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POOLING AND SERVICING AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST 2005-A
Among
CHEC FUNDING, LLC ,
as Depositor,
CENTEX HOME EQUITY COMPANY, LLC,
as Seller,
HARWOOD STREET FUNDING II, LLC,
as Conduit Seller,
CENTEX HOME EQUITY COMPANY, LLC,
as Servicer,
and
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION
as Trustee
Dated as of January 1, 2005
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION
2
Section 1.01.
Definitions.
2
Section 1.02.
Use of Words and Phrases.
36
Section 1.03.
Captions, Table of Contents.
36
Section 1.04.
Opinions.
36
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE
TRUST
37
Section 2.01.
Establishment of the Trust.
37
Section 2.02.
Office.
37
Section 2.03.
Purposes and Powers.
37
Section 2.04.
Appointment of the Trustee; Declaration of Trust.
37
Section 2.05.
Expenses of the Trust.
37
Section 2.06.
Ownership of the Trust.
37
Section 2.07.
Situs of the Trust.
38
Section 2.08.
Designation of Interests in REMICs.
38
Section 2.09.
Miscellaneous REMIC Provisions.
44
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
DEPOSITOR, THE SERVICER AND THE SELLERS; COVENANT OF SELLER
TO CONVEY HOME EQUITY LOANS
45
Section 3.01.
Representations and Warranties of the Depositor.
45
Section 3.02.
Representations and Warranties of the Servicer.
47
Section 3.03.
Representations and Warranties of the Sellers.
49
Section 3.04.
Covenants of Sellers to Take Certain Actions with Respect to
the Home Equity Loans in Certain Situations.
52
Section 3.05.
Sale Treatment of the Home Equity Loans and Qualified
Replacement Mortgages.
62
Section 3.06.
Acceptance by Trustee; Certain Substitutions of Home
Equity Loans; Certification by Trustee.
66
Section 3.07.
High-Cost Home Loans.
68
Section 3.08.
Custodian.
68
Section 3.09.
Cooperation Procedures.
68
Section 3.10.
Payment of Taxes, Insurance and Other Charges.
69
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES
70
Section 4.01.
Issuance of Certificates.
70
Section 4.02.
Sale of Certificates.
70
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS
71
Section 5.01.
Terms.
71
Section 5.02.
Forms.
71
Section 5.03.
Execution, Authentication and Delivery.
71
Section 5.04.
Registration and Transfer of Certificates.
72
Section 5.05.
Mutilated, Destroyed, Lost or Stolen Certificates.
74
Section 5.06.
Persons Deemed Owners.
75
Section 5.07.
Cancellation.
75
Section 5.08.
Limitation on Transfer of Ownership Rights.
75
Section 5.09.
Assignment of Rights.
77
ARTICLE VI COVENANTS
78
Section 6.01.
Distributions.
78
Section 6.02.
Money for Distributions to be Held in Trust; Withholding.
78
Section 6.03.
Protection of Trust Estate.
79
Section 6.04.
Performance of Obligations.
80
Section 6.05.
Negative Covenants.
80
Section 6.06.
No Other Powers.
81
Section 6.07.
Limitation of Suits.
81
Section 6.08.
Unconditional Rights of Owners to Receive Distributions.
81
Section 6.09.
Rights and Remedies Cumulative.
82
Section 6.10.
Delay or Omission Not Waiver.
82
Section 6.11.
Control by Owners.
82
Section 6.12.
Indemnification by CHEC.
82
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES
84
Section 7.01.
Collection of Money.
84
Section 7.02.
Establishment of Accounts.
84
Section 7.03.
Flow of Funds.
84
Section 7.04.
Supplemental Interest Reserve Fund; WAC Excess.
88
Section 7.05.
Investment of Accounts.
90
Section 7.06.
Payment of Trust Expenses.
90
Section 7.07.
Eligible Investments.
91
Section 7.08.
Accounting and Directions by Trustee.
92
Section 7.09.
Reports by Trustee to Owners.
93
Section 7.10.
Reports by Trustee.
96
Section 7.11.
Allocation of Losses.
97
Section 7.12.
Cap Agreement Reserve Fund.
97
ARTICLE VIII SERVICING AND ADMINISTRATION OF HOME EQUITY
LOANS
100
Section 8.01.
Servicer and Sub-Servicers.
100
Section 8.02.
Collection of Certain Home Equity Loan Payments.
101
Section 8.03.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
101
Section 8.04.
Successor Sub-Servicers.
102
Section 8.05.
Liability of Servicer; Indemnification.
102
Section 8.06.
No Contractual Relationship Between Sub-Servicer,
Trustee or the Owners.
103
Section 8.07.
Assumption or Termination of Sub-Servicing Agreement by
Trustee.
103
Section 8.08.
Principal and Interest Account.
103
Section 8.09.
Delinquency Advances and Servicing Advances.
105
Section 8.10.
Compensating Interest; Repurchase of Home Equity Loans.
106
Section 8.11.
Maintenance of Insurance.
107
Section 8.12.
Due-on-Sale Clauses; Assumption and Substitution Agreements.
108
Section 8.13.
Realization Upon Defaulted Home Equity Loans; Workout of
Home Equity Loans.
109
Section 8.14.
Trustee to Cooperate; Release of Files.
110
Section 8.15.
Servicing Compensation.
111
Section 8.16.
Annual Statement as to Compliance.
111
Section 8.17.
Annual Independent Certified Public Accountants’
Reports.
112
Section 8.18.
Access to Certain Documentation and Information Regarding
the Home Equity Loans.
112
Section 8.19.
Assignment of Agreement.
112
Section 8.20.
Removal of Servicer; Retention of Servicer; Resignation of
Servicer.
113
Section 8.21.
Inspections; Errors and Omissions Insurance.
117
Section 8.22.
Additional Servicing Responsibilities for Second Mortgage
Loans.
117
Section 8.23.
The Group II Home Equity Loans.
118
Section 8.24.
Merger, Conversion, Consolidation or Succession to Business
of Servicer.
118
Section 8.25.
Notices of Material Events.
118
Section 8.26.
Indemnification by the Servicer.
119
Section 8.27.
Reports on Foreclosure and Abandonment of Properties.
119
Section 8.28.
Reports to the Securities and Exchange Commission.
120
Section 8.29.
Advance Facility.
123
ARTICLE IX TERMINATION OF TRUST
125
Section 9.01.
Termination of Trust.
125
Section 9.02.
Termination Upon Option of the Owner of the Class X-IO
Certificates.
125
Section 9.03.
Disposition of Proceeds.
126
ARTICLE X THE TRUSTEE
127
Section 10.01.
Certain Duties and Responsibilities.
127
Section 10.02.
Removal of Trustee for Cause.
129
Section 10.03.
Certain Rights of the Trustee.
130
Section 10.04.
Not Responsible for Recitals or Issuance of Certificates.
132
Section 10.05.
May Hold Certificates.
132
Section 10.06.
Money Held in Trust.
133
Section 10.07.
Compensation and Reimbursement.
133
Section 10.08.
Corporate Trustee Required; Eligibility.
133
Section 10.09.
Resignation and Removal; Appointment of Successor.
134
Section 10.10.
Acceptance of Appointment by Successor Trustee.
135
Section 10.11.
Merger, Conversion, Consolidation or Succession to Business of
the Trustee.
135
Section 10.12.
Reporting; Withholding.
136
Section 10.13.
Indemnification and Liability of the Trustee.
136
Section 10.14.
Appointment of Co-Trustee or Separate Trustee.
137
Section 10.15.
Appointment of Custodians.
138
ARTICLE XI MISCELLANEOUS
139
Section 11.01.
Compliance Certificates and Opinions.
139
Section 11.02.
Form of Documents Delivered to the Trustee.
139
Section 11.03.
Acts of Owners.
140
Section 11.04.
Notices, etc. to Trustee.
140
Section 11.05.
Notices and Reports to Owners; Waiver of Notices.
141
Section 11.06.
Rules by Trustee.
141
Section 11.07.
Successors and Assigns.
141
Section 11.08.
Severability.
142
Section 11.09.
Benefits of Agreement.
142
Section 11.10.
Legal Holidays.
142
Section 11.11.
Governing Law; Submission to Jurisdiction.
142
Section 11.12.
Counterparts.
143
Section 11.13.
Usury.
143
Section 11.14.
Amendment.
143
Section 11.15.
Paying Agent; Appointment and Acceptance of Duties.
144
Section 11.16.
REMIC Status.
145
Section 11.17.
Additional Limitation on Action and Imposition of Tax.
147
Section 11.18.
Appointment of Tax Matters Person.
147
Section 11.19.
Notices.
148
Section 11.20.
Rule 144A Information.
150
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
[RESERVED]
SCHEDULE I-D
[RESERVED]
SCHEDULE I-E
SELLER SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-F
CONDUIT SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-G
INVESTMENT INSTRUCTIONS TO TRUSTEE
EXHIBIT A-1
FORM OF CLASS AF-1 CERTIFICATE
EXHIBIT A-2
FORM OF CLASS AF-2 CERTIFICATE
EXHIBIT A-3
FORM OF CLASS AF-3 CERTIFICATE
EXHIBIT A-4
FORM OF CLASS AF-4 CERTIFICATE
EXHIBIT A-5
FORM OF CLASS AF-5 CERTIFICATE
EXHIBIT A-6
FORM OF CLASS AF-6 CERTIFICATE
EXHIBIT A-7
FORM OF CLASS AV-1 CERTIFICATE
EXHIBIT A-8
FORM OF CLASS AV-2 CERTIFICATE
EXHIBIT A-9
FORM OF CLASS AV-3 CERTIFICATE
EXHIBIT A-10
FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-11
FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-12
FORM OF CLASS M-3 CERTIFICATE
EXHIBIT A-13
FORM OF CLASS M-4 CERTIFICATE
EXHIBIT A-14
FORM OF CLASS M-5 CERTIFICATE
EXHIBIT A-15
FORM OF CLASS M-6 CERTIFICATE
EXHIBIT A-16
FORM OF CLASS M-7 CERTIFICATE
EXHIBIT A-17
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 E-3
FORM OF DELAYED DELIVERY CERTIFICATION
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 REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT O
FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER
WITH FORM 10-K
EXHIBIT P
FORM OF CERTIFICATION TO BE PROVIDED TO DEPOSITOR BY
THE TRUSTEE
EXHIBIT Q
FORM OF CERTIFICATION TO BE PROVIDED TO DEPOSITOR
AND TRUSTEE BY SERVICER
EXHIBIT R
CAP AGREEMENT AND NOVATION AGREEMENT
POOLING AND SERVICING AGREEMENT, relating to
CENTEX HOME EQUITY LOAN TRUST 2005-A, dated as of January 1, 2005
by and among CHEC FUNDING, LLC, a Delaware limited liability
company, in its capacity as the depositor (the "Depositor"), CENTEX
HOME EQUITY COMPANY, LLC, a Delaware limited liability company,
formerly Centex Credit Corporation, a Nevada corporation ("CHEC")
in its capacities as the seller (in such capacity, the "Seller")
and as the servicer (in such capacity, the "Servicer"), HARWOOD
STREET FUNDING II, LLC, a Delaware limited liability company (the
"Conduit Seller"; together with the Seller, the "Sellers") and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a New York banking
corporation, 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, JPMorgan Chase Bank, 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 bargains, sells, conveys, assigns and
transfers 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 Pool Net WAC": With respect to any
Distribution Date, the weighted average (based on the Loan Balances
of the Home Equity Loans in each Group as of the beginning of the
related Remittance Period) of the Group I Net WAC Cap and the Group
II Net WAC Cap. For this purpose, with respect to applying
this rate to a Group I Certificate, the adjustment in clause (ii)
of the definition of Group II Net WAC Cap shall not apply and with
respect to applying this rate to a Group II Certificate, the Group
I Net WAC Cap shall be multiplied by a fraction the numerator of
which is 30 and the denominator of which is the actual number of
days in the related Interest Period.
"Advance Facility": As defined in Section
8.29(a) hereof.
"Advancing Person": As defined in Section
8.29(a) hereof.
"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 Amounts 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.
"ARM Principal Distribution Amount": With
respect to any Distribution Date, the excess of (i) the Senior
Principal Distribution Amount for that Distribution Date over
(ii) the Group I Principal Distribution Amount for that
Distribution Date.
"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
on behalf of the obligors on Home Equity Loans in the related Home
Equity Loan Group 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 by the Seller or the Servicer on or prior to the related
Monthly Remittance Date in each case to the extent the amounts are
received by the Trustee on or prior to the Monthly Remittance
Date;
(c)
any Substitution Amounts relating to principal,
delivered by the Seller on the related Monthly Remittance Date in
connection with a substitution of a Home Equity Loan in the related
Home Equity Loan Group, in each case to the extent the amounts are
received by the Trustee on or prior to the Monthly Remittance
Date;
(d)
all Net Liquidation Proceeds and Recoveries
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 and Recoveries relate to principal) in each case to the
extent the amounts are received by the Trustee on or prior to the
Monthly Remittance Date; and
(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.
"Business Day": Any day other than a Saturday,
Sunday or a day on which commercial banking institutions in New
York, New York, Dallas, Texas, the city in which the Corporate
Trust Office is located or, with respect to the obligations of the
Custodian hereunder, the State of Texas or any other state where
the principal office of the Custodian is located, are authorized or
obligated by law or executive order to be closed.
"Cap Agreement": The interest rate cap agreement
entered into with the Cap Counterparty and attached hereto as
Exhibit R.
"Cap Agreement Proceeds": As to any Distribution
Date and the Cap Agreement, an amount equal to the lesser of
(1) the amount of any payment received by the Trustee on the
Cap Agreement for such date, and (2) the product of
(A) the excess, if any, of LIBOR (subject to a maximum rate of
7.65% per annum), determined as provided in the Cap Agreement, over
the Strike Rate for such Distribution Date, (B) the Scheduled
Notional Amount for such Distribution Date as indicated in the Cap
Agreement and (C) a fraction, the numerator of which is the
actual number of days elapsed from the previous Distribution Date
to but excluding the current Distribution Date (or, for the first
Distribution Date, the actual number of days elapsed from the
Startup Day to but excluding the first Distribution Date), and the
denominator of which is 360.
"Cap Agreement Reserve Fund": The Eligible
Account established pursuant to Section 7.02(a) hereof and
maintained as described in Section 7.12.
"Cap Counterparty": Credit Suisse First
Boston International.
"Carryover Certificate": The Group I
Certificates and the Variable Rate 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
"JPMorgan Chase Bank, National Association, as Trustee on behalf of
the Owners of the Centex Home Equity Loan Trust 2005-A, Centex Home
Equity Loan Asset-Backed Certificates." The Certificate
Account shall be an Eligible Account.
"Certificate Group" or "Group": The Group I
Certificates or the Group II Certificates, as the case may be.
"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 AF-l Certificates
|
-
|
$102,250,000
|
|
Class AF-2 Certificates
|
-
|
$16,390,000
|
|
Class AF-3 Certificates
|
-
|
$26,710,000
|
|
Class AF-4 Certificates
|
-
|
$32,930,000
|
|
Class AF-5 Certificates
|
-
|
$45,320,000
|
|
Class AF-6 Certificates
|
-
|
$24,850,000
|
|
Class AV-1 Certificates
|
-
|
$334,180,000
|
|
Class AV-2 Certificates
|
-
|
$154,520,000
|
|
Class AV-3 Certificates
|
-
|
$9,780,000
|
|
Class M-1 Certificates
|
-
|
$41,160,000
|
|
Class M-2 Certificates
|
-
|
$37,000,000
|
|
Class M-3 Certificates
|
-
|
$20,350,000
|
|
Class M-4 Certificates
|
-
|
$18,030,000
|
|
Class M-5 Certificates
|
-
|
$17,570,000
|
|
Class M-6 Certificates
|
-
|
$16,650,000
|
|
Class M-7 Certificates
|
-
|
$14,330,000
|
|
Class B Certificates
|
-
|
$12,970,000
|
As of any time of determination after the
Startup Day, the Certificate Principal Balance of a Class of
Offered Certificates shall be 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 and increased by any Recoveries 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 AF-1
Certificate Rate, the Class AF-2 Certificate Rate, the Class AF-3
Certificate Rate, the Class AF-4 Certificate Rate, the Class AF-5
Certificate Rate, the Class AF-6 Certificate Rate, the Class AV-1
Certificate Rate, the Class AV-2 Certificate Rate, the Class AV-3
Certificate Rate, the Class M-1 Certificate Rate, the Class M-2
Certificate Rate, the Class M-3 Certificate Rate, the Class M-4
Certificate Rate, the Class M-5 Certificate Rate, the Class M-6
Certificate Rate, the Class M-7 Certificate Rate or the Class B
Certificate Rate.
"CHEC": Centex Home Equity Company, LLC, a
Delaware limited liability company.
"Class": Any class of the Offered Certificates
or the Class X-IO Certificates or the Class R Certificates.
"Class AF-1 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-1 Certificate Rate": With respect to
any Distribution Date and the Class AF-1 Certificates, the lesser
of (A) 3.700% per annum (or 4.200% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-2 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-2 Certificate Rate": With respect to
any Distribution Date and the Class AF-2 Certificates, the lesser
of (A) 3.900% per annum (or 4.400% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-3 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-3 Certificate Rate": With respect to
any Distribution Date and the Class AF-3 Certificates, the lesser
of (A) 4.140% per annum (or 4.640% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-4 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-4 Certificate Rate": With respect to
any Distribution Date and the Class AF-4 Certificates, the lesser
of (A) 4.720% per annum (or 5.220% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-5 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-5 Certificate Rate": With respect to
any Distribution Date and the Class AF-5 Certificates, the lesser
of (A) 5.280% per annum (or 5.780% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-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 AF-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 AF-6 Certificate": Any one of the
Certificates designated on the face thereof as a Class AF-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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AF-6 Certificate Rate": With respect to
any Distribution Date and the Class AF-6 Certificates, the lesser
of (A) 4.690% per annum (or 5.190% per annum for each Interest
Period occurring after the Clean-Up Call Date) and (B) the
Group I Net WAC Cap for the Distribution Date.
"Class AF-6 Lockout Distribution Amount": For
any Distribution Date will be an amount equal to the product of
(1) the applicable Class AF-6 Lockout Percentage for that
Distribution Date, (2) the Class AF-6 Calculation Percentage
and (3) the Group I Principal Distribution Amount for that
Distribution Date. In no event shall the Class AF-6 Lockout
Distribution Amount exceed the outstanding Certificate Principal
Balance of the Class AF-6 Certificates or the Group I Principal
Distribution Amount for the Distribution Date.
"Class AF-6 Lockout Percentage": For each
Distribution Date will be as follows:
|
Distribution Date
|
Lockout Percentage
|
|
February 2005 through January 2008
|
0%
|
|
February 2008 through January 2010
|
45%
|
|
February 2010 through January 2011
|
80%
|
|
February 2011 through January 2012
|
100%
|
|
February 2012 and thereafter
|
300%
|
"Class AV-1 Certificate": Any one of the
Certificates designated on the face thereof as a Class AV-1
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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AV-1 Certificate Rate": With respect to
any Distribution Date and the Class AV-1 Certificates, the lesser
of (A) the sum of (1) LIBOR and (2) 0.120% per annum
(or 0.240% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group II Net WAC Cap for the
Distribution Date.
"Class AV-2 Certificate": Any one of the
Certificates designated on the face thereof as a Class AV-2
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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AV-2 Certificate Rate": With respect to
any Distribution Date and the Class AV-2 Certificates, the lesser
of (A) the sum of (1) LIBOR and (2) 0.200% per annum
(or 0.400% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group II Net WAC Cap for the
Distribution Date.
"Class AV-3 Certificate": Any one of the
Certificates designated on the face thereof as a Class AV-3
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
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class AV-3 Certificate Rate": With respect to
any Distribution Date and the Class AV-3 Certificates, the lesser
of (A) the sum of (1) LIBOR and (2) 0.340% per annum
(or 0.680% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group II Net WAC Cap for the
Distribution 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-17 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC 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) the sum of (1) LIBOR and (2) 1.550% per annum
(or 2.325% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class B Principal Distribution Amount": As
to any Distribution Date on or 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), (D) the Certificate Principal Balance
of the Class M-3 Certificates (after giving effect to the
distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Certificate Principal Balance
of the Class M-4 Certificates (after giving effect to the
distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount on
such Distribution Date), (G) the Certificate Principal Balance
of the Class M-6 Certificates (after giving effect to the
distribution of the Class M-6 Principal Distribution Amount on
such Distribution Date), (H) the Certificate Principal Balance
of the Class M-7 Certificates (after giving effect to the
distribution of the Class M-7 Principal Distribution Amount on
such Distribution Date) and (I) the Certificate Principal
Balance of the Class B Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 93.10% 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, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 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 Certificate Rate for such Class.
"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-10 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC 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) the sum of (1) LIBOR and (2) 0.480% per annum
(or 0.720% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC 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) 63.50% 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-11 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC 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) the sum of (1) LIBOR and (2) 0.500% per annum
(or 0.750% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC 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) 71.50% 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-3 Certificate": Any one of the
Certificates designated on the face thereof as a Class M-3
Certificate, substantially in the form annexed hereto as Exhibit
A-12 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class M-3 Certificate Rate": With respect to
any Distribution Date and the Class M-3 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.550% per annum
(or 0.825% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-3 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, Class M-1 and Class M-2
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), (C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to distribution of the Class M-2
Principal Distribution Amount for such Distribution Date) and
(D) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 75.90% 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-4 Certificate": Any one of the
Certificates designated on the face thereof as a Class M-4
Certificate, substantially in the form annexed hereto as Exhibit
A-13 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class M-4 Certificate Rate": With respect to
any Distribution Date and the Class M-4 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.800% per annum
(or 1.200% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-4 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, Class M-1, Class M-2 and
Class M-3 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), (C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to distribution of the Class M-2
Principal Distribution Amount for such Distribution Date),
(D) the Certificate Principal Balance of the Class M-3
Certificates (after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution Date) and
(E) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 79.80% 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-5 Certificate": Any one of the
Certificates designated on the face thereof as a Class M-5
Certificate, substantially in the form annexed hereto as Exhibit
A-14 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class M-5 Certificate Rate": With respect to
any Distribution Date and the Class M-5 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.830% per annum
(or 1.245% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-5 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, Class M-1, Class M-2,
Class M-3 and Class M-4 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), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after giving
effect to distribution of the Class M-2 Principal Distribution
Amount for such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after giving
effect to distribution of the Class M-3 Principal Distribution
Amount for such Distribution Date), (E) the Certificate
Principal Balance of the Class M-4 Certificates (after giving
effect to distribution of the Class M-4 Principal Distribution
Amount for such Distribution Date) and (F) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such Distribution Date over (2) the lesser of
(A) 83.60% 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-6 Certificate": Any one of the
Certificates designated on the face thereof as a Class M-6
Certificate, substantially in the form annexed hereto as Exhibit
A-15 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class M-6 Certificate Rate": With respect to
any Distribution Date and the Class M-6 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.930% per annum
(or 1.395% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-6 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, Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 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), (C) the
Certificate Principal Balance of the Class M-2 Certificates (after
giving effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates (after
giving effect to distribution of the Class M-3 Principal
Distribution Amount for such Distribution Date), (E) the
Certificate Principal Balance of the Class M-4 Certificates (after
giving effect to distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date), (F) the
Certificate Principal Balance at the Class M-5 Certificates (after
giving effect to distribution of the Class M-5 Principal
Distribution Amount for such Distribution Date), and (G) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (2) the
lesser of (A) 87.20% 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-7 Certificate": Any one of the
Certificates designated on the face thereof as a Class M-7
Certificate, substantially in the form annexed hereto as Exhibit
A-16 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a "regular interest" in the
Master REMIC created hereunder for purposes of the REMIC
Provisions.
"Class M-7 Certificate Rate": With respect to
any Distribution Date and the Class M-7 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 1.450% per annum
(or 2.175% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-7 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, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 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),
(C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to distribution of the Class M-2
Principal Distribution Amount for such Distribution Date),
(D) the Certificate Principal Balance of the Class M-3
Certificates (after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to distribution of the Class M-4
Principal Distribution Amount for such Distribution Date),
(F) the Certificate Principal Balance of the Class M-5
Certificates (after giving effect to distribution of the Class M-5
Principal Distribution Amount for such Distribution Date),
(G) the Certificate Principal Balance of the Class M-6
Certificates (after giving effect to distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and
(H) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 90.30% 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 Date, the aggregate amount of interest accrued during
the related Interest Period at the related Certificate Rate on the
Certificate Principal Balance of the Class of Offered
Certificates.
"Class Principal Carryover Shortfall": As to any
Class of Subordinate Certificates and any Distribution Date, the
excess, if any, of (i) the sum of (x) the amount of the
reduction in the Certificate Principal Balance of that Class of
Subordinate Certificates on such Distribution Date as a result of
the application of Applied Realized Loss Amounts and (y) the
amount of such reductions on prior Distribution Dates over
(ii) the sum of (x) the amount distributed in respect of the
Class Principal Carryover Shortfall to such Class of Subordinate
Certificates on prior Distribution Dates and (y) the amount of any
increases in the Certificate Principal Balance of that Class of
Subordinate Certificates on such Distribution Date and any prior
Distribution Dates as a result of the application of Recoveries to
such Class as provided in Section 7.11(b) hereof.
"Class Principal Distribution Amount": The
Senior Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4
Principal Distribution Amount, the Class M-5 Principal Distribution
Amount, the Class M-6 Principal Distribution Amount, the Class M-7
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 LT-R Interest, which is the
"residual interest" in the Subsidiary REMIC and (ii) an
interest designated as the R-1 Interest, which is the "residual
interest" in the Master REMIC. The Owner of the Class R
Certificate shall be entitled to separate such Certificate into its
component LT-R Interest and R-1 Interest 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 ownership of
an interest designated as a "regular interest" in the Master REMIC
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)(20) hereof and (ii) the amount described in
footnote (19) of Section 2.08(g) 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)(21) and (26).
"Clean-Up Call Date": The first Distribution
Date following the last day of the Remittance Period on which the
Pool Balance has declined to 10% or less of the Pool Balance 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 Schedule of Home Equity Loans": The
Schedule of Home Equity Loans attached as Schedule I-F hereto.
"Conduit Seller": Harwood Street Funding II,
LLC, a Delaware limited liability company.
"Conduit Servicer": CHEC in its capacity as
servicer with respect to the Conduit Warehousing Facility.
"Conduit Warehousing Facility": The Amended and
Restated Mortgage Loan Purchase and Servicing Agreement dated
November 26, 2003, among Harwood Street Funding II, LLC, CHEC and
Centex Corporation, as amended.
"Corporate Trust Office": The principal office
of the Trustee at 4 New York Plaza, 6th Floor, New York, New York
10004, Attention: Global Dept. Centex Home Equity Loan Trust 2005-A
(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.
"Cumulative Loss Trigger Event": With respect to
any Distribution Date and the Home Equity Loans, shall have
occurred if the fraction, expressed as a percentage, obtained by
dividing (x) the aggregate amount of cumulative Realized Losses
incurred on the Home Equity Loans from the Cut-Off Date through the
last day of the related Remittance Period by (y) the aggregate Loan
Balance of the Home Equity Loans as of the Cut-Off Date, exceeds
the applicable percentage described below with respect to such
Distribution Date:
|
Distribution Date
|
Loss Percentage
|
|
February 2008 to January 2009:
|
3.50% for the first month, plus an additional
1/12th of 2.25% for each month thereafter.
|
|
February 2009 to January 2010:
|
5.75% for the first month, plus an additional
1/12th of 1.50% for each month thereafter.
|
|
February 2010 to January 2011:
|
7.25% for the first month, plus an additional
1/12th of 1.00% for each month thereafter.
|
|
February 2011 and thereafter:
|
8.25%
|
"Custodial Agreement": The Custodial Agreement
dated as of January 1, 2005 between the Custodian, the Servicer and
the Trustee.
"Custodian": J.P. Morgan Trust Company, National
Association, as Custodian on behalf of the Trustee pursuant to the
Custodial Agreement and any successor Custodian.
"Cut-Off Date": The later of (i) the close of
business on December 31, 2004 and (ii) the date of origination with
respect to a Home Equity Loan, but in no event later than the
Startup Day.
"Delayed Delivery Home Equity Loans": The Home
Equity Loans for which all or a portion of a related File is not
delivered to the Trustee or the Custodian on behalf of the Trustee
on the Startup Day. The number of Delayed Delivery Home
Equity Loans shall not exceed 10% of the aggregate Loan Balance of
the Home Equity Loans as of the Cut-Off Date. To the extent
that CHEC shall be in possession of any Files with respect to any
Delayed Delivery Home Equity Loan, until delivery of such File to
the Trustee or the Custodian on behalf of the Trustee, as provided
in Section 3.05, CHEC shall hold such files as Servicer hereunder,
as agent and in trust for the Trustee.
"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 36.00% 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, 7
Hanover Square, New York, New York, 10004, and any successor
Depository.
"Designated Depository Institution": With
respect to the Principal and Interest Account, a trust account
maintained by the trust department of a federal or state chartered
depository institution, 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, "A2" by Moody’s 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.
"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).
"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 February 25, 2005.
"Due Date": With respect to any Home Equity
Loan, the date on which the Monthly Payment with respect to such
Home Equity Loan is required to be paid pursuant to the related
Note exclusive of any days of grace.
"Eligible Account": Either (A) a segregated
account or accounts maintained with an institution whose deposits
are insured by the FDIC, the unsecured and uncollateralized debt
obligations of which institution shall be rated "AA" or higher by
Standard & Poor’s and, in the case of any institution
other than JPMorgan Chase Bank, National Association, "Aa2" or
higher by Moody’s and, if rated by Fitch, "AA" or higher by
Fitch, (in the case of its long-term obligations), and in the
highest short term rating category by each of Standard &
Poor’s, Moody’s and, if rated by Fitch, Fitch (in the
case of its short-term obligations), and which is (i) a federal
savings and loan 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.
"ERISA": The Employee Retirement Income
Security Act of 1974, as amended.
"ERISA-Qualifying Underwriting": A best
efforts or firm commitment underwriting or private placement that
meets the requirements of an Underwriter’s Exemption.
"ERISA-Restricted Certificate": Any Class
X-IO and Class R Certificate and any Certificate with a rating
below the lowest applicable rating permitted under an
Underwriter’s Exemption.
"Excess Interest": As to any Distribution Date,
the amounts remaining after the application of payments pursuant to
clauses 1 through 11 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 that Distribution Date and (ii) the excess, if any, of (x) the
Overcollateralization Amount (assuming 100% of the Aggregate
Principal Amount is distributed on the Offered Certificates) over
(y) the Required Overcollateralization Amount.
"Exchange Act": The Securities Exchange Act of
1934, as amended.
"FDIC": The Federal Deposit Insurance
Corporation, a corporate instrumentality of the United States, or
any successor thereto.
"FHLMC": The Federal Home Loan Mortgage
Corporation, a corporate instrumentality of the United States
created pursuant to the Emergency Home Finance Act of 1970, as
amended, or any successor thereof.
"File": The documents delivered to the Custodian
on behalf of the Trustee pursuant to Section 3.05(b) hereof
pertaining to a particular Home Equity Loan and any additional
documents required to be added to the File pursuant to this
Agreement.
"Final Certification": As defined in Section
3.06(c) hereof.
"Final Determination": As defined in Section
9.03(a) hereof.
"Final Recovery Determination": With respect to
any defaulted Home Equity Loan or REO Property (other than a Home
Equity Loan purchased by the Seller, the Depositor or the
Servicer), a determination made by the Servicer that all recoveries
which the Servicer, in its reasonable business judgment, expects to
be finally recoverable in respect thereof have been so recovered or
that the Servicer believes in its reasonable business judgment the
cost of obtaining any additional recoveries therefrom would exceed
the amount of such recoveries. The Servicer shall maintain
records of each Final Recovery Determination.
"Final Scheduled Distribution Date": As set out
in Section 2.08(g) 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.
"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 Balance": With respect to any date and
Home Equity Loan Group, the aggregate of the Loan Balances of all
Home Equity Loans of the related Home Equity Loan Group as of such
date.
"Group": Any of Group I or Group II, as
applicable.
"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. With respect to the Offered
Certificates, the related Class or Classes of Group I Certificates,
as the context requires.
"Group I Certificates": The Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificates.
"Group I Monthly Remittance Amount": As of any
Monthly Remittance Date, (A) the sum, without duplication, of (i)
all interest received (including any related Delinquency Advances)
during the related Remittance Period with respect to the Home
Equity Loans in Group I (net of the Group I Servicing Fee), (ii)
all Compensating Interest paid by the Servicer on such Monthly
Remittance Date with respect to Group I, (iii) the portion of the
Loan Purchase Price amounts, and Substitution Amounts relating to
interest on the Home Equity Loans in Group I paid by CHEC or the
Servicer on or prior to such Monthly Remittance Date, (iv) the
interest portion of all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group I
during the related Remittance Period, (v) the principal actually
collected by the Servicer with respect to Home Equity Loans in
Group I during the related Remittance Period, (vi) the outstanding
principal balance of each Home Equity Loan in Group I that was
purchased from the Trustee on or prior to such Monthly Remittance
Date, to the extent such outstanding principal balance was actually
deposited in the Principal and Interest Account on or prior to such
Monthly Remittance Date, (vii) any Substitution Amounts relating to
principal delivered by CHEC in connection with a substitution of a
Home Equity Loan in Group I, to the extent such Substitution
Amounts were actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date, (viii) the
principal portion of all Net Liquidation Proceeds and Recoveries
actually collected by the Servicer with respect to Home Equity
Loans in Group I during the related Remittance Period and (ix) the
amount of investment losses required to be deposited pursuant to
Section 8.08(b); minus (B) any amounts netted from the foregoing or
withdrawn from the Principal and Interest Account by the Servicer
as permitted by this Agreement.
"Group I Net WAC Cap": With respect to any
Distribution Date, and for any Class of Group I Certificates, a
rate per annum equal to the weighted average of the Net Coupon
Rates on the Group I Home Equity Loans as of the beginning of the
related Remittance Period.
"Group I Net WAC Cap Carryover": With respect to
any Distribution Date, and for any Class of Group I Certificates,
the sum of (A) the excess of (1) the amount of interest that such
Class of Group I Certificates would otherwise be entitled to
receive on the Distribution Date had the Certificate Rate for such
Class been calculated at the Certificate Rate for such Class and
Distribution Date without regard to the Group I Net WAC Cap 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 such Class for all previous
Distribution Dates (including any interest accrued on that amount
at the related Certificate Rate without regard to the Group I Net
WAC Cap) not previously paid to such Class.
"Group I Parity Amount": With respect to any
Distribution Date, the greater of (i) zero and (ii) the excess, if
any, of (x) the aggregate Certificate Principal Balance of the
Group I Certificates immediately prior to that Distribution Date
over (y) the aggregate Loan Balance of the Group I Home Equity
Loans as of the last day of the related Remittance Period.
"Group I Principal Distribution Amount": With
respect to any Distribution Date, the lesser of (A) the greatest of
(1) the product of (x) the Senior Principal Distribution Amount for
that Distribution Date and (y) a fraction, the numerator of which
is the excess of (i) the aggregate Loan Balance of the Group I Home
Equity Loans as of the first day of the related Remittance Period,
over (ii) the aggregate Loan Balance of the Group I Home Equity
Loans as of the last day of the related Remittance Period, and the
denominator of which is the excess of (i) the aggregate Loan
Balance of the Home Equity Loans as of the first day of the related
Remittance Period, over (ii) the aggregate Loan Balance of the Home
Equity Loans as of the last day of the related Remittance Period,
and (2) the Group I Parity Amount and (3) the excess of (i) the
Senior Principal Distribution Amount for that Distribution Date
over (ii) the aggregate of the Certificate Principal Balances of
the Class AV-1, Class AV-2 and Class AV-3 Certificates immediately
prior to the applicable Distribution Date and (B) the aggregate
Certificate Principal Balance of the Group I Certificates
immediately prior to that Distribution Date.
"Group I REMIC Cap Carryover": With respect to
any Distribution Date, and for any Class of Group I Certificates,
the sum of (A) the excess of (1) the amount of interest that such
Class of Group I Certificates is entitled to receive on the
Distribution Date (or, if greater, would be entitled to receive on
the Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and Distribution
Date without regard to the Group I Net WAC Cap) over (2) the amount
of interest payable on the Master REMIC Regular Certificate with a
Class designation corresponding to such Class of Group I
Certificates at the respective certificate interest rate for such
Master REMIC Regular Certificate for the Distribution Date, as
provided in Section 2.08 hereof, and (B) the excess described in
clause (A) for such Class for all previous Distribution Dates
(including any interest accrued on that amount at the related
Certificate Rate without regard to the Group I Net WAC Cap) not
previously paid to such Class.
"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. With respect to the Offered
Certificates, the related Class or Classes of Group II
Certificates, as the context requires.
"Group II Adjusted Cap Carryover": With respect
to any Distribution Date and the Group II Certificates, an amount
equal to that Class’ pro rata share (based on the outstanding
Certificate Principal Balance) the product of (A) the amount, if
any, received under the Cap Agreement for such Distribution Date
and (B) a fraction, the numerator of which is the outstanding
Certificate Principal Balance of the Group II Certificates and the
denominator of which is the aggregate Loan Balance of the Group II
Home Equity Loans, in each case as of the first day of the related
Remittance Period.
"Group II Certificates": The Class AV-1, Class
AV-2 and Class AV-3 Certificates.
"Group II Monthly Remittance Amount": As of any
Monthly Remittance Date, (A) the sum, without duplication, of (i)
all interest received (including any related Delinquency Advances)
during the related Remittance Period with respect to the Home
Equity Loans in Group II (net of the Group II Servicing Fee), (ii)
all Compensating Interest paid by the Servicer on such Monthly
Remittance Date with respect to Group II, (iii) the portion of the
Loan Purchase Price amounts and Substitution Amounts relating to
interest on the Home Equity Loans in Group II paid by CHEC or the
Servicer on or prior to such Monthly Remittance Date, (iv) the
interest portion of all Net Liquidation Proceeds actually collected
by the Servicer with respect to the Home Equity Loans in Group II
during the related Remittance Period, (v) the principal actually
collected by the Servicer with respect to Home Equity Loans in
Group II during the related Remittance Period, (vi) the outstanding
principal balance of each Home Equity Loan in Group II that was
purchased from the Trustee on or prior to such Monthly Remittance
Date, to the extent such outstanding principal balance was actually
deposited in the Principal and Interest Account on or prior to such
Monthly Remittance Date, (vii) any Substitution Amounts relating to
principal delivered by CHEC in connection with a substitution of a
Home Equity Loan in Group II, to the extent such Substitution
Amounts were actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date, (viii) the
principal portion of all Net Liquidation Proceeds and Recoveries
actually collected by the Servicer with respect to Home Equity
Loans in Group II during the related Remittance Period and (ix) the
amount of investment losses required to be deposited pursuant to
Section 8.08(b); minus (B) any amounts netted from the foregoing or
withdrawn from the Principal and Interest Account by the Servicer
as permitted by this Agreement.
"Group II Net WAC Cap": With respect to any
Distribution Date, and for the Group II Certificates, the rate per
annum equal to the product of (i) 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 (ii) a fraction, the numerator
of which is 30 and the denominator of which is the actual number of
days in the related Interest Period.
"Group II Net WAC Cap Carryover": With respect
to any Distribution Date and the Group II Certificates, the sum of
(A) the excess of (1) the amount of interest the related Class of
Group II Certificates would otherwise be entitled to receive on the
Distribution Date had its Certificate Rate been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Group II Net WAC Cap over (2) the amount of interest
payable on such Class at the Certificate Rate for such Class for
the Distribution Date and (B) the excess described in clause (A)
for such Class for all previous Distribution Dates (including any
interest accrued thereon at the related Certificate Rate without
regard to the Group II Net WAC Cap) not previously paid to such
Class.
"Group II Principal Distribution Amount": With
respect to any Distribution Date, the lesser of (i) the ARM
Principal Distribution Amount for that Distribution Date and
(ii) the aggregate of the Certificate Principal Balances of
the Group II Certificates immediately prior to that Distribution
Date.
"Group II REMIC Cap Carryover": With respect to
any Distribution Date, and for any Class of Group II Certificates,
the sum of (A) the excess of (1) the amount of interest each such
Class of Group II Certificates is entitled to receive on the
Distribution Date (or, if greater, would be entitled to receive on
the Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and Distribution
Date without regard to the Group II Net WAC Cap) over (2) the
amount of interest payable on the Master REMIC Regular Certificate
with a Class designation corresponding to such Class of Group II
Certificate at the respective certificate interest rate for such
Master REMIC Regular Certificate for the Distribution Date, as
provided in Section 2.08 hereof, and (B) the excess described in
clause (A) for such Class for all previous Distribution Dates
(including any interest accrued thereon at the related Certificate
Rate without regard to the Group II Net WAC Cap) not previously
paid to such Class.
"Group Subordinate Amount": With respect to each
Group and any Distribution Date, is the excess of the aggregate
Loan Balance of the related Group as of the first day of the
related Remittance Period, over the aggregate Certificate Principal
Balance of the Senior Certificates of such Group immediately prior
to such Distribution Date.
"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 or Group, shall mean (A) in the case of
Group I, the related Class of Group I Certificates and (B) in the
case of Group II, the related Class of 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 Group I 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.
"Latest Possible Maturity Date": The date
determined as of the Cut-Off Date that is the first Distribution
Date following the third anniversary of the scheduled maturity of
the Home Equity Loan with the latest scheduled maturity.
"LIBOR": With respect to any Interest Period for
the Variable Rate 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 Variable Rate 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, (iii) all reimbursed Delinquency Advances
and Servicing Advances to the extent that reimbursement is not made
from the Mortgagor and (iv) any costs and damages incurred by the
Trust in connection with any violation by the Home Equity Loan of
any predatory or abusive lending law.
"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.
"Master REMIC": The segregated group of assets
consisting of the Subsidiary REMIC Regular Interests (as defined in
Section 2.08 hereof) and constituting a REMIC created
hereunder.
"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": Moody’s 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.
"Nonrecoverable Advance": With respect to any
Home Equity Loan for which a Final Recovery Determination has been
made, means 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.25 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
AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6,
Class AV-1, Class AV-2, Class AV-3, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class B
Certificates.
"Officer’s Certificate": A certificate
signed by any Authorized Officer of any Person delivering such
certificate and delivered to the Trustee.
"Operative Documents": Collectively, this
Agreement, the Certificates and the Custodial Agreement.
"Opinion of Counsel": A written opinion of
counsel acceptable, in form and substance, to the Trustee and
delivered to the Trustee and the Rating Agencies.
"Original Aggregate Loan Balance": The sum of
the Original Group I Loan Balance and the Original Group II Loan
Balance.
"Original Group I Loan Balance": The aggregate
Loan Balance of all the Home Equity Loans in Group I as of the
Cut-Off Date, which is $248,455,729.06.
"Original Group II Loan Balance": The aggregate
Loan Balance of all the Home Equity Loans in Group II as of the
Cut-Off Date, which is $676,552,905.92.
"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
any 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 that Distribution Date (after taking into
account the payment of the Principal Distribution Amount on that
Distribution Date).
"Owner" or "Certificateholder": The Person in
whose name a Certificate is registered in the Register.
"Paying Agent": Initially, the Trustee, and
thereafter, the Trustee or any other Person that meets the
eligibility standards for the Paying Agent specified in Section
11.15 hereof and is authorized by the Trustee and the Depositor to
make payments on the Certificates on behalf of the Trustee.
"Percentage Interest": With respect to any
Offered Certificates of any Class, a fraction, expressed as a
decimal, the numerator of which is the principal balance
represented by such Offered Certificate as of the Startup Day and
the denominator of which is the Certificate Principal Balance
represented by all the Offered Certificates of such Class as of the
Startup Day. With respect to the Class X-IO or Class R
Certificates, the portion of the Class evidenced thereby, expressed
as a percentage, as stated on the face of such Certificate, all of
which shall total 100% with respect to the related Class.
"Person": Any individual, corporation, limited
partnership, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Pool Balance": With respect to any date, the
aggregate of the Loan Balances of all Home Equity Loans as of such
date.
"Prepayment": Any payment of principal of a Home
Equity Loan which is received by the Servicer which is not a
Scheduled Principal Payment and which is not accompanied by an
amount of interest representing the full amount of scheduled
interest due on any Due Date in any month or months subsequent to
the month of prepayment, the portion of Substitution Amounts
representing principal, the portion of the Loan Purchase Price of
any Home Equity Loan purchased from the Trust pursuant to Section
3.04, 3.06(b) or 8.10(b) hereof representing principal and the
proceeds of any Insurance Policy which are to be applied as a
payment of principal on the related Home Equity Loan shall be
deemed to be Prepayments for all purposes of this Agreement.
"Preservation Expenses": Expenditures made by
the Servicer in connection with a foreclosed Home Equity Loan prior
to the liquidation thereof, including, without limitation,
expenditures for real estate property taxes, hazard insurance
premiums, property restoration or preservation.
"Principal and Interest Account": The principal
and interest account created by the Servicer pursuant to Section
8.08(a) hereof. The Principal and Interest Account shall be
an Eligible Account.
"Principal Distribution Amount": As to any
Distribution Date, the lesser of (a) the aggregate Certificate
Principal Balances of the Offered Certificates immediately
preceding such Distribution Date and (b) the sum of (i) the
Aggregate Principal Amount for such Distribution Date minus the
Excess Overcollateralization Amount, if any, for such Distribution
Date and (ii) the Subordination Increase Amount, if any, 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 January 6, 2005 constituting part of the Registration
Statement.
"Prospectus Supplement": The Centex Home Equity
Loan Trust 2005-A Prospectus Supplement dated January 6, 2005 to
the Prospectus.
"Qualified Liquidation": The meaning set forth
from time to time in the definition thereof at Section 860F(a)(4)
of the Code (or any successor statute thereto) and applicable to
the Trust.
"Qualified Mortgage": The meaning set forth from
time to time in the definition thereof at Section 860G(a)(3) of the
Code (or any successor statute thereto) and applicable to the
Trust.
"Qualified Replacement Mortgage": A Home Equity
Loan substituted for another pursuant to Section 3.04, 3.05(b) or
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, Moody’s,
Fitch and Standard & Poor’s.
"Realized Loss": As to any Liquidated Loan (or,
in the case of a Cram Down Loss, a Home Equity Loan that is not a
Liquidated Loan), the amount (not less than zero), if any, by which
(A) the sum of (x) the Loan Balance thereof as of the date of
liquidation, (y) the amount of accrued but unpaid interest thereon
and (z) the amount of any Cram Down Loss with respect thereto is in
excess of (B) the Net Liquidation Proceeds, if any, realized
thereon.
"Record Date": With respect to (i) any
Distribution Date and each Class of Group I 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 each Class of
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.
"Recoveries": With respect to any Liquidated
Loan, an amount received in respect of principal on that Liquidated
Loan, which amount has previously been allocated as an Applied
Realized Loss Amount to a Class or Classes of Subordinate
Certificates, net of reimbursable expenses due and owing to the
Servicer.
"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 333-105322), 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 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 any Distribution Date (1) prior to the Stepdown
Date, the product of (x) 3.45%, 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
3.45% and the Pool Balance as of the Cut-Off Date, and (y) the
product of 6.90% 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": Schedule I-A
hereto, Schedule I-B hereto, Schedule I-E hereto or Schedule I-F
hereto, as the context may require.
"Scheduled Notional Amount": As defined in the
Cap Agreement.
"Scheduled Principal Payment": As of any date of
calculation, with respect to a Home Equity Loan, the then stated
scheduled monthly installment of principal payable thereunder
which, if timely paid, would result in the full amortization of
principal over the term thereof (or, in the case of a "balloon"
Note, the term to the nominal maturity date for amortization
purposes, without regard to the actual maturity date), without
taking into account any Prepayment made on such Home Equity Loan
during the then-current Remittance Period.
"Second Mortgage Loan": A Home Equity Loan which
constitutes a second priority mortgage lien with respect to the
related Property.
"Securities Act": The Securities Act of 1933, as
amended.
"Seller": Centex Home Equity Company, LLC, a
Delaware limited liability company.
"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-E hereto.
"Sellers": The Seller and the Conduit
Seller.
"Senior Certificate": Any one of the Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class
AV-1, Class AV-2 or Class AV-3 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 on
that 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": With
respect 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 that 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 that
Distribution Date over (ii) the lesser of (x) the product
of 54.60% and the Pool Balance as of the last day of the related
Remittance Period and (y) the Pool Balance as of the last day
of the related Remittance Period minus the OC Floor.
"Servicer": Centex Home Equity Company, LLC, a
Delaware limited liability company, 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 60 or more days
Delinquent (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 Distribution Dates) the numerator of each of which is
equal to the sum of (without duplication) the aggregate Loan
Balance of 60-Day Delinquent Loans for such Remittance Period, and
the denominator of which is the Loan Balance of all of the Home
Equity Loans as of the end of such Remittance Period.
"Standard & Poor’s": Standard &
Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or any successor thereto.
"Startup Day": January 27, 2005.
"Stepdown Date": The earlier to occur of (1) the
Distribution Date after which the aggregate Certificate Principal
Balance of the Senior Certificates is reduced to zero, and (2) the
later to occur of (A) the Distribution Date in February 2008, and
(B) 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 45.40%.
"Subordinate Adjusted Cap Carryover": With
respect to any Distribution Date and Class of the Subordinate
Certificates, an amount equal to such Class’ pro rata share
(based on outstanding Certificate Principal Balance) of the product
of (A) the amount, if any, received under the Cap Agreement and (B)
a fraction, the numerator of which is the Group Subordinate Amount
for Group II and the denominator of which is the aggregate Loan
Balance of the Group II Home Equity Loans, in each case, as of the
first day of the related Remittance Period.
"Subordinate Certificates": Any of the Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7 or Class B Certificates.
"Subordinate Net WAC Cap": With respect to any
Distribution Date and for each Class of Subordinate Certificates,
the per annum rate equal to the weighted average of (i) the product
of (a) the Group I Net WAC Cap 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 and (ii) the Group II Net WAC
Cap, weighted on the basis of the related Group Subordinate Amount
for such Distribution Date.
"Subordinate Net WAC Cap Carryover": With
respect to any Distribution Date, and for any Class of Subordinate
Certificates, the sum of (A) the excess of (1) the amount of
interest that such Class of Subordinate Certificates, as
applicable, would otherwise be entitled to receive on the
Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and Distribution
Date without regard to the Subordinate Net WAC Cap 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 such Class for all previous
Distribution Dates (including any interest accrued on that amount
at the related Certificate Rate without regard to the Subordinate
Net WAC Cap) not previously paid to such Class.
"Subordinate REMIC Cap Carryover": With respect
to any Distribution Date, and for any Class of Subordinate
Certificates, the sum of (A) the excess of (1) the amount of
interest such Class of Subordinate Certificates is entitled to
receive on the Distribution Date (or, if greater, would be entitled
to receive on the Distribution Date had the Certificate Rate for
such Class been calculated at the Certificate Rate for such Class
and Distribution Date without regard to the Subordinate Net WAC
Cap) over (2) the amount of interest payable on the Master REMIC
Regular Certificate with a Class designation corresponding to such
Class of Subordinate Certificates at the respective certificate
interest rate for such Master REMIC Regular Certificate for the
Distribution Date, as provided in Section 2.08 hereof, and (B) the
excess described in clause (A) for such Class for all previous
Distribution Dates (including any interest accrued thereon at the
related Certificate Rate without regard to the Subordinate Net WAC
Cap) not previously paid to such Class.
"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 any
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.
"Subsidiary REMIC": The segregated group of
assets consisting of all of the assets of the Trust Estate other
than the Supplemental Interest Reserve Fund and the REMIC interests
issued by The Subsidiary REMIC and the Master REMIC as defined in
Section 2.08 hereof, and constituting a REMIC created
hereunder.
"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, an amount
equal to 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 (without
duplication) the aggregate amount of (1) all unreimbursed
Delinquency Advances and unreimbursed Servicing Advances made,
(2) all accrued and unpaid interest, and (3) any costs
and damages incurred by the Trust in connection with any violation
of any predatory or abusive lending law, with respect to such Home
Equity Loan.
"Supplemental Interest Reserve Fund": The
Supplemental Interest Reserve Fund established pursuant to Section
7.02(a) 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 greater of (A) the sum of
(x) the aggregate outstanding Loan Balance of the Home Equity
Loans (other than those described in clause (y) below),
including accrued interest thereon, as of such date and (y) in
the case of any REO Property and Home Equity Loans with respect to
which foreclosure proceedings have been initiated or are otherwise
120 days or more Delinquent as of such date, the fair market value
of such REO Property and Home Equity Loans (disregarding accrued
interest thereon) and (B) the sum of (x) the
aggregate outstanding Certificate Principal Balance of the Offered
Certificates (other than any Class Principal Carryover Shortfalls),
(y) all accrued and unpaid interest on the Offered
Certificates (other than any Group I Net WAC Cap Carryover, Group
II Net WAC Cap Carryover and Subordinate Net WAC Cap
Carryover) 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 for both Groups in the
aggregate during the term of the Trust).
"Trigger Event": The existence of a Delinquency
Event or Cumulative Loss Trigger Event.
"Trust": Centex Home Equity Loan Trust 2005-A,
the trust created under this Agreement which shall be comprised of
two sub-trusts: (i) one for Group I and any Trust assets allocable
to such Group I and (ii) one for Group II and any Trust assets
allocable to such Group II.
"Trust Estate": (a) The Home Equity Loan Assets,
(b) such amounts as may be held by the Trustee in the Certificate
Account together with investment earnings on such amounts, (c) such
amounts as may be held by the Trustee in the Supplemental Interest
Reserve Fund together with investment earnings on such amounts, (d)
any Cap Agreement Proceeds received by the Trustee on the Cap
Agreement and such amounts as may be held by the Trustee in the Cap
Agreement Reserve Fund, excluding any investment earnings on such
amounts and (e) 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": JPMorgan Chase Bank, National
Association, a New York banking corporation, 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 $500.00 for
Group I and $500.00 for Group II, or if there is only one Home
Equity Loan Group, $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 A.1 or B.1 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": Credit Suisse First Boston
LLC, Banc of America Securities LLC, Citigroup Global Markets Inc.
and Greenwich Capital Markets, Inc.
"Underwriter’s Exemption":
Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), as amended (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of
Labor.
"Variable Rate Certificates": Any of the Class
AV-1 Certificates, Class AV-2 Certificates, Class AV-3
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates,
Class M-6 Certificates, Class M-7 Certificates and Class B
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 LT-R and R-1 Interests are issued, 1/2 to each such Class
of Interests (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 Group I
REMIC Cap Carryover allocable to each of the Group I Certificates,
(b) the Group II REMIC Cap Carryover allocable to each of the
Group II Certificates, and (c) the Subordinate REMIC Cap
Carryover allocable to each of the Subordinate Certificates.
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 2005-A" and which shall contain
two subtrusts.
Section 2.02.
Office.
The office of the Trust shall be in care of the
Trustee, addressed to JPMorgan Chase Bank, 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 (including the Cap Agreement) 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)
As provided herein, the Trustee shall elect that
the Trust Estate (exclusive of the assets held in the Supplemental
Interest Reserve Fund and the Cap Agreement Reserve Fund) be
treated for federal income tax purposes as comprising two real
estate mortgage investment conduits (each a "REMIC" or, in the
alternative, the "Subsidiary REMIC" and the "Master REMIC").
Each Certificate, other than the Class R Certificate,
represents ownership of a regular interest in the Master REMIC for
purposes of the REMIC Provisions. Each Certificate, other
than the Class X-IO Certificates, also represents rights with
respect to payments to be made from the Supplemental Interest
Reserve Fund as further described in Section 7.04 of this
Agreement. The Class X-IO Certificates also evidence
ownership of the assets held from time to time in the Supplemental
Interest Reserve Fund, as further described in Section 7.04 hereof.
The Class R Certificate represents ownership of the sole
class of residual interest in each of the Subsidiary REMIC, and the
Master REMIC for purposes of the REMIC Provisions.
(b)
The Master REMIC shall hold as its assets the
several classes of uncertificated Subsidiary REMIC Interests, other
than the LT-R Interest, and each such Subsidiary REMIC Interest
(other than the LT-R Interest) is hereby designated as a regular
interest in the Subsidiary REMIC for purposes of the REMIC
Provisions. The Subsidiary REMIC shall hold as its assets the
Home Equity Loans and all collections and accounts related thereto,
other than the Supplemental Interest Reserve Fund and the Cap
Agreement Reserve Fund.
(c)
For purposes of the REMIC Provisions, the latest
possible maturity date for each regular interest in each REMIC
created hereby is the Latest Possible Maturity Date.
(d)
[Reserved].
(e)
[Reserved].
(f)
Subsidiary REMIC. The following table sets
forth (or describes) the class designation, interest rate, and
initial principal balance for each Subsidiary REMIC Interest (each
such Interest other than the LT-R Interest, a "Subsidiary REMIC
Regular Interest"):
|
Interest
Designation
|
Interest Rate
|
Initial
Principal Balance
|
Corresponding Class
of Master REMIC
Certificates
|
|
LT-A1(1)
|
(2)
|
(6)
|
Class AF-1
|
|
LT-A2(1)
|
(2)
|
(6)
|
Class AF-2
|
|
LT-A3(1)
|
(2)
|
(6)
|
Class AF-3
|
|
LT-A4(1)
|
(2)
|
(6)
|
Class AF-4
|
|
LT-A5(1)
|
(2)
|
(6)
|
Class AF-5
|
|
LT-A6(1)
|
(2)
|
(6)
|
Class AF-6
|
|
LT-AV-1(1)
|
(2)
|
(6)
|
Class AV-1
|
|
LT-AV-2(1)
|
(2)
|
(6)
|
Class AV-2
|
|
LT-AV-3(1)
|
(2)
|
(6)
|
Class AV-3
|
|
LT-M-1(1)
|
(2)
|
(6)
|
Class M-1
|
|
LT-M-2(1)
|
(2)
|
(6)
|
Class M-2
|
|
LT-M-3(1)
|
(2)
|
(6)
|
Class M-3
|
|
LT-M-4(1)
|
(2)
|
(6)
|
Class M-4
|
|
LT-M-5(1)
|
(2)
|
(6)
|
Class M-5
|
|
LT-M-6(1)
|
(2)
|
(6)
|
Class M-6
|
|
LT-M-7(1)
|
(2)
|
(6)
|
Class M-7
|
|
LT-B(1)
|
(2)
|
(6)
|
Class B
|
|
LT-Grp IA
|
(3)
|
(7)
|
Not Applicable
|
|
LT-Grp IB
|
(3)
|
(7)
|
Not Applicable
|
|
LT-Grp IIA
|
(4)
|
(8)
|
Not Applicable
|
|
LT-Grp IIB
|
(4)
|
(8)
|
Not Applicable
|
|
LT-Excess
|
(2)
|
(10)
|
Not Applicable
|
|
LT-R
|
(12)
|
(11)
|
Not Applicable
|
(1)
The Subsidiary REMIC Accretion Directed
Interests.
(2)
The interest rate on this Interest shall be a
rate equal to the Adjusted Pool Net WAC, which rate can be
calculated as a rate equal to the weighted average of the interest
rates on the Home Equity Loans.
(3)
The interest rate on this Interest shall be a
rate equal to the Group I Net WAC Cap, which rate can be calculated
as a rate equal to the weighted average of the interest rates on
the Group I Home Equity Loans.
(4)
The interest rate on this Interest shall be a
rate equal to the Group II Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the interest
rates on the Group II Home Equity Loans.
(5)
[Reserved].
(6)
This Interest shall have an initial principal
balance equal to 25% of the initial principal balance of its
corresponding class in the Master REMIC. Principal payments
and Realized Losses from Group I Home Equity Loans shall be paid
(or allocated) to maintain the 25% ratio for the Subsidiary REMIC
Interests corresponding to the Master REMIC Classes.
(7)
This Interest shall have an initial principal
balance equal to 25% of the aggregate of the principal balances of
each Group I Home Equity Loan as of the Cut-Off Date.
(8)
This Interest shall have an initial principal
balance equal to 25% of the aggregate of the principal balances of
each Group II Home Equity Loan as of the Cut-Off Date.
(9)
[Reserved].
(10)
This Interest shall have an initial principal
balance equal to (i) the initial principal balances of the Home
Equity Loans as of the Cut-Off Date less (ii) an amount equal to
the sum of the initial principal balances of the Subsidiary REMIC
Interests, other than the LT-Excess Interest.
(11)
The LT-R Interest shall have no principal
balance and no interest rate and shall be entitled to only those
distributable assets, if any, remaining in the Subsidiary REMIC on
each Distribution Date after all amounts required to be distributed
to the remaining Subsidiary REMIC Interests and applicable Trust
expenses have been paid. It is expected that there will not
be any distributions on the LT-R Interest.
On each Distribution Date, all principal
payments received (or advances) and any Realized Losses with
respect to the Home Equity Loans (plus accrued interest on the
LT-Excess Interest to the extent necessary) shall be allocated and
applied in reduction of the principal balances of the Subsidiary
REMIC Interests such that following such allocation and
distribution:
(i)
the principal balance of each of the Subsidiary
REMIC Accretion Directed Interests equal 25% of the principal
balance of its Corresponding Class of Master REMIC
Certificates;
(ii)
the principal balance of each of the LT-Grp IA
and LT-Grp IB Interests equals 25% of the aggregate of the
principal balances of the Group I Home Equity Loans as of the
beginning of the Remittance Period related to the next Distribution
Date;
(iii)
the principal balance of each of the LT-Grp IIA
and LT-Grp IIB Interests equals 25% of the aggregate of the
principal balances of the Group II Home Equity Loans as of the
beginning of the Remittance Period related to the next Distribution
Date; and
(iv)
the principal balance of the LT-Excess Interest
equals the excess of the aggregate of the principal balances of the
Home Equity Loans as of the opening of business on the first
Business Day of the Remittance Period related to the next
Distribution Date over the aggregate of the principal balances of
the remaining Subsidiary REMIC Interests as reduced on such
Distribution Date.
(g)
The Master REMIC. The Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AV-1,
Class AV-2, Class AV-3, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class B, and Class X-IO
Certificates are hereby designated as "regular interests" with
respect to the Master REMIC (the "Master REMIC Regular
Certificates") and the R-1 Interest is hereby designated as the
single "residual interest" with respect to the Master REMIC.
The beneficial ownership interest in the Master
REMIC created hereunder shall be evidenced by the interests having
the following characteristics and terms:
|
Class Designation
|
Initial Certificate
Principal Balance
|
Certificate Interest Rate
|
Final Scheduled
Distribution Date
|
|
Class AF-1
|
$102,250,000
|
(1)
|
June 25, 2022
|
|
Class AF-2
|
$16,390,000
|
(2)
|
June 25, 2024
|
|
Class AF-3
|
$26,710,000
|
(3)
|
March 25, 2028
|
|
Class AF-4
|
$32,930,000
|
(4)
|
October 25, 2031
|
|
Class AF-5
|
$45,320,000
|
(5)
|
January 25, 2035
|
|
Class AF-6
|
$24,850,000
|
(6)
|
January 25, 2035
|
|
Class AV-1
|
$334,180,000
|
(7)
|
August 25, 2027
|
|
Class AV-2
|
$154,520,000
|
(8)
|
July 25, 2034
|
|
Class AV-3
|
$9,780,000
|
(9)
|
January 25, 2035
|
|
Class M-1
|
$41,160,000
|
(10)
|
January 25, 2035
|
|
Class M-2
|
$37,000,000
|
(11)
|
January 25, 2035
|
|
Class M-3
|
$20,350,000
|
(12)
|
January 25, 2035
|
|
Class M-4
|
$18,030,000
|
(13)
|
January 25, 2035
|
|
Class M-5
|
$17,570,000
|
(14)
|
January 25, 2035
|
|
Class M-6
|
$16,650,000
|
(15)
|
January 25, 2035
|
|
Class M-7
|
$14,330,000
|
(16)
|
January 25, 2035
|
|
Class B
|
$12,970,000
|
(17)
|
January 25, 2035
|
|
Class X-IO
|
(18)
|
(19)
|
|
|
Class R-1
|
(20)
|
(20)
|
|
(1)
For each Interest Period, this Class shall bear
interest at the least of (i) 3.700% per annum (or 4.200% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the
Adjusted Pool Net WAC.
(2)
For each Interest Period, this Class shall bear
interest at the least of (i) 3.900% per annum (or 4.400% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the
Adjusted Pool Net WAC.
(3)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.140 % per annum (or 4.640% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the
Adjusted Pool Net WAC.
(4)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.720 % per annum (or 5.220% per
annum for each Interest Period after the Clean-up Call Date),
(ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(5)
For each Interest Period, this Class shall bear
interest at the least of (i) 5.280 % per annum (or 5.780% per
annum for each Interest Period after the Clean-up Call Date),
(ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(6)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.690% per annum (or 5.190% per
annum for each Interest Period occurring after Clean-Up Call Date),
(ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(7)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.120% per annum (or
LIBOR plus 0.240% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group II Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(8)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.200% per annum (or
LIBOR plus 0.400% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group II Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(9)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.340% per annum (or
LIBOR plus 0.680% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group II Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(10)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.480% per annum (or
LIBOR plus 0.720% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(11)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.500% per annum (or
LIBOR plus 0.750% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(12)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.550% per annum (or
LIBOR plus 0.825% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(13)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.800% per annum (or
LIBOR plus 1.200% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(14)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.830% per annum (or
LIBOR plus 1.245% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(15)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.930% (or LIBOR plus
1.395% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (ii) the Adjusted Pool Net WAC.
(16)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 1.450% (or LIBOR plus
2.175% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (ii) the Adjusted Pool Net WAC.
(17)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 1.550% (or LIBOR plus
2.325% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (ii) the Adjusted Pool Net WAC.
(18)
The Class X-IO Certificate shall have an initial
principal balance equal to the excess of the principal balance of
the Home Equity Loans as of the Cut-Off Date over the sum of the
initial principal balances of the Certificates, other than the
Class X-IO and Class R Certificates. It shall not be entitled
to interest on its principal balance. The Class X-IO
Certificate shall also have an initial notional balance equal to
the aggregate of the principal balance of each Home Equity Loan as
of the Cut-Off Date and such notional balance for each Distribution
Date shall equal the aggregate principal balance of the Home Equity
Loans as of the beginning of the related Remittance Period.
(19)
The Class X-IO Certificate shall be entitled to
receive interest on its notional balance at a per annum rate equal
to the excess of (i) the weighted average of the interest
rates of the Subsidiary REMIC Accretion Directed Interests, and the
LT-Grp IA, LT-Grp IB, LT-Grp IIA, LT-Grp IIB, LT-Excess Interests,
weighted on the principal balance of each such Interest, over
(ii) the product of (x) two and (y) the weighted
average of the interest rates of the Subsidiary REMIC Accretion
Directed Interests and LT-Excess Interest, weighted on the
principal balance of each such Interest, treating for purposes of
this clause (y) the interest rate of the LT-Excess Interest as
capped at zero and the interest rate of each of the remaining of
such interests as capped at the interest rate of its corresponding
class in the Master REMIC. In addition, the Class X-IO
Certificates shall be entitled to an amount, as principal, equal to
the amount that the Original Aggregate Loan Balance exceeds the
aggregate Certificate Principal Balance of the Offered
Certificates, as of the Startup Date.
(20)
The Class R Certificates represent ownership of
the R-1 Interest and the LT-R Interest. The Class R
Certificates do not have either a principal balance or an interest
rate.
(h)
The foregoing REMIC structure is intended to
cause all of the cash from the Home Equity Loans to flow through to
the Master REMIC as cash flow on a REMIC regular interest, without
creating any shortfall—actual or potential (other than for
credit losses) to any REMIC regular interest. To the extent
that the structure is believed to diverge from such intention the
Trustee shall resolve ambiguities to accomplish such result and
shall to the extent necessary rectify any drafting errors or seek
clarification to the structure without Certificateholder approval
(but with guidance of counsel) to accomplish such intention.
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-1(b)(5)(ii), or any successor regulation
thereto with respect to each REMIC created hereunder. Such
information will be provided in the manner described in Treasury
Regulation Section 1.860E-2(a)(5), or any successor regulation
thereto.
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01.
Representations and Warranties of the
Depositor.
The Depositor hereby represents, warrants and
covenants to the Trustee that as of the Startup Day:
(a)
The Depositor is a limited liability company
duly formed and validly existing under the laws governing its
creation and existence, is not in violation of the laws of any
state in which any Property or the Depositor is located or doing
business which violation would materially and adversely affect the
condition (financial or other) or the operations of the Depositor
or its properties or the ability of the Trust to collect amounts
due on any Home Equity Loan and is in good standing in each
jurisdiction in which the nature of its business or the properties
owned or leased by it make such qualification necessary. The
Depositor has all requisite limited liability company power and
authority to own and operate its properties, to carry out its
business as presently conducted and as proposed to be conducted and
to enter into and discharge its obligations under this Agreement
and the other Operative Documents to which it is a party.
(b)
The execution and delivery of this Agreement and
the other Operative Documents to which it is a party by the
Depositor and its performance and compliance with the terms of this
Agreement and the other Operative Documents to which it is a party
have been duly authorized by all necessary limited liability
company action on the part of the Depositor and will not violate
the Depositor’s certificate of formation or amended and
restated limited liability company agreement or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which the
Depositor is a party or by which the Depositor is bound or violate
any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction
over the Depositor or any of its properties.
(c)
This Agreement and the other Operative Documents
to which the Depositor is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto,
each constitutes a valid, legal and binding obligation of the
Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or
at law).
(d)
The Depositor is not in default with respect to
any order or decree of any court or any order, regulation or demand
of any federal, state, municipal or governmental agency, which
default could materially and adversely affect the condition
(financial or other) or operations of the Depositor or its
properties or the consequences of which could materially and
adversely affect its performance hereunder and under the other
Operative Documents to which the Depositor is a party.
(e)
No litigation, proceeding or investigation is
pending with respect to which the Depositor has received service of
process or, to the best of the Depositor’s knowledge,
threatened against the Depositor which litigation, proceeding or
investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely affect
the condition (financial or otherwise) or operations of the
Depositor or its properties or might have consequences that would
materially and adversely affect the validity or enforceability of
the Home Equity Loans or the Depositor’s performance
hereunder and under the other Operative Documents to which the
Depositor is a party.
(f)
The statements contained in the Registration
Statement which describe the Depositor or matters or activities for
which the Depositor is responsible in accordance with the Operative
Documents or which are attributed to the Depositor therein are true
and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact
with respect to the Depositor or omit to state a material fact
required to be stated therein or necessary in order to make the
statements contained therein with respect to the Depositor not
misleading.
(g)
Immediately prior to the sale and assignment by
the Depositor to the Trustee on behalf of the Trust of each Home
Equity Loan, the Depositor had good title to each Home Equity Loan
(insofar as such title was conveyed to it by the Sellers) subject
to no prior lien, claim, participation interest, mortgage, security
interest, pledge, charge or other encumbrance or other interest of
any nature (other than liens which will be simultaneously
released).
(h)
As of the Startup Day, the Depositor has
transferred all right, title and interest in the Home Equity Loans
to the Trustee on behalf of the Trust.
(i)
The Depositor has not transferred the Home
Equity Loans to the Trustee on behalf of the Trust with any intent
to hinder, delay or defraud any of its creditors.
(j)
All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits, authorizations,
rights and licenses required to be taken, given or obtained, as the
case may be, by or from any federal, state or other governmental
authority or agency (other than any such actions, approvals, etc.
under any state securities laws, real estate syndication or "Blue
Sky" statutes, as to which the Depositor makes no such
representation or warranty), that are necessary or advisable in
connection with the purchase and sale of the Certificates and the
execution and delivery by the Depositor of the Operative Documents
to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of
the transactions contemplated by this Agreement and the other
Operative Documents on the part of the Depositor and the
performance by the Depositor of its obligations under this
Agreement and such of the other Operative Documents to which it is
a party.
Section 3.02.
Representations and Warranties of the
Servicer.
The Servicer hereby represents, warrants and
covenants to the Depositor, the Trustee and the Owners that as of
the Startup Day:
(a)
The Servicer is a limited liability company duly
formed and validly existing under the laws governing its creation
and existence, is in compliance with the laws of each state in
which any Property is located to the extent necessary to enable it
to perform its obligations hereunder and is in good standing in
each jurisdiction in which the nature of its business or the
properties owned or leased by it make such qualification necessary.
The Servicer has all requisite limited liability company
power and authority to own and operate its properties, to carry out
its business as presently conducted and as proposed to be conducted
and to enter into and discharge its obligations under this
Agreement and the other Operative Documents to which the Servicer
is a party.
(b)
The execution and delivery of this Agreement and
any other Operative Document to which it is a party by the Servicer
and its performance and compliance with the terms hereof and
thereof have been duly authorized by all necessary limited
liability company action on the part of the Servicer and will not
violate the Servicer’s certificate of formation or limited
liability company agreement or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Servicer is a party or
by which the Servicer is bound or violate any statute or any order,
rule or regulation of any court, governmental agency or body or
other tribunal having jurisdiction over the Servicer or any of its
properties.
(c)
This Agreement and the other Operative Documents
to which the Servicer is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto,
each constitutes a valid, legal and binding obligation of the
Servicer, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or
at law).
(d)
The Servicer is not in default with respect to
any order or decree of any court or any order, regulation or demand
of any federal, state, municipal or governmental agency, which
default could materially and adversely affect the condition
(financial or otherwise) or operations of the Servicer or its
properties or the consequences of which could materially and
adversely affect its performance hereunder or under the other
Operative Documents to which the Servicer is a party.
(e)
No litigation, proceeding or investigation is
pending with respect to which the Servicer has received service of
process or, to the best of the Servicer’s knowledge,
threatened against the Servicer which litigation, proceeding or
investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely affect
the condition (financial or otherwise) or operations of the
Servicer or its properties or might have consequences that would
materially and adversely affect the validity or the enforceability
of the Home Equity Loans or the Servicer’s performance
hereunder and under the other Operative Documents to which the
Servicer is a party.
(f)
The statements contained in the Registration
Statement which describe the Servicer or matters or activities for
which the Servicer is responsible in accordance with the Operative
Documents or which are attributed to the Servicer therein are true
and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact
with respect to the Servicer or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein with respect to the Servicer not misleading.
(g)
The Servicing Fee is a "current (normal)
servicing fee rate" as that term is used in Statement of Financial
Accounting Standards No. 65 issued by the Financial Accounting
Standards Board. Neither the Servicer nor any Affiliate
thereof will report on any financial statements any part of the
Servicing Fee as an adjustment to the sales price of the Home
Equity Loans.
(h)
All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits, authorizations,
rights and licenses required to be taken, given or obtained, as the
case may be, by or from any federal, state or other governmental
authority or agency (other than any such actions, approvals, etc.
under any state securities laws, real estate syndication or "Blue
Sky" statutes, as to which the Servicer makes no such
representation or warranty), that are necessary or advisable in
connection with the execution and delivery by the Servicer of the
Operative Documents to which it is a party, have been duly taken,
given or obtained, as the case may be, are in full force and effect
on the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either the time
within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement and
the other Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this Agreement
and such of the other Operative Documents to which it is a party.
(i)
The collection practices used by the Servicer
with respect to the Home Equity Loans have been, in all material
respects, legal, proper, prudent and customary in the home equity
mortgage servicing business.
(j)
The transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
(k)
The Servicer is not in default under any
agreement involving financial obligations or on any outstanding
obligation, in any such case which could materially adversely
impact the financial condition or operations of the Servicer or
adversely impact the Servicer’s performance of its
obligations under the Operative Documents.
(l)
There are no Sub-Servicers as of the Startup
Day.
It is understood and agreed that the
representations and warranties set forth in this Section 3.02 shall
survive delivery of the Home Equity Loans to the Trustee.
Upon discovery by any of the Depositor, the
Seller, the Servicer, the Custodian, any Sub-Servicer, any Owner or
the Trustee (each, for purposes of this paragraph, a party) of a
breach of any of the representations and warranties set forth in
this Section 3.02 which materially and adversely affects the
interests of the Owners, the party discovering such breach shall
give prompt written notice to the other parties. As promptly
as practicable, but in any event within 60 days of its discovery or
its receipt of notice of breach, the Servicer shall cure such
breach in all material respects.
Section 3.03.
Representations and Warranties of the
Sellers.
Each of the Seller and the Conduit 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 and the Conduit
Seller, that each is a limited liability company, duly formed and
validly existing under the laws governing its creation and
existence, neither the Seller nor the Conduit 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 limited liability company power and authority to
own and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted and to enter
into and discharge its obligations under this Agreement and the
other Operative Documents to which it is a party.
(b)
The execution and delivery of this Agreement and
the other Operative Documents to which the Seller or the Conduit
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 limited liability company action and will not violate its
certificate of formation or amended and restated limited liability
company agreement, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, or result in a breach of, any material contract, agreement
or other instrument to which it is a party or by which it is bound
or violate any statute or any order, rule or regulation of any
court, governmental agency or body or other tribunal having
jurisdiction over it or any of its properties.
(c)
This Agreement and the other Operative Documents
to which the Seller or the Conduit 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 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 Home Equity Loan Assets,
and upon receipt of each Home Equity Loan and other Home Equity
Loan Assets 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 other Home Equity Loan Assets,
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 1,151 Properties that are condominiums,
townhouses, manufactured housing, two- to four-family residential
dwellings or PUDs), and no more than 2.00% and 1.23%, 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)
[Reserved];
(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 (A) 23 Home Equity Loans, representing
approximately 0.49% 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
(B) any "interest only" Home Equity Loans. 11 and 248
Home Equity Loans in Group I and Group II, respectively,
representing 1.04% and 8.74% of the aggregate Group Balance of the
Home Equity Loans in Group I and Group II, respectively, are
"interest only" Home Equity Loans, which provide for payments of
interest but not principal for the first 60 months, in the case of
Group I, for the first 24 months, 36 months or 60 months, as
applicable, in the case of Group II, and thereafter payments of
interest and principal on a monthly basis. No Home Equity
Loan is a graduated payment loan;
(ix)
As of the Startup Day, each Mortgage is a valid
and enforceable first or second lien of record (or is in the
process of being recorded) on the Property subject in the case of
any Second Mortgage Loan only to a Senior Lien on such Property and
subject in all cases to the exceptions to title set forth in the
title insurance policy (or the binding commitment therefor) or
attorney’s opinion of title, with respect to the related Home
Equity Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending
activities, and such other exceptions to which similar properties
are commonly subject and which do not individually, or in the
aggregate, materially and adversely affect the benefits of the
security intended to be provided by such Mortgage;
(x)
Immediately prior to the transfer and assignment
of the Home Equity Loans by the Seller or the Conduit Seller, as
applicable, to the Depositor and by the Depositor to the Trustee
herein contemplated, the Seller, the Conduit Seller and the
Depositor, as the case may be, each held good and marketable title
(without any implication of a ready market for the sale thereof)
to, and was the sole owner of, each Home Equity Loan (including the
related Note) conveyed by the Seller (or the Conduit Seller, as
applicable) subject to no liens, charges, mortgages, encumbrances
or rights of others except as set forth in clause (ix) or other
liens which will be released simultaneously with such transfer and
assignment; and immediately upon the transfer and assignment herein
contemplated, the Trustee will hold good and marketable title
(without any implication of a ready market for the sale thereof)
to, and be the sole owner of, each Home Equity Loan subject to no
liens, charges, mortgages, encumbrances or rights of others except
as set forth in paragraph (ix) or other liens which will be
released simultaneously with such transfer and assignment;
(xi)
As of the Cut-Off Date, 0.58% 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 local, state and federal laws and
regulations, including, without limitation, all applicable
predatory and abusive lending laws, the federal Truth-in-Lending
Act (as amended by the Riegle Community Development and Regulatory
Improvement Act of 1994) and other consumer protection, usury,
equal credit opportunity, disclosure and recording laws. None
of the Home Equity Loans is subject to the Home Ownership and
Equity Protection Act of 1994. None of the Home Equity Loans
is a "high-cost" loan as defined by the applicable predatory and
abusive lending laws. No Home Equity Loan is a High Cost Loan
or Covered Loan, as applicable (as such terms are defined in the
then current Standard & Poor’s LEVELS® Glossary which
is now Version 5.6 Revised, Appendix E) and no Home Equity Loan
originated on or after October 1, 2002 through March 6, 2003, if
any, is governed by the Georgia Fair Lending Act;
(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 0.66% of
the aggregate Loan Balance of the Home Equity Loans 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 1.65% and 1.34% 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 2.00% 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 t
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