<PAGE>
SAXON ASSET SECURITIES TRUST 2000-2
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-2
TRUST AGREEMENT
dated as of June 1, 2000
among
SAXON ASSET SECURITIES COMPANY,
as Depositor
SAXON MORTGAGE, INC.,
as Master Servicer
and
BANKERS TRUST COMPANY,
as Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article I Definitions................................................................................. 9
Section 1.01. Standard Terms; Section References.................................................... 9
Section 1.02. Defined Terms......................................................................... 9
Article II Formation of Trust; Conveyance of Mortgage Loans........................................... 41
Section 2.01. Conveyance of Mortgage Loans.......................................................... 41
Section 2.02. Purchase of Subsequent Mortgage Loans................................................. 42
Section 2.03. Pre-Funding Account, Capitalized Interest Account, Reserve Accounts
and Accumulation Account.............................................................. 45
Article III Remitting to Certificateholders........................................................... 46
Section 3.01. Reserved.............................................................................. 46
Section 3.02. Reserved.............................................................................. 46
Section 3.03. Certificate Distributions............................................................. 46
Section 3.04. Reports to the Depositor and the Trustee:............................................. 53
Section 3.05. Reports by or on Behalf of the Master Servicer........................................ 54
Article IV The Certificates........................................................................... 56
Section 4.01. The Certificates...................................................................... 56
Section 4.02. Denominations......................................................................... 57
Article V Miscellaneous Provisions.................................................................... 57
Section 5.01. Request for Opinions.................................................................. 57
Section 5.02. Form of Certificates; Schedules and Exhibits; Governing Law........................... 57
Section 5.03. Optional Termination.................................................................. 58
Section 5.04. Master Servicer; Certificate Registrar, Paying Agent and Calculation Agent............ 58
Section 5.05. Master Servicer Termination Triggers.................................................. 58
</TABLE>
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Schedule I: The Mortgage Loans: A. Group I Mortgage Loans
B. Group II Mortgage Loans
C. PMI Loans
Schedule II: Sales Agreement and Servicing Agreement
Schedule III: Form of Subsequent Sales Agreement
Exhibit AF: 1: Form of Class AF-1 Certificate
2: Form of Class AF-2 Certificate
3: Form of Class AF-3 Certificate
4: Form of Class AF-4 Certificate
5: Form of Class AF-5 Certificate
6: Form of Class AF-6 Certificate
Exhibit MF: 1: Form of Class MF-1 Certificate
2: Form of Class MF-2 Certificate
Exhibit BF: 1: Form of Class BF-1 Certificate
2: Form of Class BF-2 Certificate
Exhibit AV 1: Form of Class AV-1 Certificate
Exhibit MV: 1: Form of Class MV-1 Certificate
2: Form of Class MV-2 Certificate
Exhibit BV: 1: Form of Class BV-1 Certificate
2: Form of Class BV-2 Certificate
Exhibit A-IO: 1: Form of Class A-IO Certificate
Exhibit P: 1: Form of Class P-1 Certificate
2: Form of Class P-2 Certificate
Exhibit C: Form of Class C Certificate
Exhibit R: Form of Class R Certificate
Exhibit I: Reportable Exceptions
Exhibit J: Form of Remittance Agency Agreement
Exhibit K: Form of Security Release Certification
ii
<PAGE>
TRUST AGREEMENT
THIS TRUST AGREEMENT dated as of June 1, 2000 (this "Agreement"), among
SAXON ASSET SECURITIES COMPANY, a Virginia corporation (the "Depositor"), SAXON
MORTGAGE, INC., a Virginia corporation, as Master Servicer (the "Master
Servicer"), and BANKERS TRUST COMPANY, a New York corporation, as Trustee, under
this Agreement and the Standard Terms to Trust Agreement (February 2000 Edition)
(the "Standard Terms"), all the provisions of which, unless otherwise specified
herein, are incorporated herein and shall be a part of this Agreement as if set
forth herein in full (this Agreement with the Standard Terms so incorporated,
the "Trust Agreement").
PRELIMINARY STATEMENT
The Board of Directors of the Depositor has duly authorized the formation of
a trust (the "Trust") to issue a series of asset backed certificates with an
aggregate initial Certificate Principal Balance of $740,000,001 to be known as
the Saxon Asset Securities Trust 2000-2, Mortgage Loan Asset Backed
Certificates, Series 2000-2 (the "Certificates"). The Certificates in the
aggregate evidence the entire beneficial ownership in the Trust. The
Certificates consist of the following: the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class
BF-2, Class AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-2, Class A-IO,
Class PF-1, Class PV-1, Class C and Class R Certificates.
In accordance with Section 10.01 of the Standard Terms, the Trustee will
make elections to treat each of the segregated pools of assets described below
as a real estate mortgage investment conduit (each a "REMIC" or, in the
alternative, the POOLING REMIC, the SECOND-TIER REMIC, and the ISSUING REMIC.
The Certificates, other than the Class R Certificates, represent ownership of
the regular interests in the ISSUING REMIC for purposes of the REMIC Provisions.
The Class R Certificates represents ownership of the sole class of residual
interest in each of the POOLING REMIC, the SECOND-TIER REMIC, and the ISSUING
REMIC for purposes of the REMIC Provisions. The ISSUING REMIC shall hold as its
assets the several classes of uncertificated Lower Tier Interests in the SECOND-
TIER REMIC, other than the Class LT2-R Interest, and each such Lower Tier
Interest is hereby designated as a regular interest in the SECOND-TIER REMIC for
purposes of the REMIC Provisions. The SECOND-TIER REMIC shall hold as its
assets the several classes of uncertificated Lower Tier Interests in the POOLING
REMIC, other than the Class LT1-R Interest, and each such Lower Tier Interest is
hereby designated as a regular interest in the POOLING REMIC. The POOLING REMIC
shall hold as its assets the property of the Trust Estate other than the Lower
Tier Interests in the POOLING REMIC and the SECOND-TIER REMIC, the Prefunding
Account, and the Capitalized Interest Account. The startup day for each REMIC
created hereby for purposes of the REMIC Provisions is the Closing Date. In
addition, for purposes of the REMIC Provisions, the latest possible maturity
date for each regular interest in each REMIC created hereby is the latest date
specified in Section 9.01 of the Standard Terms.
POOLING REMIC
The following table sets forth (or describes) the class designation,
interest rate, and principal amount for each class of the POOLING REMIC Lower
Tier Interests.
<TABLE>
<CAPTION>
POOLING REMIC POOLING REMIC
Lower Tier Initial Class Principal
---------
Lower Tier Class Interest Rate Amount
------------- ------
Designation
-----------
<S> <C> <C>
Class LT1F-1 (1) $401,980,253
Class LT1F-2 (1) 6,000,000
Class LT1F-3 (1) 15,000,000
Class LT1F-4 (1) 5,000,000
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Class LT1F-5 (1) 4,000,000
Class LT1F-6 (1) 3,000,000
Class LT1F-7 (1) 3,000,000
Class LT1F-8 (1) 5,000,000
Class LT1F-9 (1) 2,000,000
Class LT1F-10 (1) 4,000,000
Class LT1F-11 (1) 41,000,000
Class LT1V-1 (2) 218,019,848
Class LT1V-2 (2) 4,000,000
Class LT1V-3 (2) 2,500,000
Class LT1V-4 (2) 1,500,000
Class LT1V-5 (2) 1,500,000
Class LT1V-6 (2) 1,500,000
Class LT1V-7 (2) 1,000,000
Class LT1V-8 (2) 20,000,000
Class LT1-R (3) (3)
</TABLE>
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Interests is a per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans in Group I as of
the first day of the calendar month immediately preceding the Distribution
Date.
(2) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Interests is a per annum rate equal to the
weighted average of the Net Rates of the Mortgage Loans in Group II as of
the first day of the calendar month immediately preceding the Distribution
Date.
(3) The Class LT1-R Interest is the sole class of residual interest in the
POOLING REMIC. It does not have an interest rate or a principal balance.
On each Distribution Date, interest is payable on each POOLING REMIC Lower
Tier Regular Interest at the rate shown above.
On each Distribution Date, all collections and other recoveries attributable
to principal of the Mortgage Loans in Group I, and all Realized Losses
attributable to the Mortgage Loans in Group I, shall be allocated first to the
Class LT1F-1 Interest until its principal balance is reduced to zero, and then
to each of the remaining Lower Tier Interests in the POOLING REMIC having a
Class LT1F designation sequentially, in ascending numerical order, until the
principal balance of each such Lower Tier Interest is reduced to zero.
On each Distribution Date, all collections and other recoveries attributable
to principal of the Mortgage Loans in Group II, and all Realized Losses
attributable to the Mortgage Loans in Group II, shall be allocated first to the
Class LT1V-1 Interest until its principal balance is reduced to zero, and then
to each of the remaining Lower Tier Interests in
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the POOLING REMIC having a Class LT1V designation sequentially, in ascending
numerical order, until the principal balance of each such Lower Tier Interest is
reduced to zero.
For any Distribution Date, prepayment penalties received with respect to the
Mortgage Loans in Group I and Group II shall be allocated proportionally among
the Lower Tier Interests in the POOLING REMIC in accordance with their relative
principal balances immediately before such Distribution Date.
SECOND-TIER REMIC
The following table sets forth (or describes) the class designation,
interest rate, and principal amount for each class of the SECOND-TIER REMIC
Lower Tier Interests.
<TABLE>
<CAPTION>
SECOND-TIER REMIC SECOND-TIER REMIC Corresponding Class of
Lower Tier Initial Class Principal Certificates (or
---------
Lower Tier Class Interest Rate Amount Components)
------------- ------
Designation
-----------
<S> <C> <C> <C>
Class LT2-D (1) $244,990,126.50 N/A
Class LT2-AF-1 (1) 62,085,000.00 Class AF-1
Class LT2-AF-2 (1) 31,621,500.00 Class AF-2
Class LT2-AF-3 (1) 37,060,000.00 Class AF-3
Class LT2-AF-4 (1) 32,122,500.00 Class AF-4
Class LT2-AF-5 (1) 26,366,000.00 Class AF-5
Class LT2-AF-6 (1) 24,499,000.00 Class AF-6
Class LT2-MF-1 (1) 13,473,000.00 Class MF-1
Class LT2-MF-2 (1) 6,982,000.00 Class MF-2
Class LT2-BF-1 (1) 6,002,500.00 Class BF-1
Class LT2-BF-2 (1) 4,777,126.50 Class BF-2
Class LT2-IO-F1 (2) (2) Class A-IO-I
Class LT2-IO-F2 (3) (3) Class A-IO-I
Class LT2-IO-F3 (4) (4) Class A-IO-I
Class LT2-IO-F4 (5) (5) Class A-IO-I
Class LT2-IO-F5 (6) (6) Class A-IO-I
Class LT2-IO-F6 (7) (7) Class A-IO-I
Class LT2-IO-F7 (8) (8) Class A-IO-I
Class LT2-IO-F8 (9) (9) Class A-IO-I
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
Class LT2-IO-F9 (10) (10) Class A-IO-I
Class LT2-IO-F10 (11) (11) Class A-IO-I
Class LT2-Q (12) 125,009,924 N/A
Class LT2-AV-1 (12) 104,883,500 Class AV-1
Class LT2-MV-1 (12) 8,125,500 Class MV-1
Class LT2-MV-2 (12) 6,000,000 Class MV-2
Class LT2-BV-1 (12) 3,063,000 Class BV-1
Class LT2-BV-2 (12) 2,937,924 Class BV-2
Class LT2-IO-V1 (13) (13) Class A-IO-II
Class LT2-IO-V2 (14) (14) Class A-IO-II
Class LT2-IO-V3 (15) (15) Class A-IO-II
Class LT2-IO-V4 (16) (16) Class A-IO-II
Class LT2-IO-V5 (17) (17) Class A-IO-II
Class LT2-IO-V6 (18) (18) Class A-IO-II
Class LT2-IO-V7 (19) (19) Class A-IO-II
Class LT2-R (20) (20)
</TABLE>
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Interests is a per annum rate equal to the Group
I Net Rate.
(2) The Class LT2-IO F1 Interest has a notional principal balance of $6,000,000
and, for each Distribution Date up to and including the Distribution Date
in September 2000, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(3) The Class LT2-IO F2 Interest has a notional principal balance of
$15,000,000 and, for each Distribution Date up to and including the
Distribution Date in December 2000, shall bear interest at a rate of 6% and
shall not bear interest thereafter.
(4) The Class LT2-IO F3 Interest has a notional principal balance of $5,000,000
and, for each Distribution Date up to and including the Distribution Date
in March 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(5) The Class LT2-IO F4 Interest has a notional principal balance of $4,000,000
and, for each Distribution Date up to and including the Distribution Date
in June 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(6) The Class LT2-IO F5 Interest has a notional principal balance of $3,000,000
and, for each Distribution Date up to and including the Distribution Date
in September 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
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<PAGE>
(7) The Class LT2-IO F6 Interest has a notional principal balance of $3,000,000
and, for each Distribution Date up to and including the Distribution Date
in December 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(8) The Class LT2-IO F7 Interest has a notional principal balance of $5,000,000
and, for each Distribution Date up to and including the Distribution Date
in March 2002, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(9) The Class LT2-IO F8 Interest has a notional principal balance of $2,000,000
and, for each Distribution Date up to and including the Distribution Date
in June 2002, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(10) The Class LT2-IO F9 Interest has a notional principal balance of $4,000,000
and, for each Distribution Date up to and including the Distribution Date
in September 2002, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(11) The Class LT2-IO F10 Interest has a notional principal balance of
$41,000,000 and, for each Distribution Date up to and including the
Distribution Date in December 2002, shall bear interest at a rate of 6% and
shall not bear interest thereafter.
(12) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Interests is a per annum rate equal to the Group
II Net Rate.
(13) The Class LT2-IO V1 Interest has a notional principal balance of $4,000,000
and, for each Distribution Date up to and including the Distribution Date
in September 2000, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(14) The Class LT2-IO V2 Interest has a notional principal balance of
$2,5000,000 and, for each Distribution Date up to and including the
Distribution Date in December 2000, shall bear interest at a rate of 6% and
shall not bear interest thereafter.
(15) The Class LT2-IO V3 Interest has a notional principal balance of $1,500,000
and, for each Distribution Date up to and including the Distribution Date
in March 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(16) The Class LT2-IO V4 Interest has a notional principal balance of $1,500,000
and, for each Distribution Date up to and including the Distribution Date
in June 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(17) The Class LT2-IO V5 Interest has a notional principal balance of $1,500,000
and, for each Distribution Date up to and including the Distribution Date
in September 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(18) The Class LT2-IO V6 Interest has a notional principal balance of $1,000,000
and, for each Distribution Date up to and including the Distribution Date
in December 2001, shall bear interest at a rate of 6% and shall not bear
interest thereafter.
(19) The Class LT2-IO V7 Interest has a notional principal balance of
$21,000,000 and, for each Distribution Date up to and including the
Distribution Date in December 2002, shall bear interest at a rate of 6% and
shall not bear interest thereafter.
(20) The Class LT2-R Interest is the sole class of residual interest in the
SECOND-TIER REMIC. It does not have an interest rate or a principal
balance.
5
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On each Distribution Date (and the related Accrual Period), a portion of
the interest that accrues at the rate shown above on the Class LT2-D Interest
shall be deferred and added to the principal balance of the Class LT2-D
Interest. For any Distribution Date, the portion so deferred shall equal 50% of
the increase occurring on such Distribution Date in the Group I
Overcollateralization Amount. Interest so deferred shall be applied to make
principal payments on the other Lower Tier Interests in the SECOND-TIER REMIC.
On each Distribution Date (and the related Accrual Period), a portion of
the interest that accrues at the rate shown above on the Class LT2-Q Interest
shall be deferred and added to the principal balance of the Class LT2-Q
Interest. For any Distribution Date, the portion so deferred shall equal 50% of
the increase occurring on such Distribution Date in the Group II
Overcollateralization Amount. Interest so deferred shall be applied to make
principal payments on the other Lower Tier Interests in the SECOND-TIER REMIC.
On each Distribution Date the Group I Principal Funds, the Group II
Principal Funds, and any interest deferred on the Class LT2-D and Class LT2-Q
Interests, and any Realized Losses, shall be allocated among the Lower Tier
Interests in the SECOND-TIER REMIC in a manner such that immediately following
such Distribution Date:
(a) the principal balance of the Class LT2-AF-1 Interest equals 50% of the
Class AF-1 Certificate Principal Balance;
(b) the principal balance of the Class LT2-AF-2 Interest equals 50% of the
Class AF-2 Certificate Principal Balance;
(c) the principal balance of the Class LT2-AF-3 Interest equals 50% of the
Class AF-3 Certificate Principal Balance;
(d) the principal balance of the Class LT2-AF-4 Interest equals 50% of the
Class AF-4 Certificate Principal Balance;
(e) the principal balance of the Class LT2-AF-5 Interest equals 50% of the
Class AF-5 Certificate Principal Balance;
(f) the principal balance of the Class LT2-AF-6 Interest equals 50% of the
Class AF-6 Certificate Principal Balance;
(g) the principal balance of the Class LT2-MF-1 Interest equals 50% of the
Class MF-1 Certificate Principal Balance;
(h) the principal balance of the Class LT2-MF-2 Interest equals 50% of the
Class MF-2 Certificate Principal Balance;
(i) the principal balance of the Class LT2-BF-1 Interest equals 50% of the
Class BF-1 Certificate Principal Balance;
(j) the principal balance of the Class LT2-BF-2 Interest equals 50% of the
sum of Class BF-2 Certificate Principal Balance and the Class PF-1
Certificate Principal Balance;
(k) the principal balance of the Class LT2-AV-1 Interest equals 50% of the
Class AV-1 Certificate Principal Balance;
(l) the principal balance of the Class LT2-MV-1 Interest equals 50% of the
Class MV-1 Certificate Principal Balance;
(m) the principal balance of the Class LT2-MV-2 Interest equals 50% of the
Class MV-2 Certificate Principal Balance;
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(n) the principal balance of the Class LT2-BV-1 Interest equals 50% of the
Class BV-1 Certificate Principal Balance;
(o) the principal balance of the Class LT2-BV-2 Interest equals 50% of the
sum of the Class BV-2 Certificate Principal Balance and the Class PV-1
Certificate Principal Balance;
(p) the principal balance of the Class LT2-D Interest equals the excess of
the Assumed Principal Balance for Group I over the sum of the balances
of the Class LT2-AF-1, Class LT2-AF-2, Class LT2-AF-3, Class LT2-AF-4,
Class LT-2-AF-5, Class LT2-AF-6, Class LT2-MF-1, Class LT2-MF-2, Class
LT2-BF-1, and Class LT2-BF-2 Interests; and
(q) the principal balance of the Class LT2-Q Interest equals the excess of
the Assumed Principal Balance for Group II over the sum of the
balances of the Class LT2-AV-1, Class LT2-MV-1, Class LT2-MV-2, Class
LT2-BV-1, and Class LT2-BV-2 Interests.
For any Distribution Date, prepayment penalties received with respect to
the Mortgage Loans in Group I shall be allocated to the Class LT2-BF-2 Interest
and prepayment penalties received with respect to the Mortgage Loans in Group II
shall be allocated to the Class LT2-BV-2 Interest.
ISSUING REMIC
The following table sets forth (or describes) the class designation,
interest rate, and principal amount for each class of the ISSUING REMIC Lower
Tier Interests.
<TABLE>
<CAPTION>
ISSUING REMIC ISSUING REMIC
Certificate (or Certificate Initial Class Principal
Component) Class Interest Rate Amount
------------- ------
Designation
-----------
<S> <C> <C>
Class AF-1 (1) $124,170,000
Class AF-2 (2) 63,243,000
Class AF-3 (3) 74,120,000
Class AF-4 (4) 64,245,000
Class AF-5 (5) 52,732,000
Class AF-6 (6) 48,998,000
Class MF-1 (7) 26,949,000
Class MF-2 (8) 13,964,000
Class BF-1 (9) 12,005,000
Class BF-2 (10) 9,554,202
Class PF-1 0% 50
Class A-IO-I (11) (11)
Class AV-1 (12) 209,767,000
Class MV-1 (13) 16,251,000
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Class MV-2 (14) 12,000,000
Class BV-1 (15) 6,126,000
Class BV-2 (16) 5,875,798
Class PV-1 0% 50
Class A-IO-II (17) (17)
Class C (18) (18)
Class R (19) (19)
</TABLE>
(1) The Class AF-1 Pass-Through Rate.
(2) The Class AF-2 Pass Through Rate.
(3) The Class AF-3 Pass Through Rate.
(4) The Class AF-4 Pass Through Rate.
(5) The Class AF-5 Pass Through Rate.
(6) The Class AF-6 Pass Through Rate.
(7) The Class MF-1 Pass Through Rate.
(8) The Class MF-2 Pass Through Rate.
(9) The Class BF-1 Pass Through Rate.
(10) The Class BF-2 Pass Through Rate.
(11) The Class A-I0-I Component does not have a principal balance. For any
Distribution Date, the Class A-IO-I Component shall be entitled to all
interest payable for such date with respect to the Class LT2-IO-F1, Class
LT2-IO-F2, Class LT2-IO-F3, Class LT2-IO-F4, Class LT2-IO-F5, Class LT2-IO-
F6, Class LT2-IO-F7, Class LT2-IO-F8, Class LT2-IO-F9, and Class LT2-IO-F10
Interests.
(12) The Class AV-1 Pass-Through Rate.
(13) The Class MV-1 Pass-Through Rate.
(14) The Class MV-2 Pass-Through Rate.
(15) The Class BV-1 Pass-Through Rate.
(16) The Class BV-2 Pass-Through Rate.
(17) The Class A-IO-II Component does not have a principal balance. For any
Distribution Date, the Class A-IO-II Component shall be entitled to all
interest payable for such date with respect to the Class LT2-IO-V1, Class
LT2-IO-V2, Class LT2-IO-V3, Class LT2-IO-V4, Class LT2-IO-V5, Class LT2-IO-
V6, and Class LT2-IO-V7 Interests.
(18) The Class C Certificate does not have a principal balance. For any
Distribution Date (and the related Accrual Period) the Class C Certificate
shall have a notional principal balance equal to the Assumed Principal
Balance
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<PAGE>
of Group I, and shall accrue interest on such notional principal balance at
a rate equal to the excess of the Group I Net Rate over the product of (a)
2, and (b) the Adjusted Group I Net Rate. Interest that accrues on the
Class C Certificate will be deferred to the extent such interest is applied
to increase the Group I Overcollateralization Amount or the Group II
Overcollateralization Amount. Any interest so deferred shall not itself
bear interest.
(19) The Class R Certificate evidences ownership of the Class LT1-R and Class
LT2-R Interests and also represents the sole class of residual interest in
the ISSUING REMIC. It does not have an interest rate or a principal
balance.
For any Distribution Date, interest, principal, prepayment premiums, and
realized losses shall be allocated among the Certificates ( and Components) in
the manner set out in Section 3.03.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth, the Depositor, the Master
Servicer and the Trustee agree as follows:
Article I
Definitions
Section 1.01. Standard Terms; Section References.
(a) (i) The Standard Terms prescribe the duties, responsibilities and
obligations of the Depositor, the Master Servicer and the Trustee with respect
to the Certificates. The Depositor, the Master Servicer and the Trustee agree to
observe and perform such duties, responsibilities and obligations to the extent
they are not inconsistent with the provisions of this Agreement and acknowledge
that, except to the extent inconsistent with the provisions of this Agreement,
the Standard Terms as of the Closing Date, as modified by Sections 1.01 and 1.02
hereof, are and shall be a part of this Agreement to the same extent as if set
forth herein in full.
(ii) With respect to any inconsistency between the provisions of Section
2.02(b)(A) through 2.02(b)(G) of the Standard Terms and the provisions of
Section 2.3 of the Standard Terms to Custody Agreement relating to this
Agreement, the provisions of the latter shall control.
(b) Unless otherwise specified herein, all references in this Agreement to
sections shall mean sections contained in this Agreement.
Section 1.02. Defined Terms.
Capitalized terms used but not defined in this Agreement shall have the
respective meanings assigned to them in Section 1.01 of the Standard Terms. In
addition, the following provisions shall govern the defined terms set forth
below for the Trust Agreement. If a term defined in the Standard Terms is also
defined herein, the definition herein shall control.
"Accrual Period": With respect to the Group I Certificates (other than the
Class AF-1 Certificates) and the Class A-IO Certificates and each Lower Tier
Interest and any Distribution Date, the calendar month immediately preceding
such Distribution Date; a "calendar month" shall be deemed to be 30 days. With
respect to the Class AF-1 Certificates and the Group II Certificates and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding the current Distribution Date.
All calculations of interest on the Group I Certificates (other than the Class
AF-1 Certificates) and the Class A-IO Certificates will be made on the basis of
a 360-day year assumed to consist of twelve 30-day months and all calculations
of interest on the Class AF-1 Certificates and the Group II Certificates will be
made on the basis of the actual number of days elapsed in the related Accrual
Period and a year of 360 days.
"Adjusted Group I Net Rate": For any Distribution Date (and the related
-
Accrual Period), the weighted average of the interest rates on the Class LT2-D,
Class LT2-AF-1, Class LT2-AF-2, Class LT2-AF-3, Class LT2-AF-4, Class LT2-AF-5,
Class LT2-AF-6, Class LT2-MF-1, Class LT2-MF-2, Class LT2-BF-1, and Class LT2-
BF-2,
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<PAGE>
computed for this purpose by limiting the interest rate payable on the Class
LT2-D Interest at zero and the rate payable on each of the other above-listed
Lower Tier Interests in the SECOND-TIER REMIC to a rate that corresponds to the
rate payable for such Distribution Date on the Corresponding Class of
Certificates.
"A-I0-I Adjusted Rate": As of any Distribution Date, the per annum rate
equal to the product of the Class A-I0 Pass Through Rate and a fraction, the
numerator of which is the Class A-I0-I Component Notional Principal Balance for
such Distribution Date, and the denominator of which is the aggregate principal
balance of the Mortgage Loans in Group I (before giving effect to any
distributions on such Distribution Date).
"A-I0-II Adjusted Rate": As of any Distribution Date, the per annum rate
equal to the amount distributable in respect of the Class A-I0-II Component for
such Distribution Date divided by (x) the Group II Certificate Principal Balance
divided by (y) the actual number of days in the related Accrual Period and (z)
multiplied by 360.
"Assumed Investment Rate": 3.00% per annum.
"Assumed Principal Balance": As of any Distribution Date and for each group
of Mortgage Loans, the sum of:
(i) the aggregate Scheduled Principal Balances of the related Mortgage
Loans as of such Distribution Date, plus
(ii) the aggregate amount on deposit in the Pre-Funding Account (less all
amounts representing investment earnings thereon).
"Book-Entry Certificates": The Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class BF-2,
Class AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-2 and Class A-IO
Certificates except to the extent provided in Section 5.03 of the Standard
Terms.
"Calculation Agent": Bankers Trust Company, a New York corporation, and its
successors and assigns in such capacity.
"Capitalized Interest Account": The account created and maintained with the
Paying Agent by the Trust pursuant to Section 2.03.
"Capitalized Interest Requirement": As to any Distribution Date to and
including the Distribution Date immediately following the end of the Funding
Period, the sum of:
(i) the product of (x) the excess of the Group I Pre-Funded Amount on
the Closing Date over the Principal Balance of any Group I
Subsequent Mortgage Loan transferred to the Trust prior to such
Distribution Date if such loan has a monthly payment that will be
included in the amounts distributed for such Distribution Date, and
(y) the weighted average of the Net Rates for the Mortgage Loans in
Group I, and
(ii) the product of (x) the excess of the Group II Pre-Funded Amount on
the Closing Date over the Principal Balance of any Group II
Subsequent Mortgage Loan transferred to the Trust prior to such
Distribution Date if such loan has a monthly payment that will be
included in the amounts distributed for such Distribution Date, and
(y) the weighted average of the Net Rates for the Mortgage Loans in
Group II.
"Certificate": Any of the Class AF-1, Class AF-2, Class AF-3, Class AF-4,
Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class
AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-2, Class A-IO, Class PF-1,
Class PV-1, Class C and Class R Certificates.
"Certificate Registrar": Bankers Trust Company, a New York corporation, and
its successors and assigns in such capacity.
"Certificate Definitions":
10
<PAGE>
"Group I Certificates"
"Class AF-1 Available Funds Cap": As of any Distribution Date, the product
of (A) the Group I Net Rate for such Distribution Date and (B) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
"Class AF-1 Certificate": Any Certificate designated as a "Class AF-1
Certificate" on the face thereof, in the form of Exhibit AF-1 hereto,
representing the right to distributions as set forth herein.
"Class AF-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-1 Certificates.
"Class AF-1 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-1 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-1 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class AF-1 Current Interest with respect to prior Distribution
Dates over
(B) the amount actually distributed to Class AF-1 with respect to
interest on such prior Distribution Dates and
(ii) interest thereon at the Class AF-1 Pass-Through Rate for the related
Accrual Period.
"Class AF-1 Pass-Through Rate": With respect to any Distribution Date, the
lesser of:
(x) One Month LIBOR plus 0.150% per annum and
(y) the Class AF-1 Available Funds Cap for such Distribution Date.
"Class AF-2 Certificate": Any Certificate designated as a "Class AF-2
Certificate" on the face thereof, in the form of Exhibit AF-2 hereto,
representing the right to distributions as set forth herein.
"Class AF-2 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-2 Certificates.
"Class AF-2 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-2 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-2 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-2 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class AF-2 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class AF-2 with respect to
interest on such prior Distribution Dates and
11
<PAGE>
(ii) interest thereon at the Class AF-2 Pass-Through Rate for the related
Accrual Period.
"Class AF-2 Pass-Through Rate": With respect to each Distribution Date, the
lesser of:
(x) 7.965% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class AF-3 Certificate": Any Certificate designated as a "Class AF-3
Certificate" on the face thereof, in the form of Exhibit AF-3 hereto,
representing the right to distributions as set forth herein.
"Class AF-3 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-3 Certificates.
"Class AF-3 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-3 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-3 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-3 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-3 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class AF-3 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class AF-3 with respect to
interest on such prior Distribution Dates and
(ii) interest thereon at the Class AF-3 Pass-Through Rate for the related
Accrual Period.
"Class AF-3 Pass-Through Rate": With respect to each Distribution Date, the
lesser of:
(x) 8.051% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class AF-4 Certificate": Any Certificate designated as a "Class AF-4
Certificate" on the face thereof, in the form of Exhibit AF-4 hereto,
representing the right to distributions as set forth herein.
"Class AF-4 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-4 Certificates.
"Class AF-4 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-4 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-4 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-4 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-4 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class AF-4 Current Interest with respect to prior
Distribution Dates over
12
<PAGE>
(B) the amount actually distributed to Class AF-4 with respect to
interest on such prior Distribution Dates and
(ii) interest thereon at the Class AF-4 Pass-Through Rate for the related
Accrual Period.
"Class AF-4 Pass-Through Rate": With respect to each Distribution Date, the
lesser of :
(x) 8.234% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class AF-5 Certificate": Any Certificate designated as a "Class AF-5
Certificate" on the face thereof, in the form of Exhibit AF-5 hereto,
representing the right to distributions as set forth herein.
"Class AF-5 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-5 Certificates.
"Class AF-5 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-5 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-5 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-5 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-5 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class AF-5 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class AF-5 with respect to
interest on such prior Distribution Dates and
(ii) interest thereon at the Class AF-5 Pass-Through Rate for the related
Accrual Period.
"Class AF-5 Pass-Through Rate": With respect to each Distribution Date, the
lesser of:
(x) 8.483% per annum plus, after the Initial Optional Termination Date,
0.50% and
(y) the Group I Net Rate for such Distribution Date.
"Class AF-6 Certificate": Any Certificate designated as a "Class AF-6
Certificate" on the face thereof, in the form of Exhibit AF-6 hereto,
representing the right to distributions as set forth herein.
"Class AF-6 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-6 Certificates.
"Class AF-6 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class AF-6 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-6 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-6 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class AF-6 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
13
<PAGE>
(A) Class AF-6 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class AF-6 with respect to
interest on such prior Distribution Dates and
(ii) interest thereon at the Class AF-6 Pass-Through Rate for the
related Accrual Period.
"Class AF-6 Pass-Through Rate": With respect to each Distribution
Date, the lesser of:
(x) 7.971% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class AF-6 Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the product of:
(i) a fraction the numerator of which is the Class AF-6 Certificate
Principal Balance and the denominator of which is the Group I
Class A Certificate Principal Balance, in each case immediately
prior to such Distribution Date,
(ii) the Group I Class A Principal Distribution Amount for such
Distribution Date and
(iii) the applicable percentage for such Distribution Date set forth
below:
<TABLE>
Distribution Date Percentage
----------------- ----------
<S> <C>
July 2000 - June 2003 0%
July 2003 - June 2005 45%
July 2005 - June 2006 80%
July 2006 - June 2007 100%
July 2007 and thereafter 300%
</TABLE>
and (y) the Group I Class A Principal Distribution Amount.
"Class MF-1 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group I which have been
applied in reduction of the Certificate Principal Balance of the Class MF-1
Certificates pursuant to Section 3.03(n)(iv) hereof.
"Class MF-1 Certificate": Any Certificate designated as a "Class MF-1
Certificate" on the face thereof, in the form of Exhibit MF-1 hereto,
representing the right to distributions as set forth herein.
"Class MF-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class MF-1 Certificates less any Class MF-1 Applied Realized
Loss Amount.
"Class MF-1 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class MF-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
MF-1 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class MF-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class MF-1 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of
14
<PAGE>
(A) Class MF-1 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class MF-1 with
respect to interest on such prior Distribution Dates
and
(ii) interest thereon at the Class MF-1 Pass-Through Rate for the
related Accrual Period.
"Class MF-1 Pass-Through Rate": With respect to each Distribution
Date, the lesser of
(x) 8.370% per annum plus, after the Initial Optional Termination
Date, 0.50% and
(y) the Group I Net Rate for such Distribution Date.
"Class MF-1 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of:
(i) the Class MF-1 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class MF-1
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(e)(iii) hereof.
"Class MF-2 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group I which have been
applied in reduction of the Certificate Principal Balance of the Class MF-2
Certificates pursuant to Section 3.03(n)(iii) hereof.
"Class MF-2 Certificate": Any Certificate designated as a "Class MF-2
Certificate" on the face thereof, in the form of Exhibit MF-2 hereto,
representing the right to distributions as set forth herein.
"Class MF-2 Certificate Principal Balance": The Certificate Principal
Balance of the Class MF-2 Certificates less any Class MF-2 Applied Realized
Loss Amount.
"Class MF-2 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class MF-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
MF-2 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class MF-2 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class MF-2 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class MF-2 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class MF-2 with respect
to interest on such prior Distribution Dates and
(ii) interest thereon at the Class MF-2 Pass-Through Rate for the
related Accrual Period.
"Class MF-2 Pass-Through Rate": With respect to each Distribution
Date, the lesser of:
(x) 8.664% per annum plus, after the Initial Optional Termination
Date, 0.50% and
(y) the Group I Net Rate for such Distribution Date.
"Class MF-2 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of:
15
<PAGE>
(i) the Class MF-2 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class MF-2
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(e)(v) hereof.
"Class BF-1 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group I which have been
applied in reduction of the Certificate Principal Balance of the Class BF-1
Certificates pursuant to Section 3.03(n)(ii) hereof.
"Class BF-1 Certificate": Any Certificate designated as a "Class BF-1
Certificate" on the face thereof, in the form of Exhibit BF-1 hereto,
representing the right to distributions as set forth herein.
"Class BF-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class BF-1 Certificates less any Class BF-1 Applied Realized
Loss Amount.
"Class BF-1 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class BF-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
BF-1 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class BF-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class BF-1 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BF-1 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class BF-1 with respect
to interest on such prior Distribution Dates and
(ii) interest thereon at the Class BF-1 Pass-Through Rate for the
related Accrual Period.
"Class BF-1 Pass-Through Rate": With respect to each Distribution
Date, the lesser of:
(x) 8.700% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class BF-1 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of:
(i) the Class BF-1 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BF-1
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(e)(vii) hereof.
"Class BF-2 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group I which have been
applied in reduction of the Certificate Principal Balance of the Class BF-2
Certificates pursuant to Section 3.03(n)(i) hereof.
"Class BF-2 Certificate": Any Certificate designated as a "Class BF-2
Certificate" on the face thereof, in the form of Exhibit BF-2 hereto,
representing the right to distributions as set forth herein.
"Class BF-2 Certificate Principal Balance": The Certificate Principal
Balance of the Class BF-2 Certificates less any Class BF-2 Applied Realized Loss
Amount.
16
<PAGE>
"Class BF-2 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class BF-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
BF-2 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class BF-2 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final non-
appealable order.
"Class BF-2 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BF-2 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class BF-2 with respect
to interest on such prior Distribution Dates and
(ii) interest thereon at the Class BF-2 Pass-Through Rate for the
related Accrual Period.
"Class BF-2 Pass-Through Rate": With respect to each Distribution
Date, the lesser of:
(x) 8.700% per annum and
(y) the Group I Net Rate for such Distribution Date.
"Class BF-2 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of:
(i) the Class BF-2 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BF-2
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(e)(ix) hereof.
"Class PF-1 Accumulation Account": The account or accounts created
and maintained for the Trust pursuant to Section 2.03 hereof.
"Class PF-1 Certificate": Any Certificate designated as a "Class PF-1
Certificate" on the face thereof, in the form of Exhibit PF-1 hereto,
representing the right to distributions as set forth herein.
"Class PF-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class PF-1 Certificates, which is initially $50.
"Class PF-1 Prepayment Support Amount": As to each Distribution Date
on which the Class BF-2 Certificate Principal Balance or Class BV-2 Certificate
Principal Balance are greater than zero, all prepayment penalties with respect
to the Mortgage Loans in Group I collected during the related Due Period.
"Class PF-1 Reserve Account": The account or accounts created and
maintained for the Trust pursuant to Section 2.03 hereof.
"Group II Certificates"
"Class AV-1 Certificate": Any Certificate designated as a "Class AV-1
Certificate" on the face thereof, in the form of Exhibit AV-1 hereto,
representing the right to distributions as set forth herein.
"Class AV-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class AV-1 Certificates.
"Class AV-1 Certificates Carryover": If on any Distribution Date the
Class AV-1 Pass-Through Rate is based upon the Group II Available Funds Cap, the
excess of:
17
<PAGE>
(i) the amount of interest the Class AV-1 Certificates would be
entitled to receive on such Distribution Date had the Class AV-1
Pass-Through Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted average of
the Maximum Lifetime Mortgage Interest Rates on the Mortgage
Loans in Group II less the Group II Servicing Fee Rate, the Group
II Master Servicing Fee Rate, the A-IO-II Adjusted Rate and, with
respect to each PMI Mortgage Loan, the PMI Premium Rate) over
(ii) the amount of interest such Certificates received on such
Distribution Date based on the Group II Available Funds Cap,
together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the Group
II Available Funds Cap).
"Class AV-1 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class AV-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AV-1 Pass Through Rate plus any amount previously distributed with respect to
interest for Class AV-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order; provided, however, Class AV-1 Current Interest shall not
include any Class AV-1 Certificates Carryover.
"Class AV-1 Interest Carry Forward Amount": With respect to any
Distribution Date, the sum of:
(i) the excess of:
(A) Class AV-1 Current Interest with respect to prior
Distribution Dates (excluding any Class AV-1
Certificates Carryover) over
(B) the amount actually distributed to Class AV-1 with
respect to interest (other than in respect of Class AV-1
Certificate Carryover) on such prior Distribution Dates
and
(ii) interest on such excess at the Class AV-1 Pass-Through Rate for
the related Accrual Period.
"Class AV-1 Pass-Through Rate": With respect to any Distribution
Date, the lesser of:
(x) One Month LIBOR plus, in the case of any Distribution Date on or
prior to the Initial Optional Termination Date, 0.260% per annum, or
in the case of any Distribution Date that occurs after the Initial
Optional Termination Date, plus 0.520% per annum and
(y) the Group II Available Funds Cap for such Distribution Date.
"Class MV-1 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group II which have been
applied in reduction of the Certificate Principal Balance of the Class MV-1
Certificates pursuant to Section 3.03(o)(iv) hereof.
"Class MV-1 Certificate": Any Certificate designated as a "Class MV-1
Certificate" on the face thereof, in the form of Exhibit MV-1 hereto,
representing the right to distributions as set forth herein.
"Class MV-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class MV-1 Certificates less any Class MV-1 Applied Realized Loss
Amount.
"Class MV-1 Certificates Carryover": If on any Distribution Date the
Class MV-1 Pass-Through Rate is based upon the Group II Available Funds Cap, the
excess of:
(i) the amount of interest the Class MV-1 Certificates would be
entitled to receive on such Distribution Date had the Class MV-1
Pass-Through Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted average of
the Maximum Lifetime Mortgage Interest Rates on the Mortgage
Loans in Group II less the Group II
18
<PAGE>
Servicing Fee Rate, the Group II Master Servicing Fee Rate, the
A-IO-II Adjusted Rate and, with respect to each PMI Mortgage
Loan, the PMI Premium Rate) over
(ii) the amount of interest such Certificates received on such
Distribution Date based on the Group II Available Funds Cap,
together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the Group
II Available Funds Cap).
"Class MV-1 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class MV-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
MV-1 Pass Through Rate plus any amount previously distributed with respect to
interest for Class MV-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order; provided, however, Class MV-1 Current Interest shall not
include any Class MV-1 Certificates Carryover.
"Class MV-1 Interest Carry Forward Amount": With respect to any
Distribution Date, the sum of:
(i) the excess of:
(A) Class MV-1 Current Interest with respect to prior
Distribution Dates (excluding any Class MV-1
Certificates Carryover) over
(B) the amount actually distributed to Class MV-1 with
respect to interest (other than in respect of Class MV-1
Certificate Carryover) on such prior Distribution Dates
and
(ii) interest on such excess at the Class MV-1 Pass-Through Rate for
the related Accrual Period.
"Class MV-1 Pass-Through Rate": With respect to any Distribution Date,
the lesser of:
(x) One Month LIBOR plus, in the case of any Distribution Date on or
prior to the Initial Optional Termination Date, 0.580% per annum, or
in the case of any Distribution Date that occurs after the Initial
Optional Termination Date, plus 0.870% per annum and
(y) the Group II Available Funds Cap for such Distribution Date.
"Class MV-1 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of:
(i) the Class MV-1 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class MV-1
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(f)(iii) hereof.
"Class MV-2 Applied Realized Loss Amount": As to any Distribution
Date, the sum of the Realized Losses with respect to Group II which have been
applied in reduction of the Certificate Principal Balance of the Class MV-2
Certificates pursuant to Section 3.03(o)(iii) hereof.
"Class MV-2 Certificate": Any Certificate designated as a "Class MV-2
Certificate" on the face thereof, in the form of Exhibit MV-2 hereto
representing the right to distributions as set forth herein.
"Class MV-2 Certificate Principal Balance": The Certificate Principal
Balance of the Class MV-2 Certificates less any Class MV-2 Applied Realized Loss
Amount.
"Class MV-2 Certificates Carryover": If on any Distribution Date the
Class MV-2 Pass-Through Rate is based upon the Group II Available Funds Cap, the
excess of:
19
<PAGE>
(i) the amount of interest the Class MV-2 Certificates would be
entitled to receive on such Distribution Date had the Class MV-2
Pass-Through Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted average of
the Maximum Lifetime Mortgage Interest Rates on the Mortgage
Loans in Group II less the Group II Servicing Fee Rate, the Group
II Master Servicing Fee Rate, the A-IO-II Adjusted Rate and, with
respect to each PMI Mortgage Loan, the PMI Premium Rate) over
(ii) the amount of interest such Certificates received on such
Distribution Date based on the Group II Available Funds Cap,
together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the Group
II Available Funds Cap).
"Class MV-2 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class MV-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
MV-2 Pass Through Rate plus any amount previously distributed with respect to
interest for Class MV-2 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order; provided, however, Class MV-2 Current Interest shall not
include any Class MV-2 Certificates Carryover.
"Class MV-2 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class MV-2 Current Interest with respect to prior
Distribution Dates (excluding any Class MV-2
Certificates Carryover) over
(B) the amount actually distributed to Class MV-2 with
respect to interest (other than in respect of Class MV-2
Certificate Carryover) on such prior Distribution Dates
and
(ii) interest on such excess at the Class MV-2 Pass-Through Rate for
the related Accrual Period.
"Class MV-2 Pass-Through Rate": With respect to any Distribution Date, the
lesser of:
(x) One Month LIBOR plus, in the case of any Distribution Date on or
prior to the Initial Optional Termination Date, 0.950% per annum, or
in the case of any Distribution Date that occurs after the Initial
Optional Termination Date, plus 1.425% per annum and
(y) the Group II Available Funds Cap for such Distribution Date.
"Class MV-2 Unpaid Realized Loss Amount": As to any Distribution Date, the
excess of:
(i) the Class MV-2 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class MV-2
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(f)(v) hereof.
"Class BV-1 Applied Realized Loss Amount: As to any Distribution Date, the
sum of the Realized Losses with respect to Group II which have been applied in
reduction of the Certificate Principal Balance of the Class BV-1 Certificates
pursuant to Section 3.03(o)(ii) hereof.
"Class BV-1 Certificate": Any Certificate designated as a "Class BV-1
Certificate" on the face thereof, in the form of Exhibit BV-1 hereto
representing the right to distributions as set forth herein.
"Class BV-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class BV-1 Certificates less any Class BV-1 Applied Realized Loss
Amount.
20
<PAGE>
"Class BV-1 Certificates Carryover": If on any Distribution Date the Class
BV-1 Pass-Through Rate is based upon the Group II Available Funds Cap, the
excess of:
(i) the amount of interest the Class BV-1 Certificates would be
entitled to receive on such Distribution Date had the Class BV-1
Pass-Through Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted average of
the Maximum Lifetime Mortgage Interest Rates on the Mortgage
Loans in Group II less the Group II Servicing Fee Rate, the Group
II Master Servicing Fee Rate, the A-IO-II Adjusted Rate and, with
respect to each PMI Mortgage Loan, the PMI Premium Rate) over
(ii) the amount of interest such Certificates received on such
Distribution Date based on the Group II Available Funds Cap,
together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the Group
II Available Funds Cap).
"Class BV-1 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class BV-1 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
BV-1 Pass Through Rate plus any amount previously distributed with respect to
interest for Class BV-1 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order; provided, however, Class BV-1 Current Interest shall not
include any Class BV-1 Certificates Carryover.
"Class BV-1 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BV-1 Current Interest with respect to prior
Distribution Dates (excluding any Class BV-1
Certificates Carryover) over
(B) the amount actually distributed to Class BV-1 with
respect to interest (other than in respect of Class BV-1
Certificate Carryover) on such prior Distribution Dates
and
(ii) interest on such excess at the Class BV-1 Pass-Through Rate for
the related Accrual Period.
"Class BV-1 Pass-Through Rate": With respect to any Distribution Date, the
lesser of:
(x) One Month LIBOR plus, in the case of any Distribution Date on or
prior to the Initial Optional Termination Date, 1.950% per annum, or
in the case of any Distribution Date that occurs after the Initial
Optional Termination Date, plus 2.925% per annum and
(y) the Group II Available Funds Cap for such Distribution Date.
"Class BV-1 Unpaid Realized Loss Amount": As to any Distribution Date, the
excess of:
(i) the Class BV-1 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BV-1
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(f)(vii) hereof.
"Class BV-2 Applied Realized Loss Amount: As to any Distribution Date, the
sum of the Realized Losses with respect to Group II which have been applied in
reduction of the Certificate Principal Balance of the Class BV-2 Certificates
pursuant to Section 3.03(o)(i) hereof.
"Class BV-2 Certificate": Any Certificate designated as a "Class BV-2
Certificate" on the face thereof, in the form of Exhibit BV-2 hereto,
representing the right to distributions as set forth herein.
21
<PAGE>
"Class BV-2 Certificate Principal Balance": The Certificate Principal
Balance of the Class BV-2 Certificates less any Class BV-2 Applied Realized Loss
Amount.
"Class BV-2 Certificates Carryover": If on any Distribution Date the Class
BV-2 Pass-Through Rate is based upon the Group II Available Funds Cap, the
excess of:
(i) the amount of interest the Class BV-2 Certificates would be
entitled to receive on such Distribution Date had the Class BV-2
Pass-Through Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted average of
the Maximum Lifetime Mortgage Interest Rates on the Mortgage
Loans in Group II less the Group II Servicing Fee Rate, the Group
II Master Servicing Fee Rate, the Class A-I0-II Adjusted Rate
and, with respect to each PMI Mortgage Loan, the PMI Premium
Rate) over
(ii) the amount of interest such Certificates received on such
Distribution Date based on the Group II Available Funds Cap,
together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate, without giving effect to the Group
II Available Funds Cap).
"Class BV-2 Current Interest": With respect to any Distribution Date, the
interest accrued on the Class BV-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
BV-2 Pass Through Rate plus any amount previously distributed with respect to
interest for Class BV-2 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order.
"Class BV-2 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BV-2 Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class BV-2 with
respect to interest on such prior Distribution Dates and
(ii) interest on such excess at the Class BV-2 Pass-Through Rate for
the related Accrual Period.
"Class BV-2 Pass-Through Rate": With respect to any Distribution Date, the
lesser of:
(x) One Month LIBOR plus 2.100% per annum and
(y) the Group II Available Funds Cap for such Distribution Date.
"Class BV-2 Unpaid Realized Loss Amount": As to any Distribution Date, the
excess of:
(i) the Class BV-2 Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BV-2
Applied Realized Loss Amount on all previous Distribution Dates
pursuant to Section 3.03(f)(ix) hereof.
"Class PV-1 Certificate": Any Certificate designated as a "Class PV-1
Certificate" on the face thereof, in the form of Exhibit PV-1 hereto,
representing the right to distributions as set forth herein.
"Class PV-1 Certificate Principal Balance": The Certificate Principal
Balance of the Class PV-1 Certificates, which is initially $50.
22
<PAGE>
"Class PV-1 Prepayment Support Amount": As to each Distribution Date on
which the Class BF-2 Certificate Principal Balance or Class BV-2 Certificate
Principal Balance are greater than zero, all prepayment penalties with respect
to the Mortgage Loans in Group II collected during the related Due Period.
"Class PV-1 Reserve Account": The account or accounts created and
maintained for the Trust pursuant to Section 2.03 hereof.
"Class A-I0 Certificates": Any Certificate designated as a "Class A-I0
Certificate" on the face thereof, in the form of Exhibit A-I0 hereto,
representing the right to distributions as set forth herein.
"Class A-I0 Certificate Notional Principal Balance": The aggregate of the
Class A-I0-I Component Notional Principal Balance and the Class A-I0-II
Component Notional Principal Balance.
"Class A-I0-I Component": The payment component of the Class A-I0
Certificates based upon the Class A-I0-I Component Notional Principal Balance.
"Class A-I0-I Component Current Interest": With respect to any
Distribution Date, the interest accrued on the Class A-IO-I Component Notional
Principal Balance immediately prior to such Distribution Date during the related
Accrual Period at the Class A-I0 Pass-Through Rate plus any amount previously
distributed with respect to interest for the Class A-I0-I Component that is
recovered during the related Accrual Period as a voidable preference by a
trustee in bankruptcy pursuant to a final non-appealable order.
"Class A-I0-I Component Interest Carry Forward Amount": With respect to
each Distribution Date, the sum of:
(i) the excess of:
(A) Class A-I0-I Component Current Interest with respect to
prior Distribution Dates over
(B) the amount actually distributed to Class A-I0-I
Component with respect to interest on such prior
Distribution Dates and
(ii) interest thereon at the Class A-I0 Pass-Through Rate for the
related Accrual Period.
"Class A-I0-I Component Notional Principal Balance": With respect to each
Distribution Date, the lesser of:
(i) the Group I Assumed Principal Balance as of the beginning of the
related Due Period, and
(ii) an amount determined with reference to the following schedule:
<TABLE>
<CAPTION>
Class A-I0-I
Distribution Date Component
----------------- ------------
<S> <C>
July 2000 - September 2000 $88,000,000
October 2000 - December 2000 82,000,000
January 2001 - March 2001 67,000,000
April 2001 - June 2001 62,000,000
July 2001 - September 2001 58,000,000
October 2001 - December 2001 55,000,000
January 2002 - March 2002 52,000,000
April 2002 - June 2002 47,000,000
July 2002 - September 2002 45,000,000
October 2002 - December 2002 41,000,000
January 2003 and thereafter 0
</TABLE>
23
<PAGE>
"Class A-I0-II Component": The payment component of the Class A-I0
Certificates based upon the Class A-I0-II Component Notional Principal Balance.
"Class A-I0-II Component Current Interest": With respect to any
Distribution Date, the interest accrued on the Class A-IO-II Component Notional
Principal Balance immediately prior to such Distribution Date during the related
Accrual Period at the Class A-I0 Pass-Through Rate plus any amount previously
distributed with respect to interest for the Class A-I0-II Component that is
recovered during the related Accrual Period as a voidable preference by a
trustee in bankruptcy pursuant to a final non-appealable order.
"Class A-I0-II Component Interest Carry Forward Amount": With respect to
each Distribution Date, the sum of:
(i) the excess of:
(A) Class A-I0-II Component Current Interest with
respect to prior Distribution Dates over
(B) the amount actually distributed to Class A-I0-II
Component with respect to interest on such prior
Distribution Dates and
(ii) interest thereon at the Class A-I0 Pass-Through Rate for
the related Accrual Period.
"Class A-I0-II Component Notional Principal Balance": With respect to each
Distribution Date, the lesser of
(i) the Group II Assumed Principal Balance as of the beginning of the
related Due Period, and
(ii) an amount determined with reference to the following schedule:
<TABLE>
<CAPTION>
Class A-I0-II
Distribution Date Component
----------------- ---------
<S> <C>
July 2000 - September 2000 $32,000,000
October 2000 - December 2000 28,000,000
January 2001 - March 2001 25,500,000
April 2001 - June 2001 24,000,000
July 2001 - September 2001 22,500,000
October 2001 - December 2001 21,000,000
January 2002 - March 2002 20,000,000
April 2002 - June 2002 20,000,000
July 2002 - September 2002 20,000,000
October 2002 - December 2002 20,000,000
January 2003 and thereafter 0
</TABLE>
"Class A-I0 Pass-Through Rate": With respect to each Distribution Date,
6.000%.
"Class": Any of Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-
5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class AV-1, Class
MV-1, Class MV-2, Class BV-1, Class BV-2, Class A-IO, Class PF-1, Class PV-1,
Class C and Class R.
"Class C Certificate": Any of the Certificates designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto representing
the right to distributions as set forth herein.
"Class C Distribution Amount": With respect to any Distribution Date,
the interest that has accrued on the notional balance of the Class C Certificate
for the related Accrual Period, and to the extent not distributed on prior
Distribution Dates, the interest that has accrued in prior Accrual Periods, as
described in the Preliminary Statement.
24
<PAGE>
"Class R Certificate": Any of the Certificates designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit R hereto and evidencing
an interest designated as the "residual interest" in the Pooling, Second-Tier
and Issuing REMICs for purposes of the REMIC Provisions.
"Closing Date": June 14, 2000.
"Corresponding Class": With respect to any Lower Tier Interest in the
Second Tier REMIC, the Class of Certificates (or components) that correspond to
such interest in the manner described in the Preliminary Statement.
"Current Interest": As to any Class (other than the Class A-I0
Certificates) or component, the definition therefor having the corresponding
designation as such Class (other than the Class A-I0 Certificates) or component.
As to the Class A-I0 Certificates, the sum for the related Distribution Date of
Class A-I0-I Component Current Interest and Class A-I0-II Component Current
Interest.
"Custodian": Bankers Trust Company, and its successors and assigns in such
capacity.
"Cut-Off Date": As of the close of business on June 1, 2000 or on each
Subsequent Cut-Off Date, as applicable.
"Delinquent": A Mortgage Loan is "Delinquent" if any payment due thereon
is not made by the close of business on the last day of the Prepayment Period
immediately following the day such payment is scheduled to be due. A Mortgage
Loan is "30 days Delinquent" if such payment has not been received by the close
of business on the last day of the Prepayment Period of the month immediately
succeeding the month in which such payment was due. Similarly for "60 days
Delinquent," "90 days Delinquent" and so on.
"Designated Class": There is no designated Class for purposes of Section
9.02 of the Standard Terms.
"Distribution Account": The account or accounts created and maintained for
the Trust pursuant to Section 3.02 hereof.
"Distribution Amount": As to each Distribution Date and Class of
Certificates, the aggregate amount to be distributed to such Class on such date
pursuant to Section 3.03 hereof.
"Distribution Date": The 25th day of each month, or the next Business Day
if such 25th day is not a Business Day, commencing July 25, 2000.
"Fitch": Fitch, Inc., and its successors (One State Street Plaza, 33rd
Floor, New York, New York 10004).
"Funding Period": The period commencing on the Closing Date and ending on
the earliest to occur of:
(i) the date on which the amount on deposit in the Pre-Funding
Account (exclusive of any investment earnings) is less than
$100,000,
(ii) the date on which an Event of Default occurs and
(iii) August 11, 2000.
Group Definitions:
"Group I": The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Group I, including
any Group I Subsequent Mortgage Loans and any Group I Qualified Substitute
Mortgage Loans delivered in replacement thereof.
"Group I Certificate": Any of the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1,
Class BF-2 and Class PF-1 Certificates.
25
<PAGE>
"Group I Certificate Principal Balance": The sum of the Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1,
Class MF-2, Class BF-1 and Class BF-2 Certificate Principal Balances.
"Group I Class A Certificate Principal Balance": The sum of the Class
AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificate Principal Balances.
"Group I Class A Principal Distribution Amount": With respect to any
Distribution Date before the Group I Stepdown Date or as to which a Group I
Trigger Event has occurred, 100% of the Group I Principal Distribution
Amount for such Distribution Date and with respect to any Distribution Date
on or after the Stepdown Date and as to which a Group I Trigger Event has
not occurred, the excess of:
(i) the Group I Class A Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 72.0% of the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date over
(II) $2,449,901; provided, that if such excess is not a
positive number, such amount shall be deemed to
equal zero.
"Group I Class MF-1 Principal Distribution Amount": With respect to any
Distribution Date on or after the Group I Stepdown Date and as long as a
Group I Trigger Event is not in effect (subject to the proviso set forth in
Section 3.03(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance (after
giving effect to distributions on that date), and
(B) the Class MF-1 Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 83.00% of the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date over
(II) $2,449,901; provided, that if such excess is not a
positive number, such amount shall be deemed to equal
zero.
"Group I Class MF-2 Principal Distribution Amount": With respect to any
Distribution Date on or after the Group I Stepdown Date and as long as a
Group I Trigger Event is not in effect (subject to the proviso set forth in
Section 3.03(c) hereof), the excess of:
26
<PAGE>
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance
(after giving effect to distributions on that date),
(B) the Class MF-1 Certificate Principal Balance (after
giving effect to distributions on that date), and
(C) the Class MF-2 Certificate Principal Amount immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 88.70% of the Assumed Principal Balance for the
Mortgage Loans in Group I on the preceding Due Date,
and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the
Mortgage Loans in Group I on the preceding
Due Date over
(II) $2,449,901; provided, that if such excess is
not a positive number, such amount shall be
deemed to equal zero.
"Group I Class BF-1 Principal Distribution Amount": With respect to any
Distribution on and after the Group I Stepdown Date and as long as a Group I
Trigger Event is not in effect (subject to the proviso set forth in Section
3.03(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance
(after giving effect to distributions on that date),
(B) the Class MF-1 Certificate Principal Balance (after
giving effect to distributions on that date),
(C) the Class MF-2 Certificate Principal Balance (after
giving effect to distributions on that date), and
(D) the Class BF-1 Certificate Principal Balance
immediately prior to such Distribution Date over
(ii) the lesser of:
(A) 93.60% of the Assumed Principal Balance for the
Mortgage Loans in Group I on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date over
(II) $2,449,901; provided, that if such excess is not a
positive number, such amount shall be deemed to equal
zero.
27
<PAGE>
"Group I Class BF-2 Principal Distribution Amount": With respect to any
Distribution Date on and after the Group I Stepdown Date and as long as a
Group I Trigger Event is not in effect (subject to the proviso set forth in
Section 3.03(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance (after
giving effect to distributions on that date),
(B) the Class MF-1 Certificate Principal Balance (after giving
effect to distributions on that date),
(C) the Class MF-2, Certificate Principal Balance (after giving
effect to distributions on that date),
(D) the Class BF-1 Certificate Principal Balance (after giving
effect to distributions on that date), and
(E) the Class BF-2 Certificate Principal Balance immediately
prior to such Distribution Date over
(i) the lesser of:
(A) 97.5% of the Assumed Principal Balance for the Mortgage
Loans in Group I on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage Loans in
Group I on the preceding Due Date over
(II) $2,449,901; provided, that if such excess is not a
positive number, such amount shall be deemed to equal
zero.
"Group I Delinquency Percentage": For each Distribution Date and as to
Group I, the Scheduled Principal Balance of the Mortgage Loans in Group I
that, as of the last day of the related Prepayment Period, are 60 or more
days Delinquent as a percentage of the Scheduled Principal Balance of the
Mortgage Loans in Group I.
"Group I Extra Principal Distribution Amount": To the extent of Group I
Interest Funds pursuant to Section 3.03(a)(vii) and Group II Interest Funds
available for the purpose pursuant to Section 3.03(b)(vii) hereof, an amount
equal to the lesser of (x) excess interest funds pursuant to Section 3.03(e)
and:
(y) with respect to any Distribution Date, the excess of:
(i) the Group I Required Overcollateralization Amount over
(ii) the Group I Overcollateralization Amount (assuming that all Group
I Principal Funds are distributed as principal to the Group I
Certificates on such date).
"Group I Interest Funds": With respect to Group I and any Master
Servicer Remittance Date, to the extent actually deposited in the Master
Servicer Custodial Account, the sum, without duplication, of:
(i) all scheduled interest collected during the related Due Period
with respect to Group I less the Group I Servicing Fee, the Group
I Master Servicing Fee and premiums and expenses associated with
the PMI Policy,
28
<PAGE>
(ii) all Advances relating to interest with respect to Group I,
(iii) all Month End Interest with respect to Group I and
(iv) Liquidation Proceeds with respect to Group I (to the extent such
Liquidation Proceeds relate to interest) less all Non-Recoverable
Advances relating to interest and expenses pursuant to Section
6.03 of the Standard Terms.
The Group I Interest Funds for any Distribution Date shall be increased by
the pro rata portion for such Group (based on the amount on deposit in the
Pre-Funding Account in respect of such Group) of the Capitalized Interest
Requirement withdrawn from the Capitalized Interest Account for such
Distribution Date.
"Group I Master Servicing Fee": With respect to each Master Servicer
Remittance Date, an amount payable (or allocable) to the Master Servicer
equal to the product of one-twelfth of the Group I Master Servicing Fee Rate
and the aggregate Scheduled Principal Balance of Group I on the first day of
the Due Period preceding such Master Servicer Remittance Date.
"Group I Master Servicing Fee Rate": 0.05% per annum.
"Group I Net Rate": The excess of the weighted average Net Rate for
Group I over the A-I0-I Adjusted Rate.
"Group I Overcollateralization Amount": With respect to any
Distribution Date the excess of the Assumed Principal Balance of the
Mortgage Loans in Group I over the Group I Certificate Principal Balance
after giving effect to principal distributions on such Distribution Date.
"Group I Pre-Funded Amount": With respect to any Master Servicer
Reporting Date, the amount remaining on deposit in the Pre-Funding Account
with respect to Group I (exclusive of any Group I Pre-Funding Account
Earnings).
"Group I Pre-Funding Account Earnings": With respect to each
Distribution Date to and including the date immediately preceding the
Distribution Date immediately following the end of the Funding Period, Pre-
Funding Account earnings with respect to the Group I Pre-Funded Amount.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the excess of:
(A) the sum of:
(i) the Group I Principal Funds and
(ii) the Group I Extra Principal Distribution Amount over
(B) the Group I Released Principal Amount.
"Group I Principal Funds": With respect to Group I and any Master
Servicer Remittance Date, to the extent actually deposited in the Master
Servicer Custodial Account, the sum, without duplication, of:
(i) all scheduled principal with respect to Group I collected by the
Servicer during the related Due Period or advanced on or before
such Master Servicer Remittance Date,
(ii) prepayments with respect to Group I collected by the Servicer in
the related Prepayment Period,
(iii) the Scheduled Principal Balance of each Mortgage Loan in Group I
repurchased by the Depositor,
(iv) any Substitution Shortfall with respect to Group I and
29
<PAGE>
(v) all Liquidation Proceeds with respect to Group I collected by the
Servicer during the related Due Period (to the extent such
Liquidation Proceeds related to principal) less all non-
recoverable Advances relating to principal with respect to Group
I reimbursed during the related Due Period.
"Group I Released Principal Amount": With respect to any Distribution
Date
(i) if a Group I Subordinated Trigger Event exists, zero and
(ii) if a Group I Subordinated Trigger Event does not exist, the
amount by which the Group I Overcollateralization Amount
(assuming for such purpose that all Group I Principal Funds for
such Distribution Date are distributed as principal to the Group
I Certificates) exceeds the Group I Required
Overcollateralization Amount.
"Group I Required Overcollateralization Amount": With respect to any
Distribution Date:
(i) prior to the Group I Stepdown Date, 1.25% of the Assumed
Principal Balance for the Mortgage Loans in Group I as of the
Cut-Off Date and
(ii) on and after the Group I Stepdown Date the greatest of:
(x) the lesser of:
(I) 1.25% of the Assumed Principal Balance for the
Mortgage Loans in Group I as of the Cut-Off Date and
(II) 2.50% of the Assumed Principal Balance for the
Mortgage Loans in Group I on the preceding Due Date,
and
(y) 0.50% of the Assumed Principal Balance for the Mortgage
Loans in Group I as of the Cut-Off Date, and
(z) if a Group I Trigger Event is in effect, the Group I
Overcollateralization Amount as of the preceding
Distribution Date.
"Group I Servicing Fee": With respect to each Mortgage Loan in Group I
and each Remittance Date, the product of:
(x) one-twelfth of the Servicing Fee Rate and
(y) the aggregate Scheduled Principal Balance of such Mortgage Loan as
of the opening of business on the first day of the Due Period preceding
such Remittance Date.
"Group I Servicing Fee Rate": With respect to each Mortgage Loan in
Group I, the fixed per annum rate payable to the Servicer as set out on
Schedule IA to this Agreement.
"Group I Stepdown Date": With respect to Group I, the earlier to occur
of:
(i) the later to occur of:
(A) the Distribution Date in July 2003 and
(B) the first Distribution Date on which the Group I Class A
Certificate Principal Balance immediately prior to such
Distribution Date (less the Group I Principal Funds for such
Distribution Date) is less than or equal to 72.00% of the Assumed
Principal Balance for Group I on such date, and
30
<PAGE>
(ii) the Distribution Date after which the Group I Class A Certificate
Principal Balance has been reduced to zero.
"Group I Subordinated Certificates": The Class MF-1, Class MF-2, Class
BF-1, Class BF-2 and Class PF-1 Certificates.
"Group I Subordinated Trigger Event": With respect to Group I, any
Distribution Date after the Group I Stepdown Date on which:
(a) Realized Losses since the Cut-Off Date with respect to the
Mortgage Loans in Group I as a percentage of the Assumed Principal Balance
for Group I as of the Cut-Off Date exceed the percentage set out below with
respect to such Distribution Date:
Distribution Date (inclusive)
August 2003 - July 2004 1.40%
August 2004 - July 2005 2.40
August 2005 - July 2006 3.00
August 2006 - July 2007 3.40
August 2007 - July 2008 3.70
August 2008 and thereafter 4.00
and
(b) the Scheduled Principal Balance of the Mortgage Loans in Group I
that, as of such Distribution Date, are 60 or more days Delinquent as a
percentage of the Assumed Principal Balance for Group I exceeds the
percentage set out below with respect to such Distribution Date:
Distribution Date (inclusive)
August 2003 - July 2004 4.00%
August 2004 - July 2005 4.00
August 2005 - July 2006 6.50
August 2006 - July 2007 6.50
August 2007 - July 2008 8.00
August 2008 and thereafter 8.00
"Group I Subsequent Mortgage Loans": The Mortgage Loans in Group I
sold to the Trust pursuant to Section 2.02 hereof, which shall be listed on
the Schedule of Mortgage Loans attached to the related Subsequent Sales
Agreement.
"Group I Trigger Event": With respect to Group I and any Distribution
Date after the Group I Stepdown Date, a Group I Trigger Event exists if two
times the quotient of:
(i) the Scheduled Principal Balances of all 60 or more days
Delinquent Mortgage Loans (including Mortgage Loans subject to
bankruptcy or foreclosure proceedings and REO Property) in Group
I and
(ii) the Assumed Principal Balance for Group I as of the preceding
Master Servicer Remittance Date equals or exceeds 28.00%.
"Group II": The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Group II, including
any Group II Subsequent Mortgage Loans and any Group II Qualified Substitute
Mortgage Loans delivered in replacement thereof.
"Group II Available Funds Cap": As of any Distribution Date, the per
annum rate equal to:
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(w) the Group II Net Rate for such Distribution Date multiplied by
(x) a fraction the numerator of which is the principal balance of the
Mortgage Loans in Group II, and the denominator of which is the
Group II Certificate Principal Balance multiplied by
(y) a fraction the numerator of which is 30, and the denominator of
which is the actual number of days in the related Accrual Period.
"Group II Certificate": Any of the Class AV-1, Class MV-1, Class MV-2,
Class BV-1, Class BV-2 and Class PV-1 Certificates.
"Group II Certificate Principal Balance": The sum of the Class AV-1,
Class MV-1, Class MV-2, Class BV-1 and Class BV-2 Certificate Principal
Balances.
"Group II Class A Certificate Principal Balance": The Class AV-1
Certificate Principal Balance.
"Group II Class A Principal Distribution Amount": With respect to any
Distribution Date before the Group II Stepdown Date or as to which a Group
II Trigger Event has occurred, 100% of the Group II Principal Distribution
Amount for such Distribution Date and with respect to any Distribution Date
on or after the Stepdown Date and as to which a Group II Trigger Event has
not occurred, the excess of:
(i) the Group II Class A Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 65.00% of the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date over
(II) $1,250,099; provided, that if such excess if not a
positive number, such amount shall be deemed to equal zero.
"Group II Class MV-1 Principal Distribution Amount": With respect to
any Distribution on and, after the Group II Stepdown Date and as long as a
Group II Trigger Event is not in effect (subject to the proviso set forth in
Section 3.03(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance (after
giving effect to distributions on that date), and
(B) the Class MV-1 Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 78.00% of the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date, and
(B) the positive excess, if any, of:
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(I) the Assumed Principal Balance for the Mortgage Loans
in Group II on the preceding Due Date over
(II) $1,250,099; provided that if such excess if not a
positive number, such amount shall be deemed to equal
zero.
"Group II Class MV-2 Principal Distribution Amount": With respect to
any Distribution on and after the Group II Stepdown Date and as long as a
Group II Trigger Event is not in effect (subject to the proviso set forth in
Section 3.03(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance (after
giving effect to distributions on that date),
(B) the Class MV-1 Certificate Principal Balance (after giving
effect to distributions on that date), and
(C) the Class MV-2 Certificate Principal balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 87.60% of the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage Loans
in Group II on the preceding Due Date over
(II) $1,250,099; provided that if such excess if not a
positive number, such amount shall be deemed to equal
zero.
"Group II Class BV-1 Principal Distribution Amount": With respect to
any Distribution Date on and after the Group II Stepdown Date and as long as
a Group II Trigger Event is not in effect (subject to the proviso set forth
in Section 3.03(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance (after
giving effect to distributions on that date),
(B) the Class MV-1 Certificate Principal Balance(after giving
effect to distributions on that date),
(C) the Class MV-2 Certificate Principal Balance (after giving
effect to distributions on that date), and
(D) the Class BV-1 Certificate Principal Balance immediately
prior to such Distribution Date over
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(ii) the lesser of:
(A) 92.50% of the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) the Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date over
(II) $1,250,099; provided that if such excess if not a
positive number, such amount shall be deemed to equal
zero.
"Group II Class BV-2 Principal Distribution Amount": With respect to
any Distribution Date on and after the Group II Stepdown Date and as long as
a Group II Trigger Event is not in effect (subject to the proviso set forth
in Section 3.03(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance (after
giving effect to distributions on that date),
(B) the Class MV-1 Certificate Principal Balance (after giving
effect to distributions on that date),
(C) the Class MV-2 Certificate Principal Balance (after giving
effect to distributions on that date),
(D) the Class BV-1 Certificate Principal Balance (after giving
effect to distributions on that date), and
(E) the Class BV-2 Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 97.2% of the Assumed Principal Balance for the Mortgage
loans in Group II on the preceding Due Date, and
(B) the positive excess, if any, of:
(I) The Assumed Principal Balance for the Mortgage
Loans in Group II on the preceding Due Date over
(II) $1,250,099 ; provided that if such excess if not a
positive number, such amount shall be deemed to
equal zero.
"Group II Delinquency Percentage": For each Distribution Date and as
to Group II , the Scheduled Principal Balance of the Mortgage Loans in Group
II that, as of the last day of the related Prepayment Period, are 60 or more
days Delinquent as a percentage of the Scheduled Principal Balance of the
Mortgage Loans in Group II.
"Group II Extra Principal Distribution Amount": To the extent of Group
II Interest Funds pursuant to Section 3.03(b)(vi) and Group I Interest Funds
available for the purpose pursuant to Section 3.03(e)(x) hereof, an amount
equal to the lesser of (x) excess interest pursuant to Section 3.03(f) and
(y) with respect to any Distribution Date, the excess of:
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(i) the Group II Required Overcollateralization Amount over
(ii) the Group II Overcollateralization Amount (assuming that all
Group II Principal Funds are distributed as principal to the
Group II Certificates on such date).
"Group II Interest Funds": With respect to Group II and any Master
Servicer Remittance Date, to the extent actually deposited in the Master
Servicer Custodial Account, the sum, without duplication, of:
(i) all scheduled interest collected during the related Due Period
with respect to Group II less the Group II Servicing Fee, the
Group II Master Servicing Fee and premiums and expenses
associated with the PMI Policy,
(ii) all Advances relating to interest with respect to Group II,
(iii) all Month End Interest with respect to Group II and
(iv) Liquidation Proceeds with respect to Group II (to the extent
such Liquidation Proceeds relate to interest) less all Non-
Recoverable Advances relating to interest and expenses pursuant
to Section 6.03 of the Standard Terms.
The Group II Interest Funds for any Distribution Date shall be increased by
the pro rata portion for such Group (based on the amount on deposit in the
Pre-Funding Account in respect of such Group) of the Capitalized Interest
Requirement withdrawn from the Capitalized Interest Account for such
Distribution Date.
"Group II Master Servicing Fee": With respect to each Master Servicer
Remittance Date, an amount payable (or allocable) to the Master Servicer
equal to the product of one-twelfth of the Group II Master Servicing Fee
Rate and the aggregate Scheduled Principal Balance of Group II on the first
day of the Due Period preceding such Master Servicer Remittance Date.
"Group II Master Servicing Fee Rate": 0.05% per annum.
"Group II Net Rate": The excess of the weighted average Net Rate for
Group II over the A-I0-II Adjusted Rate.
"Group II Overcollateralization Amount": With respect to any
Distribution Date the excess of the aggregate Scheduled Principal Balance of
the Mortgage Loans in Group II over the Group II Certificate Principal
Balance after giving effect to principal distributions on such Distribution
Date.
"Group II Pre-Funded Amount": With respect to any Master Servicer
Reporting Date, the amount remaining on deposit in the Pre-Funding Account
with respect to Group II (exclusive of any Group II Pre-Funding Account
Earnings).
"Group II Pre-Funding Account Earnings": With respect to each
Distribution Date to and including the date immediately preceding the
Distribution Date immediately following the end of the Funding Period, Pre-
Funding Account earnings with respect to the Group II Pre-Funded Amount.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the excess of:
(A) the sum of:
(i) the Group II Principal Funds and
(ii) the Group II Extra Principal Distribution Amount over
(B) the Group II Released Principal Amount.
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"Group II Principal Funds": With respect to Group II and any Master
Servicer Remittance Date, to the extent actually deposited in the Master
Servicer Custodial Account, the sum, without duplication, of:
(i) all scheduled principal with respect to Group II collected by the
Servicers during the related Due Period or advanced on or before such
Master Servicer Remittance Date,
(ii) prepayments with respect to Group II collected by the Servicers in
the related Prepayment Period,
(iii) the Scheduled Principal Balance of each Mortgage Loan in Group II
repurchased by the Depositor,
(iv) any Substitution Shortfall with respect to Group II and
(v) all Liquidation Proceeds with respect to Group II collected by the
Servicer during the related Due Period (to the extent such Liquidation
Proceeds related to principal) less all non-recoverable Advances relating
to principal with respect to Group II reimbursed during the related Due
Period.
"Group II Released Principal Amount": With respect to any Distribution
Date,
(i) if a Group II Subordinated Trigger Event exists, zero and
(ii) if a Group II Subordinated Trigger Event does not exist, the amount
by which the Group II Overcollateralization Amount (assuming for such
purpose that all Group II Principal Funds for such Distribution Date
distributed as principal to the Group II Certificates) exceeds the Group II
Required Overcollateralization Amount.
"Group II Required Overcollateralization Amount": With respect to any
Distribution Date
(i) prior to the Group II Stepdown Date, 1.40% of the Assumed Principal
Balance for the Mortgage Loans in Group II as of the Cut-Off Date and
(ii) on and after the Group II Stepdown Date the greater of:
(x) the lesser of:
(I) 1.40% of the Assumed Principal Balance for the Mortgage Loans in
Group II as of the Cut-Off Date and
(II) 2.80% of the Assumed Principal Balance for the Mortgage Loans
in Group II on the preceding Due Date and
(y) 0.50% of the Assumed Principal Balance for the Mortgage Loans in
Group II as of the Cut-Off Date, and
(z) if a Group II Trigger Event is in effect, the Group II
Overcollateralization Amount as of the preceding Distribution Date.
"Group II Servicing Fee": With respect to each Mortgage Loan in Group II
and each Remittance Date, the product of:
(x) one-twelfth of the Servicing Fee Rate and
(y) the aggregate Scheduled Principal Balance of such Mortgage Loan as of
the opening of business on the first day of the Due Period preceding such
Remittance Date.
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"Group II Servicing Fee Rate": With respect to each Mortgage Loan in Group
II, the fixed per annum rate payable to the Servicer as set out on Schedule IB
to this Agreement.
"Group II Stepdown Date": With respect to Group II, the earlier to occur
of:
(i) the later to occur of:
(A) the Distribution Date in July 2003 and
(B) the first Distribution Date on which the Group II Class A
Certificate Principal Balance immediately prior to such Distribution
Date (less the Group II Principal Funds for such Distribution Date)
is less than or equal to 65.00% of the Assumed Principal Balance for
Mortgage Loans in Group II and
(ii) the Distribution Date after which the Group II Class A Certificate
Principal Balance has been reduced to zero.
"Group II Subordinated Certificates": The Class MV-1, Class MV-2, Class BV-
1, Class BV-2 and Class PV-1 Certificates.
"Group II Subordinated Trigger Event": With respect to Group II, any
Distribution Date after the Group II Stepdown Date on which:
(a) Realized Losses since the Cut-Off Date with respect to the Mortgage
Loans in Group II as a percentage of the Assumed Principal Balance for Group II
as of the Cut-Off Date exceed the percentage set out below with respect to such
Distribution Date:
Distribution Date (inclusive)
August 2003 - July 2004 2.00%
August 2004 - July 2005 3.30
August 2005 - July 2006 4.00
August 2006 - July 2007 4.30
August 2007 - July 2008 4.50
August 2008 and thereafter 4.75
and
(b) the Scheduled Principal Balance of the Mortgage Loans in Group II
that, as of such Distribution Date, are 60 or more days Delinquent as a
percentage of the Scheduled Principal Balance of the Mortgage Loans in Group II
exceeds the percentage set out below with respect to such Distribution Date:
Distribution Date (inclusive)
August 2003 - July 2004 6.00%
August 2004 - July 2005 6.00
August 2005 - July 2006 9.00
August 2006 - July 2007 9.00
August 2007 - July 2008 12.00
August 2008 and thereafter 12.00
"Group II Subsequent Mortgage Loans": The Mortgage Loans in Group II sold
to the Trust pursuant to Section 2.02 hereof, which shall be listed on the
Schedule of Mortgage Loans attached to the related Subsequent Sales Agreement.
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"Group II Trigger Event": With respect to Group II and any Distribution
Date after the Group II Stepdown Date, a Group II Trigger Event exists if 2
times the quotient of:
(i) the Scheduled Principal Balances of all 60 or more days Delinquent
Mortgage Loans (including Mortgage Loans subject to bankruptcy or
foreclosure proceedings and REO Property) in Group II and
(ii) the Assumed Principal Balances of Group II as of the preceding Master
Servicer Remittance Date equals or exceeds 35.00%.
"Initial Capitalized Interest Amount": $1,956,701.
"Initial Optional Termination Date": The Distribution Date immediately
following the Due Period with respect to which the aggregate Assumed Principal
Balances is less than 10% of their aggregate Assumed Principal Balances as of
the Cut-Off Date.
"Interest Carry Forward Amount": As to any Class, the definition therefor
having the corresponding designation as such Class.
"Interest Determination Date": With respect to the first Accrual Period for
the Class AF-1 Certificates and the Group II Certificates, June 12, 2000, and
with respect to any subsequent Accrual Period for the Class AF-1 Certificates
and the Group II Certificates, the second London Business Day preceding such
Accrual Period.
"Issuing REMIC": As described in the Preliminary Statement.
"London Business Day": A day on which banks are open for dealing in foreign
currency and exchange in London and New York City.
"Lower Tier Interest": As described in the Preliminary Statement.
"Master Servicer": Saxon Mortgage, Inc., a Virginia corporation, and its
successors and assigns in such capacity.
"Master Servicer Remittance Date": The Business Day preceding each
Distribution Date.
"Master Servicer Reporting Date": The opening of business on the third
Business Day preceding each Distribution Date.
"Master Servicing Fee": As applicable, the Group I Master Servicing Fee or
the Group II Master Servicing Fee.
"Meritech": Meritech Mortgage Services, Inc., a Texas corporation.
"Mortgage Loan Group": Either Group I or Group II.
"Mortgage Loans": The mortgage loans listed on Schedule I.
"Net Rate": As to each Mortgage Loan and Distribution Date, the related
Mortgage Interest Rate less the sum of the Group I or Group II Servicing Fee
Rate and the Group I or Group II Master Servicing Fee Rate, in each case, as
applicable, and the PMI Premium Rate, if any, with respect to each Mortgage
Loan.
"Notice Address": For purposes of Section 11.05 of the Standard Terms, the
addresses of the Depositor, the Master Servicer and the Trustee, are as follows:
(i) If to the Depositor:
Saxon Asset Securities Company
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4880 Cox Road
Glen Allen, Virginia 23060
(ii) If to the Master Servicer:
Saxon Mortgage, Inc.
4880 Cox Road
Glen Allen, Virginia 23060
(iii) If to the Trustee:
Bankers Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Saxon 2000-2
"One Month LIBOR": As of any Interest Determination Date, the rate for
one-month U.S. dollar deposits which appears in the Telerate Page 3750, as of
11:00 a.m., London time, on such Interest Determination Date. If such rate does
not appear on Telerate Page 3750, the rate for that day will be determined on
the basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on that day to
prime banks in the London interbank market for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The
Calculation Agent, as agent for the Master Servicer, 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 day will be the
arithmetic-mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that day will be the arithmetic-mean of the rates quoted
by major banks in New York City, selected by the Master Servicer, at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The
Calculation Agent, as agent for the Master Servicer, shall review Telerate Page
3750 as of the required time, make the required requests to the principal
offices of the Reference Banks and selections of major banks in New York City
and shall determine the rate which constitutes One Month LIBOR for each Interest
Determination Date.
"Original Pre-Funded Amount:" $175,914,831.
"Overfunded Interest Amount": With respect to each Subsequent Sales Date,
the excess of:
(i) interest accruing from the related Subsequent Cut-Off Date to the
Distribution Date immediately following the last date on which the
Funding Period may then end on the aggregate Scheduled Principal
Balances of the Subsequent Mortgage Loans acquired by the Trust on
such Subsequent Transfer Date, calculated at a rate equal to the Net
Rate on such Subsequent Mortgage Loans over
(ii) interest accruing from such Subsequent Cut-Off Date to such
Distribution Date on the aggregate Scheduled Principal Balances of the
Subsequent Mortgage Loans acquired by the Trust on such Subsequent
Sales Date, calculated at the Assumed Investment Rate.
"Paying Agent": Bankers Trust Company, a New York corporation, and its
successors and assigns in such capacity.
"PMI Mortgage Loan": Each Mortgage Loan covered by the PMI Policy as set
forth in Schedule I-C hereto.
"PMI Policy": The primary mortgage insurance policy issued by Mortgage
Guaranty Insurance Corporation and insuring the Mortgage Loans and any
substitute replacement policy issued from time to time.
"PMI Premium Rate": With respect to the PMI Mortgage Loans, a per annum
rate equal to the lesser of (i) 0.37% and (ii) the weighted average of the
premium rates with respect to the PMI Mortgage Loans.
"Pooling REMIC": As described in the Preliminary Statement.
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"Pre-Funded Amount": As of any Distribution Date, the sum of the Group I
Pre-Funded Amount and the Group II Pre-Funded Amount.
"Pre-Funding Account": The account created and maintained with the Paying
Agent by the Trust pursuant to Section 2.03.
"Pre-Funding Account Earnings": With respect to each Distribution Date to
and including the date immediately preceding the Distribution Date immediately
following the end of the Funding Period, the actual interest and investment
earnings during the related Prepayment Period on the Pre-Funded Amount as
calculated by the Master Servicer (based on information supplied by the Trustee)
pursuant to Section 2.03(c) hereof.
"Private Certificate": Any of the Class BF-2, Class BV-2, Class PF-1,
Class PV-1, Class C and Class R Certificates.
"Private Subordinated Certificate": Any of the Class BF-2, Class BV-2,
Class PF-1, Class PV-1, Class C and Class R Certificates.
"Public Subordinated Certificate": Any of the Class MF-1, Class MF-2,
Class BF-1, Class MV-1, Class MV-2 and Class BV-1 Certificates.
"Rating Agency": Each of S&P and Fitch (or, if any such agency or a
successor is no longer in existence, such other nationally recognized
statistical rating agency, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the Trustee).
"Reference Banks": Leading banks selected by the Master Servicer and
engaged in transactions in U.S. dollar deposits in the London interbank market.
"Regular Certificates": Any of the Group I Certificates, Group II
Certificates, Class A-IO Certificates, Class PF-1 Certificates, Class PV-1
Certificates and Class C Certificates which represent the "Regular Interests" in
the Issuing REMIC for purposes of the REMIC Provisions.
"Remittance Date": With respect to each Servicing Agreement, the date so
specified therein which date shall in no case be later than the 21st of each
month, or if the 21st of any month does not fall on a Business Day, then the
Business Day immediately preceding the 21st.
"Residual Certificates": The Class R Certificates, which represent the
"residual interest" in the Pooling, Second-Tier and Issuing REMICs for purposes
of the REMIC Provisions.
"S&P": Standard and Poors, Inc., and its successors (55 Water Street,
41/st/ Floor, New York, New York 10041).
"Sales Agreement": The Sales Agreement dated June 1, 2000, between the
Depositor and SMI regarding the sale of the Mortgage Loans.
"Second-Tier REMIC": As described in the Preliminary Statement.
"Servicer": Meritech and its permitted successors and assigns.
"Servicing Agreement": The Servicing Agreement listed on Schedule II
hereto which shall be deemed to be a "Servicing Agreement" for purposes of the
Standard Terms.
"Servicing Fee Rate": With respect to each Mortgage Loan, the Servicing
Rate specified on Schedule I.
"State": New York.
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"Subsequent Cut-Off Date": The time and date specified in a Subsequent
Sales Agreement with respect to those Subsequent Mortgage Loans which are
transferred and assigned to the Trust pursuant to the related Subsequent Sales
Agreement.
"Subsequent Mortgage Loans": The Group I Subsequent Mortgage Loans and the
Group II Subsequent Mortgage Loans.
"Subsequent Sales Agreement": Each Subsequent Sales Agreement dated as of
a Subsequent Sales Date executed by the Master Servicer, the Seller and Saxon
Mortgage substantially in the form of Schedule III hereto, by which Subsequent
Mortgage Loans are sold and assigned to the Trust.
"Subsequent Sales Date": The date specified in each Subsequent Sales
Agreement which shall be a date no later than the end of the Prepayment Period
preceding the first Distribution Date after the end of the Funding Period.
"Tax Matters Person": Bankers Trust Company, a New York corporation, and
its successors and assigns in such capacity.
"Telerate Page 3750" the display page currently so designated on the Bridge
Telerate Market Report (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Trust Estate": As defined in Section 2.01 hereof.
"Trustee": Bankers Trust Company, a New York corporation, its successor in
interest or any successor trustee appointed in accordance with the Trust
Agreement.
"Trustee Fee": The fee payable monthly to the Trustee by the Master
Servicer.
"Underwriters": Banc of America Securities LLC, Greenwich Capital Markets,
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Prudential Securities
Incorporated and Banc One Capital Markets, Inc.
"Underwriting Agreement": The Underwriting Agreement dated June 1, 2000,
between the Depositor and SMI and the Underwriters.
"Voting Rights": The voting rights of the trust will be allocated as
follows:
(i) 2% to the Class A-I0 Certificates;
(ii) 96% to the Group I Certificates and Group II Certificates in
proportion to their respective outstanding certificate principal
balances; and
(iii) 1% to each of the Class C and Class R Certificates.
Article II
Formation of Trust; Conveyance of Mortgage Loans
Section 2.01. Conveyance of Mortgage Loans. To provide for the
distribution of the principal of and interest on the Certificates in accordance
with their terms, the distribution of all other sums distributable under the
Trust Agreement with respect to the Certificates and the performance of the
covenants contained in the Trust Agreement, the Depositor hereby bargains,
sells, conveys, assigns and transfers to the Trustee, in trust, without recourse
and for the exclusive benefit of the Certificateholders as their interests may
appear, all the Depositor's right, title and interest in and to any and all
benefits accruing to the Depositor from: (i) the Mortgage Loans, which the
Depositor is causing to be delivered to the Trustee (or the Custodian) herewith
(and all Qualified Substitute Mortgage Loans substituted therefor as provided by
Section 2.03 of the Standard Terms and pursuant to the terms of the Sales
Agreement), together in each case with the related Trustee Mortgage Loan Files
and the Depositor's interest in any Collateral that secured a Mortgage Loan but
that is acquired by foreclosure or deed-in-lieu of foreclosure after the Closing
Date, and all Monthly Payments due after the Cut-Off Date and all curtailments
or other principal prepayments received with respect
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to the Mortgage Loans paid by the Borrower after the Cut-Off Date and proceeds
of the conversion, voluntary or involuntary, of the foregoing; (ii) the
Subsequent Mortgage Loans (iii) the Servicing Agreement; (iv) the Sales
Agreement, except that the Depositor does not assign to the Trustee any of its
rights under Sections 9 and 12 of the Sales Agreement; (v) the Asset Proceeds
Account, the Pre-Funding Account, the Capitalized Interest Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other properties; and (vi) all proceeds of any of the foregoing (including, but
not limited to, all proceeds of any mortgage insurance, hazard insurance, or
title insurance policy relating to the Mortgage 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 or are
included in the proceeds of any of the foregoing) to pay the Certificates as
specified herein (items (i) through (vi) above, collectively, the "Trust
Estate").
The Trustee acknowledges the sales, assignments and pledges created by the
foregoing paragraphs, accepts the trust hereunder in accordance with the
provisions hereof and agrees to perform the duties set forth herein or required
by the Standard Terms to the end that the interests of the Certificateholders
may be adequately and effectively protected in accordance with the terms and
conditions of this Agreement.
By its execution of this Agreement, the Trustee acknowledges and declares
that it holds and will hold or has agreed to hold all documents delivered to it
from time to time with respect to the Mortgage Loans and all assets included in
the Trust Estate in trust for the exclusive use and benefit of all present and
future Certificateholders.
Section 2.02. Purchase of Subsequent Mortgage Loans.
(a) Subject to the satisfaction of the conditions set forth in paragraph
(b) below (based on the Master Servicer's review of such conditions) in
consideration of the delivery on a Subsequent Sales Date to or upon the order of
the Depositor of all or a portion of the Pre-Funded Amount, as the case may be,
the Depositor shall on such Subsequent Sales Date sell, transfer, assign, set
over and otherwise convey without recourse, to the Trust, and the Trustee shall
purchase on behalf of the Trust, all the Depositor's right, title and interest
in and to the Subsequent Mortgage Loans, together with the related Trustee
Mortgage Loan Files, covered by the Subsequent Sales Agreement delivered on such
date.
(b) The obligation of the Trust to acquire Subsequent Mortgage Loans is
subject to the satisfaction of each of the following conditions on or prior to
the related Subsequent Sales Date:
(i) the Depositor shall have delivered to the Trustee with a copy to
the Master Servicer a duly executed written Subsequent Sales
Agreement in substantially the form of Schedule III hereto,
which shall include a Schedule of Subsequent Mortgage Loans, and
specifying the amount to be withdrawn from the Pre-Funding
Account;
(ii) the remaining term to maturity of each Subsequent Mortgage Loan
may not exceed 30 years;
(iii) no Subsequent Mortgage Loan will have been selected in a manner
adverse to the interests of Certificateholders;
(iv) the Trustee shall have received a letter from each Rating Agency
confirming that the addition of the Subsequent Mortgage Loans
will not result in the reduction, qualification or withdrawal of
the then current ratings of the Certificates;
(v) no Subsequent Mortgage Loan may have a Loan-to-Value Ratio
greater than 100.00%;
(vi) each Subsequent Mortgage Loan will be underwritten in accordance
with the Depositor's underwriting guidelines;
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(vii) no more than 1.00% of the Subsequent Mortgage Loans may be
Delinquent as of the related Cut-Off Date;
(viii) after giving effect to the acquisition of the Subsequent
Mortgage Loans, the Mortgage Loans in Group I (which shall all
be fixed interest rate Mortgage Loans):
(A) will have a weighted average Mortgage Interest Rate of not
less than 10.60% per annum;
(B) the Mortgage Loans with a Combined Loan to Value Ratio
greater than 80.00% will not exceed 38.00% of the
aggregate Scheduled Principal Balances of the Mortgage
Loans and the weighted average Loan to Value Ratio of the
Mortgage Loans will not exceed 78.00%;
(C) the weighted average remaining amortization term of the
Mortgage Loans shall not be greater than 345 months;
(D) may not exceed any of the following restrictions:
Categories of Restriction (Based on
Mortgage Loans Scheduled Principal Balances)
-------------- -----------------------------
Mortgage Loans secured by 6.00%
investment properties
Mortgage Loans secured by 3.00%
manufactured homes
Mortgage Loans with balloon 61.00%
payments
Mortgage Loans secured by 4.00%
second Liens
(E) none of the Mortgage Loans (by Scheduled Principal
Balance) shall have balances in excess of $800,000;
(F) at least 65.00% of the Mortgage Loans (by Scheduled
Principal Balance) shall be classified by Saxon Mortgage,
Inc. as "A-" or better and no more than 20.00%, 12.00%,
and 3.00% of the Mortgage Loans (by Scheduled Principal
Balance) shall be classified by Saxon Mortgage, Inc. as
"B", "C" and "D", respectively;
(G) not less than 83.00% of the Mortgage Loans (by Scheduled
Principal Balance) shall be secured by single family
(detached and attached) residences;
(H) not less than 92.00% of the Mortgage Loans shall be
secured by owner occupied dwellings; and
(I) at least 45.00% of the Mortgage Loans with a Loan to Value
Ratio greater than 80% will be covered by the PMI Policy
or other mortgage insurance.
(ix) after giving effect to the acquisition of the Subsequent
Mortgage Loans, the Mortgage Loans in Group II (which shall all
be first lien, ARM Loans):
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(A) will have a weighted average Mortgage Interest Rate of not
less than 10.45% and a weighted average margin of at least
6.28%;
(B) the Mortgage Loans with a Loan to Value Ratio greater than
80% will not exceed 35.00% of the aggregate Scheduled
Principal Balances of the Mortgage Loans and the weighted
average Loan to Value Ratio of the Mortgage Loans will not
exceed 78.00%
(C) the weighted average remaining amortization term of the
Mortgage Loans shall not be less than 355 months;
(D) may not exceed any of the following restrictions:
Categories of Restriction (Based on
Mortgage Loans Scheduled Principal Balances)
-------------- -----------------------------
Mortgage Loans secured by 4.00%
investment properties
Mortgage Loans Secured by 3.00%
manufactured homes
(E) none of the Mortgage Loans (by Scheduled Principal
Balance) shall have balances in excess of $800,000;
(F) at least 46.00% of the Mortgage Loans (by Scheduled
Principal Balance) shall be classified by Saxon Mortgage,
Inc. as "A-" or better and no more than 29.00%, 19.00% and
7.00% of the Mortgage Loans (by Scheduled Principal
Balance) shall be classified by Saxon Mortgage, Inc. as
"B", "C" and "D", respectively;
(G) not less than 80.00% of the Mortgage Loans (by Scheduled
Principal Balance) shall be secured by single family
(detached and attached) residences;
(H) not less than 95.00% of the Mortgage Loans shall be
secured by owner occupied dwellings; and
(I) at least 42.00% of the Mortgage Loans with a Loan to Value
Ratio greater than 80% will be covered by the PMI Policy
or other mortgage insurance.
For purposes of making all calculations required by clauses
(viii) and (ix), the Scheduled Principal Balances of the
Initial Mortgage Loans at the Cut-Off Date and of the
Subsequent Mortgage Loans as of their respective Subsequent
Cut-Off Dates shall be used.
(x) the Depositor shall have provided the Master Servicer and the
Trustee any information reasonably requested by any of them
with respect to the Subsequent Mortgage Loans then to be sold
to the Trust;
(xi) the Depositor shall have delivered to the Master Servicer for
deposit in the Master Servicer Custodial Account all principal
and interest due in respect of such Subsequent Mortgage Loans
after the related Subsequent Cut-Off Date;
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(xii) the Depositor shall have delivered to the Trustee, the
Underwriter and the Rating Agencies a letter from an
independent accountant stating whether or not the
characteristics of the Subsequent Mortgage Loans conform to
the characteristics of the Mortgage Loans listed on Schedule
I;
(xiii) as of each Subsequent Sales Date, neither the Depositor nor
Saxon Mortgage shall be insolvent, nor will either of them
be made insolvent by such transfer;
(xiv) the Funding Period shall not have ended; and
(xv) the Depositor and Saxon Mortgage, Inc. each shall have
delivered to the Master Servicer and the Trustee an
Officer's certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and in
the related Subsequent Sales Agreement and opinions of
counsel with respect to corporate, bankruptcy and tax
matters relating to the transfer of Subsequent Mortgage
Loans in the forms substantially similar to those delivered
on the Closing Date.
(c) Pursuant to Section 2.03(b) hereof, the Trustee shall remit on each
Subsequent Sales Date to or upon the order of the Depositor from the Pre-Funding
Account the amount specified by the Master Servicer only upon the Trustee's
receipt of:
(i) a fully executed Subsequent Sales Agreement;
(ii) the two Officer's certificates required by Section 2.02(b)(xv)
hereof;
(iii) an Opinion or Opinions of Counsel from each of the Depositor and
Saxon Mortgage, Inc. required by Section 2.02(b)(xv);
(iv) a letter from each Rating Agency as required by Section 2.02
(b)(iv);
(v) a letter from an independent accountant as required by Section
2.02(b)(xii); and
(vi) the written instruction from the Master Servicer setting forth the
amounts to be paid as required by Section 2.03(b) hereof. The
Trustee may rely and shall be protected in relying on all such
Officer's certificates as evidencing full compliance with all
conditions precedent specified in Section 2.02(b), without any
further duty of inquiry with respect thereto.
(d) On each Subsequent Sales Date and on the Master Servicer Reporting Date
immediately following the end of the Funding Period, the Master Servicer shall
determine:
(i) the amount and correct disposition of the Pre-Funded Amount and the
amount remaining in the Capitalized Interest Account and
(ii) any other necessary matters in connection with the administration
of the Pre-Funding Account and the Capitalized Interest Account.
With respect to each Subsequent Sales Date, the Master Servicer
shall determine the Overfunded Interest Amount. If any amounts are
released as a result of an error in calculation to the Holders or
the Depositor from the Pre-Funding Account or from the Capitalized
Interest Account, the Depositor shall immediately repay such
amounts to the Master Servicer.
Section 2.03. Pre-Funding Account, Capitalized Interest Account, Reserve
Accounts and Accumulation Account
(a) The Trustee shall establish and maintain the Pre-Funding Account
and the Capitalized Interest Account, each to be held in trust for the benefit
of the Certificateholders. Each of the Pre-Funding Account and the Capitalized
Interest Account shall be an Eligible Account. On the Closing Date, the
Depositor will cause to be deposited in the Pre-Funding Account the Original
Pre-Funded Amount and in the Capitalized Interest Account the Initial
Capitalized Interest Amount.
(b) On any Subsequent Sales Date, the Master Servicer shall instruct
the Trustee, with a copy to the Depositor,
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(i) to withdraw from the Pre-Funded Amount in the Pre-Funding
Account an amount equal to 100% of the aggregate Scheduled Principal
Balances of the Subsequent Mortgage Loans as of the applicable
Subsequent Cut-Off Date sold to the Trust on such Subsequent Sales
Date and
(ii) to pay such amounts to or upon the order of the Depositor upon
satisfaction of the conditions set forth in Section 2.02(c) hereof
with respect thereto. In no event shall the Trustee withdraw from the
Pre-Funding Account an amount in excess of the Original Pre-Funded
Amount.
(c) On each Master Servicer Remittance Date immediately following the end
of the Funding Period, the Master Servicer shall instruct the Paying Agent to
transfer: (i) to the Capitalized Interest Account from the Pre-Funding Account,
the Pre-Funding Account Earnings; and (ii) to the Asset Proceeds Account from
the Capitalized Interest Account, the Capitalized Interest Requirement.
(d) On each Subsequent Sales Date the Master Servicer shall instruct the
Trustee to distribute the Overfunded Interest Amount, if any, to the Depositor.
At the end of the Funding Period, all amounts, if any, remaining in the
Capitalized Interest Account shall be transferred to the Depositor and the
Capitalized Interest Account shall be closed.
(e) On the Master Servicer Remittance Date immediately following the end
of the Funding Period, the Master Servicer shall instruct the Trustee to
transfer the Pre-Funded Amount to the Asset Proceeds Account for distribution to
the Holders of the Certificates in accordance with Section 3.01(b) hereof.
(f) The Pre-Funding Account and the Capitalized Interest Account shall not
be assets of any REMIC created pursuant to this Agreement.
(g) The Trustee shall establish and maintain the Class PF-1 Reserve
Account, the Class PV-1 Reserve Account and the Class PF-1 Accumulation Account,
each to be held in trust for the benefit of the Class BF-2, Class BV-2, Class
PF-1 and Class PV-1 Certificateholders. Each of the Class PF-1 Reserve Account,
the Class PV-1 Reserve Account and the Class PF-1 Accumulation Account shall be
an Eligible Account. Until the Certificate Principal Balance of the Class BF-2
and Class BV-2 Certificates have been reduced to zero, the Class PF-1 Prepayment
Support Amount will be deposited into the Class PF-1 Reserve Account and the
Class PV-1 Prepayment Support Amount will be deposited into the Class PV-1
Reserve Account, all on the terms and conditions set forth herein.
(h) On each Master Servicer Remittance Date, the Master Servicer shall
instruct the Paying Agent to transfer (i) to the Class PF-1 Reserve Account, the
Class PF-1 Prepayment Support Amount, and (ii) to the Class PV-1 Reserve
Account, the Class PV-1 Prepayment Support Amount.
(i) The Class PF-1 Reserve Account, the Class PV-1 Reserve Account and the
Class PF-1 Accumulation Account shall be assets of the Issuing REMIC created
pursuant to this Agreement.
Section 2.04. PMI Policy. As of the Closing Date, the Master Servicer
shall provide to the Trustee, for the benefit of the Trust, the PMI Policy.
Article III
Remitting to Certificateholders
Section 3.01. (Reserved).
Section 3.02. (Reserved).
Section 3.03. Certificate Distributions.
(a) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of an amount equal to the
Group I Interest Funds in the following order of priority, and each
such allocation shall be made only after all preceding allocations
shall have been made until such amount shall have been fully allocated
for such Distribution Date:
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(i) premiums and expenses associated with the PMI Policy covering the
Group I Mortgage Loans;
(ii) to the Group I Class A Certificates and the Class A-IO-I Component,
the Current Interest and any Interest Carry Forward Amount for the
Group I Class A Certificates and the Class A-IO-I Component; provided,
however, if the Group I Interest Funds and any amounts transferred
from the Capitalized Interest Account for the Group I Mortgage Loans
are not sufficient to make a full distribution of the Current Interest
and any Interest Carry Forward Amount with respect to all the Group I
Class A Certificates and the Class A-IO-I Component, such amount will
be distributed pro rata among each Class of the Group I Class A
Certificates and the Class A-IO-I Component based on the ratio of (x)
the Current Interest and Interest Carry Forward Amount for each Class
of the Group I Class A Certificates or the Class A-IO-I Component to
(y) the total amount of Current Interest and any Interest Carry
Forward Amount for the Group I Class A Certificates and the Class
A-IO-I Component;
(iii) to the Class MF-1 Certificates, the Class MF-1 Current Interest;
(iv) to the Class MF-2 Certificates, the Class MF-2 Current Interest;
(v) to the Class BF-1 Certificates, the Class BF-1 Current Interest;
(vi) to the Class BF-2 Certificates, the Class BF-2 Current Interest; and
(vii) any remainder pursuant to Section 3.03(e) hereof.
(b) On each Distribution Date, the Trustee shall make the following allocations
from the Distribution Account of an amount equal to the Group II Interest
Funds in the following order of priority, and each such allocation shall be
made only after all preceding allocations shall have been made until such
amount shall have been fully allocated for such Distribution Date:
(i) premiums and expenses associated with the PMI Policy covering the
Group II Mortgage Loans;
(ii) to the Group II Class A Certificates and the Class A-IO-II Component,
the Current Interest and any Interest Carry Forward Amount for the Group II
Class A Certificates and the Class A-I0-II Component; provided, however, if
the Group II Interest Funds and any amounts transferred from the Capitalized
Interest Account for the Group II Mortgage Loans are not sufficient to make
a full distribution of the Current Interest and any Interest Carry Forward
Amount with respect to the Group II Class A Certificates and the Class A-IO-
II Component, such amount will be distributed pro rata among the Group II
Class A Certificates and the Class A-IO-II Component based on the ratio of
(x) the Current Interest and Interest Carry Forward Amount for the Group II
Class A Certificates or the Class A-IO-II Component to (y) the total amount
of Current Interest and any Interest Carry Forward Amount for the Group II
Class A Certificates and the Class A-IO-II Component;
(iii) to the Class MV-1 Certificates, the Class MV-1 Current Interest;
(iv) to the Class MV-2 Certificates, the Class MV-2 Current Interest;
(v) to the Class BV-1 Certificates, the Class BV-1 Current Interest;
(vi) to the Class BV-2 Certificates, the Class BV-2 Current Interest; and
(vii) any remainder pursuant to Section 3.03(f) hereof.
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<PAGE>
(c) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of an amount equal to the Group I
Principal Distribution Amount in the following order of priority, and each such
allocation shall be made only after all preceding allocations shall have been
made until such amount shall have been fully allocated for such Distribution
Date:
(i) to the Group I Class A Certificates, the Group I Class A
Principal Distribution Amount to be distributed as follows: (x)
the Class AF-6 Principal Distribution Amount to the Class AF-6
Certificates; and (y) the balance of the Group I Class A
Principal Distribution Amount sequentially to the Class AF-1,
Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6
Certificates so that no such distribution pursuant to this
clause (y) will be made to any such Class until the Certificate
Principal Balances of all Group I Class A Certificates with a
lower numeral designation shall have been reduced to zero;
provided, however, that, on any Distribution Date on which the
Group I Class A Certificate Principal Balance is equal to or
greater than the Scheduled Principal Balances of the Mortgage
Loans in Group I, the Group I Class A Principal Distribution
Amount will be distributed pro rata and not sequentially to the
Group I Class A Certificates;
(ii) to the Class MF-1 Certificates, the Group I Class MF-1 Principal
Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) to the Class MF-2 Certificates, the Group I Class MF-2 Principal
Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(iv) to the Class BF-1 Certificates, the Group I Class BF-1 Principal
Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(v) to the Class BF-2 Certificates, the Group I Class BF-2 Principal
Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(vi) if a Group I Subordinated Trigger Event exists on such
Distribution Date, any remaining amounts, sequentially, to the
Class BF-2, Class BF-1, Class MF-2 and Class MF-1 Certificates,
in that order;
(vii) to the Class PF-1 Certificates; and
(viii) to the Class R Certificates;
provided, however, that, before the Group I Stepdown Date or if a Group I
Trigger Event is in effect on any Distribution Date:
(a) the Group I Class A Principal Distribution Amount shall equal the
Group I Principal Distribution Amount until the Certificate
Principal Balance of the Group I Class A Certificates has been
reduced to zero;
(b) after the Certificate Principal Balance of the Group I Class A
Certificates has been reduced to zero, the Group I Class MF-1
Principal Distribution Amount shall equal the Group I Principal
Distribution Amount for such Distribution Date;
(c) after the Certificate Principal Balance of the Class MF-1
Certificates has been reduced to zero, the Group I Class MF-2
Principal Distribution Amount shall equal the Group I Principal
Distribution Amount for such Distribution Date;
(d) after the Certificate Principal Balance of the Class MF-2
Certificates has been reduced to zero, the Group I Class BF-1
Principal Distribution Amount shall equal the Group I Principal
Distribution Amount, and
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(e) after the Certificate Principal Balance of the Class BF-1
Certificates has been reduced to zero, the Group I Class BF-2
Principal Distribution Amount shall equal the Group I Principal
Distribution Amount for such Distribution Date.
(d) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of an amount equal to the Group II
Principal Distribution Amount in the following order of priority, and each such
allocation shall be made only after all preceding allocations shall have been
made until such amount shall have been fully allocated for such Distribution
Date:
(i) to the Class AV-1 Certificates, the Group II Class AV-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) to the Class MV-1 Certificates, the Group II Class MV-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
(iii) to the Class MV-2 Certificates, the Group II Class MV-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) to the Class BV-1 Certificates, the Group II Class BV-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
(v) to the Class BV-2 Certificates, the Group II Class BV-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
(vi) if a Group II Subordinated Trigger Event exists on such
Distribution Date, any remaining amounts, sequentially, to the
Class BV-2, Class BV-1, Class MV-2 and Class MV-1 Certificates,
in that order;
(vii) to the Class PV-1 Certificates; and
(viii) to the Class R Certificates.
provided, however, that, before the Group II Stepdown Date or if a Group II
Trigger Event is in effect on any Distribution Date:
(a) the Group II Class AV-1 Principal Distribution Amount shall equal
the Group II Principal Distribution Amount until the Certificate
Principal Balance of the Class AV-1 Certificates has been reduced
to zero;
(b) after the Certificate Principal Balance of the Group II Class A
Certificates has been reduced to zero, the Group II Class MV-1
Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date;
(c) after the Certificate Principal Balance of the Class MV-1
Certificates has been reduced to zero, the Group II Class MV-2
Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date;
(d) after the Certificate Principal Balance of the Class MV-2
Certificates has been reduced to zero, the Group II Class BV-1
Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date; and
(e) after the Certificate Principal Balance of the Class BV-1
Certificates has been reduced to zero, the Group II Class BV-2
Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date.
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(e) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.03(a)(vii) hereof and, to the extent required to make the allocations set
forth below in clauses (iii), (v), (vii), and (ix) of this Section 3.03(e), and
Section 3.03(f)(xv) hereof in the following order of priority, and each such
allocation shall be made only after all preceding allocations shall have been
made until such remainders shall have been fully allocated:
(i) the Group I Extra Principal Distribution Amount;
(ii) to the Class MF-1 Certificates, the Class MF-1 Interest Carry
Forward Amount;
(iii) to the Class MF-1 Certificates, any class MF-1 Unpaid Realized
Loss Amount;
(iv) to the Class MF-2 Certificates, the Class MF-2 Interest Carry
Forward Amount;
(v) to the Class MF-2 Certificates, any Class MF-2 Unpaid Realized
Loss Amount;
(vi) to the Class BF-1 Certificates, the Class BF-1 Interest Carry
Forward Amount;
(vii) to the Class BF-1 Certificates, any Class BF-1 Unpaid Realized
Loss Amount;
(viii) to the Class BF-2 Certificates, the Class BF-2 Interest Carry
Forward Amount;
(ix) to the Class BF-2 Certificates, any Class BF-2 Unpaid Realized
Loss Amount;
(x) to the extent required to make the allocations set forth in
clauses (iii), (v), (vii) and (ix) of Section 3.03(f) hereof,
pursuant to Section 3.03(f) hereof; and
(xi) the remainder pursuant to Section 3.03(m) hereof.
(f) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.03(b)(vii) hereof and, to the extent required to make the allocations set
forth below in clauses (iii), (v), (vii), and (ix) of this Section 3.03(f) and
Section 3.03(e)(x) hereof in the following order of priority, and each such
allocation shall be made only after all preceding allocations shall have been
made until such remainders have been fully allocated:
(i) the Group II Extra Principal Distribution Amount;
(ii) to the Class MV-1 Certificates, the Class MV-1 Interest Carry
Forward Amount;
(iii) to the Class MV-1 Certificates, any Class MV-1 Unpaid Realized
Loss Amounts;
(iv) to the Class MV-2 Certificates, the Class MV-2 Interest Carry
Forward Amount;
(v) to the Class MV-2 Certificates, any Class MV-2 Unpaid Realized
Loss Amount;
(vi) to the Class BV-1 Certificates, the Class BV-1 Interest Carry
Forward Amount;
(vii) to the Class BV-1 Certificates, any Class BV-1 Unpaid Realized
Loss Amount;
(viii) to the Class BV-2 Certificates, the Class BV-2 Interest Carry
Forward Amount;
(ix) to the Class BV-2 Certificates, any Class BV-2 Unpaid Realized
Loss Amount;
(x) on any Distribution Date on or before the last Distribution
Date with respect to the Class AV-1 Certificates, to the Class
AV-1 Certificates, the Class AV-1 Certificates Carryover;
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(xi) on any Distribution Date on or before the last Distribution
Date with respect to the Class MV-1 Certificates, to the Class
MV-1 Certificates, the Class MV-1 Certificates Carryover;
(xii) on any Distribution Date on or before the last Distribution
Date with respect to the Class MV-2 Certificates, to the Class
MV-2 Certificates, the Class MV-2 Certificates Carryover;
(xiii) on any Distribution Date on or before the last Distribution
Date with respect to the Class BV-1 Certificates, to the Class
BV-1 Certificates, the Class BV-1 Certificates Carryover;
(xiv) on any Distribution Date on or before the last Distribution
Date with respect to the Class BV-2 Certificates, to the Class
BV-2 Certificates, the Class BV-2 Certificates Carryover;
(xv) to the extent required to make the allocations set forth in
clauses (iii), (v), (vii) and (ix) of Section 3.03(e) hereof,
pursuant to Section 3.03(e) hereof; and
(xvi) the remainder pursuant to Section 3.03(m) hereof.
(g) On each distribution date until and including the Distribution Date in
June 2003 unless the Class BF-2 and Class BV-2 Certificate Principal Balances
have been reduced to zero, the Trustee shall make the following allocations from
the Class PF-1 Reserve Account of an amount equal to the Class PF-1 Prepayment
Support Amount for such Distribution Date in the following order of priority,
and each such allocation shall be made only after all preceding allocations
shall have been made until such amount shall have been fully allocated for such
Distribution Date:
(i) to the Class BF-2 Certificates, an amount equal to the lesser
of (x) any Class BF-2 Unpaid Realized Loss Amount and (y) the
current period Class PF-1 Prepayment Support Amount;
(ii) to the Class BV-2 Certificates, an amount equal to the lesser
of (x) any Class BV-2 Unpaid Realized Loss Amount and (y) the
remainder of the current period Class PF-1 Prepayment Support
Amount after the distribution set forth in clause (i);
(iii) to the Class PF-1 Accumulation Account until the amount on
deposit in such account equals $3,050,000; provided, however,
that after the first Distribution Date on which the amount on
deposit in such account equals $3,050,000, no further deposits
shall be made to such account; and
(iv) thereafter, to the Class PF-1 Certificates.
(h) On each distribution date until and including the Distribution Date in
June 2003 unless the Class BF-2 and Class BV-2 Certificate Principal Balances
have been reduced to zero, the Trustee shall make the following allocations from
the Class PV-1 Reserve Account of an amount equal to the Class PV-1 Prepayment
Support Amount for such Distribution Date in the following order of priority,
and each such allocation shall be made only after all preceding allocations
shall have been made until such amount shall have been fully allocated for such
Distribution Date:
(i) to the Class BV-2 Certificates, an amount equal to the lesser
of (x) any Class BV-2 Unpaid Realized Loss Amount and (y) the
current period Class PV-1 Prepayment Support Amount;
(ii) to the Class BF-2 Certificates, an amount equal to the lesser
of (x) any Class BF-2 Unpaid Realized Loss Amount and (y) the
remainder of the current period Class PV-1 Prepayment Support
Amount after the distribution set forth in clause (i);
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(iii) to the Class PF-1 Accumulation Account until the amount on
deposit in such account equals $3,050,000; provided, however,
that after the first Distribution Date on which the amount on
deposit in such account equals $3,050,000, no further deposits
shall be made to such account; and
(iv) thereafter, to the Class PV-1 Certificates.
(i) On each Distribution Date until and including the Distribution Date in
June 2003 unless the Class BF-2 Certificate Principal Balances have been reduced
to zero and after the distributions pursuant to paragraphs (g) and (h) above,
the Trustee shall make the following allocations from the Class PF-1
Accumulation Account in the following order of priority, and each such
allocation shall be made only after all preceding allocations shall have been
made until such amount shall have been fully allocated for such Distribution
Date:
(i) to the Class BF-2 Certificates, any Class BF-2 Unpaid Realized
Loss Amount; and
(ii) to the extent amounts remaining on deposit in the Class PF-1
Accumulation Account exceed $3,050,000, to the Class PF-1
Certificates; and
(iii) on the Distribution Date in June 2003, all amounts remaining
on deposit in the Class PF-1 Accumulation Account, to the
Class PF-1 Certificates.
(j) On each distribution date after the Distribution Date in June 2003
until the Class BF-2 and Class BV-2 Certificate Principal Balances have been
reduced to zero, the Trustee shall make the following allocations from the Class
PF-1 Reserve Account of an amount equal to the Class PF-1 Prepayment Support
Amount in the following order of priority, and each such allocation shall be
made only after all preceding allocations shall have been made until such amount
shall have been fully allocated for such Distribution Date:
(i) to the Class BF-2 Certificates, an amount equal to the lesser
of (x) any Class BF-2 Unpaid Realized Loss Amount and (y) the
current period class PF-1 Prepayment Support Amount;
(ii) to the Class BV-2 Certificates, an amount equal to the lesser
of (x) any Class BV-2 Unpaid Realized Loss Amount and (y) the
remainder of the current period Class PF-1 Prepayment Support
Amount after the distribution set forth in clause (i); and
(iii) to the Class PF-1 Certificates.
(k) On each distribution date after the Distribution Date in June 2003
until the Class BF-2 and Class BV-2 Certificate Principal Balances have been
reduced to zero, the Trustee shall make the following allocations from the Class
PV-1 Reserve Account of an amount equal to the Class PV-1 Prepayment Support
Amount in the following order of priority, and each such allocation shall be
made only after all preceding allocations shall have been made until such amount
shall have been fully allocated for such Distribution Date:
(i) to the Class BV-2 Certificates, an amount equal to the lesser
of (x) any Class BV-2 Unpaid Realized Loss Amount and (y) the
current period Class PV-1 Prepayment Support Amount;
(ii) to the Class BF-2 Certificates, an amount equal to the lesser
of (x) any Class BF-2 Unpaid Realized Loss Amount and (y) the
remainder of the current period Class PV-1 Prepayment Support
Amount after the distribution set forth in clause (i); and
(iii) to the Class PV-1 Certificates.
(l) On the first Distribution Date after the Class BF-2 and Class BV-2
Certificate Principal Balances have been reduced to zero,
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(i) the Trustee shall distribute any remaining amounts in the
Class PF-1 Reserve Account and the Class PF-1 Accumulation
Account to the Class PF-1 Certificates; and
(ii) the Trustee shall distribute any remaining amount in the Class
PV-1 Reserve Account to the Class PV-1 Certificates.
(m) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.03(e)(xi) and (f)(xvi) hereof in the following order of priority, and each
such allocation shall be made only after the preceding allocations shall have
been made until such remainders have been fully allocated:
(i) to the Class C Certificates, the Class C Distribution Amount;
and
(ii) to the Class R Certificates, the remainder.
(n) On each Distribution Date, the Trustee shall allocate any excess of
the Group I Certificate Principal Balance over the Scheduled Principal Balances
of the Mortgage Loans in Group I to reduce the Certificate Principal Balances of
the Group I Subordinated Certificates in the following order of priority:
(i) to the Class BF-2 Certificates until the Class BF-2
Certificate Principal Balance is reduced to zero;
(ii) to the Class BF-1 Certificates until the Class BF-1
Certificate Principal Balance is reduced to zero;
(iii) to the Class MF-2 Certificates until the Class MF-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class MF-1 Certificates until the Class MF-1
Certificate Principal Balance is reduced to zero.
(o) On each Distribution Date, the Trustee shall allocate any excess of
the Group II Certificate Principal Balance over the Scheduled Principal Balances
of the Mortgage Loans in Group II to reduce the Certificate Principal Balances
of the Group II Subordinated Certificates in the following order of priority:
(i) to the Class BV-2 Certificates until the Class BV-2
Certificate Principal Balance is reduced to zero;
(ii) to the Class BV-1 Certificates until the Class BV-1
Certificate Principal Balance is reduced to zero;
(iii) to the Class MV-2 Certificates until the Class MV-2
Certificate Principal Balance is reduced to zero; and
(iv) to the Class MV-1 Certificates until the Class MV-1
Certificate Principal Balance is reduced to zero.
Section 3.04. Reports to the Depositor and the Trustee:
On or before the Business Day preceding each Distribution Date, based on
information provided by the Servicer, the Master Servicer shall notify, or cause
to be notified, the Depositor and the Trustee of the following information with
respect to the next Distribution Date (which notification may be given by
facsimile, or by telephone promptly confirmed in writing):
(a) the aggregate amount then on deposit in the Asset Proceeds Account and
the source thereof (identified as interest, scheduled principal or unscheduled
principal);
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(b) the amount of any Realized Losses, Applied Realized Loss Amounts and
Unpaid Realized Loss Amounts;
(c) the application of the amounts described in clauses (a) and (b) on
such Distribution Date in accordance with Section 3.03 hereof;
(a) whether a Group I or Group II Trigger Event or a Group I or Group II
Subordinated Trigger Event has occurred; and
(b) For each Distribution Date during the Funding Period,
(h) the Group I Pre-Funded Amount and the Group II Pre-Funded
Amount previously used to acquire Subsequent Mortgage Loans,
(ii) the Group I Pre-Funding Account Earnings and the Group II Pre-
Funding Account Earnings transferred to the Asset Proceeds
Account,
(iii) the Group I Capitalized Interest Requirement and the Group II
Capitalized Interest Requirement transferred to the Asset
Proceeds Account; and
(iv) the Group I Pre-Funded Amount and the Group II Pre-Funded
Amount; and for the Distribution Dated following the end of the
Funding Period, the Group I Pre-Funded Amount distributed as a
part of a Group I Principal Distribution and the Group II Pre-
Funded Amount distributed as a part of a Group II Principal
Distribution Amount.
Section 3.05. Reports by or on Behalf of the Master Servicer.
(a) On or before the Business Day preceding each Distribution Date, based
on information provided by the Servicer, the Master Servicer shall report or
cause to be reported in writing to the Depositor (in hard copy), each Holder of
a Certificate, the Underwriters and the Trustee and their designees (designated
in writing to the Master Servicer) and the Rating Agencies:
(i) with respect to each Class of Certificates (other than Class C
and Class R) (based on a Certificate in the original principal amount of
$1,000):
(a) the amount of the distributions on such Distribution Date;
(b) the amount of such distribution allocable to interest;
(c) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any prepayments,
Substitution Shortfalls, repurchase amounts pursuant to Section 2.03
of the Standard Terms or other recoveries of principal included
therein, any Group I or Group II Extra Principal Distribution Amount
and any Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class MV-1,
Class MV-2, Class BV-1 and Class BV-2 Applied Realized Loss Amount
with respect to, and any Class MF-1, Class MF-2, Class BF-1, Class BF-
2, Class MV-1, Class MV-2, Class BV-1 and Class BV-2 Unpaid Realized
Loss Amount at, such Distribution Date;
(d) the principal balance after giving effect to any
distribution allocable to principal; and
(e) any Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class
AF\-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1 and Class BF-2
Interest Carry Forward Amount, any Class AV-1, Class MV-1, Class MV-2,
Class BV-1 and Class BV-2 Interest Carry Forward Amount or any Class
AV-1, Class MV-1, Class MV-2 and Class BV-1 Certificates Carryover;
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(ii) the Group I Net Rate and the Group II Net Rate;
(iii) the Realized Losses for Group I and Group II for the period and
since the Cut-Off Date;
(iv) the largest Mortgage Loan balance outstanding in each Group;
(v) the Servicing Fees and Master Servicing Fees allocable to each
Group;
(vi) One-Month LIBOR on the most recent Interest Determination Date;
(vii) the Pass-Through Rates for the Class AF-1 Certificates and the
Group II Certificates for the current Accrual Period and, if
the Pass-Through Rates for any Class of the Group I
Certificates (other than the Class AF-1 Certificates) for the
current Accrual Period are based on the Group I Net Rate (or
Group II Net Rate, as applicable), the Pass-Through Rates for
the Group I Certificates (other than the Class AF-1
Certificates) with respect to which the Group I Net Rate (or
Group II Net Rate, as applicable) applies; and
(viii) for each Distribution Date during the Funding Period, the Pre-
Funded Amount allocable to each Group.
(b) On each Distribution Date, based on information provided by the
Servicer, the Master Servicer will distribute or cause to be distributed to the
Depositor, each Holder, the Underwriters, the Rating Agencies and the Trustee,
together with the information described in subsection (a) preceding, the
following information with respect to each Mortgage Loan Group in hard copy:
(i) the number and aggregate principal balances of Mortgage Loans
in each Group (a) 30-59 days Delinquent, (b) 60-89 days Delinquent and (c)
90 or more days Delinquent, as of the close of business as of the end of
the related prepayment period;
(ii) the percentage that each of the Scheduled Principal Balances
set forth pursuant to clauses (a), (b) and (c) of paragraph (i) above
represent with respect to all Mortgage Loans in each Group;
(iii) the number and Scheduled Principal Balance of all Mortgage
Loans in each Group in foreclosure proceedings as of the close of business
as of the end of the related Prepayment Period and in the immediately
preceding Prepayment Period;
(iv) the number of Mortgagors and the Scheduled Principal Balances
of Mortgage Loans in each Group involved in bankruptcy proceedings as of
the close of business as of the end of the related Prepayment Period;
(v) the aggregate number and aggregate book value of any REO
Property in each Group as of the close of business as of the end of the
related Prepayment Period; and
(vi) the number and amount by principal balance of 60+ Day
Delinquent Loans in each Group, in each case by Servicer and as of the end
of the related Prepayment Period.
(c) All allocations made by the Trustee shall be based on information the
Trustee receives from the Master Servicer which the Trustee shall be protected
in relying on.
(d) At the request of any Holder of any Private Certificate and a
prospective purchaser of a Private Certificate designated by any such Holder,
the Master Servicer on behalf of the Depositor will furnish to such persons a
copy of the Confidential Private Placement Memorandum, prepared by the Depositor
with respect to the private offering of such Certificates and copies of the
reports required to be furnished to Certificateholders pursuant to Section 3.04
hereof for the preceding two years (or such shorter period commencing June 1,
2000) pursuant to Section 5.05 of the Standard Terms.
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Article IV
The Certificates
Section 4.01. The Certificates.
The Certificates shall be designated generally as the Mortgage Loan Asset
Backed Certificates, Series 2000-2. The aggregate principal amount of
Certificates that may be executed and delivered under this Agreement is limited
to $740,000,001, except for Certificates executed and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Certificates pursuant to Sections 5.04 or 5.06 of the Standard Terms. The
following table sets forth the Classes of Certificates, the initial Certificate
Principal Balance for each such Class and the CUSIP number for each Class:
Initial Certificate
Class Principal Balance CUSIP
Group I - Fixed Rate Mortgage Loans
AF-1 $124,170,000 805564FT3
AF-2 $ 63,243,000 805564FU0
AF-3 $ 74,120,000 805564FV8
AF-4 $ 64,245,000 805564FW6
AF-5 $ 52,732,000 805564FX4
AF-6 $ 48,998,000 805564FY2
MF-1 $ 26,949,000 805564FZ9
MF-2 $ 13,964,000 805564GA3
BF-1 $ 12,005,000 805564GB1
BF-2 $ 9,554,202 805564GC9
PF-1 $ 50
Group II - Adjustable Rate Mortgage Loans
AV-1 $209,767,000 805564GD7
MV-1 $ 16,251,000 805564GE5
MV-2 $ 12,000,000 805564GF2
BV-1 $ 6,126,000 805564GG0
BV-2 $ 5,875,798 805564GH8
PV-1 $ 50
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A-IO (1) 805564GJ4
C (2)
R (3)
_____________________
(1) The Class A-IO Certificates have no stated principal balance and are not
entitled to any scheduled distributions of principal.
(2) The Class C Certificates have no stated principal balance or Pass-Through
Rate and are entitled to receive the Class C Distribution Amount.
(3) The Class R Certificates have no stated principal balance or Pass-Through
Rate and are not entitled to any scheduled distributions of principal or
interest.
Section 4.02. Denominations.
The Book-Entry Certificates shall be registered as one or more certificates
in the name of the Clearing Agency or its nominee. Beneficial interests in the
Book-Entry Certificates shall be held by the Beneficial Owners thereof through
the book-entry facilities of the Clearing Agency as described herein, in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof in
the case of the Public Certificates. So long as the Private Certificates are
Book-Entry Certificates, each Person which becomes a Beneficial Owner of Private
Certificates will be deemed to make the representations and agreements set forth
in the form of Rule 144A Agreement-QIB Certification attached as Exhibit D to
the Standard Terms, and to indemnify the Depositor, the Trustee and the Master
Servicer against any liability that may result if any transfer of a Private
Certificate by such person is not exempt from registration under the Securities
Act and all applicable state securities laws or is not made in accordance with
such federal and state laws. The Class C and Class R Certificates shall be
issued in certificated, fully-registered form in minimum Percentage Interests of
25% and integral multiples of 1% in excess thereof, except that two Class R
Certificates may be issued in different denominations.
Article V
Miscellaneous Provisions
Section 5.01. Request for Opinions.
(a) The Depositor and the Master Servicer hereby request and authorize
McGuire, Woods, Battle & Boothe LLP, as their counsel in this transaction, to
issue on behalf of the Depositor and the Master Servicer such legal opinions to
the Trustee and each Rating Agency as may be (i) required by any and all
documents, certificates or agreements executed in connection with the Trust or
(ii) requested by the Trustee, any Rating Agency or their respective counsels.
(b) The Trustee hereby requests and authorizes its counsel to issue on
behalf of the Trustee such legal opinions to the Depositor, the Master Servicer,
and each Rating Agency as may be required by any and all documents, certificates
or agreements executed in connection with the establishment of the Trust and the
issuance of the Certificates.
Section 5.02. Form of Certificates; Schedules and Exhibits; Governing Law.
(a) The Certificates shall be substantially in the respective forms set
forth in the Exhibits hereto. All Certificates shall be dated the date of their
execution.
(b) Each of the Schedules and Exhibits attached hereto or referenced
herein is incorporated herein by reference as contemplated by the Standard
Terms.
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(c) In accordance with Section 11.04 of the Standard Terms, this Agreement
shall be construed in accordance with and governed by the laws of the State,
without regard to any conflicts of laws principles thereof.
(d) Notwithstanding Section 5.05(a) of the Standard Terms, Class C and
Class R Certificates shall only be transferable to an affiliate of the Depositor
or a Qualified Institutional Buyer.
Section 5.03. Optional Termination.
(a) On any Master Servicer Remittance Date on or after the Initial
Optional Termination Date, the Master Servicer may determine to purchase and may
cause the purchase from the Trust of all (but not fewer than all) Mortgage Loans
and all property theretofore acquired in respect of any Mortgage Loan by
foreclosure, deed in lieu of foreclosure, or otherwise then remaining in the
Trust Estate at a price equal to 100% of the aggregate Scheduled Principal
Balances of the Mortgage Loans (including any REO Property) as of the day of
purchase minus amounts remitted from the Master Servicer Custodial Account to
the Asset Proceeds Account representing collections of principal on the Mortgage
Loans during the current Remittance Period, plus one month's interest on such
amount, plus in all cases all accrued and unpaid Servicing Fees and Master
Servicing Fees plus the aggregate amount of any unreimbursed Advances and any
Advances which the Servicer or the Master Servicer has theretofore failed to
remit; but in any event such purchase amount shall be sufficient to retire all
Group I and Group II Certificates in full. In connection with such purchase, the
Master Servicer shall remit to the Trustee all amounts then on deposit in the
Master Servicer Custodial Account for deposit to the Asset Proceeds Account,
which deposit shall be deemed to have occurred immediately preceding such
purchase.
(b) The Master Servicer shall direct the Trustee to adopt and the Trustee
shall adopt, as to each REMIC established hereunder, a plan of complete
liquidation as contemplated by Section 860F(a)(4) of the Code and as prepared by
the Master Servicer, and shall provide to the Trustee an Opinion of Counsel
experienced in federal income tax matters acceptable to the Trustee to the
effect that such purchase and liquidation constitutes, as to each REMIC, a
Qualified Liquidation. In addition, the Master Servicer shall provide to the
Trustee an Opinion of Counsel acceptable to the Trustee to the effect that such
purchase and liquidation does not constitute a preference payment pursuant to
the United States Bankruptcy Code.
(c) Promptly following any purchase described in this Section 5.04, the
Trustee will release the Trustee Mortgage Loan File to the Master Servicer or
otherwise upon its order.
Section 5.04. Master Servicer; Certificate Registrar, Paying Agent and
Calculation Agent
(a) Saxon Mortgage, Inc. is hereby appointed as Master Servicer hereunder.
(b) Bankers Trust Company is hereby appointed as Certificate Registrar,
Paying Agent, and Calculation Agent. As Calculation Agent, Bankers Trust Company
will be responsible for calculating and distributing to holders of Certificates
on a timely basis all amounts of principal and interest on each Distribution
Date and for (i) preparing and distributing on a timely basis all related
payment distribution statements to Holders of Certificates, (ii) preparing and
filing on a timely basis with the Securities and Exchange Commission all
required reports under the Securities Exchange Act of 1934 relating to the Trust
and (iii) preparing and distributing on a timely basis all reports required by
Sections 3.04 and 3.05 of this Agreement.
Section 5.05. Master Servicer Termination Triggers
(a) Notwithstanding anything to the contrary contained in the Standard
Terms, in the event that Total Expected Losses (as defined below) exceed either
the Group I Master Servicer Termination Trigger (as defined below) or the Group
II Master Servicer Termination Trigger (as defined below), the Trustee shall, at
the direction of the Holders of Certificates entitled to at least 51% of the
Voting Rights, by notice in writing to the Master Servicer, terminate all the
rights and obligations of the Master Servicer under the Trust Agreement, other
than its rights as a Certificateholder. On and after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under the Trust Agreement shall pass to and be vested in the Trustee pursuant to
and under Section 7.02 of the Standard Terms. For purposes of this Section 5.04,
the following terms shall have the meanings set forth below.
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"Group I Master Servicer Termination Trigger": On any determination date
(i) on or prior to March 25, 2006, if the Total Expected Losses of the Mortgage
Loans for Group I exceeds 8.00% of the Assumed Principal Balance for Group I as
of the Closing Date and (ii) after March 25, 2006, but on or prior to June 25,
2010, if the Total Expected Losses of the Mortgage Loans for Group I exceed
12.00% of the Assumed Principal Balance for Group I as of the Closing Date.
"Group II Master Servicer Termination Trigger": On any determination date
(i) on or prior to March 25, 2006, if the Total Expected Losses of the Mortgage
Loans for Group I exceeds 10.50% of the Assumed Principal Balance for Group I as
of the Closing Date and (ii) after March 25, 2006, but on or prior to June 25,
2010, if the Total Expected Losses of the Mortgage Loans for Group I exceed
15.75% of the initial Assumed Principal Balance for Group I as of the Closing
Date.
"Total Expected Losses": On any determination date, the sum of (i) the
cumulative Realized Losses from the Closing Date through and including such
determination date and (ii) the Delinquency Calculation.
"Delinquency Calculation": On any determination date, the sum of
(i) the aggregate principal balance of the Mortgage Loans that are
30-59 days delinquent multiplied by 25% and then multiplied by
43%;
(ii) the aggregate principal balance of the Mortgage Loans that are
60-89 days delinquent multiplied by 50% and then multiplied by
43%; and
(iii) the aggregate principal balance of the Mortgage Loans that are
90 days or more delinquent (including bankruptcy, foreclosure
and REO properties) multiplied by 43%.
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IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized and their respective signatures duly attested all as of June 1,
2000.
SAXON ASSET SECURITIES COMPANY
By: /s/ Bradley D. Adams
-------------------------------------
Bradley D. Adams, Vice President
SAXON MORTGAGE, INC.
as Master Servicer
By: /s/ Bradley D. Adams
--------------------------------------
Bradley D. Adams, Vice President
BANKERS TRUST COMPANY
as Trustee
By: /s/ Barbara Campbell
-----------------------------------
Barbara Campbell, Assistant Secretary
<PAGE>
CITY OF RICHMOND )
) ss.:
COMMONWEALTH OF VIRGINIA )
The foregoing instrument was acknowledged before me June 14, 2000, by
Bradley D. Adams, a Vice President of Saxon Asset Securities Company, a Virginia
corporation, on behalf of the corporation.
/s/ Patsy K. Childress
_________________________________
Notary Public
My Commission expires: 02/28/03
---------
<PAGE>
CITY OF RICHMOND )
) ss.:
COMMONWEALTH OF VIRGINIA )
The foregoing instrument was acknowledged before me on June 14, 2000, by
Bradley D. Adams, Vice President of Saxon Mortgage, Inc., a Virginia
corporation, on behalf of the corporation.
/s/ Patsy K. Childress
_____________________________
Notary Public
My Commission expires: 02/28/03
--------
<PAGE>
CITY OF RICHMOND )
) ss.:
COMMONWEALTH OF VIRGINIA )
The foregoing instrument was acknowledged before me June 14, 2000, by
Barbara Campbell, Assistant Secretary of Bankers Trust Company, a New York
corporation, on behalf of the bank.
/s/ Patsy K. Childress
____________________________
Notary Public
My Commission expires: 02/28/03
--------
<PAGE>
Schedule I
Mortgage Loans
--------------
A. Group I Mortgage Loans.
B. Group II Mortgage Loans.
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Schedule II
Sales Agreement
---------------
65
