Group I.
2. Concurrently, to each Class of Group I Certificates, the related
Class Monthly Interest Amount and any related Class Interest Carryover
Shortfall for the Distribution Date, allocated among each such Class of
Group I Certificates on a pro rata basis based on each Group I
Certificate's Class Monthly Interest Amount and Class Interest Carryover
Shortfall without priority among such Group I Certificates.
3. The remaining amount pursuant to clause C. below.
B. With respect to amounts in the Certificate Account received with
respect to Group II:
1. To the Trustee, the Trustee Fee and any Transition Expenses for
Group II.
2. To the Class A-7 Certificates, the related Class Monthly Interest
Amount and any related Class Interest Carryover Shortfall for the
Distribution Date.
3. The remaining amount pursuant to clause C. below
C. With respect to any remaining amounts in the Certificate Account
received with respect to Group I and Group II:
1. Concurrently, to the Senior Certificates in both Certificate
Groups, the related Class Monthly Interest Amount and any related Class
Interest Carryover Shortfall to the extent not paid pursuant to clauses A.
and B. above on the applicable Distribution Date, allocated among each such
class of Senior Certificates pro rata based on the amount that would have
been distributed to each such Class in the absence of such shortfall.
2. Sequentially, to the Class M-1, Class M-2 and Class B Certificates,
in that order, the related Class Monthly Interest Amount for the
Distribution Date.
3. To the Senior Certificates, an amount up to the Senior Principal
Distribution Amount for the Distribution Date, excluding any Subordination
Increase Amount included in that amount, concurrently as follows:
(i) To the Group I Certificates, the Group I Principal
Distribution Amount allocated in the following order of
priority:
(a) To the Class A-6 Certificates, an amount equal to the
Class A-6 Lockout Distribution Amount; and
(b) Sequentially, to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, and Class A-6 Certificates, in
that order, until the respective Certificate Principal
Balances of such Certificates have been reduced to
zero.
(ii) To the Group II Certificates, the Group II Principal
Distribution Amount until the Certificate Principal Balance
of such Certificates has been reduced to zero.
4. To the Class M-1 Certificates, the Class M-1 Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal Balance
thereof is reduced to zero.
5. To the Class M-2 Certificates, the Class M-2 Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal Balance
thereof is reduced to zero.
6. To the Class B Certificates, the Class B Principal Distribution
Amount for the Distribution Date, excluding any Subordination Increase
Amount included in that amount, until the Certificate Principal Balance
thereof is reduced to zero.
7. To the Offered Certificates, the Subordination Increase Amount for
the applicable Distribution Date, allocated in the order of priority set
forth in clauses 3 through 6 of clause C, above.
8. To the Class M-1 Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
9. To the Class M-2 Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
10. To the Class B Certificates, (a) any related Class Interest
Carryover Shortfall and then (b) any related Class Principal Carryover
Shortfall.
11. To the Class X-IO Certificates for deposit to the Supplemental
Interest Reserve Fund, the lesser of (a) the Class X-IO Distribution Amount
and (b) the WAC Excess.
12. To the Class A-7 Certificates, the amount of any Class A-7
Certificateholders' Interest Index Carryover to be paid from and to the
extent of funds on deposit in the Supplemental Interest Reserve Fund.
13. Sequentially to the Class A-5, Class M-1, Class M-2 and Class B
Certificates, in that order, the related Net Rate Cap Carryover to be paid
from and to the extent of funds on deposit in the Supplemental Interest
Reserve Fund.
14. To the Trustee as reimbursement for all Trustee Reimbursable
Expenses incurred in connection with its duties and obligations under this
Agreement, to the extent not paid as Trustee Fees or Transition Expenses
pursuant to clauses A.1 and B.1 above.
15. To the Servicer to the extent of any unreimbursed Delinquency
Advances, unreimbursed Servicing Advances and unreimbursed Compensating
Interest.
16. To the Class X-IO Certificates, an amount equal to the Class X-IO
Distribution Amount less any amounts thereof applied pursuant to clause
C.11 above; provided, however, that on any Distribution Date on which the
Class X-IO Distribution Amount is distributable pursuant to Section
9.02(d), any Class X-IO Distribution Amount shall instead be distributed to
the Classes of Offered Certificates, such amounts to be applied in
reduction of the Certificate Principal Balance of such Classes in the same
order of priority as the principal distribution amounts are to be applied
for such related Offered Certificates pursuant to clauses 3 through 6 of
clause C. above.
17. To the Class R Certificates, the remainder.
(c) Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Distribution Dates to the Owners of the related
Offered Certificates on account of principal pursuant to Section 7.03(b) shall
not exceed the original Certificate Principal Balance of the related Offered
Certificates.
The rights of the Owners to receive distributions from the proceeds of
the Trust Estate, and all ownership interests of the Owners in such
distributions, shall be as set forth in this Agreement. In this regard, all
rights of the Owners of the Class X-IO and Class R Certificates to receive
distributions in respect of the Class X-IO and Class R Certificates shall be
subject and subordinate to the preferential rights of the holders of the Offered
Certificates to receive distributions thereon and the ownership interests of
such Owners in such distributions, as described herein. In accordance with the
foregoing, the ownership interests of the Owners of the Class X-IO and Class R
Certificates in amounts deposited in the Accounts from time to time shall not
vest unless and until such amounts are distributed in respect of the Class X-IO
and Class R Certificates in accordance with the terms of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, the Owners
of the Class X-IO and Class R Certificates shall not be required to refund any
amount properly distributed on the Class X-IO and Class R Certificates pursuant
to this Section 7.03.
Section 7.04. SUPPLEMENTAL INTEREST RESERVE FUND. On the Startup Day,
the holders of the Class X-IO Certificates will deposit, or cause to be
deposited, into the Supplemental Interest Reserve Fund, $10,000. On each
Distribution Date as to which there is WAC Excess, the Trustee has been directed
to, and shall therefore, deposit into the Supplemental Interest Reserve Account
an amount equal to the WAC Excess which is payable pursuant to Section 7.03(b)
clause C.12 and 7.03(b) clause C.13. If no WAC Excess is payable on a
Distribution Date, the Trustee shall deposit into the Supplemental Interest
Reserve Fund on behalf of the Class X-IO Certificateholders an amount such that
when added to other amounts already on deposit in the fund, the aggregate amount
on deposit therein is equal to $10,000. For federal and state income tax
purposes, the Class X-IO Certificateholders will be deemed to be the owners of
the Supplemental Interest Reserve Fund and all amounts deposited into the
Supplemental Interest Reserve Fund (other than the initial $10,000 deposit)
shall be treated as amounts distributed by REMIC II with respect to the Class
X-IO Distribution Amount. Amounts held in the Supplemental Interest Reserve Fund
and not distributable to the Carryover Certificateholders on any Distribution
Date will be invested by the Trustee in investments designated by the Class X-IO
Certificateholders having maturities on or prior to the next succeeding
Distribution Date on which such amounts will be distributable to the Carryover
Certificateholders. Upon the termination of the Trust, or the payment in full of
the Carryover Certificates, all amounts remaining on deposit in the Supplemental
Interest Reserve Fund will be released from the lien of the Trust and
distributed to the Class X-IO Certificateholders or their designees. The
Supplemental Interest Reserve Fund will be part of the Trust but not part of any
REMIC created hereunder and any payments to the Carryover Certificates of WAC
Excess and will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860G(a)(1).
Section 7.04A OPTIONAL LIMITED PURCHASE OF HOME EQUITY LOANS;
REPURCHASE RESERVE FUND.
The Servicer will have a one-time option on any Distribution Date to
purchase all of the Home Equity Loans constituting the assets of any one of the
Fifty REMIC IIIs at a purchase price equal to (i) the aggregate outstanding Loan
Balances of such Home Equity Loans ("REMIC III Aggregate Balance") together with
accrued and unpaid interest at the percentage rate payable on such Home Equity
Loans plus the aggregate amounts (without duplication) of (x) all unreimbursed
Delinquency Advances and Servicing Advances theretofore made with respect to
such Home Equity Loans, (y) all Delinquency Advances which the Servicer has
theretofore failed to remit with respect to such Home Equity Loans and (z) all
reimbursed Delinquency Advances and Servicing Advances to the extent that
reimbursement is not made from the Mortgagor ("Repurchase Price") plus (ii) a
premium of 4% of the REMIC III Aggregate Balance ("Premium Amount"). Once the
Servicer exercises its repurchase option with respect to any of the Fifty REMIC
IIIs, the Servicer's option to exercise such option with respect to any of the
other Fifty REMIC IIIs shall expire.
Amounts received by the Trustee during any Remittance Period
attributable to the Repurchase Price with respect to each Home Equity Loan in
the applicable one of the Fifty REMIC IIIs shall be allocated between Home
Equity Loan Groups based upon the Home Equity Loan Group of such Home Equity
Loan and will be distributed on the related Distribution Date.
Amounts received by the Trustee during any Remittance Period
attributable to the Premium Amount shall be deposited in a Repurchase Reserve
Fund established by the Trustee. The Trustee shall distribute such Premium
Amount to the Owners of the Offered Certificates on the related Distribution
Date pro rata without regard to priority, based on Certificate Principal
Balances of each Class of Offered Certificates. The Repurchase Reserve Fund will
be part of the Trust but not part of any REMIC created hereunder and any Premium
Payments will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860 G (a) (i).
Section 7.05. INVESTMENT OF ACCOUNTS.
(a) Consistent with any requirements of the Code, all or a portion of
any Account held by the Trustee for the benefit of the Owners may (i) remain
uninvested or (ii) be invested and reinvested by the Trustee as directed in
writing by the Servicer in the name of the Trustee for the benefit of the Owners
in one or more Eligible Investments bearing interest or sold at a discount. The
bank serving as Trustee or any Affiliate thereof may be the obligor on any
investment which otherwise qualifies as an Eligible Investment. No investment in
any Account shall mature later than the Business Day immediately preceding the
next Distribution Date. Amounts held in the Certificate Account shall be
invested in Eligible Investments, which Eligible Investments shall mature no
later than the Business Day preceding the immediately following Distribution
Date or, if such Eligible Investments are an obligation of the Trustee or are
money market funds for which the Trustee or any Affiliate is the manager or the
adviser, such Eligible Investments shall mature no later than the following
Distribution Date.
(b) If any amounts are needed for disbursement from any Account held
by the Trustee and sufficient uninvested funds are not available to make such
disbursement, the Trustee shall cause to be sold or otherwise converted to cash
as directed in writing by the Servicer a sufficient amount of the investments in
such Account. No investments will be liquidated prior to maturity unless the
proceeds thereof are needed for disbursement.
(c) All income or other gain from investment in the Certificate
Account held by the Trustee shall be withdrawn by the Trustee and remitted to
the Servicer (except with respect to all income or other gain from investment
earned on the Business Day immediately preceding a Distribution Date, which
amounts shall be retained by the Trustee). Any investment losses on amounts held
in the Certificate Account shall, promptly upon realization of such loss, be
contributed by the Servicer to the Trustee for deposit in the Certificate
Account.
Section 7.06. PAYMENT OF TRUST EXPENSES.
(a) With respect to the Certificate Account the Trustee shall receive
all income and other gains from investments as described in Section 7.05(c).
(b) The Seller shall pay directly on the Startup Day the reasonable
fees and expenses of counsel to the Trustee.
Section 7.07. ELIGIBLE INVESTMENTS.
The following are Eligible Investments:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States, FHLMC
senior debt obligations, and FNMA senior debt obligations, but excluding any of
such securities whose terms do not provide for payment of a fixed dollar amount
upon maturity or call for redemption;
(b) Federal Housing Administration debentures;
(c) FHLMC participation certificates which guaranty timely payment of
principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home Loan
Banks;
(e) FNMA mortgage-backed securities (other than stripped mortgage
securities) and senior debt obligations;
(f) Federal funds, certificates of deposit, time deposits, and
bankers' acceptances (having original maturities of not more than 365 days) of
any domestic bank, the short-term debt obligations of which have been rated P-l
by Xxxxx'x 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 Xxxxx'x 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 Xxxxx'x, and if rated by Fitch, AA- or
F1+, respectively, or better by Fitch provided:
a. A master repurchase agreement or specific written repurchase
agreement governs the transaction;
b. The securities are held free and clear of any lien by the
Trustee or an independent third party acting solely as agent for the
Trustee, and such third party is (a) a Federal Reserve Bank or (b) a
bank which is a member of the FDIC and which has combined capital,
surplus and undivided profits of not less than $125,000,000 or (c) a
bank approved in writing for such purpose by the Trustee, and the
Trustee shall have received written confirmation from such third party
that it holds such securities, free and clear of any lien, as agent
for the Trustee;
c. A perfected first security interest under the Uniform
Commercial Code, or book-entry procedures prescribed at 31 CFR 306.1
ET SEQ. or 31 CFR 350.0 ET SEQ., in such securities is created for
the benefit of the Trustee;
d. The repurchase agreement has a term of thirty days or less and
the Trustee will value the collateral securities no less frequently
than weekly marked-to-market at current market price plus interest and
will liquidate the collateral securities if any deficiency in the
required collateral percentage is not restored within two business
days of such valuation; and
e. The fair market value of the collateral securities in relation
to the amount of the repurchase obligation, including principal and
interest, is equal to at least 106%.
(i) Commercial paper (having original maturities of not more than 270
days) rated in the highest short-term rating categories of Xxxxx'x and if rated
by Fitch, Fitch;
(j) Any money market fund rated Aaa by Xxxxx'x and if rated by Fitch,
AA by Fitch which funds are registered under the Investment Company Act of 1940
and whose shares are registered under the Securities Act, including any such
fund that is managed by the Trustee or any Affiliate of the Trustee or for which
the Trustee or any of its Affiliates acts as an adviser; and
(k) Any other investment permitted by each of the Rating Agencies;
PROVIDED THAT NO INSTRUMENT DESCRIBED ABOVE SHALL EVIDENCE EITHER THE RIGHT TO
RECEIVE (A) ONLY INTEREST WITH RESPECT TO THE OBLIGATIONS UNDERLYING SUCH
INSTRUMENT OR (B) BOTH PRINCIPAL AND INTEREST PAYMENTS DERIVED FROM OBLIGATIONS
UNDERLYING SUCH INSTRUMENT AND THE INTEREST AND PRINCIPAL PAYMENTS WITH RESPECT
TO SUCH INSTRUMENT PROVIDED A YIELD TO MATURITY AT PAR GREATER THAN 120% OF THE
YIELD TO MATURITY AT PAR OF THE UNDERLYING OBLIGATIONS; AND PROVIDED, FURTHER,
THAT ALL INSTRUMENTS DESCRIBED HEREUNDER SHALL MATURE AT PAR ON OR PRIOR TO THE
NEXT SUCCEEDING DISTRIBUTION DATE UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT
AND THAT NO INSTRUMENT DESCRIBED HEREUNDER MAY BE PURCHASED AT A PRICE GREATER
THAN PAR IF SUCH INSTRUMENT MAY BE PREPAID OR CALLED AT A PRICE LESS THAN ITS
PURCHASE PRICE PRIOR TO STATED MATURITY.
Section 7.08. ACCOUNTING AND DIRECTIONS BY TRUSTEE.
By 12:00 noon New York time, on each Distribution Date (or such
earlier period as shall be agreed by the Seller and the Trustee), the Trustee
shall notify (subject to the terms of Section 10.03(j) hereof, based solely on
information provided to the Trustee by the Servicer and upon which the Trustee
may conclusively rely) the Seller, the Depositor and each Owner, of the
following information with respect to such Distribution Date (which notification
may be given by facsimile, or by telephone promptly confirmed in writing):
(1) The aggregate amount on deposit in the Certificate Account as of
the related Determination Date;
(2) The Class Principal Distribution Amount, with respect to each
Class individually, and all Classes in the aggregate on the next
Distribution Date;
(3) The amount of any Excess Interest;
(4) The application of the amounts described in clauses (1) and (3)
above to be made on such Distribution Date in accordance with
Section 7.03 hereof;
(5) The Certificate Principal Balance of each Class, the aggregate
amount of the principal of each Class of the Offered Certificates
to be paid on such Distribution Date and the remaining
Certificate Principal Balance of each Class of Offered
Certificates following any such payment;
(6) The amount, if any, of any Realized Losses for each Home Equity
Loan Group for the related Remittance Period and any Applied
Realized Loss Amounts with respect to the Subordinate
Certificates for the related Distribution Date; and
(7) The amount of any Subordination Increase Amount, any Excess
Overcollateralization Amount and the Required
Overcollateralization Amount, in each case for the relevant
Distribution Date.
Section 7.09. REPORTS BY TRUSTEE TO OWNERS.
(a) On each Distribution Date the Trustee shall transmit a report in
writing to each Owner, the Underwriters, the Depositor, Xxxxx'x and Fitch
setting forth:
(i) the amount of the distribution with respect to such Owner's
Certificates (based on a Certificate in the original principal amount
of $1,000);
(ii) the amount of such Owner's distributions allocable to
principal, separately identifying the aggregate amount of any
Prepayments in full or other Prepayments or other recoveries of
principal included therein (based on a Certificate in the original
principal amount of $1,000) and any related Subordination Increase
Amount;
(iii) the amount of such Owner's distributions allocable to
interest (based on a Certificate in the original principal amount of
$1,000);
(iv) any Class Interest Carryover Shortfall for any Class of
Offered Certificates for such Distribution Date;
(v) any Class Principal Carryover Shortfall for any Class of
Subordinate Certificates for such Distribution Date;
(vi) the principal amount of each Class of Offered Certificate
which will be Outstanding and the aggregate Loan Balance of each
Group, after giving effect to any payment of principal on such
Distribution Date;
(vii) the Overcollateralization Amount and Required
Overcollateralization Amount, if any, remaining after giving effect to
all distributions and transfers on such Distribution Date;
(viii) based upon information furnished by the Servicer, such
information as may be required by Section 6049(d)(7)(C) of the Code
and the regulations promulgated thereunder to assist the Owners in
computing their market discount;
(ix) the total of any Substitution Amounts and any Loan Purchase
Price amounts included in such distribution with respect to each
Group;
(x) the weighted average Coupon Rate of the Home Equity Loans in
each Group;
(xi) [Reserved];
(xii) such other information as any Owner may reasonably request
with respect to Delinquent Home Equity Loans;
(xiii) the weighted average gross margin of the Home Equity Loans
in Group II;
(xiv) the largest Loan Balance outstanding in each Group;
(xv) [Reserved];
(xvi) the Class A-7 Certificateholders' Interest Index Carryover
and the Net Rate Cap Carryover paid to the Owners of each Class of
Carryover Certificates for such Distribution Date and any Class A-7
Certificateholders' Interest Index Carryover and Net Rate Cap
Carryover remaining unpaid;
(xvii) the related Certificate Rate for each Class for the
related Distribution Date;
(xviii) the Fixed Rate Interest Rate Cap and the Class A-7
Available Funds Cap for such Distribution Date; and
(xix) the amount of any Applied Realized Loss Amounts applied
with respect to each Class of Subordinate Certificates; and
(xx) the occurrence of the Stepdown Date.
The Servicer shall provide to the Trustee the information described in
Section 8.08(f) and in clause (b) below to enable the Trustee to perform its
reporting obligations under this Section, and such obligations of the Trustee
under this Section are conditioned upon such information being received and the
information provided in clauses (ii), (ix) and (x) above shall be based solely
upon information contained in the monthly servicing report provided by the
Servicer to the Trustee pursuant to Section 8.08 hereof.
(b) In addition, on each Distribution Date the Trustee will distribute
to each Owner, the Underwriters, Xxxxx'x and Fitch, together with the
information described in subsection (a) preceding, the following information
with respect to each Home Equity Loan Group and for both Groups in the aggregate
which is hereby required to be prepared by the Servicer and furnished to the
Trustee for such purpose on or prior to the related Monthly Remittance Date:
(i) the number and aggregate Loan Balances of Home Equity Loans
(a) 30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90 or
more days Delinquent, as of the close of business on the last Business
Day of the calendar month immediately preceding the Distribution Date,
(d) the number and aggregate Loan Balances of all Home Equity Loans as
of such Distribution Date after giving effect to any payment of
principal on the last day of the Remittance Period immediately
preceding the Distribution Date and (e) the percentage that each of
the amounts represented by clauses (a), (b) and (c) represent as a
percentage of the respective amounts in clause (d);
(ii) the status and the number and dollar amounts of all Home
Equity Loans in foreclosure proceedings as of the close of business on
the last Business Day of the calendar month immediately preceding such
Distribution Date, separately stating, for this purpose, all Home
Equity Loans with respect to which foreclosure proceedings were
commenced in the immediately preceding calendar month;
(iii) the number of Mortgagors and the Loan Balances of (a) the
related Home Equity Loans involved in bankruptcy proceedings as of the
close of business on the last Business Day of the calendar month
immediately preceding such Distribution Date and (b) Home Equity Loans
that are "balloon" loans;
(iv) the existence and status of any REO Properties, as of the
close of business on the last Business Day of the calendar month
immediately preceding the Distribution Date;
(v) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month immediately
preceding the Distribution Date;
(vi) cumulative Realized Losses incurred on the Home Equity Loans
from the Startup Day to and including the Remittance Period
immediately preceding the Distribution Date;
(vii) the amount of Net Liquidation Proceeds realized on the Home
Equity Loans during the Remittance Period immediately preceding the
Distribution Date; and
(viii) the 60+ Delinquency Percentage (Rolling Three Month) with
respect to such Distribution Date; and
(ix) whether a Trigger Event has occurred.
The Trustee shall forward such report (together with the information
described in (a) above) concurrently with each distribution to the
Certificateholders and the Rating Agencies.
(c) The Trustee shall, on behalf of the Trust, cause to be filed with
the Commission any periodic reports required to be filed on behalf of the Trust
under the provisions of the Exchange Act, and the rules and regulations of the
Commission thereunder. Upon the request of the Trustee, each of the Seller, the
Servicer and the Depositor shall cooperate with the Trustee in the preparation
of any such report and shall provide to the Trustee in a timely manner all such
information or documentation as is in the possession of such Person and that the
Trustee may reasonably request in connection with the performance of its duties
and obligations under this Section.
The Trustee shall file with the Commission a Form 15 with respect to
the Trust as soon as practicable following the first date on which the
conditions to filing thereof have been satisfied. Following the filing of such
Form 15, the Trustee will submit a certificate addressed to an officer of the
Depositor certifying that all filings under the Exchange Act have been made and
shall attach a copy of acceptance slips for such filings. On the Startup Day,
the Depositor shall provide the Trustee with a letter at Closing, substantially
in the form attached hereto as Exhibit M, instructing the Trustee, as filing
agent, to comply with the reporting obligations for the Trust under the Exchange
Act.
Section 7.10. REPORTS BY TRUSTEE.
(a) The Trustee shall report to the Depositor, the Seller and each
Owner, with respect to the amount on deposit in the Certificate Account
(including the amount therein relating to each Group) and the identity of the
investments included therein, as the Depositor, the Seller or any Owner may from
time to time reasonably request. Without limiting the generality of the
foregoing, the Trustee shall, at the reasonable request of the Depositor, the
Seller or any Owner, transmit promptly to the Depositor, the Seller and any
Owner copies of all accountings of receipts in respect of the Home Equity Loans
furnished to it by the Servicer and shall notify the Seller if any Monthly
Remittance Amount has not been received by the Trustee when due.
(b) The Trustee shall report to each Owner with respect to any written
notices it may from time to time receive which provide an Authorized Officer
with actual knowledge that any of the statements set forth in Section 3.04(b)
hereof are inaccurate.
(c) The Trustee will make the report referred to in Section 7.09
herein (and, at its option, any additional files containing the same information
in an alternative format) available each month to Certificateholders and other
parties to this Agreement via the Trustee's internet website, which is presently
located at xxx.xxx.xxxxxxx.xxx. Persons that are unable to use the above website
are entitled to have a paper copy mailed to them via first Class mail by calling
the Trustee at 0-000-000-0000. The Trustee shall have the right to change the
way the report referred to in Section 7.09 herein is distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and to the Certificateholders. The Trustee shall provide timely and
adequate notification to all above parties and to the Certificateholders
regarding any such change.
Section 7.11. ALLOCATION OF LOSSES. On each Distribution Date, the
Trustee shall determine the total of the Applied Realized Loss Amounts for such
Distribution Date. The Applied Realized Loss Amount for any Distribution Date
shall be applied by reducing, on a dollar for dollar basis, the Certificate
Principal Balance of each Class of Subordinate Certificates beginning with the
Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Certificate Principal
Balance thereof is reduced to zero. Any Applied Realized Loss Amount allocated
to a Class of Subordinate Certificates shall be allocated among the Subordinate
Certificates of such Class in proportion to their respective Percentage
Interests.
END OF ARTICLE VII
ARTICLE VIII
SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS
Section 8.01. SERVICER AND SUB-SERVICERS.
Acting directly or through one or more Sub-Servicers as provided in
Section 8.03, the Servicer shall service and administer the Home Equity Loans in
accordance with this Agreement and the terms of the respective Home Equity
Loans, and with prudent and reasonable care, using the degree of skill and
attention that the Servicer exercises with respect to comparable home equity
loans that it services for itself or others and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable but without regard to: (i) any relationship that the Servicer, any
Sub-Servicer or any Affiliate of the Servicer or any Sub-Servicer may have with
the related Mortgagor; (ii) the ownership of any Certificate by the Servicer or
any Affiliate of the Servicer; (iii) the Servicer's obligation to make
Delinquency Advances or Servicing Advances; or (iv) the Servicer's or any
Sub-Servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction.
Subject to Section 8.03 hereof, the Servicer may, and is hereby
authorized to, perform any of its servicing responsibilities with respect to all
or certain of the Home Equity Loans through a Sub-Servicer as it may from time
to time designate, but no such designation of a Sub-Servicer shall serve to
release the Servicer from any of its obligations under this Agreement. Such
Sub-Servicer shall have the rights and powers of the Servicer which have been
delegated to such Sub-Servicer with respect to such Home Equity Loans under this
Agreement.
Without limiting the generality of the foregoing, but subject to
Sections 8.13 and 8.14, the Servicer in its own name or in the name of a
Sub-Servicer is hereby authorized and empowered (i) to execute and deliver, on
behalf of itself, the Owners and the Trustee or any of them, any and all
instruments of satisfaction or cancellation or of partial or full release or
discharge and all other comparable instruments with respect to the Home Equity
Loans and with respect to the Properties, (ii) to institute foreclosure
proceedings or obtain a deed in lieu of foreclosure so as to effect ownership of
any Property in the name of the Servicer on behalf of the Trustee, and (iii) to
hold title to any Property upon such foreclosure or deed in lieu of foreclosure
on behalf of the Trustee; provided, however, that Section 8.13(a) and Section
8.14(a) shall each constitute a revocable power of attorney from the Trustee to
the Servicer to execute an instrument of satisfaction (or assignment of Mortgage
without recourse) with respect to any Home Equity Loan held by the Trustee
hereunder paid in full or foreclosed (or with respect to which payment in full
has been escrowed). Revocation of the power of attorney created by the proviso
of the preceding sentence shall take effect upon (i) the receipt by the Servicer
of written notice thereof from the Trustee or (ii) a Servicer Termination Event
or (iii) the termination of the Trust. The Trustee shall at the written
direction of the Servicer execute any documentation furnished to it by the
Servicer for recordation by the Servicer in the appropriate jurisdictions, as
shall be necessary to effectuate the foregoing. Subject to Sections 8.13 and
8.14, the Trustee shall, if necessary, execute a limited power of attorney in
the form reasonably acceptable to the Trustee to the Servicer or any
Sub-Servicer and furnish them with any other documents as the Servicer or such
Sub-Servicer shall reasonably request to enable the Servicer and such
Sub-Servicer to carry out their respective servicing and administrative duties
hereunder.
Upon the request of the Trustee, the Servicer shall send to the
Trustee, the details concerning the servicing of the Home Equity Loans on
computer generated tape, diskette or other machine readable format which is
mutually agreeable.
The Servicer shall give prompt written notice to the Trustee of any
action, of which the Servicer has actual knowledge, to (i) assert a claim
against the Trust or (ii) assert jurisdiction over the Trust.
Servicing Advances incurred by the Servicer or any Sub-Servicer in
connection with the servicing of the Home Equity Loans (including any penalties
in connection with the payment of any taxes and assessments or other charges on
any Property) shall be recoverable by the Servicer or such Sub-Servicer to the
extent described in Section 8.09(b) hereof.
The Servicer will exercise its discretion consistent with customary
servicing procedures and the terms of this Agreement, with respect to the
enforcement of defaulted Home Equity Loans in such manner as will maximize the
receipt of principal and interest with respect thereto, including but not
limited to the sale of such Home Equity Loans to a third party, the modification
of such Home Equity Loans, or foreclosure upon the related Property and
disposition thereof.
Section 8.02. COLLECTION OF CERTAIN HOME EQUITY LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Home Equity Loans, and shall,
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any applicable Insurance Policy, follow collection
procedures for all Home Equity Loans at least as rigorous as those described in
the FNMA Guide. Consistent with the foregoing, the Servicer may in its
discretion waive or permit to be waived any late payment charge, prepayment
charge, assumption fee or any penalty interest in connection with the prepayment
of a Home Equity Loan or any other fee or charge which the Servicer would be
entitled to retain hereunder as servicing compensation. In the event the
Servicer shall consent to the deferment of the due dates for payments due on a
Note, the Servicer shall nonetheless make payment of any required Delinquency
Advance with respect to the payments so extended to the same extent as if such
installment were due, owing and Delinquent and had not been deferred, and shall
be entitled to reimbursement therefor in accordance with Section 8.09(a) hereof.
Section 8.03. SUB-SERVICING AGREEMENTS BETWEEN SERVICER AND
SUB-SERVICERS.
The Servicer may, with the prior written consent of the Trustee, enter
into Sub-Servicing Agreements for any servicing and administration of Home
Equity Loans with any institution which is acceptable to the Trustee and which
(x) is in compliance with the laws of each state necessary to enable it to
perform its obligations under such Sub-Servicing Agreement, (y) has experience
servicing home equity loans that are similar to the Home Equity Loans and (z)
has equity of not less than $5,000,000 (as determined in accordance with
generally accepted accounting principles). The Servicer shall give written
notice to the Trustee, the Owners and the Rating Agencies of the appointment of
any Sub-Servicer (and shall receive the confirmation of the Rating Agencies that
such Sub-Servicer shall not result in a withdrawal or downgrading by any Rating
Agency of the rating or the shadow rating of the Offered Certificates). For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Home Equity Loans when any Sub-Servicer has received such payments.
Each Sub-Servicer shall be required to service the Home Equity Loans in
accordance with this Agreement and any such Sub-Servicing Agreement shall be
consistent with and not violate the provisions of this Agreement. Each
Sub-Servicing Agreement shall provide that the Trustee (if acting as successor
Servicer) or any other successor Servicer shall have the option to terminate
such agreement without payment of any fees if the original Servicer is
terminated or resigns. The Servicer shall deliver to the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Servicer's execution and delivery of such instrument.
Section 8.04. SUCCESSOR SUB-SERVICERS.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement in accordance with the terms and conditions of such Sub-Servicing
Agreement and to either itself directly service the related Home Equity Loans or
enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 8.03.
Section 8.05. LIABILITY OF SERVICER; INDEMNIFICATION.
(a) The Servicer shall not be relieved of its obligations under this
Agreement notwithstanding any Sub-Servicing Agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer and the Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Home Equity Loans. The Servicer shall be entitled to enter
into any agreement with a Sub-Servicer for indemnification of the Servicer by
such Sub-Servicer and nothing contained in such Sub-Servicing Agreement shall be
deemed to limit or modify this Agreement.
(b) The Servicer agrees to indemnify and hold the Trustee, the
Depositor and each Owner harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Trustee, the Depositor and any Owner may
sustain in any way related to the failure of the Servicer to perform its duties
and service the Home Equity Loans in compliance with the terms of this
Agreement. The Servicer shall immediately notify the Trustee, the Depositor and
each Owner if a claim is made by a third party with respect to this Agreement,
and the Servicer shall assume (with the consent of the Trustee) the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Servicer, the Trustee, the Depositor
and/or Owner in respect of such claim. The Trustee shall, in accordance with
written instructions received from the Servicer, reimburse the Servicer only
from amounts otherwise distributable on the Class R Certificates for all amounts
advanced by it pursuant to the preceding sentence, except when a final
nonappealable adjudication determines that the claim relates directly to the
failure of the Servicer to perform its duties in compliance with the Agreement.
The provisions of this Section 8.05(b) shall survive the termination of this
Agreement, the resignation or removal of the Trustee, and the payment of the
outstanding Certificates.
Section 8.06. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICER,
TRUSTEE OR THE OWNERS.
Any Sub-Servicing Agreement and any other transactions or services
relating to the Home Equity Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Trustee and the Owners
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to any Sub-Servicer except as
set forth in Section 8.07.
Section 8.07. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENT BY
TRUSTEE.
In connection with the assumption of the responsibilities, duties and
liabilities and of the authority, power and rights of the Servicer hereunder by
the Trustee pursuant to Section 8.20 or another successor Servicer, it is
understood and agreed that the Servicer's rights and obligations under any
Sub-Servicing Agreement then in force between the Servicer and a Sub-Servicer
shall be assumed simultaneously by the Trustee or another successor Servicer
without act or deed on part of the Trustee or such successor servicer provided,
however, that the Trustee (if acting as successor Servicer) or any other
successor Servicer may terminate the Sub-Servicer as provided in Section 8.03.
The Servicer shall, upon the reasonable request of the Trustee, but at
the expense of the Servicer, deliver to the assuming party documents and records
relating to each Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements to the assuming
party.
Section 8.08. PRINCIPAL AND INTEREST ACCOUNT.
(a) The Servicer shall establish and maintain at one or more
Designated Depository Institutions the Principal and Interest Account, which
shall be an Eligible Account. The Principal and Interest Account shall be
identified on the records of the Designated Depository Institution as follows:
Bank One, National Association, as Trustee on behalf of the Owners of the Centex
Home Equity Loan Trust 2001-B Home Equity Loan Asset-Backed Certificates. If the
institution at any time holding the Principal and Interest Account ceases to be
eligible as a Designated Depository Institution hereunder, then the Servicer
shall immediately be required to name a successor institution meeting the
requirements for a Designated Depository Institution hereunder. If the Servicer
fails to name such a successor institution, then the Principal and Interest
Account shall thenceforth be held as a trust account at the Corporate Trust
Office of the Trustee. The Servicer shall notify the Trustee and the Owners if
there is a change in the name, account number or institution holding the
Principal and Interest Account.
Subject to Subsection (c) below, the Servicer shall deposit all
receipts required pursuant to Subsection (c) below and related to the Home
Equity Loans to the Principal and Interest Account on a daily basis (but no
later than the second Business Day after receipt).
(b) All funds in the Principal and Interest Account shall be held (i)
uninvested up to the amount insured by the FDIC or (ii) invested in Eligible
Investments. Any investments of funds in the Principal and Interest Account
shall mature or be withdrawable at par on or prior to the immediately succeeding
Monthly Remittance Date. The Principal and Interest Account shall be held in
trust in the name of the Trust for the benefit of the Owners. The Trust shall be
divided into two separate sub-trusts; one for Group I and any Trust assets
allocable to Group I and the other for Group II and any Trust assets allocable
to Group II. Any investment earnings on funds held in the Principal and Interest
Account shall be for the account of the Servicer and may only be withdrawn from
the Principal and Interest Account by the Servicer immediately following the
remittance of the Monthly Remittance Amount by the Servicer in accordance with
the terms hereof. Any investment losses on amounts held in the Principal and
Interest Account shall be for the account of the Servicer and promptly upon the
realization of such loss shall be contributed by the Servicer to the Principal
and Interest Account. Any references herein to amounts on deposit in the
Principal and Interest Account shall refer to amounts net of such investment
earnings.
(c) The Servicer shall deposit to the Principal and Interest Account
no later than the second Business Day after receipt, all principal collected and
interest due on the Home Equity Loans (net of the Servicing Fee related to such
Home Equity Loans) on and after the Cut-Off Date and the Replacement Cut-Off
Date, as applicable, including any Prepayments and Net Liquidation Proceeds,
other recoveries or amounts related to the Home Equity Loans received by the
Servicer and any income from REO Properties, but net of (i) Net Liquidation
Proceeds to the extent such Net Liquidation Proceeds exceed the sum of (A) the
Loan Balance of the related Home Equity Loan immediately prior to liquidation,
plus (B) accrued and unpaid interest on such Home Equity Loan (net of the
related Servicing Fee) plus (C) any unrecovered Cram Down Losses, (ii)
reimbursements for unreimbursed Delinquency Advances and unreimbursed Servicing
Advances (but in each case solely from amounts received on the related Home
Equity Loan) as provided in Section 8.09 and (iii) reimbursements for amounts
deposited in the Principal and Interest Account representing payments of
principal and/or interest on a Note by a Mortgagor which are subsequently
returned by a depository institution as unpaid.
(d) The Servicer may make withdrawals from the Principal and Interest
Account, with respect to each Home Equity Loan Group, for the following
purposes:
(A) on each Monthly Remittance Date, to pay itself the related
Servicing Fees to the extent such Servicing Fees are not retained by
the Servicer;
(B) to withdraw investment earnings on amounts on deposit in the
Principal and Interest Account;
(C) to withdraw amounts that have been deposited to the Principal
and Interest Account in error;
(D) to reimburse itself for unreimbursed Delinquency Advances and
for unreimbursed Servicing Advances (in each case, solely from amounts
recovered on the related Home Equity Loan) as provided in Section
8.09;
(E) to reimburse itself pursuant to Section 8.09(a) for
Nonrecoverable Advances; and
(F) to clear and terminate the Principal and Interest Account
following the termination of the Trust pursuant to Article IX.
(e) The Servicer shall (i) remit to the Trustee for deposit in the
Certificate Account by wire transfer, or otherwise make funds available in
immediately available funds, without duplication, the Monthly Remittance Amount
allocable to a Remittance Period not later than the related Monthly Remittance
Date, and (ii) on each Monthly Remittance Date, deliver to the Trustee and the
Depositor, a monthly servicing report, with respect to each Home Equity Loan
Group, containing (without limitation) the following information: principal and
interest collected in respect of the Home Equity Loans, scheduled principal and
interest that was due on the Home Equity Loans, relevant information with
respect to Liquidated Loans, if any, summary and detailed delinquency reports,
Liquidation Proceeds and other similar information concerning the servicing of
the Home Equity Loans. In addition, the Servicer shall inform the Trustee on
each Monthly Remittance Date, with respect to each Home Equity Loan Group, of
the amounts of any Loan Purchase Prices or Substitution Amounts so remitted
during the related Remittance Period, and of the Loan Balance of the Home Equity
Loan having the largest Loan Balance as of such date.
(f) The Servicer shall provide to the Trustee the information
described in Section 8.08(e)(ii) and in Section 7.09(b) to enable the Trustee to
perform its reporting requirements under Section 7.09 and to make the
allocations and disbursements set forth in Sections 7.02 and 7.03.
Section 8.09. DELINQUENCY ADVANCES AND SERVICING ADVANCES.
(a) On or before each Monthly Remittance Date, the Servicer shall be
required to remit to the Trustee for deposit to the Certificate Account out of
the Servicer's own funds or from collections on any Home Equity Loans that are
not required to be distributed on the Distribution Date occurring during the
month in which such remittance is made (all or any portion of such amount to be
replaced on future Monthly Remittance Dates to the extent required for
distribution) any Delinquent payment of interest with respect to each Delinquent
Home Equity Loan, which payment was not received on or prior to the last day of
the related Remittance Period. Such amounts of the Servicer's own funds so
deposited are "Delinquency Advances".
The Servicer shall be permitted to reimburse itself on any Business
Day for any Delinquency Advances paid from the Servicer's own funds (i) from
late collections on the related Home Equity Loan or (ii) as otherwise provided
in Section 7.03(b).
Notwithstanding the foregoing, in the event that the Servicer
determines in its reasonable business judgment in accordance with the servicing
standards set out herein that any proposed Delinquency Advance would not be
recoverable, the Servicer shall not be required to make Delinquency Advances
with respect to such Home Equity Loan. To the extent that the Servicer
previously has made Delinquency Advances with respect to a Home Equity Loan that
the Servicer subsequently determines are Nonrecoverable Advances, the Servicer
shall be entitled to reimbursement for such aggregate Nonrecoverable Advances
from collections on any Home Equity Loan on deposit in the Principal and
Interest Account. The Servicer shall deliver an Officer's Certificate of such
determination as to why such amount would not be recoverable to the Trustee; the
Trustee shall promptly furnish a copy of such notice to the Owners of the Class
R Certificates upon request; provided, further, that the Servicer shall be
entitled to recover any unreimbursed Delinquency Advances from Liquidation
Proceeds for the related Home Equity Loan.
(b) The Servicer will pay all "out-of-pocket" costs and expenses
incurred in the performance of its servicing obligations, including, but not
limited to, (i) Preservation Expenses, (ii) the cost of any enforcement or
judicial proceedings, including foreclosures, (iii) the cost of the management
and liquidation of REO Property, (iv) advances required by Section 8.13(a), and
(v) expenses incurred pursuant to Section 8.22, except to the extent that such
amounts are determined by the Servicer in its reasonable business judgment not
to be recoverable. Such costs will constitute "Servicing Advances". The Servicer
may recover a Servicing Advance (x) from the Mortgagors to the extent permitted
by the Home Equity Loans or, if not theretofore recovered from the Mortgagor on
whose behalf such Servicing Advance was made, from Liquidation Proceeds realized
upon the liquidation of the related Home Equity Loan and (y) as provided in
Section 7.03(b) clause C.15. The Servicer shall be entitled to recover the
Servicing Advances from the Liquidation Proceeds on the related Home Equity Loan
prior to the payment of the Liquidation Proceeds to any other party to this
Agreement. In no case may the Servicer recover Servicing Advances from the
principal and interest payments on any other Home Equity Loan except as provided
in Section 7.03(b) clause C.15.
Section 8.10. COMPENSATING INTEREST; REPURCHASE OF HOME EQUITY LOANS.
(a) If any Prepayment in full of a Home Equity Loan occurs during any
calendar month, any shortfall between (x) the interest collected from the
Mortgagor in connection with such payoff, and (y) the full month's interest at
the Coupon Rate that would be due on the related Due Date for such Home Equity
Loan ("Compensating Interest") (but not in excess of the aggregate Servicing Fee
for the related Remittance Period) shall be deposited by the Servicer to the
Principal and Interest Account (or if such difference is an excess, the Servicer
shall retain such excess) on the next succeeding Monthly Remittance Date and
shall be included in the Monthly Remittance Amount to be made available to the
Trustee on such Monthly Remittance Date. The Servicer may recover any
unreimbursed payments of Compensating Interest from collections on any Home
Equity Loan on deposit in the Principal and Interest Account, as provided in
Section 7.03(b) clause C.15.
(b) Subject to clause (c) below, the Servicer has the right and the
option, but not the obligation, to purchase for its own account any Home Equity
Loan which is 60 days or more Delinquent, or any Home Equity Loan as to which
enforcement proceedings have been brought by the Servicer pursuant to Section
8.13; provided, however, that the Servicer may not purchase any such Home Equity
Loan unless the Servicer has delivered to the Trustee at the Servicer's expense,
an Opinion of Counsel acceptable to the Trustee to the effect that such a
purchase would not constitute a Prohibited Transaction for the Trust or
otherwise subject the Trust to tax and would not jeopardize the status of any
REMIC created hereunder as REMICs. Any such Home Equity Loan so purchased shall
be purchased by the Servicer on or prior to a Monthly Remittance Date at a
purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be deposited in the Principal and Interest Account.
(c) [Reserved]
(d) The Net Liquidation Proceeds from the disposition of any REO
Property shall be deposited in the Principal and Interest Account and remitted
to the Trustee as part of the Monthly Remittance Amount remitted by the Servicer
to the Trustee.
Section 8.11. MAINTENANCE OF INSURANCE.
(a) (i) The Servicer shall cause to be maintained with respect to each
Home Equity Loan a hazard insurance policy with a carrier generally acceptable
to the Servicer that provides for fire and extended coverage, and which provides
for a recovery by the Trust of insurance proceeds relating to such Home Equity
Loan in an amount not less than the least of (A) the outstanding principal
balance of the Home Equity Loan (plus the related Senior Lien loan, if any), (B)
the minimum amount required to compensate for damage or loss on a replacement
cost basis and (C) the full insurable value of the premises. The Servicer shall
maintain the insurance policies required hereunder in the name of the mortgagee,
its successors and assigns, and shall be named as loss payee. The policies shall
require the insurer to provide the mortgagee with 30 days' notice prior to any
cancellation or as otherwise required by law.
(ii) As an alternative to maintaining a hazard insurance policy
with respect to each Home Equity Loan as described in clause (i)
above, the Servicer may maintain a blanket hazard insurance policy or
policies if the insurer or insurers of such policies are rated
investment grade by Xxxxx'x and if rated by Fitch, Fitch.
(b) If the Home Equity Loan at the time of origination (or if required
by federal law, at any time thereafter) relates to a Property in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, the Servicer will cause to be maintained with
respect thereto a flood insurance policy in a form meeting the requirements of
the then current guidelines of the Federal Insurance Administration with a
carrier generally acceptable to the Servicer in an amount representing coverage,
and which provides for a recovery by the Trust of insurance proceeds relating to
such Home Equity Loan of not less than the least of (i) the outstanding
principal balance of the Home Equity Loan (plus the related Senior Lien loan, if
any), (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973. The Servicer shall
indemnify the Trust out of the Servicer's own funds for any loss to the Trust
resulting from the Servicer's failure to advance premiums for such insurance
required by this Section when so permitted by the terms of the Mortgage as to
which such loss relates.
(c) Amounts collected by the Servicer under any Insurance Policy shall
be deposited into the Principal and Interest Account.
Section 8.12. DUE-ON-SALE CLAUSES; ASSUMPTION AND SUBSTITUTION
AGREEMENTS.
When a Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall (except as provided below), to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Home Equity Loan under any "due-on-sale" clause
contained in the related Mortgage or Note; provided, however, that the Servicer
shall not exercise any such right if the "due-on-sale" clause, in the reasonable
belief of the Servicer, is not enforceable under applicable law, or the
Servicer, in a manner consistent with reasonable commercial practice, and only
if the Servicer reasonably believes assumption by the purchaser would not
materially and adversely affect the interests of the Owners, permits the
purchaser of the related Property to assume such Home Equity Loan. An Opinion of
Counsel, provided at the expense of the Servicer, to the foregoing effect shall
conclusively establish the reasonableness of such belief. In such event, the
Servicer shall enter into an assumption and modification agreement with the
person to whom such Property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Note and, unless prohibited by
applicable law or the Mortgage documents, the Mortgagor remains liable thereon.
If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as Mortgagor and becomes liable under the Note. The Home
Equity Loan, as assumed, shall conform in all material respects to the
requirements, representations and warranties of this Agreement. The Servicer
shall notify the Trustee in writing that any such assumption or substitution
agreement has been completed by forwarding to the Custodian on the Trustee's
behalf the original copy of such assumption or substitution agreement
(indicating the File to which it relates) which copy shall be added by the
Trustee or by the Custodian on the Trustee's behalf to the related File and
which shall, for all purposes, be considered a part of such File to the same
extent as all other documents and instruments constituting a part thereof. The
Servicer shall be responsible for recording any such assumption or substitution
agreements. In connection with any such assumption or substitution agreement, no
material term of the Home Equity Loan (including, without limitation, the
required monthly payment on the related Home Equity Loan, the stated maturity,
the outstanding principal amount or the Coupon Rate) shall be changed nor shall
any required monthly payments of principal or interest be deferred or forgiven.
Any fee collected by the Servicer or the Sub-Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Home Equity Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 8.13. REALIZATION UPON DEFAULTED HOME EQUITY LOANS; WORKOUT OF
HOME EQUITY LOANS.
(a) The Servicer shall foreclose upon or otherwise comparably effect
the ownership in the name of the Trustee on behalf of the Trust of Properties
relating to defaulted Home Equity Loans as to which no satisfactory arrangements
can be made for collection of Delinquent payments and which the Servicer has not
purchased pursuant to Section 8.10(b). In connection with such foreclosure or
other conversion, the Servicer shall exercise such of the rights and powers
vested in it hereunder, and use the same degree of care and skill in their
exercise or use, as prudent mortgage lenders would exercise or use under the
circumstances in the conduct of their own affairs and consistent with the
servicing standards set forth in the FNMA Guide, including, but not limited to,
advancing funds for the payment of taxes, amounts due with respect to Senior
Liens, and insurance premiums. Any amounts so advanced shall constitute
"Servicing Advances" within the meaning of Section 8.09(b) hereof. The Servicer
shall sell any REO Property within 35 months from the close of the taxable year
of its acquisition by the Trust, at such price as the Servicer in good xxxxx
xxxxx necessary to comply with this covenant unless the Servicer obtains for the
Trustee, an Opinion of Counsel (the expense of which opinion shall be a
Servicing Advance) experienced in federal income tax matters acceptable to the
Trustee, addressed to the Trustee and the Servicer, to the effect that the
holding by the Trust of such REO Property for any greater period will not result
in the imposition of taxes on "Prohibited Transactions" of the Trust or any
REMIC as defined in Section 860F of the Code or cause any REMIC to fail to
qualify as a REMIC under the REMIC Provisions at any time that any Certificates
are Outstanding. Notwithstanding the generality of the foregoing provisions, the
Servicer shall manage, conserve, protect and operate each REO Property for the
Owners solely for the purpose of its prompt disposition and sale in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by any REMIC created hereunder of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Owners, rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the Owners
for the period prior to the sale of such REO Property. The Servicer shall take
into account the existence of any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act of 1976, or other federal, state or local environmental legislation, on a
Property in determining whether to foreclose upon or otherwise comparably
convert the ownership of such Property. If the Servicer has actual knowledge of
any environmental or hazardous waste risk with respect to the Property that the
Servicer is contemplating acquiring in foreclosure or deed in lieu of
foreclosure, the Servicer will cause an environmental inspection of the Property
in accordance with the servicing standards set forth in this Agreement.
(b) The Servicer shall determine, with respect to each defaulted Home
Equity Loan, when it has recovered, whether through trustee's sale, foreclosure
sale or otherwise, all amounts it expects to recover from or on account of such
defaulted Home Equity Loan, whereupon such Home Equity Loan shall become a
"Liquidated Loan" and the Servicer shall promptly submit a liquidation report to
the Trustee in substantially the form of Exhibit N hereto, provided that such
form is acceptable to the Trustee.
(c) The Servicer shall not agree to any modification, waiver or
amendment of any provision of any Home Equity Loan unless, in the Servicer's
good faith judgment, such modification, waiver or amendment would minimize the
loss that might otherwise be experienced with respect to such Home Equity Loan
and only in the event of a payment default with respect to such Home Equity Loan
or in the event that a payment default with respect to such Home Equity Loan is
reasonably foreseeable by the Servicer; provided, however, that no such
modification, waiver or amendment shall extend the maturity date of such Home
Equity Loan beyond the date that is six months after the Final Scheduled
Distribution Date of the latest Class of Offered Certificates remaining in the
Trust. Notwithstanding anything set out in this Section 8.13(c) or elsewhere in
this Agreement to the contrary, the Servicer shall be permitted to modify, waive
or amend any provision of a Home Equity Loan if required by statute or a court
of competent jurisdiction to do so.
(d) The Servicer has no intent to foreclose on any Mortgage based on
the delinquency characteristics as of the Startup Day; provided, that the
foregoing does not prevent the Servicer from initiating foreclosure proceedings
on any date hereafter if the facts and circumstances of such Mortgage including
delinquency characteristics in the Servicer's discretion so warrant such action.
Section 8.14. TRUSTEE TO COOPERATE; RELEASE OF FILES.
(a) Upon the payment in full of any Home Equity Loan (including any
liquidation of such Home Equity Loan through foreclosure or otherwise), or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Servicer shall deliver to the
Custodian, on behalf of the Trustee, a written request of the Servicer, in the
form attached hereto as Exhibit O, signed by an Authorized Officer which states
the purpose of the release of a File. Upon receipt of such written request, the
Custodian, on behalf of the Trustee shall promptly release the related File, in
trust, in its reasonable discretion to (i) the Servicer, (ii) an escrow agent or
(iii) any employee, agent or attorney of the Trustee. Upon any such payment in
full, or the receipt of such notification that such funds have been placed in
escrow, the Servicer is authorized to give, as attorney-in-fact for the Trustee
and the mortgagee under the Mortgage which secured the Note, an instrument of
satisfaction (or assignment of Mortgage without recourse) regarding the Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed that
no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Principal and
Interest Account or to the Trustee.
(b) The Servicer shall have the right to accept applications of
Mortgagors for consent to (i) partial releases of Mortgages, (ii) alterations
and (iii) removal, demolition or division of Properties subject to Mortgages. No
application for approval shall be considered by the Servicer unless: (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Loan-to-Value Ratio and debt-to-income ratio after any release does not exceed
the Loan-to-Value Ratio and debt-to-income ratio of such Note on the Cut-Off
Date or Replacement Cut-Off Date, as applicable, and any increase in the
Loan-to-Value Ratio shall not exceed 5%; and (z) the lien priority of the
related Mortgage is not affected. Upon receipt by the Trustee of an Officer's
Certificate executed on behalf of the Servicer setting forth the action proposed
to be taken in respect of a particular Home Equity Loan and certifying that the
criteria set forth in the immediately preceding sentence have been satisfied,
the Trustee shall execute and deliver to the Servicer the consent or partial
release so requested by the Servicer. A proposed form of consent or partial
release, as the case may be, shall accompany any Officer's Certificate delivered
by the Servicer pursuant to this paragraph.
(c) From time to time and as appropriate in the servicing of any Home
Equity Loan, including, without limitation, foreclosure or other comparable
conversion of a Home Equity Loan or collection under any applicable Insurance
Policy, the Custodian, on behalf of the Trustee, shall release the related File
to the Servicer, promptly upon a written request of the Servicer, in the form
attached hereto as Exhibit O, signed by an Authorized Officer, which states the
purpose of the release of a File. Such receipt shall obligate the Servicer to
return the File to the Custodian, on behalf of the Trustee, when the need
therefor by the Servicer no longer exists.
(d) In all cases where the Servicer directs the Custodian, on behalf
of the Trustee, to sign any document or to release a File within a particular
period of time, the Servicer shall notify an Authorized Officer of the Trustee
by telephone of such need and the Trustee shall thereon use its best efforts to
comply with the Servicer's needs, but in any event will comply within two
Business Days of such request.
(e) No costs associated with the procedures described in this Section
8.14 shall be an expense of the Trust.
Section 8.15. SERVICING COMPENSATION.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Home
Equity Loan Group. Additional servicing compensation in the form of prepayment
charges, release fees, bad check charges, assumption fees, late payment charges,
prepayment penalties, or any other servicing-related fees, Net Liquidation
Proceeds not required to be deposited in the Principal and Interest Account
pursuant to Section 8.08(c)(i) and similar items may, to the extent collected
from Mortgagors, be retained by the Servicer, unless a successor Servicer is
appointed pursuant to Section 8.20 hereof, in which case the successor Servicer
shall be entitled to such fees as are agreed upon by the Trustee and the
successor Servicer.
The right to receive the Servicing Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement.
Section 8.16. ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer, at its own expense, will deliver to the Trustee, the
Depositor, and the Rating Agencies, on or before July 31 of each year,
commencing in 2001, an Officer's Certificate stating, as to each signer thereof,
that (i) a review of the activities of the Servicer during such preceding
calendar year and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement for such year, or, if there has been a default in the fulfillment of
any such obligations, specifying each such default known to such officers and
the nature and status thereof including the steps being taken by the Servicer to
remedy such default.
The Servicer shall deliver to the Trustee, the Depositor and the
Rating Agencies, promptly after having obtained knowledge thereof but in no
event later than five Business Days thereafter, written notice by means of an
Officer's Certificate of any event which with the giving of notice or the lapse
of time would become a Servicer Termination Event.
Section 8.17. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORTS.
On or before July 31 of each year, commencing in 2002, the Servicer,
at its own expense (or if the Trustee is then acting as Servicer, at the expense
of the Seller), shall cause to be delivered to the Trustee, the Depositor, and
the Rating Agencies a letter or letters of a firm of independent, nationally
recognized certified public accountants stating that such firm has examined the
Servicer's overall servicing operations in accordance with the requirements of
the Uniform Single Attestation Program for Mortgage Bankers, and stating such
firm's conclusions relating thereto. In the event such firm requires the Trustee
to agree to the procedures performed by such firm, the Servicer shall direct the
Trustee in writing to so agree; it being understood and agreed that the Trustee
will deliver such letter of agreement in conclusive reliance upon the direction
of the Servicer, and the Trustee makes no independent inquiry or investigation
as to, and shall have no obligation or liability in respect of, the sufficiency,
validity, or correctness of such procedures.
Section 8.18. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE HOME EQUITY LOANS.
The Servicer shall provide to the Trustee access to the documentation
regarding the Home Equity Loans and the Trust, such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer designated by it.
Upon any change in the format of the computer tape maintained by the
Servicer in respect of the Home Equity Loans, the Servicer shall deliver a copy
of such computer tape to the Trustee and in addition shall provide a copy of
such computer tape to the Trustee at such other times as the Trustee may
reasonably request.
Section 8.19. ASSIGNMENT OF AGREEMENT.
Other than with respect to entering into Sub-Servicing Agreements
pursuant to Section 8.03 hereof, the Servicer may not assign its obligations
under this Agreement, in whole or in part, unless it shall have first obtained
the written consent of the Trustee, which such consent shall not be unreasonably
withheld; provided, however, that any assignee must meet the eligibility
requirements set forth in Section 8.20(h) hereof for a successor Servicer.
Section 8.20. REMOVAL OF SERVICER; RETENTION OF SERVICER; RESIGNATION
OF SERVICER.
(a) The Trustee or the Owners of at least a 51% Percentage Interest in
all of the Certificates may remove the Servicer upon the occurrence of any of
the following events (each a "Servicer Termination Event"):
(i) The Servicer shall (I) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or similar
entity with respect to itself or its property, (II) admit in writing
its inability to pay its debts generally as they become due, (III)
make a general assignment for the benefit of creditors, (IV) be
adjudicated a bankrupt or insolvent, (V) commence a voluntary case
under the federal bankruptcy laws of the United States of America or
any state bankruptcy law or similar laws or file a voluntary petition
or answer seeking reorganization, an arrangement with creditors or an
order for relief or seeking to take advantage of any insolvency law or
file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding
or (VI) take corporate, limited liability company or other entity
action, as applicable, for the purpose of effecting any of the
foregoing; or
(ii) If without the application, approval or consent of the
Servicer, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking in respect of the
Servicer an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment
of a trustee, receiver, liquidator or custodian or similar entity with
respect to the Servicer or of all or any substantial part of its
assets, or other like relief in respect thereof under any bankruptcy
or insolvency law, and, if such proceeding is being contested by the
Servicer in good faith, the same shall (A) result in the entry of an
order for relief or any such adjudication or appointment or (B)
continue undismissed or pending and unstayed for any period of
seventy-five (75) consecutive days; or
(iii) The Servicer shall fail to perform any one or more of its
obligations hereunder and shall continue in default thereof for a
period of thirty (30) days (one (1) Business Day in the case of a
delay in making a payment or deposit required of the Servicer under
this Agreement) which failure materially and adversely affects the
Owners after the earlier of (a) actual knowledge of an officer of the
Servicer or (b) receipt of notice from the Trustee of said failure;
(iv) The Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 3.02 or in the
other Operative Documents which materially and adversely affects the
interests of the Owners which remains unremedied for a period of sixty
(60) days after the earlier of the Servicer's discovery or receipt of
notice thereof; or
(v) The merger, consolidation or other combination of the
Servicer with or into any other entity, unless (1) the Servicer or an
Affiliate of the Servicer is the surviving entity of such combination
or (2) the surviving entity (A) is servicing at least $300,000,000 of
home equity loans that are similar to the Home Equity Loans, (B) has
Tangible Net Worth of not less than $70,000,000 (as determined in
accordance with generally accepted accounting principles), and (C)
agrees to assume the Servicer's obligations hereunder;
(vi) The Servicer shall be declared in default of its credit
facility by its credit facility provider, which default, if left
uncured, would result in termination or acceleration of amounts owed
thereunder; or
(vii) Centex Corporation or its successors shall fail to own,
directly or indirectly, at least 51% of the Servicer unless the
Servicer shall be rated at least investment grade by Xxxxx'x and if
rated by Fitch, by Fitch.
(b) Upon the occurrence of a Servicer Termination Event, the Servicer
shall continue to act as Servicer under this Agreement until removed as set
forth in this Section 8.20 and a successor Servicer has assumed the servicing
obligations. After the occurrence of a Servicer Termination Event, the Trustee
or the Owners of at least 51% Percentage Interest in all the Certificates may
remove the Servicer by written notice to the Servicer. Such termination shall be
effective on the date specified in such notice, provided that a successor
Servicer or the Trustee has assumed the servicing obligations. Upon the
effective date of termination of the Servicer, the Trustee shall assume the
servicing obligations hereunder. Notwithstanding the foregoing, the parties
hereto agree that the Trustee, in its capacity as successor Servicer,
immediately will assume all of the obligations of the Servicer to make
Delinquency Advances and the Trustee will assume the other duties of the
Servicer as soon as practicable, but in no event later than 90 days after the
Trustee becomes successor Servicer pursuant to the preceding sentence.
Notwithstanding the foregoing, the Trustee, in its capacity as successor
Servicer, shall not be responsible for the lack of information and or documents
that it cannot obtain through reasonable efforts. Until a successor Servicer has
been appointed, the Trustee shall be the successor Servicer in all respects
without further action, and all authority and power of the Servicer under this
Agreement shall pass to and be vested in the Trustee on and after the effective
date of termination. Notwithstanding anything herein to the contrary, in no
event shall the Trustee be liable for any Servicing Fee or for any differential
in the amount of the Servicing Fee paid hereunder and the amount necessary to
induce any successor Servicer to act as successor Servicer under this Agreement
and the transactions set forth or provided for herein.
(c) Reserved.
(d) The Servicer shall not resign from the obligations and duties
hereby imposed on it, except upon (i) determination that its duties hereunder
are no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer at the date of this Agreement or (ii) written consent
of the Trustee. Any such determination under clause (i) shall be evidenced by an
Opinion of Counsel acceptable to the Trustee at the expense of the Servicer to
such effect which shall be delivered to the Trustee.
(e) No removal or resignation of the Servicer shall become effective
until the Trustee or a successor Servicer shall have assumed the Servicer's
responsibilities and obligations in accordance with this Section.
(f) Upon removal or resignation of the Servicer, the Servicer at its
own expense also shall promptly deliver or cause to be delivered to a successor
Servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Home Equity Loans, including all tax bills, assessment notices,
insurance premium notices and all other documents as well as all original
documents then in the Servicer's possession.
(g) Any collections due to the Trust then being held by the Servicer
prior to its removal and any collections received by the Servicer after removal
or resignation shall be endorsed by it to the Trustee and remitted directly and
immediately to the Trustee or the successor Servicer.
(h) Upon removal or resignation of the Servicer, the Trustee (A) may,
solicit bids for a successor Servicer as described below and (B) until such time
as another successor Servicer is appointed by the Trustee, shall assume the
duties and obligations of the Servicer hereunder. The Trustee agrees to act as
Servicer during the solicitation process and shall assume all duties and
obligations of the Servicer. The Trustee shall, if it is unable to obtain a
qualifying bid and is prevented by law from acting as Servicer, appoint, or
petition a court of competent jurisdiction to appoint, any housing and home
finance institution, bank or mortgage servicing institution which has been
designated as an approved seller-servicer by FNMA or FHLMC for first and second
home equity loans and having equity of not less than $5,000,000, as determined
in accordance with generally accepted accounting principles, act as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. The
compensation of any successor Servicer (other than the Trustee in its capacity
as successor Servicer) so appointed shall be the amount agreed to between the
successor Servicer and the Trustee (up to a maximum of 0.50% per annum on the
outstanding principal balance of each Home Equity Loan), together with the other
servicing compensation in the form of assumption fees, late payment charges or
otherwise as provided in Sections 8.08 and 8.15; provided, however, that if the
Trustee becomes the successor Servicer it shall receive as its compensation the
same compensation paid to the Servicer immediately prior to the Servicer's
removal or resignation; provided, further, however, that the predecessor
Servicer agrees to pay to the Trustee or other successor Servicer at such time
that it becomes such successor Servicer a set-up fee of twenty-five dollars
($25) for each Home Equity Loan then included in the Trust Estate. The amount
payable in excess of twenty-five dollars ($25) per Home Equity Loan, if any,
shall be payable to the successor Servicer and reimbursable pursuant to Section
7.03(b)(x) hereof. The Trustee shall be obligated to serve as successor Servicer
whether or not the fee described in this section is paid by the Servicer, but
shall in any event be entitled to receive, and to enforce payment of, such fee
from the Servicer.
(i) In the event the Trustee elects to solicit bids as provided above,
the Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor Servicer shall be entitled to servicing compensation in accordance
with clause (h) above, together with the other servicing compensation in the
form of assumption fees, late payment charges or otherwise as provided in
Sections 8.08 and 8.15. Within thirty days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest satisfactory bid as to the price it will pay to obtain
servicing. The Trustee shall deduct from any sum received by the Trustee from
the successor to the Servicer in respect of such sale, transfer and assignment
all costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder. After such
deductions, the remainder of such sum less any amounts due the Trustee or the
Trust from the Servicer shall be paid by the Trustee to the predecessor Servicer
at the time of such sale, transfer and assignment to the Servicer's successor.
(j) The Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession, including the notification to all Mortgagors of the transfer of
servicing. The predecessor Servicer agrees to cooperate with the Trustee and any
successor Servicer in effecting the termination of the predecessor Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Trustee or such successor Servicer, as applicable, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee or such successor
Servicer, as applicable, all amounts which then have been or should have been
deposited in the Principal and Interest Account by the Servicer or which are
thereafter received with respect to the Home Equity Loans. Any amounts and
documents which are property of the Trust held by the predecessor Servicer shall
be held in trust on behalf of the Trustee until transferred to the successor
Servicer or Trustee. Neither the Trustee nor any other successor Servicer shall
be held liable by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Servicer. If the Servicer resigns or is replaced hereunder, the
Servicer agrees to reimburse the Trust and the Owners for the costs and expenses
associated with the transfer of servicing to the replacement Servicer, but
subject to a maximum reimbursement to all such parties in the amount of
twenty-five dollars ($25) for each Home Equity Loan then included in the Trust
Estate. The amount payable in excess of twenty-five dollars ($25) per Home
Equity Loan, if any, shall be payable to the successor Servicer and reimbursable
pursuant to Section 7.03(b)(x) hereof.
(k) The Trustee or any other successor Servicer, upon assuming the
duties of Servicer hereunder, shall immediately (i) record all assignments of
Home Equity Loans not previously recorded in the name of the Trustee pursuant to
Section 3.05(b)(ii) as a result of an Opinion of Counsel and (ii) make all
Delinquency Advances and Compensating Interest payments and deposit them to the
Principal and Interest Account which the Servicer has theretofore failed to
remit with respect to the Home Equity Loans.
(l) The Servicer which is being removed or is resigning shall give
notice to the Mortgagors and to the Rating Agencies of the transfer of the
servicing to the successor.
(m) The Trustee shall give notice to the Depositor, the Owners, the
Seller, and the Rating Agencies of the occurrence of any event described in
paragraph (a) above of which the Trustee is aware.
(n) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities of the predecessor Servicer including,
but not limited to, the maintenance of the hazard insurance policy(ies), the
fidelity bond and an errors and omissions policy pursuant to Section 8.21(b) and
shall be entitled to the Servicing Fee and all of the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement. The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer (including, without limitation, any deductible under an
insurance policy) nor shall any successor Servicer be liable for any acts or
omissions of the predecessor Servicer or for any breach by such Servicer of any
of its representations or warranties contained herein or in any related document
or agreement.
(o) The Trustee shall be entitled to be reimbursed pursuant to
Sections 7.03(b) for all Transition Expenses (other than amounts reimbursed
pursuant to paragraph (j) above), including, without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Home Equity Loans properly and
effectively.
Section 8.21. INSPECTIONS; ERRORS AND OMISSIONS INSURANCE.
(a) At any reasonable time and from time to time upon reasonable
notice, the Trustee, any Owner of a Class X-IO or Class R Certificate, or any
agents thereof may inspect the Servicer's servicing operations and discuss the
servicing operations of the Servicer during the Servicer's normal business hours
with any of its officers or directors; provided, however, that the costs and
expenses incurred by the Servicer or its agents or representatives in connection
with any such examinations or discussions shall be paid by the Servicer.
(b) The Servicer (including the Trustee if it shall become the
Servicer hereunder) agrees to maintain errors and omissions coverage and a
fidelity bond, each at least to the extent required by Section 305 of Part I of
FNMA Guide or any successor provision thereof; provided, however, that in the
event that the fidelity bond or the errors and omissions coverage is no longer
in effect, the Servicer shall notify the Trustee and the Owners.
Section 8.22. ADDITIONAL SERVICING RESPONSIBILITIES FOR SECOND
MORTGAGE LOANS.
The Servicer shall file (or cause to be filed) a request for notice of
any action by a superior lienholder under a superior lien for the protection of
the Trustee's interest, where permitted by local law and whenever applicable
state law does not require that a junior lienholder be named as a party
defendant in foreclosure proceedings in order to foreclose such junior
lienholder's equity of redemption.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations under a Senior Lien, or has
declared or intends to declare a default under the mortgage or the promissory
note secured thereby, or has filed or intends to file an election to have the
mortgaged property sold or foreclosed, the Servicer shall take, on behalf of the
Trust, whatever actions are necessary to protect the interests of the Owners,
and/or to preserve the security of the related Home Equity Loan, subject to the
application of the REMIC Provisions. The Servicer shall advance the necessary
funds to cure the default or reinstate the Senior Lien, if such advance is in
the best interests of the Owners; provided, however, that no such additional
advance need be made if such advance would be nonrecoverable from Liquidation
Proceeds on the related Home Equity Loan. The Servicer shall thereafter take
such action as is necessary to recover the amount so advanced. Any expenses
incurred by the Servicer pursuant to this Section 8.22 shall be Servicing
Advances.
Section 8.23. THE GROUP II HOME EQUITY LOANS.
The Servicer shall enforce each Home Equity Loan in Group II in
accordance with its terms and shall timely calculate, record, report and apply
all interest rate adjustments in accordance with the related Note. The
Servicer's records shall, at all times, reflect the then Coupon Rate and monthly
payment and the Servicer shall timely notify the Mortgagor of any changes to the
Coupon Rate or the Mortgagor's monthly payment. If the Servicer fails to make
either a timely or accurate adjustment to the Coupon Rate or monthly payment or
to notify the Mortgagor of such adjustments, upon the Servicer's discovery of
such error and such continued failure, the Servicer shall pay from its own funds
any shortage. If the Servicer's continued failure after notice thereof to make a
scheduled change affects the Trust's rights to make future adjustments under the
terms of such Home Equity Loan, the Servicer shall repurchase such Home Equity
Loan in accordance with the provisions hereof. Any amounts paid by the Servicer
pursuant to this Section shall not be an advance and shall not be reimbursable
from the proceeds of any Home Equity Loan.
Section 8.24. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF SERVICER. Any corporation, limited liability company or other entity
into which the Servicer may be merged or converted or with which it may be
consolidated, or any corporation, limited liability company or other entity
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party or any corporation, limited liability company or other entity
succeeding to all or substantially all of the business of the Servicer shall be
the successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto provided that
such corporation, limited liability company or other entity meets the
qualifications set forth in Section 8.20(h) and the resulting corporation,
limited liability company or other entity has a Tangible Net Worth of at least
$35,000,000.
Section 8.25. NOTICES OF MATERIAL EVENTS. The Servicer shall give
prompt notice to the Trustee and the Rating Agencies of the occurrence of any of
the following events:
(a) Any default or any fact or event of which the Servicer has
knowledge which results, or which with notice or the passage of time, or both,
would result in the occurrence of a default by the Seller or the Servicer under
any Operative Document or would constitute a material breach of a
representation, warranty or covenant under any Operative Document;
(b) The submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against the
Seller or the Servicer to which the Servicer has knowledge in any federal, state
or local court or before any governmental body or agency or before any
arbitration board or any such proceedings threatened by any governmental agency,
which, if adversely determined, would have a material adverse effect upon any of
the Seller's or the Servicer's ability to perform its obligations under any
Operative Document;
(c) The commencement of any proceedings by or against the Seller or
the Servicer under any applicable bankruptcy, reorganization, liquidation,
insolvency or other similar law now or hereafter in effect or of any proceeding
in which a receiver, liquidator, trustee or other similar official shall have
been, or may be, appointed or requested for the Seller or the Servicer; and
(d) The receipt of notice from any agency or governmental body having
authority over the conduct of any of the Seller's or the Servicer's business
that the Seller or the Servicer is to cease or desist, or to undertake, any
practice, program, procedure or policy employed by the Seller or the Servicer in
the conduct of the business of any of them, and such cessation or undertaking
will materially and adversely affect the conduct of the Seller's or the
Servicer's business or its ability to perform under the Operative Documents or
materially and adversely affect the financial affairs of the Seller or the
Servicer.
Section 8.26. INDEMNIFICATION BY THE SERVICER. The Servicer agrees to
indemnify and hold the Trustee, the Depositor and each Owner harmless against
any and all claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor and any Owner may sustain in any way related to the
failure of the Servicer to perform its duties and service the Home Equity Loans
in compliance with the terms of this Agreement. A party against whom a claim is
brought shall immediately notify the other parties and the Rating Agencies if a
claim is made by a third party with respect to this Agreement, and the Servicer
shall assume (with the consent of the Trustee) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee and/or Owner in respect of such claim.
Section 8.27. REPORTS ON FORECLOSURE AND ABANDONMENT OF PROPERTIES. On
or before February 28th of each year beginning in 2002, the Servicer shall file
the reports of foreclosures and abandonments of any Property required by Code
Section 6050J with the Internal Revenue Service and provide a copy of such
filing to the Trustee. The reports from the Servicer shall be in a form and
substance sufficient to meet the reporting requirements imposed by such Section
6050J.
END OF ARTICLE VIII
ARTICLE IX
TERMINATION OF TRUST
Section 9.01. TERMINATION OF TRUST.
The Trust created hereunder and all obligations created by this
Agreement will terminate upon the payment to the Owners of all Certificates from
amounts held by the Trustee and required to be paid to such Owners pursuant to
this Agreement upon the later to occur of (a) the final payment or other
liquidation (or any advance made with respect thereto) of the last Home Equity
Loan in the Trust Estate, (b) the disposition of all property acquired in
respect of any Home Equity Loan remaining in the Trust Estate and (c) at any
time if a Qualified Liquidation of both Home Equity Loan Groups within the Trust
is effected as described in Section 9.02. In no event, however, will the Trust
created by this Agreement continue beyond the expiration of twenty-one (21)
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the United Kingdom, living
on the date hereof. The Trustee shall give written notice of termination of the
Agreement to each Owner in the manner set forth in Section 11.05.
Section 9.02. TERMINATION UPON OPTION OF THE OWNER OF THE CLASS X-IO
CERTIFICATES.
(a) On any Distribution Date on or after the Clean-Up Call Date, the
Owner of the Class X-IO Certificates may cause the purchase from the Trust of
all (but not fewer than all) Home Equity Loans and all property theretofore
acquired in respect of any Home Equity Loan by foreclosure, deed in lieu of
foreclosure, or otherwise then remaining in the Trust Estate (i) on terms agreed
upon among the Servicer and the Owners of the Class X-IO and Class R
Certificates (if such terms result in payment to the Owners of the Offered and
Class X-IO Certificates of their entire principal balance and interest at their
Certificate Rate (and any Class Interest Carryover Shortfall)), or (ii) in the
absence of such an agreement, at a price equal to the Termination Price. In
connection with such purchase, the Servicer shall remit to the Trustee all
amounts then on deposit in the Principal and Interest Account for deposit to the
Certificate Account (less amounts permitted to be withdrawn by the Servicer
pursuant to Section 8.08 (d)), which deposit shall be deemed to have occurred
immediately preceding such purchase.
(b) In the event that the Owner of the Class X-IO Certificates
purchases all Home Equity Loans remaining in the Trust Estate pursuant to
Section 9.02(a), the Trust Estate shall be terminated in accordance with the
following additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the final tax return of
the REMICs created hereunder pursuant to Treasury regulation Section
1.860F-1 and shall satisfy all requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder;
(ii) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Trustee
shall sell all of the Home Equity Loans to the Owner of the Class X-IO
Certificates for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Owners of the Class X-IO and Class R
Certificates all cash on hand in the Trust Estate (other than cash
retained to meet claims), and the Trust Estate shall terminate at that
time.
(c) If the Owner of the Class X-IO Certificates does not repurchase
all of the Home Equity Loans pursuant to clause (a) of this Section 9.02 above
on the Clean-Up Call Date, then on the following Distribution Date the Trustee
shall begin a process for soliciting bids in connection with an auction of the
Home Equity Loans. The Owner of the Class X-IO Certificates may submit a bid in
connection with the auction, however neither of the Sellers nor the Depositor
shall be permitted to submit a bid or otherwise purchase any or all of the Home
Equity Loans in connection with the auction. The Trustee shall provide the Owner
of the Class X-IO Certificates written notice of such auction at least ten (10)
Business Days prior to the date bids must be received in such auction (the
"Auction Date"). The auction shall be conducted as follows:
(i) If at least two bids are received, the Trustee shall solicit
and resolicit new bids from all participating bidders until only one
bid remains or the remaining bidders decline to resubmit bids. The
Trustee shall accept the highest of such remaining bids if it is equal
to or in excess of the Termination Price, consummate the sale and end
the auction. If less than two bids are received or the highest bid
after the resolicitation process is completed is not equal to or in
excess of the Termination Price, the Trustee shall not consummate such
sale. To determine if a bid meeting the Termination Price is received,
the Trustee may, and if so requested by the Owner of the Class X-IO
Certificates shall, prior to accepting such bid, consult with a
financial advisor, which may be an Underwriter of the Certificates, to
determine if the fair market value of the Home Equity Loans and
related property has been offered.
(ii) If the first auction conducted by the Trustee does not
produce any bid at least equal to the Termination Price, then the
Trustee shall, beginning on the Distribution Date occurring
approximately three months after the first Auction Date, commence
another auction in accordance with the requirements of this subsection
(c). If such second auction does not produce any bid at least equal to
the Termination Price, then the Trustee shall, beginning on the
Distribution Date occurring approximately three months after the
second Auction Date, commence another auction in accordance with the
requirements of this subsection (c), and shall continue to conduct
similar auctions approximately every three months thereafter until the
earliest of (A) the exercise by the Owner of the Class X-IO
Certificates of its repurchase option pursuant to clause (a) of this
Section 9.02 above, (B) receipt by the Trustee of a bid meeting the
conditions specified in the preceding paragraph, or (C) the
Distribution Date on which the Loan Balance of all the Home Equity
Loans is reduced to zero.
(iii) If the Trustee receives a bid meeting the conditions
specified in this subsection (c), then the Trustee's written
acceptance of such bid shall constitute a plan of complete liquidation
within the meaning of Section 860F of the Code, and the Trustee shall
release to the winning bidder, upon payment of the bid purchase price,
the Files pertaining to the Home Equity Loans being purchased and take
such other actions as the winning bidder may reasonably request to
effect the transfer of the Home Equity Loans to the winning bidder.
(d) If the Owner of the Class X-IO Certificates does not repurchase
all of the Home Equity Loans pursuant to clause (a) of this Section 9.02 on the
Clean-Up Call Date, then on the third Distribution Date following the Clean-Up
Call Date and each Distribution Date thereafter the Owners of the Offered
Certificates shall be entitled to receive the Class X-IO Distribution Amount,
distributable pursuant to Section 7.03(b) C.16 hereof, allocated among the
Classes of Offered Certificates in the order of priority set forth in Section
7.03(b) C.16 hereof.
(e) By their acceptance of the Certificates, the Owners thereof hereby
agree to authorize the Trustee to specify the first day in the 90-day
liquidation period in a statement attached to the Trust Estate's final tax
return, which shall be binding upon all successor Owners.
(f) In connection with any purchase pursuant to Section 9.02(a) or
(c), the Owner of the Class X-IO Certificates or other purchaser of the Home
Equity Loans, as the case may be, shall provide to the Trustee at the expense of
the Owner of the Class X-IO Certificates or other purchaser of the Home Equity
Loans, as the case may be, an Opinion of Counsel experienced in federal income
tax matters acceptable to the Trustee to the effect that such purchase and
liquidation constitutes a Qualified Liquidation of all of the REMICs created
hereunder.
(g) Promptly following any purchase described in Section 9.02(a) or
(c), the Trustee will release the Files to the Owner of the Class X-IO
Certificates or other purchaser of the Home Equity Loans, as the case may be, or
otherwise upon their order, in a manner similar to that described in Section
8.14 hereof. The Owner of the Class X-IO Certificates or other purchaser of the
Home Equity Loans, as the case may be, will promptly prepare and record
assignments of Mortgages from the Trustee to the appropriate person.
(h) In the event the Servicer exercises its option pursuant to Section
7.04A to make a limited purchase of all the assets of one of the Fifty REMIC
IIIs such purchase shall be subject to the requirements of subsection (b)(i) and
(f) of this Section but solely with respect to such single REMIC.
Section 9.03. DISPOSITION OF PROCEEDS.
The Trustee shall, upon receipt thereof, deposit the proceeds of any
Termination Price or other liquidation of the Trust Estate pursuant to this
Article IX to the Certificate Account for distribution in accordance with the
priorities set forth in Section 7.03(b) hereof; provided, however, that any
amounts representing unreimbursed Delinquency Advances and Servicing Advances
theretofore funded by the Servicer from the Servicer's own funds shall be paid
by the Trustee to the Servicer from the proceeds of the Trust Estate.
Notwithstanding the foregoing, no distribution of the proceeds of any
Termination Price shall be made to the Owners of the Class X-IO and Class R
Certificates until all such amounts have been applied in reduction of any
outstanding Class A-7 Certificateholders' Interest Index Carryover and Net Rate
Cap Carryover.
Section 9.04. NETTING OF AMOUNTS.
If any Person paying the Termination Price would receive a portion of
the amount to be paid, such Person may net any such amount against the
Termination Price otherwise payable.
END OF ARTICLE IX
ARTICLE X
THE TRUSTEE
Section 10.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee (i) (A) undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Trustee
and (B) the banking institution that is the Trustee shall serve as the Trustee
at all times under this Agreement, and (ii) in the absence of bad faith on its
part, may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions or
any other resolutions, statements, reports, documents, orders or other
instruments furnished pursuant to and conforming to the requirements of this
Agreement; but in the case of any such certificates or opinions or any other
resolutions, statements, reports, documents, orders or other instruments which
by any provision hereof are specifically required to be furnished to the
Trustee, shall be under a duty to examine the same to determine whether or not
on their face they conform to the requirements of this Agreement; provided,
however, that the Trustee shall not be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Servicer, the Sellers or the Depositor
hereunder. Notwithstanding the foregoing, if a Servicer Termination Event of
which an Authorized Officer of the Trustee shall have actual knowledge has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Notwithstanding the appointment of the Servicer hereunder, the
Trustee is hereby empowered to perform the duties of the Servicer it being
expressly understood, however, that the foregoing describes a power and not an
obligation of the Trustee (unless the Servicer shall have resigned or been
terminated and a successor Servicer shall not have been appointed pursuant to
the terms of this Agreement), and that all parties hereto agree that, prior to
any termination of the Servicer, the Servicer and, thereafter, the Trustee or
any other successor Servicer shall perform such duties. Specifically, and not in
limitation of the foregoing, the Trustee shall upon termination or resignation
of the Servicer, and pending the appointment of any other Person as successor
Servicer have the power and duty during its performance as successor Servicer:
(i) to collect Mortgagor payments;
(ii) to foreclose on defaulted Home Equity Loans;
(iii) to enforce due-on-sale clauses and to enter into assumption
and substitution agreements as permitted by Section 8.12 hereof;
(iv) to deliver instruments of satisfaction pursuant to Section
8.14;
(v) to enforce the Home Equity Loans;
(vi) to make Delinquency Advances and Servicing Advances and to
pay Compensating Interest; and
(vii) to conduct an auction of the Home Equity Loans pursuant to
Section 9.02.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(i) This subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) The Trustee shall not be personally liable for any error of
judgment made in good faith by an Authorized Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Owners of a majority in Percentage Interest of
the Certificates of the affected Class or Classes relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement relating to such Certificates;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default unless an Authorized
Officer of the Trustee shall have received written notice thereof or
an Authorized Officer shall have actual knowledge thereof. In the
absence of receipt of such notice, the Trustee may conclusively assume
that there is no default; and
(v) Subject to the other provisions of this Agreement and without
limiting the generality of this Section l0.01, the Trustee shall have
no duty (A) to see to any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance or (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust Estate.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
(e) No provision of this Agreement shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or indemnity reasonably satisfactory to it against such
risk or liability is not reasonably assured to it. None of the provisions
contained in this Agreement shall in any event require the Trustee to perform,
or be responsible for the manner of performance of, any of the obligations of
the Servicer under this Agreement, except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Servicer in accordance with the terms of this Agreement.
(f) The permissive right of the Trustee to take actions enumerated in
this Agreement shall not be construed as a duty and the Trustee shall not be
answerable for other than its own negligence or willful misconduct.
(g) The Trustee shall be under no obligation to institute any suit, or
to take any remedial proceeding under this Agreement, or to take any steps in
the execution of the trusts hereby created or in the enforcement of any rights
and powers hereunder until it shall be indemnified to its satisfaction against
any and all costs and expenses, outlays and counsel fees and other reasonable
disbursements and against all liability, except liability which is adjudicated
to have resulted from its negligence or willful misconduct, in connection with
any action so taken.
(h) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice, or other document it may receive or which may
be alleged to have been delivered to or served upon it by third parties as a
consequence of the assignment of any of the Home Equity Loans hereunder or may
otherwise pertain to its interests in any of the Properties; provided, however,
that the Trustee shall use commercially reasonable efforts to deliver to the
Servicer any such complaint, claim, demand, notice, or other document which is
delivered to the Corporate Trust Office of the Trustee and contains sufficient
information to enable an Authorized Officer of the Trustee to identify it as
pertaining to a Mortgage or a Property.
Section 10.02. REMOVAL OF TRUSTEE FOR CAUSE.
(a) The Trustee may be removed pursuant to paragraph (b) hereof upon
the occurrence of any of the following events (whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the Trustee shall fail to distribute to the Owners entitled
hereto on any Distribution Date any amounts available for distribution
that it has received in accordance with the terms hereof; (provided,
however, that any such failure which is due to circumstances beyond
the control of the Trustee shall not be a cause for removal
hereunder); or
(2) the Trustee shall fail in the performance of, or breach, any
covenant or agreement of the Trustee in this Agreement, or if any
representation or warranty of the Trustee made in this Agreement or in
any certificate or other writing delivered pursuant hereto or in
connection herewith shall prove to be incorrect in any material
respect as of the time when the same shall have been made, and such
failure or breach shall continue or not be cured for a period of 30
days after there shall have been given, by registered or certified
mail, to the Trustee by the Seller or by the Owners of at least 25% of
the aggregate Percentage Interests represented by the Offered
Certificates then Outstanding, or, if there are no Offered
Certificates then Outstanding, by such Percentage Interests
represented by the Class X-IO Certificates, or if there are no Class
X-IO Certificates then Outstanding, by such Percentage Interests
represented by the Class R Certificates, a written notice specifying
such failure or breach and requiring it to be remedied; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Trustee, and such decree or order shall have remained in
force undischarged or unstayed for a period of 75 days; or
(4) a conservator or receiver or liquidator or sequestrator or
custodian of the property of the Trustee is appointed in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Trustee or
relating to all or substantially all of its property; or
(5) the Trustee shall become insolvent (however insolvency is
evidenced), generally fail to pay its debts as they come due, file or
consent to the filing of a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations, or take corporate action for the purpose of any of the
foregoing.
The Depositor shall give to the Rating Agencies notice of the
occurrence of any such event of which the Depositor is aware.
(b) If any event described an Paragraph (a) occurs and is continuing,
then and in every such case the Depositor and the Owners of a majority of the
Percentage Interests represented by the Offered Certificates then Outstanding or
if there are no Offered Certificates then Outstanding by such majority of the
Percentage Interests represented by the Class X-IO Certificates or if there are
no Class X-IO Certificates then Outstanding by such majority of the Percentage
Interests represented by the Class R Certificates, may, whether or not the
Trustee resigns pursuant to Section l0.09(b) hereof, immediately, concurrently
with the giving of notice to the Trustee, and without delaying the 30 days
required for notice therein, appoint a successor Trustee pursuant to the terms
of Section l0.09 hereof.
Section 10.03. CERTAIN RIGHTS OF THE TRUSTEE.
Except as otherwise provided in Section 10.01 hereof:
(a) the Trustee (acting as Trustee or Tax Matters Person) may request
and may conclusively rely and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Depositor, the Seller, or the
Owners of any Class of Certificates mentioned herein shall be sufficiently
evidenced in writing;
(c) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel, and the advice of such
counsel or any opinion of counsel (selected in good faith by the Trustee) shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reasonable
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction of
any of the Owners pursuant to this Agreement, unless such Owners shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document, unless requested in writing to do so by the Owners; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition precedent to taking any such action;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
nominees or custodians and shall not be responsible for any willful misconduct
or gross negligence on the part of any agent, attorney, custodian or nominee
appointed with due care;
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized by the
Authorized Officer of any Person and within its rights or powers under this
Agreement other than as to validity and sufficiency of its authentication of the
Certificates;
(i) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(j) pursuant to the terms of this Agreement, the Servicer is required
to furnish to the Trustee from time to time certain information and make various
calculations which are relevant to the performance of the Trustee's duties under
the Agreement. The Trustee shall be entitled to rely in good faith on any such
information and calculations in the performance of its duties hereunder, (i)
unless and until an Authorized Officer of the Trustee has actual knowledge, or
is advised by any Owner of a Certificate (either in writing or orally with
prompt written or telecopy confirmations), that such information or calculations
is or are incorrect, or (ii) unless there is a manifest error in any such
information;
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Estate created hereby or the powers
granted hereunder;
(l) In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity. The Trustee shall invest and reinvest
amounts held in the Certificate Account in Eligible Investments as set forth in
Schedule I-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 or any Home Equity Loan or
document related thereto other than as to validity and sufficiency of its
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor, the Sellers or the Servicer in respect of the Home Equity
Loans or deposited into or withdrawn from the Principal and Interest Account or
the Certificate Account by the Depositor, the Servicer or the Sellers, and shall
have no responsibility for filing any financing or continuation statement in any
public office at any time or otherwise to perfect or maintain the perfection of
any security interest or lien or except as otherwise provided herein to prepare
or file any tax returns or Commission filings for the Trust or to record this
Agreement. The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any default unless an Authorized Officer of the Trustee
shall have received written notice thereof or an Authorized Officer has actual
knowledge thereof. In the absence of receipt of such notice, the Trustee may
conclusively assume that no default has occurred.
Section 10.05. MAY HOLD CERTIFICATES.
The Trustee, any Paying Agent, Registrar or any other agent of the
Trust, in its individual or any other capacity, may become an Owner or pledgee
of Certificates and may otherwise deal with the Trust and the other parties
hereto with the same rights it would have if it were not Trustee, any Paying
Agent, Registrar or such other agent.
Section 10.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other trust funds except to the extent required herein or required by law.
The Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Depositor and except to the extent
of income or other gain on investments which are deposits in or certificates of
deposit of the Trustee in its commercial capacity and income or other gain
actually received by the Trustee on Eligible Investments.
Section 10.07. COMPENSATION AND REIMBURSEMENT.
As compensation for its services hereunder, the Trustee shall be
entitled to receive the Trustee Fee, any investment income or other benefit
derived from funds or Eligible Investments in the Certificate Account to the
extent permitted by Section 7.05(c), and such other amounts as separately agreed
with the Seller. Except as otherwise provided in this Agreement, the Trustee and
any director, officer, employee or agent of the Trustee shall be indemnified by
the Trust and held harmless against any loss, liability, or "unanticipated
out-of-pocket" expense incurred or paid to third parties (which expenses shall
not include salaries paid to employees, or allocable overhead, of the Trustee)
in connection with or any claim or legal action or any pending or threatened
claim or legal action arising out of or in connection with the acceptance or
administration of its trusts hereunder or the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. All such amounts described in the
preceding sentence shall constitute Trustee Reimbursable Expenses. It is
understood by the parties hereto that a "claim" as used in this paragraph
includes any claim for indemnification made by the Custodian under the
applicable provisions of the Custodial Agreement. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Seller and
held harmless against any loss, liability or reasonable expenses incurred by the
Trustee in performing its duties as Tax Matters Person for the REMICs created
under this Agreement, other than any loss, liability or expense incurred by
reason of willful misfeasance, negligence or bad faith. When the Trustee incurs
expenses or provides services after the occurrence of a default and the
commencement of a voluntary or involuntary case under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
similar law involving any of the Sellers or the Servicer, the expenses and fees
for such services are intended to constitute expenses of administration under
such laws. The provisions of this Section 10.07 shall survive the resignation or
removal of the Trustee and the termination of this Agreement.
Section 10.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 subject to supervision or examination by the United States of
America, or any state and having a deposit rating of at least A2 by Xxxxx'x and
if rated by Fitch, A by Fitch. If such Trustee publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article X.
Section 10.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor Trustee under Section 10.10 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
resign at any time by giving written notice of resignation to the Depositor and
the Seller and by mailing notice of resignation by first-class mail, postage
prepaid, to the Owners at their addresses appearing on the Register. A copy of
such notice shall be sent by the resigning Trustee to the Rating Agencies. Upon
receiving notice of resignation, the Depositor shall promptly appoint a
successor Trustee or Trustees by written instrument, in duplicate, executed on
behalf of the Trust by an Authorized Officer of the Depositor, one copy of which
instrument shall be delivered to the Trustee so resigning and one copy to the
successor Trustee or Trustees. If no successor Trustee shall have been appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Owner may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and appropriate, appoint a successor
Trustee.
(c) If at any time the Trustee shall cease to be eligible under
Section 10.08 hereof and shall fail to resign after written request therefor by
the Depositor, the Depositor may remove the Trustee and appoint a successor
Trustee by written instrument, in duplicate, executed on behalf of the Trust by
an Authorized Officer of the Depositor, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor Trustee.
(d) The Owners of a majority of the Voting Rights represented by the
Offered Certificates, or, if there are no Offered Certificates then Outstanding,
by such majority of the Voting Rights represented by the Class X-IO and Class R
Certificates, may at any time remove the Trustee and appoint a successor Trustee
by delivering to the Trustee to be removed, to the successor Trustee so
appointed, to the Depositor and to the Servicer, copies of the record of the act
taken by the Owners, as provided for in Section 11.03 hereof.
(e) [Reserved].
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Depositor shall promptly appoint a successor Trustee. If within one year
after such resignation, removal or incapability or the occurrence of such
vacancy, a successor Trustee shall be appointed by act of the Owners of a
majority of the Percentage Interests represented by the Offered Certificates
then Outstanding, the successor Trustee so appointed shall forthwith upon its
acceptance of such appointment become the successor Trustee and supersede the
successor Trustee appointed by the Depositor. If no successor Trustee shall have
been so appointed by the Depositor or the Owners and shall have accepted
appointment in the manner hereinafter provided, any Owner may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.
(g) The Servicer shall give notice of any removal of the Trustee by
mailing notice of such event by first-class mail, postage prepaid, to the Rating
Agencies and to the Owners as their names and addresses appear in the Register.
Each notice shall include the name of the successor Trustee and the address of
its corporate trust office.
Section 10.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Depositor on behalf of the Trust and to its predecessor
Trustee an instrument accepting such appointment hereunder and stating its
eligibility to serve as Trustee hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, duties and obligations of its predecessor
hereunder; but, on request of the Depositor or the successor Trustee, such
predecessor Trustee shall, upon payment of its charges then unpaid, execute and
deliver an instrument transferring to such successor Trustee all of the rights,
powers and trusts of the Trustee so ceasing to act, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such Trustee so ceasing to act hereunder. Upon request of any such successor
Trustee, the Depositor on behalf of the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Depositor shall mail notice thereof by first-class mail,
postage prepaid, to the Owners at their last addresses appearing upon the
Register. The Depositor shall send a copy of such notice to the Rating Agencies.
If the Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Trust.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor shall be qualified and eligible under this
Article X.
Section 10.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF THE TRUSTEE.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation or association shall be otherwise qualified and eligible
under this Article X. In case any Certificates have been executed, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such Trustee may adopt such execution and deliver the
Certificates so executed with the same effect as if such successor Trustee had
itself executed such Certificates.
Section 10.12. REPORTING; WITHHOLDING.
(a) The Trustee shall timely provide to the Owners the Internal
Revenue Service's Form 1099 and any other statement required by applicable
Treasury regulations as determined by the Tax Matters Person, and shall
withhold, as required by applicable law, federal, state or local taxes, if any,
applicable to distributions to the Owners, including but not limited to backup
withholding under Section 3406 of the Code and the withholding tax on
distributions to foreign investors under Sections 1441 and 1442 of the Code.
(b) As required by law or upon request of the Tax Matters Person and
except as otherwise specifically set forth in (a) preceding, the Trustee shall
timely file all reports prepared by the Seller and required to be filed by the
Trust, including other reports that must be filed with the Owners, such as the
Internal Revenue Service's Form 1066 and Schedule Q. The Trustee shall, upon
written request of the Seller, collect any forms or reports from the Owners
determined by the Seller to be required under applicable federal, state and
local tax laws.
(c) Except as otherwise provided, the Trustee shall have the
responsibility for preparation and execution of those returns, forms, reports
and other documents referred to in this Section.
(d) The Seller covenants and agrees that it shall provide to the
Trustee any information necessary to enable the Trustee to meet its obligations
under subsections (a), (b) and (c) above.
Section 10.13. LIABILITY OF THE TRUSTEE.
The Trustee shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Trustee
herein. Neither the Trustee nor any of the directors, officers, employees or
agents of the Trustee shall be under any liability on any Certificate or
otherwise to the Certificate Account, the Depositor, the Sellers, the Servicer
or any Owner for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Trustee, its
directors, officers, employees or agents or any such Person against any
liability which would otherwise be imposed by reason of negligent action,
negligent failure to act or willful misconduct in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. Subject to
the foregoing sentence, the Trustee shall not be liable for losses on
investments of amounts in the Certificate Account (except for any losses on
obligations on which the bank serving as Trustee is the obligor). In addition,
the Depositor and CHEC covenant and agree to indemnify the Trustee and the
Servicer (if the Servicer is also the Trustee) and their officers, directors,
agents and employees from, and hold it harmless against, any and all losses,
liabilities, damages, claims or expenses (including legal fees and expenses) of
whatsoever kind arising out of or in connection with the performance of its
duties hereunder other than those resulting from negligence or bad faith. The
Trustee and any director, officer, employee or agent of the Trustee may
conclusively rely and shall be fully protected in acting or refraining from
acting in good faith on any certificate, notice or other document of any kind
prima facie properly executed and submitted by the Authorized Officer of any
Person respecting any matters arising hereunder. The provisions of this Section
10.13 shall survive the resignation or removal of the Trustee, termination of
this Agreement and the payment of the outstanding Certificates. When the Trustee
incurs expenses or provides services after the occurrence of a default and the
commencement of a voluntary or involuntary case under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
similar law involving the Sellers or the Servicer, the expenses and fees for
such services are intended to constitute expenses of administration under such
laws.
Section 10.14. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Estate or Property may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-Trustee or co-Trustees, jointly with the Trustee, of all or
any part of the Trust Estate or separate Trustee or separate Trustees of any
part of the Trust Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Owners, such title to the Trust Estate, or
any part thereof, and, subject to the other provisions of this Section 10.14,
such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case any event indicated in Section 8.20(a) shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-Trustee or separate Trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 10.08 and no
notice to Owner of the appointment of any co-Trustee or separate Trustee shall
be required under Section 10.09.
Every separate Trustee and co-Trustee shall, to the extent permitted,
be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate Trustee or
co-Trustee jointly (it being understood that such separate Trustee or
co-Trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate Trustee or co-Trustee, but solely at
the direction of the Trustee;
(ii) No co-Trustee hereunder shall be held personally liable by
reason of any act or omission of any other co-Trustee hereunder; and
(iii) The Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate Trustee or
co-Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate Trustees and co-Trustees,
as effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Section 10.14. Each separate Trustee and co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate Trustee or co-Trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 10.15. APPOINTMENT OF CUSTODIANS.
The Trustee may appoint one or more Custodians to hold all or a portion
of the Files as agent for the Trustee, by entering into a Custodial Agreement.
Subject to this Article X, the Trustee agrees to comply with the terms of the
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Owners of the Certificates.
END OF ARTICLE X
ARTICLE XI
MISCELLANEOUS
Section 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Depositor, the Sellers or the
Owners to the Trustee to take any action under any provision of this Agreement,
the Depositor, each of the Sellers or the Owners, as the case may be, shall
furnish to the Trustee a certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate need be furnished.
Except as otherwise specifically provided herein, each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Agreement (including one furnished pursuant to specific requirements of
this Agreement relating to a particular application or request) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; and
(c) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 11.02. FORM OF DOCUMENTS DELIVERED TO THE TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Trustee may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such Authorized Officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of an Authorized
Officer of the Trustee or any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, one or more Authorized Officers of the Depositor, either of the Sellers or
the Servicer, stating that the information with respect to such factual matters
is in the possession of the Depositor, either of the Sellers or the Servicer,
unless such Authorized Officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel may also be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an Authorized Officer of the Trustee, stating that
the information with respect to such matters is in the possession of the
Trustee, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 11.03. ACTS OF OWNERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Owners may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Owners in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee, and, where it is hereby expressly required, to the Seller. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Owners signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Certificates shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Owner of any Certificate shall bind the Owner of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee or the Trust in reliance thereon, whether or
not notation of such action is made upon such Certificates.
Section 11.04. NOTICES, ETC. TO TRUSTEE.
Any request, demand, authorization, direction, notice, consent, waiver
or act of the Owners under this Agreement or other documents provided or
permitted by this Agreement to be made upon, given or furnished to, or filed
with the Trustee by any Owner, the Depositor, either of the Sellers or the
Servicer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Trustee at its
Corporate Trust Office as set forth in Section 2.02 hereof.
Section 11.05. NOTICES AND REPORTS TO OWNERS; WAIVER OF NOTICES.
Where this Agreement provides for notice to Owners of any event or the
mailing of any report to Owners, such notice or report shall be sufficiently
given (unless otherwise herein expressly provided) if mailed, first-class
postage prepaid, to each Owner affected by such event or to whom such report is
required to be mailed, at the address of such Owner as it appears on the
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Owners is mailed in the manner provided
above, neither the failure to mail such notice or report nor any defect in any
notice or report so mailed to any particular Owner shall affect the sufficiency
of such notice or report with respect to other Owners, and any notice or report
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given or provided. Notwithstanding the foregoing, if the Servicer
is removed or resigned or the Trust is terminated, notice of any such events
shall be made by overnight courier, registered mail or telecopy followed by a
telephone call.
Where this Agreement provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Owners shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Owners when such notice is required to be given
pursuant to any provision of this Agreement, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Agreement provides for notice to any Rating Agency that
rated any Certificates, failure to give such notice shall not affect any other
rights or obligations created hereunder.
Section 11.06. RULES BY TRUSTEE.
The Trustee may make reasonable rules for any meeting of Owners.
Section 11.07. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by any party hereto
shall bind its successors and assigns, whether so expressed or not.
Section 11.08. SEVERABILITY.
In case any provision in this Agreement or in the Certificates shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 11.09. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Owners and the parties hereto
and their successors hereunder, any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 11.10. LEGAL HOLIDAYS.
In any case where the date of any Distribution Date, any other date on
which any distribution to any Owner is proposed to be paid, or any date on which
a notice is required to be sent to any Person pursuant to the terms of this
Agreement (with the exception of any Monthly Remittance Date) shall not be a
Business Day, then (notwithstanding any other provision of the Certificates or
this Agreement) payment or mailing need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made or mailed on the nominal date of any such Distribution Date, or such other
date for the payment of any distribution to any Owner or the mailing of such
notice, as the case may be, and no interest shall accrue for the period from and
after any such nominal date, provided such payment is made in full on such next
succeeding Business Day. In any case where the date of any Monthly Remittance
Date shall not be a Business Day, then payment or mailing need not be made on
such date, but must be made on the preceding Business Day.
Section 11.11. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) In view of the fact that Owners are expected to reside in many
states and outside the United States and the desire to establish with certainty
that this Agreement will be governed by and construed and interpreted in
accordance with the law of a state having a well-developed body of commercial
and financial law relevant to transactions of the type contemplated herein, this
Agreement and each Certificate shall be construed in accordance with and
governed by the laws of the State of New York applicable to agreements made and
to be performed therein, without giving effect to the conflicts of law
principles thereof.
(b) The parties hereto hereby irrevocably submit to the jurisdiction
of the United States District Court for the Southern District of New York and
any court in the State of New York located in the City and County of New York,
and any appellate court from any thereof, in any action, suit or proceeding
brought against it or in connection with this Agreement or any of the related
documents or the transactions contemplated hereunder or for recognition or
enforcement of any judgment, and the parties hereto hereby irrevocably and
unconditionally agree that all claims in respect of any such action or
proceeding may be heard or determined in such New York state court or, to the
extent permitted by law, in such federal court. The parties hereto agree that a
final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. To the extent permitted by applicable law, the parties
hereto hereby waive and agree not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that the related documents or the subject
matter thereof may not be litigated in or by such courts.
(c) Each of the Depositor, 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, any of the Sellers or the Servicer, as the case may be,
to serve process in any other manner permitted by law or to start legal
proceedings relating to any of the Home Equity Loans against any Mortgagor in
the courts of any jurisdiction.
Section 11.12. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.13. USURY.
The amount of interest payable or paid on any Certificate under the
terms of this Agreement shall be limited to an amount which shall not exceed the
maximum nonusurious rate of interest allowed by the applicable laws of the State
of New York or any applicable law of the United States permitting a higher
maximum nonusurious rate that preempts such applicable New York laws, which
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Certificate exceeds the
Highest Lawful Rate, the Trust stipulates that such excess amount will be deemed
to have been paid to the Owner of such Certificate as a result of an error on
the part of the Trustee acting on behalf of the Trust and the Owner receiving
such excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Trustee on behalf of the Trust, refund the amount of such
excess or, at the option of such Owner, apply the excess to the payment of
principal of such Certificate, if any, remaining unpaid. In addition, all sums
paid or agreed to be paid to the Trustee for the benefit of Owners of
Certificates for the use, forbearance or detention of money shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Certificates.
Section 11.14. AMENDMENT.
(a) The Trustee, the Depositor, the Sellers and the Servicer may, at
any time and from time to time, without the giving of notice to or the receipt
of the consent of the Owners, amend this Agreement, and the Trustee shall
consent to the amendment for the purposes of (i) if accompanied by an approving
Opinion of Counsel experienced in federal income tax matters, and an Officer's
Certificate, which shall not be at the expense of the Trustee, removing the
restriction against the transfer of a Class R Certificate to a Disqualified
Organization, (ii) complying with the requirements of the Code including any
amendments necessary to maintain REMIC status of each REMIC, (iii) curing any
ambiguity, (iv) correcting or supplementing any provisions of this Agreement
which are inconsistent with any other provisions of this Agreement or (v) for
any other purpose, provided that in the case of clause (v), such amendment shall
not adversely affect in any material respect any Owner. Any such amendment shall
be deemed not to adversely affect in any material respect any Owner if such
Owner shall have consented thereto in writing or if there is delivered to the
Trustee written notification from each Rating Agency that such amendment will
not cause such Rating Agency to reduce its then current rating assigned to the
Offered Certificates. Notwithstanding anything to the contrary, no such
amendment shall (a) change in any manner the amount of, or delay the timing of,
payments which are required to be distributed to any Owner without the consent
of such Owner or (b) change the percentages of Percentage Interest which are
required to consent to any such amendments, without the consent of the Owners of
all Certificates of the Class or Classes affected then outstanding. The Trustee
shall not be required to execute any amendment or supplement if it affects its
rights, duties, immunities or indemnities.
(b) The Rating Agencies shall be provided by the Seller and the
Depositor with copies of any amendments to this Agreement, together with copies
of any opinions or other documents or instruments executed in connection
therewith.
(c) Notwithstanding any contrary provisions of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (provided by the Person requesting
such amendment) to the effect that such amendment will not result in the
imposition of any tax on the Trust pursuant to the REMIC Provisions or cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any of
the Certificates are outstanding.
Section 11.15. PAYING AGENT; APPOINTMENT AND ACCEPTANCE OF DUTIES.
The Trustee is hereby appointed Paying Agent. The Seller may, if such
Person meets the eligibility requirements for the Trustee set forth in Section
10.08 hereof, appoint one or more other Paying Agents or successor Paying
Agents.
Each Paying Agent, immediately upon such appointment shall signify its
acceptance of the duties and obligations imposed upon it by this Agreement by
written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of Section 6.02, that such Paying Agent
will:
(a) allocate all sums received for distribution to the Owners of
Certificates of each Class for which it is acting as Paying Agent on each
Distribution Date among such Owners in the proportion specified by the Trustee;
and
(b) hold all sums held by it for the distribution of amounts due with
respect to the Certificates in trust for the benefit of the Owners entitled
thereto until such sums shall be paid to such Owners or otherwise disposed of as
herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least sixty (60) days written notice to the Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent and signed
by the Trustee.
In the event of the resignation or removal of any Paying Agent other
than the Trustee such Paying Agent shall pay over, assign and deliver any moneys
held by it as Paying Agent to its successor, or if there be no successor, to the
Trustee.
Upon the appointment, removal or notice of resignation of any Paying
Agent, the Trustee shall notify the Owners by mailing notice thereof at their
addresses appearing on the Register.
Section 11.16. REMIC STATUS.
(a) The parties hereto intend that each REMIC created hereunder shall
constitute, and that the affairs of each REMIC created hereunder shall be
conducted so as to qualify it as a REMIC in accordance with the REMIC
Provisions. In furtherance of such intention, Bank One, National Association, or
such other person designated pursuant to Section 11.18 hereof shall act as agent
for the Trust and as Tax Matters Person for the Trust and that in such capacity
it shall: (i) prepare or cause to be prepared and filed, at its own expense, in
a timely manner, annual tax returns and any other tax return required to be
filed by each REMIC created hereunder using a calendar year as the taxable year
for such REMIC; (ii) in the related first such tax return, make (or cause to be
made) an election satisfying the requirements of the REMIC Provisions, on behalf
of each REMIC created hereunder, for it to be treated as a REMIC; (iii) at the
Tax Matters Person's expense, prepare and forward, or cause to be prepared and
forwarded, to the Owners all information, reports or tax returns required with
respect to each REMIC created hereunder, including Schedule Q to Form 1066, as,
when and in the form required to be provided to the Owners, and to the Internal
Revenue Service and any other relevant governmental taxing authority in
accordance with the REMIC Provisions and any other applicable federal, state or
local laws, including without limitation information reports relating to
"original issue discount" as defined in the Code based upon the prepayment
assumption and calculated by using the "Issue Price" (within the meaning of
Section 1273 of the Code) of the Certificates of the related Class; provided
that the tax return filed on Schedule Q to Form 1066 shall be prepared and
forwarded to the Owners of the Class R Certificates no later than 50 days after
the end of the period to which such tax return was due; (iv) not take any action
or omit to take any action that would cause the termination of the REMIC status
of any REMIC created hereunder, except as provided under this Agreement; (v)
represent the Trust or each REMIC created hereunder in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to a taxable year of
the Trust or each REMIC created hereunder, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of the Trust or each REMIC created hereunder, and otherwise act on
behalf of the Trust or each REMIC created hereunder in relation to any tax
matter involving the Trust or each REMIC created hereunder (the legal expenses
and costs of any such action described in this subsection (v) and any liability
resulting therefrom shall constitute expenses of the Trust and shall constitute
Trustee Reimbursable Expenses, unless such legal expenses and costs are incurred
by reason of the Trustee's willful misfeasance, bad faith or negligence); (vi)
comply with all statutory or regulatory requirements with regard to its conduct
of activities pursuant to the foregoing clauses of this Section 11.16,
including, without limitation, providing all notices and other information to
the Internal Revenue Service and Owners of Class R Certificates required of a
"tax matters person" pursuant to subtitle F of the Code and the Treasury
Regulations thereunder; (vii) make available information necessary for the
computation of any tax imposed (A) on transfer of residual interests to certain
Disqualified Organizations or (B) on pass-through entities, any interest in
which is held by a Disqualified Organization; and (viii) acquire and hold the
Tax Matters Person Residual Interest. The obligations of the Trustee or such
other designated Tax Matters Person pursuant to this Section 11.16 shall survive
the termination or discharge of this Agreement.
(b) The Sellers, the Depositor, the Trustee and the Servicer covenant
and agree for the benefit of the Owners (i) to take no action which would result
in the termination of REMIC status for any REMIC created hereunder, (ii) not to
engage in any "prohibited transaction", as such term is defined in Section
860F(a)(2) of the Code, (iii) not to engage in any other action which may result
in the imposition on the Trust of any other taxes under the Code and (iv) to
cause the Servicer not to take or engage in any such action, to the extent that
either of the Sellers is aware of any such proposed action by the Servicer.
(c) Each REMIC created hereunder shall, for federal income tax
purposes, maintain books on a calendar year basis and report income on an
accrual basis.
(d) Except as otherwise permitted by Section 7.05(b), no Eligible
Investment shall be sold prior to its stated maturity (unless sold pursuant to a
plan of liquidation in accordance with Article IX hereof).
(e) None of the Depositor, the Sellers or the Trustee shall enter into
any arrangement by which the Trustee will receive a fee or other compensation
for services rendered pursuant to this Agreement, other than as expressly
contemplated by this Agreement.
(f) Notwithstanding the foregoing clauses (d) and (e), the Trustee or
either of the Sellers may engage in any of the transactions prohibited by such
clauses, provided that the Trustee shall have received an Opinion of Counsel
experienced in federal income tax matters to the effect that such transaction
does not result in a tax imposed on the Trust or cause a termination of REMIC
status for any REMIC created hereunder; provided, however, that such transaction
is otherwise permitted under this Agreement.
(g) In the event that any tax is imposed on "prohibited transactions"
of the Trust created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of the Trust as defined in Section
860G(c) of the Code, on any contributions to the Trust after the Startup Date
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee if such tax arises out of or results from the
willful misfeasance, bad faith or negligence in performance by the Trustee of
any of its obligations under Article X, or (ii) to the Servicer if such tax
arises out of or results from a breach by the Servicer of any of its obligations
under Article VIII or otherwise.
Section 11.17. ADDITIONAL LIMITATION ON ACTION AND IMPOSITION OF TAX.
Any provision of this Agreement to the contrary notwithstanding, the
Trustee shall not, without having obtained an Opinion of Counsel experienced in
federal income tax matters at the expense of the party seeking to take such
action but in no event at the expense of the Trust to the effect that such
transaction does not result in a tax imposed on the Trust or any REMIC created
hereunder or cause a termination of REMIC status for any REMIC created
hereunder, (i) sell any assets in the Trust Estate, (ii) accept any contribution
of assets after the Startup Day, (iii) allow the Servicer to foreclose upon any
Home Equity Loan if such foreclosure would result in a tax on the Trust or any
REMIC created hereunder or cause termination of REMIC status for any REMIC
created hereunder or (iv) agree to any modification of this Agreement. To the
extent that sufficient amounts cannot be so retained to pay or provide for the
payment of such tax, the Trustee is hereby authorized to and shall segregate,
into a separate non-interest bearing account, the net income from any such
Prohibited Transactions of each REMIC created hereunder and use such income, to
the extent necessary, to pay such tax; provided that, to the extent that any
such income is paid to the Internal Revenue Service, the Trustee shall retain an
equal amount from future amounts otherwise distributable to the Owners of Class
R Certificates and shall distribute such retained amounts to the Owners of
Offered Certificates to the extent they are fully reimbursed and then to the
Owners of the Class R Certificates. If any tax, including interest penalties or
assessments, additional amounts or additions to tax, is imposed on the Trust,
such tax shall be charged against amounts otherwise distributable to the owners
of the Class R Certificates on a pro rata basis. The Trustee is hereby
authorized to and shall retain from amounts otherwise distributable to the
Owners of the Class R Certificates sufficient funds to pay or provide for the
payment of, and to actually pay, such tax as is legally owed by the Trust (but
such authorization shall not prevent the Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings).
Section 11.18. APPOINTMENT OF TAX MATTERS PERSON.
A Tax Matters Person will be appointed for each REMIC created
hereunder for all purposes of the Code and such Tax Matters Person will perform,
or cause to be performed, such duties and take, or cause to be taken, such
actions as are required to be performed or taken by the Tax Matters Person under
the Code. The Tax Matters Person for each REMIC created hereunder shall be the
Trustee as long as it owns a Class R Certificate. If the Trustee does not own a
Class R Certificate, the Tax Matters Person will be the holder of the largest
percentage interest in the Class R Certificates. The Trustee is hereby
irrevocably appointed to act as the agent of the Tax Matters Person for all
purposes of the Code and regulations thereunder.
Section 11.19. NOTICES.
All notices hereunder shall be given as follows, until any superseding
instructions are given to all other Persons listed below:
THE TRUSTEE: Bank One, National Association
Bank Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Office
Tel: (000) 000-0000
Fax: (000) 000-0000
THE DEPOSITOR: CHEC Funding, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE SELLER: Centex Credit Corporation d/b/a Centex Home Equity Corporation
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE CONDUIT
SELLER: Xxxxxxx Street Funding II, LLC
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE SERVICER: Centex Credit Corporation d/b/a Centex Home Equity Corporation
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
THE CUSTODIAN: Bank One Trust Company, N.A.
0000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax: (972) 785-534
Confirmation: (000) 000-0000
THE UNDERWRITERS: Xxxxxx Brothers, Inc.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Tel: (000) 000-0000
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
11th Floor
NC1-007-11-07
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
MOODY'S: Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage
Monitoring Department
Tel: (000) 000-0000
Fax: (000) 000-0000
FITCH: Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Section 11.20. RULE 144A INFORMATION. For so long as any of the Class
R or Class X-IO Certificates are "restricted securities" within the meaning of
Rule 144A under the Securities Act, the Servicer (or if the Trustee is then
acting as Servicer, CHEC) agrees to provide to any Owner of the Class R or Class
X-IO Certificate and to any prospective purchaser of Class R or Class X-IO
Certificates designated by such an Owner, upon the request of such Owner or
prospective purchaser, the information specified below which is intended to
satisfy the conditions set forth in Rule 144A(d)(4) under the Securities Act;
PROVIDED that this Section 11.20 shall require, as to the Trustee or CHEC, only
that the Servicer (or if the Trustee is then acting as Servicer, CHEC) provide
publicly available information regarding it or the Trustee in response to any
such request; and PROVIDED FURTHER that the Servicer (or if the Trustee is then
acting as Servicer, CHEC) shall be obligated to provide only such basic,
material information concerning the structure of the Class R or Class X-IO
Certificates and distributions thereon, the nature, performance and servicing of
the Home Equity Loans supporting the Certificates, and any credit enhancement
mechanism, if any, associated with the Certificates. Any recipient of
information provided pursuant to this Section 11.20 shall agree that such
information shall not be disclosed or used for any purpose other than the
evaluation of the Class R or Class X-IO Certificates by the prospective
purchaser. The Trustee shall have no responsibility for the sufficiency under
Rule 144A of any information so provided by the Servicer or CHEC to any Owner or
prospective purchaser of Class R or Class X-IO Certificates.
END OF ARTICLE XI
IN WITNESS WHEREOF, the Depositor, the Sellers, the Servicer and the
Trustee have caused this Agreement to be duly executed their respective officers
thereunto duly authorized, all as of the day and year first above written.
CHEC FUNDING, LLC,
as Depositor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CENTEX CREDIT CORPORATION d/b/a
CENTEX HOME EQUITY CORPORATION,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
XXXXXXX STREET FUNDING II, LLC, as Conduit
Seller
By Centex Credit Corporation d/b/a Centex
Home Equity Corporation, as Manager
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CENTEX CREDIT CORPORATION d/b/a CENTEX
HOME EQUITY CORPORATION, as Servicer
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxx X. Xxxx
------------------------
Name: Xxxx X. Xxxx
Title: Vice President
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 15th day of June 2001, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of CHEC Funding, LLC, a
Delaware limited liability agreement; and that he signed his name thereto by
order of the sole member of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Xxxx Xxxxxx
-----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 15th day of June 2001, before me personally came Xxxxxxx X.
Xxxxxxxx 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/ Xxxx Xxxxxx
------------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 15th day of June, 2001, before me personally came Xxxxxxx X.
Xxxxxxxx to me known that he is a Vice President of Centex Credit Corporation
d/b/a Centex Home Equity Corporation and that he signed his name thereto by
order of Centex Credit Corporation d/b/a Centex Home Equity Corporation, as
manager of Xxxxxxx Street Funding II, LLC.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
NOTARIAL SEAL
/s/ Xxxx Xxxxxx
----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 15th day of June 2001, before me personally came Xxxx X. Xxxx,
to me known that he is a Vice President of Bank One, National Association,
described in and that he executed the above instrument as Trustee; and that he
signed his 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/ Xxxx Xxxxxx
----------------------------------
Notary Public
SCHEDULE I-A
GROUP I SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
SCHEDULE I
GROUP II SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
SCHEDULE I-C
SELLER SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
SCHEDULE I-D
CONDUIT SCHEDULE OF HOME EQUITY LOANS
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
SCHEDULE I-E
INVESTMENT INSTRUCTIONS TO TRUSTEE
Account Eligible Investment
------- -------------------
(1) Certificate Account One Group Institutional Prime Fund
(2) Supplemental Interest Reserve Fund One Group Institutional Prime Fund
(3) Repurchase Reserve Fund
SCHEDULE I-F
FIFTY REMIC IIIs
A copy of this Schedule is maintained by the Trustee at the Corporate
Trust Office and by the Servicer.
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 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-1
(4.93% Certificate Rate)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DK4
----------
CUSIP
$134,074,000 June 15, 2001 November 25, 2016
Original Class A-1 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-2
(the "Class A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-1 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-1 Certificates. The Percentage Interest of
each Class A-1 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-1 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-1 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-1 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-1 Certificates are exchangeable for new Class A-1
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Title:
---------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------------
By:
--------------------------------------------------
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-2
(5.35% Certificate Rate)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DL1
----------
CUSIP
$57,096,000 June 15, 2001 October 25, 2022
Original Class A-2 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates, on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-2 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-2 Certificates. The Percentage Interest of
each Class A-2 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-2 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-2 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-2 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-2 Certificates are exchangeable for new Class A-2
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Title:
----------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------------
By:
--------------------------------------------------
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET
BACKED CERTIFICATE
CLASS A-3
(5.77% Certificate Rate)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DM9
----------
CUSIP
$59,251,000 June 15, 2001 November 25, 2027
Original Class A-3 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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 JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-4 (the "Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-3 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-3 Certificates. The Percentage Interest of
each Class A-3 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-3 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-3 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-3 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-3 Certificates are exchangeable for new Class A-3
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Title:
-----------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------------
By:
--------------------------------------------------
EXHIBIT A-4
FORM OF CLASS A-4 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-4
(6.41% Certificate Rate)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DN7
----------
CUSIP
$39,093,000 June 15, 2001 February 25, 2030
Original Class A-4 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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 JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-5 (the "Class A-5 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-4 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-4 Certificates. The Percentage Interest of
each Class A-4 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-4 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-4 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-4 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-4 Certificates are exchangeable for new Class A-4
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------
Title:
-------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------
By:
----------------------------------
EXHIBIT A-5
FORM OF CLASS A-5 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-5
(6.83% Certificate Rate (or 7.33% for each Interest Period occurring
after the date on which an affiliate of the Servicer first fails to exercise its
clean-up call option), subject to Fixed Rate Interest Cap)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DP2
----------
CUSIP
$28,871,000 June 15, 2001 July 25, 2032
Original Class A-5 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-6 (the "Class A-6 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-5 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-5 Certificates. The Percentage Interest of
each Class A-5 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-5 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-5 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-5 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-5 Certificates are exchangeable for new Class A-5
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
---------------------------------
Title:
---------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
By:
-----------------------------------
EXHIBIT A-6
FORM OF CLASS A-6 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-6
(6.36% Certificate Rate)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") 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 DQ0
----------
CUSIP
$35,376,000 June 15, 2001 July 25, 2032
Original Class A-6 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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 JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-7 (the "Class A-7
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-6 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-6 Certificates. The Percentage Interest of
each Class A-6 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-6 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-6 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-6 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-6 Certificates are exchangeable for new Class A-6
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Title:
---------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------
By:
--------------------------------
EXHIBIT A-7
FORM OF CLASS A-7 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS A-7
(Variable Certificate Rate, with an increase in margin on or after the Clean-Up
Call Date)
(Subject to Available Funds Cap)
Representing Certain Interests Relating to two Pools of Home Equity Loans Sold
and Serviced by
CENTEX 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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") or its agent for registration of
transfer, exchange, or payment and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: A-7-1 152314 DR8
----------
CUSIP
$56,639,000 June 15, 2001 July 25, 2032
Original Class A-7 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
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 July 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.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class A-7 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class A-7 Certificates. The Percentage Interest of
each Class A-7 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class A-7 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class A-7 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class A-7 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A-7 Certificates are exchangeable for new Class A-7
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------
Title:
-------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------
By:
---------------------------
EXHIBIT A-8
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS M-1
(6.92% Certificate Rate (or 7.42% for each Interest Period occurring after the
date on which an affiliate of the Servicer first fails to exercise its clean-up
call option), subject to Fixed Rate Interest Cap)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") or its agent for registration of
transfer, exchange, or payment and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: M-1-1 152314 DS6
----------
CUSIP
$28,800,000 June 15, 2001 July 25, 2032
Original Class M-1 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
The Owner hereof is entitled to principal payments on each
Distribution Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance of the Class M-1 Certificates over the
period from the date of initial issuance of the Certificates to the Final
Scheduled Distribution Date for the Class M-1 Certificates. Therefore, the
actual Outstanding principal amount of this Certificate may, on any date
subsequent to July 25, 2001 (the first Distribution Date), be less than the
original Certificate Principal Balance of the Class M-1 Certificates set forth
above.
Upon receiving the final distribution hereon, the Owner hereof is
required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement provides that, in any event, upon the making of the final distribution
due on this Certificate, this Certificate shall be deemed canceled for all
purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, Home Equity Loan
Asset-Backed Certificates, Class M-1 (the "Class M-1 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class A-7 (the "Class A-7 Certificates"), Class M-2 (the "Class
M-2 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 25, 2001, the Owners of the Class M-1 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class M-1 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class M-1 Certificates. The Percentage Interest of
each Class M-1 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-1 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class M-1 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class M-1 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class M-1 Certificates are exchangeable for new Class M-1
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------
Title:
-------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------
By:
-----------------------------
EXHIBIT A-9
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS M-2
(7.36% Certificate Rate (or 7.86% for each Interest Period occurring after
the date on which an affiliate of the Servicer first fails to exercise its
clean-up call option), subject to Fixed Rate Interest Cap)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") or its agent for registration of
transfer, exchange, or payment and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: M-2-1 152314 DT4
----------
CUSIP
$21,600,000 June 15, 2001 July 25, 2032
Original Class M-2 Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
The Owner hereof is entitled to principal payments on each
Distribution Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance of the Class M-2 Certificates over the
period from the date of initial issuance of the Certificates to the Final
Scheduled Distribution Date for the Class M-2 Certificates. Therefore, the
actual Outstanding principal amount of this Certificate may, on any date
subsequent to July 25, 2001 (the first Distribution Date), be less than the
original Certificate Principal Balance of the Class M-2 Certificates set forth
above.
Upon receiving the final distribution hereon, the Owner hereof is
required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement provides that, in any event, upon the making of the final distribution
due on this Certificate, this Certificate shall be deemed canceled for all
purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, Home Equity Loan
Asset-Backed Certificates, Class M-2 (the "Class M-2 Certificates") and issued
under and subject to the terms, provisions and conditions of that certain
Pooling and Servicing Agreement dated as of June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class
M-1 Certificates"), Class B (the Class B Certificates"), Class X-IO (the "Class
X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 25, 2001, the Owners of the Class M-2 Certificates as of
the close of business on the last Business Day of the calendar month immediately
preceding the calendar month in which a Distribution Date occurs (the "Record
Date") will be entitled to receive the Class Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class M-2 Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class M-2 Certificates. The Percentage Interest of
each Class M-2 Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class M-2 Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class M-2 Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class M-2 Certificates are issuable only as registered
Certificates in minimum denominations of $25,000 original Certificate Principal
Balance and in integral multiples of $1,000 in excess of $25,000. As provided in
the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class M-2 Certificates are exchangeable for new Class M-2
Certificates of authorized denominations evidencing the same aggregate principal
amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------
Title:
-------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
By:
-------------------------------
EXHIBIT A-10
FORM OF CLASS B CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
CENTEX HOME EQUITY LOAN TRUST 2001-B
HOME EQUITY LOAN ASSET-BACKED CERTIFICATE
CLASS B
(7.81% Certificate Rate (or 8.31% for each Interest Period occurring
after the date on which an affiliate of the Servicer first fails to exercise its
clean-up call option), subject to Fixed Rate Interest Cap)
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"), Xxxxxxx Street Funding II, 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.)
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 2001-B") or its agent for registration of
transfer, exchange, or payment and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
No: B-1 152314 DU1
----------
CUSIP
$19,200,000 June 15, 2001 July 25, 2032
Original Class B Certificate Date Final Scheduled
Principal Balance Distribution Date
CEDE & CO.
Registered Owner
The registered Owner named above is the registered beneficial Owner of
a fractional interest in (a) the Home Equity Loans listed in Schedule I-A and
Schedule I-B to the Pooling and Servicing Agreement (as defined below) which the
Seller and the Conduit 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").
The Owner hereof is entitled to principal payments on each
Distribution Date, as hereinafter described, which will fully amortize such
original Certificate Principal Balance of the Class B Certificates over the
period from the date of initial issuance of the Certificates to the Final
Scheduled Distribution Date for the Class B Certificates. Therefore, the actual
Outstanding principal amount of this Certificate may, on any date subsequent to
July 25, 2001 (the first Distribution Date), be less than the original
Certificate Principal Balance of the Class B Certificates set forth above.
Upon receiving the final distribution hereon, the Owner hereof is
required to send this Certificate to the Trustee. The Pooling and Servicing
Agreement provides that, in any event, upon the making of the final distribution
due on this Certificate, this Certificate shall be deemed canceled for all
purposes under the Pooling and Servicing Agreement.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS.
THEREFORE, THE ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY ON
ANY DATE SUBSEQUENT TO JULY 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 2001-B, Home Equity Loan
Asset-Backed Certificates, Class B (the "Class B Certificates") and issued under
and subject to the terms, provisions and conditions of that certain Pooling and
Servicing Agreement dated as of June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class
M-1 Certificates"), Class M-2 (the "Class M-2 Certificates"), Class X-IO (the
"Class X-IO Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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 Principal Distribution Amount
relating to such Certificates on such Distribution Date. Distributions will be
made in immediately available funds to Owners of Certificates having an
aggregate original Certificate Principal Balance of at least $1,000,000 (by wire
transfer or otherwise) to the account of an Owner at a domestic bank or other
entity having appropriate facilities therefor, if such Owner has so notified the
Trustee, or by check mailed to the address of the person entitled thereto as it
appears on the Register.
Each Owner of record of a Class B Certificate will be entitled to
receive such Owner's Percentage Interest in the amounts due on such Distribution
Date to the Owners of the Class B Certificates. The Percentage Interest of each
Class B Certificate as of any date of determination will be equal to the
percentage obtained by dividing the original Certificate Principal Balance of
such Class B Certificate on the Startup Day by the aggregate Certificate
Principal Balance of the Class B Certificates on the Startup Day.
The Trustee or any duly-appointed Paying Agent will duly and
punctually pay distributions with respect to this Certificate in accordance with
the terms hereof and the Pooling and Servicing Agreement. Amounts properly
withheld under the Code by any Person from a distribution to any Owner shall be
considered as having been paid by the Trustee to such Owner for all purposes of
the Pooling and Servicing Agreement.
The Home Equity Loans will be serviced by the Servicer pursuant to the
Pooling and Servicing Agreement. The Pooling and Servicing Agreement permits the
Servicer to enter into Sub-Servicing Agreements with certain institutions
eligible for appointment as Sub-Servicers for the servicing and administration
of certain Home Equity Loans. No appointment of any Sub-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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), as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
No Owner shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Pooling and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy under the Pooling
and Servicing Agreement except in compliance with the terms thereof.
Notwithstanding any other provisions in the Pooling and Servicing
Agreement, the Owner of any Certificate shall have the right which is absolute
and unconditional to receive distributions to the extent provided in the Pooling
and Servicing Agreement with respect to such Certificate or to institute suit
for the enforcement of any such distribution, and such right shall not be
impaired without the consent of such Owner.
The Pooling and Servicing Agreement provides that the obligations
created thereby will terminate upon the payment to the Owners of all
Certificates of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like Percentage Interest
will be issued to the designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendments. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class B Certificates are issuable only as registered Certificates
in minimum denominations of $25,000 original Certificate Principal Balance and
in integral multiples of $1,000 in excess of $25,000. As provided in the Pooling
and Servicing Agreement and subject to certain limitations therein set forth,
Class B Certificates are exchangeable for new Class B Certificates of authorized
denominations evidencing the same aggregate principal amount.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Title:
----------------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
By:
------------------------------
EXHIBIT B
FORM OF CLASS X-IO CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A CLASS OF
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTION 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), ASSUMING COMPLIANCE WITH THE
REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN
(INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO EMPLOYEE BENEFIT PLANS AND
OTHER RETIREMENT ARRANGEMENTS).
TRANSFER OF THIS CLASS X-IO CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
CENTEX HOME EQUITY LOAN TRUST 2001-B
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"), Xxxxxxx Street Funding II, 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: June 15, 2001
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 2001-B, 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 June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed Certificates, Class A-1
(the "Class A-1 Certificates"), Class A-2 (the "Class A-2 Certificates"), Class
A-3 (the "Class A-3 Certificates"), Class A-4 (the "Class A-4 Certificates"),
Class A-5 (the "Class A-5 Certificates"), Class A-6 (the "Class A-6
Certificates"), Class A-7 (the "Class A-7 Certificates"), Class M-1 (the "Class
M-1 Certificates"), Class M-2 (the "Class M-2 Certificates"), Class B (the Class
B Certificates"), and Class R-1 and Class R-2 (together, the "Class R
Certificates"). The Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-5 Certificates,
the Class A-6 Certificates, the Class A-7 Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class B Certificates shall be
together referred to as the "Offered Certificates" and the Offered Certificates,
the Class X-IO Certificates and the Class R Certificates are together referred
to herein as the "Certificates." Terms capitalized herein and not otherwise
defined herein shall have the respective meanings set forth in the Pooling and
Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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, Xxxxxxx Street Funding II, 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 of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Trust Estate will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, and
the Servicer at any time and from time to time, without the consent of the
Owners; provided, that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendment. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class X-IO Certificates are issuable only as registered
Certificates. As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth, Class X-IO Certificates are exchangeable
for new Class X-IO Certificates evidencing the same Percentage Interest as the
Class X-IO Certificates exchanged.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------
Title:
---------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------------------
By:
--------------------------------------------------
EXHIBIT C
FORM OF CLASS R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
EACH OF THE SOLE CLASSES OF "RESIDUAL INTERESTS" IN TWO "REAL ESTATE MORTGAGE
INVESTMENT CONDUITS" ("REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTION 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), ASSUMING COMPLIANCE WITH THE REMIC PROVISIONS OF THE CODE.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY BE MADE ONLY IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.08 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN
(INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO EMPLOYEE BENEFIT PLANS AND
OTHER RETIREMENT ARRANGEMENTS).
TRANSFER OF THIS CLASS R CERTIFICATE IS RESTRICTED AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT. NO TRANSFER OF THIS CLASS R CERTIFICATE MAY BE
MADE TO A "DISQUALIFIED ORGANIZATION" AS DEFINED IN SECTION 860E(e)(5) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUCH TERM INCLUDES THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY AGENCY OR INSTRUMENTALITY OF ANY
OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE INSTRUMENTALITIES), ANY COOPERATIVE
ORGANIZATION FURNISHING ELECTRIC ENERGY OR PROVIDING TELEPHONE SERVICE TO
PERSONS IN RURAL AREAS, OR ANY ORGANIZATION (OTHER THAN A XXXXXX'X COOPERATIVE)
THAT IS EXEMPT FROM FEDERAL INCOME TAX UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX ON UNRELATED BUSINESS INCOME. NO TRANSFER OF THIS CLASS R CERTIFICATE
WILL BE REGISTERED BY THE CERTIFICATE REGISTRAR UNLESS THE PROPOSED TRANSFEREE
HAS DELIVERED AN AFFIDAVIT AFFIRMING, AMONG OTHER THINGS, THAT THE PROPOSED
TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION AND IS NOT ACQUIRING THE CLASS R
CERTIFICATE FOR THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A COPY OF THE FORM
OF AFFIDAVIT REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE AND AVAILABLE FROM
THE TRUSTEE.
A TRANSFER IN VIOLATION OF THE APPLICABLE RESTRICTIONS MAY GIVE RISE
TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN CERTAIN CASES, UPON AN AGENT
ACTING FOR THE TRANSFEREE. A PASS-THROUGH ENTITY THAT HOLDS THIS CLASS R
CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD OWNER IN ANY
TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR EQUAL TO THE
PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE PORTION OF
THIS CERTIFICATE OWNED THROUGH SUCH PASS-THROUGH ENTITY BY SUCH DISQUALIFIED
ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON CORPORATIONS. FOR
PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THROUGH" ENTITY INCLUDES
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, COMMON TRUST
FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I OF SUBCHAPTER
1T OF THE CODE APPLIES AND, EXCEPT AS PROVIDED IN REGULATIONS, NOMINEES.
NEITHER THIS CERTIFICATE NOR THE UNDERLYING HOME EQUITY LOANS ARE
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION OR ANY OTHER GOVERNMENTAL AGENCY.
THIS CLASS R CERTIFICATE REPRESENTS A RESIDUAL INTEREST IN EACH OF
REMIC I AND REMIC II FOR FEDERAL INCOME TAX PURPOSES.
CENTEX HOME EQUITY LOAN TRUST 2001-B 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, Xxxxxxx Street Funding II, 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: June 15, 2001
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.
This Certificate is one of a Class of duly-authorized Certificates
designated as Centex Home Equity Loan Trust 2001-B, Home Equity Loan
Asset-Backed Certificates, Class R-__ and issued under and subject to the terms,
provisions and conditions of that certain Pooling and Servicing Agreement dated
as of June 1, 2001 (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"), Xxxxxxx Street Funding II, 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 2001-B Home Equity Loan Asset-Backed
Certificates, Class A-1 (the "Class A-1 Certificates"), Class A-2 (the "Class
A-2 Certificates"), Class A-3 (the "Class A-3 Certificates"), Class A-4 (the
"Class A-4 Certificates"), Class A-5 (the "Class A-5 Certificates"), Class A-6
(the "Class A-6 Certificates"), Class A-7 (the "Class A-7 Certificates"), Class
M-1 (the "Class M-1 Certificates"), Class M-2 (the "Class M-2 Certificates"),
Class B (the Class B Certificates"), Class X-IO (the "Class X-IO Certificates"),
and Class R-__ (together with Class R-__, the "Class R Certificates"). The Class
A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the
Class A-4 Certificates, the Class A-5 Certificates, the Class A-6 Certificates,
the Class A-7 Certificates, the Class M-1 Certificates, the Class M-2
Certificates and the Class B Certificates shall be together referred to as the
"Offered Certificates" and the Offered Certificates, the Class X-IO Certificates
and the Class R Certificates are together referred to herein as the
"Certificates." Terms capitalized herein and not otherwise defined herein shall
have the respective meanings set forth in the Pooling and Servicing Agreement.
On the 25th day of each month, or, if such day is not a Business Day,
then the next succeeding Business Day (each such day being a "Distribution
Date") commencing July 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-Servicer shall release
the Servicer from any of its obligations under the Pooling and Servicing
Agreement.
This Certificate does not represent a deposit or other obligation of,
or an interest in, nor are the underlying Home Equity Loans insured or
guaranteed by, CHEC Funding, LLC, Xxxxxxx Street Funding II, LLC or Centex
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 of all amounts held by the Trustee and required to be paid to such
Owners pursuant to the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement additionally provides that the
Owner of the Class X-IO Certificates may, at its option, purchase from the Trust
all remaining Home Equity Loans and other property then constituting the Trust
Estate, and thereby effect early retirement of the Certificates, on any
Distribution Date on or after the Clean-Up Call Date. If the Owner of the Class
X-IO Certificates does not exercise this optional purchase on the Clean-Up Call
Date, then (i) on the next Distribution Date, the Trustee will begin an auction
process to sell the Home Equity Loans and (ii) on the third Distribution Date
following such date and on each Distribution Date thereafter, the amounts that
otherwise would have been payable to the Class X-IO Certificates will be paid to
the Offered Certificates as an additional principal distribution amount. In
addition, under certain circumstances relating to the qualification of REMIC I
and REMIC II as REMICs under the Code, the Home Equity Loans may be sold,
thereby effecting the early retirement of the Certificates.
The Class R Certificates evidence ownership in the "residual interest"
in REMIC I and the "residual interest" in REMIC II. The registered Owner of a
Class R Certificate will be entitled to separate such Certificate into such
component parts. The Trustee shall, upon delivery to it of this Class R
Certificate and a written request of the registered Owner thereof to separate
such Certificate into its component parts, issued to such registered Owner in
exchange for such Class R Certificate (i) a separately transferable, certified
and fully registered security (a "Class R-1 Certificate") that will, from the
date of its issuance, represent the Owner's Percentage Interest in the residual
interest in REMIC I and (ii) a separately transferable, certified and fully
registered security (a "Class R-2 Certificate") that will, from the date of its
issuance, represent the Owner's Percentage Interest in the residual interest in
REMIC II. The Trustee may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection with such exchange of this
Class R Certificate.
The Trustee shall give written notice of termination of the Pooling
and Servicing Agreement to each Owner in the manner set forth therein.
The Owners of the majority of the Percentage Interests represented by
the Offered Certificates have the right to exercise any trust or power set forth
in Section 6.11 of the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement and subject to
certain limitations therein set forth and referred to on the face hereof, the
transfer of this Certificate is registrable in the Register upon surrender of
this Certificate for registration of transfer at the office designated as the
location of the Register duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by,
the Owner hereof or his attorney duly authorized in writing, and thereupon one
or more new Certificates of the like Class, tenor and a like aggregate
fractional undivided interest in the Trust Estate will be issued to the
designated transferee or transferees.
The Pooling and Servicing Agreement permits, with certain exceptions
as therein provided, the amendment thereof and the modifications of rights and
obligations of the parties provided therein by the Depositor, the Trustee, the
Seller and the Servicer at any time and from time to time, without the consent
of the Owners; provided, that in certain other circumstances provided for in the
Pooling and Servicing Agreement such consent of the Owners will be required
prior to amendment. Any such consent by the Owner of this Certificate shall be
conclusive and binding upon such Owner and upon all future Owners of the
Certificate and of any Certificate issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Certificate.
The Trustee is required to furnish certain information on each
Distribution Date to the Owner of this Certificate, as more fully described in
the Pooling and Servicing Agreement.
The Class R Certificates are issuable only as registered Certificates.
As provided in the Pooling and Servicing Agreement and subject to certain
limitations therein set forth, Class R Certificates are exchangeable for new
Class R Certificates evidencing the same Percentage Interest as the Class R
Certificates exchanged.
No service charge will be made for any such registration of transfer
or exchange, but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee and any agent of the Trustee may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Trustee nor any such agent shall be affected by notice to the
contrary.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed on behalf of the Trust.
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------
Title:
--------------------------
Trustee Authentication
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
By:
------------------------------------
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL AFTER
CUT-OFF DATE
CERTIFICATE RE: PREPAID LOANS
I, __________________________, ______________________ of Centex Credit
Corporation d/b/a Centex Home Equity Corporation ("Centex"), hereby certify that
between the "Cut-Off Date" (as defined in the Pooling and Servicing Agreement
dated as of June 1, 2001 among CHEC Funding, LLC, as Depositor, Centex, as
Seller and Servicer, Xxxxxxx Street Funding II, LLC, as seller and Bank One,
National Association, as Trustee) and the "Startup Day," the following schedule
of "Home Equity Loans" (each as defined in the Pooling and Servicing Agreement)
have been prepaid in full.
Account Original Current Date
Number Name Amount Balance Paid Off
------ ---- ----- ------- --------
Dated: June 15, 2001
By:
-----------------------------
Title:
--------------------------
EXHIBIT E-1
FORM OF TRUSTEE'S RECEIPT
TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT
Reference is made to that certain Pooling and Servicing Agreement
dated as of June 1, 2001 (the "Pooling and Servicing Agreement") among CHEC
Funding, LLC, as depositor, Xxxxxxx Street Funding II, LLC, as 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.
Dated: June 15, 2001
BANK ONE NATIONAL ASSOCIATION
as Trustee
By:
-----------------------
Name:
Title:
EXHIBIT E-2
FORM OF CUSTODIAN'S ACKNOWLEDGMENT OF RECEIPT
CUSTODIAN'S ACKNOWLEDGMENT OF RECEIPT
Bank One Trust Company, N.A., in its capacity as custodian (the
"Custodian") under the Custodial Agreement dated as of June 1, 2001, 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 June
1, 2001 (the "Pooling and Servicing Agreement") among CHEC Funding, LLC, as
depositor (the "Depositor"), Xxxxxxx Street Funding II, 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: June 15, 2001
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 June 1, 2001, 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 June 1,
2001, (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, Xxxxxxx Street Funding II, LLC, as a seller and the
Trustee, as trustee; and
WHEREAS, the Custodian is required, pursuant to Section 3.06(a) of the
Pooling and Servicing Agreement, to review the Files relating to the Home Equity
Loans within a specified period following the Startup Day and to notify the
Seller promptly of any defects with respect to the Home Equity Loans, and the
Seller is required to remedy such defects or take certain other action, all as
set forth in Section 3.06(b) of the Pooling and Servicing Agreement; and
WHEREAS, Section 3.06(a) of the Pooling and Servicing Agreement
requires the Custodian to deliver this Pool Certification upon the satisfaction
of certain conditions set forth therein.
NOW, THEREFORE, the Custodian hereby certifies that it has determined
that all required documents (or certified copies of documents listed in Section
3.05 of the Pooling and Servicing Agreement) have been executed or received, and
that such documents relate to the Home Equity Loans identified in the Schedule
of Home Equity Loans pursuant to Section 3.06(a) of the Pooling and Servicing
Agreement or, in the event that such documents have not been executed and
received or do not so relate to such Home Equity Loans, any remedial action by
the Seller pursuant to Section 3.06(b) of the Pooling and Servicing Agreement
has been completed. The Custodian makes no certification hereby, however, with
respect to any intervening assignments or assumption and modification
agreements.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Pooling and Servicing Agreement.
BANK ONENATIONAL ASSOCIATION
as Custodian
By:
---------------------
Name:
Title:
Dated: July 30, 2001
EXHIBIT G
FORM OF DELIVERY ORDER
DELIVERY ORDER
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Pursuant to Section 4.01 of the Pooling and Servicing Agreement, dated
as of June 1, 2001 (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, Xxxxxxx Street
Funding II, 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 2001-B Home Equity Loan
Asset-Backed Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class B, Class X-IO and Class R
(the "Certificates"), HAVE BEEN SATISFIED, and HEREBY REQUESTS YOU TO
AUTHENTICATE AND DELIVER said Certificates, and to RELEASE said Certificates to
the owners thereof, or otherwise upon their order. Instructions regarding the
registration of the Certificates are attached hereto.
Very truly yours,
CHEC FUNDING, LLC
By:
------------------
Title:
---------------
Dated: June 15, 2001
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
AFFIDAVIT PURSUANT TO SECTION860E(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:
That he is [Title of Officer] of [Name of Investor] (the "Investor"),
a [savings institution] [corporation] duly organized and existing under the laws
of [the State of _________] [the United States], on behalf of which he makes
this affidavit.
That (i) the Investor is not a "disqualified organization" and will
not be a "disqualified organization" as of [date of transfer] (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any
agency or instrumentality of any of the foregoing (other than certain taxable
instrumentalities), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas, or any organization
(other than a farmers' cooperative) that is exempt from federal income tax
unless such organization is subject to the tax on unrelated business income.);
(ii) it is not acquiring the Class R Certificate for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Trustee (upon advice
of counsel) to constitute a reasonable arrangement to ensure that the Class R
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Class R Certificate unless (a)
it has received from the transferee an affidavit in substantially the same form
as this affidavit containing these same four representations and (b) as of the
time of the transfer, it does not have actual knowledge that such affidavit is
false.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] and its corporate seal to be hereunto attached, attested by
its [Assistant] Secretary, this ___ day of __________, 2001.
[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 ____________, 2001.
----------------------
NOTARY PUBLIC
COUNTY OF
-----------------------------
STATE OF
-----------------------------
My commission expires the _ day of _______________, 20__.
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER
(ACCREDITED INVESTOR)
[DATE]
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 2001-B
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 June 1, 2001 (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;
5. The Purchaser (i) is not an employee benefit plan subject to
Section 406 of ERISA nor a plan or other arrangement subject to Section 406 of
ERISA nor a plan or other arrangement subject to Section 4975 of the Code
(collectively, a "Plan"), nor is acting on behalf of any Plan nor using the
assets of any Plan to effect such purchase or (ii) in the event that any Class
X-IO or Class R Certificate is purchased by a Plan, or by a person or entity
acting on behalf of any Plan or using the assets of any Plan to effect such
purchase (including the assets of any Plan held in an insurance company separate
or general account), is delivering herewith an Opinion of Counsel, acceptable to
and in form and substance satisfactory to the Trustee, which Opinion of Counsel
shall not be at the expense of either the Trustee or the Trust, to the effect
that the purchase or holding of any Class X-IO or Class R Certificates will not
result in a prohibited transaction under ERISA and/or Section 4975 of the Code,
and will not subject the Trustee to any obligation or liability in addition to
those expressly undertaken under the Pooling and Servicing Agreement.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Certificate to or on behalf of any Plan without the delivery to the Trustee of
an Opinion of Counsel as described above shall be null and void and no effect;
6. If the Purchaser sells any of the Certificates, it will (i) obtain
from any investor that purchases any Certificate from it a letter substantially
in the form of Exhibit I-1 or I-2 to the Pooling and Servicing Agreement and
(ii) to the extent required by the Pooling and Servicing Agreement, cause an
Opinion of Counsel to be delivered, addressed and satisfactory to the Seller and
the Trustee, to the effect that such sale is in compliance with all applicable
federal and state securities laws; and
________________
1 Not required if the Purchaser is a broker/dealer.
7. For purposes of the Certificate Register, its address, including
telecopier number and telephone number, is as follows:
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
telecopier:
-------------------------------------------
telephone:
-------------------------------------------
8. The purchase of the Certificates by the Purchaser does not violate
the provisions of the first sentence of Section 5.08(c) of the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this letter to be executed
by its signatory, duly authorized, as of the date first above written.
[PURCHASER]
By:
----------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I-2
FORM OF CERTIFICATE REGARDING TRANSFER
(Rule 144A)
[Date]
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Advanced Structured Products Services
Re: Centex Home Equity Loan Trust 2001-B
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 June 1, 2001 (the "Pooling and Servicing Agreement") pursuant to which the
Certificates are being sold, and such other documents and information concerning
the Certificates and the home equity loans in which the Certificates represent
interests which we have requested;
4 We believe we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Certificates and that we are able to bear the economic risks
of such an investment;
5 If we sell any of the Certificates, at our option, we will either
(i) obtain from any institutional investor that purchases any Certificate from
us a certificate containing the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 4 and this paragraph 5 or (ii)
deliver an Opinion of Counsel to such institutional investor, addressed and
satisfactory to the Seller and the Trustee, to the effect that such sale is in
compliance with all applicable federal and state securities laws;
6 We are acquiring the Certificates for our own account and the source
of funds is not an employee benefit plan subject to Section 406 of ERISA nor a
plan or other arrangement subject to Section 406 of ERISA nor a plan or other
arrangement subject to Section 4975 of the Code (collectively, a "Plan"), nor
are we acting on behalf of any Plan nor using the assets of any Plan to effect
such acquisition or (ii) in the event that any Class X-IO or Class R Certificate
is purchased by a Plan, or by a person or entity acting on behalf of any Plan or
using the assets of any Plan to effect such purchase (including the assets of
any Plan held in an insurance company separate or general account), we are
delivering herewith an Opinion of Counsel, acceptable to and in form and
substance satisfactory to the Trustee, which Opinion of Counsel shall not be at
the expense of either the Trustee or the Trust, to the effect that the purchase
or holding of any Class X-IO or Class R Certificates will not result in a
prohibited transaction under ERISA and/or Section 4975 of the Code, and will not
subject the Trustee to any obligation or liability in addition to those
expressly undertaken under the Pooling and Servicing Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of a Certificate to
or on behalf of any Plan without the delivery to the Trustee of an Opinion of
Counsel as described above shall be null and void and no effect;
7 For purposes of the Certificate Register, our address, including
telecopier number and telephone number, is as follows:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
telecopier:
-------------
telephone:
--------------
8 If we sell any of the Certificates, we will obtain from any
purchaser from us the same representations contained in the foregoing paragraph
6 and this paragraph 8; and
9 Our purchase of the Certificates does not violate the provisions of
the first sentence of Section 5.08(c) of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, we have signed this certificate as of the date
first written above.
By:
Name:
Title:
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
Loan Number Borrower Name Original Loan Amount Exception
----------- ------------- -------------------- ---------
EXHIBIT M
FORM OF LETTER REGARDING REPORTING OBLIGATIONS UNDER THE
SECURITIES EXCHANGE ACT OF 1934
________, 200_
Bank One, National Association
0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Re: Centex Home Equity Loan Trust 2001-B
Home Equity Loan Asset-Backed Certificates,
Series 2001-B
------------------------------------------------------
Ladies and Gentlemen:
Pursuant to and in reference to Section 7.09(c) of the Pooling and
Servicing Agreement dated as of June 1, 2001 relating to the above referenced
Certificates, please note the following:
(a) CIK Number for Centex Home Equity Loan Trust 2001-B (the "Trust"):
(b) CCC for the Trust:
In order to comply with the reporting obligations for the Trust under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Trustee must file within 15 days following each Distribution Date a copy of the
report distributed by the Trustee to the Certificateholders in a current report
on Form 8-K. Such reports provide all current information ordinarily of interest
to the Certificateholders. The Trustee must also report on a current report on
Form 8-K any significant occurrences during the reporting period that would be
reportable under Item 1, Item 2, Item 4 and Item 5. In addition, the Trustee
should cause the filing of an annual report on Form 10-K within 90 days
following the end of the Trust's fiscal year containing the following
information:
Part I, Item 3. A description of any material pending litigation;
Part I, Item 4. A description of any matters submitted to vote of
Certificateholders;
Part II, Item 5. A statement of the number of Certificateholders
and the principal market, if any, in which the
Certificates trade;
Part II, Item 9. A statement as to any changes in or disagreements
with the independent public accountants for the
Trust;
Part IV, Item 14. A copy of the annual certificate of compliance by
an officer of the Servicer and any Subservicer, and
the audit of the servicing by the independent
accounting firm.
The Trustee shall timely file the Form 10-K, and the Trustee should file a Form
15 in accordance with Section 7.09(c) of the Pooling and Servicing Agreement,
deregistering the Trust and terminating the reporting obligations under the
Exchange Act.
All filings must be made through the Xxxxx System and all acceptance slips from
the filings should be saved as they will be needed for the annual certificate.
CHEC FUNDING, LLC
By:
---------------------------------------
Name:
Title:
EXHIBIT N
FORM OF LIQUIDATION REPORT
(1) Issue Name: $_______________
(2) Customer Name: $_______________
Loan Number: $_______________
Lien Position: $_______________
(3) Original Mortgage Amount: $_______________
Current Mortgage Amount: $_______________
(4) Interest Paid Through Date:
(5) Liquidation Date:
(6) Original Appraised Value: $_______________
(7) Most Recent Appraised Value: $_______________
Recent Appraisal Date:
(8) Interest Rate: [ ]% $_______________
(9) Sale Price: $_______________
(10) Interest Carry: $_______________
(11) Taxes Advances $_______________
(12) Maintenance Costs $_______________
(13) Legal Expenses: $_______________
(14) Miscellaneous Expenses $_______________
(15) Net Proceeds: $_______________
(16) Loss Severity Percentage: [ ]% $_______________
EXHIBIT O
REQUEST FOR RELEASE OF DOCUMENTS
-------------------,
TO: o
Re: Custodial Agreement, dated as of June 1, 2001, 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.
(The Servicer hereby certifies that the repurchase price has been
finally received by and credited to the Trust as required by the Pooling and
Servicing Agreement and Custodial Agreement).
__ 3. Mortgage Loan Liquidation by _______________________
(The Servicer hereby certifies that all proceeds of foreclosure,
insurance or other liquidation have been finally received and credited to the
Trust as required by the Pooling and Servicing Agreement and the Custodial
Agreement).
__ 4. Mortgage Loan in Foreclosure.
__ 5. Other (explain)
--------------------------------------
If box 1, 2 or 3 above is checked, and if the Note was previously
released to us, please release to us our previous receipt on file.
If box 4 or 5 above is checked, upon our return of the Note to you as
Custodian, please acknowledge your receipt by signing in the space indicated
below, and returning this form.
[Servicer]
----------------------------------
Name:
Title:
Documents returned to Custodian:
[BANK ONE TRUST COMPANY, NA]
---------------------------------------------------
Name:
