<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 29, 2000
Saxon Asset Securities Company
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
Virginia 34-0-20552 54-1810895
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
</TABLE>
4880 Cox Road, Glen Allen, Virginia 23060
-----------------------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (804) 967-7400
--------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 1. Changes in Control of Registrant. Not Applicable.
Item 2. Acquisition or Disposition of Assets. Not Applicable.
Item 3. Bankruptcy or Receivership. Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant. Not Applicable.
Item 5. Other Events.
On February 29, 2000, the Registrant caused the issuance and sale of Mortgage
Loan Asset Backed Certificates, Series 2000-1, pursuant to a Trust Agreement
dated as of February 1, 2000, among the Registrant, Saxon Mortgage, Inc., as
Master Servicer, and Chase Bank of Texas, National Association, as Trustee, and
incorporating by reference the February 2000 Edition of the Standard Terms to
Trust Agreement (the "Trust Agreement"). Capitalized terms used and not defined
herein shall have the meanings assigned to them in the Trust Agreement.
Certificates were issued with original principal amounts and pass-through
rates set forth below:
<TABLE>
<CAPTION>
Designation Pass-Through Rate Principal Balance
<S> <C> <C>
Class AF-1 Certificates 7.585% $100,000,000
Class AF-2 Certificates 7.710% $ 42,000,000
Class AF-3 Certificates 7.755% $ 40,000,000
Class AF-4 Certificates 8.075% $ 30,000,000
Class AF-5 Certificates 8.305%(1) $ 21,914,000
Class AF-6 Certificates 8.005%(1) $ 26,000,000
Class MF-1 Certificates 8.335%(1) $ 15,386,000
Class MF-2 Certificates 8.730%(1) $ 10,457,000
Class BF-1 Certificates 9.760%(1) $ 8,964,000
Class BF-1A Certificates 8.990%(1) $ 4,034,000
Class AV-1 Certificates Variable(2) $128,000,000
Class MV-1 Certificates Variable(2) $ 13,600,000
Class MV-2 Certificates Variable(2) $ 10,000,000
Class BV-1 Certificates Variable(2) $ 5,200,000
Class BV-1A Certificates 9.165%(2) $ 3,200,000
Class C Certificates Variable (3)
Class R Certificates (4) (3)
</TABLE>
(1) Subject to a cap equal to the Net Rate on the Fixed Rate Mortgage Loans for
the applicable Accrual Period.
(2) Subject to a cap equal to the Available Funds on the Adjustable Rate
Mortgage Loans for the applicable Accrual Period.
(3) The Class C and Class R Certificates do not have principal balances.
(4) The Class R Certificates do not have an interest rate.
<PAGE>
The Certificates represent undivided ownership interest in pools of mortgage
loans (the "Mortgage Loans") held by a trust (the "Trust") created pursuant to
the Trust Agreement . The Mortgage Loans were acquired by the Registrant from
Saxon Mortgage, Inc. ("SMI"), an affiliate of the Registrant which originated or
acquired the Mortgage Loans from various mortgage banking institutions. The
Mortgage Loans are secured by liens on single family residential properties,
including investment properties (which may be condominiums, one family
residences, one to four family residences or homes in planned unit
developments). The Mortgage Loans will be serviced by Meritech Mortgage
Services, Inc., an affiliate of the Registrant.
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-1A, Class AV-1, Class MV-1, Class
MV-2, Class BV-1 and Class BV-1A Certificates were purchased by Prudential
Securities Incorporated, Banc of America Securities LLC, Greenwich Capital
Markets, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriters"), from the Seller pursuant to an Underwriting Agreement dated
February 18, 2000, and offered pursuant to Registration Statement No. 333-87351
by the Underwriters from time to time in negotiated transactions or otherwise,
at varying prices to be determined at the time of sale.
Elections will be made to treat certain assets of the Trust as a real estate
mortgage investment conduits ("REMICs") for federal income tax purposes. Each
Class of Certificates listed above (other than the Class R Certificates) will
constitute "regular interests" in the Issuing REMIC.
The description of the Mortgage Loans sold to the Trustee pursuant to the
Trust Agreement as of the Closing Date begins on the following page. The
amounts contained in the following tables have been rounded to the nearest
dollar amount and percentage, as applicable.
<PAGE>
<TABLE>
<CAPTION>
COUPON
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Coupon Range Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
7.000% (less than) to (less than or equal to) 7.250% 1 0.03 $213,864.60 0.07
7.250% (less than) to (less than or equal to) 7.500% 2 0.06 $154,959.18 0.05
7.500% (less than) to (less than or equal to) 7.750% 11 0.33 $1,190,497.55 0.40
7.750% (less than) to (less than or equal to) 8.000% 24 0.72 $4,060,519.54 1.36
8.000% (less than) to (less than or equal to) 8.250% 30 0.90 $3,881,950.18 1.30
8.250% (less than) to (less than or equal to) 8.500% 59 1.77 $9,136,932.58 3.06
8.500% (less than) to (less than or equal to) 8.750% 92 2.77 $11,666,927.13 3.91
8.750% (less than) to (less than or equal to) 9.000% 138 4.15 $17,018,116.36 5.70
9.000% (less than) to (less than or equal to) 9.250% 105 3.16 $12,489,366.29 4.18
9.250% (less than) to (less than or equal to) 9.500% 172 5.17 $20,413,272.77 6.83
9.500% (less than) to (less than or equal to) 9.750% 182 5.47 $20,219,455.28 6.77
9.750% (less than) to (less than or equal to) 10.000% 284 8.54 $29,918,027.38 10.01
10.000% (less than) to (less than or equal to) 10.250% 165 4.96 $16,127,132.26 5.40
10.250% (less than) to (less than or equal to) 10.500% 234 7.04 $20,599,557.46 6.90
10.500% (less than) to (less than or equal to) 10.750% 223 6.71 $18,700,167.38 6.26
10.750% (less than) to (less than or equal to) 11.000% 292 8.78 $24,745,260.93 8.28
11.000% (less than) to (less than or equal to) 11.250% 155 4.66 $12,969,730.26 4.34
11.250% (less than) to (less than or equal to) 11.500% 219 6.59 $16,010,390.01 5.36
11.500% (less than) to (less than or equal to) 11.750% 142 4.27 $11,100,194.70 3.72
11.750% (less than) to (less than or equal to) 12.000% 178 5.35 $12,612,567.46 4.22
12.000% (less than) to (less than or equal to) 12.250% 110 3.31 $6,775,680.91 2.27
12.250% (less than) to (less than or equal to) 12.500% 122 3.67 $7,137,112.56 2.39
12.500% (less than) to (less than or equal to) 12.750% 97 2.92 $6,277,726.12 2.10
12.750% (less than) to (less than or equal to) 13.000% 87 2.62 $4,685,976.11 1.57
13.000% (less than) to (less than or equal to) 13.250% 49 1.47 $2,858,475.84 0.96
13.250% (less than) to (less than or equal to) 13.500% 46 1.38 $2,214,554.70 0.74
13.500% (less than) to (less than or equal to) 13.750% 30 0.90 $1,470,611.70 0.49
13.750% (less than) to (less than or equal to) 14.000% 37 1.11 $1,820,066.21 0.61
14.000% (less than) to (less than or equal to) 14.250% 11 0.33 $624,769.48 0.21
14.250% (less than) to (less than or equal to) 14.500% 17 0.51 $954,993.93 0.32
14.500% (less than) to (less than or equal to) 14.750% 9 0.27 $529,586.62 0.18
15.750% (less than) to (less than or equal to) 16.000% 1 0.03 $155,775.08 0.05
16.000% (less than) to (less than or equal to) 16.250% 1 0.03 $23,500.00 0.01
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
REMAINING TERM TO STATED MATURITY
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Rem Term Range Loans Mortgage Loans Principal Balance Principal Bal
54 (less than) to (less than or equal to) 60 5 0.15 $99,054.63 0.03
114 (less than) to (less than or equal to) 120 51 1.53 $1,975,022.66 0.66
138 (less than) to (less than or equal to) 144 9 0.27 $522,427.81 0.17
168 (less than) to (less than or equal to) 174 9 0.27 $542,254.46 0.18
174 (less than) to (less than or equal to) 180 418 12.57 $22,077,003.15 7.39
228 (less than) to (less than or equal to) 234 3 0.09 $160,424.67 0.05
234 (less than) to (less than or equal to) 240 71 2.14 $4,134,489.83 1.38
294 (less than) to (less than or equal to) 300 7 0.21 $580,845.08 0.19
342 (less than) to (less than or equal to) 348 1 0.03 $274,102.56 0.09
348 (less than) to (less than or equal to) 354 42 1.26 $5,794,978.25 1.94
354 (less than) to (less than or equal to) 360 2,709 81.47 $262,597,115.46 87.90
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL LTV RANGE
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Original LTV Range Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
5.00 (less than) to (less than or equal to) 10.00 23 0.69 $525,191.99 0.18
10.00 (less than) to (less than or equal to) 15.00 65 1.95 $1,830,188.62 0.61
15.00 (less than) to (less than or equal to) 20.00 82 2.47 $3,610,318.65 1.21
20.00 (less than) to (less than or equal to) 25.00 62 1.86 $3,227,500.92 1.08
25.00 (less than) to (less than or equal to) 30.00 46 1.38 $2,266,852.90 0.76
30.00 (less than) to (less than or equal to) 35.00 31 0.93 $1,375,176.00 0.46
35.00 (less than) to (less than or equal to) 40.00 43 1.29 $2,170,631.13 0.73
40.00 (less than) to (less than or equal to) 45.00 54 1.62 $3,111,377.31 1.04
45.00 (less than) to (less than or equal to) 50.00 87 2.62 $5,876,838.43 1.97
50.00 (less than) to (less than or equal to) 55.00 67 2.02 $4,192,463.93 1.40
55.00 (less than) to (less than or equal to) 60.00 111 3.34 $8,573,016.04 2.87
60.00 (less than) to (less than or equal to) 65.00 182 5.47 $14,139,846.92 4.73
65.00 (less than) to (less than or equal to) 70.00 263 7.91 $25,616,345.67 8.57
70.00 (less than) to (less than or equal to) 75.00 410 12.33 $39,486,107.42 13.22
75.00 (less than) to (less than or equal to) 80.00 816 24.54 $81,056,042.03 27.13
80.00 (less than) to (less than or equal to) 85.00 411 12.36 $40,779,257.74 13.65
85.00 (less than) to (less than or equal to) 90.00 530 15.94 $56,574,113.17 18.94
90.00 (less than) to (less than or equal to) 95.00 42 1.26 $4,346,449.69 1.45
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
CURRENT BALANCE
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Current Balance Ragge Loans Mortgage Loans Principal Balance Principal Bal
0 (less than) to (less than or equal to) 25,000 170 5.11 $3,450,900.97 1.16
25,000 (less than) to (less than or equal to) 50,000 889 26.74 $34,050,435.27 11.40
50,000 (less than) to (less than or equal to) 75,000 838 25.20 $51,913,312.53 17.38
75,000 (less than) to (less than or equal to) 100,000 499 15.01 $43,508,638.84 14.56
100,000 (less than) to (less than or equal to) 125,000 293 8.81 $32,708,730.62 10.95
125,000 (less than) to (less than or equal to) 150,000 184 5.53 $25,035,897.84 8.38
150,000 (less than) to (less than or equal to) 175,000 126 3.79 $20,367,944.61 6.82
175,000 (less than) to (less than or equal to) 200,000 72 2.17 $13,494,700.87 4.52
200,000 (less than) to (less than or equal to) 225,000 45 1.35 $9,617,644.64 3.22
225,000 (less than) to (less than or equal to) 250,000 41 1.23 $9,880,701.41 3.31
250,000 (less than) to (less than or equal to) 275,000 50 1.50 $13,077,279.69 4.38
275,000 (less than) to (less than or equal to) 300,000 31 0.93 $8,919,762.15 2.99
300,000 (less than) to (less than or equal to) 325,000 24 0.72 $7,469,192.66 2.50
325,000 (less than) to (less than or equal to) 350,000 17 0.51 $5,760,440.36 1.93
350,000 (less than) to (less than or equal to) 375,000 10 0.30 $3,644,680.66 1.22
375,000 (less than) to (less than or equal to) 400,000 9 0.27 $3,520,830.73 1.18
400,000 (less than) to (less than or equal to) 425,000 6 0.18 $2,479,486.39 0.83
425,000 (less than) to (less than or equal to) 450,000 4 0.12 $1,755,473.85 0.59
450,000 (less than) to (less than or equal to) 475,000 10 0.30 $4,623,913.93 1.55
475,000 (less than) to (less than or equal to) 500,000 7 0.21 $3,477,750.54 1.16
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
PRODUCT TYPE
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Product Type Loans Mortgage Loans Principal Balance Principal Bal
5 Year Fixed 5 0.15 $99,054.63 0.03
10 Year Fixed 51 1.53 $1,975,022.66 0.66
12 Year Fixed 9 0.27 $522,427.81 0.17
15 Year Fixed 427 12.84 $22,619,257.61 7.57
20 Year Fixed 74 2.23 $4,294,914.50 1.44
25 Year Fixed 7 0.21 $580,845.08 0.19
30 Year Fixed 1,152 34.65 $113,875,032.98 38.12
30/15 Year Balloon 1,599 48.09 $154,696,614.13 51.78
30/5 Year Balloon 1 0.03 $94,549.16 0.03
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY TYPE
Percentage of
Number of Percentage of Cut-Off
Property Type Mortgage Number of Aggregate Unpaid Date Aggregate
Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
2-4 Family 196 5.89 $18,878,086.45 6.32
Single Family Attached 74 2.23 $4,956,407.35 1.66
Single Family Detached 2,691 80.93 $241,603,741.26 80.87
Manufactured Housing 131 3.94 $8,918,015.23 2.99
High Rise Condominium 16 0.48 $2,351,340.71 0.79
Low Rise Condominium 80 2.41 $6,217,509.88 2.08
PUD 111 3.34 $14,411,891.26 4.82
Townhouse 26 0.78 $1,420,726.42 0.48
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
OWNER OCCUPANCY
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Owner Occupancy Loans Mortgage Loans Principal Balance Principal Bal
Investor 305 9.17 $19,551,402.28 6.54
Primary 3,006 90.41 $277,547,665.75 92.90
Second Home 14 0.42 $1,658,650.53 0.56
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
DOCUMENTATION
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Documentation Loans Mortgage Loans Principal Balance Principal Bal
Full Documentation 2,700 81.20 $228,164,675.65 76.37
Limited Documentation 163 4.90 $22,094,595.77 7.40
No Ratio 437 13.14 $46,478,093.91 15.56
Stated Income 25 0.75 $2,020,353.23 0.68
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
LOAN PURPOSE
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Loan Purpose Loans Mortgage Loans Principal Balance Principal Bal
Cash-Out Refinance 2,290 68.87 $196,450,269.30 65.76
Purchase 695 20.90 $65,425,578.25 21.90
Refinance 340 10.23 $36,881,871.01 12.35
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
LIEN STATUS
Percentage of
Number of Percentage of Cut-Off
Mortgage Number of Aggregate Unpaid Date Aggregate
Lien Status Loans Mortgage Loans Principal Balance Principal Bal
1 3,045 91.58 $286,744,605.62 95.98
2 280 8.42 $12,013,112.94 4.02
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CREDIT QUALITY
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Credit Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
A+ 335 10.08 $37,643,088.73 12.60
A 526 15.82 $47,413,878.94 15.87
A- 1,219 36.66 $120,601,859.63 40.37
B 680 20.45 $53,510,903.95 17.91
C 496 14.92 $35,407,808.16 11.85
D 69 2.08 $4,180,179.15 1.40
- ---------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
===========================================================================================================================
GEOGRAPHIC DISTRIBUTION
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
State Loans Mortgage Loans Principal Balance Principal Bal
AK 7 0.21 $1,024,170.83 0.34
AR 30 0.90 $2,004,440.89 0.67
AZ 69 2.08 $5,061,621.84 1.69
CA 387 11.64 $51,406,978.26 17.21
CO 79 2.38 $7,994,745.92 2.68
CT 48 1.44 $5,269,994.10 1.76
DC 9 0.27 $1,063,622.04 0.36
DE 16 0.48 $1,539,856.84 0.52
FL 235 7.07 $19,157,674.80 6.41
GA 179 5.38 $16,274,985.63 5.45
HI 26 0.78 $5,037,110.83 1.69
IA 39 1.17 $2,353,760.78 0.79
ID 21 0.63 $1,692,135.60 0.57
IL 144 4.33 $12,666,051.17 4.24
IN 108 3.25 $6,777,614.64 2.27
KS 39 1.17 $3,137,113.41 1.05
KY 41 1.23 $2,965,432.55 0.99
LA 93 2.80 $6,441,115.15 2.16
MA 19 0.57 $1,912,128.12 0.64
MD 40 1.20 $4,682,120.83 1.57
MI 196 5.89 $14,216,433.02 4.76
MN 49 1.47 $5,243,138.24 1.75
MO 84 2.53 $4,856,001.93 1.63
MS 32 0.96 $2,408,408.14 0.81
MT 5 0.15 $338,956.25 0.11
NC 56 1.68 $4,505,500.87 1.51
ND 1 0.03 $80,966.93 0.03
NE 6 0.18 $294,135.51 0.10
NH 8 0.24 $684,488.75 0.23
NJ 84 2.53 $9,221,526.30 3.09
NM 21 0.63 $1,914,309.44 0.64
NV 17 0.51 $1,751,168.89 0.59
NY 74 2.23 $9,845,648.56 3.30
OH 184 5.53 $13,004,215.03 4.35
OK 44 1.32 $2,766,039.11 0.93
OR 50 1.50 $5,439,796.62 1.82
PA 159 4.78 $11,997,427.76 4.02
RI 8 0.24 $609,016.36 0.20
SC 34 1.02 $2,901,375.68 0.97
SD 1 0.03 $132,252.83 0.04
TN 124 3.73 $8,346,792.21 2.79
TX 200 6.02 $15,203,182.60 5.09
UT 33 0.99 $3,667,631.01 1.23
VA 112 3.37 $10,493,584.76 3.51
VT 1 0.03 $64,581.47 0.02
WA 60 1.80 $6,929,115.70 2.32
WI 34 1.02 $2,437,611.82 0.82
WV 14 0.42 $750,636.61 0.25
WY 5 0.15 $191,101.93 0.06
- ---------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
===========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMORTIZATION
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Amortization Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
Fully Amortizing 1,725 51.88 $143,966,555.27 48.19
Partially Amortizing 1,600 48.12 $154,791,163.29 51.81
- ---------------------------------------------------------------------------------------------------------------------------
Total: 3,325 100.00% $298,757,718.56 100.00%
===========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COUPON
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Coupon Range Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
7.000% (less than) to (less than or equal to) 7.250% 3 0.22 $515,062.53 0.32
7.250% (less than) to (less than or equal to) 7.500% 1 0.07 $84,000.00 0.05
7.500% (less than) to (less than or equal to) 7.750% 3 0.22 $383,788.76 0.24
7.750% (less than) to (less than or equal to) 8.000% 14 1.02 $2,184,073.37 1.37
8.000% (less than) to (less than or equal to) 8.250% 9 0.66 $1,633,817.28 1.02
8.250% (less than) to (less than or equal to) 8.500% 20 1.46 $2,509,299.10 1.57
8.500% (less than) to (less than or equal to) 8.750% 22 1.61 $2,932,081.11 1.83
8.750% (less than) to (less than or equal to) 9.000% 70 5.11 $9,376,567.37 5.86
9.000% (less than) to (less than or equal to) 9.250% 56 4.09 $7,780,458.15 4.86
9.250% (less than) to (less than or equal to) 9.500% 92 6.72 $12,286,724.52 7.68
9.500% (less than) to (less than or equal to) 9.750% 101 7.37 $12,445,196.73 7.78
9.750% (less than) to (less than or equal to) 10.000% 179 13.07 $23,405,590.46 14.63
10.000% (less than) to (less than or equal to) 10.250% 103 7.52 $13,336,154.00 8.34
10.250% (less than) to (less than or equal to) 10.500% 129 9.42 $14,555,531.58 9.10
10.500% (less than) to (less than or equal to) 10.750% 117 8.54 $12,792,638.43 8.00
10.750% (less than) to (less than or equal to) 11.000% 144 10.51 $16,286,608.75 10.18
11.000% (less than) to (less than or equal to) 11.250% 82 5.99 $7,754,624.53 4.85
11.250% (less than) to (less than or equal to) 11.500% 62 4.53 $5,889,621.38 3.68
11.500% (less than) to (less than or equal to) 11.750% 41 2.99 $3,685,371.31 2.30
11.750% (less than) to (less than or equal to) 12.000% 63 4.60 $5,808,090.16 3.63
12.000% (less than) to (less than or equal to) 12.250% 15 1.09 $1,271,891.88 0.79
12.250% (less than) to (less than or equal to) 12.500% 20 1.46 $1,456,542.38 0.91
12.500% (less than) to (less than or equal to) 12.750% 10 0.73 $600,246.34 0.38
12.750% (less than) to (less than or equal to) 13.000% 9 0.66 $722,158.42 0.45
13.000% (less than) to (less than or equal to) 13.250% 2 0.15 $138,532.64 0.09
13.250% (less than) to (less than or equal to) 13.500% 3 0.22 $166,280.36 0.10
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
REMAINING TERM TO STATED MATURITY
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Rem Term Range Loans Mortgage Loans Principal Balance Principal Bal
330 (less than) to (less than or equal to) 336 1 0.07 $135,231.26 0.08
336 (less than) to (less than or equal to) 342 1 0.07 $49,362.47 0.03
342 (less than) to (less than or equal to) 348 3 0.22 $191,878.55 0.12
348 (less than) to (less than or equal to) 354 41 2.99 $4,947,126.19 3.09
354 (less than) to (less than or equal to) 360 1,324 96.64 $154,677,353.07 96.67
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
ORIGINIAL LTV RANGE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Originial LTV Range Loans Mortgage Loans Principal Balance Principal Bal
15.00 (less than) to (less than or equal to) 20.00 2 0.15 $126,932.58 0.08
20.00 (less than) to (less than or equal to) 25.00 2 0.15 $89,983.21 0.06
25.00 (less than) to (less than or equal to) 30.00 1 0.07 $24,900.00 0.02
30.00 (less than) to (less than or equal to) 35.00 7 0.51 $601,953.74 0.38
35.00 (less than) to (less than or equal to) 40.00 5 0.36 $333,838.96 0.21
40.00 (less than) to (less than or equal to) 45.00 12 0.88 $945,723.02 0.59
45.00 (less than) to (less than or equal to) 50.00 17 1.24 $1,241,213.86 0.78
50.00 (less than) to (less than or equal to) 55.00 16 1.17 $1,579,085.87 0.99
55.00 (less than) to (less than or equal to) 60.00 37 2.70 $3,405,335.60 2.13
60.00 (less than) to (less than or equal to) 65.00 76 5.55 $9,015,413.13 5.63
65.00 (less than) to (less than or equal to) 70.00 115 8.39 $14,374,900.64 8.98
70.00 (less than) to (less than or equal to) 75.00 186 13.58 $21,682,345.51 13.55
75.00 (less than) to (less than or equal to) 80.00 389 28.39 $47,607,829.95 29.75
80.00 (less than) to (less than or equal to) 85.00 244 17.81 $26,957,495.10 16.85
85.00 (less than) to (less than or equal to) 90.00 252 18.39 $31,044,586.77 19.40
90.00 (less than) to (less than or equal to) 95.00 9 0.66 $969,413.60 0.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CURRENT BALANCE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Current Balance Range Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
0 (less than) to (less than or equal to) 25,000 6 0.44 $146,564.33 0.09
25,000 (less than) to (less than or equal to) 50,000 154 11.24 $6,331,780.72 3.96
50,000 (less than) to (less than or equal to) 75,000 327 23.87 $20,682,314.75 12.93
75,000 (less than) to (less than or equal to) 100,000 255 18.61 $22,305,294.19 13.94
100,000 (less than) to (less than or equal to) 125,000 192 14.01 $21,528,738.98 13.46
125,000 (less than) to (less than or equal to) 150,000 139 10.15 $19,121,676.28 11.95
150,000 (less than) to (less than or equal to) 175,000 92 6.72 $15,036,012.19 9.40
175,000 (less than) to (less than or equal to) 200,000 49 3.58 $9,165,939.92 5.73
200,000 (less than) to (less than or equal to) 225,000 37 2.70 $7,938,150.54 4.96
225,000 (less than) to (less than or equal to) 250,000 37 2.70 $8,781,288.92 5.49
250,000 (less than) to (less than or equal to) 275,000 28 2.04 $7,302,276.58 4.56
275,000 (less than) to (less than or equal to) 300,000 14 1.02 $4,026,256.25 2.52
300,000 (less than) to (less than or equal to) 325,000 9 0.66 $2,827,234.33 1.77
325,000 (less than) to (less than or equal to) 350,000 3 0.22 $1,020,327.96 0.64
350,000 (less than) to (less than or equal to) 375,000 7 0.51 $2,518,138.63 1.57
375,000 (less than) to (less than or equal to) 400,000 6 0.44 $2,351,626.14 1.47
400,000 (less than) to (less than or equal to) 425,000 1 0.07 $404,880.23 0.25
425,000 (less than) to (less than or equal to) 450,000 1 0.07 $438,900.59 0.27
450,000 (less than) to (less than or equal to) 475,000 1 0.07 $459,767.70 0.29
475,000 (less than) to (less than or equal to) 500,000 1 0.07 $488,000.00 0.30
525,000 (less than) to (less than or equal to) 550,000 3 0.22 $1,627,850.22 1.02
575,000 (less than) to (less than or equal to) 600,000 1 0.07 $599,734.57 0.37
600,000 (less than) to (less than or equal to) 625,000 3 0.22 $1,859,277.57 1.16
625,000 (less than) to (less than or equal to) 650,000 1 0.07 $633,000.00 0.40
725,000 (less than) to (less than or equal to) 750,000 1 0.07 $746,835.88 0.47
775,000 (less than) to (less than or equal to) 800,000 1 0.07 $780,000.00 0.49
875,000 (less than) to (less than or equal to) 900,000 1 0.07 $879,084.07 0.55
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
PRODUCT TYPE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Product Type Loans Mortgage Loans Principal Balance Principal Bal
1CMT 4 0.29 $315,926.39 0.20
2Yr/6Libor 595 43.43 $67,299,793.18 42.06
3Yr/6Libor 765 55.84 $91,415,918.85 57.13
6Libor 6 0.44 $969,313.12 0.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
PROPERTY TYPE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Property Type Loans Mortgage Loans Principal Balance Principal Bal
2-4 Family 60 4.38 $7,148,401.93 4.47
Deminimus PUD 2 0.15 $160,956.77 0.10
High Rise Condominium 8 0.58 $1,181,915.72 0.74
Low Rise Condominium 57 4.16 $5,755,690.02 3.60
Manufactured Housing 31 2.26 $2,480,999.44 1.55
PUD 74 5.40 $11,335,591.92 7.08
Single Family Attached 23 1.68 $3,337,335.45 2.09
Single Family Detached 1,108 80.88 $128,072,409.57 80.04
Townhouse 7 0.51 $527,650.72 0.33
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OWNER OCCUPANCY
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Owner Occupancy Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
Investor 74 5.40 $5,757,970.25 3.60
Primary 1,288 94.01 $153,551,196.38 95.97
Second Home 8 0.58 $691,784.91 0.43
- ---------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===========================================================================================================================
DOCUMENTATION
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Documentation Loans Mortgage Loans Principal Balance Principal Bal
Full Documentation 1,062 77.52 $118,302,125.22 73.94
Limited Documentation 68 4.96 $10,086,684.20 6.30
Stated Income 240 17.52 $31,612,142.12 19.76
- ---------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===========================================================================================================================
LOAN PURPOSE
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Loan Purpose Loans Mortgage Loans Principal Balance Principal Bal
Cash-Out Refinance 692 50.51 $81,508,470.62 50.94
Purchase 531 38.76 $60,932,064.80 38.08
Refinance 147 10.73 $17,560,416.12 10.98
- ---------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===========================================================================================================================
LIEN STATUS
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Lien Status Loans Mortgage Loans Principal Balance Principal Bal
1 1,370 100.00 $160,000,951.54 100.00
- ---------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===========================================================================================================================
CREDIT QUALITY
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Credit Loans Mortgage Loans Principal Balance Principal Bal
A+ 14 1.02 $2,802,930.46 1.75
A 52 3.80 $9,456,230.42 5.91
A- 580 42.34 $71,406,314.67 44.63
B 357 26.06 $38,174,951.84 23.86
C 313 22.85 $32,463,217.28 20.29
D 54 3.94 $5,697,306.87 3.56
- ---------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS MARGIN RANGE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Loans Mortgage Loans Principal Balance Principal Bal
Gross Margin Range
<S> <C> <C> <C> <C>
3.500% (less than) to (less than or equal to) 3.750% 1 0.07 $276,000.00 0.17
3.750% (less than) to (less than or equal to) 4.000% 5 0.36 $1,570,190.94 0.98
4.000% (less than) to (less than or equal to) 4.250% 4 0.29 $1,573,998.59 0.98
4.250% (less than) to (less than or equal to) 4.500% 7 0.51 $656,347.11 0.41
4.500% (less than) to (less than or equal to) 4.750% 5 0.36 $1,736,575.87 1.09
4.750% (less than) to (less than or equal to) 5.000% 37 2.70 $5,007,409.98 3.13
5.000% (less than) to (less than or equal to) 5.250% 62 4.53 $7,327,532.27 4.58
5.250% (less than) to (less than or equal to) 5.500% 98 7.15 $10,555,920.47 6.60
5.500% (less than) to (less than or equal to) 5.750% 70 5.11 $9,171,088.61 5.73
5.750% (less than) to (less than or equal to) 6.000% 197 14.38 $23,836,359.67 14.90
6.000% (less than) to (less than or equal to) 6.250% 141 10.29 $15,404,741.52 9.63
6.250% (less than) to (less than or equal to) 6.500% 245 17.88 $27,384,355.89 17.12
6.500% (less than) to (less than or equal to) 6.750% 128 9.34 $14,845,683.63 9.28
6.750% (less than) to (less than or equal to) 7.000% 184 13.43 $20,980,306.20 13.11
7.000% (less than) to (less than or equal to) 7.250% 110 8.03 $12,414,262.86 7.76
7.250% (less than) to (less than or equal to) 7.500% 41 2.99 $3,902,631.72 2.44
7.500% (less than) to (less than or equal to) 7.750% 14 1.02 $1,311,118.54 0.82
7.750% (less than) to (less than or equal to) 8.000% 7 0.51 $863,525.17 0.54
8.000% (less than) to (less than or equal to) 8.250% 7 0.51 $537,854.85 0.34
8.250% (less than) to (less than or equal to) 8.500% 4 0.29 $272,617.85 0.17
8.500% (less than) to (less than or equal to) 8.750% 1 0.07 $191,493.95 0.12
8.750% (less than) to (less than or equal to) 9.000% 1 0.07 $139,959.49 0.09
9.250% (less than) to (less than or equal to) 9.500% 1 0.07 $40,976.36 0.03
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
GROSS LIFE CAP RANGE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Life Cap Range Loans Mortgage Loans Principal Balance Principal Bal
13.00% (less than) to (less than or equal to) 13.50% 3 0.22 $515,062.53 0.32
13.50% (less than) to (less than or equal to) 14.00% 15 1.09 $2,330,437.95 1.46
14.00% (less than) to (less than or equal to) 14.50% 27 1.97 $4,094,961.31 2.56
14.50% (less than) to (less than or equal to) 15.00% 65 4.74 $8,547,301.60 5.34
15.00% (less than) to (less than or equal to) 15.50% 81 5.91 $11,889,266.39 7.43
15.50% (less than) to (less than or equal to) 16.00% 146 10.66 $20,734,487.20 12.96
16.00% (less than) to (less than or equal to) 16.50% 158 11.53 $18,450,894.40 11.53
16.50% (less than) to (less than or equal to) 17.00% 242 17.66 $28,667,963.22 17.92
17.00% (less than) to (less than or equal to) 17.50% 182 13.28 $20,979,793.30 13.11
17.50% (less than) to (less than or equal to) 18.00% 197 14.38 $20,862,339.44 13.04
18.00% (less than) to (less than or equal to) 18.50% 118 8.61 $11,364,231.56 7.10
18.50% (less than) to (less than or equal to) 19.00% 93 6.79 $8,496,744.65 5.31
19.00% (less than) to (less than or equal to) 19.50% 29 2.12 $2,041,408.74 1.28
19.50% (less than) to (less than or equal to) 20.00% 11 0.80 $815,426.61 0.51
20.00% (less than) to (less than or equal to) 20.50% 3 0.22 $210,632.64 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
===================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS LIFE FLOOR RANGE
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Life Floor Range Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
5.50% (less than) to (less than or equal to) 6.00% 4 0.29 $1,033,869.30 0.65
6.00% (less than) to (less than or equal to) 6.50% 3 0.22 $524,301.52 0.33
6.50% (less than) to (less than or equal to) 7.00% 2 0.15 $167,345.92 0.10
7.00% (less than) to (less than or equal to) 7.50% 10 0.73 $1,266,219.09 0.79
7.50% (less than) to (less than or equal to) 8.00% 26 1.90 $3,889,770.15 2.43
8.00% (less than) to (less than or equal to) 8.50% 31 2.26 $5,224,470.97 3.27
8.50% (less than) to (less than or equal to) 9.00% 91 6.64 $12,032,408.43 7.52
9.00% (less than) to (less than or equal to) 9.50% 141 10.29 $18,685,692.39 11.68
9.50% (less than) to (less than or equal to) 10.00% 271 19.78 $34,142,411.85 21.34
10.00% (less than) to (less than or equal to) 10.50% 228 16.64 $27,106,567.77 16.94
10.50% (less than) to (less than or equal to) 11.00% 256 18.69 $28,434,534.75 17.77
11.00% (less than) to (less than or equal to) 11.50% 144 10.51 $13,644,245.91 8.53
11.50% (less than) to (less than or equal to) 12.00% 104 7.59 $9,493,461.47 5.93
12.00% (less than) to (less than or equal to) 12.50% 35 2.55 $2,728,434.26 1.71
12.50% (less than) to (less than or equal to) 13.00% 19 1.39 $1,322,404.76 0.83
13.00% (less than) to (less than or equal to) 13.50% 5 0.36 $304,813.00 0.19
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
PERIODIC INTEREST CAP
Percentage of
Number of Percentage of Cut-Off Date
Mortgage Number of Aggregate Unpaid Aggregate
Periodic Interest Cap Loans Mortgage Loans Principal Balance Principal Bal
0.50% 2 0.15 $562,356.28 0.35
1.00% 1,092 79.71 $126,837,391.34 79.27
1.50% 267 19.49 $31,764,270.69 19.85
2.00% 6 0.44 $612,746.24 0.38
3.00% 3 0.22 $224,186.99 0.14
- ------------------------------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEXT INTEREST ROLL DATE
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
Next Roll Date Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
4/1/00 2 0.15 $243,686.44 0.15
5/1/00 1 0.07 $49,362.47 0.03
7/1/00 3 0.22 $472,926.68 0.30
8/1/00 1 0.07 $252,700.00 0.16
9/15/00 1 0.07 $51,718.29 0.03
10/1/00 1 0.07 $79,399.81 0.05
1/1/01 3 0.22 $255,926.39 0.16
2/1/01 2 0.15 $120,760.45 0.08
4/1/01 2 0.15 $199,524.92 0.12
5/1/01 2 0.15 $334,398.96 0.21
6/1/01 1 0.07 $43,199.80 0.03
6/28/01 1 0.07 $141,377.41 0.09
7/1/01 5 0.36 $746,294.17 0.47
7/5/01 1 0.07 $85,181.28 0.05
7/8/01 1 0.07 $50,844.75 0.03
7/9/01 1 0.07 $130,100.61 0.08
7/22/01 1 0.07 $124,458.92 0.08
8/1/01 11 0.80 $1,293,477.43 0.81
8/3/01 1 0.07 $90,729.43 0.06
8/10/01 1 0.07 $303,366.81 0.19
8/11/01 1 0.07 $99,730.89 0.06
8/16/01 1 0.07 $49,334.69 0.03
9/1/01 25 1.82 $2,437,903.19 1.52
9/7/01 1 0.07 $61,060.35 0.04
9/9/01 1 0.07 $438,900.59 0.27
10/1/01 14 1.02 $1,555,265.37 0.97
11/1/01 38 2.77 $4,831,873.56 3.02
12/1/01 103 7.52 $11,218,110.32 7.01
12/6/01 1 0.07 $104,878.48 0.07
1/1/02 255 18.61 $28,710,409.62 17.94
1/2/02 1 0.07 $236,701.75 0.15
2/1/02 121 8.83 $13,688,548.86 8.56
3/1/02 2 0.15 $173,566.46 0.11
5/1/02 3 0.22 $290,450.24 0.18
6/1/02 2 0.15 $469,095.73 0.29
7/1/02 6 0.44 $705,676.54 0.44
8/1/02 3 0.22 $242,358.97 0.15
9/1/02 18 1.31 $1,771,204.22 1.11
10/1/02 26 1.90 $2,760,730.59 1.73
10/18/02 1 0.07 $79,907.02 0.05
11/1/02 30 2.19 $4,171,653.04 2.61
11/18/02 1 0.07 $67,941.04 0.04
11/23/02 1 0.07 $60,234.87 0.04
12/1/02 135 9.85 $19,444,631.53 12.15
12/8/02 2 0.15 $160,958.32 0.10
12/10/02 1 0.07 $59,965.41 0.04
12/20/02 1 0.07 $122,327.62 0.08
12/23/02 2 0.15 $158,663.54 0.10
12/28/02 1 0.07 $24,982.56 0.02
1/1/03 312 22.77 $35,924,851.08 22.45
1/5/03 2 0.15 $159,177.20 0.10
1/6/03 1 0.07 $63,731.24 0.04
1/10/03 1 0.07 $52,174.32 0.03
1/19/03 1 0.07 $113,050.00 0.07
1/20/03 1 0.07 $223,000.00 0.14
1/21/03 1 0.07 $36,485.65 0.02
1/25/03 1 0.07 $81,900.00 0.05
1/26/03 1 0.07 $103,680.00 0.06
1/27/03 1 0.07 $88,167.68 0.06
2/1/03 190 13.87 $22,682,983.98 14.18
2/2/03 1 0.07 $76,000.00 0.05
3/1/03 18 1.31 $1,129,250.00 0.71
- -----------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
=================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Percentage of Percentage of Cut-Off
Number of Mortgage Number of Aggregate Unpaid Date Aggregate
State Loans Mortgage Loans Principal Balance Principal Bal
<S> <C> <C> <C> <C>
AK 5 0.36 $781,936.56 0.49
AR 7 0.51 $551,975.46 0.34
AZ 38 2.77 $4,444,576.13 2.78
CA 288 21.02 $48,866,092.22 30.54
CO 52 3.80 $6,196,117.93 3.87
CT 19 1.39 $2,323,302.34 1.45
DC 1 0.07 $165,250.51 0.10
DE 4 0.29 $297,409.83 0.19
FL 60 4.38 $7,092,605.09 4.43
GA 36 2.63 $3,584,152.22 2.24
HI 8 0.58 $1,703,416.45 1.06
IA 18 1.31 $1,132,431.11 0.71
ID 17 1.24 $1,591,946.70 0.99
IL 101 7.37 $11,440,873.40 7.15
IN 42 3.07 $3,478,637.59 2.17
KS 4 0.29 $396,457.15 0.25
KY 17 1.24 $1,581,669.35 0.99
LA 20 1.46 $1,709,124.70 1.07
MA 17 1.24 $2,316,080.25 1.45
MD 12 0.88 $1,262,752.88 0.79
MI 53 3.87 $4,253,353.80 2.66
MN 26 1.90 $2,648,799.60 1.66
MO 44 3.21 $2,787,445.76 1.74
MS 5 0.36 $477,007.14 0.30
MT 1 0.07 $84,831.32 0.05
NC 14 1.02 $1,192,498.40 0.75
ND 1 0.07 $51,944.78 0.03
NE 1 0.07 $34,336.71 0.02
NH 2 0.15 $167,294.75 0.10
NJ 14 1.02 $2,283,397.80 1.43
NM 5 0.36 $338,582.03 0.21
NV 21 1.53 $2,676,736.00 1.67
NY 10 0.73 $1,029,701.12 0.64
OH 67 4.89 $5,343,990.96 3.34
OK 11 0.80 $817,067.28 0.51
OR 20 1.46 $2,165,538.90 1.35
PA 42 3.07 $3,618,550.71 2.26
RI 1 0.07 $94,948.65 0.06
SC 4 0.29 $309,304.50 0.19
SD 2 0.15 $125,212.79 0.08
TN 10 0.73 $682,020.34 0.43
TX 86 6.28 $7,823,801.18 4.89
UT 31 2.26 $4,618,642.53 2.89
VA 34 2.48 $4,719,215.49 2.95
WA 72 5.26 $8,171,609.32 5.11
WI 23 1.68 $2,266,984.58 1.42
WV 3 0.22 $232,545.56 0.15
WY 1 0.07 $68,781.67 0.04
- -----------------------------------------------------------------------------------------------------------------
Total: 1,370 100.00% $160,000,951.54 100.00%
=================================================================================================================
</TABLE>
<PAGE>
Item 6. Resignations of Registrant's Directors. Not Applicable.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired. Not Applicable.
(b) Pro forma financial information. Not Applicable.
(c) Exhibits
Exhibit 1. Underwriting Agreement dated February 18, 2000, among Saxon Asset
Securities Company, Saxon Mortgage Inc., Prudential Securities Incorporated,
Banc of America Securities LLC, Greenwich Capital Markets, Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
Exhibit 2.1 Trust Agreement dated February 1, 2000, among Saxon Asset
Securities Company, Saxon Mortgage, Inc., as Master Servicer, and Chase Bank of
Texas, National Association, as Trustee.
Exhibit 2.2. Standard Terms to Trust Agreement (February 2000 Edition).
Item 8. Change in Fiscal Year. Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S. Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SAXON ASSET SECURITIES COMPANY
By: /s/ Bradley D. Adams
---------------------
Bradley D. Adams, Vice President
March 9, 2000
<PAGE>
INDEX TO EXHIBITS
1 Underwriting Agreement dated February 18, 2000, among Saxon Asset
Securities Company, Saxon Mortgage Inc., Prudential Securities
Incorporated, Banc of America Securities LLC, Greenwich Capital Markets,
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
2.1 Trust Agreement dated February 1, 2000, among Saxon Asset Securities
Company, Saxon Mortgage, Inc., as Master Servicer, and Chase Bank of
Texas, National Association, as Trustee.
2.2 Standard Terms to Trust Agreement (February 2000 Edition).
<PAGE>
Saxon Asset Securities Company
Mortgage Loan Asset Backed Certificates,
Series 2000-1
UNDERWRITING AGREEMENT
----------------------
Dated: February 18, 2000
To: Saxon Asset Securities Company (the "Company")
Saxon Mortgage Inc. ("SMI")
Re: Standard Terms to Underwriting Agreement (June 1997 Edition)
Series
Designation: Mortgage Loan Asset Backed Certificates, Series 2000-1, 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-1A, Class AV-1,
Class MV-1, Class MV-2, Class BV-1, Class BV-1A, Class C and
Class R (collectively the "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-1A, Class AV-1, Class MV-1,
Class MV-2, Class BV-1 and Class BV-1A Certificates are referred
to herein as the "Underwritten Certificates."
Underwriting Agreement: Subject to the terms and conditions set
forth and incorporated by reference herein, the Company hereby agrees to issue
and sell to Prudential Securities Incorporated, Banc of America Securities LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Greenwich Capital
Markets, Inc. (collectively, the "Underwriters"), and the Underwriters hereby
agree to purchase from the Company, on or about February 29, 2000, the
Underwritten Certificates at the purchase price and on the terms set forth
below; provided, however, that the obligations of the Underwriters are subject
-------- -------
to: (i) receipt by the Company of (a) the ratings specified in the table below
by Moody's Investors Service, Inc. ("Moody's") and Fitch Investors Service, L.P.
("Fitch" and together with Moody's, the "Rating Agencies") with respect to each
of the Classes of Certificates; (ii) receipt of a Prospectus Supplement in form
and substance satisfactory to the Underwriters; and (iii) the Sales Agreement
dated as of February 18, 2000 by and between the Company and Saxon Mortgage,
Inc. ("SMI") and the Trust Agreement (as defined below) each being in form and
substance satisfactory to the Underwriters.
The Certificates will be issued pursuant to a Trust Agreement, dated
as of February 1, 2000 (the "Trust Agreement"), by and among the Company, SMI,
as Master Servicer (the "Master Servicer"), and Chase Bank of Texas, National
Association, as Trustee (the "Trustee"). The Certificates will represent in the
aggregate the entire beneficial ownership interest in the assets of the Trust
created under the Trust Agreement (the "Trust"), which will consist primarily of
two pools of conventional, one- to four-family, mortgage loans (the "Mortgage
Loans") with original terms to stated maturity of not more than 30 years which
have the characteristics described in the Prospectus Supplement.
<PAGE>
The Company and SMI specifically covenant to make available on the
Closing Date for sale, transfer and assignment to the Trust, Mortgage Loans
having the characteristics described in the Prospectus Supplement; provided,
--------
however, that there may be immaterial variances from the description of the
- -------
Mortgage Loans in the Prospectus Supplement and the actual Mortgage Loans
delivered on the Closing Date. Upon delivery of the Mortgage Loans to the
Company, the Company will deliver such Mortgage Loans to the Trust.
Registration Statement: References in the Agreement (as defined below)
to the Registration Statement shall be deemed to include registration statement
no. 333-87351.
Aggregate Scheduled Principal Balance of Mortgage Loans: Approximately
$458,755,000 (as of the Statistical Cut-off Date), including approximately
$298,757,718.56 of fixed-rate Mortgage Loans and approximately $160,000,951.54
of Variable Rate Mortgage Loans.
Statistical Cut-Off Date: As of the close of business February 1,
2000.
<PAGE>
<TABLE>
<CAPTION>
Terms of the Certificates:
- ---------------------------------------------------------------------------------------------------------------
Initial Proposed
Series 2000-1 Principal Pass-Through Ratings by CUSIP Number Sale of the
Designation Amount Rate Moody's and Certificates
Fitch
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Class AF-1 $ 100,000,000 7.585% Aaa/AAA 805564 FC0 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AF-2 $ 42,000,000 7.710% Aaa/AAA 805564 FD8 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AF-3 $ 40,000,000 7.755% Aaa/AAA 805564 FE6 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AF-4 $ 30,000,000 8.075%(3) Aaa/AAA 805564 FF3 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AF-5 $ 21,914,000 8.305%(3) Aaa/AAA 805564 FG1 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AF-6 $ 26,000,000 8.005%(3) Aaa/AAA 805564 FH9 (1)
- ---------------------------------------------------------------------------------------------------------------
Class MF-1 $ 15,386,000 8.335%(3) Aa2/AA 805564 FJ5 (1)
- ---------------------------------------------------------------------------------------------------------------
Class MF-2 $ 10,457,000 8.730%(3) A2/A 805564 FK2 (1)
- ---------------------------------------------------------------------------------------------------------------
Class BF-1 $ 8,964,000 9.760%(3) Baa2/BBB 805564 FL0 (1)
- ---------------------------------------------------------------------------------------------------------------
Class BF-1A $ 4,034,000 8.990%(3) Baa1/BBB+ 805564 FM8 (1)
- ---------------------------------------------------------------------------------------------------------------
Class AV-1 $ 128,000,000 %(2)(4) Aaa/AAA 805564 FN6 (1)
- ---------------------------------------------------------------------------------------------------------------
Class MV-1 $ 13,600,000 %(2)(4) Aa2/AA 805564 FP1 (1)
- ---------------------------------------------------------------------------------------------------------------
Class MV-2 $ 10,000,000 %(2)(4) A2/A 805564 FQ9 (1)
- ---------------------------------------------------------------------------------------------------------------
Class BV-1 $ 5,200,000 %(2)(4) Baa2/BBB 805564 FR7 (1)
- ---------------------------------------------------------------------------------------------------------------
Class BV-1A $ 3,200,000 9.165%(3) Baa1/BBB+ 805564 FS5 (1)
- ---------------------------------------------------------------------------------------------------------------
Class C N/A N/A (5) N/A (6)
- ---------------------------------------------------------------------------------------------------------------
Class R N/A N/A (5) N/A (7)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
_________________________
(1) The Underwritten Certificates will be purchased by the Underwriters from
the Company and will be offered by the Underwriters to the public from time
to time in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
(2) On each Distribution Date, the Variable Rate Pass-Through Rates per annum
will equal the least of: (i) One Month LIBOR plus the related spread; (ii)
the weighted Average of the maximum lifetime Mortgage Interest Rates on the
Mortgage Loans in the Variable Rate Group, in each case less the Servicing
Fee Rate and Master Servicing Fee Rate; and (iii) the applicable Available
Funds Cap (as further described in the Prospectus Supplement).
(3) On any Distribution Date, the Pass-Through Rates for the Class AF-4, Class
AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class BF-1A and Class
BV-1A Certificates will equal the lesser of (i) the Pass-Through Rate set
forth above (subject, in the case of the AF-5, MF-1 and MF-2 Certificates,
to a 0.50% increase for any Distribution Date after the Initial Optional
Redemption Date) and (ii) (A) in the case of the Class AF-4, Class AF-5,
AF-6, MF-1, MF-2, BF-1 and BF-1A Certificates the Weighted Average Interest
Rates on the Mortgage Loans in the Fixed Rate Group and (B) in the case of
the Class BV-1A Certificates, the Weighted Average Interest Rates on the
Mortgage Loans in the Variable Rate Group, in each case less the Servicing
Fee Rate and Master Servicing Fee Rate per annum (as further described in
the Prospectus Supplement).
(4) The Applicable Spread for these Classes are subject to adjustment on or
after the Step-Up Date, as further described in the Prospectus Supplement.
(5) No ratings have been requested by the Underwriters for the Class C and
Class R Certificates.
(6) The Class C Certificates will be sold to the Company in a privately
negotiated transaction.
(7) The Class R Certificates will be sold to the Company in a privately
negotiated transaction.
<PAGE>
Underwritten Certificates Ratings: It is agreed that as a further
condition of the Underwriters' obligation to purchase the Underwritten
Certificates, the ratings indicated above by the Rating Agencies on the
Underwritten Certificates shall not have been rescinded and there shall not have
occurred any downgrading, or public notification of a possible downgrading or
public notice of a possible change, without indication of direction, in the
ratings accorded the Underwritten Certificates.
Mortgage Loans: Mortgage Loans having the approximate characteristics
described in the Prospectus Supplement with the final schedule attached as
Schedule I to the Trust Agreement.
Principal and Interest Distribution Dates: Each Distribution Date
shall be the 25th day of each month, or if such day is not a business day, the
next succeeding business day, commencing in March 2000.
REMIC Election: One or more elections will be made to treat the
Mortgage Loans and related assets of the Trust as a real estate mortgage
investment conduit (the "REMIC"). The Underwritten Certificates and the Class C
Certificates will be designated as "regular interests" in the REMIC. The Class R
Certificates will be designated as the "residual interest" in the REMIC.
Purchase Price: The Underwriters hereby agree to purchase each Class
of Underwritten Securities from the Company at the applicable purchase price set
forth below, plus, in the case 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 BF-1A
Certificates, accrued interest at the applicable Pass-Through Rate from the
close of business on February 1 through the Closing Date. Each such purchase
price is expressed as a percentage of the initial principal amount of the
related Mortgage Loan pool.
Purchase Price
--------------
Class AF-1 99.750000%
Class AF-2 99.750000%
Class AF-3 99.750000%
Class AF-4 99.750000%
Class AF-5 99.750000%
Class AF-6 99.750000%
Class MF-1 99.750000%
Class MF-2 99.750000%
Class BF-1 99.750000%
Class BF-1A 99.750000%
Class AV-1 99.750000%
Class MV-1 99.750000%
Class MV-2 99.750000%
Class BV-1 99.750000%
<PAGE>
Class BV-1A 99.750000%
Each of the Underwriters agrees, severally and not jointly, subject to the
terms and conditions contained herein and in the Standard Terms to Underwriting
Agreement (June 1997 Edition), to purchase the principal balances of the Classes
of Certificates specified opposite its name below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Series 2000-1 Prudential Securities Banc of America Greenwich Merrill Lynch,
Designation Incorporated Securities LLC Capital Pierce,
Markets, Inc. Fenner & Smith
Incorporated
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class AF-1 $25,000,000.00 $25,000,000.00 $25,000,000.00 $25,000,000.00
- -----------------------------------------------------------------------------------------------------------
Class AF-2 $10,500,000.00 $10,500,000.00 $10,500,000.00 $10,500,000.00
- -----------------------------------------------------------------------------------------------------------
Class AF-3 $10,000,000.00 $10,000,000.00 $10,000,000.00 $10,000,000.00
- -----------------------------------------------------------------------------------------------------------
Class AF-4 $ 7,500,000.00 $ 7,500,000.00 $ 7,500,000.00 $ 7,500,000.00
- -----------------------------------------------------------------------------------------------------------
Class AF-5 $ 5,478,500.00 $ 5,478,500.00 $ 5,478,500.00 $ 5,478,500.00
- -----------------------------------------------------------------------------------------------------------
Class AF-6 $ 6,500,000.00 $ 6,500,000.00 $ 6,500,000.00 $ 6,500,000.00
- -----------------------------------------------------------------------------------------------------------
Class MF-1 $ 3,846,500.00 $ 3,846,500.00 $ 3,846,500.00 $ 3,846,500.00
- -----------------------------------------------------------------------------------------------------------
Class MF-2 $ 2,614,250.00 $ 2,614,250.00 $ 2,614,250.00 $ 2,614,250.00
- -----------------------------------------------------------------------------------------------------------
Class BF-1 $ 2,241,000.00 $ 2,241,000.00 $ 2,241,000.00 $ 2,241,000.00
- -----------------------------------------------------------------------------------------------------------
Class BF-1A $ 1,008,500.00 $ 1,008,500.00 $ 1,008,500.00 $ 1,008,500.00
- -----------------------------------------------------------------------------------------------------------
Class AV-1 $32,000,000.00 $32,000,000.00 $32,000,000.00 $32,000,000.00
- -----------------------------------------------------------------------------------------------------------
Class MV-1 $ 3,400,000.00 $ 3,400,000.00 $ 3,400,000.00 $ 3,400,000.00
- -----------------------------------------------------------------------------------------------------------
Class MV-2 $ 2,500,000.00 $ 2,500,000.00 $ 2,500,000.00 $ 2,500,000.00
- -----------------------------------------------------------------------------------------------------------
Class BV-1 $ 1,300,000.00 $ 1,300,000.00 $ 1,300,000.00 $ 1,300,000.00
- -----------------------------------------------------------------------------------------------------------
Class BV-1A $ 800,000.00 $ 800,000.00 $ 800,000.00 $ 800,000.00
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Closing Date and Location: 10:00 a.m. Eastern Time on or about
February 29, 2000, at the offices of McGuire, Woods, Battle & Boothe LLP, One
James Center, 901 E. Cary Street, Richmond, VA 23219. The Company will deliver
the Underwritten Certificates in book-entry form only through the same day funds
settlement system of the relevant Depositories, and the Class C and Class R
Certificates in certificated, fully registered form on or February 29, 2000.
Due Diligence: At any time prior to the Closing Date, the Underwriters
have the right to inspect the Mortgage Loan files, the related mortgaged
properties and the loan origination procedures to ensure conformity with the
Prospectus and the Prospectus Supplement.
Controlling Agreement: This Underwriting Agreement, together with the
Standard Terms to Underwriting Agreement (June 1997 Edition) (together, the
"Agreement"), completely sets forth the agreements between the Company and SMI
and the Underwriters and fully supersedes all prior agreements, both written and
oral, relating to the issuance of the Underwritten Certificates and all matters
set forth herein. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement. Notwithstanding
the foregoing, the Standard Terms are hereby amended for purposes of the
Agreement such that there shall be added to the final sentence of Section 1(ii)
thereof the words", the Trustee, DTC, "immediately following the phrase "any
Credit Enhancer" therein.
Information Provided by the Underwriters: It is understood and agreed
that the information set forth under the heading "Underwriting" in the
Prospectus Supplement and the sentence regarding the Underwriters's intention to
establish a market in the Underwritten Certificates on the inside front Cover
Page of the Prospectus Supplement is the only information
<PAGE>
furnished by the Underwriters to the Company for inclusion in the Registration
Statement and the Final Prospectus.
Collateral Term Sheets, Structural Term Sheets and Computational
Materials: The Underwriters hereby represent and warrant that (i) a hard copy of
the information provided by the Underwriters to the Company in electronic form
and attached hereto as Exhibit A, if any, constitutes all "Collateral Term
Sheets" or "Structural Term Sheets" (that are required to be filed with the
Commission within two business days of first use under the terms of the Public
Securities Association letter) disseminated by the Underwriters to investors in
connection with the Underwritten Certificates and (ii) a hard copy of the
information provided by the Underwriters to the Company and attached hereto as
Exhibit B, if any, constitutes all "Computational Materials" disseminated by the
Underwriters in connection with the Underwritten Certificates.
Trustee: Chase Bank of Texas, National Association will act as Trustee
of the Trust.
Blue Sky Qualifications: The Underwriters specify, and the parties
intend to qualify the Underwritten Certificates in, no jurisdictions pursuant to
the Agreement.
State Law Tax Opinion: At Closing, the Underwriters shall have
received from Locke, Liddell & Sapp LLP an opinion dated the Closing Date and
satisfactory in form and substance to the Underwriters, as to the tax treatment
of the Certificates under Texas law.
Applicable Law: THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
Notices: All communications hereunder, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to Prudential Securities
Incorporated, One new York Plaza, 14/th/ Floor, New York, New York 10292-2014,
Attention Brendan Keane.
* * * * *
<PAGE>
The Underwriters agree, subject to the terms and provisions of the
Agreement, a copy of which is attached, and which is incorporated by reference
herein in its entirety and made a part hereof to the same extent as if such
provisions had been set forth in full herein, to purchase the Underwritten
Certificates.
PRUDENTIAL SECURITIES INCORPORATED
on behalf of the Underwriters
By:/s/ Brendan Keane
--------------------------------------
Name: Brendan Keane
Title: Director
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By:/s/ Bradley D. Adams
----------------------------------
Name: Bradley D. Adams
Title: Senior Vice President
SAXON MORTGAGE, INC.
By:/s/ Bradley D. Adams
__________________________________
Name: Bradley D. Adams
Title: Senior Vice President
<PAGE>
SAXON ASSET SECURITIES TRUST 2000-1
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 2000-1
TRUST AGREEMENT
dated as of February 1, 2000
among
SAXON ASSET SECURITIES COMPANY,
as Depositor
SAXON MORTGAGE, INC.,
as Master Servicer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article I Definitions.................................................................... 1
Section 1.01. Standard Terms; Section References................................... 1
Section 1.02. Defined Terms........................................................ 1
Article II Formation of Trust; Conveyance of Mortgage Loans.............................. 27
Section 2.01. Conveyance of Mortgage Loans......................................... 27
Article III Remitting to Certificateholders.............................................. 27
Section 3.01. Subaccount Distributions............................................. 27
Section 3.02. Certificate Distributions............................................ 28
Section 3.03. Reports to the Depositor and the Trustee............................. 33
Section 3.04. Reports by Master Servicer........................................... 33
Article IV The Certificates.............................................................. 35
Section 4.01. The Certificates..................................................... 35
Section 4.02. Denominations........................................................ 35
Article V Miscellaneous Provisions....................................................... 36
Section 5.01. Request for Opinions................................................. 36
Section 5.02. Form of Certificates; Schedules and Exhibits; Governing Law.......... 36
Section 5.03. REMIC Administration................................................. 36
Section 5.04. Optional Termination................................................. 37
Section 5.05. Master Servicer; Certificate Registrar and Paying Agent.............. 38
</TABLE>
<PAGE>
Schedule I: The Mortgage Loans: A. Group I Mortgage Loans
B. Group II Mortgage Loans
Schedule II: Sales Agreement and Servicing 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-1A 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-1A 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
<PAGE>
TRUST AGREEMENT
THIS TRUST AGREEMENT dated as of February 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 CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association, 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 $458,755,000 to be known as
the Saxon Asset Securities Trust 2000-1, Mortgage Loan Asset Backed
Certificates, Series 2000-1 (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-1A, Class AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-1A, Class C and
Class R Certificates.
In accordance with Section 10.01 of the Standard Terms, the Trustee will
make elections to treat certain assets of the Trust as real estate mortgage
investment conduits for federal income tax purposes.
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) 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.
(b) Unless otherwise specified herein, all references in this Agreement to
sections shall mean sections contained in this Agreement.
(c) Upon notification by the Master Servicer of the occurrence of a Group I
or Group II Trigger Event, the Trustee shall advise the Certificateholders of
that fact and, if requested to do so by the holders of Certificates representing
a majority of the Voting Rights, the Trustee shall terminate Meritech as the
Servicer.
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 and the Class
BV-1A Certificates 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 Group II Certificates (other than the Class BV-1A
Certificates) and any
<PAGE>
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 and the Class BV-1A
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 Group II
Certificates (other than the Class BV-1A 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.
"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-1A,
Class AV-1, Class MV-1, Class MV-2, Class BV-1 and Class BV-1A Certificates
except to the extent provided in Section 5.03 of the Standard Terms.
"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-1A, Class
AV-1, Class MV-1, Class MV-2, Class BV-1, Class BV-1A, Class C and Class R
Certificates.
"Certificate Registrar": Chase Bank of Texas, National Association, a
national banking association, and its successors and assigns in such capacity.
"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-1A, Class AV-1, Class
MV-1, Class MV-2, Class BV-1, Class BV-1A, Class C and Class R.
"Certificate Definitions":
"Group I Certificates":
"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, 7.585% per annum.
"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.
2
<PAGE>
"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
(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, 7.710% per annum.
"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, 7.755% per annum.
"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
(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 (i) 8.075% per annum and (ii) the Group I Net Rate for
such 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.
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<PAGE>
"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 (i) 8.305% per annum plus, after the Initial Optional
Termination Date, 0.50% and (ii) the Group I Net Rate for such 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:
(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 (i) 8.005% per annum and (ii) the Group I Net Rate for
such date.
"Class AF-6 Principal Distribution Amount": With respect to any
Distribution Date, 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:
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<PAGE>
Distribution Date Percentage
------------------ ----------
March 2000 - February 2003 0%
March 2003 - February 2005 45%
March 2005 - February 2006 80%
March 2006 - February 2007 100%
March 2007 and thereafter 300%
"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 3.02(h)(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
(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 (i) 8.335% per annum plus, after the Initial Optional
Termination Date, 0.50% and (ii) the Group I Net Rate on such 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
3.02(f) 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 3.02(h)(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:
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<PAGE>
(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 (i) 8.730% per annum plus, after the Initial Optional
Termination Date, 0.50% and (ii) the Group I Net Rate on such date.
"Class MF-2 Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of (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
3.02(f) 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 3.02(h)(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 (i) 9.760% per annum and (ii) the Group I Net Rate on
such 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
3.02(f) hereof.
"Class BF-1A 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-1A Certificates pursuant to Section 3.02(h)(i) hereof.
"Class BF-1A Certificate": Any Certificate designated as a "Class BF-
1A Certificate" on the face thereof, in the form of Exhibit BF-1A hereto,
representing the right to distributions as set forth herein.
6
<PAGE>
"Class BF-1A Certificate Principal Balance": The Certificate Principal
Balance of the Class BF-1A Certificates less any Class BF-1A Applied
Realized Loss Amount.
"Class BF-1A Current Interest": With respect to any Distribution
Date, the interest accrued on the Class BF-1A Certificate Principal Balance
immediately prior to such Distribution Date during the related Accrual
Period at the Class BF-1A Pass-Through Rate plus any amount previously
distributed with respect to interest for Class BF-1A 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-1A Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BF-1A Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class BF-1A with
respect to interest on such prior Distribution Dates and
(ii) interest thereon at the Class BF-1A Pass-Through Rate for the
related Accrual Period.
"Class BF-1A Pass-Through Rate": With respect to each Distribution
Date, the lesser of (i) 8.990% per annum and (ii) the Group I Net Rate on
such date.
"Class BF-1A Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of (i) the Class BF-1A Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BF-1A Applied
Realized Loss Amount on all previous Distribution Dates pursuant to Section
3.02(f) 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:
(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 and the
Group II Master Servicing Fee 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
7
<PAGE>
(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 prior to the Initial Optional Termination Date, 0.240%
per annum, or in the case of any Distribution Date that occurs on or after
the Initial Optional Termination Date, plus 0.480% 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 3.02(i)(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 Servicing Fee Rate and the
Group II Master Servicing Fee 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 prior to the Initial Optional Termination Date, 0.430% per annum, or
in the case of any Distribution Date that occurs on or after the Initial
Optional Termination Date, plus 0.645% 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
3.02(f) hereof.
8
<PAGE>
"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 3.02(i)(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:
(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 and the Group II
Master Servicing Fee 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 prior to the Initial Optional Termination Date, 0.820%
per annum, or in the case of any Distribution Date that occurs on or after
the Initial Optional Termination Date, plus 1.230% 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
3.02(f) 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 3.02(i)(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.
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<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 and the
Group II Master Servicing Fee 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 prior to the Initial Optional Termination Date, 1.950%
per annum, or in the case of any Distribution Date that occurs on or 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
3.02(f) hereof.
"Class BV-1A 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-1A Certificates pursuant to Section 3.02(i)(i) hereof.
"Class BV-1A Available Funds Cap": As of any Distribution Date, the
weighted average of the Net Rates of the Mortgage Loans in Group II
(weighted on the basis of the principal balances thereof as of the first
day of the month preceding the month of such Distribution Date).
"Class BV-1A Certificate": Any Certificate designated as a "Class BV-
1A Certificate" on the face thereof, in the form of Exhibit BV-1A hereto
representing the right to distributions as set forth herein.
"Class BV-1A Certificate Principal Balance": The Certificate Principal
Balance of the Class BV-1A Certificates less any Class BV-1A Applied
Realized Loss Amount.
"Class BV-1A Current Interest": With respect to any Distribution
Date, the interest accrued on the Class BV-1A Certificate Principal Balance
immediately prior to such Distribution Date during the related Accrual
Period at the Class BV-1A Pass Through Rate plus any amount previously
distributed with respect to interest for Class BV-1A that is recovered
during the related Accrual Period as a voidable preference by a trustee in
bankruptcy pursuant to a final, nonappealable order.
10
<PAGE>
"Class BV-1A Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of:
(i) the excess of:
(A) Class BV-1A Current Interest with respect to prior
Distribution Dates over
(B) the amount actually distributed to Class BV-1A with respect
to interest on such prior Distribution Dates and
(ii) interest on such excess at the Class BV-1A Pass-Through Rate for
the related Accrual Period.
"Class BV-1A Pass-Through Rate": With respect to any Distribution
Date, the lesser of (x) 9.165% per annum and (y) the Class BV-1A Available
Funds Cap for such Distribution Date.
"Class BV-1A Unpaid Realized Loss Amount": As to any Distribution
Date, the excess of (i) the Class BV-1A Applied Realized Loss Amount over
(ii) the sum of all distributions in reduction of the Class BV-1A Applied
Realized Loss Amount on all previous Distribution Dates pursuant to Section
3.02(f) hereof.
"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, one-
twelfth of the sum of:
(a) the product of the AF-1 Balance and the excess of the Group I Net Rate
over the Class AF-1 Pass-Through Rate;
(b) the product of the AF-2 Balance and the excess of the Group I Net Rate
over the Class AF-2 Pass-Through Rate;
(c) the product of the AF-3 Balance and the excess of the Group I Net Rate
over the Class AF-3 Pass-Through Rate;
(d) the product of the AF-4 Balance and the excess of the Group I Net Rate
over the Class AF-4 Pass-Through Rate;
(e) the product of the AF-5 Balance and the excess of the Group I Net Rate
over the Class AF-5 Pass-Through Rate;
(f) the product of the AF-6 Balance and the excess of the Group I Net Rate
over the Class AF-6 Pass-Through Rate;
(g) the product of the MF-1 Balance and the excess of the Group I Net Rate
over the Class MF-1 Pass-Through Rate;
(h) the product of the MF-2 Balance and the excess of the Group I Net Rate
over the Class MF-2 Pass-Through Rate;
(i) the product of the BF-1 Balance and the excess of the Group I Net Rate
over the Class BF-1 Pass-Through Rate;
(j) the product of the BF-1A Balance and the excess of the Group I Net Rate
over the Class BF-1A Pass-Through Rate; and
(k) any excess of the amount specified pursuant to clauses (a) through (j)
above for prior Distribution Dates over the amount actually distributed pursuant
to such clauses on prior Distribution Dates.
"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 and Issuing
REMICs for purposes of the REMIC Provisions.
"Closing Date": February 29, 2000.
"Current Interest": As to any Class, the definition therefor having the
corresponding designation as such Class.
11
<PAGE>
"Custodian": Chase Bank of Texas, National Association, a national banking
association, and its successors and assigns in such capacity.
"Cut-Off Date": As of the close of business on February 1, 2000.
"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 3.01 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 3.02 hereof.
"Distribution Date": The 25th day of each month, or the next Business Day
if such 25th day is not a Business Day, commencing March 27, 2000.
"Fitch": Fitch IBCA, Inc., and its successors (One State Street Plaza, 33rd
Floor, New York, New York 10004).
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 Qualified Substitute Mortgage Loans delivered in replacement
thereof.
"Group I Applicable Percentage": For each Distribution Date, and as to
Group I, the percentage set out below with respect to such Distribution
Date:
Distribution Date (inclusive)
March 2000 - April 2001 67.5%
May 2001 and thereafter 100%
; provided, however, that (i) if the average of the Group I Realized Loss
Percentages for the immediately preceding three Distribution Dates exceeds
the percentage set forth below with respect to such Distribution Date or
(ii) if the average of the Group I Delinquency Percentages for the
immediately preceding three Distribution Dates exceeds the percentage set
forth below with respect to such Distribution Date, the Group I Applicable
Percentage will be as set forth below:
<TABLE>
<CAPTION>
Distribution Applicable
Date Losses % Delinquency % Percentage
------------ --------- ------------- ----------
<S> <C> <C> <C>
01/00 - 03/00 0.03% 2.00% 75%
04/00 - 06/00 0.05% 3.00% 75%
07/00 - 09/00 0.10% 3.75% 75%
10/00 - 12/00 0.15% 4.50% 75%
01/01 - 03/01 0.30% 5.25% 100%
04/01 - 05/01 0.50% 6.25% 100%
</TABLE>
"Group I Available Funds Cap": As of any Distribution Date, the
weighted average of the Net Rates on the Mortgage Loans in Group I (weighted
on the basis of the principal balances thereof as of the first day of the
month preceding the month of such Distribution Date).
12
<PAGE>
"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 and
Class BF-1A Certificates.
"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-1A 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) 70.7% of the Schedule Principal Balances of the Mortgage
Loans in Group I on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans
in Group I on the preceding Due Date over
(II) $1,493,789.
"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 3.02(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance and
(B) the Class MF-1 Certificate Principal Balance immediately
prior to such Distribution Date over
(ii) the lesser of:
(A) 81.00% of the aggregate Scheduled Principal Balances of the
Mortgage Loans in Group I on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans in
Group I on the preceding Due Date over
(II) $1,493,789.
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<PAGE>
"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 3.02(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance,
(B) the Class MF-1 Certificate Principal Balance and
(C) the Class MF-2 Certificate Principal Amount immediately prior to
such Distribution Date over
(ii) the lesser of:
(A) 88.00% of the Scheduled Principal Balances of the Mortgage Loans
in Group I on the preceding Due Date and
(B) the excess of
(I) the Scheduled Principal Balances of the Mortgage Loans in
Group I over on the preceding Due Date over
(II) $1,493,789.
"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
3.02(c) hereof), the excess of:
(i) the sum of:
(A) the Group I Class A Certificate Principal Balance,
(B) the Class MF-1 Certificate Principal Balance,
(C) the Class MF-2 Certificate Principal Balance and
(D) the Class BF-1 Certificate Principal Balance immediately prior
to such Distribution Date over
(ii) the lesser of:
(A) 94.00% of the Scheduled Principal Balances of the Mortgage Loans
in Group I on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans
in Group I on the preceding Due Date over
(II) $1,493,789.
"Group I Class BF-1A 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 3.02(c) hereof), the excess of:
(i) the Group I Principal Distribution Amount for such day over
(ii) the sum of:
(A) the Group I Class A Principal Distribution Amount,
(B) the Class MF-1 Principal Distribution Amount,
(C) the Class MF-2, Principal Distribution Amount and
(D) the Class BF-1 Principal Distribution Amount.
14
<PAGE>
"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 such Distribution Date, 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 3.02(a)(v) and Group II Interest Funds
available for the purpose pursuant to Section 3.02(f)(ix) hereof, an amount
equal to (x) with respect to any Distribution Date prior to the Distribution
Date on which the Class BF-1A Certificate Principal Balance is reduced to
zero, the Group I Realized Loss Coverage Amount for such Distribution Date
and (y) with respect to any Distribution Date thereafter, 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).
"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 and the
Group I Master Servicing Fee,
(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.
"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 weighted average Net Rate for Group I.
"Group I Overcollateralization Amount": With respect to any
Distribution Date the sum of (i) the excess of the aggregate Scheduled
Principal Balance of the Mortgage Loans in Group I over the Group I
Certificate Principal Balance and (ii) the Class BF-1A Certificate Principal
Balance.
"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
Servicers 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 Servicers
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
15
<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 Realized Loss Coverage Amount": With respect to Group I and any
Distribution Date, to the extent of Group I Interest Funds available for the
purpose, an amount equal to the excess of (i) all Realized Losses with respect
to Group I (including all Realized Losses for such Distribution Date) over (ii)
all amounts distributed pursuant to clause (x) of the definition of Group I
Extra Principal Distribution Amount on all prior Distribution Dates.
"Group I Realized Loss Percentage": For each Distribution Date and as to
Group I, Realized Losses since the Cut-Off Date with respect to the Mortgage
Loans in Group I as a percentage of the Scheduled Principal Balance of the
Mortgage Loans in Group I as of the Cut-Off Date.
"Group I Released Principal Amount": With respect to any Distribution Date
(i) if a Group I Trigger Event or Subordinated Trigger Event exists, zero and
(ii) if a Group I Trigger Event or 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, 3.00% of the Scheduled Principal
Balance of the Mortgage Loans in Group I as of the Cut-Off Date and
(ii) on and after the Group I Stepdown Date the greater of:
(x) the lesser of:
(I) 3.00% of the Scheduled Principal Balance of the
Mortgage Loans in Group I with respect to the Cut-Off Date
and
(II) 6.00% of the Scheduled Principal Balance of the
Mortgage Loans in Group I on such Distribution Date, and
(y) 0.50% of the Scheduled Principal Balance of the Mortgage Loans
in Group I as of the Cut-Off 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 March 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 70.70% of the Scheduled Principal Balances of
the Mortgage Loans in Group I and
(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 and Class BF-1A Certificates.
16
<PAGE>
"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 Scheduled Principal Balance of the
Mortgage Loans in Group I as of the Cut-Off Date exceed the percentage set out
below with respect to such Distribution Date:
Distribution Date (inclusive)
March 2002 - February 2003 1.40%
March 2003 - February 2004 2.40
March 2004 - February 2005 3.00
March 2005 - February 2006 3.40
March 2006 - February 2007 3.70
March 2007 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 Scheduled Principal Balance of the Mortgage Loans in Group I exceeds the
percentage set out below with respect to such Distribution Date:
Distribution Date (inclusive)
March 2002 - February 2003 4.00%
March 2003 - February 2004 4.00
March 2004 - February 2005 6.50
March 2005 - February 2006 6.50
March 2006 - February 2007 8.00
March 2007 and thereafter 8.00
"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 in Group I and (ii) the Scheduled Principal Balances
of the Mortgage Loans in Group I as of the preceding Master Servicer Remittance
Date equals or exceeds 29.30%.
"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
Qualified Substitute Mortgage Loans delivered in replacement thereof.
"Group II Applicable Percentage": For each Distribution Date, and as to
Group II, the percentage set out below with respect to such Distribution Date:
Distribution Date (inclusive)
March 2000 - April 2001 67.5%
May 2001 and thereafter 100%
;provided, however, that (i) if the average of the Group II Realized Loss
Percentages for the immediately preceding three Distribution Dates exceeds the
percentage set forth below with respect to such Distribution Date or (ii) if the
average of the Group II Delinquency Percentages for the immediately preceding
three Distribution Dates exceeds the percentage set forth below with respect to
such Distribution Date, the Group II Applicable Percentage will be as set forth
below
17
<PAGE>
Distribution Applicable
Date Losses % Delinquency % Percentage
------------ -------- ------------- ----------
01/00 - 03/00 0.13% 4.00% 75%
04/00 - 06/00 0.15% 5.00% 75%
07/00 - 09/00 0.20% 6.50% 75%
10/00 - 12/00 0.25% 9.00% 75%
01/01 - 03/01 0.50% 12.00% 100%
04/01 - 05/01 0.60% 14.00% 100%
"Group II Available Funds Cap": Except for the Class BV-1A Certificates,
as of any Distribution Date, the per annum rate equal to:
(w)(i) the total scheduled interest on the Mortgage Loans in Group II for
the related Due Period less
(ii) the Servicing Fees and Master Servicing Fee for that Due Period
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.
"Group II Certificate": Any of the Class AV-1, Class MV-1, Class MV-2,
Class BV-1 and Class BV-1A 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-1A 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) 58.50% of the Schedule Principal Balances of the Mortgage Loans in
Group II on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans in
Group II on the preceding Due Date over
(II) $800,005.
"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
3.02(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance and
(B) the Class MV-1 Certificate Principal Balance immediately prior to
such Distribution Date over
(ii) the lesser of:
(A) 75.50% of the Scheduled Principal Balances of the Mortgage
Loans in Group II on the preceding Due Date and
18
<PAGE>
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans
in Group II on the preceding Due Date over
(II) $800,005.
"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
3.02(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance,
(B) the Class MV-1 Certificate Principal Balance and
(C) the Class MV-2 Certificate Principal Balance immediately prior
to such Distribution Date over
(ii) the lesser of:
(A) 88.00% of the Scheduled Principal Balances of the Mortgage Loans
in Group II on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans in
Group II on the preceding Due Date over
(II) $800,005.
"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
3.02(d) hereof), the excess of:
(i) the sum of:
(A) the Group II Class A Certificate Principal Balance,
(B) the Class MV-1 Certificate Principal Balance,
(C) the Class MV-2 Certificate Principal Balance and
(D) the Class BV-1 Certificate Principal Balance immediately prior
to such Distribution Date over
(ii) the lesser of:
(A) 94.50% of the Scheduled Principal Balances of the Mortgage Loans
in Group II on the preceding Due Date and
(B) the excess of:
(I) the Scheduled Principal Balances of the Mortgage Loans in
Group II on the preceding Due Date over
(II) $800,005.
"Group II Class BV-1A 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
3.02(d) hereof), the excess of:
(i) the Group II Principal Distribution Amount for each day over
(ii) the sum of:
19
<PAGE>
(A) the Group II Class A Principal Distribution Amount,
(B) the Class MV-1 Principal Distribution Amount,
(C) the Class MV-2 Principal Distribution Amount and
(D) the Class BV-1 Principal Distribution Amount.
"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 such Distribution Date, 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 3.02(b)(v) and Group I Interest Funds
available for the purpose pursuant to Section 3.02(e)(ix) hereof, an amount
equal to (x) with respect to any Distribution Date prior to the Distribution
Date on which the Class BV-1A Certificate Principal Balance is reduced to zero,
the Group II Realized Loss Coverage Amount for such Distribution Date and (y)
with respect to any Distribution Date thereafter, the excess of:
(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).
"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 and the Group II
Master Servicing Fee,
(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.
"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 weighted average Net Rate for Group II.
"Group II Overcollateralization Amount": With respect to any Distribution
Date the sum of (i) the excess of the aggregate Scheduled Certificate Principal
Balance and (ii) the Class BV-1A Certificate Principal Balance.
"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.
"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,
20
<PAGE>
(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,
(iii) any Substitution Shortfall with respect to Group II and
(iv) 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 Realized Loss Coverage Amount": With respect to Group II and any
Distribution Date, to the extent of Group II Interest Funds available for the
purpose, an amount equal to the excess of (i) all Realized Losses with respect
to Group II (including all Realized Losses for such Distribution Date) over (ii)
all amounts distributed pursuant to clause (x) of the definition of Group II
Extra Principal Distribution Amount on all prior Distribution Dates.
"Group II Realized Loss Percentage": For each Distribution Date and as to
Group II, Realized Losses since the Cut-Off Date with respect to the Mortgage
Loans in Group II as a percentage of the Scheduled Principal Balance of the
Mortgage Loans in Group II as of the Cut-Off Date.
"Group II Released Principal Amount": With respect to any Distribution Date
(i) if a Group II Trigger Event or Subordinated Trigger Event exists, zero and
(ii) if a Group II Trigger Event or 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, 2.75% of the Scheduled Principal
Balance of 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) 2.75% of the Scheduled Principal Balance of the Mortgage
Loans in Group II with respect to the Cut-Off Date and
(II) 5.50% of the Scheduled Principal Balance of the Mortgage
Loans in Group II on such Distribution Date and
(y) 0.50% of the Scheduled Principal Balance of the Mortgage Loans
in Group II as of the Cut- Off 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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<PAGE>
"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 March 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 58.50% of the
Scheduled Principal Balances of the 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 and Class BV-1A 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 Scheduled Principal
Balance of the Mortgage Loans in Group II as of the Cut-Off Date exceed the
percentage set out below with respect to such Distribution Date:
Distribution Date (inclusive)
March 2002 - February 2003 2.00%
March 2003 - February 2004 3.30
March 2004 - February 2005 4.00
March 2005 - February 2006 4.30
March 2006 - February 2007 4.50
March 2007 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)
March 2002 - February 2003 6.00%
March 2003 - February 2004 6.00
March 2004 - February 2005 9.00
March 2005 - February 2006 9.00
March 2006 - February 2007 12.00
March 2007 and thereafter 12.00
"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 2.5
times the quotient of (i) the Scheduled Principal Balances of all 60 or more
days Delinquent Mortgage Loans in Group II and (ii) the Scheduled Principal
Balances of Group II as of the preceding Master Servicer Remittance Date equals
or exceeds 41.50%.
"Initial Optional Termination Date": The Distribution Date immediately
following the Due Period with respect to which the aggregate Scheduled Principal
Balances of the Mortgage Loans have declined to less than 10% of their aggregate
Scheduled Principal Balances as of the Cut-Off Date.
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"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 Group II Certificates (other than the Class BV-1A Certificates) February 25,
2000, and with respect to any subsequent Accrual Period for the Group II
Certificates (other than the Class BV-1A Certificates), the second London
Business Day preceding such Accrual Period.
"London Business Day": A day on which banks are open for dealing in foreign
currency and exchange in London and New York City.
"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.
"Moody's": Moody's Investors Service, Inc., and its successors (99 Church
Street, New York, New York 10007).
"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.
"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
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:
Chase Bank of Texas, National Association
600 Travis, 10th Floor
Houston, Texas 77002
Attention: Capital Markets Fiduciary Services - Saxon
2000-1
"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 Master Servicer
will request the principal London office of each of the
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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 Master Servicer shall review Telerate
Page 3750 at 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.
"Paying Agent": Chase Bank of Texas, National Association, a national
banking association, and its successors and assigns in such capacity.
"Private Certificate": Any of the Class C and Class R Certificates.
"Private Subordinated Certificate": Any of the Class C and Class R
Certificates.
"Public Subordinated Certificate": Any of the Class MF-1, Class MF-2, Class
BF-1, Class BF-1A, Class MV-1, Class MV-2, Class BV-1 and Class BV-1A
Certificates.
"Rating Agency": Each of Moody's 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 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 and Issuing REMICs for purposes of the REMIC
Provisions.
"Sales Agreement": The Sales Agreement dated February 18, 2000, between the
Depositor and SMI regarding the sale of the Mortgage Loans.
"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.
"Subaccount Definitions":
"Balance": With respect to each Subaccount, on any Distribution Date,
the balance, if any, of such Subaccount immediately prior to such
Distribution Date (or, in the case of the first Distribution Date, an
amount equal to the initial balance of such Subaccount as of the Closing
Date) less the amounts to be applied on such Distribution Date to reduce
the balance of such Subaccount.
"Subaccounts": Any one of the Subaccounts created pursuant to Section
5.03(a)(i) hereof.
Group I:
"AF-1 Balance": The Balance of the Subaccount AF-1.
"AF-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-1 Balance during the Accrual Period for the Class AF-
1 Certificates for that Distribution Date at the Group I Net Rate.
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"Subaccount AF-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"AF-2 Balance": The Balance of Subaccount AF-2.
"AF-2 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-2 Balance during the Accrual Period for the Class AF-
2 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount AF-2": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"AF-3 Balance": The Balance of Subaccount AF-3.
"AF-3 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-3 Balance during the Accrual Period for the Class AF-
3 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount AF-3": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"AF-4 Balance": The Balance of the Subaccount AF-4.
"AF-4 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-4 Balance during the Accrual Period for the Class AF-
4 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount AF-4": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"AF-5 Balance": The Balance of Subaccount AF-5.
"AF-5 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-5 Balance during the Accrual Period for the Class AF-
5 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount AF-5": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"AF-6 Balance": The Balance of Subaccount AF-6.
"AF-6 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AF-6 Balance during the Accrual Period for the Class AF-
6 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount AF-6": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"MF-1 Balance": The Balance of Subaccount MF-1.
"MF-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the MF-1 Balance during the Accrual Period for the Class MF-
1 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount MF-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"MF-2 Balance": The Balance of Subaccount MF-2.
"MF-2 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the MF-2 Balance during the Accrual Period for the Class MF-
2 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount MF-2": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"BF-1 Balance": The Balance of Subaccount BF-1.
"BF-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the BF-1 Balance during the Accrual Period for the Class BF-
1 Certificates for that Distribution Date at the Group I Net Rate.
"Subaccount BF-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"BF-1A Balance": The Balance of Subaccount BF-1A.
"BF-1A Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the BF-1A Balance during the Accrual Period for the Class
BF-1A Certificates for that Distribution Date at the Group I Net Rate.
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"Subaccount BF-1A": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
Group II:
"AV-1 Balance": The Balance of the Subaccount AV-1.
"AV-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the AV-1 Balance during the Accrual Period for the Class AV-
1 Certificates for that Distribution Date at the Group II Net Rate.
"Subaccount AV-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"MV-1 Balance": The Balance of Subaccount MV-1.
"MV-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the MV-1 Balance during the Accrual Period for the Class MV-
1 Certificates for that Distribution Date at the Group II Net Rate.
"Subaccount MV-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"MV-2 Balance": The Balance of Subaccount MV-2.
"MV-2 Monthly Interest Amounts": With respect to any Distribution Date, the
interest accrued on the MV-2 Balance during the Accrual Period for the Class MV-
2 Certificates for that Distribution Date at the Group II Net Rate.
"Subaccount MV-2": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"BV-1 Balance": The Balance of Subaccount BV-1.
"BV-1 Monthly Interest Amount": With respect to any Distribution Date, the
interest accrued on the BV-1 Balance during the Accrual Period for the Class BV-
1 Certificates for that Distribution Date at the Group II Net Rate.
"Subaccount BV-1": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"BV-1A Balance": The Balance of Subaccount BV-1A.
"BV-1A Monthly Interest Amount": With respect to any Distribution Date,
the interest accrued on the BV-1A Balance during the Accrual Period for the
Class BV-1A Certificates for that Distribution Date at the Group II Net Rate.
"Subaccount BV-1A": The Subaccount by that name created pursuant to
Section 5.03(a)(i) hereof.
"Subaccount R": The Subaccount by that name created pursuant to Section
5.03(a)(i) hereof.
"Tax Matters Person": Chase Bank of Texas, National Association, a national
banking association, 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": Chase Bank of Texas, National Association, a national banking
association, 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": Prudential Securities Incorporated, Banc of America
Securities LLC, Greenwich Capital Markets, Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
"Underwriting Agreement": The Underwriting Agreement dated February 18,
2000, between the Depositor and SMI and the Underwriters.
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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 (except for any
prepayment penalties payable at any time with respect thereto), which the
Depositor is causing to be delivered to the Trustee (or the Custodian) herewith
(and all Qualified Substitute Mortgage Loans (except for any prepayment
penalties payable at any time with respect thereto) 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 to the
Mortgage Loans paid by the Borrower after the Cut-Off Date (except for any
prepayments received after the Cut-Off Date but reflected in the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the Cut-Off Date) and
proceeds of the conversion, voluntary or involuntary, of the foregoing; (ii) the
Servicing Agreement; (iii) 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; (iv) the Asset Proceeds Account and the Distribution Account, whether
in the form of cash, instruments, securities or other properties; and (v) 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 (v)
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.
Article III
Remitting to Certificateholders
Section 3.01. Subaccount Distributions. On each Distribution Date, the
Trustee shall subject to Section 3.02(b) of the Standard Terms make the
following allocations, disbursements and transfers from the Asset Proceeds
Account to the Distribution Account, which shall be an Eligible Account, in the
following order of priority:
(a) from the Group I Interest Funds to Subaccounts AF-1, AF-2, AF-3, AF-4,
AF-5, AF-6, MF-1, MF-2, BF-1 and BF-1A, in the following order: first, pro rata,
the AF-1, AF-2, AF-3, AF-4, AF-5 and AF-6 Monthly Interest Amounts, second, the
MF-1 Monthly Interest Amount, third the MF-2 Monthly Interest Amount, and
fourth, pro rata, the BF-1 and BF-1A Monthly Interest Amounts;
(b) from the Group II Interest Funds to Subaccounts AV-1, MV-1, MV-2, BV-1
and BV-1A, in the following order: first, the AV-1 Monthly Interest Amount,
second, the MV-1 Monthly Interest Amount, third, the MV-2 Monthly Interest
Amount, and fourth, pro rata, the BV-1 and BV-1A Monthly Interest Amounts;
(c) from the Group I Principal Funds:
(A) to Subaccount AF-1 until the AF-1 Balance is reduced to
zero;
(B) to Subaccount AF-2 until the AF-2 Balance is reduced to
zero;
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(C) to Subaccount AF-3 until the AF-3 Balance is reduced to
zero;
(D) to Subaccount AF-4 until the AF-4 Balance is reduced to
zero;
(E) to Subaccount AF-5 until the AF-5 Balance is reduced to
zero;
(F) to Subaccount AF-6 until the AF-6 Balance is reduced to
zero;
(G) to Subaccount MF-1 until the MF-1 Balance is reduced to
zero;
(H) to Subaccount MF-2 until the MF-2 Balance is reduced to
zero;
(I) to Subaccount BF-1 until the BF-1 Balance is reduced to
zero; and
(J) to Subaccount BF-1A until the BF-1A Balance is reduced to
zero;
provided, however, that (a) such Balances shall be reduced in the same
order and manner that the Class of Certificates having the
corresponding class designation is decreased; and
(d) from the Group II Principal Funds:
(A) to Subaccount AV-1 until the AV-1 Balance is reduced to
zero;
(B) to Subaccount MV-1 until the MV-1 Balance is reduced to
zero;
(C) to Subaccount MV-2 until the MV-2 Balance is reduced to
zero;
(D) to Subaccount BV-1 until the BV-1 Balance is reduced to
zero; and
(E) to Subaccount BV-1A until the BV-1A Balance is reduced to
zero;
provided, however, that (a) such Balances shall be reduced in the same
order and manner that the Class of Certificates having the
corresponding class designation is decreased.
Section 3.02. 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:
(i) to the Group I Class A Certificates, the Current Interest and
any Interest Carry Forward Amount for the Group I Class A
Certificates; provided, however, if the Group I Interest Funds
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, such amount will be
distributed pro rata among each Class of the Group I Class A
Certificates based on the ratio of (x) the Current Interest and
Interest Carry Forward Amount for each Class of the Group I
Class A Certificates to (y) the total amount of Current
Interest and any Interest Carry Forward Amount for the Group I
Class A Certificates;
(ii) to the Class MF-1 Certificates, the Class MF-1 Current
Interest;
(iii) to the Class MF-2 Certificates, the Class MF-2 Current
Interest;
(iv) to the Class BF-1 and Class BF-1A Certificates, the Class BF-1
and Class BF-1A Current Interest; provided, however, if the
Group I Interest Funds are not sufficient to make a full
distribution of the Current Interest with respect to the Class
BF-1 and Class BF-1A Certificates, such Interest Funds and
amounts will be distributed pro rata among each Class of the
Class BF-1 and Class BF-1A Certificates based on the ratio of
(x) the Current Interest for such Class to (y) the total amount
of Current Interest for the Class BF-1 and Class BF-1A
Certificates; and
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(v) any remainder pursuant to Section 3.02(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) to the Group II Class A Certificates, the Current Interest and
any Interest Carry Forward Amount for the Group II Class A
Certificates;
(ii) to the Class MV-1 Certificates, the Class MV-1 Current
Interest;
(iii) to the Class MV-2 Certificates, the Class MV-2 Current
Interest;
(iv) to the Class BV-1 and Class BV-1A Certificates, the Class BV-1
and Class BV-1A Current Interest; provided, however, if the
Group II Interest Funds are not sufficient to make a full
distribution of the Current Interest with respect to the Class
BV-1 and Class BV-1A Certificates, such Interest Funds and
amounts will be distributed pro rata among each Class of the
Class BV-1 and Class BV-1A Certificates based on the ratio of
(x) the Current Interest for such Class to (y) the total amount
of Current Interest for the Class BV-1 and Class BV-1A
Certificates; and
(v) any remainder pursuant to Section 3.02(f) hereof.
(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) if a Group I Subordinated Trigger Event exists on such
Distribution Date, sequentially, to the Class BF-1, Class
MF-2 and Class MF-1 Certificates, in that order, the Group I
Class BF-1A Principal Distribution Amount;
(vi) to the Class BF-1A Certificates, the Group I Class BF-1A
Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero (provided
that a Group I Subordinated Trigger Event does not exist on
such Distribution Date); and
(vii) to the Class R Certificates;
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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
(e) after the Certificate Principal Balance of the Class BF-1
Certificates has been reduced to zero, the Group I Class BF-1A
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) if a Group II Subordinated Trigger Event exists on such
Distribution Date, sequentially, to the Class BV-1, Class
MV-2 and Class MV-1 Certificates, in that order, the Group
II Class BV-1A Principal Distribution Amount;
(vi) to the Class BV-1A Certificates, the Group II Class BV-1A
Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero (provided
that a Group II Subordinated Trigger Event does not exist on
such Distribution Date); and
(vii) to the Class R Certificates;
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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 Principal Distribution Amount;
(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-1A
Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date.
(e) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.02(a)(v) hereof and, to the extent required to make the allocations set forth
below in clauses (i) through (viii) of this Section 3.02(e), Section 3.02(f)(ix)
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) pro rata, to the Class BF-1 and Class BF-1A Certificates,
the Class BF-1 and Class BF-1A Interest Carry Forward
Amount;
(vii) to the Class BF-1 Certificates, any Class BF-1 Unpaid
Realized Loss Amount;
(viii) to the Class BF-1A Certificates, any Class BF-1A Unpaid
Realized Loss Amount;
(ix) to the extent required to make the allocations set forth in
clauses (i) through (viii) of Section 3.02(f) hereof,
pursuant to Section 3.02(f) hereof; provided, however, that
with respect to allocations pursuant to clause 3.02(f)(i),
only amounts set forth in clause (x) of the definition of
Group II Extra Principal Distribution Amount shall be
included (without regard to whether the Class BV-1A
Certificates remain outstanding);
(x) to the Class BF-1A Certificates, an amount equal to the
Group I Applicable Percentage of the remaining amount (such
amount the "Class BF-1A Distributable Amount"), in reduction
of the Certificate Principal Balance thereof, until the
Class BF-1A Certificate Principal Balance has been reduced
to zero;
(xi) on the Distribution Date on which the Class BF-1A
Certificate Principal Balance has been reduced to zero, any
remaining Class BF-1A Distributable Amount will be applied
as additional Group I Extra Principal Distribution Amount;
and
(xii) the remainder pursuant to Section 3.02(g) hereof.
31
<PAGE>
(f) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.02(b)(v) hereof and, to the extent required to make the allocations set forth
below in clauses (i) through (viii) of this Section 3.02(f), Section 3.02(e)(ix)
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) pro rata, to the Class BV-1 and Class BV-1A Certificates,
the Class BV-1 and Class BV-1A Interest Carry Forward
Amount;
(vii) to the Class BV-1 Certificates, any Class BV-1 Unpaid
Realized Loss Amount;
(viii) to the Class BV-1A Certificates, any Class BV-1A Unpaid
Realized Loss Amount;
(ix) to the extent required to make the allocations set forth in
clauses (i) through (viii) of Section 3.02(e) hereof,
pursuant to Section 3.02(e) hereof; provided, however, that
with respect to allocations pursuant to clause 3.02(e)(i),
only amounts set forth in clause (x) of the definition of
Group I Extra Principal Distribution Amount shall be
included (without regard to whether the Class BF-1A
Certificates remain outstanding);
(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;
(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) to the Class BV-1A Certificates, an amount equal to the
Group II Applicable Percentage of the remaining amount (such
amount, the "Class BV-1A Distributable Amount"), in
reduction of the Certificate Principal Balance thereof,
until the Class BV-1A Certificate Principal Balance has been
reduced to zero;
(xv) on the Distribution Date on which the Class BV-1A
Certificate Principal Balance has been reduced to zero, any
remaining Class BV-1A Distributable Amount will be applied
as additional Group II Extra Principal Distribution Amount;
and
(xvi) the remainder pursuant to Section 3.02(g) hereof.
(g) On each Distribution Date, the Trustee shall make the following
allocations from the Distribution Account of the remainders pursuant to Section
3.02(e)(xii) 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.
(h) 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:
32
<PAGE>
(i) to the Class BF-1A Certificates until the Class BF-1A
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.
(i) On each Distribution Date, the Trustee shall allocate any excess of
the 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-1A Certificates until the Class BV-1A
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 3.03. 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 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);
(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 3.02 hereof; and
(d) whether a Group I or Group II Trigger Event or a Group I or Group II
Subordinated Trigger Event has occurred.
Section 3.04. Reports by 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
33
<PAGE>
or Group II Extra Principal Distribution Amount and any Class MF-1,
Class MF-2, Class BF-1, Class BF-1A, Class MV-1, Class MV-2, Class BV-
1 and Class BV-1A Applied Realized Loss Amount with respect to, and
any Class MF-1, Class MF-2, Class BF-1, Class BF-1A, Class MV-1, Class
MV-2, Class BV-1 and Class BV-1A 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-1A
Interest Carry Forward Amount, any Class AV-1, Class MV-1, Class MV-2,
Class BV-1 and Class BV-1A Interest Carry Forward Amount or any Class
AV-1, Class MV-1, Class MV-2 and Class BV-1 Certificates Carryover ;
(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 Group II Certificates (other
than the Class BV-1A Certificates) for the current Accrual Period and, if
the Pass-Through Rates for any Class of the Group I Certificates (or the
Class BV-1A 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 (or the Class BV-1A Certificates) with
respect to which the Group I Net Rate (or Group II Net Rate, as applicable)
applies.
(b) On each Distribution Date, based on information provided by the
Servicer, the Master Servicer will distribute 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.
34
<PAGE>
Article IV
The Certificates
Section 4.01. The Certificates.
The Certificates shall be designated generally as the Mortgage Loan Asset
Backed Certificates, Series 2000-1. The aggregate principal amount of
Certificates that may be executed and delivered under this Agreement is limited
to $458,755,000, 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:
<TABLE>
<CAPTION>
Initial Certificate
Class Principal Balance CUSIP
<S> <C> <C>
Group I - Fixed Rate Mortgage Loans
AF-1 $100,000,000 805564FC0
AF-2 $ 42,000,000 805564FD8
AF-3 $ 40,000,000 805564FE6
AF-4 $ 30,000,000 805564FF3
AF-5 $ 21,914,000 805564FG1
AF-6 $ 26,000,000 805564FH9
MF-1 $ 15,386,000 805564FJ5
MF-2 $ 10,457,000 805564FK2
BF-1 $ 8,964,000 805564FL0
BF-1A $ 4,034,000 805564FM8
Group II - Adjustable Rate Mortgage Loans
AV-1 $128,000,000 805564FN6
MV-1 $ 13,600,000 805564FP1
MV-2 $ 10,000,000 805564FQ9
BV-1 $ 5,200,000 805564FR7
BV-1A $ 3,200,000 805564FS5
C (1)
R (2)
</TABLE>
_____________________
(1) The Class C Certificates have no stated principal balance or Pass-Through
Rate and are entitled to receive the Class C Distribution Amount.
(2) 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.
35
<PAGE>
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.
(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. REMIC Administration.
(a) Pooling REMIC. (i) The beneficial ownership of the Pooling REMIC shall
be evidenced by interests having the following terms:
<TABLE>
<CAPTION>
Type of Interest
Pooling Interest Initial Subaccount Pass-Through For Purposes of
Designation Balance Rate REMIC
Provisions
<S> <C> <C> <C>
Group I
Subaccount AF-1 $100,000,000 (1) Regular
Subaccount AF-2 $ 42,000,000 (1) Regular
Subaccount AF-3 $ 40,000,000 (1) Regular
Subaccount AF-4 $ 30,000,000 (1) Regular
Subaccount AF-5 $ 21,914,000 (1) Regular
Subaccount AF-6 $ 26,000,000 (1) Regular
Subaccount MF-1 $ 15,386,000 (1) Regular
Subaccount MF-2 $ 10,457,000 (1) Regular
Subaccount BF-1 $ 8,964,000 (1) Regular
Subaccount BF-1A $ 4,034,000 (1) Regular
Group II
Subaccount AV-1 $128,000,000 (2) Regular
Subaccount MV-1 $ 13,600,000 (2) Regular
Subaccount MV-2 $ 10,000,000 (2) Regular
Subaccount BV-1 $ 5,200,000 (2) Regular
Subaccount BV-1A $ 3,200,000 (2) Regular
Subaccount R (3) (3) Residual
</TABLE>
(1) On any Distribution Date, the Group I Net Rate.
(2) On any Distribution Date, the Group II Net Rate.
36
<PAGE>
(3) Subaccount R is not issued with a Balance or a Pass-Through Rate.
(ii) Subaccount R is the residual interest in the Pooling REMIC
and shall be issued in fully registered certificate form as part of the
Class R Certificate. All other Subaccounts shall be deemed issued as non-
certificated interests and shall constitute assets of the Issuing REMIC.
(iii) The assets of the Pooling REMIC are the Mortgage Loans and
the Asset Proceeds Account.
(iv) On each Distribution Date, amounts in the Asset Proceeds
Account will be distributed as provided in Section 3.01 hereof.
(b) Issuing REMIC. (i) The beneficial ownership of the Issuing REMIC
shall be evidenced as set forth in Section 4.01 hereof; 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-1A, Class AV-1, Class MV-1, Class MV-2, Class BV-1 and
Class BV-1A Certificates and each of the separate interest-only rights making up
the Class C Distribution Amount are Regular Interests in the Issuing REMIC. The
Class R Certificates are the residual interest in the Issuing REMIC.
(ii) The assets of the Issuing REMIC are the Subaccounts in the
Pooling REMIC other than Subaccount R and the Distribution Account.
(iii) On each Distribution Date, amounts in the Distribution
Account will be distributed as provided in Section 3.02 hereof.
(c) General.
(i) The Closing Date is designated as the "start up" day of the
Pooling REMIC and Issuing REMIC.
(ii) The Trustee shall make elections to treat the Pooling REMIC
and the Issuing REMIC as REMICs under the Code.
(d) The "latest possible maturity date" for purposes of the REMIC
regulations and each REMIC established hereby is February 25, 2032.
Section 5.04. 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.
37
<PAGE>
(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 5.05. Master Servicer; Certificate Registrar and Paying Agent
(a) Saxon Mortgage, Inc. is hereby appointed as Master Servicer
hereunder.
(b) Chase Bank of Texas, National Association is hereby appointed as
Certificate Registrar and Paying Agent.
38
<PAGE>
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 February
1, 2000.
SAXON ASSET SECURITIES COMPANY
By: ____________________________________
Bradley D. Adams, Vice President
SAXON MORTGAGE, INC.
as Master Servicer
By: ______________________________________________
Robert G. Partlow, Executive Vice President
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
as Trustee
By: _________________________________
Lila R. Garlin, Vice President
<PAGE>
COMMONWEALTH OF VIRGINIA )
) ss.:
COUNTY OF HENRICO )
The foregoing instrument was acknowledged before me February __, 2000, by
Bradley D. Adams, a Vice President of Saxon Asset Securities Company, a Virginia
corporation, on behalf of the corporation.
___________________________________________
Notary Public
My Commission expires: __________________
<PAGE>
COMMONWEALTH OF VIRGINIA )
) ss.:
COUNTY OF HENRICO )
The foregoing instrument was acknowledged before me on February __, 2000,
by Robert G. Partlow, Executive Vice President of Saxon Mortgage, Inc., a
Virginia corporation, on behalf of the corporation.
___________________________________
Notary Public
My Commission expires: __________________
<PAGE>
CITY OF RICHMOND )
) ss.:
COMMONWEALTH OF VIRGINIA )
The foregoing instrument was acknowledged before me February __, 2000, by
Lila R. Garlin, a Vice President of Chase Bank of Texas, National Association, a
national banking association, on behalf of the bank.
____________________________________
Notary Public
My Commission expires: __________________
<PAGE>
Schedule I
Mortgage Loans
--------------
A. Group I Mortgage Loans.
B. Group II Mortgage Loans.
<PAGE>
Schedule II
Sales Agreement
---------------
<PAGE>
SAXON ASSET SECURITIES COMPANY
ASSET BACKED CERTIFICATES
STANDARD TERMS TO TRUST AGREEMENT
(February 2000 Edition)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Preliminary Statement.............................................................................................1
Article I Definitions.............................................................................................1
Section 1.01. Defined Terms.............................................................................1
Section 1.02. Section References; Calculations; Ratings; Consents......................................15
Section 1.03. Certain Matters Relating to any Certificate Insurance Policy.............................15
Article II Mortgage Loan Files...................................................................................16
Section 2.01. Mortgage Loan Files......................................................................16
Section 2.02. Acceptance by the Trustee................................................................17
Section 2.03. Purchase or Substitution of Mortgage Loans by a Seller, a Servicer or Saxon..............19
Section 2.04. Representations and Warranties of Saxon..................................................22
Section 2.05. Representations and Warranties of the Master Servicer....................................23
Article III Administration of the Trust..........................................................................24
Section 3.01. Master Servicer Custodial Account........................................................24
Section 3.02. Asset Proceeds Account...................................................................25
Section 3.03. Issuing REMIC Accounts...................................................................26
Section 3.04. Advances by Master Servicer and Trustee..................................................27
Section 3.05. Month End Interest.......................................................................28
Section 3.06. Trustee to Cooperate; Release of Mortgage Files..........................................28
Section 3.07. Reports to the Trustee; Annual Compliance Statements.....................................29
Section 3.08. Title, Management and Disposition of REO Properties......................................29
Section 3.09. Amendments to Servicing Agreements; Modification of the Servicing Guides.................32
Section 3.10. Oversight of Servicing...................................................................32
Section 3.11. Credit Enhancement.......................................................................33
Article IV Reporting/Remitting to Certificateholders.............................................................33
Section 4.01. Statements to Certificateholders.........................................................33
Section 4.02. Remittance Reports.......................................................................33
Section 4.03. Compliance with Withholding Requirements.................................................34
Section 4.04. Reports to the Clearing Agency...........................................................34
Section 4.05. Preparation of Regulatory Reports........................................................34
Article V The Pooling Interests and the Certificates.............................................................35
Section 5.01. Pooling REMIC Interests..................................................................35
Section 5.02. The Certificates.........................................................................35
Section 5.03. Book-Entry Certificates..................................................................35
Section 5.04. Registration of Transfer and Exchange of Certificates....................................36
Section 5.05. Restrictions on Transfers................................................................37
Section 5.06. Mutilated, Destroyed, Lost or Stolen Certificates........................................38
Section 5.07. Persons Deemed Owners....................................................................39
Section 5.08. Paying Agent.............................................................................39
Article VI Saxon and the Master Servicer.........................................................................39
Section 6.01. Liability of, and Indemnification by, Saxon and the Master Servicer......................39
Section 6.02. Merger or Consolidation of Saxon or the Master Servicer..................................39
Section 6.03. Limitation on Liability of Saxon, the Master Servicer and Others.........................40
Section 6.04. Resignation of the Master Servicer.......................................................40
Section 6.05. Compensation to the Master Servicer......................................................40
Section 6.06. Assignment or Delegation of Duties by Master Servicer....................................40
Article VII Termination of Servicing and Master Servicing Arrangements...........................................41
Section 7.01. Termination and Substitution of Servicing Agreements.....................................41
Section 7.02. Termination of Master Servicer; Trustee to Act...........................................41
Section 7.03. Notification to Certificateholders.......................................................43
Article VIII Concerning the Trustee..............................................................................43
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
Section 8.01. Duties of Trustee........................................................................43
Section 8.02. Certain Matters Affecting the Trustee....................................................44
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans....................................45
Section 8.04. Trustee May Own Certificates.............................................................45
Section 8.05. Trustee's Fees...........................................................................45
Section 8.06. Eligibility Requirements for Trustee.....................................................46
Section 8.07. Resignation and Removal of the Trustee...................................................46
Section 8.08. Successor Trustee........................................................................47
Section 8.09. Merger or Consolidation of Trustee.......................................................47
Section 8.10. Appointment of Trustee or Separate Trustee...............................................47
Section 8.11. Appointment of Custodians................................................................48
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates............................48
Article IX Termination of the Trust; Purchase of Certificates....................................................48
Section 9.01. Termination of Trust.....................................................................48
Section 9.02. Optional Termination.....................................................................49
Section 9.03. Optional Purchase........................................................................49
Section 9.04. Termination Upon Loss of REMIC Status....................................................49
Section 9.05. Disposition of Proceeds..................................................................50
Article X REMIC Tax Provisions...................................................................................51
Section 10.02. Prohibited Activities...................................................................52
Article XI Miscellaneous Provisions..............................................................................53
Section 11.01. Amendment of Trust Agreement............................................................53
Section 11.02. Recordation of Agreement; Counterparts..................................................53
Section 11.03. Limitation of Rights of Certificateholders..............................................53
Section 11.04. Governing Law...........................................................................54
Section 11.05. Notices.................................................................................54
Section 11.06. Severability of Provisions..............................................................54
Section 11.07. Sale of Mortgage Loans..................................................................54
Section 11.08. Notice to Rating Agency.................................................................55
</TABLE>
Exhibit A-1 Form of Initial Certification
Exhibit A-2 Form of Final Certification
Exhibit B Form of Recordation Report
Exhibit C Form of Remittance Report
Exhibit D Form of Rule 144A Agreement-QIB Certification
Exhibit E Form of Transferee Agreement
Exhibit F Form of Benefit Plan Affidavit
Exhibit G Form of Residual Transferee Agreement
Exhibit H-1 Form of Disqualified Organization Affidavit
Exhibit H-2 Form of Disqualified Organization Affidavit
Exhibit I Form of Reportable Exceptions
Exhibit J Form of Remittance Agency Agreement
Exhibit K Form of Security Release Certification
2
<PAGE>
Preliminary Statement
Saxon Asset Securities Company ("Saxon"), a bank or mortgage banking
company, as administrative agent (in such capacity, the "Master Servicer"), and
a bank or trust company, as trustee (the "Trustee"), have entered into a Trust
Agreement (the "Trust Agreement") that provides for the issuance of a series of
asset backed certificates (the "Certificates") that in the aggregate evidence
the entire interest in mortgage-related assets and certain other property owned
by the trust created by the Trust Agreement (the "Trust"). These Standard Terms
are a part of, and are incorporated by reference into, the Trust Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Trust Agreement and as hereinafter
set forth, Saxon, the Master Servicer and the Trustee agree as follows:
Article I
Definitions
Section 1.01. Defined Terms
Except as otherwise specified or as the context may otherwise require,
the following capitalized terms shall, whenever used in the Trust Agreement,
have the respective meanings assigned to them in this Section 1.01. Capitalized
terms used but not defined in the Trust Agreement shall have the respective
meanings assigned to them in a Servicing Guide.
"Advance": With respect to any Mortgage Loan, any advance of principal
and interest, taxes, insurance or expenses made by a Servicer, the Master
Servicer, the Trustee or an Insurer.
"Affiliate": Any person or entity controlling, controlled by or under
common control with Saxon or the Master Servicer ("control" meaning the power to
direct the management and policies of a person or entity, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise, and "controlling" and "controlled" having meanings correlative to the
foregoing).
"Annual Compliance Statement": The Officer's certificate required to be
delivered annually by the Master Servicer pursuant to Section 3.07 hereof.
"ARM Loan": An "adjustable rate" Mortgage Loan, the Mortgage Interest
Rate of which is subject to periodic adjustment in accordance with the terms of
the related Mortgage Note.
"Asset Proceeds Account": The account or accounts created and maintained
for the Trust pursuant to Section 3.02 hereof.
"Basis Limit Amount": With respect to a Mortgage Loan purchased from a
REMIC, an amount equal to the REMIC's adjusted federal income tax basis in such
Mortgage Loan as of the date on which the purchase occurs as set forth in a
certificate of an Officer of the Master Servicer, which certificate shall be
delivered to the Trustee in connection with any purchase of a Mortgage Loan.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person
who is registered as owner of such Certificate in the books of the Clearing
Agency for such Certificate or in the books of a Person maintaining an account
with such Clearing Agency.
"Benefit Plan Affidavit": An affidavit substantially in the form of
Exhibit F attached hereto.
"Benefit Plan Opinion": An Opinion of Counsel satisfactory to the Master
Servicer and the Trustee (and upon which Saxon, the Master Servicer, the Tax
Matters Person and the Trustee are authorized to rely) to the effect that the
proposed transfer will not (i) cause the assets of the Trust to be regarded as
plan assets for purposes of the Plan Asset Regulations, (ii) give rise to any
fiduciary duty under ERISA on the part of Saxon, a Servicer, the Master Servicer
or the Trustee or (iii) result in, or be treated as, a prohibited transaction
under Section 406 or 407 of ERISA or section 4975 of the Code (which opinion
shall not be a cost or expense of Saxon, the Master Servicer, the Tax Matters
Person or the Trustee).
"Book-Entry Certificates": Each Class of Certificates, if any, specified
as such in the Trust Agreement.
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"Borrower": With respect to each Mortgage Loan, the individual or
individuals or any Servicer obligated to repay the related Mortgage Note.
"Business Day": Unless otherwise provided in the Trust Agreement, any
day that is not a Saturday, Sunday, or a day on which the Certificate Insurer or
commercial banking institutions in New York City or the city in which the
Corporate Trust Office of the Trustee, or the Paying Agent is located are
authorized or obligated by law or executive order to be closed.
"Certificate": Any asset backed certificate designated in the Trust
Agreement.
"Certificate Guaranty Insurance Policy" means any certificate or
financial guaranty insurance policy identified in the Trust Agreement.
"Certificate Insurer" means the issuer, if any, of a Certificate
Guaranty Insurance Policy with respect to the Certificates named in the Trust
Agreement.
"Certificate Insurer Default": The existence and continuance of any of
the following:
(a) the Certificate Insurer fails to make a payment required under
the Certificate Insurance Policies in accordance with their terms; or
(b) (i) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Certificate Insurer in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, rehabilitation, reorganization or other similar
law or (B) a decree or order adjudging the Certificate Insurer as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
rehabilitation, arrangement, adjustment or composition of or in respect of the
Certificate Insurer under any applicable United States federal or state law, or
appointing a custodian, receiver, liquidator, rehabilitator, assignee, trustee,
sequestrator or other similar official of any substantial part of the
Certificate Insurer's property, or ordering the winding-up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(ii) the commencement by the Certificate Insurer of a voluntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the consent of the
Certificate Insurer to the entry of a decree or order for relief in respect of
the Certificate Insurer in an involuntary case or proceeding under any
applicable United States federal or state bankruptcy, insolvency case or
proceeding against the Certificate Insurer, or the consent by the Certificate
Insurer to the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Certificate Insurer of any substantial part of its
property, or the failure of the Certificate Insurer to pay debts generally as
they become due, or the admission by the Certificate Insurer in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Certificate Insurer in furtherance of any such action;
provided, however, the Certificate Insurer's rights shall be reinstated
following a cure, to the satisfaction of the Trustee, of any Certificate Insurer
Default.
"Certificate of Title Insurance": A certificate of title insurance
issued pursuant to a master title insurance policy.
"Certificate Principal Balance": Unless otherwise provided in the Trust
Agreement, with respect to each Class of Certificates, on any Distribution Date,
the aggregate principal amount, if any, of such Class of Certificates
immediately prior to such Distribution Date (or, in the case of the first
Distribution Date, an amount equal to the aggregate initial principal amount of
such Class of Certificates as of the Closing Date) less the amounts to be
applied on such Distribution Date to reduce the aggregate principal amount of
such Class of Certificates in accordance with the Trust Agreement plus any
amount previously distributed with respect to principal that is recovered as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order (except, for purposes of effecting the Certificate Insurer's
subrogation rights, any payment made by the Certificate Insurer with respect to
principal of the Certificates shall not be taken into account).
"Certificate Register": The register maintained pursuant to the related
Trust Agreement.
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"Certificate Registrar": The registrar designated in the related Trust
Agreement, or appointed pursuant to Section 5.02 hereof.
"Certificateholders": The holders of the Certificates as recorded on
the Certificate Register.
"Class": The Certificates of a Series bearing the same designation.
"Clearing Agency": The Depository Trust Company or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act and the regulations of the SEC
thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with such Clearing
Agency.
"Closing Date": The date on which Certificates are issued by a Trust as
set forth in the Trust Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": With respect to any Mortgage Loan, the Mortgaged Premises
and any real property (other than the related Mortgaged Premises), personal
property, securities, cash, instruments, contracts, or other documents, if any,
constituting or evidencing collateral pledged as additional security for such
Mortgage Loan.
"Converted Mortgage Loan": An ARM Loan with respect to which the
Borrower has complied with the applicable requirements of the related Mortgage
Note to convert the Mortgage Interest Rate relating thereto to a fixed rate of
interest (and with respect to which the related Servicer has processed such
conversion).
"Cooperative Loan": A Mortgage Loan that is secured by a first lien
against (i) shares issued by a cooperative housing corporation and (ii) the
related Borrower's leasehold interest in a cooperative dwelling unit owned by
such cooperative housing corporation.
"Corporate Trust Office": The principal corporate trust office of the
Trustee, any Paying Agent or any Certificate Registrar at which at any
particular time its corporate trust business shall be administered.
"Credit Enhancement": Any certificate guaranty insurance policy,
mortgage pool insurance policy, special hazard insurance policy, special hazard
fund, mortgagor bankruptcy fund, reserve fund, letter of credit, Certificate
Guaranty Insurance Policy, corporate guaranty, third party guaranty or other
form of insurance specified in the Trust Agreement that is obtained by or on
behalf of Saxon with respect to the Certificates.
"Credit Enhancement Fee": With respect to each form of Credit
Enhancement, the monthly premium or fee that is payable to the provider of such
Credit Enhancement as specified in the Trust Agreement.
"Credit Enhancement Fee Rate": With respect to each form of Credit
Enhancement, each Mortgage Loan and each Distribution Date, an amount equal to
the Credit Enhancement Fee with respect to the related Certificates, divided by
the aggregate Scheduled Principal Balance of the related Mortgage Loans.
"Custodian": The Custodian identified in the Trust Agreement that shall
hold all or a portion of the Trustee Mortgage Loan Files with respect to the
Certificates.
"Cut-Off Date": The date specified as such in the Trust Agreement.
"Defect Discovery Date": With respect to a Mortgage Loan, the date on
which either the Trustee or the Master Servicer first discovers a Qualification
Defect affecting such Mortgage Loan.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, or any use of such REO Property in a trade or business
conducted by the Trust, in each case other than through an Independent
Contractor; provided, however, that the Trustee or the Master Servicer on behalf
of the Trust shall not be considered to Directly Operate an REO Property solely
because the Trustee or the Master Servicer on behalf of the Trust establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or maintenance with respect to
such REO Property.
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"Disqualified Organization": Either (i) the United States, (ii) any
state or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative described
in section 521 of the Code) that is exempt from federal income tax unless such
organization is subject to tax under the unrelated business taxable income
provisions of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, or (vii) any other entity identified as a
disqualified organization by the REMIC Provisions. A corporation will not be
treated as an instrumentality of the United States or any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
"Disqualified Organization Affidavit": If provided by a Non-U.S. Person,
an affidavit substantially in the form of Exhibit H-1 attached hereto, and, if
provided by a U.S. Person, an affidavit substantially in the form of Exhibit H-2
attached hereto.
"Distribution Account": With respect to any Double REMIC Series, an
Eligible Account established and maintained with the Paying Agent by the Trustee
for the Issuing REMIC. Unless otherwise provided in the Trust Agreement, the
Distribution Account shall be considered an asset of the Issuing REMIC.
"Distribution Date": Unless otherwise provided in the Trust Agreement,
the 25th day of each month, or the next Business Day if such 25th day is not a
Business Day, commencing in the month following the Closing Date.
"Double REMIC Series": A Series with respect to which two REMIC
elections are made to form an Issuing REMIC and a Pooling REMIC.
"Due Date": The first day of the month of the related Distribution Date.
"Due Period": Unless otherwise provided in the Trust Agreement, (i) the
period from but excluding the Cut-Off Date to and including the first day of the
month in which the first Distribution Date occurs and (ii) each period
thereafter from and including the second day of a month to and including the
first day of the following month.
"Eligible Account": Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the long-term
or short-term unsecured debt obligations of which (or a federal or state
chartered depository institution or trust company that is the principal
subsidiary of a holding company the long-term or short-term unsecured debt
obligations of which), respectively, are rated by each Rating Agency in one of
its two highest long-term rating categories and its highest short-term rating
category at the time any amounts are held on deposit therein or (ii) a trust
account or accounts maintained with a federal or state chartered depository
institution or trust company, acting in the capacity of a trustee, paying agent
or master servicer, in a manner acceptable to each Rating Agency in respect of
mortgage pass-through certificates rated in one of its two highest rating
categories. Eligible Accounts may be interest-bearing accounts or the funds
therein may be invested in Permitted Investments. If qualified under this
definition, accounts maintained with the Trustee may constitute Eligible
Accounts.
"ERISA": The Employee Retirement Income Securities Act of 1974, as
amended.
"Event of Default": An event with respect to the Master Servicer
described in Section 7.02 hereof.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit A-2 attached
hereto provided by the Trustee (or the Custodian) on or before the first
anniversary of the Closing Date pursuant to Section 2.02(c) hereof.
"Final Distribution Date": The meaning set forth in Section 9.03 hereof.
"Fiscal Year": Unless otherwise provided in the Trust Agreement, the
fiscal year of the Trust shall run from January 1 (or from the Closing Date, in
the case of the first fiscal year) through the last day of December.
"FNMA Guidelines": The provisions contained in the guide for selling and
servicing first lien residential mortgage loans issued from time to time by the
Federal National Mortgage Association.
"Fraud Losses": Losses on Mortgage Loans resulting from fraud,
dishonesty or misrepresentation in the origination of such
Mortgage Loans.
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"Gross Margin": With respect to each ARM Loan, the fixed percentage
specified in the related Mortgage Note that is added to or subtracted from the
Index to determine the Mortgage Interest Rate for such ARM Loan.
"Guide": Unless otherwise provided in the Trust Agreement, the SMI
Underwriting Manual and Shipping Manual, as supplemented and amended from time
to time through the Closing Date.
"Holders": The holders of the Certificates as recorded on the
Certificate Register.
"Home Improvement Loan": A mortgage loan that is made to finance actions
or items that substantially protect or improve the basic livability or utility
of a residential property and that is secured by a lien on such residential
property.
"Independent Contractor": Either (i) any Person (other than the Trustee
or the Master Servicer) that would be an "independent contractor" with respect
to the Trust within the meaning of section 856(d)(3) of the Code if the Trust
were a real estate investment trust (except that, in applying such section, more
than 35% of the outstanding principal balance of any Class shall be deemed to be
more than 35% of the certificates of beneficial interest of the Trust), so long
as the Trust does not receive or derive any income from such Person, the
relationship between such Person and the Trust is at arm's length and such
Person is not an employee of the Trust, the Trustee or the Master Servicer, all
within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Trustee or the Master Servicer) upon receipt by the
Trustee of an Opinion of Counsel, the expense of which shall constitute an
Advance if borne by a Servicer or a subservicer, to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents From Real Property.
"Index": With respect to each ARM Loan, the index rate specified in the
related Mortgage Note to which or from which the Gross Margin is added or
subtracted, in accordance with the terms of such Mortgage Note, to determine the
Mortgage Interest Rate for such ARM Loan.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit A-1 attached
hereto provided by the Trustee (or the Custodian) on the Closing Date pursuant
to Section 2.02(b) hereof.
"Initial Mortgage Loans": Any of the Mortgage Loans listed on the
Mortgage Loan Schedule attached to the Trust Agreement.
"Initial Optional Termination Date": As defined in the Trust Agreement.
"Insurance Proceeds": The proceeds paid by any Insurer pursuant to an
insurance policy covering any Mortgage Loan, less the expenses of recovering
such proceeds and any Non-Recoverable Advances made with respect to such
Mortgage Loan.
"Insurer": Any issuer of an insurance policy relating to the Mortgage
Loans.
"Interest Fund": An Eligible Account that may be established for the
purpose of making interest payments on Mortgage Loans for which the Trust is not
due any payments until after the first Distribution Date. The amount of the
Interest Fund, if any, shall be set forth in the Trust Agreement. The Interest
Fund shall not be an asset of any REMIC but shall be for the benefit of the
Certificateholders.
"Interest Shortfall": Month End Interest Shortfall and Soldiers' and
Sailors' Shortfall.
"Issuing REMIC": With respect to any Double REMIC Series, unless
otherwise provided in the Trust Agreement, the REMIC consisting primarily of the
Distribution Account and the Subaccounts of such Distribution Account.
"Junior Mortgage Loan": Any Mortgage Loan with respect to which the
related Security Instrument constitutes a lien of other than first priority on
the related Collateral.
"Letter of Credit": A letter of credit issued to the Trustee and its
successors or assigns by any Person whose long-term unsecured debt obligations
are rated by each Rating Agency in one of its two highest rating categories.
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"Liquidation Proceeds": The proceeds received in connection with the
liquidation of any Mortgage Loan as a result of defaults by the related Borrower
(including any insurance or guarantee proceeds with respect to such Mortgage
Loan), less the expenses of such liquidation and any Advances made with respect
to such Mortgage Loan.
"Loan to Value Ratio": With respect to any Mortgage Loan, the ratio that
results when the Unpaid Principal Balance of such Mortgage Loan is divided by
the fair market value of the related Mortgaged Premises. For purposes of
determining that ratio, the fair market value of the Mortgage Premises must be
reduced by (i) the full amount of any lien on such Mortgaged Premises that is
senior to the Mortgage Loan and (ii) a pro rata portion of any lien on such
Mortgaged Premises that is in parity with the Mortgage Loan.
"Master Servicer": The bank or mortgage banking company identified as
such in the Trust Agreement.
"Master Servicer Advance Amount": The amount, if any, specified as such
in the Trust Agreement.
"Master Servicer Compensation": The Master Servicing Fee and any
additional compensation payable to the Master Servicer as specified in Section
6.05 hereof.
"Master Servicer Custodial Account": The account described in Section
3.01 hereof.
"Master Servicer Errors and Omissions Insurance Policy": If the Master
Servicer is not a national banking association, an insurance policy in an amount
and otherwise in form and substance acceptable under FNMA Guidelines insuring
the Master Servicer as the named insured against liability for damages arising
out of errors, omissions or mistakes committed in the performance of the
services and other obligations required of the Master Servicer under the Trust
Agreement and, if permitted by the issuer of such policy, naming the Trustee as
an additional insured, and containing a severability of interests provision but
no other exclusion or other provision that would limit the liability of any
insured to any other insured.
"Master Servicer Fidelity Bond": If the Master Servicer is not a
national banking association, a fidelity bond issued by an insurer and in form
and substance acceptable under FNMA Guidelines (i) under which such insurer
agrees to indemnify the Master Servicer for all losses sustained as a result of
any theft, embezzlement, fraud or other dishonest act on the part of the Master
Servicer's directors, officers or employees and (ii) which provides for limits
of liability for each such director, officer or employee of not less than an
amount required by such guidelines.
"Master Servicer Remittance Date": Unless otherwise provided in the
Trust Agreement, (i) each Distribution Date, if the Asset Proceeds Account and
the Master Servicer Custodial Account are maintained at the same bank, or (ii)
the Business Day preceding each Distribution Date, if such accounts are not
maintained at the same bank.
"Master Servicer Reporting Date": Unless otherwise provided in the Trust
Agreement, the close of business on the third Business Day preceding each
Distribution Date.
"Master Servicing Fee": Unless otherwise provided in the Trust
Agreement, with respect to each Distribution Date and each Mortgage Loan, an
amount equal to one-twelfth of the Master Servicing Fee Rate multiplied by the
Scheduled Principal Balance of such Mortgage Loan as of the preceding Due Date.
"Master Servicing Fee Rate": The rate specified as such in the Trust
Agreement.
"Maximum Lifetime Mortgage Interest Rate": With respect to each ARM
Loan, the interest rate, if any, set forth in the related Mortgage Note as the
maximum Mortgage Interest Rate thereunder.
"Minimum Lifetime Mortgage Interest Rate": With respect to each ARM
Loan, the interest rate, if any, set forth in the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder.
"Month End Interest": With respect to any Mortgage Loan liquidated or
prepaid during a Prepayment Period, the difference between the interest that
would have been paid on such Mortgage Loan through the last day of the month in
which such liquidation or prepayment occurred and the interest actually received
by the Servicer with respect to such Mortgage Loan, in each case net of the
Servicing Fee applicable thereto. No Month End Interest shall accrue with
respect to a prepayment of a Mortgage Loan or to Liquidation Proceeds received
on account of any Mortgage Loan during the period from the first day of a month
through the last day of the Prepayment Period ending during such month.
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"Month End Interest Shortfall": The amount of Month End Interest not
paid by a Servicer or the Master Servicer.
"Monthly Payment": With respect to any Mortgage Loan and any month, the
scheduled payment of principal and interest due in such month under the terms of
the related Mortgage Note.
"Monthly Statement": The statement required to be prepared and delivered
to the Trustee by the Master Servicer on or before each Master Servicer
Reporting Date as described in Section 4.01 hereof.
"Mortgage Interest Rate": With respect to any Mortgage Loan, the annual
interest rate required to be paid by the related Borrower under the terms of the
related Mortgage Note.
"Mortgage Loan": Any of the Single Family Loans, Multi-Family Loans,
Home Improvement Loans, or Cooperative Loans sold by Saxon to the Trust and
listed on the Mortgage Loan Schedule to the Trust Agreement or any Subsequent
Sales Agreement and any loans substituted therefor pursuant to the terms of the
Trust Agreement.
"Mortgage Loan Schedule": The schedule(s) of the Mortgage Loans which
are attached to the Trust Agreement, in the case of the Initial Mortgage Loans,
and to the Subsequent Sales Agreement(s) in the case of Subsequent Mortgage
Loans, and set forth for each Mortgage Loan (i) the Servicer (Saxon) Loan
Number, (ii) the Borrower's name, (iii) the original principal balance, (iv) the
Scheduled Principal Balance as of the Cut-Off Date and (v) such additional
information as may be reasonably requested by the Trustee, the Master Servicer
or any Certificate Insurer.
"Mortgage Note": The note or other evidence of indebtedness of a
Borrower with respect to a Mortgage Loan.
"Mortgaged Premises": With respect to any Mortgage Loan other than a
Cooperative Loan, the real property or the leasehold interest, together with any
improvements thereon, securing the indebtedness of the Borrower under such
Mortgage Loan. With respect to any Cooperative Loan, the shares issued by a
cooperative housing corporation that secure the indebtedness of the Borrower
under such Cooperative Loan.
"Mortgagor Bankruptcy Fund": A fund consisting of: (i) a surety bond,
insurance policy, Letter of Credit, guarantee or other credit instrument, issued
by an insurance company, surety company, bank, trust company, savings and loan
association, financial institution or other Person or (ii) cash, Permitted
Investments or a Class of Certificates or portion thereof held by or on behalf
of the Trust. The Mortgagor Bankruptcy Fund will not be considered an asset of
the Trust or any REMIC, but shall be for the benefit of the Certificateholders.
The owner of the Mortgagor Bankruptcy Fund will be identified in the Trust
Agreement and, to the extent provided in the REMIC Provisions, any amounts
transferred by a REMIC to such fund shall be treated as amounts distributed by
such REMIC to the owner of such fund.
"Mortgagor Bankruptcy Losses": Losses resulting from any court ordered
reduction in the valuation of the Collateral securing a Mortgage Loan or changes
in the repayment terms of a Mortgage Loan in conjunction with a bankruptcy
proceeding of a Borrower or otherwise.
"Multi-Family Loan": A mortgage loan that is secured by a lien on a
rental apartment building, a cooperative housing corporation or a mixed
commercial and residential use property.
"Negative Amortization Amount": With respect to each Mortgage Loan, the
excess, if any, of interest accrued at the related Mortgage Interest Rate for
any month over the greater of (i) the amount of the Monthly Payment for such
month and (ii) the interest received in respect of such month.
"Net Rate": Unless otherwise provided in the Trust Agreement, with
respect to each Mortgage Loan and Distribution Date, the related Mortgage
Interest Rate less the sum of the Servicing Fee Rate, the Master Servicing Fee
Rate, the Trustee Fee Rate and the Credit Enhancement Fee Rate relating thereto.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed, modified or extended on behalf of the Trust
(if the Trustee, the Master Servicer, a Servicer or an agent of the foregoing
has the right to renegotiate the terms of such lease).
"Non-Recoverability Certificate": The meaning set forth in Section 3.04
hereof.
"Non-Recoverable Advance": Any Advance or proposed Advance that the
Master Servicer or the Trustee, as the case may be, has determined to be
non-recoverable in accordance with Section 3.04 hereof.
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"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income taxation regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to section 1441 or 1442 of the
Code and the Treasury regulations thereunder on income derived from a Residual
Interest.
"Officer": With respect to the Trustee, Custodian, Paying Agent,
Certificate Registrar or Master Servicer, any senior vice president, any vice
president, any assistant vice president, any assistant treasurer, any trust
officer, any assistant secretary, or any other officer customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, and also to whom, with respect to a particular corporate trust
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. With respect to any other Person, the
chairman of the board, the president, a vice president (however designated), the
treasurer or the controller of such Person.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
for Saxon or the Master Servicer, acceptable to the Trustee, the Certificate
Insurer and the Master Servicer. Except with the consent of each Rating Agency
and the Certificate Insurer, an Opinion of Counsel may not be delivered by
in-house counsel of the entity required to deliver such opinion.
"Pass-Through Rate": With respect to each Class of Certificates, as to
each Distribution Date, the rate specified as such in the Trust Agreement.
"Paying Agent": The paying agent designated in the related Trust
Agreement or appointed pursuant to Section 5.08 hereof.
"Percentage Interest": With respect to any Certificate to which a
principal balance is assigned as of the Closing Date, the portion of the Class
evidenced by such Certificate, expressed as a percentage, the numerator of which
is the initial Certificate Principal Balance of such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates of such Class as of the Closing Date. With respect to any
Certificate to which a principal balance is not assigned as of the Closing Date,
the portion of the Class evidenced by such Certificate, expressed as a
percentage, as stated on the face of such Certificate.
"Permitted Investments": Except as otherwise provided in the Trust
Agreement, the following investments:
(a) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(b) senior debt obligations and mortgage participation
certificates of the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation;
(c) repurchase obligations of a depository institution or trust
company (acting as principal) (the collateral for which is held by a
third party or the Trustee) with respect to any security described in
clauses (a) or (b) above, provided that the long-term or short-term
unsecured debt obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in one of its
two highest long-term unsecured debt rating categories and its highest
short-term unsecured debt rating category;
(d) certificates of deposit, time deposits and bankers'
acceptances of any bank or trust company (including the Trustee)
incorporated under the laws of the United States or any state thereof,
provided that the long-term unsecured debt obligations of such bank or
trust company at the date of acquisition thereof have been rated by each
Rating Agency in one of its two highest long-term unsecured debt rating
categories and the short term unsecured debt rating of such bank or
trust company at the date of acquisition thereof by each Rating Agency
is the highest short term unsecured debt rating by each Rating Agency;
(e) any other demand, money market or time deposit or obligation,
interest-bearing or other security or investment earning a return in the
nature of interest that would not adversely affect the then current
rating of the Certificates by any Rating Agency (without regard to the
existence of any Credit Enhancement); and
(f) any other investment approved by the Certificate Insurer;
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provided, however, that no investment described above shall constitute a
Permitted Investment if such investment evidences either the right to receive
(i) only interest with respect to the obligations underlying such instrument or
(ii) both principal and interest payments derived from obligations underlying
such instrument if the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; and, provided further, that no
investment described above shall constitute a Permitted Investment unless such
investment matures on or before the Business Day preceding the Distribution Date
on which the funds invested therein are required to be distributed (or, in the
case of an investment that is an obligation of the institution in which the
account is maintained, on or before such Distribution Date).
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Plan": Any "employee benefit plan" within the meaning of Section 3(3)
of ERISA, any retirement arrangement (including individual retirement accounts,
individual retirement annuities and Keogh plans), and any collective investment
funds, separate accounts, insurance company general accounts and similar pooled
investment funds in which such plans or arrangements are invested, that are
described in or subject to the Plan Asset Regulations, ERISA or corresponding
provisions of the Code.
"Plan Asset Regulations": The United States Department of Labor
regulations set forth in 29 C.F.R.ss.2510.3-101, as amended from time to time.
"Plan Investor": Any Plan, any Person acting on behalf of a Plan or
any Person using the assets of a Plan, as determined under the Plan Asset
Regulations.
"Pooling REMIC": With respect to any Double REMIC Series, unless
otherwise provided in the Trust Agreement, the REMIC consisting primarily of the
Mortgage Loans and the Asset Proceeds Account.
"Pre-Funding Account": An Eligible Account that may be established with
the Paying Agent for the purpose of providing for the purchase by the Trust of
Subsequent Mortgage Loans.
"Prepayment Period": The period specified in each Servicing Agreement
with respect to which prepayments or Liquidation Proceeds with respect to a
Mortgage Loan will be remitted on a Remittance Date.
"Private Certificate": Any Certificate designated as such in the Trust
Agreement.
"Private Subordinated Certificate": Any Certificate designated as such
in the Trust Agreement.
"Public Subordinated Certificate": Any Certificate designated as such in
the Trust Agreement.
"Purchase Price": With respect to each Mortgage Loan purchased from the
Trust, an amount equal to the Unpaid Principal Balance of such Mortgage Loan,
plus accrued and unpaid interest thereon at the related Mortgage Interest Rate
to the last day of the month in which such purchase occurs, and, if a Servicer
is the Purchaser, minus any unreimbursed Advances of principal and interest made
by such Servicer on such Mortgage Loan and any outstanding Servicing Fee owed
with respect to such Mortgage Loan.
"Purchaser": The Person that purchases a Mortgage Loan from the Trust
pursuant to Section 2.03 hereof.
"Qualification Defect": With respect to a Mortgage Loan, (i) a defective
document in the Trustee Mortgage Loan File, (ii) the absence of a document in
the Trustee Mortgage Loan File, or (iii) the breach of any representation,
warranty or covenant with respect to such Mortgage Loan made by a Seller, a
Servicer or Saxon, but only if the affected Mortgage Loan would cease to qualify
as a "qualified mortgage" for purposes of the REMIC Provisions. With respect to
a Regular Interest or a mortgage certificate described in section 860G(a)(3) of
the Code, the failure to qualify as a "qualified mortgage" for purposes of the
REMIC Provisions.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted by
Saxon or a Seller for a Deleted Mortgage Loan that, on the date of such
substitution: (i) has an Unpaid Principal Balance not greater than the Unpaid
Principal Balance of the Deleted Mortgage Loan, (ii) with respect to a fixed
rate Mortgage Loan, has a Mortgage Interest Rate not less than (and not more
than one percentage point in excess of) the Mortgage Interest Rate of the
Deleted Mortgage Loan, (iii) has a Net Rate not less than the Net Rate of the
Deleted Mortgage Loan,
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(iv) has a remaining term to maturity ending not later than one year prior to
the "latest possible maturity date" specified in the Trust Agreement, and (v)
complies with each applicable representation, warranty, and covenant pertaining
to an individual Mortgage Loan set forth in the Trust Agreement, was
underwritten on the basis of credit underwriting standards at least as strict as
the credit underwriting standards used with respect to the Deleted Mortgage Loan
and, if a Seller is effecting the substitution, complies with each applicable
representation, warranty, or covenant pertaining to an individual Mortgage Loan
set forth in the related Sales Agreement or Subsequent Sales Agreement;
provided, however, that no ARM Loan may be substituted for a Deleted Mortgage
Loan unless such Deleted Mortgage Loan is also an ARM Loan and, in addition to
meeting the conditions set forth above, the ARM Loan to be substituted, on the
date of the substitution: (a) provides for a lowest possible Net Rate that is
not lower than the lowest possible Net Rate for the Deleted Mortgage Loan and a
highest possible Net Rate that is not lower than the highest possible Net Rate
for the Deleted Mortgage Loan, (b) has a Gross Margin that is not less than the
Gross Margin of the Deleted Mortgage Loan, and (c) is not convertible to a fixed
Mortgage Interest Rate unless the Deleted Mortgage Loan is so convertible. If
more than one mortgage loan is substituted for one or more Deleted Mortgage
Loans, the amount described in clause (i) of the preceding sentence shall be
determined on the basis of aggregate Unpaid Principal Balances, the rates
described in clauses (ii) and (iii) of the preceding sentence and clause (a) of
the proviso to the preceding sentence shall be determined on the basis of
weighted average Mortgage Interest Rates and Net Rates, as the case may be, the
Gross Margins described in clause (b) of the proviso to the preceding sentence
shall be determined on the basis of weighted average Gross Margins. In the case
of a Trust for which a REMIC election has been or will be made, a Qualified
Substitute Mortgage Loan also shall satisfy the following criteria as of the
date of its substitution for a Deleted Mortgage Loan: (A) the Borrower shall not
be 59 or more days delinquent in payment on the Qualified Substitute Mortgage
Loan, (B) the Trustee Mortgage Loan File for such Mortgage Loan shall not
contain any material deficiencies in documentation and shall include an executed
Mortgage Note and a recorded Security Instrument; (C) the Loan to Value Ratio of
such Mortgage Loan must be 125% or less on the date of origination of such
Mortgage Loan or, if any of the terms of such Mortgage Loan were modified other
than in connection with a default or imminent default on such Mortgage Loan, on
the date of such modification; (D) no property securing such Mortgage Loan may
be subject to foreclosure, bankruptcy, or insolvency proceedings; (E) such
Mortgage Loan must be secured by a valid lien on the related Mortgaged Premises;
and (F) shall otherwise constitute an eligible asset for a REMIC under the REMIC
Provisions.
"Rating Agency": Each nationally recognized statistical rating agency
specified in the Trust Agreement that, on the Closing Date, rated one or more
Classes of Certificates at the request of Saxon.
"Realized Interest Shortfall": With respect to any Mortgage Loan, the
amount by which the interest payable thereon exceeds the net amount recovered
(including Insurance Proceeds) in liquidation thereof, after payment of expenses
of liquidation and reimbursement of Advances made with respect to such Mortgage
Loan.
"Realized Loss": With respect to any Mortgage Loan, an amount equal to
the sum of (i) the amount by which the Unpaid Principal Balance thereof exceeds
the net amount recovered in liquidation thereof (after payment of expenses of
liquidation and reimbursement of Advances), after payment of accrued interest on
such Mortgage Loan and after application of any Insurance Proceeds with respect
thereto, and (ii) any other types of principal loss with respect to such
Mortgage Loan, including, but not limited to, Mortgagor Bankruptcy Losses,
Special Hazard Losses and Fraud Losses.
"Record Date": Unless otherwise provided in the Trust Agreement, (i)
with respect to the first Distribution Date, the Closing Date, and (ii) with
respect to each Distribution Date thereafter, the last Business Day of the month
preceding the month in which such Distribution Date occurs.
"Recordation Report": A report substantially in the form of Exhibit B
attached hereto provided by the Trustee (or the Custodian) pursuant to Section
2.02 hereof identifying those Mortgage Loans for which a Security Instrument or
an Assignment remains unrecorded.
"Redeeming Purchase": The purchase of all the Regular Certificates
issued by the Trust pursuant to Section 9.01 hereof.
"Redemption Account": An escrow account maintained by the Trustee
into which any Trust funds not distributed on a Distribution Date on which
a Redeeming Purchase is made are deposited. The Redemption Account shall be an
Eligible Account.
"Redemption Date": The date, if any, specified as such in the Trust
Agreement.
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"Regular Certificate": A Certificate that represents a Regular Interest
or a combination of Regular Interests.
"Regular Interest": An interest in a REMIC that is designated as a
"regular interest" in such REMIC for purposes of the REMIC
Provisions.
"REMIC": With respect to a Trust, each "real estate mortgage investment
conduit," within the meaning of the REMIC Provisions, relating to such Trust.
"REMIC Provisions": The provisions of the Code relating to "real estate
mortgage investment conduits," which provisions appear at sections 860A through
860G of the Code, related Code provisions, and regulations, announcements and
rulings thereunder, as the foregoing may be in effect from time to time.
"Remittance Date": The date specified in the Servicing Agreement as
the date on which the related Servicer is to make the remittance required by
Section 3.01(b) hereof.
"Remittance Report": A report (either a data file or hard copy) that is
prepared by the Master Servicer in accordance with Section 4.02 hereof and
contains the information specified in Exhibit C attached hereto.
"Rents From Real Property": With respect to any REO Property, gross
income of the character described in section 856(d) of the Code and the Treasury
regulations thereunder.
"REO Disposition": The receipt by a Servicer of Insurance Proceeds and
other payments and recoveries (including Liquidation Proceeds) which a Servicer
recovers from the sale or other disposition of an REO Property.
"REO Property": A Mortgaged Premises acquired by a Servicer on behalf of
the Certificateholders through foreclosure or deed in lieu of foreclosure, as
further described in Section 3.08 hereof.
"Request for Release": A release signed by an Officer of a Servicer in
the form attached to the Servicing Agreement as Form 340 of a Servicing Guide
(or a similar certificate of the Master Servicer containing the same
information).
"Reserve Fund": Unless otherwise provided in the Trust Agreement, any
fund in the Trust Estate other than (i) the Asset Proceeds Account or (ii) any
other fund that is expressly excluded from a REMIC.
"Residual Certificate": A Certificate that represents a Residual
Interest.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" in such REMIC for purposes of the REMIC Provisions.
"Residual Transferee Agreement": An agreement substantially in the form
of Exhibit G attached hereto.
"Rule 144A": Rule 144A promulgated by the SEC, as the same may be
amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of
Exhibit D attached hereto.
"Sales Agreement": The Sales Agreement identified in the Trust
Agreement.
"Saxon": Saxon Asset Securities Company, a Virginia corporation.
"Scheduled Principal Balance": Unless otherwise provided in the Trust
Agreement, with respect to any Mortgage Loan as of any date of determination,
the scheduled principal balance thereof as of the Cut-Off Date, increased by the
Negative Amortization Amount, if any, with respect thereto, and reduced by (i)
the principal portion of all Monthly Payments due on or before such
determination date, whether or not paid by the Borrower or advanced by a
Servicer, the Master Servicer, the Trustee or an Insurer, (ii) all amounts
allocable to unscheduled principal payments received on or before the last day
of the Prepayment Period preceding such date of determination, and (iii) without
duplication, the amount of any Realized Loss that has occurred with respect to
such Mortgage Loan.
"SEC": The Securities and Exchange Commission and its successors.
"Securities Act": The Securities Act of 1933, as amended.
"Security Instrument": With respect to any Mortgage Loan, the mortgage,
deed of trust, deed to secure debt, security deed, or other instrument creating
a first, second, or more junior lien on the Collateral that secures the
indebtedness of the Borrower under such Mortgage Loan.
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"Seller": With respect to each Mortgage Loan, SMI or any other party
other than Saxon that executes a Sales Agreement applicable to such Mortgage
Loan.
"Senior Mortgage Loan": Any Mortgage Loan with respect to which the
related Security Instrument constitutes a lien of first priority on the related
Collateral.
"Series": A group of Certificates issued by the Trust.
"Servicer": With respect to each Mortgage Loan, the Person responsible
for the servicing thereof in accordance with the applicable Servicing Agreement.
"Servicer Compensation": The Servicing Fee and any additional
compensation payable to the Servicer.
"Servicing Agreement": Any agreement between a Servicer and SMI or Saxon
relating to the servicing of Mortgage Loans which is in form and substance
satisfactory to the Master Servicer.
"Servicing Fee": Unless otherwise provided in the Trust Agreement, with
respect to each Distribution Date and each Mortgage Loan, an amount equal to
one-twelfth of the applicable Servicing Fee Rate multiplied by the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the preceding Due
Period.
"Servicing Fee Rate": With respect to each Mortgage Loan, the rate
specified as such in the Trust Agreement.
Servicing Guide": The Saxon Mortgage, Inc. Servicing Guide for Credit-
Sensitive Loans, or other loan servicing guidelines adopted subject to Section
3.09 hereof, by a Servicer as may be referenced in the applicable Servicing
Agreement.
"Single Family Loan": A mortgage loan that is secured by a first,
second, or more junior lien on a one- to four-family residential property.
"SMI": Saxon Mortgage, Inc., a Virginia corporation.
"Special Hazard Fund": A fund consisting of: (i) a surety bond,
insurance policy, Letter of Credit, guarantee or other credit instrument issued
by an insurance company, surety company, bank, trust company, savings and loan
association, financial institution or other Person or (ii) cash, Permitted
Investments or a Class of Certificates or portion thereof held by or on behalf
of the Trust. The Special Hazard Fund will not be considered an asset of any
REMIC but shall be for the benefit of the Certificateholders. The owner of the
Special Hazard Fund will be identified in the Trust Agreement and, to the extent
provided in the REMIC Provisions, any amounts transferred by a REMIC to such
fund shall be treated as amounts distributed by such REMIC to the owner of such
fund.
"Special Hazard Insurance Policy": An insurance policy covering a
Mortgage Loan against (i) loss by reason of damage to Mortgaged Premises caused
by certain hazards not covered by any hazard insurance and (ii) partial loss
from damage to the Mortgaged Premises caused by reason of the application of the
coinsurance clause contained in any Hazard Insurance policy.
"Special Hazard Losses": Losses on Mortgage Loans arising by reason of
damage to Mortgaged Premises not covered by hazard insurance, excluding losses
caused by war, nuclear reaction, nuclear or atomic weapons, insurrection or
normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction
or activity will not (i) affect adversely the status of any REMIC as a REMIC or
of the Regular Interests as the "regular interests" therein under the REMIC
Provisions, (ii) affect the payment of interest or principal on the Regular
Interests or (iii) result in the encumbrance of the Mortgage Loans by a tax
lien.
"Standard Terms": These Standard Terms, as amended or supplemented from
time to time.
"State": The jurisdiction specified in the Trust Agreement.
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"Subaccount": With respect to any Double REMIC Series, each subaccount
of the Distribution Account that is deemed established by the Paying Agent
solely for purposes of the REMIC Provisions pursuant to Section 3.03(a) hereof.
"Subsequent Cut-Off Date": The time and date specified in a Subsequent
Sales Agreement with respect to those Subsequent Mortgage Loans which are
acquired by the Trust pursuant to such Subsequent Sales Agreement.
"Subsequent Mortgage Loans": Any of the Mortgage Loans listed on a
Mortgage Loan Schedule attached to a Subsequent Sales Agreement.
"Subsequent Sales Agreement": Each Subsequent Sales Agreement executed
by the Master Servicer (on behalf of itself and the Trustee), the Seller and SMI
by which Subsequent Mortgage Loans are sold to the Trust in the form attached to
the related Trust Agreement.
"Substitution Shortfall": The meaning set forth in Section 2.03(h)
hereof.
"TAPRI Certificate": A certificate signed by the transferor of a
Residual Certificate stating whether such Certificate has "tax avoidance
potential" as defined in Treasury regulations section 1.860G-3(a)(2).
"Tax Matters Person": The Person or Persons designated from time to time
under the Trust Agreement to act as the "tax matters person" (within the meaning
of the REMIC Provisions) of a REMIC.
"Title Insurance Policy": A title insurance policy insuring the title
to Mortgaged Premises for the benefit of the holder of the related Mortgage
Note.
"Transferee Agreement": An agreement substantially in the form of
Exhibit E attached hereto.
"Treasury": The United States Treasury Department.
"Trust": The trust formed pursuant to the Trust Agreement.
"Trust Agreement": The Trust Agreement among Saxon, the Master Servicer
and the Trustee relating to the issuance of Certificates and into which these
Standard Terms are incorporated by reference.
"Trust Estate": The segregated pool of assets transferred and assigned
and to be transferred and assigned to the Trustee for the benefit of the
Certificateholders by Saxon pursuant to the conveyance clause of the Trust
Agreement.
"Trustee": The bank or trust company identified as the Trustee in the
Trust Agreement.
"Trustee Fee": Unless otherwise provided in the Trust Agreement, with
respect to each Distribution Date and each Mortgage Loan, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Scheduled Principal
Balance of such Mortgage Loan as of the first day of the preceding Due Period.
"Trustee Fee Rate": The rate specified as such in the Trust Agreement.
"Trustee Mortgage Loan File": With respect to each Cooperative Loan, the
file containing the documents specified in the Trust Agreement. With respect to
each Mortgage Loan that is not a Cooperative Loan, unless otherwise specified in
the Trust Agreement, the file containing the following documents, together with
any other Mortgage Loan Documents held by the Trustee or the Custodian with
respect to such Mortgage Loan:
(a) the original Mortgage Note or lost note affidavits in lieu
thereof, provided the total original principal balances of
such Mortgage Loans evidenced by such affidavits do not exceed
in the aggregate 5% of the total original principal balances
of the Mortgage Loans on the Mortgage Loan Schedule, endorsed
in blank or to the Trustee or the Custodian with all prior and
intervening endorsements as may be necessary to show a
complete chain of endorsements from the originator (provided,
however, that SMI may direct such originator to endorse the
Mortgage Note directly to the Custodian pursuant to the Guide)
and any related power of attorney, surety or guaranty
agreement, Note Assumption Rider or buydown agreement, in each
case as has been identified on the Mortgage Loan Schedule;
(b) the original recorded Security Instrument with evidence of
recordation noted thereon or attached thereto, together with
any addenda or riders thereto, in each case as has been
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identified on the Mortgage Loan Schedule, or a copy of
such recorded Security Instrument with such evidence of
recordation certified to be true and correct by the
appropriate governmental recording office, or, if such
original Security Instrument has been submitted for
recordation but has not been returned from the applicable
public recording office, a photocopy of such Security
Instrument certified by an Officer of the Servicer or by the
title insurance company providing title insurance in respect
of such Security Instrument, the closing/settlement - escrow
agent or the closing attorney to be a true and correct copy of
the original Security Instrument submitted for recordation;
(c) each original recorded intervening assignment of the Security
Instrument, regardless of the date of such assignment or the
date of the acknowledgement thereon, as may be necessary to
show a complete chain of title from the originator to the
related Servicer, Trustee or Custodian, as applicable,
(provided, however, that SMI may direct such originator to
endorse the Mortgage Note directly to the Custodian
pursuant to the Guide) with evidence of recordation noted
thereon or attached thereto, or a copy of such assignment
with such evidence of recordation certified to be true and
correct by the appropriate governmental recording office or,
if any such Assignment has been submitted for recordation but
has not been returned from the applicable public recording
office or is not otherwise available,a copy of such certified
by an Officer of the Servicer to be a true and correct copy of
the recorded assignment or the assignment submitted for
recordation;
(d) if an assignment of the Security Instrument, regardless of the
date of such assignment or the date of the acknowledgement
thereon, to the related Servicer has been recorded or sent for
recordation, an original assignment of the Security Instrument
from such Servicer in blank or to the Trustee or the Custodian
in recordable form;
(e) in the case of a Mortgage Loan that is not identified in the
Mortgage Loan Schedule as a Junior Mortgage Loan of the type
described below, an original Title Insurance Policy,
Certificate of Title Insurance or a written commitment to
issue a Title Insurance Policy or Certificate of Title
Insurance or a copy of a Title Insurance Policy or
Certificate of Title Insurance certified as true and correct
by the applicable Insurer (or, in the case of a Mortgage
Loan for which the related Mortgaged Premises are located in
the state of Iowa, an attorney's opinion of title or written
commitment for the issuance thereof) and, in the case of a
Mortgage Loan identified as a Junior Mortgage Loan with a
principal balance of $50,000 or less, a representation of
the Seller in the Sales Agreement that (i) the related senior
mortgage loan is held by an institutional lender such as a
bank, other financial institution or mortgage company and
(ii) the Seller has determined based on a review of a
property profile or title report acceptable to such Seller
that the Borrower has valid title to the Mortgaged Premises;
(f) if indicated on a Schedule to the Trust Agreement or a
Subsequent Sales Agreement (or otherwise received by the
Trustee or the Custodian), the original or certified copies of
each assumption agreement, modification agreement, written
assurance or substitution agreement, if any; and
(g) any other items required by the Rating Agencies as a condition
to their provision of written confirmation that the ratings on
the rated Certificates will not be downgraded (without regard
to any Certificate Guaranty Insurance Policy) or required by
the Certificate Insurer.
"UCC": The Uniform Commercial Code, as in effect in the State from time
to time.
"Unpaid Principal Balance": With respect to any Mortgage Loan, the
outstanding principal balance thereof payable by the Borrower under the terms of
the related Mortgage Note.
"U.S. Person": A Person other than a Non-U.S. Person.
"Voting Rights": The portion of the voting rights of all the
Certificates that is allocated to any Certificate. Unless otherwise provided in
the Trust Agreement, (i) if any Class of Certificates does not have a
Certificate Principal Balance or has an initial Certificate Principal Balance
that is less than or equal to 1% of the aggregate Certificate Principal Balance
of all the Certificates, then 1% of the Voting Rights shall be allocated to each
Class of such Certificates and the balance of the Voting Rights shall be
allocated among the remaining Classes of Certificates in proportion to their
respective Certificate Principal Balances following the most recent Distribution
Date, and (ii) if no Class of Certificates has an initial Certificate Principal
Balance that is less than 1% of the aggregate Certificate Principal Balance of
all the Certificates, then all the Voting Rights shall be allocated among all
the Classes of Certificates in proportion to their respective Certificate
Principal Balances following the most recent Distribution Date. Voting Rights
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allocated to each Class of Certificates shall be allocated in proportion to the
respective Percentage Interests of the Holders thereof.
"Withholding Agent": The Paying Agent or any other person who is liable
to withhold federal income tax from a distribution on a Residual Certificate
under section 1441 or 1442 of the Code and the Treasury regulations thereunder.
Section 1.02. Section References; Calculations; Ratings; Consents
(a) Unless otherwise specified herein, all references in these Standard
Terms to sections shall mean sections contained in these Standard Terms.
(b) Unless otherwise provided in the Trust Agreement, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
(c) Unless otherwise provided in the Trust Agreement, all references
herein to any long-term rating category of a Rating Agency shall mean such
rating category without regard to any plus or minus or numerical designation.
(d) Whenever the consent of any Person is required hereunder, such
Person shall not be entitled to withhold its consent unreasonably.
Section 1.03. Certain Matters Relating to any Certificate Insurance
Policy
(a) The Trustee shall surrender any Certificate Insurance Policy to the
Certificate Insurer for cancellation upon termination of the Trust pursuant to
the applicable provisions of the Trust Agreement.
(b) Saxon makes the representations and warranties set forth in Section
2.04 and the Master Servicer makes the representations and warranties set forth
in Section 2.05 to the Certificate Insurer.
(c) All notices, statements, reports, certificates or opinions required
by the Trust Agreement to be sent to any party hereto or to any of the
Certificateholders shall also be sent to the Certificate Insurer. Any such
opinions shall be given by counsel reasonably acceptable to the Certificate
Insurer. The Trust and the Trustee shall make available to the Certificate
Insurer their books and records, during normal business hours, for the purpose
of copying and inspecting any information about the Certificates, the Trust
Estate or the Certificateholders.
(d) The Certificate Insurer shall be entitled to indemnification
pursuant to Section 5.05 and 6.01 hereof and to security or indemnity pursuant
to Section 5.06 hereof to the same extent as the parties named in those
Sections.
(e) Unless a Certificate Insurer Default exists and is continuing:
(i) The Certificate Insurer shall be entitled to exercise the
Voting Rights, other than with respect to amendments to the Trust
Agreement pursuant to Section 11.01 hereof requiring the consent of
Certificateholders, of any Class of the Certificates which are covered
by a Certificate Guaranty Insurance Policy issued by such Certificate
Insurer and the Certificateholders may not exercise such rights without
the prior written consent of the Certificate Insurer.
(ii) the Certificate Insurer shall have the right to institute
any suit, action or proceeding in equity or at law upon or under or
with respect to the Trust Agreement if it previously shall have given
the Trustee a written notice of default and of the continuance thereof
and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding;
(iii) the Certificate Insurer's prior written consent will be
required (A) to remove any Trustee, Custodian, Master Servicer or
Servicer, (B) to appoint any successor Trustee, Custodian, Master
Servicer or Servicer or (C) to amend the Trust Agreement, a Servicing
Agreement or a Servicing Guide;
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(iv) the Certificate Insurer may give notice to the Master
Servicer and the Trustee with respect to Events of Default and may
direct the Trustee to give any notice pursuant to Section 7.02(a)
hereof or to exercise any right to remove any Trustee, Custodian,
Master Servicer or Servicer;
(v) the Trustee shall not exercise the right, without the
prior written consent of the Certificate Insurer (A) to consent to the
resignation of the Master Servicer pursuant to Section 6.04 hereof or
any assignment or delegation of duties pursuant to Section 6.06 hereof;
(B) consent to the resignation of a Servicer pursuant to a Servicing
Agreement; (B) to undertake any litigation pursuant to the Agreement;
(C) to exercise any of the remedies set forth in Section 7.01 or
Section 7.02 hereof; or (v) to agree to any amendment to any Sales
Agreement (or the transfer or assignment thereof), any Servicing
Agreement or the Custody Agreement; and
(vi) the Trustee shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests hereunder or
under the Trust Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein or under the
Trust Agreement.
(f) Whenever reference is made in these Standard Terms, the Trust
Agreement or the Certificates to "on behalf of the Certificateholders (and for
the exclusive use and benefit of all present and future Certificateholders)",
"the benefit of the Certificateholders", or "for the benefit of the
Certificateholders", such references shall be deemed to include the Certificate
Insurer, and references to "the interest of the Trust", "an adverse effect on
the Certificateholders or the Trust" or "the interests of the
Certificateholders" shall be deemed to include the Certificate Insurer.
(g) This Section 1.03 and references to Certificate Insurer in the
Standard Terms shall be deemed to be deleted with respect to any Trust Agreement
if a Certificate Guaranty Insurance Policy is not issued with respect to one or
more Classes of Certificates issued pursuant thereto.
Article II
Mortgage Loan Files
Section 2.01. Mortgage Loan Files
(a) Pursuant to the Trust Agreement, Saxon has sold to the Trustee, for
the benefit of the Certificateholders without recourse all the right, title and
interest of Saxon in and to the Initial Mortgage Loans, any and all rights,
privileges and benefits accruing to Saxon under the Sales Agreement and
Servicing Agreement with respect to the Initial Mortgage Loans (except, in the
case of the Sales Agreement, any rights of Saxon to fees and indemnification by
the Seller under such Agreement), including the rights and remedies with respect
to the enforcement of any and all representations, warranties and covenants
under such agreements, and all other agreements and assets included or to be
included in the Trust for the benefit of the Certificateholders as set forth in
the conveyance clause of the Trust Agreement. Such sale includes all Saxon's
rights to Monthly Payments on the Initial Mortgage Loans due after the Cut-Off
Date, and all other payments of principal (and interest) made on or after the
Cut-Off Date that are reflected in the initial aggregate Certificate Principal
Balance of the Certificates issued pursuant to the Trust Agreement (other than
amounts deposited in a Pre-Funding Account).
In connection with such sale, Saxon shall deliver, or cause to be
delivered, to the Trustee or the Custodian on or before the Closing Date, a
Trustee Mortgage Loan File with respect to each Initial Mortgage Loan. If any
Security Instrument or assignment of a Security Instrument to the related
Servicer, the Trustee, or the Custodian, as applicable, or any intervening
assignment is in the process of being recorded on the Closing Date, Saxon shall
cause each such original recorded document, or a certified copy thereof, to be
delivered to the Custodian promptly following its recordation. Saxon also shall
cause to be delivered to the Custodian any other original Mortgage Loan
Documents to be included in the Trustee Mortgage Loan File if a copy thereof
initially was delivered.
Saxon has delivered or caused to be delivered to each Servicer, on or
before the Closing Date, a Servicer File with respect to each Initial Mortgage
Loan serviced by such Servicer. All such documents shall be held by such
Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(b) Pursuant to the Trust Agreement, Saxon may sell to the Trustee, for
the benefit of the Certificateholders without recourse all the right, title and
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interest of Saxon in and to the Subsequent Mortgage Loans, any and all rights,
privileges and benefits accruing to Saxon under the Subsequent Sales Agreements
and the Servicing Agreement with respect to the Mortgage Loans (except, in the
case of the Subsequent Sales Agreement, any rights of Saxon to fees and
indemnification by the Seller under such Agreement), including the rights and
remedies with respect to the enforcement of any and all representations,
warranties and covenants under such agreements, and all other agreements and
assets included or to be included in the Trust for the benefit of the
Certificateholders as set forth in the conveyance clause of the Trust Agreement.
Any such sale shall include all Saxon's rights to Monthly Payments on the
Subsequent Mortgage Loans due after the applicable Subsequent Cut-Off Date, and
all other payments of principal (and interest) made on or after the applicable
Subsequent Cut-Off Date that are reflected in the purchase price therefor.
In connection with any such sale, Saxon shall deliver, or cause to be
delivered, to the Trustee or the Custodian on or before the applicable
Subsequent Sales Date, a Trustee Mortgage Loan File with respect to each
Mortgage Loan. If any Security Instrument or assignment of a Security Instrument
to the related Servicer, the Trustee, or the Custodian, as applicable, or any
intervening assignment is in the process of being recorded on the applicable
Subsequent Sales Date, Saxon shall cause each such original recorded document,
or a certified copy thereof, to be delivered to the Custodian promptly following
its recordation. Saxon also shall cause to be delivered to the Custodian any
other original Mortgage Loan Documents to be included in the Trustee Mortgage
Loan File if a copy thereof initially was delivered.
Saxon will deliver or cause to be delivered to each Servicer, on or
before the applicable Subsequent Sales Date, a Servicer File with respect to
each Mortgage Loan serviced by such Servicer. All such documents shall be held
by such Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
Section 2.02. Acceptance by the Trustee
(a) By its execution of the Trust Agreement, each of the Trustee and the
Custodian 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 each
Mortgage Loan and all assets included in the Trust Estate in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee represents and warrants that (i) it acquired the Initial Mortgage Loans,
and will acquire Subsequent Mortgage Loans, on behalf of the Trust from Saxon in
good faith, for value and without actual notice or actual knowledge of any
adverse claim, lien, charge, encumbrance or security interest (including, but
not limited to, federal tax liens or liens arising under ERISA) (it being
understood that the Trustee has not undertaken, and will not undertake, searches
(lien records or otherwise) of any public records), (ii) except as permitted in
the Trust Agreement, it has not and will not, in any capacity, assert any claim
or interest in the Mortgage Loans and will hold (or its agent will hold) such
Mortgage Loans and the proceeds thereof in trust pursuant to the terms of the
Trust Agreement and (iii) it has not encumbered or transferred its right, title
or interest in the Mortgage Loans.
In order to facilitate sales and deliveries of Mortgage Loans pursuant
to the Trust Agreement, the Trustee may execute and deliver one or more
remittance agency agreements in substantially the form of Exhibit J hereto, or
such other similar form as may be attached to the Trust Agreement (each, a
"Remittance Agency Agreement"), and in such event the Trustee: (i) shall perform
the duties of Remittance Agent (as that term is defined in the related
Remittance Agency Agreement); and (ii) may accept as conclusive evidence of the
release of the related security interests one or more security release
certifications in substantially the form attached as Exhibit K hereto, or such
other similar form as may be attached to the Trust Agreement (each, a "Security
Release Certification").
(b) The Custodian shall deliver to Saxon, the Trustee and the Master
Servicer, on the Closing Date with respect to the Initial Mortgage Loans and on
each Subsequent Sale Date with respect to the related Subsequent Mortgage Loans,
an Initial Certification certifying that, except as specifically noted on a
schedule of exceptions thereto and subject to its review as herein provided, it
is in possession of a Trustee Mortgage Loan File for each such Mortgage Loan
that includes each of the documents required to be included therein. Before
delivering the Initial Certification, the Custodian shall have examined each
Trustee Mortgage Loan File to confirm that (except as specifically noted on a
schedule of exceptions thereto):
(i) except for the endorsement required pursuant to clause (a) of
the definition of Trustee Mortgage Loan File, the Mortgage Note, on the
face or the reverse side thereof, does not contain evidence of any
unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(ii) the Mortgage Note bears an endorsement (which appears to be
an original) as required pursuant to clause (a) of the definition of
Trustee Mortgage Loan File;
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(iii) all documents required to be contained in the Trustee
Mortgage Loan File are in its possession or in the possession of a
Custodian on its behalf;
(iv) such documents have been reviewed by it, or by a Custodian
on its behalf, relate to such Mortgage Loan and are not torn or
mutilated; and
(v) based on its examination, or the examination by a Custodian
on its behalf, and only as to the foregoing documents, the information
set forth on the Mortgage Loan Schedule accurately reflects the
information set forth in the Trustee Mortgage Loan File.
It is understood that, before delivering the Initial Certification, the
Custodian shall examine the Mortgage Loan Documents to confirm that:
(A) each Mortgage Note and Security Instrument bears a signature
or signatures that appear to be original and that purport to be that of the
Person or Persons named as the maker and mortgagor/trustor or, if photocopies
are permitted under the definition of Trustee Mortgage Loan File, that such
copies bear a reproduction of such signature or signatures;
(B) except for the endorsement required pursuant to clause (a) of
the definition of Trustee Mortgage Loan File, neither the Security Instrument
nor any assignment, on the face or the reverse side thereof, contains evidence
of any unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(C) the principal amount of the indebtedness secured by the
Security Instrument is identical to the original principal amount of the
Mortgage Note;
(D) the assignment of the Security Instrument from the Seller, or
from the originator of the related Mortgage Loan to the Custodian as the case
may be, is in the form required pursuant to clause (c) of the definition of
Trustee Mortgage Loan File and bears a signature or signatures that appear to be
original and that purport to be that of the Seller and any other necessary party
or, if photocopies are permitted under the definition of Trustee Mortgage Loan
File, that such copies bear a reproduction of such signature or signatures;
(E) if intervening assignments are to be included in the Trustee
Mortgage Loan File, each such intervening assignment bears a signature or
signatures that appear to be original and that purport to be that of the
Mortgagee and/or the assignee (and any other necessary party) or, if photocopies
are permitted under the definition of Trustee Mortgage Loan File, that such
copies bear a reproduction of such signature or signatures;
(F) if either a Title Insurance Policy, a Certificate of Title
Insurance or a written commitment to issue a Title Insurance Policy is
delivered, the address of the real property set forth in such policy, report or
written commitment is substantially identical to the address of the real
property contained in the Security Instrument; and
(G) if a Title Insurance Policy or Certificate of Title Insurance
is delivered with respect to a Mortgage Loan, such policy or certificate: (i) is
for an amount not less than the original principal amount of the related
Mortgage Note and (ii) insures (x) in the case of a Senior Mortgage Loan, that
the Security Instrument constitutes a valid first lien, senior in priority to
all other related deeds of trust, mortgages, deeds to secure debt, financing
statements and security agreements and to any related mechanic's liens, judgment
liens or writs of attachment and (y) in the case of a Junior Mortgage Loan, that
the Security Instrument constitutes a valid second or more junior lien, senior
in priority to any related mechanic's liens, judgment liens or writs of
attachment but subordinate in priority to certain related deeds of trust,
mortgages, deeds to secure debt, financing statements and security agreements
with respect to the related Collateral of higher priority (or, if a written
commitment to issue a Title Insurance Policy is delivered with respect to a
Mortgage Loan, such written commitment obligates the insurer to issue such
policy for an amount not less than the original principal amount of the related
Mortgage Note).
(c) Prior to the first anniversary of the Closing Date, the Custodian
shall deliver to Saxon and the Master Servicer a Final Certification evidencing
the completeness of the Trustee Mortgage Loan File for each Mortgage Loan, with
any applicable exceptions noted on such certification.
(d) In delivering each of the certifications required above, the
Custodian shall be under no duty or obligation (i) to inspect, review or examine
any such documents, instruments, securities or other papers to determine that
they or the signatures thereon are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
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other than what they purport to be on their face or that any document that
appears to be an original is in fact an original or (ii) to determine whether
any Trustee Mortgage Loan File should include any power of attorney, surety or
guaranty agreement, note assumption rider, buydown agreement, assumption
agreement, modification agreement, written assurance or substitution agreement.
(e) On or before the fifth Business Day of each third month, commencing
the fourth month following the month in which the Closing Date occurs, the
Custodian shall deliver to the Seller a Recordation Report, dated as of the
first day of such month, identifying those Mortgage Loans for which it has not
yet received (i) an original recorded Security Instrument or a copy thereof
certified to be true and correct by the public recording office in possession of
such Security Instrument, (ii) an original recorded assignment of the Security
Instrument to the related Servicer, the Trustee or the Custodian, as applicable,
and any required intervening assignments or copies thereof, in each case,
certified to be a true and correct copy by the public recording office in
possession of such assignment, or (iii) if an assignment of the Security
Instrument to the related Servicer has been recorded or sent for recordation, an
original assignment of the Security Instrument from such Servicer in blank or to
the Trustee or the Custodian in recordable form.
(f) The Trustee may, in accordance with Section 8.11 hereof, appoint one
or more Custodians to hold the Trustee Mortgage Loan Files on its behalf and to
review the Trustee Mortgage Loan Files as provided in this Section 2.02. Saxon
shall, upon notice of the appointment of a Custodian, deliver or cause to be
delivered all documents to such Custodian that would otherwise be delivered to
the Trustee. In such event, the Trustee shall obtain from each such Custodian
will deliver, within the specified times, the Initial Certifications, Final
Certifications, and Recordation Reports with respect to the Mortgage Loans held
and reviewed by such Custodian to Saxon and the Master Servicer in satisfaction
of the Trustee's obligation to prepare such certifications and reports. The
Trustee shall notify the Custodian of any notices delivered to the Trustee with
respect to the Trustee Mortgage Loan Files held by the Custodian.
(g) During the Custodian's review, the Custodian will create as to each
Trust Estate a report substantially of the form of Exhibit I hereto setting
forth the particular respects in which any Mortgage File fails to satisfy the
definition of "Trustee Mortgage Loan File" herein, and shall be under no duty or
obligation to report any other exceptions to a Mortgage File. Exhibit I may be
replaced from time to time with the consent of the Depositor, the Trustee and
the Master Servicer.
Section 2.03. Purchase or Substitution of Mortgage Loans by a Seller, a
Servicer or Saxon
(a) Seller Breach. Upon discovery or notice of any defective document in
a Trustee Mortgage Loan File or of any breach by a Seller of any of its
representations, warranties or covenants under a Sales Agreement, which defect
or breach materially and adversely affects the value of any Mortgage Loan or the
interest of the Trust therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the value of
such Mortgage Loan or the interest of the Trust therein if the Trust incurs a
loss as a result of such defect or breach), the Custodian or the Trustee shall
promptly notify the Master Servicer of such defect or breach and direct the
Master Servicer to request that the Seller of such Mortgage Loan cure such
defect or breach and, if such Seller does not cure such defect or breach in all
material respects within 60 days from the date on which it is notified of such
defect or breach, to enforce such Seller's obligation under the Sales Agreement
to purchase such Mortgage Loan from the Trustee. In lieu of purchasing any such
Mortgage Loan as provided above, if so provided in the Sales Agreement, the
Seller may cause such Mortgage Loan to be removed from the Trust (in which case
it shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(h) hereof. Notwithstanding the foregoing, if such defect or
breach is or results in a Qualification Defect, such cure, purchase or
substitution must take place within 75 days of the Defect Discovery Date. It is
understood and agreed that enforcement of the obligation of the Seller to cure,
purchase or substitute for any Mortgage Loan as to which a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such defect or breach
available to the Trustee on behalf of the Certificateholders; provided, however,
that such provision shall not limit the indemnification provisions of Section
8.05 hereof or of any Sales Agreement.
(b) Servicer Breach. In addition to taking any action required pursuant
to Section 7.01, upon discovery or notice of any breach by a Servicer of any
representation, warranty or covenant under the Servicing Agreement which
materially and adversely affects the value of any Mortgage Loan or the interest
of the Trust therein (it being understood that any such breach shall be deemed
to have materially and adversely affected the value of such Mortgage Loan or the
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interest of the Trust therein if the Trust incurs a loss as a result of such
breach), the Trustee shall promptly notify the Master Servicer of such breach
and direct the Master Servicer to request that the Servicer of such Mortgage
Loan cure such breach and, if such Servicer does not cure such breach in all
material respects within 60 days from the date on which it is notified of such
breach, to enforce the obligation of such Servicer under the Servicing Agreement
to purchase such Mortgage Loan from the Trustee. Notwithstanding the foregoing,
if such breach results in a Qualification Defect, such cure or purchase must
take place within 75 days of the Defect Discovery Date.
If a Seller has breached a representation or warranty under a Sales
Agreement that is substantially identical to a representation or warranty
breached by a Servicer, the Master Servicer shall first proceed against such
Seller. If such Seller does not, within 60 days after notification of the
breach, take steps to cure such breach or purchase or substitute for the
Mortgage Loan, the Master Servicer shall enforce the obligation of such Servicer
under the Servicing Agreement to cure such breach or purchase the Mortgage Loan
from the Trust as provided in this Section 2.03(b).
Except as specifically set forth herein, the Trustee shall have no
responsibility to enforce any provision of the Sales Agreement or Servicing
Agreements assigned to it hereunder, to oversee compliance therewith, or to take
notice of any breach or default thereunder. No successor servicer shall have any
obligation to repurchase a Mortgage Loan except to the extent specifically set
forth in the Servicing Agreement signed by such successor servicer.
(c) Saxon Breach. Within 90 days of the earlier of discovery or receipt
of notice by Saxon of the breach of any of its representations or warranties set
forth in Section 2.04 hereof with respect to any Mortgage Loan, which breach
materially and adversely affects the value of such Mortgage Loan or the interest
of the Trust therein (it being understood that any such breach shall be deemed
to have materially and adversely affected the value of such Mortgage Loan or the
interest of the Trust therein if the Trust incurs a loss as a result of such
breach), Saxon shall (i) cure such breach in all material respects, (ii)
purchase such Mortgage Loan from the Trustee, or (iii) remove such Mortgage Loan
from the Trust (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(h) hereof. Notwithstanding
the foregoing, if such breach results in a Qualification Defect, such cure,
purchase or substitution must take place within 75 days of the Defect Discovery
Date.
(d) Assignment Failure. If an Assignment of a Security Instrument to the
related Servicer, the Trustee, or the Custodian, as applicable, as required
pursuant to the definition of Trustee Mortgage Loan File has not been recorded
within one year of the Closing Date, the Master Servicer shall enforce the
related Servicer's obligation set forth in the related Servicing Agreement
either to (i) purchase the related Mortgage Loan from the Trustee on behalf of
the Certificateholders or (ii) if there have been no defaults in the Monthly
Payments on such Mortgage Loan, deposit an amount equal to the Purchase Price of
such Mortgage Loan into an escrow account maintained by the Paying Agent (which
account shall not be an asset of the Trust or any REMIC) as required by the
related Servicing Agreement. Any such amounts deposited to an escrow account,
plus any earnings thereon, shall (i) be released to the related Servicer upon
receipt by the Trustee of satisfactory evidence that an Assignment has been
recorded in the name of such Servicer, the Trustee, or the Custodian, as
applicable, as required pursuant to the definition of Trustee Mortgage Loan File
(and, if the Assignment has been recorded in the name of the Servicer,
satisfactory evidence that an original Assignment from such Servicer in blank or
to the Trustee or the Custodian in recordable form has been deposited into the
Trustee Mortgage Loan File) or (ii) be applied to purchase the related Mortgage
Loan if the Master Servicer notifies the Trustee that there has been a default
thereon. Any amounts in the escrow account may be invested in Permitted
Investments at the written direction of the Master Servicer.
(e) Converted Mortgage Loans. Upon receipt of written notice from the
Servicer of the conversion of any ARM Loan to a Converted Mortgage Loan, the
Master Servicer shall enforce the Servicer's obligation, if any, set forth in
the Servicing Agreement or the Seller's obligation, if any, set forth in the
Sales Agreement to purchase such Converted Mortgage Loan from the Trustee. If
the Servicer or the Seller defaults upon its obligation to purchase any
Converted Mortgage Loan, and such default remains unremedied for a period of
five Business Days after written notice of such default shall have been given by
the Master Servicer to the Servicer or the Seller, as applicable, then the
Master Servicer shall use its best efforts to cause such Converted Mortgage Loan
to be sold for settlement on the last day of any month to any Person which the
Master Servicer may in its sole discretion select. The Master Servicer shall not
cause a Converted Mortgage Loan to be sold or otherwise transferred to a Person
other than the Servicer or the Seller (or any other Person who has a preexisting
obligation to purchase such Mortgage Loan) unless (i) upon such sale or other
transfer the Trust would receive a net amount at least equal to the Purchase
Price and (ii) if the Purchase Price exceeds the Basis Limit Amount, the Master
Servicer receives an Opinion of Counsel (which Opinion of Counsel will not be an
expense of the Master Servicer or the Trustee) that such sale or other transfer
will not result in the imposition of a "prohibited transaction" tax (as such
term is defined in the Code) on the related REMIC or jeopardize its status as a
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REMIC. Any such Converted Mortgage Loan which is not purchased by the Servicer
or the Seller and which the Master Servicer is unable to sell shall remain in
the Trust.
(f) Delinquent Mortgage Loans. Saxon may, but is not obligated to,
purchase any Mortgage Loan that is delinquent in payment by 90 days or more for
a price equal to the greater of the Purchase Price for such Mortgage Loan or the
fair market value thereof at the time of purchase.
(g) Purchase Price. Unless otherwise provided in the Trust Agreement,
the purchase of any Mortgage Loan from the Trust pursuant to this Section 2.03
shall be effected for the related Purchase Price. If the Purchaser is a
Servicer, the Purchase Price shall be deposited into its Servicer Custodial
Account. If the Purchaser is other than the Servicer, the Purchase Price shall
be deposited into the Master Servicer Custodial Account. Within five Business
Days of its receipt of such funds or certification by the Master Servicer that
such funds have been deposited in the appropriate Servicer Custodial Account or
in the Master Servicer Custodial Account, the Trustee shall release or cause to
be released to the Purchaser the related Trustee Mortgage Loan File and the
related Servicer File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, in form as presented by the
Purchaser and satisfactory to the Trustee, as shall be necessary to vest in the
Purchaser title to any Mortgage Loan released pursuant hereto and the Trustee
shall have no further responsibility with regard to such Trustee Mortgage Loan
File or Servicer File. The Master Servicer shall use its best efforts to cause
the Servicer of any Deleted Mortgage Loan to release to the Purchaser the
Servicer File relating thereto.
(h) Substitution. Unless otherwise provided in the Trust Agreement, the
right to substitute a Qualified Substitute Mortgage Loan for any Deleted
Mortgage Loan that is an asset of the Trust shall be limited to (i) in the case
of substitutions pursuant to Section 2.03(a) or 2.03(c) hereof, the one-year
period beginning on the Closing Date and (ii) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Deleted Mortgage Loan for which Saxon or a Seller substitutes
one or more Qualified Substitute Mortgage Loans, Saxon or the Seller, as the
case may be, shall effect such substitution by delivering to the Custodian for
each such Qualified Substitute Mortgage Loan the related Mortgage Note, the
related Security Instrument, the related Assignment(s), and such other documents
and agreements, with all necessary endorsements thereon, as are required to be
included in the Trustee Mortgage Loan File pursuant to Sections 1.01 and 2.01
hereof, together with a certificate of an Officer of Saxon to the effect that
each such Qualified Substitute Mortgage Loan complies with the terms of the
Trust Agreement and notify the Master Servicer and the Trustee in writing of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust and will
be retained by Saxon or the Seller, as the case may be. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Deleted Mortgage Loan on or before the first day of the
month in which the substitution occurs, and Saxon or the Seller, as the case may
be, shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Master Servicer shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of the Trust Agreement and the substitution of each such Qualified
Substitute Mortgage Loan. Each Qualified Substitute Mortgage Loan shall be
subject, as of the date of its substitution, to the terms of the Trust Agreement
in all respects (including the representations and warranties of Saxon with
respect to the Mortgage Loans set forth in the Trust Agreement). In addition, in
the case of any substitution effected by a Seller, each Qualified Substitute
Mortgage Loan shall be subject, as of the date of its substitution, to the terms
of the related Sales Agreement (including the representations and warranties of
the Seller with respect to the Mortgage Loans set forth in the Sales Agreement).
The Trustee shall, within five Business Days of its receipt of the documents
referred to above, effect the conveyance of such Deleted Mortgage Loan to Saxon
or the Seller, as the case may be, in accordance with the procedures specified
above.
For any month in which Saxon or a Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer shall determine and notify the Trustee in writing of the amount,
if any, by which the aggregate Unpaid Principal Balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after
application of Monthly Payments due in the month of substitution) (the
"Substitution Shortfall"). On the date of such substitution, Saxon or the
Seller, as the case may be, shall deliver or cause to be delivered to the Paying
Agent, for deposit into the Asset Proceeds Account, an amount equal to the
Substitution Shortfall.
(i) Determination of Purchase Price. The Master Servicer shall be
responsible for determining the Purchase Price of any Mortgage Loan for purposes
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of this Section 2.03 and, where appropriate, the Basis Limit Amount for any
Converted Mortgage Loan that is sold by the Trust, and shall at the time of any
purchase or escrow of funds pursuant to this Section 2.03 certify such amounts
to the Trustee. If the Master Servicer shall certify to the Trustee in writing
that there is a miscalculation of the amount to be paid to the Trust, the
Trustee shall, from moneys in the Asset Proceeds Account, return any overpayment
that the Trust received as a result of such miscalculation to the applicable
Purchaser upon the discovery of such overpayment, and the Master Servicer shall
collect from the applicable Purchaser for payment to the Trustee any
underpayment that resulted from such miscalculation upon the discovery of such
underpayment. Recovery may be made either directly or by set-off of all or any
part of such underpayment against amounts owed by the Trust to such Purchaser.
(j) Qualification Defect. If (i) any Person required to cure, purchase
or substitute for a Mortgage Loan affected by a Qualification Defect under the
terms of the Trust Agreement or a separate agreement fails to perform within the
earlier of (A) 75 days of the Defect Discovery Date or (B) the time limit set
forth in the Trust Agreement or such separate agreement or (ii) no Person is
obligated to cure, purchase or substitute for a Mortgage Loan affected by a
Qualification Defect, the Trustee shall dispose of such Mortgage Loan in such
manner and for such price as the Master Servicer notifies the Trustee in writing
are appropriate, provided that the removal of such Mortgage Loan occurs on or
before the 90th day from the Defect Discovery Date. It is the express intent of
the parties that a Mortgage Loan affected by a Qualification Defect be removed
from the Trust before the 90th day from the Defect Discovery Date so that the
related REMIC(s) will continue to qualify as a REMIC(s). Accordingly, the
Trustee is not required to sell an affected Mortgage Loan for its fair market
value nor shall the Trustee be required to make up any shortfall resulting from
the sale of such Mortgage Loan. The Person failing to cure, purchase, or
substitute for a Mortgage Loan as required under the terms of the Trust
Agreement shall be liable to the Trust for (i) any difference between (A) the
Unpaid Principal Balance of the Mortgage Loan plus accrued and unpaid interest
thereon at the related Mortgage Interest Rate to the date of disposition and (B)
the net amount received by the Trustee from the disposition (after the payment
of related expenses), (ii) interest on such difference at the related Mortgage
Interest Rate from the date of disposition to the date of payment and (iii) any
legal and other expenses incurred by or on behalf of the Trust in seeking such
payments. The Master Servicer shall pursue the legal remedies of the Trust
relating to this Section 2.03(j) on the Trust's behalf, and the Trust shall
reimburse the Master Servicer for any legal or other expenses of the Master
Servicer related to such pursuit not recovered from the Person that failed to
cure, purchase, or substitute for a Mortgage Loan as required under the terms of
the Trust Agreement.
(k) Any Person required under this Section 2.03 to give notice or to
make a request of another Person to give notice shall give such notice or make
such request promptly.
Section 2.04. Representations and Warranties of Saxon
Saxon hereby represents and warrants to the Trustee and the Master
Servicer that as of the Closing Date or as of such other date specifically
provided herein:
(a) Saxon has been duly incorporated and is validly existing as a
corporation and in good standing under the laws of the Commonwealth of
Virginia with full power and authority (corporate and other) to own its
properties and conduct its business as now conducted by it and to enter
into and perform its obligations under the Trust Agreement, and has duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases any material properties, except
where the failure so to qualify would not have a material adverse effect
on Saxon;
(b) The Trust Agreement, assuming due authorization, execution
and delivery by the Trustee and the Master Servicer, constitutes a
legal, valid and binding agreement of Saxon, enforceable against Saxon
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law;
(c) Neither the execution and delivery by Saxon of the Trust
Agreement, nor the consummation by Saxon of the transactions therein
contemplated, nor compliance by Saxon with the provisions thereof, will
(i) conflict with or result in a breach of, or constitute a default
under, any of the provisions of the articles of incorporation or by-laws
of Saxon or any law, governmental rule or regulation or any judgment,
decree or order binding on Saxon or any of its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other
instrument to which Saxon is a party or by which it is bound or (ii)
result in the creation or imposition of any lien, charge, or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument;
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(d) There are no actions, suits or proceedings against, or
investigations of, Saxon pending, or, to the knowledge of Saxon,
threatened, before any court, administrative agency or other tribunal
(i) asserting the invalidity of the Trust Agreement or (ii) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the Trust Agreement;
(e) As of the Closing Date with respect to each Initial Mortgage
Loan and as of each Subsequent Sale Date with respect to each related
Subsequent Mortgage Loan:
(i) The information set forth in the related Mortgage
Loan Schedule with respect to such Mortgage Loan is true and
correct in all material respects at the date or dates with
respect to which such information is furnished;
(ii) Saxon either is (i) the owner of such Mortgage Loan
or (ii) the holder of a first, second, or more junior (as
applicable) priority perfected security interest in the
Collateral securing such Mortgage Loan subject, in the case of
any Junior Mortgage Loan, to any lien on the related Collateral
that is senior in priority to the lien represented by such loan,
and subject, in the case of any Mortgage Loan, to any exceptions
of title set forth in the title insurance policy with respect to
such loan that are generally acceptable to home equity mortgage
lending institutions and such other exceptions to which similar
properties commonly are subject, provided such exceptions do not
individually, or in the aggregate, materially and adversely
affect the benefits of the security intended to be provided by
the related Collateral;
(iii) Saxon has acquired its ownership of, or security
interest in, such Mortgage Loan in good faith without notice of
any adverse claim;
(iv) Saxon has not assigned any interest or participation
in such Mortgage Loan (or, if any such interest or participation
has been assigned, it has been released); and
(e) Saxon has full right to sell the Trust Estate to the Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Trustee
Mortgage Loan Files to the Trustee and shall inure to the benefit of the Trustee
notwithstanding any restrictive or qualified endorsement or assignment. Upon the
discovery by Saxon, the Master Servicer or the Trustee of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interest of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties to the
Trust Agreement. It is understood and agreed that the obligations of Saxon set
forth in Section 2.03(c) to cure, repurchase or substitute for a Mortgage Loan
constitute the sole remedies available to the Certificateholders or to the
Trustee on their behalf respecting a breach of the representations and
warranties contained in this Section 2.04. It is further understood and agreed
that Saxon shall be deemed not to have made the representations and warranties
in this Section 2.04 with respect to, and to the extent of, representations and
warranties made, as to the matters covered in this Section 2.04, by any Servicer
in the related Servicing Agreement assigned to the Trustee or any Seller in the
related Sales Agreement assigned to the Trustee.
Section 2.05. Representations and Warranties of the Master Servicer
The Master Servicer hereby represents and warrants to the Trustee that
as of the Closing Date or as of such other date specifically provided herein:
(a) The Master Servicer has been duly incorporated and is validly
existing as a bank or a corporation and in good standing under the laws
of the jurisdiction of its incorporation with full power and authority
(corporate and other) to own its properties and conduct its business as
now conducted by it and to enter into and perform its obligations under
the Trust Agreement, and has duly qualified to do business and is in
good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases any material properties or
conducts any material business or in which the performance of its duties
under the Trust Agreement would require such qualification, except where
the failure so to qualify would not have a material adverse effect on
the performance of its obligations under the Trust Agreement;
(b) The Trust Agreement, assuming due authorization, execution
and delivery by Saxon and the Trustee, constitutes a legal, valid and
binding agreement of the Master Servicer, enforceable against the Master
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Servicer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, conservatorship, receivership, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law;
(c) Neither the execution and delivery by the Master Servicer of
the Trust Agreement, nor the consummation by the Master Servicer of the
transactions therein contemplated, nor compliance by the Master Servicer
with the provisions thereof, will (i) conflict with or result in a
breach of, or constitute a default under, any of the provisions of the
articles of association or incorporation (or corresponding charter
document) or by-laws of the Master Servicer or any law, governmental
rule or regulation or any judgment, decree or order binding on the
Master Servicer or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which the Master Servicer is a party or by which it is bound or (ii)
result in the creation or imposition of any lien, charge or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.
(d) There are no actions, suits or proceedings against, or
investigations of, the Master Servicer pending, or, to the knowledge of
the Master Servicer, threatened, before any court, administrative agency
or other tribunal which would prohibit the Master Servicer from entering
into the Trust Agreement or performing its obligations under the Trust
Agreement; and
(e) If the Master Servicer is not a national banking association,
the Master Servicer maintains a Master Servicer Errors and Omissions
Policy and a Master Servicer Fidelity Bond which cover the Master
Servicer's performance under the Trust Agreement, and such policy and
bond are in full force and effect.
Upon the discovery by Saxon, the Master Servicer or the Trustee of a
breach of any of the foregoing representations or warranties which materially
and adversely affects the interest of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt written notice (but in
no event later than two Business Days following such discovery) to the other
parties to the Trust Agreement.
Article III
Administration of the Trust
Section 3.01. Master Servicer Custodial Account
(a) Establishment. The Master Servicer shall establish a Master Servicer
Custodial Account into which the Master Servicer shall deposit payments,
collections and Advances with respect to the Mortgage Loans until such amounts
are transferred to the Asset Proceeds Account as provided herein. The Master
Servicer may elect to use a single Master Servicer Custodial Account for more
than one Series of Certificates (and for more than one group of Mortgage Loans
if the Mortgage Loans for a Series of Certificates are to be held in separate
groups), but shall maintain separate accounting records for each Series of
Certificates (and for each group of Mortgage Loans with respect to a Series of
Certificates). Each Master Servicer Custodial Account shall be an Eligible
Account and shall reflect the custodial nature of the account and that all funds
in such account (except interest earned thereon) are held in trust for the
benefit of the Trustee. Unless otherwise provided in the Trust Agreement, the
owner of the Master Servicer Custodial Account shall be the Master Servicer. To
the extent provided in the REMIC Provisions or proposed temporary or final
regulations, any amounts transferred by a REMIC to the Master Servicer Custodial
Account shall be treated as amounts distributed by such REMIC to the Master
Servicer. The Master Servicer Custodial Account shall not be considered an asset
of the Trust or any REMIC. The Master Servicer shall notify the Trustee of the
location and account number of such Master Servicer Custodial Account and of any
changes in the location or account number of such account.
(b) Deposits. On each Remittance Date, the Servicer shall withdraw from
the Servicer Custodial Account maintained by each Servicer and deposit into the
Master Servicer Custodial Account an amount with respect to each Mortgage Loan
serviced by such Servicer equal to the sum of the following:
(i) all Monthly Payments received by such Servicer during the
preceding Due Period, whether paid by the Borrower or advanced by such
Servicer, minus the Servicing Fee due such Servicer to the extent paid
by the Borrower after the payment of Month-End Interest;
(ii) all Monthly Payments made by the Borrower after their Due
Date that were not paid or advanced pursuant to Section 3.01(b)(i)
hereof;
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(iii) all other payments (other than late charges, prepayment
penalties, conversion fees and miscellaneous servicing charges and fees
retained by such Servicer pursuant to the Servicing Agreement) received
by such Servicer in connection with any unscheduled principal payments
or recoveries on such Mortgage Loan during the preceding Prepayment
Period, including Liquidation Proceeds and Insurance Proceeds, together
with any interest thereon paid by or for the account of the Borrower
minus the sum of (A) expenses associated with such recovery, (B) any
Advances on such Mortgage Loan paid by such Servicer and (C) the
Servicing Fee allocable thereto; and
(iv) the Purchase Price of such Mortgage Loan if such Mortgage
Loan was purchased by the Servicer from the Trust during the preceding
Prepayment Period.
(c) Withdrawals. On each Business Day, the Master Servicer may withdraw
from the appropriate Master Servicer Custodial Account (to the extent the funds
therein are not invested) any Non-Recoverable Advance and any Advance previously
made with respect to a Mortgage Loan as to which a late payment, Liquidation
Proceeds or Insurance Proceeds have been received (but only to the extent of
such late payment, Liquidation Proceeds or Insurance Proceeds).
On or prior to each Master Servicer Remittance Date, the Master Servicer
shall remit from the funds in the Master Servicer Custodial Account by wire
transfer (or as otherwise instructed by the Trustee) in immediately available
funds to the Asset Proceeds Account an amount with respect to each Mortgage Loan
equal to the sum of the following:
(i) all Monthly Payments received by the Master Servicer during
the preceding Due Period, whether paid by the Borrower or advanced by a
Servicer, the Master Servicer, the Trustee or an Insurer, minus the sum
of (A) the Servicing Fees due the Servicer to the extent paid by the
Borrower (net of any payments on account of Month End Interest required
pursuant to Section 3.05 hereof or the Servicing Agreement) and (B) the
Master Servicing Fee to the extent paid by the Borrower or advanced by
the Servicer or the Master Servicer;
(ii) all Monthly Payments made by a Borrower after their Due Date
that were not paid or advanced pursuant to Section 3.01(c)(i) hereof,
net of the Master Servicing Fee;
(iii) all other payments (excluding prepayment penalties)
received by the Master Servicer in connection with any unscheduled
principal payments or recoveries on the Mortgage Loans during the
preceding Prepayment Period, including Liquidation Proceeds and
Insurance Proceeds, together, with respect to prepayments or Liquidation
Proceeds or Insurance Proceeds received during the preceding month, with
any interest thereon received by the Master Servicer (net of the Master
Servicing Fee attributable thereto); and
(iv) the Purchase Price of any Mortgage Loans purchased from the
Trust during the preceding Prepayment Period, less any amounts due the
Servicer or the Master Servicer on account of Advances, the Servicing
Fee or the Master Servicing Fee attributable to such Mortgage Loans.
(d) Investment. The Master Servicer shall cause the funds in the Master
Servicer Custodial Account to be invested in Permitted Investments with a
maturity prior to the next Master Servicer Remittance Date. If so specified in a
Servicing Agreement, net investment income on the funds in the Master Servicer
Custodial Account shall be released to the related Servicer as a part of the
Servicer Compensation on or before the fifth Business Day of the month following
the month in which the related Distribution Date occurs unless the Trust
Agreement provides that such net investment income is to be applied to Month End
Interest Shortfall; provided, however, that, if there is a loss on the
investments in the Master Servicer Custodial Account for any month, the Master
Servicer shall deposit the amount of such loss into the Master Servicer
Custodial Account on or before the related Distribution Date (and shall
subsequently retain net investment income to recover such loss).
Section 3.02. Asset Proceeds Account
(a) Deposits. The Trustee shall establish and maintain with the Paying
Agent one or more accounts (collectively, the "Asset Proceeds Account") held in
trust for the benefit of the Certificateholders. Each Asset Proceeds Account
shall be an Eligible Account. On each Distribution Date, the Paying Agent shall
deposit into the Asset Proceeds Account the following amounts, to the extent not
previously deposited therein:
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(i) the amount to be deposited from the Master Servicer
Custodial Account pursuant to Section 3.01(c);
(ii) Advances;
(iii) the amount required to effect a Terminating Purchase
pursuant to Section 9.02 hereof; and
(iv) amounts required to be deposited from any Credit
Enhancement, Reserve Fund, Interest Fund, or other fund as provided in
the Trust Agreement.
(b) Withdrawals. Unless otherwise provided in the Trust Agreement, on
each Distribution Date, the Paying Agent shall withdraw all moneys in the Asset
Proceeds Account in accordance with the amounts set forth in the statement
furnished by the Master Servicer pursuant to Section 4.01 hereof in the
following order of priority and for the purposes indicated:
(i) to pay itself the Trustee Fee with respect to such
Distribution Date (unless the Trustee Fee is to be paid by the Master
Servicer out of its Master Servicing Fee);
(ii) to pay each Servicer its Servicing Fee with respect to such
Distribution Date, to the extent not retained
by such Servicer;
(iii) to pay the Master Servicer the Master Servicing Fee with
respect to such Distribution Date, to the extent not previously paid to
the Master Servicer;
(iv) to pay each Credit Enhancement provider its Credit
Enhancement Fee with respect to such Distribution Date unless provision
therefore is otherwise made in the Trust Agreement;
(v) to reimburse the Trustee, the Master Servicer and each
Servicer, in that order of priority, for any Advance previously made
that has been determined to be a Non-Recoverable Advance;
(vi) to reimburse Saxon or the Master Servicer for expenses
incurred by or reimbursable to it pursuant to Section 6.03;
(vii) to refund any overpayment of the Purchase Price of a
Mortgage Loan; and
(viii) to make the payments provided for in the Trust Agreement.
(c) Accounting. The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any payment to and from the Asset Proceeds Account.
(d) Investment. No later than the close of business on the day preceding
the Master Servicer Remittance Date, the Master Servicer shall direct the Paying
Agent in writing (which may be in the form of standing instructions) as to the
investment of funds (which funds, if received by noon, Houston time, shall be
invested in Permitted Investments) in the Asset Proceeds Account for the period
from the Master Servicer Remittance Date through the Distribution Date. Net
investment income on funds in the Asset Proceeds Account shall be released to
the Master Servicer as part of the Master Servicer Compensation on or before the
fifth Business Day of the month following the month in which the related
Distribution Date occurs, unless the Trust Agreement provides that such net
investment income is to be applied to the payment of other amounts due from the
Master Servicer.
Section 3.03. Issuing REMIC Accounts
(a) With respect to any Double REMIC Series, the Paying Agent shall
establish one or more Subaccounts of the Distribution Account. Unless otherwise
provided in the Trust Agreement, the Subaccounts will be Regular Interests in
the Pooling REMIC and the Paying Agent shall deposit all payments with respect
to such Regular Interests into such Subaccounts.
(b) With respect to any Double REMIC Series, the Paying Agent may
establish one or more accounts into which the Paying Agent may deposit all
payments on account of the Residual Interest in the Pooling REMIC and any
Regular Interests in the Pooling REMIC that are not considered assets of the
Issuing REMIC and from which the Paying Agent may withdraw funds to pay the
Certificates that do not evidence interests in the Issuing REMIC. In lieu of
establishing such accounts, the Paying Agent may pay on each Distribution Date
to the Holders of the Certificates that do not evidence interests in the Issuing
REMIC the amounts that are due with respect to such Certificates. In addition,
with respect to a Double REMIC Series, upon payment in full of all related
Regular Interests and all administrative costs of the related Trust and each
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related REMIC, any amount remaining in the Asset Proceeds Account may be
distributed directly to the Holders of the Certificate representing beneficial
ownership of the Residual Interest in the Pooling REMIC.
Section 3.04. Advances by Master Servicer and Trustee
(a) To the extent not made by the Servicer of a Mortgage Loan, the
Master Servicer shall be obligated to make Advances with respect to such
Mortgage Loan to the extent the Master Servicer determines, in good faith, that
such Advances will be recoverable from Insurance Proceeds, Liquidation Proceeds
or subsequent payments by the Borrower of such Mortgage Loan. If the Master
Servicer determines that all, or a portion of, any Advance required by this
Section 3.04 is not so recoverable, the Master Servicer shall promptly deliver
to the Trustee an Officer's certificate setting forth the reasons for such
determination and the amount of the Non-Recoverable Advance (a
"Non-Recoverability Certificate"). Subject to the foregoing:
(i) Prior to the close of business on the Business Day prior to
each Master Servicer Remittance Date, the Master Servicer shall
determine whether and to what extent any Servicers have failed to make
any Advances in respect of Monthly Payments that were due on the
previous Due Date. The Master Servicer shall make an Advance to the
Master Servicer Custodial Account in the amount, if any, of the
aggregate Monthly Payments (less applicable Servicing Fees) on the
Mortgage Loans that were due on such Due Date but which were not
received or advanced by the Servicers and remitted to the Master
Servicer Custodial Account prior to such Master Servicer Remittance
Date. Each such Advance shall be remitted in immediately available funds
to the Master Servicer Custodial Account on or before such Master
Servicer Remittance Date.
(ii) To the extent not made by a Servicer, the Master Servicer
shall make Advances from time to time for attorneys' fees and court
costs incurred, or which reasonably can be expected to be incurred, for
the foreclosure of any Mortgage Loan or for any transaction in which the
Trustee is expected to receive a deed in lieu of foreclosure.
(iii) If any Mortgaged Premises shall be damaged or destroyed and
the Servicer of the related Mortgage Loan fails to Advance the funds
necessary to repair or restore the damaged or destroyed Mortgaged
Premises, then the Master Servicer shall Advance such funds and take
such other action as is necessary to repair or restore the damage or
loss.
(iv) To the extent a Servicer is required to Advance funds
sufficient to pay the taxes or insurance premiums with respect to a
Mortgage Loan pursuant to a Servicing Agreement or a Servicing Guide and
fails to make such Advance, the Master Servicer shall Advance such funds
and take such steps as are necessary to pay such taxes or insurance
premiums.
(v) If any Servicer fails to remit to the Master Servicer
Custodial Account, on or before the Master Servicer Remittance Date, the
full amount of the funds in the custody or under the control of the
Servicer that the Servicer is required to remit under its Servicing
Agreement, then the Master Servicer shall Advance and remit to the
Master Servicer Custodial Account an amount equal to the required
remittance on or before the Master Servicer Remittance Date for the
month in which such funds were required to be remitted by the Servicer
under the Servicing Agreement.
(b) Any Advance made by the Master Servicer under this Section 3.04
which the Master Servicer shall ultimately determine in its good faith judgment
to be non-recoverable from Insurance Proceeds, Liquidation Proceeds, the related
Servicer, or subsequent payments by the Borrower shall be a Non-Recoverable
Advance. The determination by the Master Servicer that it has made a
Non-Recoverable Advance shall be evidenced by a Non-Recoverability Certificate
of the Master Servicer promptly delivered to the Trustee setting forth the
reasons for such determination. Following the Trustee's receipt of such
Non-Recoverability Certificate, the Master Servicer shall be entitled to
reimbursement for such Non-Recoverable Advance as provided herein.
(c) If the Master Servicer fails to make any Advance required of it
hereunder, the Trustee shall, to the maximum extent permitted by law, make such
Advance in its stead, and, in such event, the Trustee shall be entitled to
receive the Master Servicing Fee payable with respect to the Distribution Date
related to such Master Servicer Remittance Date; provided, however, that in no
event shall the Trustee, whether as Trustee, Master Servicer or Servicer, be
deemed to have assumed the obligations of any Person to purchase any Mortgage
Loan from the Trust for breach of representations or warranties or as a
Converted Mortgage Loan or otherwise or to make any Advances or pay Month End
Interest with respect to any Mortgage Loan except to the extent specifically
provided in Sections 3.04 and 3.05 hereof. Notwithstanding the foregoing,
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neither the Master Servicer nor the Trustee will be obligated to make an Advance
that it reasonably believes to be a Non-Recoverable Advance. The Trustee may
conclusively rely for any determination to be made by it hereunder upon the
determination of the Master Servicer as set forth in its Non-Recoverability
Certificate.
(d) To the extent that any Advance has been made by the Trustee, the
Trustee shall be entitled to reimbursement therefor at the times and to the same
extent as either the Servicer or the Master Servicer would have been so entitled
had such Person originally made such Advance, whether or not any provision of
the Trust Agreement specifically references the right of the Trustee to such
reimbursement. If the Trustee determines that it is prevented by law from making
an Advance, the Trustee will notify the Master Servicer within one Business Day
of such determination.
(e) Notwithstanding anything herein to the contrary, no Advance shall be
required to be made by the Master Servicer or the Trustee to the extent that
making such Advance would result in the amount of aggregate Advances then
outstanding and unreimbursed by the Master Servicer or the Trustee to exceed the
Master Servicer Advance Amount.
Section 3.05. Month End Interest
Unless otherwise provided in the Servicing Agreement, the Servicer shall
pay and deposit into the Servicer Custodial Account, on or before each Servicer
Remittance Date, an amount equal to Month End Interest with respect to the
preceding month, but only to the extent of the Servicer Fee payable with respect
to the preceding month. Such payment will not be considered a Non-Recoverable
Advance. The Servicer shall not be entitled to any recovery or reimbursement of
such payment from the Master Servicer, the Trustee or the Certificateholders.
Section 3.06. Trustee to Cooperate; Release of Mortgage Files
The Trustee shall, if requested by any Servicer with a rating
satisfactory to the Trustee, execute a power of appointment pursuant to which
the Trustee shall authorize, make, constitute and appoint designated officers of
such Servicer with full power to execute in the name of the Trustee (without
recourse, representation or warranty) any deed of reconveyance, any substitution
of trustee documents or any other document to release, satisfy, cancel or
discharge any Security Instrument or Mortgage Loan upon its payment in full or
other liquidation; provided, however, that such power of appointment shall be
limited to the powers listed above. The Servicer shall promptly forward to the
Trustee for its files copies of all documents executed pursuant to such power of
appointment.
Upon the liquidation of any Mortgage Loan, the Servicer of such Mortgage
Loan shall remit the proceeds thereof to its Servicer Custodial Account and,
unless such Servicer has been given a power of appointment as provided in the
proceeding paragraph, deliver to the Master Servicer a Request for Release
requesting that the Trustee execute such instrument of release or satisfaction
as is necessary to release the related Collateral from the lien of the Security
Instrument. Upon the Master Servicer's receipt of such Request for Release and
its confirmation that all amounts required to be remitted to the appropriate
Servicer Custodial Account in connection with such liquidation have been so
deposited, the Master Servicer shall deliver such Request for Release to the
Trustee. The Trustee shall, within five Business Days of its receipt of such
Request for Release, execute, and deliver to the Servicer, such instrument of
release or satisfaction; and release, or cause the Custodian to release, the
related Trustee Mortgage Loan File to the Master Servicer or the Servicer, as
requested by the Master Servicer. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Master Servicer Custodial Account or the Asset Proceeds Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including, but not limited to, collection under any Title
Insurance Policy or Credit Enhancement with respect thereto or to effect a
partial release of any Collateral from the lien of the Security Instrument, the
Servicer shall deliver to the Master Servicer a Request for Release. Upon the
Master Servicer's receipt of any such Request for Release, the Master Servicer
shall promptly forward such Request for Release to the Trustee and the Trustee
shall, within five Business Days of its receipt of such Request for Release,
release, or cause the Custodian to release, the related Trustee Mortgage Loan
File to the Master Servicer or the Servicer, as requested by the Master
Servicer. Any such Request for Release shall obligate the Master Servicer or the
Servicer, as the case may be, to return each and every document previously
requested from the Trustee Mortgage Loan File to the Trustee by the twenty-first
day following the release thereof, unless (i) the related Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to such Mortgage Loan have been
deposited in the Asset Proceeds Account or the Servicer Custodial Account or
(ii) the Trustee Mortgage Loan File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
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for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the related Mortgaged Premises either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee a
certificate of the Master Servicer or the Servicer certifying as to the name and
address of the Person to which such Trustee Mortgage Loan File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of an
Officer's certificate of the Master Servicer or the Servicer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation which are required to be deposited into the
Servicer Custodial Account or the Asset Proceeds Account have been so deposited,
or that such Mortgage Loan is secured by an REO Property, the Request for
Release shall be released by the Trustee to the Master Servicer or the Servicer,
as appropriate.
Upon written certification of the Master Servicer or the Servicer, the
Trustee (subject to Section 8.01(e) hereof), shall execute and deliver to the
Master Servicer or the Servicer, as directed by the Master Servicer, court
pleadings, requests for trustee's sale or other documents necessary to a
foreclosure proceeding or trustee's sale in respect of a Mortgaged Premises or
to any legal action brought to obtain judgment against any Borrower on any
Mortgage Note or Security Instrument or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by any Mortgage Note or Security
Instrument or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings, requests or other documents be
executed by the Trustee and a statement as to the reason such pleadings,
requests or other documents are required and that the execution and delivery
thereof by the Trustee will not invalidate or otherwise affect the lien of the
Security Instrument, except for the termination of such a lien upon completion
of the foreclosure proceeding or trustee's sale.
The Master Servicer or Servicer may provide an electronic transmission
for release of documents in a form, which complies in all respects to the
requirements of FNMA or GNMA or in a form mutually acceptable to the Custodian
and either the Master Servicer or Servicer, and is agreed to in advance of
initial transmission by both the Master Servicer or Servicer, as applicable, and
the Custodian, containing information readable without intervention by the
Custodian's data processing operations computer hardware and software staff, and
arranged in a record layout to be specified by the Custodian. The Master
Servicer and Servicer agree to maintain and control access to electronic
signature information and assume liability for any unauthorized use thereof. The
Master Servicer and Servicer also agree to maintain accurate records of
electronic transactions related to the Mortgage Files. For purposes of this
Agreement the term "electronic signature" is defined as an "electronic
identifier intended by the person using it to have the same force and effect as
the use of manual signature."
Section 3.07. Reports to the Trustee; Annual Compliance Statements
The Master Servicer shall deliver to the Trustee, on or before March 31
of each year, an Annual Compliance Statement with respect to the Trust Agreement
(if the Master Servicer entered into the Trust Agreement on or before the
preceding December 31), signed by an Officer of the Master Servicer, certifying
that (i) such Officer has reviewed the activities of the Master Servicer during
the preceding calendar year or portion thereof and its performance under the
Trust Agreement and (ii) to the best of such Officer's knowledge, based on such
review, the Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under the Trust Agreement in all material
respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such Officer and the nature and status thereof, and (iii)
(A) an Officer of the Master Servicer has conducted an examination (based solely
on information and written reports furnished by each Servicer to the Master
Servicer) of the activities of each Servicer during the preceding calendar year
and the performance of such Servicer under the related Servicing Agreement, (B)
an Officer of the Master Servicer has examined each Servicer's Fidelity Bond and
Errors and Omissions Policy and each such bond or policy is in effect and
conforms to the requirements of the related Servicing Agreement, (C) the Master
Servicer has received from each Servicer such Servicer's annual audited
financial statements and such other information as is required by the applicable
Servicing Agreement or Servicing Guide and (D) to the best of such Officer's
knowledge, based on such examination, each Servicer has performed and fulfilled
its duties, responsibilities and obligations under its Servicing Agreement in
all material respects throughout such year, or, if there has been a default in
the performance or fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Officer and the nature
and status thereof. The Trustee shall provide copies of the Annual Compliance
Statement to any Certificateholder upon written request provided such statement
is delivered, or caused to be delivered, by the Master Servicer to the Trustee.
Section 3.08. Title, Management and Disposition of REO Properties
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(a) If any Mortgaged Premises becomes an REO Property, the Master
Servicer shall use its best efforts to cause the Servicer of the related
Mortgage Loan to manage, conserve, protect and operate such REO Property for the
benefit of the Certificateholders solely for the purpose of its prompt
disposition and sale. If one or more REMIC elections are made with respect to
the assets of the Trust, the Master Servicer shall use its best efforts to cause
the Servicer to use its best efforts to dispose of any REO Property for its fair
market value by not later than October 31 of the third year following the year
of its acquisition by the Trust, unless the Trustee has been granted an
extension of time to dispose of such REO Property by the Internal Revenue
Service pursuant to section 856(e)(3) of the Code (an "Extension"). If the
Trustee has been granted an Extension, the Master Servicer shall continue to use
its best efforts to have the Servicer sell the REO Property for its fair market
value for the period ending two months prior to the time such Extension expires
(the "Extended Period"). If the Servicer is unable to dispose of any REO
Property within such original period or Extended Period, as the case may be, the
Master Servicer shall use its best efforts to ensure that such REO Property is
auctioned to the highest bidder within one month after the end of such original
period or Extended Period, as the case may be. If no REMIC election has been or
is to be made with respect to the assets of the Trust, the time period for
disposing of any REO Property as specified in the preceding two sentences shall
be within eleven months of its acquisition by the Trust. In the event of any
such sale or auction of an REO Property, the Trustee shall, at the written
request of the Master Servicer and upon being provided with appropriate forms
therefor, within five Business Days of its receipt of the proceeds of such sale
or auction, release or cause to be released to the purchaser the related Trustee
Mortgage Loan File and Servicer File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the purchaser title to the REO Property, and upon so
doing the Trustee shall have no further responsibility with regard to such
Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master
Servicer nor the Servicer, acting on behalf of the Trust, shall provide
financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquired, the deed or certificate of
sale shall be issued to the Trustee for the benefit of the Certificateholders.
Each Servicer shall, in accordance with Section 3.08(a) hereof, use its
reasonable efforts to sell any REO Property as expeditiously as possible, but in
any event within the time period, and subject to the conditions set forth in
Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each
Servicer shall either itself, or through an agent selected by it, protect and
conserve such REO Property in the same manner and to the same extent as it
customarily does in connection with its own real estate acquired through
foreclosure or by deed in lieu of foreclosure, incident to its conservation and
protection of the interests of the Certificateholders, and may rent such REO
Property, or any part thereof, as it deems likely to increase the net proceeds
distributable to the Certificateholders, subject to the terms and conditions
described in this Section 3.08.
For the purpose of protecting the interests of the Trustee and
conserving any REO Property prior to sale, the Servicer of the related Mortgage
Loan may contract with any Independent Contractor for the conservation,
protection and rental of such REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor (A) pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, (B) hold all related revenues in a segregated account insured
by the Federal Deposit Insurance Corporation and (C) remit all related
revenues collected (net of such costs and expenses retained by such
Independent Contractor) to the Servicer on a monthly or more frequent
basis; and
(iii) none of the provisions of this Section 3.08 relating to any
such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its duties
and obligations to the Trustee and the Certificateholders with respect
to the conservation, protection and rental of such REO Property.
A Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. A Servicer or any Independent Contractor shall be entitled
to a fee, based on the prevailing market rate (and set in good faith at a
reasonable level in the case of a fee payable to a Servicer), for the operation
and management of any REO Property, which fee shall be an expense of the Trust
payable out of the gross income on such REO Property.
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(c) A Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property in its Servicer Custodial
Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be
entitled to be reimbursed for any unreimbursed Advances and paid any unpaid
Servicing Fees with respect to the related Mortgage Loan from the Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, however, that any such unreimbursed Advances or unpaid Servicing Fees
may be reimbursed or paid, as the case may be, out of any net rental income or
other net amounts derived from such REO Property.
(e) The final disposition of any REO Property shall be carried out by a
Servicer at the fair market value of such REO Property under the circumstances
existing at the time of disposition and upon such terms and conditions as such
Servicer shall deem necessary or advisable and as are in accordance with
accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final
disposition of any REO Property in its Servicer Custodial Account on or before
the second Business Day following receipt of such Liquidation Proceeds and,
subject to such withdrawals as may be permitted by Section 3.08(d) hereof, such
proceeds shall be transferred to the Asset Proceeds Account pursuant to Section
3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer,
acting on behalf of the Trustee, shall not rent, lease or otherwise earn income
or take any action on behalf of the Trust with respect to any REO Property that
might (i) cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of section 86OG(a)(8) of the Code or (ii) result in the
receipt by the REMIC of any "income from non-permitted assets" within the
meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure
property" within the meaning of section 860G(c)(2) of the Code, both of which
types of income are subject to tax under the REMIC Provisions, unless the
Trustee has received an Opinion of Counsel, at the expense of the Trust (the
costs of which shall be recoverable out of such Servicer's Servicer Custodial
Account), to the effect that, under the REMIC Provisions and any relevant
proposed legislation, any income generated for any related REMIC by such REO
Property would not result in the imposition of a tax upon such REMIC.
Without limiting the generality of the foregoing, neither the Trustee,
the Master Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any
REO Property if the New Lease by its terms will give rise to any income
that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of section
856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly
Operate, any REO Property on any date more than 90 days after its
acquisition date (unless the Person who would Directly Operate such REO
Property is an Independent Contractor);
unless, in any such case, the Person proposing to take such action has requested
and received the Opinion of Counsel described in the preceding sentence, in
which case the Person may take such actions as are specified in such Opinion of
Counsel.
A Servicer shall not acquire any personal property relating to any
Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property (within
the meaning of section 856(e)(1) of the Code) so acquired by such
Servicer; or
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(ii) such Servicer shall have requested and received an Opinion
of Counsel, at the expense of the Trust (the costs of which shall be
recoverable out of its Servicer Custodial Account), to the effect that
the holding of such personal property by the related REMIC will not
cause the imposition of a tax under the REMIC Provisions on any REMIC
related to the Trust or cause any such REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding.
(j) Any actions required or permitted to be taken by a Servicer under
this Section 3.08 may be taken by the Master Servicer on behalf of such
Servicer.
(k) Each Servicing Agreement relating to a Trust Agreement shall provide
that the related Servicer shall manage, conserve, protect and operate any REO
Property as provided in this Section 3.08, and the Master Servicer is hereby
obligated to assure that each Servicer complies with the provisions of this
Section 3.08.
Section 3.09. Amendments to Servicing Agreements; Modification of the
Servicing Guides
From time to time Saxon may, to the extent permitted by the applicable
Servicing Agreement, make such modifications and amendments to the related
Servicing Guide as Saxon deems necessary or appropriate to confirm or carry out
more fully the intent and purpose of such Servicing Agreement and the duties,
responsibilities and obligations to be performed by the Servicer thereunder;
provided, however, that in no event shall Saxon modify or amend a Servicing
Guide if such modification or amendment would have an adverse effect on the
Certificateholders. Any such modification or amendment of a Servicing Guide
shall be deemed to have an adverse effect on the Certificateholders if such
amendment or modification either (i) results in and of itself in the downgrading
of the rating assigned by any Rating Agency to the Certificates or (ii) results
in the loss by the Trust or the assets thereof of REMIC status for federal
income tax purposes. Prior to the issuance of any such modification or
amendment, Saxon shall deliver to the Master Servicer and the Trustee an
Officer's certificate setting forth (i) the provision that is to be modified or
amended, (ii) the modification or amendment that Saxon desires to issue and
(iii) the reason or reasons for such proposed modification or amendment.
Section 3.10. Oversight of Servicing
The Master Servicer shall supervise, administer, monitor and oversee the
servicing of the Mortgage Loans by each Servicer and the performance by each
Servicer of all services, duties, responsibilities and obligations that are to
be observed or performed by such Servicer under its Servicing Agreement
(including, but not limited to, such Servicer's obligation to comply with the
provisions of Section 3.08 hereof). Without limiting the generality of the
foregoing, the Master Servicer, acting with the consent of Saxon and subject to
Section 1.03 hereof but without the consent of the Trustee or any
Certificateholder, shall have the power and responsibility for approving the
transfer or other assignment of any Servicing Agreement by any Servicer. Saxon
shall provide the Master Servicer with a copy of the Servicing Agreement
executed by each Servicer as well as any Servicing Guide incorporated by
reference into such Servicing Agreement on or before the Closing Date. The
Master Servicer acknowledges that, prior to taking certain actions required to
service the Mortgage Loans, as set forth in the applicable Servicing Agreement
or Servicing Guide the Servicer must notify, consult with, obtain the consent of
or otherwise follow the instructions of the Master Servicer. The Master Servicer
shall have authority to waive compliance by the Servicer with certain provisions
of the Servicing Agreement to the extent set forth in the applicable Servicing
Agreement or Servicing Guide. In each such instance, the Master Servicer shall
promptly instruct the Servicer or otherwise respond to any request of the
Servicer as the Master Servicer deems appropriate, provided that, in no event
shall the Master Servicer instruct the Servicer to take any action, give any
consent to action by the Servicer or waive compliance by the Servicer with any
provision of the Servicing Agreement if any resulting action or failure to act
is inconsistent with the obligations of the Servicer for similarly rated
transactions or would otherwise have an adverse effect on the
Certificateholders. Any such action or failure to act shall be deemed to have an
adverse effect on the Certificateholders if such action or failure to act either
results (i) in and of itself, in the downgrading of the rating assigned by any
Rating Agency to the Certificates or (ii) in the loss by the Trust or the assets
thereof of REMIC status for federal income tax purposes.
The Master Servicer shall instruct each Servicer that it should not take
any action to foreclose, or accept a deed in lieu of foreclosure, with respect
to any Mortgage Loan if such Servicer knows, or has reason to know, that the
related Mortgaged Premises are contaminated with toxic wastes or other hazardous
substances.
During the term of the Trust Agreement, the Master Servicer shall
consult fully with each Servicer as may be necessary from time to time to
perform and carry out the Master Servicer's obligations hereunder and receive,
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review and evaluate all reports, information and other data that are provided to
the Master Servicer by each Servicer and otherwise exercise reasonable efforts
to encourage each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by it under its Servicing Agreement.
For the purposes of determining whether any modification of a Mortgage
Loan shall be permitted by the Trustee or the Master Servicer, such modification
shall be construed as a substitution of the modified Mortgage Loan for the
Mortgage Loan originally assigned and transferred to the Trust. No modification
shall be approved unless (i) such modification is occasioned by default or a
reasonably foreseeable default or (ii) there is delivered to the Trustee an
Opinion of Counsel (at the expense of the party seeking to modify the Mortgage
Loan) to the effect that such modification would not be treated as giving rise
to a new debt instrument for federal income tax purposes.
The relationship of the Master Servicer or any Servicer to the Trustee
under the Trust Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer or partner.
Section 3.11. Credit Enhancement
To the extent provided in the Trust Agreement, one or more forms of
Credit Enhancement shall be maintained for the benefit of the
Certificateholders. The Trust Agreement shall specify with respect to each such
form of Credit Enhancement, among other things, the manner in which any funds
relating to such Credit Enhancement are to be invested, the source and manner of
payment of any Credit Enhancement Fees, the circumstances, if any, under which
supplemental or replacement Credit Enhancement shall be obtained, the manner in
which such Credit Enhancement is to be enforced, and whether such Credit
Enhancement covers or will cover other Series of Certificates.
Article IV
Reporting/Remitting to Certificateholders
Section 4.01. Statements to Certificateholders
Unless otherwise provided in the Trust Agreement: (i) on or before each
Master Servicer Reporting Date, the Master Servicer shall prepare and deliver to
Saxon and the Paying Agent a Monthly Statement and (ii) on the Distribution Date
following each Master Servicer Reporting Date, the Master Servicer shall prepare
and mail a copy of such Monthly Statement to the Trustee, the Rating Agencies,
the Underwriters and each Certificateholder.
In addition to the Monthly Statement, the Master Servicer shall prepare
and deliver to the Paying Agent prior to each Distribution Date, and the Paying
Agent shall forward to each Holder of a Residual Certificate, if any, on each
Distribution Date, a statement setting forth the amounts actually distributed
with respect to the Residual Certificates on such Distribution Date and the
aggregate Certificate Principal Balance, if any, of any Residual Certificates
after giving effect to any distribution to be made on such Distribution Date,
separately identifying the amount of Realized Losses allocated to such Residual
Certificates for the preceding Prepayment Period.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare, based on information provided by the
Servicers, and deliver a statement setting forth the distributions (based on a
Certificate in the original principal amount of $1,000) allocable to interest
and principal to each Person who at any time during the calendar year was a
Certificateholder that constituted a retail investor or to any other
Certificateholder that requests such statement, aggregated for such calendar
year or portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Master
Servicer pursuant to any requirements of the Code as from time to time are in
effect.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare and deliver to the Trustee, and the Trustee
shall forward by mail to each Person who at any time during such calendar year
was a Holder of a Residual Certificate, a statement containing the information
provided pursuant to the second preceding paragraph aggregated for such calendar
year. Such obligation of the Master Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in effect.
Access to the Monthly Statements and other statements described in this
Section 4.01 may be provided via electronic on-line reports in lieu of
forwarding such statements by mail to Certificateholders provided that such
electronic on-line reports satisfy the requirements of the Code as from time to
time may be in effect.
Section 4.02. Remittance Reports
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The Master Servicer shall prepare and deliver to the Trustee by mail,
facsimile or electronic transfer on or before each Master Servicer Reporting
Date, the Remittance Report with respect to the following Distribution Date.
Each Remittance Report shall contain the information specified in Exhibit C
attached hereto. The information in such report shall be made available by the
Trustee to any Certificateholder that requests such report in writing.
If the Master Servicer does not furnish the Remittance Report or any
other statement or report as required by this Section 4.02 or Section 4.01
hereof, or if an Officer of the Trustee has actual knowledge that any such
Remittance Report or other statement or report is erroneous or inaccurate in any
material respect, and if any such Remittance Report or other statement or report
is not furnished or corrected, as the case may be, within one Business Day
following the date it is due to be delivered, then the Trustee shall request and
the Master Servicer shall furnish by electromagnetic tape (or such other medium
as the Trustee and the Master Servicer may agree from time to time) the
information necessary to enable the Trustee to prepare the Remittance Report and
the other statements and reports as required by this Section 4.02 and Section
4.01 hereof, and the Trustee shall thereupon prepare such report and receive the
Master Servicing Fee for such month. Upon termination of the Master Servicer
pursuant to Section 7.02 hereof, the Trustee shall thereafter undertake all the
obligations of the Master Servicer pursuant to this Section 4.02 and Section
4.01 hereof and shall be entitled to the compensation otherwise payable to the
Master Servicer pursuant hereto in consideration of the performance of such
obligations.
The Trustee shall be under no duty and shall have no obligation to
recalculate, verify or recompute the information provided to it hereunder by the
Master Servicer.
Section 4.03. Compliance with Withholding Requirements
Notwithstanding any other provision of the Trust Agreement, each of the
Trustee and the Paying Agent shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Certificates that the Trustee or the Paying Agent
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. If either the
Trustee or the Paying Agent does withhold any amount from interest or original
issue discount payments or Advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Paying Agent shall indicate with any
payment to such Certificateholder the amount withheld.
Section 4.04. Reports to the Clearing Agency
If and for so long as any Certificate is held by a Clearing Agency, on
each Master Servicer Remittance Date, the Paying Agent shall telecopy a copy of
the Monthly Statement to the Clearing Agency together with a statement as to (i)
the Distribution Date and (ii) the Record Date for such Distribution Date.
Section 4.05. Preparation of Regulatory Reports
(a) Subject to the provisions of subsections (b) and (c) of this Section
4.05, the Master Servicer shall prepare or cause to be prepared, on behalf of
the Trust, and shall file or cause to be filed in a timely manner such
supplementary and periodic information, documents and reports (collectively,
"Periodic Reports") as may be required pursuant to Section 12(g) or Section
15(d) of the Exchange Act, by the rules and regulations of the SEC thereunder or
as a condition to approval of any application for relief ("Application for
Relief") hereinafter referred to and, in connection therewith, shall prepare
such applications and requests for exemption and other relief from such
provisions as it may deem appropriate. If any Periodic Report is required to be
signed by Saxon or the Trustee rather than by the Master Servicer, the Master
Servicer shall be deemed to certify as to each Periodic Report delivered to
Saxon or the Trustee for its review and execution that such Periodic Report
conforms in all material respects to applicable reporting requirements imposed
by the Exchange Act or is otherwise in form and content appropriate for filing
with the SEC. Saxon or the Trustee shall execute all such Periodic Reports and
Applications for Relief delivered as provided above and shall return the same to
the Master Servicer for filing with the SEC and other required filing offices,
if any, on behalf of the Trust or shall authorize the Master Servicer to execute
any such Periodic Report or Application for Relief on the Trustee's behalf.
(b) Within 30 days after the beginning of the first fiscal year of the
Trust during which the obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Master Servicer shall prepare, or
cause to be prepared, a notice on SEC Form 15 ("Form 15") and shall forward such
notice to the Trustee for execution. The Trustee shall execute each Form 15
delivered as provided above and shall return the same to the Master Servicer for
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filing with the SEC on behalf of the Trust or shall authorize the Master
Servicer to execute such Form 15 on the Trustee's behalf; provided, however,
that the Master Servicer shall be under no obligation to prepare such notice if
the number of Certificateholders exceeds 300. The Certificate Registrar shall
notify the Master Servicer in a timely manner if the number of
Certificateholders at any one time exceeds 300. The Master Servicer shall file
any Form 15 with the SEC in accordance with the provisions of Rule 15d-6 under
the Exchange Act.
(c) Notwithstanding any other provision of this Agreement, none of the
Master Servicer, the Certificate Registrar, the Paying Agent, or the Trustee has
assumed, and shall not by its performance hereunder be deemed to have assumed,
any of the duties or obligations of Saxon or any other Person with respect to
(i) the registration of the Certificates pursuant to the Securities Act, (ii)
the issuance or sale of the Certificates or (iii) compliance with the provisions
of the Securities Act, the Exchange Act or any applicable federal or state
securities or other laws, including, but not limited to, any requirement to
update the registration statement or prospectus relating to the Certificates in
order to render the same not materially misleading to investors.
(d) In connection with the Master Servicer's preparation of any Form 15
or any Periodic Report, the Certificate Registrar shall provide the Master
Servicer with such information as the Master Servicer may reasonably request
concerning the number and identity of the Holders appearing on the Certificate
Register, but the Certificate Registrar shall have no duty or obligation to
provide information which does not appear on the Certificate Register, including
any information concerning the ownership of Persons for whom a nominee is the
Certificateholder of record.
Article V
The Pooling Interests and the Certificates
Section 5.01. Pooling REMIC Interests
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Trust Agreement will set forth the terms of the Regular
Interests and the Residual Interest of the Pooling REMIC. Unless otherwise
provided in the Trust Agreement, (i) the Subaccounts will be the Regular
Interests in the Pooling REMIC but will not constitute securities or
certificates of interest in the Trust and (ii) the Trustee will be the owner of
the Subaccounts, which may not be transferred to any person other than a
successor trustee appointed pursuant to Section 8.07 hereof unless the party
desiring the transfer obtains a Special Tax Opinion.
Section 5.02. The Certificates
The Certificates shall be designated in the Trust Agreement. The
Certificates in the aggregate will represent the entire beneficial ownership
interest in the Trust Estate. On the Closing Date, the aggregate Certificate
Principal Balance of the Certificates will be equal to or less than the sum of
(i) the aggregate Scheduled Principal Balance of the Initial Mortgage Loans as
of the Cut-Off Date and (ii) the amount in the Pre-Funded Account. The
Certificates will be substantially in the forms annexed to the Trust Agreement.
Unless otherwise provided in the Trust Agreement, the Certificates of each Class
will be issuable in registered form, in denominations or authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered by
the Trustee and the Trustee shall cause the Certificates to be authenticated by
the Certificate Registrar to or upon the order of Saxon upon receipt by the
Trustee of the documents specified in Section 2.01 hereof. The Certificates
shall be executed and attested by manual or facsimile signature on behalf of the
Trustee by an authorized Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper Officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of such Certificates.
The Certificate shall be authenticated by a manual signature of a duly
authorized signatory of the Certificate Registrar. No Certificate shall be
entitled to any benefit under the Trust Agreement or be valid for any purpose
unless there appears on such Certificate a certificate of authentication
substantially in the form provided in the Trust Agreement executed by the
Certificate Registrar by manual signature, and such certificate of
authentication shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered under the Trust Agreement.
All Certificates shall be dated the date of their execution.
Section 5.03. Book-Entry Certificates
(a) The Book-Entry Certificates shall be represented initially by one or
more certificates registered in the name designated by the Clearing Agency.
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Saxon, the Master Servicer the Certificate Registrar, the Paying Agent and the
Trustee may for all intents and purposes (including the making of payments on
the Book-Entry Certificates) deal with the Clearing Agency as the authorized
representative of the Beneficial Owners of the Book-Entry Certificates for as
long as such Certificates are registered in the name of the Clearing Agency. The
rights of Beneficial Owners of the Book-Entry Certificates shall be limited to
those established by law and agreements between such Beneficial Owners and the
Clearing Agency and Clearing Agency Participants. The Beneficial Owners of the
Book-Entry Certificates shall not be entitled to certificates for the Book-Entry
Certificates as to which they are the Beneficial Owners, except as provided in
subsection (c) below. Requests and directions from, and votes of, the Clearing
Agency, as Certificateholder, shall not be deemed to be inconsistent if they are
made with respect to different Beneficial Owners. A Book-Entry Certificate may
not be transferred by the Clearing Agency without the consent of Saxon, the
Master Servicer and the Trustee except to another Clearing Agency that agrees to
hold such Book-Entry Certificate for the account of the respective Clearing
Agency Participants and Beneficial Owners.
(b) Neither Saxon, the Master Servicer, the Certificate Registrar, the
Paying Agent nor the Trustee shall have any liability for any aspect of the
records relating to or payment made on account of Beneficial Owners of the
Book-Entry Certificates held by the Clearing Agency, for monitoring or
restricting any transfer of beneficial ownership in a Book-Entry Certificate or
for maintaining, supervising or reviewing any records relating to such
Beneficial Owners.
(c) The Book-Entry Certificates shall be issued in fully registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (i) Saxon
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities as depository with respect to
the Book-Entry Certificates, and Saxon is unable to locate a qualified successor
within 30 days, or (ii) Saxon, at its option, elects to terminate the book-entry
system operating through the Clearing Agency. Upon the occurrence of either such
event, the Trustee shall notify the Clearing Agency and the Certificate
Registrar, which in turn shall notify all Beneficial Owners of Book-Entry
Certificates through Clearing Agency Participants, of the availability of
certificated Certificates. Upon surrender by the Clearing Agency of the
certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Certificate Registrar shall reissue the
Book-Entry Certificates as certificated Certificates to the Beneficial Owners
identified in writing by the Clearing Agency. Such certificated Certificates
shall not constitute Book-Entry Certificates. All reasonable costs associated
with the preparation and delivery of certificated Certificates shall be borne by
Saxon.
Section 5.04. Registration of Transfer and Exchange of Certificates
The Certificate Registrar shall cause to be kept at its Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
provided in the Trust Agreement. The Certificate Registrar designated in the
related Trust Agreement shall initially serve as Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as provided in the Trust Agreement. Upon any resignation of any Certificate
Registrar, the Trustee shall promptly appoint, subject to Section 1.03 hereof, a
successor or, in the absence of such appointment, shall assume the duties of
Certificate Registrar. The Trustee shall have no liability or responsibility for
any act or omission to act of any Certificate Registrar (unless the Trustee is
then serving as such Certificate Registrar) appointed pursuant to the terms of
the related Trust Agreement. The Certificate Registrar shall be entitled to the
same rights, privileges and immunities accorded the Trustee pursuant to Article
VIII hereof.
Subject to Section 5.05 hereof, upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office of the Certificate
Registrar or at any other office or agency of the Certificate Registrar
maintained for such purpose, the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class of a
like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be
exchanged for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in a form satisfactory to the Certificate
Registrar duly executed by, the Holder of such Certificate or his attorney duly
authorized in writing.
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No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
The Certificate Registrar shall provide notice to the Trustee of each
transfer of a Certificate and shall provide the Trustee and the Master Servicer
with an updated copy of the Certificate Register on January 1 and July 1 of each
year. If the Trustee shall not at any time be acting as the Certificate
Registrar, the Trustee shall have the right to inspect such Certificate Register
at all reasonable times and to rely conclusively upon a certificate of the
Certificate Registrar as to the names and addresses of the Certificateholders
and the Percentage Interests held by each.
Section 5.05. Restrictions on Transfers
(a) Securities Law Compliance. No transfer of any Private Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify Saxon, the Trustee, the Certificate Registrar and the Master Servicer
against any liability that may result if any transfer of such Certificate by
such Holder 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. None of Saxon, the Trustee, the Certificate Registrar or the
Master Servicer is obligated to register or qualify any Private Certificate
under the Securities Act or any other securities law or to take any action not
otherwise required under the Trust Agreement to permit the transfer of such
Certificate without such registration or qualification. The Certificate
Registrar shall not register any transfer of a Private Certificate (other than a
Residual Certificate) unless and until the prospective transferee provides the
Certificate Registrar with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer, and unless and until the transfer otherwise
complies with the provisions of this Section 5.05. If the proposed transferee of
a Private Certificate does not certify to facts which, if true, would mean that
such proposed transferee is a Qualified Institutional Buyer, the Certificate
Registrar shall require that the transferor and such proposed transferee certify
as to the factual basis for the registration exemption(s) relied upon, and if
the transfer is made within three years of the acquisition of such Certificate
by a non-Affiliate of Saxon from Saxon or an Affiliate of Saxon, the Master
Servicer or the Certificate Registrar also may require an Opinion of Counsel
that such transfer may be made without registration or qualification under the
Securities Act and applicable state securities laws, which Opinion of Counsel
shall not be obtained at the expense of Saxon, the Certificate Registrar or the
Master Servicer. Notwithstanding the foregoing, no Rule 144A Agreement,
Transferee Agreement or Opinion of Counsel shall be required in connection with
the initial issuance of the Private Certificates to Saxon, SMI, the Master
Servicer, the Trustee or any of their Affiliates.
Saxon shall provide to any Holder of a Private Certificate and any
prospective transferee that is a Qualified Institutional Buyer designated by
such Holder information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the condition
to eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A.
(b) Regular Certificates.
(i) Public Subordinated Certificates. No Regular Certificate that
is a Public Subordinated Certificate shall be transferred to a
transferee that acknowledges that it is a Plan Investor unless such
transferee provides the Certificate Registrar and the Master Servicer
with a Benefit Plan Opinion. The transferee of a Public Subordinated
Certificate that does not provide the Certificate Registrar and the
Master Servicer with a Benefit Plan Opinion will be deemed, by virtue of
its acquisition of such Certificate, to have represented that it is not
a Plan Investor.
(ii) Private Subordinated Certificates. No Regular Certificate
that is a Private Subordinated Certificate shall be transferred unless
the prospective transferee provides the Certificate Registrar and the
Master Servicer with a properly completed Benefit Plan Affidavit,
together with a Benefit Plan Opinion if required in order to comply with
such Benefit Plan Affidavit.
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(c) Residual Certificates. No Residual Certificate (including any
beneficial interest therein) may be transferred to a Disqualified Organization.
In addition, no Residual Certificate (including any beneficial interest therein)
may be transferred unless (i) the proposed transferee provides the Certificate
Registrar and the Master Servicer with (A) a Residual Transferee Agreement, (B)
a Benefit Plan Affidavit, (C) a Disqualified Organization Affidavit and (D) if
the proposed transferee is a Non-U.S. Person, a TAPRI Certificate, and (ii) the
interest transferred involves the entire interest in a Residual Certificate or
an undivided interest therein (unless the transferor or the transferee provides
the Master Servicer and the Certificate Registrar with an Opinion of Counsel
(which shall not be an expense of the Master Servicer or the Certificate
Registrar) that the transfer will not jeopardize the REMIC status of any related
REMIC). Notwithstanding the foregoing, the Residual Transferee Agreement,
Benefit Plan Affidavit, Disqualified Organization Affidavit or TAPRI Certificate
shall not be required to be provided upon original issuance of a Residual
Certificate to Saxon or SMI or any of their Affiliates or to the Master
Servicer, the Trustee or any of their Affiliates for the purpose of acting as
the Tax Matters Persons. Furthermore, if a proposed transfer involves a Private
Certificate, (i) the Certificate Registrar shall require that the transferor and
the transferee certify as to the factual basis for the registration exemption(s)
relied upon and (ii) if the transfer is made within three years from the
acquisition of the Certificate by a non-Affiliate of Saxon from Saxon or an
Affiliate of Saxon, the Certificate Registrar also may require an Opinion of
Counsel that such transfer may be made without registration or qualification
under the Securities Act and applicable state securities laws, which Opinion of
Counsel shall not be obtained at the expense of the Certificate Registrar or the
Master Servicer. In any event, the Certificate Registrar shall not effect any
transfer of a Residual Certificate except upon notification of such transfer to
the Master Servicer. Notwithstanding the foregoing, no Opinion of Counsel shall
be required in connection with the initial issuance of the Residual Certificates
or their transfer by a broker or dealer, if such broker or dealer was the
initial transferee.
Upon notice to the Trustee that any legal or beneficial interest in any
portion of the Residual Certificates has been transferred, directly or
indirectly, to a Disqualified Organization or an agent thereof (including a
broker, nominee or middleman) in contravention of the foregoing restrictions,
(i) such transferee shall be deemed to hold the Residual Certificates in
constructive trust for the last transferor who was not a Disqualified
Organization or an agent thereof, and such transferor shall be restored as the
owner of such Residual Certificates as completely as if such transfer had never
occurred; provided, however, that the Trustee may, but is not required to,
recover any distributions made to such transferee with respect to the Residual
Certificates and return such recovery to the transferor, and (ii) the Master
Servicer agrees to furnish to the Internal Revenue Service and to any transferor
of the Residual Certificates or any such agent (within 60 days of the request
therefor by the transferor or such agent) such information as may be necessary
for the computation of the tax imposed under section 860E(e) of the Code and as
otherwise may be required by the Code, including, but not limited to, the
present value of the total anticipated excess inclusions with respect to the
Residual Certificates (or portion thereof) for periods after such transfer. At
the election of the Master Servicer, the cost of computing and furnishing such
information may be charged to the transferor or the agent referred to above;
provided, however, that the Master Servicer shall in no event be excused from
furnishing such information.
If a tax or a reporting cost is borne by a REMIC as a result of the
transfer of a Residual Certificate (or any beneficial interest therein) in
violation of the restrictions set forth in this Section 5.05, the transferor
shall pay such tax or cost and, if such tax or cost is not so paid, the Paying
Agent, upon notification from the Master Servicer, shall pay such tax or cost
with amounts that otherwise would have been paid to the transferee of the
Residual Certificate (or the beneficial interest therein). In that event,
neither the transferee nor the transferor shall have any right to seek repayment
of such amounts from Saxon, the Trustee, any REMIC, the Master Servicer, the
Certificate Registrar, the Paying Agent or the other Holders of any of the
Certificates, and none of such parties shall have any liability for payment of
any such tax or reporting cost.
Section 5.06. Mutilated, Destroyed, Lost or Stolen Certificates
If (i) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to its respective satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee or the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of actual knowledge by the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
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the same Class and of like tenor and Percentage Interest. Upon the issuance of
any new Certificate under this Section 5.06, the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Certificate Registrar) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.06 shall constitute
complete and indefeasible evidence of ownership in the Trust as if originally
issued, whether or not the destroyed, lost or stolen Certificate shall be found
at any time.
Section 5.07. Persons Deemed Owners
Prior to due presentation of a Certificate for registration of transfer,
the Master Servicer, the Trustee, the Paying Agent, the Certificate Registrar
and any agent of either of them may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions and for all other purposes whatsoever, and neither the
Master Servicer, the Trustee, the Certificate Registrar, the Paying Agent nor
any agent of either of them shall be affected by notice to the contrary.
Section 5.08. Paying Agent
Any Paying Agent designated in the related Trust Agreement shall make
distributions to Certificateholders. Upon any resignation of any Paying Agent,
the Trustee shall promptly appoint, subject to Section 1.03 hereof, a successor
or, in the absence of such appointment, shall assume the duties of Paying Agent.
No such resignation shall be effective until the acceptance of appointment by
the successor Paying Agent. The Trustee shall have no liability or
responsibility for any act or omission to act of any Paying Agent appointed
(unless the Trustee is then servicing as such Paying Agent) pursuant to the
terms of the related Trust Agreement. Any such Paying Agent will hold all sums
held by it for the payment to Certificateholders in an Eligible Account in trust
for the benefit of the Certificateholders entitled thereto until such sums shall
be paid to the Certificateholders. Any Paying Agent shall be entitled to the
same rights, privileges and immunities accorded the Trustee pursuant to Article
VIII hereof.
Article VI
Saxon and the Master Servicer
Section 6.01. Liability of, and Indemnification by, Saxon and the Master
Servicer
Saxon and the Master Servicer shall each be liable in accordance
herewith only to the extent of the respective obligations specifically imposed
by the Trust Agreement and undertaken by Saxon and the Master Servicer under the
Trust Agreement.
The Master Servicer shall indemnify and hold harmless the Trustee, Saxon
and any director, officer, employee or agent thereof against any loss, liability
or expense, including reasonable attorney's fees, arising out of or in
connection with or incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Master Servicer under the Trust
Agreement or by reason of reckless disregard of its obligations and duties under
the Trust Agreement. Any payment pursuant to this Section 6.01 made by the
Master Servicer to Saxon, the Trustee shall be from such entity's own funds,
without reimbursement therefor. The provisions of this Section 6.01 or shall
survive the resignation or removal of the Master Servicer and the termination of
the Trust Agreement.
Saxon shall indemnify and hold harmless the Master Servicer and any
director, officer, employee or agent thereof against any loss, liability or
expense, including reasonable attorney's fees, incurred in connection with or
arising out of or in connection with the Trust Agreement (other than a loss,
liability or expense subject to indemnification by the Master Servicer pursuant
to the preceding paragraph), any custodial agreement or the Certificates,
including, but not limited to, any such loss, liability or expense incurred in
connection with any legal action against the Master Servicer or any director,
officer, employee or agent thereof, or the performance of any of the Master
Servicer's duties under the Trust Agreement other than any loss, liability or
expense incurred by reason of the Master Servicer's willful misfeasance, bad
faith or negligence in the performance of its duties under the Trust Agreement
or by reason of its reckless disregard of its obligations and duties under the
Trust Agreement. The provisions of this Section 6.01 shall survive the
resignation or removal of the Master Servicer and the termination of the Trust
Agreement.
Section 6.02. Merger or Consolidation of Saxon or the Master Servicer
Subject to the following paragraph, Saxon and the Master Servicer each
will keep in full effect its existence, rights and franchises under the laws of
the jurisdiction of its organization, and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of the Trust
Agreement, the Certificates or any of the Mortgage Loans and to perform its
respective duties under the Trust Agreement.
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Saxon or the Master Servicer may be merged or consolidated with or into
any Person, or transfer all or substantially all their respective assets to any
Person, in which case any Person resulting from any merger or consolidation to
which Saxon or the Master Servicer shall be a party, or any Person succeeding to
the business of Saxon or the Master Servicer, shall be the successor of Saxon or
the Master Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties to the
Trust Agreement, anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of Saxon, the Master Servicer and
Others
Neither Saxon, the Master Servicer nor any of the directors, officers,
employees or agents of Saxon or the Master Servicer shall be under any liability
to the Trust or the Certificateholders, and all such Persons shall be held
harmless for any action taken or for refraining from the taking of any action in
good faith pursuant to the Trust Agreement, or for errors in judgment; provided,
however, that this provision shall not protect any such Person against any
breach of warranties or representations made herein or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under the Trust Agreement. Saxon, the Master Servicer and
any of the directors, officers, employees or agents of Saxon or the Master
Servicer may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any Person respecting any matters arising
hereunder. Neither Saxon nor the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal action unless such action is related
to its respective duties under the Trust Agreement and in its opinion does not
involve it in any expense or liability, except as provided in Section 10.01(b)
hereof; provided, however, that Saxon or the Master Servicer may in its
discretion subject to Section 1.03 hereof undertake any such action that it
deems necessary or desirable with respect to the Trust Agreement and the rights
and duties of the parties thereto and the interests of the Certificateholders
thereunder if Saxon or the Master Servicer, as the case may be, are offered
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby.
Section 6.04. Resignation of the Master Servicer
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon appointment of a successor master servicer
and receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not, in and of itself, result in a downgrading
of any rated Certificates (without regard to any Credit Enhancement) or (ii)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination under clause (ii) of the preceding
sentence permitting the resignation of the Master Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a successor master
servicer shall have become the successor master servicer hereunder and agreed to
perform the responsibilities, duties, liabilities and obligations of the Master
Servicer that arise thereafter; provided, however, that no successor master
servicer shall (unless otherwise agreed) assume any liability for the actions
(or failure to act) of the Master Servicer prior to the date that such successor
becomes Master Servicer under the Trust Agreement.
Section 6.05. Compensation to the Master Servicer
The Master Servicer shall be entitled to receive a monthly fee as
compensation for services rendered by the Master Servicer under the Trust
Agreement. The monthly Master Servicing Fee with respect to the Trust shall
equal the amount set forth in the Trust Agreement, which may be retained by the
Master Servicer when it remits funds from the Master Servicer Custodial Account
to the Asset Proceeds Account. The Master Servicer also will be entitled, as
additional compensation, to any late reporting fees or late remittance fees
assessed against a Servicer pursuant to a Servicing Agreement or a Servicing
Guide.
Section 6.06. Assignment or Delegation of Duties by Master Servicer
Except as expressly provided in the Trust Agreement, the Master Servicer
shall not assign or transfer any of its rights, benefits or privileges under the
Trust Agreement to any other Person, or delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by the Master Servicer under the Trust Agreement,
without the prior written consent of the Trustee, and any agreement, instrument
or act purporting to effect any such assignment, transfer, delegation or
appointment without such written consent shall be void. Notwithstanding the
foregoing, the Master Servicer shall have the right without the prior written
consent of the Trustee to delegate to, subcontract with, authorize or appoint an
affiliate of the Master Servicer to perform and carry out any duties, covenants
or obligations to be performed and carried out by the Master Servicer under the
Trust Agreement and hereby agrees so to delegate, subcontract, authorize or
appoint to an affiliate of the Master Servicer any duties, covenants or
obligations to be performed and carried out by the Master Servicer under the
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Trust Agreement to the extent that such duties, covenants or obligations are to
be performed in any state or states in which the Master Servicer is not
authorized to do business as a foreign corporation but in which the affiliate is
so authorized. In no case, however, shall any permitted assignment relieve the
Master Servicer of any liability under the Trust Agreement.
Article VII
Termination of Servicing and Master Servicing Arrangements
Section 7.01. Termination and Substitution of Servicing Agreements
Upon discovery or notice of the occurrence of any event for which a
Servicer may be terminated pursuant to its Servicing Agreement, the Master
Servicer shall promptly deliver to Saxon, the Master Servicer and the Trustee, a
certificate of an Officer that an event has occurred that may justify
termination of such Servicing Agreement, describing the circumstances
surrounding such event. Subject to Section 1.03 hereof, the Master Servicer may
or shall terminate such Servicing Agreement.
If a Servicing Agreement is terminated, the Master Servicer shall enter
into a substitute Servicing Agreement with another mortgage loan servicing
company acceptable to the Master Servicer and Rating Agency under which such
mortgage loan servicing company shall assume, satisfy, perform and carry out all
liabilities, duties, responsibilities and obligations that are to be, or
otherwise were to have been, satisfied, performed and carried out by the
terminated Servicer under such terminated Servicing Agreement. Notwithstanding
the foregoing, no such substitute Servicing Agreement need contain a covenant by
the substitute Servicer to purchase Converted Mortgage Loans. Until such time as
the Master Servicer enters into a substitute servicing agreement with respect to
the Mortgage Loans, the Master Servicer shall assume, satisfy, perform and carry
out all obligations which otherwise were to have been satisfied, performed and
carried out by the terminated Servicer under the terminated Servicing Agreement.
In no event, however, shall the Master Servicer be deemed to have assumed the
obligations of a Servicer to purchase any Mortgage Loan from the Trust pursuant
to any provision of the related Servicing Agreement or Servicing Guide or to
make Advances with respect to any Mortgage Loan, except to the extent
specifically provided in Section 3.04 of the Standard Terms. As compensation to
the Master Servicer for any servicing obligations fulfilled or assumed by the
Master Servicer, the Master Servicer shall be entitled to any servicing
compensation to which the terminated Servicer would have been entitled if the
Servicing Agreement with such Servicer had not been terminated.
Section 7.02. Termination of Master Servicer; Trustee to Act
Each of the following shall constitute an Event of Default by the Master
Servicer of its obligations under the Trust Agreement:
(a) the Master Servicer shall fail duly to observe or perform in any
material respect any of its covenants or agreements (other than its obligation
to make an Advance pursuant to Section 3.04 hereof) contained in the Trust
Agreement and such failure shall continue unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(b) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged and unstayed for a period of 60 days; or
(c) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding of or relating to the
Master Servicer or relating to all or substantially all its property; or
(d) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations; or
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(e) the Master Servicer shall fail to remit funds in the Master Servicer
Custodial Account to the Asset Proceeds Account as required by Section 3.01(c)
hereof within one Business Day of the date that such funds are due; or
(f) the Master Servicer shall fail to make any Advance or other payment
required by Section 3.04 or Section 3.05 hereof within one Business Day of the
date that such Advance or other payment is due.
The rights and obligations of the Master Servicer under the Trust
Agreement may be terminated only upon the occurrence of an Event of Default and
subject to Section 1.03 hereof. Subject to Section 1.03 hereof, if an Event of
Default described in clauses (a) through (d) of this Section 7.02 shall occur,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Trustee may, and at the direction of the Holders of
Certificates entitled to at least 51% of the Voting Rights, the Trustee shall,
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. Subject to Section 1.03 hereof if an Event of
Default described in clauses (e) and (f) of this Section 7.02 shall occur, the
Trustee may terminate, by notice in writing to the Master Servicer, 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, whether with respect to the Certificates (other than
as a Holder thereof) or the Mortgage Loans or otherwise, shall, to the maximum
extent permitted by law, pass to and be vested in the Trustee pursuant to and
under this Section 7.02 (provided, however, that the Master Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under the
Trust Agreement on or prior to the date of such termination. Without limiting
the generality of the foregoing, the Trustee is hereby authorized and empowered
to execute and deliver on behalf of and at the expense of the Master Servicer,
as the Master Servicer's attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things that in
the Trustee's sole and absolute judgment may be necessary or appropriate, to
effect such termination. Notwithstanding the foregoing, upon any such
termination the Master Servicer shall do all things reasonably requested by the
Trustee to effect the termination of the Master Servicer's responsibilities,
rights and powers under the Trust Agreement, and the transfer thereof to the
Trustee, including, but not limited to, promptly providing to the Trustee (and
in no event later than ten Business Days subsequent to such notice) all
documents and records electronic and otherwise reasonably requested by the
Trustee to enable the Trustee or its designee to assume and carry out the duties
and obligations that otherwise were to have been performed and carried out by
the Master Servicer but for such termination.
Upon any such termination, the Trustee shall, to the maximum extent
permitted by law, be the successor in all respects to the Master Servicer in its
capacity as master servicer under the Trust Agreement, but the Trustee shall not
have any liability for, or any duty or obligation to perform, any duties or
obligations of the Master Servicer required to be performed prior to the date
that the Trustee becomes successor master servicer.
As successor master servicer, the Trustee shall be entitled to the fees
to which the Master Servicer would have been entitled if the Master Servicer had
continued to act as such. The Trustee shall also, as successor master servicer,
be entitled to all the protections and indemnification afforded to the Master
Servicer pursuant to Section 6.03 hereof.
Notwithstanding the above but subject to Section 1.03 hereof, upon the
occurrence of an Event of Default, if the Trustee shall be unwilling so to act,
or shall, if it is unable so to act or, if the Holders of Certificates entitled
to at least 51% of the Voting Rights so request in writing to the Trustee,
promptly appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution acceptable to each Rating Agency
and having a net worth of not less than $15,000,000 as the successor to the
Master Servicer. No appointment of a successor to the Master Servicer shall be
effective until the assumption by such successor of all future responsibilities,
duties and liabilities of the Master Servicer under the Trust Agreement. Pending
appointment of a successor to the Master Servicer, the Trustee or an affiliate
shall, to the maximum extent permitted by law, act in such capacity as
hereinabove provided.
In connection with any such appointment and assumption described herein,
the Trustee may make such arrangements for the compensation of such successor
out of payments received on the assets included in the Trust Estate as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Master Servicer under the Trust Agreement.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
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Upon the occurrence of any Event of Default, the Trustee, in addition to
the rights specified in this Section 7.02, shall have the right, in its own name
and as Trustee, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). No remedy provided for by the Trust Agreement shall be exclusive of
any other remedy, each and every remedy shall be cumulative and in addition to
any other remedy and no delay or failure to exercise any right or remedy shall
impair any such right or remedy or shall be deemed to be a waiver of any Event
of Default.
For the purposes of this Section 7.02 and Section 8.01 hereof, the
Trustee shall not be deemed to have knowledge of an Event of Default unless an
Officer of the Trustee has actual knowledge thereof or unless written notice of
such Event of Default is received by the Trustee at its Corporate Trust Office
and such notice references the Certificates, the Trust or the Trust Agreement.
Section 7.03. Notification to Certificateholders
(a) Upon any termination pursuant to Section 7.01 or Section 7.02
hereof, or any appointment of a successor to a Servicer or the Master Servicer,
the Trustee shall give prompt written notice thereof to the Certificateholders
at their respective addresses appearing in the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default or the
Trustee's receipt of notice of the occurrence of any event permitting
termination of a Servicer, the Trustee shall transmit by mail to the
Certificateholders notice of each such Event of Default or event known to the
Trustee, unless such Event of Default or event shall have been cured or waived.
Article VIII
Concerning the Trustee
Section 8.01. Duties of Trustee
The Trustee, prior to the occurrence of an Event of Default and after
the curing of each Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in the Trust Agreement. During an
Event of Default of which the Trustee has notice, the Trustee shall exercise
such of the rights and powers vested in it by the Trust Agreement, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of any resolution, certificate, statement,
opinion, report, document, order or other instrument specifically required to be
furnished to it pursuant to any provision of the Trust Agreement, shall examine
such instrument to determine whether it conforms to the requirements of the
Trust Agreement; provided, however, that the Trustee shall be under no duty to
recalculate, verify or recompute any information provided to it hereunder by
Saxon or the Master Servicer. If any such instrument is found not to conform to
the requirements of the Trust Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee shall
provide notice thereof to the Certificateholders.
No provision of the Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default, and after the curing
of each Event of Default, the duties and obligations of the Trustee shall be
determined solely by the express provisions of the Trust Agreement, the Trustee
shall not be liable except for the performance of such duties and obligations as
are specifically set forth in the Trust Agreement, no implied covenants or
obligations shall be read into the Trust Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee that conform to the requirements of the Trust Agreement;
(b) the Trustee shall not be personally liable for an error of judgment
made in good faith by an Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
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with the direction of the Holders of Certificates entitled to at least 25% of
the Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under the Trust Agreement;
(d) any determination of negligence or bad faith of the Trustee shall be
made only upon a finding that there is clear and convincing evidence (and not
upon the mere preponderance of evidence) thereof in a proceeding before a court
of competent jurisdiction in which the Trustee has had an opportunity to defend;
and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Master Servicer or a Servicer (excepting the Trustee's own
actions as Master Servicer or Servicer), and in connection with any action or
claim for recovery sought against the Trustee based upon facts involving the
acts or omissions of the Master Servicer or Saxon, or involving any allegation
or claim of liability or recovery against the Trustee by the Master Servicer or
by a Seller, the Trustee shall not be held to a greater standard of care than
the Master Servicer or the Seller would be held in such situation. No provision
of the Trust Agreement shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it unless
such risk or liability relates to duties set forth herein (which duties shall
not be deemed to include actions required to be taken by the Trustee arising out
of the failure of another person to take any required action hereunder).
Section 8.02. Certain Matters Affecting the Trustee
(a) Except as otherwise provided in Section 8.01 hereof:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate of auditors or
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties. Further, the Trustee may accept a copy of the
vote of the Board of Directors of any party certified by its clerk or
assistant clerk or secretary or assistant secretary as conclusive
evidence of the authority of any person to act in accordance with such
vote, and such vote may be considered as in full force and effect until
receipt by the Trustee of written notice to the contrary;
(ii) the Trustee may, in the absence of bad faith on its part,
rely upon a certificate of an Officer of the appropriate Person whenever
in the administration of the Trust Agreement the Trustee shall deem it
desirable that a matter be proved or established (unless other evidence
be herein specifically prescribed) prior to taking, suffering or
omitting any action hereunder;
(iii) the Trustee may consult with counsel chosen with due care
and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such written advice or Opinion of Counsel;
(iv) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by the Trust Agreement or to
institute, conduct or defend any litigation thereunder or in relation
thereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Trust Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(v) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Trust Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing
to do so by the Holders of Certificates entitled to at least 25% of the
Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not assured to the Trustee by the security
afforded to it by the terms of the Trust Agreement, the Trustee may
require indemnity against such expense or liability as a condition to
taking any such action. The expense of every such investigation shall be
paid by the Master Servicer or, if paid by the Trustee, shall be repaid
by the Master Servicer upon demand;
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(vii) the Trustee may execute any of the trusts or powers under
the Trust Agreement or perform any duties thereunder either directly or
by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it under the Trust Agreement;
(viii) whenever the Trustee is authorized herein to require acts
or documents in addition to those required to be provided it in any
matter, it shall be under no obligation to make any determination
whether or not such additional acts or documents should be required
unless obligated to do so under Section 8.01 hereof;
(ix) the permissive right or authority of the Trustee to take
any action enumerated in the Trust Agreement shall not be construed as
a duty or obligation; and
(x) the Trustee shall not be deemed to have notice of any matter,
including, but limited to, any Event of Default, unless an Officer of
the Trustee has actual knowledge thereof or unless written notice
thereof is received by the Trustee at its Corporate Trust Office and
such notice references the Certificates, the Trust or the Trust
Agreement.
(b) All rights of action under the Trust Agreement or under any of the
Certificates that are enforceable by the Trustee may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
any trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of such Certificates, subject to the provisions of
the Trust Agreement.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans
The recitals contained in the Trust Agreement and in the Certificates
(other than the signature and countersignature of the Trustee on the
Certificates) shall be taken as the statements of Saxon, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of the Trust Agreement or the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by Saxon of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to Saxon in respect of the Mortgage Loans or
deposited in or withdrawn from the Asset Proceeds Account or the Master Servicer
Custodial Account other than any funds held by or on behalf of the Trustee in
accordance with Sections 3.01 and 3.02 hereof or as owner of the Regular
Interests of the Pooling REMIC.
Section 8.04. Trustee May Own Certificates
The Trustee, the Paying Agent, the Certificate Registrar or the
Custodian in its respective individual capacity or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee, the Paying Agent, the Certificate Registrar or the Custodian.
Section 8.05. Trustee's Fees
The Trustee shall be entitled to receive the Trustee Fee as compensation
for its services under the Trust Agreement. The Trustee Fee shall be payable
from amounts received with respect to the Mortgage Loans. Saxon shall indemnify
and hold harmless the Trustee, the Paying Agent, the Certificate Registrar or
the Custodian and any director, officer, employee or agent thereof against any
loss, liability or expense, including reasonable attorney's fees, incurred in
connection with or arising out of or in connection with the Trust Agreement
(other than a loss, liability or expense subject to indemnification by the
Master Servicer pursuant to Section 6.01 hereof), any custodial agreement or the
Certificates, including, but not limited to, any such loss, liability or expense
incurred in connection with any legal action against the Trust or the Trustee,
the Paying Agent, the Certificate Registrar or the Custodian or any director,
officer, employee or agent thereof, or the performance of any of the duties of
the Trustee, the Paying Agent or the Certificate Registrar under the Trust
Agreement or the duties of the Custodian under any custodial agreement
(including, but not limited to, the execution and delivery of documents in
connection with a foreclosure sale, trustee's sale, or deed in lieu of
foreclosure of a Mortgage Loan, including, but not limited to, any deed of
reconveyance, any substitution of trustee documents or any other documents to
release, satisfy, cancel or discharge any Security Instrument or Mortgage Loan)
other than any loss, liability or expense incurred by reason of the willful
misfeasance, bad faith or negligence in the performance of the duties under the
Trust Agreement or by reason of the willful misfeasance, bad faith or gross
negligence of the Custodian under any custodial agreement (including
specifically any loss, liability or expense incurred by the Custodian by reason
of simple negligence under any custodial agreement). The provisions of this
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Section 8.05 shall survive the resignation or removal of the Trustee, the Paying
Agent or the Certificate Registrar and the termination of the Trust Agreement
and the resignation or removal of the Custodian under any custodial agreement.
The Trustee may receive an additional indemnity from a party acceptable to the
Trustee.
Section 8.06. Eligibility Requirements for Trustee
The Trustee shall at all times be a bank or trust company that: (i) is
not an Affiliate, (ii) is organized and doing business under the laws of the
United States or any state thereof and is authorized under such laws to exercise
corporate trust powers, (iii) has a combined capital and surplus of at least
$50,000,000, and (iv) is subject to supervision or examination by a federal or
state authority. If such bank or trust company publishes reports of its
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such bank or trust company
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 hereof.
Section 8.07. Resignation and Removal of the Trustee
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Trust Agreement by giving written notice thereof to
Saxon, the Master Servicer and all Certificateholders. Upon receiving such
notice of resignation, Saxon shall promptly, subject to Section 1.03 hereof,
appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. Saxon shall deliver a copy of such instrument to the
Certificateholders, the Master Servicer and each Servicer. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 hereof and shall fail to resign after written
request therefor by Saxon, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then Saxon, subject to Section
1.03 hereof, may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. Saxon shall also deliver a copy of such
instrument to the Certificateholders, the Master Servicer and each Servicer.
Subject to Section 1.03 hereof, the Holders of Certificates entitled to
at least 51% of the Voting Rights may at any time remove the Trustee and appoint
a successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to each of Saxon, the Trustee so removed
and the successor so appointed. Saxon shall deliver a copy of such instruments
to the Certificateholders, the Master Servicer and each Servicer.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 8.08 hereof.
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Section 8.08. Successor Trustee
Any successor trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to Saxon, the Master Servicer and the
predecessor trustee an instrument accepting such appointment under the Trust
Agreement, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor thereunder, with the like effect as if originally
named as trustee therein. The predecessor trustee shall deliver, or cause to be
delivered, to the successor trustee all Trustee Mortgage Loan Files and related
documents and statements held by it under the Trust Agreement, and Saxon, the
Master Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section, Saxon shall mail notice of the succession of such trustee under
the Trust Agreement to all Certificateholders at their addresses as shown in the
Certificate Register. If Saxon fails to mail such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of Saxon.
Section 8.09. Merger or Consolidation of Trustee
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any Person resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any Person succeeding
to the business of the Trustee, shall be the successor of the Trustee under the
Trust Agreement provided such Person shall be eligible under the provisions of
Section 8.06 hereof, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10. Appointment of Trustee or Separate Trustee
For the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or property securing the same may at the time be
located, Saxon, the Master Servicer and the Trustee acting jointly, subject to
Section 1.03 hereof, shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as Saxon, the Master Servicer or the Trustee may
consider necessary or desirable. If Saxon or the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Trustee alone shall have the power to make such appointment. No
co-trustee(s) or separate trustee(s) hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 hereof and no
notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee under the
Trust Agreement or as successor to the Master Servicer pursuant to Section 7.02
hereof), the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Trust Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of the
Trust Agreement, specifically including every provision of the Trust Agreement
relating to the conduct of or affecting the liability of, or affording
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protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee. Any expense associated with the appointment of a separate
trustee or co-trustee shall not be an expense of the Master Servicer.
Section 8.11. Appointment of Custodians
The appointment of the Custodian may at any time be terminated and a
substitute Custodian appointed therefor by the Trustee, subject to Section 1.03
hereof, pursuant to a Custody Agreement satisfactory in form and substance to
the Trustee. Subject to Section 1.03 hereof, the Trustee shall terminate the
appointment of any Custodian and appoint a substitute custodian upon the request
of the Master Servicer. The Trustee agrees to comply with the terms of each
custodial agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodian shall be a
depository institution or trust company subject to supervision by federal or
state authority, shall have combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds any
Trustee Mortgage Loan File. Any such Custodian may not be an affiliate of Saxon
or any Seller.
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates
All rights of action and claims under the Trust Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
Article IX
Termination of the Trust; Purchase of Certificates
Section 9.01. Termination of Trust
The Trust created under a Trust Agreement and all obligations created
thereby will terminate upon the payment to the Holders of all Certificates
(including the Certificate Insurer, pursuant to its subrogation and
reimbursement rights), from amounts other than those available under the
Certificate Insurance Policies, of all amounts held by the Trustee and required
to be paid to such Holders pursuant to this Agreement upon the last to occur of
(a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate, (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate and (c) if an election has been made to treat certain assets of the Trust
as a REMIC, at any time when a Qualified Liquidation of the REMIC is effected as
described below. To effect a termination of this Agreement pursuant to clause
(c) above, the Holders of all Certificates then Outstanding shall (i)
unanimously direct the Trustee on behalf of the REMIC to adopt a plan of
complete liquidation , as contemplated by Section 860F(a)(4) of the Code and as
prepared by the Master Servicer and (ii) provide to the Trustee an opinion of
counsel experienced in federal income tax matters acceptable to the Trustee to
the effect that such liquidation constitutes, as to the REMIC, a Qualified
Liquidation, and the Trustee either shall sell the assets constituting the REMIC
and distribute the proceeds of the liquidation of the Trust Estate, or shall
distribute equitably in kind all the assets of the Trust Estate to the remaining
Holders of the Certificates each in accordance with such plan, so that the
liquidation or distribution of the Trust Estate, the distribution of any
proceeds of the liquidation and the termination of this Agreement occur no later
than the close of the 90th day after the date of adoption of the plan of
liquidation and such liquidation qualifies as a Qualified Liquidation. The
Holders of the Certificates agree, by acceptance of Certificates, that there may
be no claim under any Certificate Insurance Policy following termination of the
Trust pursuant to clause (c) of the first sentence of this Section 9.01 without
the consent of the Certificate Insurer. In no event, however, will the Trust
created by this Agreement continue beyond the expiration of twenty-one (21)
years from the death of the last survivor of the descendants of George Herbert
Walker Bush, former President of the United States, living on the date hereof.
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The Trustee shall give written notice of termination of the Agreement to each
Holder and Certificate Insurer in the manner set forth in Section 11.05 hereof.
Section 9.02. Optional Termination
(a) On any Master Servicer Remittance Date on or after the Initial
Optional Termination Date, Saxon or the Holders of a majority in Percentage
Interests of the Class of Certificates designated in the Trust Agreement (the
"Designated Class") 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 computed at
the Adjusted Pass-Through Rate, plus in all cases all accrued and unpaid
Servicing Fees and Master Servicing Fees plus any unpaid Reimbursement Amounts
plus the aggregate amount of any unreimbursed Advances and any Advances which a
Servicer or the Master Servicer has theretofore failed to remit; but in any
event such purchase amount shall be sufficient to retire all other Certificates
in full. In connection with such purchase, the Master Servicer shall remit to
the Trustee (or the Paying Agent on behalf of 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) If an election has been made to treat certain assets of the Trust as
a REMIC, in connection with any such purchase, Saxon or such Holders shall
direct the Trustee to adopt and the Trustee shall adopt, as to the REMIC, 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 the REMIC, a
Qualified Liquidation. In addition, Saxon or such Holders 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 9.02, the
Trustee will release the Trustee Mortgage Loan File to the Holders of the
Designated Certificates or otherwise upon their order.
Section 9.03. Optional Purchase
On any Distribution Date on or after the Initial Optional Termination
Date, the Holders of a majority in Percentage Interests of the Designated Class
may purchase the Certificates of all other Classes by depositing with the Paying
Agent on the preceding Master Servicer Remittance Date an amount equal to the
Certificate Principal Balance of such Certificates on such Distribution Date
plus interest thereon to such Distribution Date.
Section 9.04. Termination Upon Loss of REMIC Status
If a REMIC has been formed with respect to all or any portion of the
Trust Estate:
(a) Following a final determination by the Internal Revenue Service or
by a court of competent jurisdiction, in either case from which no appeal is
taken within the permitted time for such appeal, or if any appeal is taken,
following a final determination of such appeal from which no further appeal may
be taken, to the effect that the REMIC does not and will no longer qualify as a
REMIC pursuant to Section 860D of the Code (the "Final Determination"), at any
time on or after the date which is 30 calendar days following such Final
Determination (i) the Certificate Insurer or the Holders of a majority in
Percentage Interests of the Regular Certificates then outstanding with the
consent of the Certificate Insurer may direct the Trustee on behalf of the Trust
to adopt a plan of complete liquidation, as prepared by the Master Servicer, and
(ii) the Certificate Insurer may notify the Trustee of the Certificate Insurer's
determination to purchase from the Trust all (but not fewer than all) Mortgage
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Mortgage Loan then remaining in the
Trust Estate at a price equal to the sum of (x) the greater of (i) 100% of the
aggregate Scheduled Principal Balances of the Mortgage Loans as of the day of
purchase minus amounts remitted from the Master Servicer Custodial Account
representing collections of principal on the Mortgage Loans during the current
Remittance Period and (ii) the fair market value of such Mortgage Loans
(disregarding accrued interest), (y) one month's interest on such amount
computed at the Adjusted Pass-Through Rate and (z) the aggregate amount of any
unreimbursed Advances and any Advances which a Servicer or Master Servicer has
theretofore failed to remit.
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Upon receipt of such direction from the Certificate Insurer, the Trustee
shall notify the Servicers and the Holders of the Residual Certificates of such
election to liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Holders of a majority of the Percentage Interest of
the Residual Certificates then Outstanding may, within 60 days from the date of
receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from the Trust all (but not fewer than all) Mortgage Loans and
all property theretofore acquired by foreclosure, deed in lieu of foreclosure,
or otherwise in respect of any Mortgage Loan then remaining in the Trust Estate
at a purchase price equal to the aggregate Scheduled Principal Balances of all
Mortgage Loans as of the date of such purchase, plus (a) one month's interest on
such amount at the Adjusted Pass-Through Rate, (b) the aggregate amount of any
unreimbursed Advances and unpaid Servicing Fees and Master Servicing Fees, (c)
any Advances which a Servicer or Master Servicer has theretofore failed to remit
and (d) any outstanding Reimbursement Amount.
If, during the Purchase Option Period, the Holders of the Residual
Certificates have not exercised the option described in the immediately
preceding paragraph, then upon the expiration of the Purchase Option Period (i)
if the Certificate Insurer or the Holders of a majority in Percentage Interests
of the Regular Certificates with the consent of the Certificate Insurer have
given the Trustee the direction described in clause (a)(i) above, the Trustee
shall sell the Mortgage Loans and reimburse the Servicers or Master Servicer for
unreimbursed Advances, Master Servicing Fees, and Servicing Fees and distribute
the remaining proceeds of the liquidation of the Trust Estate, each in
accordance with the plan of complete liquidation, such that, if so directed, the
liquidation of the Trust Estate, the distribution of the proceeds of the
liquidation and the termination of this Agreement occur no later than the close
of the 60th day, or such later day as the Certificate Insurer or Holders with
the consent of the Certificate Insurer shall permit or direct in writing, after
the expiration of the Purchase Option Period and (ii) if the Certificate Insurer
has given the Trustee notice of the Certificate Insurer's determination to
purchase the Trust Estate described in clause (a)(ii) above, the Certificate
Insurer shall, within 60 days, purchase all (but not fewer than all) Mortgage
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure or otherwise in respect of any Mortgage Loan then remaining in the
Trust Estate. In connection with such purchase, the Master Servicer shall remit
to the Trustee (or the Paying Agent on behalf of 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) Following a Final Determination, the Holders of a majority in
Percentage Interests of the Residual Certificates then Outstanding may, at their
option and upon delivery to the Certificate Insurer of an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate Insurer
selected by such Holders which opinion shall be reasonably satisfactory in form
and substance to the Certificate Insurer to the effect that the effect of the
Final Determination is to increase substantially the probability that the gross
income of the Trust will be subject to federal taxation, purchase from the Trust
all (but not fewer than all) Mortgage Loans and all property theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any Mortgage Loan then remaining in the Trust Estate at a purchase price equal
to the aggregate Scheduled Principal Balances of all Mortgage Loans as of the
date of such purchase, plus (a) one month's interest on such amount computed at
the Adjusted Pass-Through Rate, (b) the aggregate amount of unreimbursed
Advances, Servicing Fees and Master Servicing Fees, (c) the interest portion of
any Advances which a Servicer or Master Servicer has theretofore failed to remit
and (d) any outstanding Reimbursement Amount. In connection with such purchase,
the Master Servicer shall remit to the Trustee (or the Paying Agent on behalf of
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. The foregoing opinion
shall be deemed satisfactory unless the Certificate Insurer gives such Holders
notice that such opinion is not satisfactory within thirty days after receipt of
such opinion. In connection with any such purchase, such Holders shall direct
the Trustee to adopt a plan of complete liquidation acceptable to the
Certificate Insurer, as prepared by the Master Servicer and shall provide to the
Trustee and the Certificate Insurer an Opinion of Counsel experienced in federal
income tax matters to the effect that such purchase constitutes, as to the
REMIC, a Qualified Liquidation.
Section 9.05. Disposition of Proceeds
The Trustee (or the Paying Agent on behalf of the Trustee) shall deposit
the proceeds of any liquidation of the Trust Estate pursuant to this Article IX
to the Asset Proceeds Account for application as provided in the Trust
Agreement; provided, however, that any amounts representing unrecovered Advances
which the Master Servicer determined to be non-recoverable and unreimbursed
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<PAGE>
Advances, accrued and unpaid Master Servicing Fees, and Servicing Fees
theretofore funded by a Servicer from such Servicer's own funds shall be paid by
the Trustee (or the Paying Agent on behalf of the Trustee) to the Master
Servicer or such Servicer, respectively, from the proceeds of the Trust Estate.
Article X
REMIC Tax Provisions
Section 10.01. REMIC Administration
(a) Unless otherwise specified in the Trust Agreement, the Trustee shall
elect (on behalf of each REMIC to be created) to have the Trust (or designated
assets thereof) treated as one or more REMICs on Form 1066 or such other
appropriate federal tax or information return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued as well as on
any corresponding state tax or information return necessary to have the Trust
(or such assets) treated as one or more REMICs under state law.
(b) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of the Trust and each REMIC, including, but not limited to, any
professional fees or expenses related to (i) audits or any administrative or
judicial proceedings with respect to each REMIC that involve the Internal
Revenue Service or state tax authorities or (ii) the adoption of a plan of
complete liquidation.
(c) The Master Servicer shall prepare any necessary forms for election
as well as all the Trust's and each REMIC's federal and state tax and
information returns. At the request of the Master Servicer, the Trustee shall
sign and file such returns on behalf of each REMIC. The expenses of preparing
and filing such returns shall be borne by the Master Servicer.
(d) The Master Servicer shall perform all reporting and other tax
compliance duties that are the responsibility of the Trust and each REMIC under
the REMIC Provisions or state or local tax law. Among its other duties, if
required by the REMIC Provisions, the Master Servicer, acting as agent of each
REMIC, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any Disqualified Organization and (ii) to
the Trustee such information as is necessary for the Trustee to discharge its
obligations under the REMIC Provisions to report tax information to the
Certificateholders.
(e) Saxon, the Master Servicer, the Trustee (to the extent it has been
instructed by Saxon or the Master Servicer), and the Holders of the Residual
Certificates shall take any action or cause any REMIC to take any action
necessary to create or maintain the status of such REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or maintain
such status.
(f) Saxon, the Master Servicer, the Trustee (to the extent it has been
instructed by Saxon or the Master Servicer), and the Holders of the Residual
Certificates shall not take any action required by the Code or REMIC Provisions
or fail to take any action, or cause any REMIC to take any action or fail to
take any action, that, if taken or not taken, could endanger the status of any
such REMIC as a REMIC unless the Trustee and the Master Servicer have received
an Opinion of Counsel (at the expense of the party seeking to take or to fail to
take such action) to the effect that the contemplated action or failure to act
will not endanger such status.
(g) Unless otherwise provided in the Trust Agreement, any taxes that are
imposed upon the Trust or any REMIC by federal or state (including local)
governmental authorities (other than taxes paid by a party pursuant to Section
10.02 hereof or as provided in the following sentence) shall be allocated in the
same manner as Realized Losses are allocated. Any taxes imposed upon the Trust
or any REMIC by the jurisdiction (or any subdivision thereof) in which the
Corporate Trust Office of the Trustee is located that would not have been
imposed on the Trust or such REMIC in the absence of any legal or business
connection between the Trustee and such jurisdiction (or locality), shall be
paid by the Trustee and, notwithstanding anything to the contrary in the Trust
Agreement, such taxes shall be deemed to be part of the Trustee's cost of doing
business and shall not be reimbursable to the Trustee.
(h) Unless otherwise provided in the Trust Agreement, the Master
Servicer or an Affiliate shall acquire a Residual Certificate in each REMIC and
will act as the Tax Matters Person of each REMIC and perform various tax
administration functions of each REMIC as its agent. If the Master Servicer or
an Affiliate is unable for any reason to fulfill its duties as Tax Matters
Person for a REMIC, the holder of the largest Percentage Interest of the
Residual Certificates in such REMIC shall become the successor Tax Matters
Person of such REMIC.
51
<PAGE>
Section 10.02. Prohibited Activities
Except as otherwise provided in the Trust Agreement, neither Saxon, the
Master Servicer, the Holders of the Residual Certificates, nor the Trustee shall
engage in, nor shall the parties permit, any of the following transactions or
activities unless it has received (i) a Special Tax Opinion and (ii) a Special
Tax Consent from each of the Holders of the Residual Certificates (unless the
Special Tax Opinion specially provides that no REMIC-level tax will result from
the transaction or activity in question):
(i) the sale or other disposition of, or substitution for, any
Mortgage Loan except pursuant to (A) a foreclosure or default with
respect to such Mortgage Loan, (B) the bankruptcy or insolvency of any
REMIC, (C) the termination of any REMIC pursuant to Section 9.02 hereof
or (D) a substitution or purchase in accordance with Section 2.03
hereof;
(ii) the acquisition of any Mortgage Loan for the Trust after the
Closing Date except (A) during the three-month period beginning on the
Closing Date pursuant to a fixed price contract in effect on the Closing
Date that has been reviewed and approved by tax counsel acceptable to
the Master Servicer or (B) a substitution in accordance with Section
2.03 hereof;
(iii)the sale or other disposition of any investment in the
Asset Proceeds Account at a gain;
(iv) the sale or other disposition of any asset held in a Reserve
Fund for a period of less than three months (a "Short-Term Reserve Fund
Investment") if such sale or other disposition would cause 30% or more
of a REMIC's income from such Reserve Fund for the taxable year to
consist of gain from the sale or disposition of Short-Term Reserve Fund
Investments;
(v) the withdrawal of any amounts from any Reserve Fund except
(A) for the distribution pro rata to the Holders of the Residual
Certificates or (B) to provide for the payment of expenses of the
related REMIC or amounts payable on the Certificates in the event of
defaults or late payments on the Mortgage Loans or lower than expected
returns on funds held in the Asset Proceeds Account, as provided under
section 860G(a)(7) of the Code;
(vi) the acceptance of any contribution to the Trust except (A) a
cash contribution received during the three month period beginning on
the Closing Date, (B) any transfer of funds from a Mortgagor Bankruptcy
Fund, Special Hazard Fund or Interest Fund to the Asset Proceeds
Account, (C) a cash contribution to a Reserve Fund owned by a REMIC that
is made pro rata by the Holders of the Residual Certificates, (D) a cash
contribution to facilitate a Terminating Purchase that is made within
the 90-day period beginning on the date on which a plan of complete
liquidation is adopted pursuant to Section 9.04(a)(A) hereof, or (E) any
other cash contribution approved by the Master Servicer after
consultation with tax counsel; or
(vii)any other transaction or activity that is not contemplated
by the Trust Agreement.
Any party causing the Trust to engage in any of the activities
prohibited in this Section 10.02 shall be liable for the payment of any tax
imposed on the Trust pursuant to section 860F(a)(1) or 860G(d) of the Code as a
result of the Trust engaging in such activities.
52
<PAGE>
Article XI
Miscellaneous Provisions
Section 11.01. Amendment of Trust Agreement
The Trust Agreement may be amended or supplemented from time to time by
Saxon, the Master Servicer and the Trustee, subject to Section 1.03 hereof, but
without the consent of any of the Certificateholders (i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, (iii) to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of the Trust (or certain assets thereof) either as a REMIC or
as a grantor trust, as applicable under the Code at all times that any
Certificates are outstanding or (iv) to make any other provisions with respect
to matters or questions arising under the Trust Agreement or matters arising
with respect to the Trust that are not covered by the Trust Agreement, provided
that such action shall not adversely affect in any material respect the
interests of any Certificateholder. Any such amendment or supplement shall be
deemed not to adversely affect in any material respect any Certificateholder if
there is delivered to the Trustee written notification from each Rating Agency
to the effect that such amendment or supplement will not cause such Rating
Agency to reduce the then current rating assigned to such Certificates.
The Trust Agreement may also be amended from time to time by Saxon, the
Master Servicer and the Trustee, subject to Section 1.03 hereof, and with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights of such Class, or (iii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all such Certificates then outstanding.
For purposes of the giving or withholding of consents pursuant to this Section
11.01, Certificates registered in the name of Saxon or an Affiliate shall be
entitled to Voting Rights with respect to matters affecting such Certificates.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 11.02. Recordation of Agreement; Counterparts
To the extent permitted by applicable law, the Trust Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any of or
all the properties subject to the Security Instruments are situated, and in any
other appropriate public recording office or elsewhere, only if such recording
is deemed necessary by an Opinion of Counsel (which shall not be an expense of
the Master Servicer or the Trustee) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
Neither the Trustee nor the Master Servicer shall be obligated to seek such
recordation or Opinion of Counsel unless requested in writing to do so by a
Certificateholder, Rating Agency or Certificate Insurer, in which case all legal
fees and expenses related to such Opinion of Counsel shall be paid by such
requesting Person.
For the purpose of facilitating any recordation of the Trust Agreement
as herein provided and for other purposes, the Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation of Rights of Certificateholders
The death or incapacity of any Certificateholder shall not operate to
terminate the Trust Agreement or the Trust, nor entitle such Certificateholder's
53
<PAGE>
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Trust Agreement pursuant to any provision thereof.
No Certificateholder shall have any right by virtue of any provision of
the Trust Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Trust Agreement unless (i) such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and (ii) the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee under the Trust Agreement and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more
Certificateholders shall have any right in any manner whatever by virtue of any
provision of the Trust Agreement to affect, disturb or prejudice the rights of
any other Certificateholders, or to obtain or seek to obtain priority over or
preference to any other Certificateholders or to enforce any right under the
Trust Agreement, except in the manner therein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04. Governing Law
The Trust Agreement shall be construed in accordance with and governed
by the laws of the State applicable to agreements made and to be performed
therein.
Section 11.05. Notices
All demands and notices under the Trust Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to the
party concerned at its address set forth in the Trust Agreement, or such other
address or telecopy number as may hereafter be furnished to each party to the
Trust Agreement in writing by any such party. Any notice required or permitted
to be mailed to a Certificateholder shall be given by first-class mail, postage
prepaid, or by express delivery service, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in the Trust Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
Section 11.06. Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
the Trust Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of the Trust Agreement and
shall in no way affect the validity or enforceability of the other provisions of
the Trust Agreement or of the Certificates or the rights of the
Certificateholders.
Section 11.07. Sale of Mortgage Loans
It is the express intent of Saxon and the Trustee that the conveyance of
the Mortgage Loans by Saxon to the Trustee pursuant to the Trust Agreement be
construed as a sale of the Mortgage Loans by Saxon to the Trustee for the
benefit of the Certificateholders. It is, further, not the intention of Saxon
and the Trustee that such conveyance be deemed a pledge of the Mortgage Loans by
Saxon to the Trustee for the benefit of the Certificateholders to secure a debt
54
<PAGE>
or other obligation of Saxon. Nevertheless, if, notwithstanding the intent of
the parties, the Mortgage Loans are held to continue to be property of Saxon
then (i) the Trust Agreement shall be deemed to be a security agreement within
the meaning of Article 9 of the UCC, (ii) the conveyance by Saxon provided for
in the Trust Agreement shall be deemed to be a grant by Saxon to the Trustee for
the benefit of the Certificateholders of a security interest in all Saxon's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including, but not limited to,
all amounts, other than investment earnings, from time to time held or invested
in the Master Servicer Custodial Account or Asset Proceeds Account, whether in
the form of cash, instruments, securities or other property, (iii) the
possession by the Trustee or the Custodian of Mortgage Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
UCC of the State and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. Saxon
and the Trustee (to the extent it has been instructed by Saxon or the Master
Servicer) shall, to the extent consistent with the Trust Agreement, take such
actions as may be necessary to ensure that, if the Trust Agreement were deemed
to create a security interest in the Mortgage Loans, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the Trust
Agreement.
Section 11.08. Notice to Rating Agency
(a) The Trustee shall use its best efforts promptly to provide notice to
each Rating Agency with respect to each of the following of which it has actual
knowledge:
(i) any material change or amendment to the Trust Agreement or
any agreement assigned to the Trust;
(ii) the occurrence of any Event of Default involving the Master
Servicer that has not been cured or any recommendation by the Master
Servicer that a Servicing Agreement with a Servicer be terminated;
(iii) the resignation, termination or merger of Saxon, the Master
Servicer, the Trustee or any Servicer;
(iv) the purchase or substitution of Mortgage Loans pursuant to
Section 2.03 hereof;
(v) the final payment to Certificateholders;
(vi) any change in the location of any Master Servicer Custodial
Account, Reserve Fund or Asset Proceeds Account;
(vii) any event that would result in the inability of the
Servicer or the Master Servicer to make Advances regarding delinquent
Mortgage Loans or the inability of the Trustee to make any such Advance
if it is serving as the Master Servicer pursuant to Section 7.02 hereof;
(viii) any change in applicable law that would require an
Assignment of a Security Instrument, not previously recorded pursuant to
Section 2.01 hereof, to be recorded in order to protect the right, title
and interest of the Trustee in and to the related Mortgage Loan or, in
case a court should recharacterize the sale of the Mortgage Loans as a
financing, to perfect a first priority security interest in favor of the
Trustee in the related Mortgage Loan.
(b) The Master Servicer shall promptly notify the Trustee of any of the
events listed in Section 11.08(a) of which it has actual knowledge. In addition,
the Trustee shall promptly furnish to each Rating Agency at its address set
forth in the Trust Agreement copies of the following:
(i) each report to Certificateholders described in Section 4.01
hereof; and
(ii) each Annual Compliance Statement.
(c) Any notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service, to each
Rating Agency at the address specified in the Trust Agreement.
55
<PAGE>
Exhibit A-1
FORM OF INITIAL CERTIFICATION
[____________], 200[_]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
[MASTER SERVICER]
[_________________________]
[_________________________]
Attention: [____________________]
Trust Agreement, dated as of [____________], 200[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 200[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Standard Terms to the
above-captioned Trust Agreement, the Custodian hereby certifies that, as to each
mortgage loan listed in the Mortgage Loan Schedule [to the Trust Agreement
referred to above] [to the Subsequent Sales Agreement dated [ ], 200[ ], has
reviewed the Trustee Mortgage Loan File and determined that, except as noted on
the Schedule of Exceptions attached hereto: (i) all documents required to be
included in the Trustee Mortgage Loan File (as set forth in Section 2.01 of the
Standard Terms) are in its possession; (ii) such documents have been reviewed by
it and appear regular on their face and relate to such Mortgage Loan; and (iii)
based on its examination, or the examination by a Custodian on its behalf, and
only as to such documents, the information set forth on such Mortgage Loan
Schedule accurately reflects the information set forth in the Trustee Mortgage
Loan File. The Custodian further certifies that its review of each Trustee
Mortgage Loan File included each of the procedures listed in clause (b) of
Section 2.02 of the Standard Terms.
The Custodian further certifies as to each Mortgage Note that:
(1) except for the endorsement required pursuant to clause (a) of the
definition of Trustee Mortgage Loan File, the Mortgage Note, on the face or the
reverse side(s) thereof, does not contain evidence of any unsatisfied claims,
liens, security interests, encumbrances or restrictions on transfer; and
(2) the Mortgage Note bears an endorsement (which appears to be an
original) as required pursuant to clause (a) of the definition of Trustee
Mortgage Loan File.
Except as described herein, neither the Trustee nor any Custodian on its
behalf has made an independent examination of any documents contained in any
Trustee Mortgage Loan File. Neither the Trustee nor the Custodian makes any
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in any Trustee Mortgage Loan
File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the
Trust Agreement, (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan or (iii) whether any Trustee Mortgage Loan
File should include any surety or guaranty agreement, Note Assumption Rider,
buydown agreement, assumption agreement, modification agreement, written
assurance or substitution agreement.
A-1-1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Trust Agreement.
[CUSTODIAN],
as custodian
By:____________________________
Title:_________________________
A-1-2
<PAGE>
Exhibit A-2
FORM OF FINAL CERTIFICATION
[____________], 200[_]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
[MASTER SERVICER]
[_________________________]
[_________________________]
Attention: [____________________]
Trust Agreement, dated as of [____________], 200[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 200[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Standard Terms to the
above-captioned Trust Agreement, the Custodian hereby certifies that, except as
noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan
listed in the Mortgage Loan Schedules (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has received a complete Trustee Mortgage
Loan File which includes each of the documents required to be included in the
Trustee Mortgage Loan File.
Except as specifically required in the above-captioned Trust Agreement,
neither the Trustee nor any Custodian on its behalf has made an independent
examination of any documents contained in any Trustee Mortgage Loan File.
Neither the Trustee nor the Custodian makes any representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in any Trustee Mortgage Loan File for any of the Mortgage
Loans listed on the Mortgage Loan Schedule to the Trust Agreement, (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Trustee Mortgage Loan File should include any surety
or guaranty agreement, Note Assumption Rider, buydown agreement, assumption
agreement, modification agreement, written assurance or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Trust Agreement.
[CUSTODIAN],
as custodian
By:____________________________
Title:_________________________
A-2-1
<PAGE>
Exhibit B
FORM OF RECORDATION REPORT
[____________], 200[_]
[MASTER SERVICER]
[_________________________]
[_________________________]
Attention: [____________________]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
Trust Agreement, dated as of [____________], 200[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 200[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02(e) of the Standard Terms, the Custodian
hereby notifies you that, as of the date hereof with respect to the following
Mortgage Loans, it has not received the indicated documents.
If a Security Instrument for any Mortgage Loan has not been recorded and
the original recorded Security Instrument or a copy of such recorded Security
Instrument with such evidence of recordation certified to be true and correct by
the appropriate governmental recording office has not been delivered to the
Trustee (or to a Custodian on its behalf), the Seller or Servicer may be
required to purchase such Mortgage Loan from the Trustee if such defect
materially and adversely affects the value of the Mortgage Loan or the interest
of the Trust therein.
[If an Assignment to the Trustee or a Custodian on its behalf, as
applicable, of the Seller's interest in a Security Instrument has not been
recorded within one year of the Closing Date, the Seller or Servicer shall be
required to (i) purchase the related Mortgage Loan from the Trustee or (ii) if
there have been no defaults in the Monthly Payments on such Mortgage Loan,
deposit an amount equal to the Purchase Price into an escrow account maintained
by the Trustee.]
Documents Not Received
__________________________________________________________
Original Recorded
Saxon Loan Number Original Recorded Assignment of
Security Instrument Security Instrument
_____________________ _________________________ ___________________________
or certified copy thereof or certified copy thereof
*Also required with regard to any intervening Assignments.
[TRUSTEE],
as Trustee
By:____________________________
Title:_________________________
B-1
<PAGE>
Exhibit C
FORM OF REMITTANCE REPORT
Saxon Asset Securities Company
Trust: Mortgage Loan Asset Backed Certificates, Series 200[_]-[_]
Distribution Date: [____________], 200[_]
Reporting Month: [____________] 200[_]
The following class, series and collateral information will be
included on each Remittance Report, as appropriate:
<TABLE>
<CAPTION>
Class Level Collateral Level Series Level
- ----------- ---------------- ------------
<S> <C>
Class Name Asset Proceeds Account - Scheduled Principal
Pass-Through Rate Deposits and Withdrawals Unscheduled Principal
Beginning Balance Balance Information for Scheduled Interest
Interest Distribution Other Accounts Beginning Loan Count
Principal Distribution Advances on Delinquencies Ending Loan Count
Realized Losses Beginning Balance Realized Losses
Ending Balance Interest Distribution Weighted Average Maturity
Aggregate Realized Losses Principal Distribution (WAM)
Original Balance Realized Losses Weighted Average
Record Date Ending Balance Mortgage Note Rate
Interest Distribution Factor Total Distribution Total Distribution
Principal Distribution Factor Aggregate Realized Losses Weighted Average Net Rate
Remaining Principal Factor Original Balance Weighted Average Pass-
Scheduled Principal Remaining Principal Factor Through Rate
Unscheduled Principal Scheduled Principal Delinquency Statistics
Current Interest Unscheduled Principal - 30, 60, and 90 day
Recovery/(Shortfall) Current Interest delinquencies; foreclosures
Accretion Recovery/(Shortfall) and REO's
Accretion
</TABLE>
C-1
<PAGE>
Exhibit D
FORM OF RULE 144A AGREEMENT-QIB CERTIFICATION
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200[_]-[_], CLASS [___]
[____________], 200[_]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[_________________________]
[_________________________]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee and the Trust as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act") and has completed the form of certification to
that effect attached hereto as Annex A1 (if the Transferee is not a registered
investment company) or Annex A2 (if the Transferee is a registered investment
company). The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased Certificates have not
been registered under the Securities Act or registered or qualified under any
state securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the Securities Act and under applicable state
law or unless an exemption from such registration is available. The Transferee
further understands that neither Saxon, the Master Servicer, the Certificate
Registrar, the Paying Agent, the Trustee nor the Trust is under any obligation
to register the Purchased Certificates or make an exemption from such
registration available.
3. The Transferee is acquiring the Purchased Certificates for its own
account or for the account of a "qualified institutional buyer," and understands
that such Purchased Certificates may be resold, pledged or transferred only (a)
to a person reasonably believed to be such a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the Securities Act and under applicable state securities laws. In
addition, such transfer may be subject to additional restrictions, as set forth
in Section 5.05 of the Standard Terms to the Trust Agreement.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Trust Agreement referred to below.
5. If applicable, the Transferee has complied or will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
D-1
<PAGE>
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated as of
[____________], 200[_], which incorporates by reference the Standard Terms
thereto, among Saxon Asset Securities Company, the Master Servicer and the
Trustee, pursuant to which the Purchased Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A
Agreement--QIB Certification to be executed by a duly authorized representative
this [____] day of [____________], 200[_].
[TRANSFEREE]
By:____________________________
Title:_________________________
D-2
<PAGE>
Annex A1 to Exhibit D
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), because (a) the Transferee owns and/or
invests on a discretionary basis at least $100,000,000 in securities or, if the
Transferee is a dealer, the Transferee owns and/or invests on a discretionary
basis at least $10,000,000 in securities. The Transferee owned and/or invested
on a discretionary basis at least $[____________] in securities (except for the
excluded securities referred to in paragraph 3 below) as of [_____________],
200[_] [specify a date on or since the end of the Transferee's most recently
ended fiscal year] (such amount being calculated in accordance with Rule 144A)
and (b) the Transferee meets the criteria listed in the category marked below.
_____ Corporation. etc. The Transferee is an organization described
in Section 501(c) (3) of the Internal Revenue Code of 1986, as
amended, a corporation (other than a bank as defined in
Section 3(a) (2) of the Securities Act or a savings and loan
association or other similar institution referenced in Section
3(a) (5) (A) of the Securities Act), a partnership, or a
Massachusetts or similar business trust.
____ Bank. The Transferee (a) is a national bank or banking
institution as defined in Section 3(a) (2) of the Securities
Act and is organized under the laws of a state, territory or
the District of Columbia. The business of the Transferee is
substantially confined to banking and is supervised by the
appropriate state or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. bank, and not more than 18
months preceding the date of this certification in the case of
a foreign bank or equivalent institution, a copy of which
financial statements is attached hereto.
_____ Saving and Loan. The Transferee is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution referenced in
Section 3(a) (5) (A) of the Securities Act. The Transferee is
supervised and examined by a state or federal authority having
supervisory authority over any such institutions or is a
foreign savings and loan association or equivalent institution
and has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. savings and loan
association or similar institution, and not more than 18
months preceding the date of this certification in the case of
a foreign savings and loan association or equivalent
institution, a copy of which financial statements is attached
hereto.
_____ Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Certificates Exchange Act of 1934, as
amended (the "1934 Act").
_____ Insurance Company. The Transferee is an insurance company as
defined in Section 2(13) of the Securities Act, whose primary
and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies
and which is subject to supervision by the insurance
commissioner or a similar official or agency of a state,
territory or the District of Columbia.
_____ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Certificate Act of 1974, as amended.
D-1-1
<PAGE>
_____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as
amended.
_____ Other. The Transferee qualifies as a "qualified institutional
buyer" as defined in Rule 144A on the basis of facts other
than those listed in any of the entries above. If this
response is marked, the Transferee must certify on additional
pages, to be attached to this certification, to facts that
satisfy the Servicer that the Transferee is a "qualified
institutional buyer" as defined in Rule 144A.
3. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee, (b) securities constituting
the whole or part of an unsold allotment to or subscription by the Transferee,
if the Transferee is a dealer, (c) bank deposit notes and certificates of
deposit, (d) loan participations, (e) repurchase agreements, (f) securities
owned but subject to a repurchase agreement and (g) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee and did not include any of the
securities referred to in the preceding paragraph. Further, in determining such
aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing YES NO
the Purchased Certificates only for the Transferee's own account?
If the answer to the foregoing question is "NO", the
Transferee agrees that, in connection with any purchase of securities
sold to the Transferee for the account of a third party (including any
separate account) in reliance on Rule 144A, the Transferee will only
purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a
current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third
party independently meets the definition of "qualified institutional
buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
D-1-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this [____] day of
[____________], 200[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Saxon Asset Securities Company,
Mortgage Loan Asset Backed Certificates, Series 200[_]-[_], Class [___]
D-1-3
<PAGE>
Annex A2 to Exhibit D
TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES
----------------------------------------------------
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Purchased Certificates (the `Transferee") or, if the Transferee is part of a
Family of Investment Companies (as defined in paragraph 3 below), is an officer
of the related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), because (a) the Transferee is an investment
company (a "Registered Investment Company") registered under the Investment
Company Act of 1940, as amended (the "1940 Act") and (b) as marked below, the
Transferee alone, or the Transferee's Family of Investment Companies, owned at
least $100,000,000 in securities (other than the excluded securities referred to
in paragraph 4 below) as of [____________], 200[_] [specify a date on or since
the end of the Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities to the Transferee or
the Transferee's Family of Investment Companies was used.
_____ The Transferee owned $[____________] in securities (other than
the excluded securities referred to in paragraph 4 below) as
of the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $[____________] in securities
(other than the excluded securities referred to in paragraph 4
below) as of the end of the Transferee's most recent fiscal
year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more Registered Investment Companies except for a unit investment trust whose
assets consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company, as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of a unit investment trust, the same
depositor) or investment advisers (or depositors) that are affiliated (by virtue
of being majority-owned subsidiaries of the same parent or because one
investment adviser is a majority-owned subsidiary of the other).
4. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (b) bank deposit notes and
certificates of deposit, (c) loan participations, (d) repurchase agreements, (e)
securities owned but subject to a repurchase agreement and (f) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Purchased Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
D-2-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this [____] of [____________],
200[_].
[TRANSFEREE OR ADVISOR]
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Saxon Asset Securities Company,
Mortgage Loan Asset Backed Certificates, Series 200[_]-[_], Class [___]
IF AN ADVISER:
Print Name of Transferee
Date:__________________________
D-2-2
<PAGE>
Exhibit E
FORM OF TRANSFEREE AGREEMENT
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200[_]-[_], CLASS [___]
[____________], 200[_]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[_________________________]
[_________________________]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee and the Trust as follows:
1. Representations and Warranties. The Transferee represents and
warrants:
(a) The Transferee is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the
Transferee is organized, is authorized to invest in the Purchased
Certificates and to enter into this Agreement, and has duly executed
and delivered this Agreement.
(b) The Transferee is acquiring the Purchased Certificates for
its own account as principal and not with a view to the distribution of
the Purchased Certificates, in whole or in part, in violation of
Section 5 of the Securities Act of 1933, as amended (the "Securities
Act").
(c) The Transferee is an "Accredited Investor" as defined in
Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities
Act.
(d) The Transferee has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Purchased Certificates; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to
bear the economic risk of an investment in the Purchased Certificates
and can afford a complete loss of such investment;
(e) The Transferee confirms that Saxon has made available to
the Transferee the opportunity to ask questions of, and receive answers
from, Saxon concerning Saxon, the Trust, the purchase by the Transferee
of the Purchased Certificates and all matters relating thereto, and to
obtain additional information relating thereto that Saxon possesses or
can acquire without unreasonable effort or expense.
2. Covenants. The Transferee Covenants:
(a) The Transferee will not make a public offering of the
Purchased Certificates, and will not reoffer or resell the Purchased
E-1
<PAGE>
Certificates in a manner that would render the issuance and sale of the
Purchased Certificates, whether considered together with the resale or
otherwise, a violation of the Securities Act, or any state securities
or "Blue Sky" laws or require registration pursuant thereto;
(b) The Transferee agrees that, in its capacity as holder of
the Purchased Certificates, it will assert no claim or interest in the
Mortgage Loans by reason of owning the Purchased Certificates other
than with respect to amounts that may be properly and actually payable
to the Transferee pursuant to the terms of the Trust Agreement and the
securities; and
(c) If applicable, the Transferee will comply in all material
respects with respect to the Purchased Certificates with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products.
3. Transfer Restrictions.
(a) The Transferee understands that the Purchased Certificates
have not been registered under the Securities Act or registered or
qualified under any state securities laws and that no transfer may be
made unless the Purchased Certificates are registered under the
Securities Act and under applicable state law or unless an exemption
from such registration is available. If so requested by the Master
Servicer or the Trustee, the Transferee and the transferor shall
certify to Saxon, the Master Servicer and the Trustee as to the factual
basis for the registration or qualification exemption relied upon. The
Transferee further understands that neither Saxon, the Master Servicer,
the Trustee nor the Trust is under any obligation to register the
Purchased Certificates or make an exemption from such registration
available.
(b) In the event that the transfer is to be made within three
years of the date the Purchased Certificates were acquired by a
non-Affiliate of Saxon from Saxon or an Affiliate of Saxon, the Master
Servicer or the Trustee may require an Opinion of Counsel (which shall
not be an expense of Saxon, the Master Servicer or the Trustee) that
such transfer is not required to be registered under the Securities Act
or state securities laws.
(c) Any Certificateholder desiring to effect a transfer shall,
and does hereby agree to, indemnify Saxon, the Master Servicer and the
Trustee against any liability that may result if the transfer is not
exempt under federal or applicable state securities laws.
(d) The transfer of the Certificates may be subject to
additional restrictions, as set forth in Section 5.05 of the Standard
Terms of the Trust Agreement.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated as of
[____________], 200[_], which incorporates by reference the Standard Terms
thereto, among Saxon Asset Securities Company, the Master Servicer and the
Trustee, pursuant to which the Purchased Certificates were issued.
E-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Agreement to be executed by its duly authorized representative as of the [____]
day of [____________], 200[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
E-3
<PAGE>
Exhibit F
FORM OF BENEFIT PLAN AFFIDAVIT
Re: Saxon Asset Securities Company
Series 200[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class [___]
STATE OF [____________]
ss
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. I am a duly authorized officer of [____________] (the "Purchaser"),
whose taxpayer identification number is [____________], and on behalf of which I
have the authority to make this affidavit.
2. That the Purchaser is acquiring a Class [___] Certificate
representing an interest in the Trust, certain assets of which one or more real
estate mortgage investment conduit ("REMIC") elections are to be made under
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a Plan Investor and (B) either (I) is not an
insurance company or (II) is an insurance company, in which case none
of the funds used by the Purchaser in connection with its purchase of
the Certificates constitute plan assets as defined in the Plan Asset
Regulations ("Plan Assets") and its purchase of the Certificates shall
not result in the Certificates or the assets of the Trust being deemed
to be Plan Assets;
(ii) is an insurance company and either (A) represents that
the funds used to purchase the Certificates are held in an "insurance
company pooled separate account" within the meaning of United States
Department of Labor Prohibited Transaction Class Exemption 90-1 ("PTCE
90-1") and that each of the applicable conditions set forth in PTCE
90-1 are met with respect to the purchase and holding of the
Certificates, or (B) represents that the funds used to purchase the
Certificates are held in an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60") and that each of the applicable
conditions set forth in PTCE 95-60 are met with respect to the purchase
and holding of the Certificates; or
(iii) has provided a Benefit Plan Opinion, obtained at the
Transferee's expense.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Trust Agreement, dated as of
[____________], 200[_], which incorporates by reference the Standard Terms
thereto.
F-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Benefit Plan
Affidavit to be executed by its duly authorized representative as of the [____]
day of [____________], 200[_].
[PURCHASER]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Purchaser, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me this [____] day of [____________],
200[_].
________________________________
Notary Public
My commission expires the [____] day of [____________], 200[_].
F-2
<PAGE>
Exhibit G
FORM OF RESIDUAL TRANSFEREE AGREEMENT
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 200[_]-[_], CLASS [R]
[____________], 200[_]
[TRUSTEE]
[_________________________]
[_________________________]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[_________________________]
[_________________________]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Residual Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee, and the Trust as follows:
1. Representations and Warranties. The Transferee represents and
warrants:
(a) The Transferee's taxpayer identification number is as
set forth on the signature page hereof;
(b) The Transferee is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the
Transferee is organized, is authorized to invest in the Residual
Certificates and to enter into this Agreement, and has duly executed
and delivered this Agreement;
(c) The Transferee represents that (i) it understands that the
Residual Certificates represent for federal income tax purposes a
"residual interest" in one or more real estate mortgage investment
conduits (each, a "REMIC") and that, as the holder of the Residual
Certificates, it will be required to take into account, in determining
its taxable income, its pro rata share of the taxable income of each
such REMIC, (ii) it understands that it may incur federal income tax
liabilities with respect to the Residual Certificates in excess of any
cash flows generated by such Residual Certificates, (iii) it has the
financial wherewithal and intends to pay any tax imposed on the income
that it derives from the Certificates as they become due, and (iv) it
has historically paid its debts as they became due and intends to pay
its debts as they become due in the future;
(d) The Transferee (i) has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Residual Certificates, (ii) has sought such
accounting, legal, and tax advice as it has considered necessary to
make an informed investment decision, and (iii) is able to bear the
economic risk of an investment in the Residual Certificates and can
afford a complete loss of such investment;
*(e) The Transferee is acquiring the Residual Certificates for
its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Securities Act"); and
G-1
<PAGE>
*(f) The Transferee confirms that Saxon has made available to
the Transferee the opportunity to ask questions of, and receive answers
from, Saxon concerning Saxon, the Trust, the purchase by the Transferee
of the Residual Certificates and all matters relating thereto, and to
obtain additional information relating thereto that Saxon possesses or
can acquire without unreasonable effort or expense.
2. Covenants. The Transferee covenants:
*(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Securities Act, or any state securities
or "Blue Sky" laws or require registration pursuant thereto;
(b) The Transferee agrees that, in its capacity as a holder of
the Residual Certificates, it will assert no claim or interest in the
Mortgage Loans by reason of owning the Residual Certificates other than
with respect to amounts that may be properly and actually payable to
the Transferee pursuant to the terms of the Trust Agreement and the
Certificates;
(c) If applicable, the Transferee will comply with respect to
the Residual Certificates in all material respects with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products;
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Trust Agreement relating to the
transfer of the Residual Certificates (or any interest therein) that
counsel to Saxon or the Trust may deem necessary to ensure that any
such transfer will not result in the imposition of any tax on the
Trust;
(e) The Transferee hereby agrees that the Master Servicer or
an affiliate thereof will (i) supervise or engage in any action
necessary or advisable to preserve the status of each related REMIC as
a REMIC, (ii) be, and perform the functions of, each such REMIC's tax
matters person ("TMP"), and (iii) employ on a reasonable basis counsel,
accountants, and professional assistance to aid in the preparation of
tax returns or the performance of the above;
(f) The Transferee hereby agrees to cooperate with the TMP and
to take any action required of it by the REMIC Provisions in order to
create or maintain the REMIC status of each related REMIC;
(g) The Transferee hereby agrees that it will not take any
action that could endanger the REMIC status of any related REMIC or
result in the imposition of tax on any such REMIC unless counsel for,
or acceptable to, the TMP has provided an opinion that such action will
not result in the loss of such REMIC status or the imposition of such
tax, as applicable;
(h) The Transferee hereby agrees to be bound by all the
provisions of the Trust Agreement applicable to the holders of a
Residual Certificate including, but not limited to, Section 5.05(c) of
the Standard Terms to the Trust Agreement (which relates to the
transfer of a Residual Certificate), and acknowledges that each
Residual Certificate will bear a legend setting forth the applicable
restrictions on transfer;
(i) The Transferee hereby agrees that it shall pay any tax or
reporting costs borne by a REMIC as result of its purchase of the
Residual Certificates or any beneficial interest therein in violation
of Section 5.05(c) of the Standard Terms to the Trust Agreement to the
extent such tax or reporting costs are not paid by the Transferor or by
the Trustee out of amounts that otherwise would have been paid to the
Transferee;
(j) The Transferee hereby agrees to indemnify and hold
harmless Saxon, the Master Servicer, the Trustee, the Trust and each
other holder of a Residual Certificate from and against any tax
liability or reporting costs arising from its violation of the
restrictions on transfer contained in Section 5.05(c) of the Standard
Terms to the Trust Agreement or its breach of any of its
representations, warranties, or covenants contained herein; and
(k) The Transferee agrees that it will take no action to
question or invalidate the interest of the Trust in the Mortgage Loans
or seek or maintain any claim or interest in the Mortgage Loans having
a priority over the interest of the Trust in such Mortgage Loans.
G-2
<PAGE>
The representations and covenants above marked with an * apply only to Residual
Certificates that are Private Certificates.
3. Acknowledgments.
(a) The Transferee acknowledges that, if the Residual
Certificates are Private Certificates, the Residual Certificates have
not been registered under the Securities Act or registered or qualified
under any state securities laws and that no transfer may be made unless
the Purchased Certificates are registered under the Securities Act and
under applicable state law or unless an exemption from such
registration is available. The Transferee further understands that
neither Saxon, the Master Servicer nor the Trust is under any
obligation to register the Certificate or make an exemption from such
registration available.
(b) The Transferee acknowledges that if a Residual Certificate
is transferred to a Non-U.S. Person, the transfer will not be
recognized by the Withholding Agent (as defined below) unless the
Withholding Agent has received from the Transferee an affidavit
substantially in the form of Exhibit H-1 attached to the Standard Terms
to Trust Agreement.
(c) The Transferee acknowledges that if any United States
federal income tax is due at the time a Non-U.S. Person transfers a
Residual Certificate, the Trustee or its designated Paying Agent or
other person who is liable to withhold federal income tax from a
distribution on a Residual Certificate under sections 1441 and 1442 of
the Code and the Treasury regulations thereunder (the "Withholding
Agent") may (i) withhold an amount equal to the taxes due upon
disposition of the Certificate from future distributions made with
respect to the Certificate to the Transferee (after giving effect to
the withholding of taxes imposed on such Transferee), and (ii) pay the
withheld amount to the Internal Revenue Service unless satisfactory
written evidence of payment of the taxes due by the transferor has been
provided to the Withholding Agent.
(d) The Transferee acknowledges the Withholding Agent may (i)
hold distributions on a Certificate, without interest, pending
determination of amounts to be withheld, (ii) withhold other amounts
required to be withheld pursuant to United States federal income tax
law, if any, from distributions that otherwise would be made to such
Transferee on each Certificate it holds, and (iii) pay to the Internal
Revenue Service all such amounts withheld.
(e) The Transferee acknowledges that the transfer of all or
part of the Residual Certificates that have "tax avoidance potential"
(as defined in Treasury regulations section 1.860G-3(a)(2) or any
successor provision) to a Non-U.S. Person will be disregarded for all
federal income tax purposes, and that Treasury regulations or other
administrative guidance issued by the Treasury may effectively prohibit
the transfer of the Residual Certificates to Non-U.S. Persons.
(f) The Transferee acknowledges that the transfer of the
Residual Certificates to a U.S. Person will be disregarded for all
federal income tax purposes if a significant purpose of the transfer is
to impede the assessment or collection of the taxes and expenses
associated with such Certificates within the meaning of Treasury
regulation section 1.860E-1(c)(1).
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the [____] day of
[____________], 200[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Taxpayer ID #__________________
G-3
<PAGE>
Exhibit H-1
FORM OF NON-U.S. PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 86OE(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Saxon Asset Securities Company
Series 200[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class R
STATE OF [____________]
ss:
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of [__________________________]
(the "Transferee") and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the Class R
Certificates (the "Residual Certificates"), which represent a residual interest
in one or more real estate mortgage investment conduits (each, a "REMIC") for
which elections are to be made under Section 860D of the Internal Revenue Code
of 1986, as amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income tax regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to Section 1441 or 1442 of the
Code and the Treasury regulations thereunder on income derived from the Residual
Certificates (a "Non-U.S. Person").
4. The Transferee agrees that it will not hold the Residual
Certificates in connection with a trade or business in the United States, and
the Transferee understands that it will be subject to United States federal
income tax under sections 871 and 881 of the Code in accordance with section
860G of the Code and any Treasury regulations issued thereunder on "excess
inclusions" that accrue with respect to the Residual Certificates during the
period the Transferee holds the Residual Certificates.
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal
income tax return for the year in which disposition of a Residual Certificate it
holds occurs (or earlier if required by law) and will pay any United States
federal income tax due at that time and (ii) if any tax is due at that time, to
provide satisfactory written evidence of payment of such tax to the Trustee or
its designated paying agent or other person who is liable to withhold federal
income tax from a distribution on the Residual Certificates under sections 1441
and 1442 of the Code and the Treasury regulations thereunder (the "Withholding
Agent").
7. The Transferee understands that until it provides written evidence
of the payment of tax due upon the disposition of a Residual Certificate to the
H-1-1
<PAGE>
Withholding Agent pursuant to paragraph 6 above, the Withholding Agent may (i)
withhold an amount equal to such tax from future distributions made with respect
to the Residual Certificate to subsequent transferees (after giving effect to
the withholding of taxes imposed on such subsequent transferees), and (ii) pay
the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may
withhold other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificate it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual
Certificate (or any interest therein) to a United States Person (including a
foreign person who is subject to net United States federal income taxation with
respect to such Residual Certificate), the Withholding Agent may disregard the
transfer for federal income tax purposes if the transfer would have the effect
of allowing the Transferee to avoid tax on accrued excess inclusions and may
continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual
Certificate (or any interest therein) to a Non-U.S. Person (i.e., a foreign
person who is not subject to net United States federal income tax with respect
to such Residual Certificate) will not be recognized unless the Withholding
Agent has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a) (2) (C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by Saxon (upon the advice of counsel to
Saxon) to constitute a reasonable arrangement to ensure that no interest in a
Residual Certificate will be owned directly or indirectly by a Disqualified
Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the Transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
H-1-2
<PAGE>
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of [____________],
200[_], which incorporates by reference the Standard Terms thereto, among Saxon
Asset Securities Company, the Master Servicer and the Trustee.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized representative as of the [____] day of
[____________], 200[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this [____] day of [____________],
200[_].
_________________________________
Notary Public
My commission expires the [____] day of [____________], 200[_].
H-1-3
<PAGE>
Exhibit H-2
FORM OF U.S. PERSON AFFIDAVIT
PURSUANT TO SECTIONS 860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Saxon Asset Securities Company
Series 200[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class R
STATE OF [____________]
ss:
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of [____________________]
(the "Transferee") and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the Class R
Certificates (the "Residual Certificates"), which represent a residual interest
in one or more real estate mortgage investment conduits (each, a "REMIC") for
which elections are to be made under Section 860D of the Internal Revenue Code
of 1986, as amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a domestic partnership or corporation, (iii) an estate or trust
that is subject to United States federal income tax regardless of the source of
its income, or (iv) a foreign person who would be subject to United States
income taxation on a net basis on income derived from the Residual Certificates
(a "U.S. Person").
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by Saxon (upon the advice of counsel to
Saxon) to constitute a reasonable arrangement to ensure that no interest in a
Residual Certificate will be owned directly or indirectly by a Disqualified
Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the Transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of [____________],
200[_], which incorporates by reference the Standard Terms thereto, among Saxon
Asset Securities Company, the Master Servicer and the Trustee.
H-2-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized representative as of the [____] day of
[____________], 200[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this [____] day of [____________],
200[_].
____________________________________
Notary Public
My commission expires the [____] day of [____________], 200[_].
H-2-2
