EXECUTION COPY
POOLING AND SERVICING
AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST
2005-D
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 October 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.
37
Section 1.03.
Captions, Table of Contents.
37
Section 1.04.
Opinions.
37
ARTICLE II ESTABLISHMENT AND
ORGANIZATION OF THE TRUST
39
Section 2.01.
Establishment of the Trust.
39
Section 2.02.
Office.
39
Section 2.03.
Purposes and Powers.
39
Section 2.04.
Appointment of the Trustee; Declaration
of Trust.
39
Section 2.05.
Expenses of the Trust.
39
Section 2.06.
Ownership of the Trust.
39
Section 2.07.
Situs of the Trust.
40
Section 2.08.
Designation of Interests in
REMICs.
40
Section 2.09.
Miscellaneous REMIC
Provisions.
46
ARTICLE III REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE
DEPOSITOR, THE SERVICER AND THE
SELLERS; COVENANT OF SELLER TO
CONVEY HOME EQUITY
LOANS
47
Section 3.01.
Representations and Warranties of the
Depositor.
47
Section 3.02.
Representations and Warranties of the
Servicer.
49
Section 3.03.
Representations and Warranties of the
Sellers.
51
Section 3.04.
Covenants of Sellers to Take Certain
Actions with Respect to the Home
Equity Loans in Certain
Situations.
54
Section 3.05.
Sale Treatment of the Home Equity Loans
and Qualified Replacement
Mortgages.
64
Section 3.06.
Acceptance by Trustee; Certain
Substitutions of Home Equity Loans;
Certification by Trustee.
68
Section 3.07.
High-Cost Home Loans.
70
Section 3.08.
Custodian.
70
Section 3.09.
Cooperation Procedures.
70
Section 3.10.
Payment of Taxes, Insurance and Other
Charges.
71
ARTICLE IV ISSUANCE AND SALE OF
CERTIFICATES
72
Section 4.01.
Issuance of Certificates.
72
Section 4.02.
Sale of Certificates.
72
ARTICLE V CERTIFICATES AND TRANSFER OF
INTERESTS
73
Section 5.01.
Terms.
73
Section 5.02.
Forms.
73
Section 5.03.
Execution, Authentication and
Delivery.
73
Section 5.04.
Registration and Transfer of
Certificates.
74
Section 5.05.
Mutilated, Destroyed, Lost or Stolen
Certificates.
76
Section 5.06.
Persons Deemed Owners.
77
Section 5.07.
Cancellation.
77
Section 5.08.
Limitation on Transfer of Ownership
Rights.
77
Section 5.09.
Assignment of Rights.
79
ARTICLE VI COVENANTS
80
Section 6.01.
Distributions.
80
Section 6.02.
Money for Distributions to be Held in
Trust; Withholding.
80
Section 6.03.
Protection of Trust Estate.
81
Section 6.04.
Performance of Obligations.
82
Section 6.05.
Negative Covenants.
82
Section 6.06.
No Other Powers.
83
Section 6.07.
Limitation of Suits.
83
Section 6.08.
Unconditional Rights of Owners to Receive
Distributions.
83
Section 6.09.
Rights and Remedies
Cumulative.
84
Section 6.10.
Delay or Omission Not Waiver.
84
Section 6.11.
Control by Owners.
84
Section 6.12.
Indemnification by CHEC.
84
ARTICLE VII ACCOUNTS, DISBURSEMENTS
AND RELEASES
86
Section 7.01.
Collection of Money.
86
Section 7.02.
Establishment of Accounts.
86
Section 7.03.
Flow of Funds.
86
Section 7.04.
Supplemental Interest Reserve Fund; WAC
Excess.
91
Section 7.05.
Investment of Accounts.
92
Section 7.06.
Payment of Trust Expenses.
93
Section 7.07.
Eligible Investments.
93
Section 7.08.
Accounting and Directions by
Trustee.
95
Section 7.09.
Reports by Trustee to Owners.
96
Section 7.10.
Reports by Trustee.
99
Section 7.11.
Allocation of Losses.
99
Section 7.12.
Cap Agreement Reserve Fund.
100
ARTICLE VIII SERVICING AND
ADMINISTRATION OF HOME EQUITY LOANS
103
Section 8.01.
Servicer and Sub-Servicers.
103
Section 8.02.
Collection of Certain Home Equity Loan
Payments.
104
Section 8.03.
Sub-Servicing Agreements Between Servicer
and Sub-Servicers.
104
Section 8.04.
Successor Sub-Servicers.
105
Section 8.05.
Liability of Servicer;
Indemnification.
105
Section 8.06.
No Contractual Relationship Between
Sub-Servicer, Trustee or the Owners.
106
Section 8.07.
Assumption or Termination of
Sub-Servicing Agreement by Trustee.
106
Section 8.08.
Principal and Interest
Account.
106
Section 8.09.
Delinquency Advances and Servicing
Advances.
108
Section 8.10.
Compensating Interest; Repurchase of Home
Equity Loans.
109
Section 8.11.
Maintenance of Insurance.
110
Section 8.12.
Due-on-Sale Clauses; Assumption and
Substitution Agreements.
111
Section 8.13.
Realization Upon Defaulted Home Equity
Loans; Workout of Home Equity
Loans.
112
Section 8.14.
Trustee to Cooperate; Release of
Files.
113
Section 8.15.
Servicing Compensation.
114
Section 8.16.
Annual Statement as to
Compliance.
114
Section 8.17.
Annual Independent Certified Public
Accountants’ Reports.
115
Section 8.18.
Access to Certain Documentation and
Information Regarding the Home
Equity Loans.
115
Section 8.19.
Assignment of Agreement.
115
Section 8.20.
Removal of Servicer; Retention of
Servicer; Resignation of Servicer.
116
Section 8.21.
Inspections; Errors and Omissions
Insurance.
120
Section 8.22.
Additional Servicing Responsibilities for
Second Mortgage Loans.
120
Section 8.23.
The Group II Home Equity
Loans.
121
Section 8.24.
Merger, Conversion, Consolidation or
Succession to Business of Servicer.
121
Section 8.25.
Notices of Material Events.
121
Section 8.26.
Indemnification by the
Servicer.
122
Section 8.27.
Reports on Foreclosure and Abandonment of
Properties.
122
Section 8.28.
Reports to the Securities and Exchange
Commission.
122
Section 8.29.
Advance Facility.
125
ARTICLE IX TERMINATION OF
TRUST
128
Section 9.01.
Termination of Trust.
128
Section 9.02.
Termination Upon Option of the Owner of
the Class X-IO Certificates.
128
Section 9.03.
Disposition of Proceeds.
129
ARTICLE X THE TRUSTEE
130
Section 10.01.
Certain Duties and
Responsibilities.
130
Section 10.02.
Removal of Trustee for Cause.
132
Section 10.03.
Certain Rights of the Trustee.
133
Section 10.04.
Not Responsible for Recitals or Issuance
of Certificates.
135
Section 10.05.
May Hold Certificates.
135
Section 10.06.
Money Held in Trust.
136
Section 10.07.
Compensation and
Reimbursement.
136
Section 10.08.
Corporate Trustee Required;
Eligibility.
136
Section 10.09.
Resignation and Removal; Appointment of
Successor.
137
Section 10.10.
Acceptance of Appointment by Successor
Trustee.
138
Section 10.11.
Merger, Conversion, Consolidation or
Succession to Business of the
Trustee.
138
Section 10.12.
Reporting; Withholding.
139
Section 10.13.
Indemnification and Liability of the
Trustee.
139
Section 10.14.
Appointment of Co-Trustee or Separate
Trustee.
140
Section 10.15.
Appointment of Custodians.
141
ARTICLE XI
MISCELLANEOUS
142
Section 11.01.
Compliance Certificates and
Opinions.
142
Section 11.02.
Form of Documents Delivered to the
Trustee.
142
Section 11.03.
Acts of Owners.
143
Section 11.04.
Notices, etc. to Trustee.
143
Section 11.05.
Notices and Reports to Owners; Waiver of
Notices.
144
Section 11.06.
Rules by Trustee.
144
Section 11.07.
Successors and Assigns.
144
Section 11.08.
Severability.
145
Section 11.09.
Benefits of Agreement.
145
Section 11.10.
Legal Holidays.
145
Section 11.11.
Governing Law; Submission to
Jurisdiction.
145
Section 11.12.
Counterparts.
146
Section 11.13.
Usury.
146
Section 11.14.
Amendment.
146
Section 11.15.
Paying Agent; Appointment and Acceptance
of Duties.
147
Section 11.16.
REMIC Status.
148
Section 11.17.
Additional Limitation on Action and
Imposition of Tax.
150
Section 11.18.
Appointment of Tax Matters
Person.
150
Section 11.19.
Notices.
151
Section 11.20.
Rule 144A Information.
153
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 M-1 CERTIFICATE
EXHIBIT A-10
FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-11
FORM OF CLASS M-3 CERTIFICATE
EXHIBIT A-12
FORM OF CLASS M-4 CERTIFICATE
EXHIBIT A-13
FORM OF CLASS M-5 CERTIFICATE
EXHIBIT A-14
FORM OF CLASS M-6 CERTIFICATE
EXHIBIT A-15
FORM OF CLASS M-7 CERTIFICATE
EXHIBIT A-16
FORM OF CLASS B-1 CERTIFICATE
EXHIBIT A-17
FORM OF CLASS B-2 CERTIFICATE
EXHIBIT A-18
FORM OF CLASS B-3 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-D, dated as of October 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 9.65% 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”: The Royal
Bank of Scotland Group plc.
“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-D, 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
|
-
|
$101,700,000
|
|
Class AF-2 Certificates
|
-
|
$19,290,000
|
|
Class AF-3 Certificates
|
-
|
$26,430,000
|
|
Class AF-4 Certificates
|
-
|
$24,310,000
|
|
Class AF-5 Certificates
|
-
|
$54,020,000
|
|
Class AF-6 Certificates
|
-
|
$28,000,000
|
|
Class AV-1 Certificates
|
-
|
$342,200,000
|
|
Class AV-2 Certificates
|
-
|
$195,050,000
|
|
Class M-1 Certificates
|
-
|
$47,000,000
|
|
Class M-2 Certificates
|
-
|
$32,500,000
|
|
Class M-3 Certificates
|
-
|
$22,500,000
|
|
Class M-4 Certificates
|
-
|
$17,000,000
|
|
Class M-5 Certificates
|
-
|
$17,000,000
|
|
Class M-6 Certificates
|
-
|
$15,500,000
|
|
Class M-7 Certificates
|
-
|
$16,000,000
|
|
Class B-1 Certificates
|
-
|
$14,500,000
|
|
Class B-2 Certificates
|
-
|
$11,000,000
|
|
Class B-3 Certificates
|
-
|
$12,000,000
|
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 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, the Class B-1 Certificate Rate, the
Class B-2 Certificate Rate or the Class B-3 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) 5.040% per annum (or
5.540% 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) 4.940% per annum (or
5.440% 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) 5.045% per annum (or
5.545% 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) 5.270% per annum (or
5.770% 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) 5.590% per annum (or
6.090% 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) 5.235% per annum (or
5.735% 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
|
|
November 2005 through October 2008
|
0%
|
|
November 2008 through October 2010
|
45%
|
|
November 2010 through October 2011
|
80%
|
|
November 2011 through October 2012
|
100%
|
|
November 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) 0.110% per annum (or 0.220% 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) 0.270% per annum (or 0.540% 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-1 Certificate”: Any
one of the Certificates designated on the face thereof as a Class
B-1 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 B-1 Certificate Rate”:
With respect to any Distribution Date and the Class B-1
Certificates, the lesser of (A) the sum of (1) LIBOR and
(2) 1.350% per annum (or 2.025% 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-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 each Class of Senior
Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates and the Class M-7 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 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-1 Certificates immediately prior to
such Distribution Date, over (2) the lesser of (A) 89.60%
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 B-2 Certificate”: Any
one of the Certificates designated on the face thereof as a Class
B-2 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-2 Certificate Rate”:
With respect to any Distribution Date and the Class B-2
Certificates, the lesser of (A) the sum of (1) LIBOR and
(2) 1.850% per annum (or 2.775% 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-2 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 each Class of Senior Certificates,
the Class M-1 Certificates, the Class M-2 Certificates, the Class
M-3 Certificates, the Class M-4 Certificates, the Class M-5
Certificates, the Class M-6 Certificates, the Class M-7
Certificates and the Class B-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 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), (I) the Certificate Principal Balance
of the Class B-1 Certificates (after giving effect to the
distribution of the Class B-1 Principal Distribution Amount on
such Distribution Date) and (J) the Certificate Principal
Balance of the Class B-2 Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 91.80% 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 B-3 Certificate”: Any
one of the Certificates designated on the face thereof as a Class
B-3 Certificate, substantially in the form annexed hereto as
Exhibit A-18 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-3 Certificate Rate”:
With respect to any Distribution Date and the Class B-3
Certificates, the lesser of (A) the sum of (1) LIBOR and
(2) 2.000% per annum (or 3.000% 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-3 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), (I) the Certificate Principal Balance
of the Class B-1 Certificates (after giving effect to the
distribution of the Class B-1 Principal Distribution Amount on
such Distribution Date), (J) the Certificate Principal
Balance of the Class B-2 Certificates (after giving effect to the
distribution of the Class B-2 Principal Distribution Amount on
such Distribution Date) and (K) the Certificate Principal Balance
of the Class B-3 Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 94.20% 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; 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, Class M-7, Class B-1 and Class
B-2 Certificates are reduced to zero, the Class B-3 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-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 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) 0.430% per annum (or 0.645% 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 Class of the 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) 62.60% 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-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-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-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) 0.460% per annum (or 0.690% 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
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) 69.10% 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.
“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-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-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) 0.480% 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-3 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 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) 73.60% 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-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-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-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) 0.610% per annum (or 0.915% 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
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) 77.00% 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-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-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) 0.640% per annum (or 0.960% 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
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) 80.40% 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-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-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) 0.700% per annum (or 1.050% 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
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) 83.50% 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-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-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-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) 1.200% per annum (or 1.800% 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
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) 86.70% 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, the Class B-1
Principal Distribution Amount, the Class B-2 Principal Distribution
Amount or the Class B-3 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) clause C.24 hereof and (ii) the
amount described in footnote (20) of Section 2.08(g) for the
current and for all prior Distribution Dates less amounts treated
as distributed to the Class X-IO Certificates on prior Distribution
Dates pursuant to Sections 7.03(b) clauses C.25 and
C.30.
“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, 6
th Floor, New York, New York 10004, Attention: Global
Dept. Centex Home Equity Loan Trust 2005-D (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 (less the aggregate amount of Recoveries during such 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
|
|
November 2007 to October 2008
|
1.50% for the first month, plus an additional 1/12 th of
2.00% for each month thereafter.
|
|
November 2008 to October 2009:
|
3.50% for the first month, plus an additional 1/12 th of
2.00% for each month thereafter.
|
|
November 2009 to October 2010:
|
5.50% for the first month, plus an additional 1/12 th of
1.50% for each month thereafter.
|
|
November 2010 to October 2011:
|
7.00% for the first month, plus an additional 1/12 th of
1.00% for each month thereafter.
|
|
November 2011 and thereafter:
|
8.00%
|
“Custodial Agreement”: The
Custodial Agreement dated as of October 1, 2005 among 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 opening of business on October 1, 2005 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
36.10% 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 25 th 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 November 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 B-3, 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 13 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 and Class AV-2 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 any
class of the Group II Certificates, an amount equal to 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 related
class of 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 and Class AV-2 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.29 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 M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B-1,
Class B-2 and Class B-3 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
$253,777,765.86.
“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
$746,519,755.28.
“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 October 7, 2005 constituting
part of the Registration Statement.
“Prospectus Supplement”: The
Centex Home Equity Loan Trust 2005-D Prospectus Supplement dated
October 7, 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 333-125022), 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) 2.90%, and (y) the
Pool Balance as of the Cut-Off Date; and (2) on and after the
Stepdown Date, the greater of (i) the lesser of (x) the
product of 2.90% and the Pool Balance as of the Cut-Off Date, and
(y) the product of 5.80% 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 or Class AV-2 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 53.20% 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”: October 12,
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
November 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 46.80%.
“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, Class B-1, Class B-2 or Class B-3
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 for both Groups in the aggregate 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-D, 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”:
Greenwich Capital Markets, Inc., Banc of America Securities
LLC, Citigroup Global Markets Inc. and Credit Suisse First Boston
LLC.
“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
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, Class B-1 Certificates, Class
B-2 Certificates and Class B-3 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-D” and which
shall contain two subtrusts.
Section 2.02.
Office.
The office of the Trust shall be in care
of the Trustee, addressed to 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-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(1)
|
(2)
|
(6)
|
Class B-1
|
|
LT-B-2(1)
|
(2)
|
(6)
|
Class B-2
|
|
LT-B-3(1)
|
(2)
|
(6)
|
Class B-3
|
|
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
|
(11)
|
(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 Net
Coupon 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 Net
Coupon 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 Net
Coupon 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 M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class B-1, Class B-2, Class B-3 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
|
$101,700,000
|
(1)
|
September 2021
|
|
Class AF-2
|
$19,290,000
|
(2)
|
May 2024
|
|
Class AF-3
|
$26,430,000
|
(3)
|
April 2027
|
|
Class AF-4
|
$24,310,000
|
(4)
|
October 2030
|
|
Class AF-5
|
$54,020,000
|
(5)
|
October 2035
|
|
Class AF-6
|
$28,000,000
|
(6)
|
October 2035
|
|
Class AV-1
|
$342,200,000
|
(7)
|
August 2027
|
|
Class AV-2
|
$195,050,000
|
(8)
|
July 2035
|
|
Class M-1
|
$47,000,000
|
(9)
|
October 2035
|
|
Class M-2
|
$32,500,000
|
(10)
|
October 2035
|
|
Class M-3
|
$22,500,000
|
(11)
|
October 2035
|
|
Class M-4
|
$17,000,000
|
(12)
|
October 2035
|
|
Class M-5
|
$17,000,000
|
(13)
|
October 2035
|
|
Class M-6
|
$15,500,000
|
(14)
|
October 2035
|
|
Class M-7
|
$16,000,000
|
(15)
|
October 2035
|
|
Class B-1
|
$14,500,000
|
(16)
|
October 2035
|
|
Class B-2
|
$11,000,000
|
(17)
|
October 2035
|
|
Class B-3
|
$12,000,000
|
(18)
|
October 2035
|
|
Class X-IO
|
(19)
|
(20)
|
|
|
Class R-1
|
(21)
|
(21)
|
|
(1)
For each Interest Period, this Class
shall bear interest at the least of (i) 5.040% per annum (or
5.540% 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) 4.940% per annum (or
5.440% 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) 5.045% per annum (or
5.545% 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) 5.270% per annum (or
5.770% 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) 5.590% per annum (or
6.090% 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) 5.235% per annum (or
5.735% 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 0.110% per
annum (or LIBOR plus 0.220% 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 0.270% per
annum (or LIBOR plus 0.540% 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 0.430% per
annum (or LIBOR plus 0.645% per annum for each Interest Period
occurring after the Clean-Up Call Date) and (ii) the Adjusted
Pool Net WAC.
(10)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.460% per
annum (or LIBOR plus 0.690% 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 0.480% 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.
(12)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 0.610% per
annum (or LIBOR plus 0.915% 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 0.640% per
annum (or LIBOR plus 0.960% 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 0.700% per
annum (or LIBOR plus 1.050% 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 1.200% (or
LIBOR plus 1.800% 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 1.350% (or
LIBOR plus 2.025% 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 1.850% (or
LIBOR plus 2.775% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(18)
For each Interest Period, this Class
shall bear interest at the least of (i) LIBOR plus 2.000% (or
LIBOR plus 3.000% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(19)
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.
(20)
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.
(21)
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 1,492 Properties that are
condominiums, townhouses, manufactured housing, two- to four-family
residential dwellings or PUDs), and no more than 3.69% and 1.96%,
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) 321 Home Equity Loans, representing
approximately 6.35% 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 15
th year, and (B) any “interest only”
Home Equity Loans. 15 and 564 Home Equity Loans in Group I
and Group II, respectively, representing 1.35% and 17.91% 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 or 36 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, 1.28% 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 5.6B 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
0.60% 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 1.49% and 0.48% 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 terms of the related Note;
(lii)
No Home Equity Loan in Group II is
subject to negative amortization;
(liii)
As of the Cut-Off Date, the FTC holder
regulation provided in 16 C.F.R. Part 433 applies to none of
the Home Equity Loans;
(liv)
[Reserved];
(lv)
[Reserved];
(lvi)
The rights with respect to each Home
Equity Loan are assignable by the Seller or the Conduit Seller, as
applicable, without the consent of any Person other than consents
which will have been obtained on or before the Startup
Day;
(lvii)
The Seller or the Conduit Seller, as
applicable, has duly fulfilled all obligations to be fulfilled on
the lender’s part under or in connection with the
origination, acquisition and assignment of the Home Equity Loans
and the related Mortgage and Note, and has done nothing to impair
the rights of the Trustee or the Owners in payments with respect
thereto;
(lviii)
To the Seller’s or the
Servicer’s, as applicable, knowledge, the documents,
instruments and agreements submitted by each Mortgagor for loan
underwriting were not falsified and contain no untrue statement of
a material fact and do not omit to state a material fact required
to be stated therein or necessary to make the information and
statements contained therein not misleading;
(lix)
No Home Equity Loan matures later than
September 1, 2035;
(lx)
The first date on which the applicable
Mortgagor must make a payment on each Home Equity Loan is no later
than October 2005; and
(lxi)
With respect to each Home Equity Loan
that is a Second Mortgage Loan:
(1)
The related Senior Lien does not provide
for negative amortization.
(2)
None of the Servicer, the Seller, the
Conduit Seller or the Conduit Servicer as applicable, has received,
or is aware of, a notice of default of any Senior Lien which has
not been cured.
(3)
To the best knowledge of the Seller or
the Servicer, as applicable, no funds provided to the Mortgagor
from a Second Mortgage Loan were concurrently used as a down
payment for the Senior Lien.
(c)
In the event that any such repurchase
pursuant to this Section results in a prohibited transaction tax as
specified in the REMIC Opinion delivered pursuant to Section
3.04(a), the Trustee shall immediately notify the Seller in writing
thereof and the Seller will, within 10 days of receiving notice
thereof from the Trustee, deposit the amount due from the Trust
with the Trustee for the payment thereof, including any interest
and penalties, in immediately available funds. In the event
that any Qualified Replacement Mortgage is delivered by the Seller
to the Trust pursuant to Section 3.04 or Section 3.06 hereof, the
Seller shall be obligated to take the actions described in Section
3.04(a) with respect to such Qualified Replacement Mortgage upon
the discovery by any of the Depositor, the Owners, the Seller, the
Conduit Seller, the Servicer, any Sub-Servicer, the Custodian or
the Trustee that the statements set forth in subsection (b) above
are untrue in any material respect, without regard to any
limitation set forth therein concerning the knowledge of the Seller
or the Servicer as to facts stated therein, on the date such
Qualified Replacement Mortgage is conveyed to the Trust, such that
the interests of the Owners in the related Qualified Replacement
Mortgage are, or may be, materially and adversely affected;
provided, however, that for the purposes of this subsection (c) the
statements in subsection (b) above referring to items “as of
the Cut-Off Date” or “as of the Startup Day”
shall be deemed to refer to such items as of the Replacement
Cut-Off Date or as of the date such Qualified Replacement Mortgage
is conveyed to the Trust, respectively. Notwithstanding the
fact that a representation contained in subsection (b) above may be
limited to the Seller’s or the Servicer’s knowledge,
such limitation shall not relieve CHEC of its substitution or
repurchase obligation under this Section and Section 3.06 hereof.
(d)
It is understood and agreed that the
representations, warranties and covenants set forth in this Section
3.04 shall survive delivery of the respective Home Equity Loans
(including Qualified Replacement Mortgages) to the Trustee or the
Custodian, on behalf of the Trustee.
(e)
The Trustee shall have no duty to conduct
any affirmative investigation other than as specifically set forth
in this Agreement as to the occurrence of any condition requiring
the repurchase or substitution of any Home Equity Loan pursuant to
this Article III or the eligibility of any Home Equity Loan for the
purpose of this Agreement.
Section 3.05.
Sale Treatment of the Home Equity Loans
and Qualified Replacement Mortgages.
(a)
The transfer by the Seller and the
Conduit Seller to the Depositor and by the Depositor to the Trustee
of the Home Equity Loans set forth on the applicable Schedule of
Home Equity Loans is absolute and is intended by the Owners and all
parties hereto to be treated as a sale by the Seller, the Conduit
Seller and the Depositor for bankruptcy law purposes.
In the event that any such conveyance is
deemed to be a loan, the parties intend that each of the Seller and
the Conduit Seller shall be deemed to have granted to the Depositor
and the Depositor shall be deemed to have granted to the Trustee a
security interest in the Trust Estate, and that this Agreement
shall constitute a security agreement under applicable law.
(b)
In connection with the transfer and
assignment of the Home Equity Loans, CHEC agrees to:
(i)
deliver without recourse to the
Custodian, on behalf of the Trustee, on the Startup Day with
respect to each Home Equity Loan (except that, in the case of any
Delayed Delivery Home Equity Loans, such delivery may take place
within twenty (20) days following the Startup Day), (A) the
original Note endorsed in blank or to the order of the Trustee
(“Pay to the order of JPMorgan Chase Bank, National
Association, as Trustee for Centex Home Equity Loan Trust 2005-D,
without recourse”) and signed by manual signature of the
Seller or the Conduit Seller, as applicable, or, if the original
Note has been lost or destroyed and not replaced, an original lost
note affidavit from the Seller, or the Conduit Seller, as
applicable, stating that the original Note was lost or destroyed,
together with a copy of the related Note, such lost note affidavits
not to exceed 5% of the Pool Balance as of the Cut-Off Date; (B)
either (1) if the original title insurance policy is not available,
the original title insurance commitment or a copy thereof certified
as a true copy by the closing agent or CHEC, and when available,
the original title insurance policy or a copy certified by the
issuer of the title insurance policy, (2) if title insurance is not
available in the applicable state, the attorney’s opinion of
title, or (3) for a Home Equity Loan the original principal balance
of which was equal to or less than $40,000, a title report and
indemnity, (C) originals or copies of all intervening assignments
certified as true copies by the closing agent or CHEC, showing a
complete chain of title from origination to the Seller or the
Conduit Seller, if any, including warehousing assignments, if
recorded, (D) originals of all assumption and modification
agreements, if any, (E) either: (1) the original Mortgage, with
evidence of recording thereon (if such original Mortgage has been
returned to the Seller or the Conduit Seller, as applicable, from
the applicable recording office), or a copy of the Mortgage
certified as a true copy by the closing agent or an Authorized
Officer of CHEC, or (2) a copy of the Mortgage certified by the
public recording office in those instances where the original
recorded Mortgage has been lost and (F) the original assignments of
Mortgages (as described in clause (b)(ii)) in recordable form and
acceptable for recording in the state or other jurisdiction where
the Property is located;
(ii)
cause, within 60 days following the
Startup Day with respect to the Home Equity Loans, assignments of
the Mortgages from the Seller or the Conduit Seller, as applicable,
to “JPMorgan Chase Bank, National Association, as Trustee of
Centex Home Equity Loan Trust 2005-D under the Pooling and
Servicing Agreement dated as of October 1, 2005” to be
submitted for recording in the appropriate jurisdictions; provided,
further, that CHEC shall not be required to record an assignment of
a Mortgage if CHEC furnishes to the Trustee, on or before the
Startup Day, at CHEC’s expense, an Opinion of Counsel with
respect to the relevant jurisdiction that such recording is not
necessary to perfect the Trustee’s interest in the related
Home Equity Loans (in form and substance reasonably satisfactory to
the Trustee and the Rating Agencies); provided further, however,
notwithstanding the delivery of any legal opinions, each assignment
of Mortgage shall be recorded by the Custodian on behalf of the
Trustee at the expense of CHEC upon the earliest to occur of: (i)
the occurrence of a Servicer Termination Event, (ii) if the Seller
is not the Servicer and with respect to any one assignment of
Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage, or (iii) the
occurrence of a bankruptcy or insolvency relating to the Seller or
the Conduit Seller, as applicable;
(iii)
deliver the title insurance policy or
title searches or reports, the original Mortgages and such recorded
assignments, together with originals or duly certified copies of
any and all prior assignments (other than unrecorded warehouse
assignments), to the Custodian, on behalf of the Trustee, within 15
days of receipt thereof by CHEC, but in any event, with respect to
any Mortgage as to which original recording information has been
made available to the Seller or the Conduit Seller, within one year
after the Startup Day; and
(iv)
furnish to the Trustee and the Rating
Agencies, at CHEC’s expense, an Opinion of Counsel with
respect to the sale and perfection of the Home Equity Loans
delivered to the Trust.
In connection with the transfer and
assignment set forth in clause (i) above, the Depositor has
delivered or caused to be delivered to the Custodian, on behalf of
the Trustee, (or, in the case of the Delayed Delivery Home Equity
Loans, will deliver or cause to be delivered to the Custodian, on
behalf of the Trustee, within twenty (20) days following the
Startup Day) for the benefit of the Certificateholders the
documents or instruments set forth in clause (i) above, with
respect to each Home Equity Loan.
In instances where the original recorded
Mortgage cannot be delivered by CHEC to the Custodian on behalf of
the Trustee prior to or concurrently with the execution and
delivery of this Agreement due to a delay in connection with
recording, CHEC may in lieu of delivering such original recorded
Mortgage, deliver to the Custodian on behalf of the Trustee a copy
thereof, provided that CHEC certifies that the original Mortgage
has been delivered to a title insurance company for recordation
after receipt of its policy of title insurance or binder therefor.
In all such instances, CHEC will deliver or cause to be
delivered the original recorded Mortgage to the Custodian on behalf
of the Trustee promptly upon receipt of the original recorded
Mortgage but in no event later than one year after the Startup
Day.
CHEC hereby confirms to the Trustee that
it has made the appropriate entries in its general records to
indicate that such Home Equity Loans have been transferred to the
Trustee and constitute part of the Trust Estate in accordance with
the terms of the trust created hereunder.
Notwithstanding anything to the contrary
contained in this Section 3.05, in those instances where the public
recording office retains the original Mortgage, the assignment of a
Mortgage or the intervening assignments of the Mortgage after it
has been recorded, the Depositor and each of the Sellers shall be
deemed to have satisfied their obligations hereunder upon delivery
to the Custodian, on behalf of the Trustee, of a copy of such
Mortgage, such assignment or assignments of Mortgage certified by
the public recording office to be a true copy of the recorded
original thereof.
Notwithstanding anything to the contrary
in this Section 3.05, within twenty days after the Startup Day, the
Seller shall either (i) deliver to the Depositor, or at the
Depositor’s direction, to the Trustee or the Custodian, on
behalf of the Trustee, or other designee of the Depositor the File
as required pursuant to this Section 3.05 for each Delayed Delivery
Home Equity Loan or (ii) (A) substitute a Qualified Replacement
Mortgage for the Delayed Delivery Home Equity Loan or (B)
repurchase the Delayed Delivery Home Equity Loan, which
substitution or repurchase shall be accomplished in the manner and
subject to the conditions set forth in Section 3.06(b); provided,
however, that if the Seller fails to deliver a File for any Delayed
Delivery Home Equity Loan within the twenty-day period provided
above, the Seller shall use its best reasonable efforts to effect a
substitution, rather than a repurchase of, such Delayed Delivery
Home Equity Loan and provided further that the cure period provided
for in Section 3.06(b) shall not apply to the initial delivery of
the File for such Delayed Delivery Home Equity Loan, but rather the
Seller shall have five (5) Business Days to cure such failure to
deliver. At the end of such twenty-day period the Trustee shall
send a Delayed Delivery Certification for the Delayed Delivery Home
Equity Loans delivered during such twenty-day period in accordance
with the provisions of Section 3.06.
Not later than ten days following the end
of the 60-day period referred in clause (b)(ii) above, CHEC shall
deliver to the Custodian on behalf of the Trustee, with a copy to
the Trustee, a list of all Mortgages for which no Mortgage
assignment has yet been submitted for recording by CHEC, which list
shall state the reason why CHEC has not yet submitted such Mortgage
assignments for recording. With respect to any Mortgage
assignment disclosed on such list as not yet submitted for
recording for a reason other than a lack of original recording
information, the Custodian, on behalf of the Trustee, shall make an
immediate demand on CHEC to prepare such Mortgage assignments.
Thereafter, the Custodian, on behalf of the Trustee, shall
cooperate in executing any documents submitted to the Custodian, on
behalf of the Trustee in connection with this provision.
Following the expiration of the 60-day period referred to in
clause (b)(ii) above, CHEC shall promptly prepare a Mortgage
assignment for any Mortgage for which original recording
information is subsequently received by CHEC, and shall promptly
deliver a copy of such Mortgage assignment to the Custodian, on
behalf of the Trustee. CHEC agrees that it will follow its
normal servicing procedures and attempt to obtain the original
recording information necessary to complete a Mortgage assignment.
In the event that CHEC is unable to obtain such recording
information with respect to any Mortgage prior to the end of the 18
th calendar month following the Startup Day and has not
provided to the Custodian, on behalf of the Trustee, a Mortgage
assignment with evidence of recording thereon relating to the
assignment of such Mortgage to the Trustee, the Custodian, on
behalf of the Trustee shall notify CHEC of its obligation to
provide a completed assignment (with evidence of recording thereon)
on or before the end of the 20 th calendar month
following the Startup Day. If no such completed assignment
(with evidence of recording thereon) is provided before the end of
such 20 th calendar month, the related Home Equity Loan
shall be deemed to have breached the representation contained in
clause (xxii) of Section 3.04(b) hereof. The requirement to
deliver a completed assignment with evidence of recording thereon
will be deemed satisfied upon delivery of a copy of the completed
assignment certified by the applicable public recording office.
Copies of all Mortgage assignments
received by the Custodian on behalf of the Trustee shall be
retained in the related File.
All recording required pursuant to this
Section 3.05 shall be accomplished at the expense of CHEC.
(c)
In the case of Home Equity Loans which
have been prepaid in full on or after the Cut-Off Date and prior to
the Startup Day, CHEC, in lieu of the foregoing, will deliver
within six (6) days after the Startup Day to the Trustee a
certification of an Authorized Officer in the form set forth in
Exhibit D.
(d)
CHEC shall transfer, assign, set over and
otherwise convey, without recourse, to the Trustee all right, title
and interest of CHEC in and to any Qualified Replacement Mortgage
delivered to the Custodian, on behalf of the Trustee on behalf of
the Trust by CHEC pursuant to Section 3.04 or 3.06 hereof and all
its right, title and interest to principal and interest due on such
Qualified Replacement Mortgage on and after the applicable
Replacement Cut-Off Date; provided, however, that CHEC shall
reserve and retain all right, title and interest in and to payments
of principal and interest due on such Qualified Replacement
Mortgage prior to the applicable Replacement Cut-Off Date.
(e)
As to each Home Equity Loan released from
the Trust in connection with a repurchase thereof or the conveyance
of a Qualified Replacement Mortgage therefor, the Trustee will
transfer, assign, set over and otherwise convey without recourse or
representation, on CHEC’s order, all of its right, title and
interest in and to such released Home Equity Loan and all the
Trust’s right, title and interest to principal and interest
due on such released Home Equity Loan after the applicable
repurchase date or Replacement Cut-Off Date, as the case may be;
provided, however, that the Trust shall reserve and or and retain
all right, title and interest in and to payments of principal and
interest due on such released Home Equity Loan prior to such
repurchase date or Replacement Cut-Off Date, as the case may be.
(f)
In connection with any transfer and
assignment of a Qualified Replacement Mortgage to the Trustee on
behalf of the Trust, CHEC agrees to (i) deliver or cause to be
delivered without recourse to the Custodian, on behalf of the
Trustee on the date of delivery of such Qualified Replacement
Mortgage the original Note relating thereto, endorsed in blank or
to the order of the Trustee, (ii) cause promptly to be recorded an
assignment in the appropriate jurisdictions, (iii) deliver or cause
to be delivered the original Qualified Replacement Mortgage and
such recorded assignment, together with original or duly certified
copies of any and all prior assignments, to the Custodian, on
behalf of the Trustee within 15 days of receipt thereof by CHEC
(but in any event within 120 days after the date of conveyance of
such Qualified Replacement Mortgage) and (iv) deliver the title
insurance policy, or where no such policy is required to be
provided under Section 3.05(b)(i)(B), the other evidence of title
required in Section 3.05(b)(i)(B).
(g)
As to each Home Equity Loan released from
the Trust in connection with a repurchase or the conveyance of a
Qualified Replacement Mortgage, the Custodian, on behalf of the
Trustee shall deliver on the date of such repurchase or conveyance
of such Qualified Replacement Mortgage and on the order of CHEC (i)
the original Note relating thereto, endorsed, without recourse or
representation, in blank or to the order of CHEC, (ii) the original
Mortgage so released and all assignments relating thereto and (iii)
such other documents as constituted the File with respect thereto.
(h)
If a Mortgage assignment is lost during
the process of recording, or is returned from the recorder’s
office unrecorded due to a defect therein, CHEC shall prepare or
cause to be prepared a substitute assignment or cure such defect,
as the case may be, and thereafter cause each such assignment to be
duly recorded.
Section 3.06.
Acceptance by Trustee; Certain
Substitutions of Home Equity Loans; Certification by
Trustee.
(a)
The Trustee agrees to execute and deliver
and the Trustee agrees to cause the Custodian to execute and
deliver on behalf of the Trustee on the Startup Day an
acknowledgment of receipt of the items delivered by CHEC in the
forms attached as Exhibits E-1 and E-2 hereto, respectively, and
declares through the Custodian that it will hold such documents and
any amendments, replacements or supplements thereto, as well as any
other assets included in the definition of Trust Estate and
delivered to the Custodian, on behalf of the Trustee, as Trustee in
trust upon and subject to the conditions set forth herein for the
benefit of the Owners. At the end of the twenty (20) day
period after the Startup Day, the Custodian, on behalf of the
Trustee, shall execute and deliver to the Depositor, the Servicer
and the Sellers a Delayed Delivery Certification with respect to
the Delayed Delivery Home Equity Loans in the form attached as
Exhibit E-3 hereto, with any applicable exceptions noted thereon.
The Trustee agrees, for the benefit of the Owners, to cause
the Custodian to review the items delivered by CHEC pursuant to
Section 3.05(b)(i) within 45 days after the Startup Day (or, with
respect to any document delivered after the Startup Day, within 45
days of receipt and with respect to any Qualified Replacement
Mortgage, within 45 days after the assignment thereof) and to
deliver to the Depositor, the Seller, the Conduit Seller, the
Servicer and the Trustee a certification in the form attached
hereto as Exhibit F (a “Pool Certification”) to the
effect that, as to each Home Equity Loan listed in the Schedule of
Home Equity Loans (other than any Home Equity Loan paid in full or
any Home Equity Loan specifically identified in such Pool
Certification as not covered by such Pool Certification), (i) all
documents required to be delivered to it pursuant to Section
3.05(b)(i) of this Agreement have been executed and are in its
possession and that the Notes have been endorsed as set forth in
Section 3.05(b)(i) hereof, (ii) such documents have been reviewed
by it and have not been mutilated, damaged or torn and relate to
such Home Equity Loan and (iii) based on its examination and only
as to the foregoing documents, the information set forth on the
Schedule of Home Equity Loans accurately reflects the information
set forth in the File, except as may be indicated in an exception
report in the form attached hereto as Exhibit J (“Exception
Report”), such Exception Report to be provided electronically
concurrently with the delivery of the Pool Certification to the
e-mail addresses specified by the recipients. The Custodian,
on behalf of the Trustee, shall have no responsibility for
reviewing any File except as expressly provided in this subsection
3.06(a). Without limiting the effect of the preceding
sentence, in reviewing any File, the Custodian, on behalf of the
Trustee, shall have no responsibility for determining whether any
document is valid and binding, whether the text of any assignment
is in proper form (except to determine if the Trustee is the
assignee), whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction or whether a
blanket assignment is permitted in any applicable jurisdiction, but
shall only be required to determine whether a document has been
executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded. The Custodian,
on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face, nor
shall the Custodian, on behalf of the Trustee, be under any duty to
determine independently whether there are any intervening
assignments or assumption or modification agreements with respect
to any Home Equity Loan.
(b)
If the Custodian, on behalf of the
Trustee during such 45-day period finds any document constituting a
part of a File which is not executed, has not been received, or is
unrelated to the Home Equity Loans identified in the Schedule of
Home Equity Loans, or that any Home Equity Loan does not conform to
the description thereof as set forth in the Schedule of Home Equity
Loans, the Custodian, on behalf of the Trustee shall promptly so
notify the Depositor, CHEC and the Owners. In performing any
such review, the Custodian, on behalf of the Trustee may
conclusively rely on CHEC as to the purported genuineness of any
such document and any signature thereon. It is understood
that the scope of the review of the items delivered by CHEC
pursuant to Section 3.05(b)(i) is limited solely to confirming that
the documents listed in Section 3.05(b)(i) have been executed and
received, relate to the Files identified in the Schedule of Home
Equity Loans and conform to the description thereof in the Schedule
of Home Equity Loans. CHEC agrees to use reasonable efforts
to remedy a material defect in a document constituting part of a
File of which it is so notified by the Custodian, on behalf of the
Trustee. If, however, within 90 days after such notice to it
respecting such defect CHEC has not remedied the defect and the
defect materially and adversely affects the interest in the related
Home Equity Loan of the Owners, CHEC will (or will cause an
Affiliate to) on the next succeeding Monthly Remittance Date (i)
substitute in lieu of such Home Equity Loan a Qualified Replacement
Mortgage and deliver the Substitution Amount to the Servicer for
deposit in the Principal and Interest Account or (ii) purchase such
Home Equity Loan at a purchase price equal to the Loan Purchase
Price thereof, which purchase price shall be delivered to the
Servicer for deposit in the Principal and Interest Account.
In connection with any proposed purchase or substitution of a
Home Equity Loan, CHEC shall cause at its expense to be delivered
to the Trustee an Opinion of Counsel experienced in federal income
tax matters stating whether or not such a proposed purchase or
substitution would constitute a Prohibited Transaction for the
Trust or would jeopardize the status of any REMIC created hereunder
as a REMIC, and CHEC shall only be required to take either such
action to the extent such action would not constitute a Prohibited
Transaction for the Trust and would not jeopardize the status of
such REMIC as a REMIC. Any required purchase or substitution,
if delayed by the absence of such opinion, shall nonetheless occur
upon the earlier of (i) the occurrence of a default or imminent
default with respect to the Home Equity Loan or (ii) the delivery
of such opinion.
(c)
In addition to the foregoing, the
Custodian, on behalf of the Trustee also agrees to make a review
during the 12 th month after the Startup Day indicating
the current status of the exceptions previously indicated on the
Exception Report delivered electronically concurrently with the
Pool Certification in the form attached hereto as Exhibit F (the
“Final Certification”) and, by the end of the 12
th month after the Startup Day, deliver electronically
to the Depositor, the Seller, the Conduit Seller, the Servicer and
the Trustee (to the e-mail addresses specified by the recipients)
such Final Certification. After delivery of the Final
Certification, the Custodian, on behalf of the Trustee and the
Servicer shall provide electronically to the Trustee (to the e-mail
address specified by the Trustee) no less frequently than monthly
updated certifications indicating the then current status of
exceptions, until all such exceptions have been eliminated.
Section 3.07.
High-Cost Home Loans.
It is agreed and understood by the
Depositor and the Trustee hereto that it is not intended that any
Home Equity Loan be included in the Trust that is (i) a "High-Cost
Home Loan" as defined in the New Jersey Home Ownership Act
effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective
January 1, 2004, (iii) a "High Cost Home Mortgage Loan" as defined
in the Massachusetts Regulatory Home Loan Practices Act effective
November 7, 2004 or (iv) a “High-Cost Home Loan” as
defined by the Indiana High Cost Home Loan Law effective January 1,
2005.
Section 3.08.
Custodian.
Notwithstanding anything to the contrary
in this Agreement, the parties hereto acknowledge that the
functions of the Trustee with respect to the custody, acceptance,
inspection and release of the Files pursuant to Sections 3.05,
3.06, and 8.14 and the related Pool Certification and Final
Certification shall be performed by the Custodian on the
Trustee’s behalf pursuant to the Custodial Agreement;
provided, however, the Trustee shall remain primarily liable for
such obligations. The fees and expenses of the Custodian will
be paid by the Servicer.
If, pursuant to Section 4.12 of the
Custodial Agreement, the Custodian shall request written
instructions from the Trustee, the Trustee hereby agrees to
promptly provide such instructions.
Section 3.09.
Cooperation Procedures.
(a)
The Seller, the Conduit Seller, the
Depositor, the Servicer and the Trustee covenant to provide each
other with all data and information required to be provided by them
hereunder at the times required hereunder, and additionally
covenant reasonably to cooperate with each other in providing any
additional information required to be obtained by any of them in
connection with their respective duties hereunder. CHEC
shall, in connection with the delivery of each Qualified
Replacement Mortgage to the Custodian, on behalf of the Trustee,
provide the Trustee with information set forth in the Schedule of
Home Equity Loans with respect to such Qualified Replacement
Mortgage.
(b)
The Servicer shall maintain such accurate
and complete accounts, records and computer systems pertaining to
each File as shall enable it and the Trustee to comply with this
Agreement. In performing its recordkeeping duties the
Servicer shall act in accordance with the servicing standards set
forth in this Agreement. The Servicer shall conduct, or cause
to be conducted, periodic audits of its accounts, records and
computer systems as set forth in Sections 8.16 and 8.17 hereof.
The Servicer shall promptly report in writing to the Trustee
any failure on its part to maintain its accounts, records and
computer systems herein provided and promptly take appropriate
action to remedy any such failure.
(c)
CHEC further confirms to the Trustee that
it has caused the portions of the electronic ledger relating to the
Home Equity Loans to be clearly and unambiguously marked to
indicate that such Home Equity Loans have been sold, transferred,
assigned and conveyed through the Depositor to the Trustee and
constitute part of the Trust Estate in accordance with the terms of
the trust created hereunder.
Section 3.10.
Payment of Taxes, Insurance and Other
Charges.
With respect to each Home Equity Loan,
the Servicer shall maintain accurate records reflecting fire and
hazard insurance coverage.
With respect to each Home Equity Loan as
to which the Servicer maintains escrow accounts, the Servicer shall
maintain accurate records reflecting the status of property taxes
which are or may become a lien upon the Property and the status of
fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of
the Mortgagor in any escrow account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the
extent that a Mortgage does not provide for escrow payments, the
Servicer shall, if it has received notice of a default or
deficiency, monitor such payments to determine if they are made by
the Mortgagor, and for this purpose the Servicer shall maintain a
third-party (which may be an Affiliate of the Servicer) tax
monitoring service.
END OF ARTICLE III
ARTICLE IV
ISSUANCE AND SALE OF CERTIFICATES
Section 4.01.
Issuance of Certificates.
On the Startup Day, upon the
Trustee’s receipt from the Depositor of an executed Delivery
Order in the form set forth as Exhibit G hereto, the Trustee shall
authenticate and deliver the Certificates on behalf of the Trust.
Section 4.02.
Sale of Certificates.
At 11:00 a.m. New York City time on the
Startup Day, at the offices of McKee Nelson LLP, One Battery Park
Plaza, 34 th Floor, New York, New York 10004 (or at such
other location acceptable to the Seller), the Seller and the
Conduit Seller will sell and convey the Home Equity Loans and the
money, instruments and other property related thereto to the
Depositor and the Depositor will convey the Home Equity Loans and
the money, instruments and other property related thereto to the
Trustee and the Trustee will deliver (i) to the Underwriters (as
designee of the Depositor), the Offered Certificates with an
aggregate Percentage Interest in each Class equal to 100%
registered in the name of Cede & Co. or in such other names as
the Underwriters shall direct, against payment to the Depositor of
the purchase price thereof by wire transfer of immediately
available funds to the Trustee as designee of the Depositor and
(ii) to the respective registered owners thereof (as designees of
the Depositor, the Seller and the Conduit Seller), Class R
Certificates registered in the name of CHEC Residual, LLC, a
Delaware limited liability company, and the Class X-IO
Certificates, registered in the name of CHEC Residual, LLC, a
Delaware limited liability company (all such events shall be
referred to herein as the “Closing”).
END OF ARTICLE IV
ARTICLE V
CERTIFICATES AND TRANSFER OF INTERESTS
Section 5.01.
Terms.
(a)
The Certificates are pass-through
securities having the rights described therein and herein.
Notwithstanding references herein or therein with respect to
the Certificates as to “principal” and
“interest” thereof, no debt of any Person is
represented thereby, nor are the Certificates or the underlying
Notes guaranteed by any Person (except that the Notes may be
recourse to the Mortgagors thereof to the extent permitted by law
and the terms of the related Note). The Offered Certificates
are payable solely from payments received on or with respect to the
Home Equity Loans (net of the Servicing Fees and Trustee Fees),
from moneys in the Principal and Interest Account, except as
otherwise provided herein and from earnings on moneys and the
proceeds of property held as a part of the Trust Estate. Each
Certificate entitles the Owner thereof to receive monthly on each
Distribution Date, in order of priority of distributions with
respect to such Class of Certificates as set forth in Section 7.03,
a specified portion of such payments with respect to the Home
Equity Loans.
(b)
Each Owner is required, and hereby
agrees, to return to the Trustee, any Certificate prior to the
Trustee making the final distribution due thereon. Any such
Certificate as to which the Trustee has made the final distribution
thereon shall be deemed canceled and shall no longer be Outstanding
for any purpose of this Agreement.
Section 5.02.
Forms.
The Class AF-1 Certificates, the Class
AF-2 Certificates, the Class AF-3 Certificates, the Class AF-4
Certificates, the Class AF-5 Certificates, the Class AF-6
Certificates, the Class AV-1 Certificates, the Class AV-2
Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7 Certificates, the Class B-1
Certificates, the Class B-2 Certificates, the Class B-3
Certificates, the Class X-IO Certificates and the Class R
Certificates shall be in substantially the forms set forth in
Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11,
A-12, A-13, A-14, A-15, A-16, A-17, A-18, B and C hereof,
respectively.
Section 5.03.
Execution, Authentication and
Delivery.
Each Certificate shall be executed on
behalf of the Trust, by the manual signature of one of the
Trustee’s Authorized Officers at the written direction of the
Servicer. In addition, each Certificate shall be
authenticated by the manual signature of one of the Trustee’s
Authorized Officers at the written direction of the
Servicer.
Certificates bearing the manual signature
of individuals who were at any time the proper officers of the
Trustee shall, upon proper authentication by the Trustee, bind the
Trust, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of
authentication of such Certificates.
The initial Certificates shall be dated
as of the Startup Day and delivered at the Closing to the parties
specified in Section 4.02 hereof. Subsequently issued
Certificates will be dated as of the issuance of the Certificate.
No Certificate shall be valid until
executed and authenticated as set forth above.
Section 5.04.
Registration and Transfer of
Certificates.
(a)
The Trustee shall cause to be kept a
register (the “Register”) in which, subject to such
reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and the registration
of transfer of Certificates. The Trustee is hereby initially
appointed Registrar for the purpose of registering Certificates and
transfers of Certificates as herein provided. The Depositor,
the Owners and the Trustee shall have the right to inspect the
Register upon reasonable notice during the Trustee’s normal
hours and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the
Registrar by an Authorized Officer thereof as to the names and
addresses of the Owners of the Certificates and the principal
amounts and numbers of such Certificates.
If a Person other than the Trustee is
appointed as Registrar by the Owners of a majority of the aggregate
Voting Rights represented by the Certificates then Outstanding,
such Owners shall give the Trustee and the Owners prompt written
notice of the appointment of such Registrar and of the location,
and any change in the location, of the Register. In
connection with any such appointment the reasonable fees of the
Registrar shall be paid, as expenses of the Trust, pursuant to
Section 7.06 hereof.
(b)
Subject to the provisions of Section 5.08
hereof, upon surrender for registration of transfer of any
Certificate at the office designated as the location of the
Register, upon the direction of the Registrar, the Trustee shall
execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of a like
Class and in the aggregate outstanding principal amount or
Percentage Interest of the Certificate so surrendered.
(c)
At the option of any Owner, Certificates
of any Class owned by such Owner may be exchanged for other
Certificates authorized of like Class and tenor and a like
aggregate outstanding principal amount or Percentage Interest and
bearing numbers not contemporaneously outstanding, upon surrender
of the Certificates to be exchanged at the office designated as the
location of the Register. Whenever any Certificate is so
surrendered for exchange, upon the direction of the Registrar, the
Trustee shall execute, authenticate and deliver the Certificate or
Certificates which the Owner making the exchange is entitled to
receive.
(d)
All Certificates issued upon any
registration of transfer or exchange of Certificates shall be valid
evidence of the same ownership interests in the Trust and entitled
to the same benefits under this Agreement as the Certificates
surrendered upon such registration of transfer or exchange.
(e)
Every Certificate presented or
surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Registrar duly executed by the Owner
thereof or his attorney duly authorized in writing.
(f)
No service charge shall be made to an
Owner for any registration of transfer or exchange of Certificates,
but the Registrar or Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or
exchange of Certificates; any other expenses in connection with
such transfer or exchange shall be an expense of the Trust.
(g)
It is intended that the Offered
Certificates be registered so as to participate in a global
book-entry system with the Depository, as set forth herein.
Each Class of Offered Certificates shall, except as otherwise
provided in Subsection (h), be initially issued in the form of a
single fully registered Offered Certificate of such Class.
Upon initial issuance, the ownership of each such Offered
Certificate shall be registered in the Register in the name of Cede
& Co., or any successor thereto, as nominee for the Depository.
On the Startup Day, the Offered
Certificates (other than the Class B-3 Certificates) shall be
issued in denominations of $25,000 and integral multiples of $1,000
in excess thereof and the Class B-3 Certificates shall be issued in
denomination of $100,000 and integral multiples of $1,000 in excess
thereof.
The Depositor and the Trustee are hereby
authorized to execute and deliver the Representation Letter with
the Depository in the form provided to the Trustee by the
Depositor.
With respect to the Offered Certificates
registered in the Register in the name of Cede & Co., as
nominee of the Depository, the Depositor, the Servicer, the Seller
and the Trustee shall have no responsibility or obligation to
Direct or Indirect Participants or beneficial owners for which the
Depository holds Offered Certificates from time to time as a
Depository. Without limiting the immediately preceding
sentence, the Depositor, the Servicer, the Sellers and the Trustee
shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any
Direct or Indirect Participant with respect to the ownership
interest in the Offered Certificates, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a
registered Owner of an Offered Certificate as shown in the
Register, of any notice with respect to the Offered Certificates or
(iii) the payment to any Direct or Indirect Participant or any
other Person, other than a registered Owner of an Offered
Certificate as shown in the Register, of any amount with respect to
any distribution of principal or interest on the Offered
Certificates. No Person other than a registered Owner of an
Offered Certificate as shown in the Register shall receive a
certificate evidencing such Offered Certificate.
Upon delivery by the Depository to the
Trustee of written notice to the effect that the Depository has
determined to substitute a new nominee in place of Cede & Co.,
and subject to the provisions hereof with respect to the payment of
interest by the mailing of checks or drafts to the registered
Owners of Offered Certificates appearing as registered Owners in
the registration books maintained by the Trustee at the close of
business on a Record Date, the name “Cede & Co.” in
this Agreement shall refer to such new nominee of the Depository.
(h)
In the event that (i) the Depository or
the Depositor advises the Trustee in writing that the Depository is
no longer willing or able to discharge properly its
responsibilities as nominee and depository with respect to the
Offered Certificates and either of CHEC or the Trustee is unable to
locate a qualified successor or (ii) the Depositor at its sole
option elects to terminate the book-entry system through the
Depository or (iii) after the occurrence of a Servicer Termination
Event, the beneficial owners of each Class of Offered Certificates
representing Percentage Interests aggregating not less than 51% of
such Class advises the Trustee and Depository through the Direct or
Indirect Participants in writing that the continuation of a
book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the “Definitive
Certificates”) to Owners is no longer in the best interests
of the Owners, the Offered Certificates shall no longer be
restricted to being registered in the Register in the name of Cede
& Co. (or a successor nominee) as nominee of the Depository.
In the case of (i) and (ii) above, CHEC may determine that
the Offered Certificates shall be registered in the name of and
deposited with a successor depository operating a global book-entry
system, as may be acceptable to the CHEC and at the expense of
CHEC, or such depository’s agent or designee but, if CHEC
does not select such alternative global book-entry system and in
the case of (iii) above, the Offered Certificates may be registered
in whatever name or names registered Owners of Offered Certificates
transferring Offered Certificates shall designate, in accordance
with the provisions hereof.
(i)
Notwithstanding any other provision of
this Agreement to the contrary, so long as any Offered Certificate
is registered in the name of Cede & Co., as nominee of the
Depository, all distributions of principal or interest on such
Offered Certificates and all notices with respect to such Offered
Certificates shall be made and given, respectively, in the manner
provided in the Representation Letter.
Section 5.05.
Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is
surrendered to the Trustee, or the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate,
and (ii) in the case of any mutilated Certificate, such mutilated
Certificate shall first be surrendered to the Trustee, and in the
case of any destroyed, lost or stolen Certificate, there shall be
first delivered to the Trustee such security or indemnity as may be
reasonably required by it to hold the Trustee harmless (provided,
that with respect to an Owner which is an institutional investor, a
letter of indemnity furnished by it shall be sufficient for this
purpose), then, in the absence of written notice to the Trustee or
the Registrar that such Certificate has been acquired by a bona
fide purchaser, the Trustee shall execute on behalf of the Trust
and the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and aggregate
principal amount, bearing a number not contemporaneously
outstanding.
Upon the issuance of any new Certificate
under this Section, the Registrar or Trustee may require the
payment from the transferor or transferee of the related
Certificate of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto; any
other expenses in connection with such issuance shall be an expense
of the Trust.
Every new Certificate issued pursuant to
this Section in exchange for or in lieu of any mutilated,
destroyed, lost or stolen Certificate shall constitute evidence of
a substitute interest in the Trust, and shall be entitled to all
the benefits of this Agreement equally and proportionately with any
and all other Certificates of the same Class duly issued hereunder
and such mutilated, destroyed, lost or stolen Certificate shall not
be valid for any purpose.
The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates.
Section 5.06.
Persons Deemed Owners.
Prior to due presentment for registration
of transfer of any Certificate, the Trustee and any agent of the
Trustee may treat the Person in whose name any Certificate is
registered as the Owner of such Certificate for the purpose of
receiving distributions with respect to such Certificate and for
all other purposes whatsoever, and neither the Trustee nor any
agent of the Trustee shall be affected by notice to the contrary.
Section 5.07.
Cancellation.
All Certificates surrendered for
registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and
shall be promptly canceled by it. No Certificate shall be
authenticated in lieu of or in exchange for any Certificate
canceled as provided in this Section, except as expressly permitted
by this Agreement. All canceled Certificates may be held by
the Trustee in accordance with its standard retention policy in
effect from time to time.
Section 5.08.
Limitation on Transfer of Ownership
Rights.
(a)
No sale or other transfer of record or
beneficial ownership of a Class R Certificate (whether pursuant to
a purchase, a transfer resulting from a default under a secured
lending agreement or otherwise) shall be made to a Disqualified
Organization or an agent of a Disqualified Organization. The
transfer, sale or other disposition of a Class R Certificate
(whether pursuant to a purchase, a transfer resulting from a
default under a secured lending agre
