Exhibit 2
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SAXON ASSET SECURITIES TRUST 1999-3
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1999-3
TRUST AGREEMENT
dated as of August 1, 1999
among
SAXON ASSET SECURITIES COMPANY,
as Depositor
SAXON MORTGAGE, INC.,
as Master Servicer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
TABLE OF CONTENTS
Article I Definitions.................................................................................... 1
Section 1.01. Standard Terms; Section References................................................... 1
Section 1.02. Defined Terms........................................................................ 3
Article II Formation of Trust; Conveyance of Mortgage Loans.............................................. 24
Section 2.01. Conveyance of Mortgage Loans......................................................... 24
Section 2.02. Purchase of Subsequent Mortgage Loans................................................ 24
Section 2.03. Pre-Funding Account and Capitalized Interest Account................................. 27
Article III Remitting to Certificateholders.............................................................. 28
Section 3.01. Subaccount Distributions............................................................. 28
Section 3.02. Certificate Distributions............................................................ 29
Section 3.03. Reports to the Depositor:............................................................ 33
Section 3.04. Reports by Master Servicer........................................................... 34
Article IV The Certificates.............................................................................. 35
Section 4.01. The Certificates..................................................................... 35
Section 4.02. Denominations........................................................................ 36
Article V Miscellaneous Provisions....................................................................... 37
Section 5.01. Request for Opinions................................................................. 37
Section 5.02. Form of Certificates; Schedules and Exhibits; Governing Law.......................... 37
Section 5.03. REMIC Administration................................................................. 38
Section 5.04. Optional Termination................................................................. 39
Section 5.05. Master Servicer; Certificate Registrar and Paying Agent.............................. 39
Schedule I: The Mortgage Loans: A. Group I Mortgage Loans
B. Group II Mortgage Loans
Schedule II: Sales Agreement and Servicing Agreement
Schedule III: Form of Subsequent Sales Agreement
Exhibit AF: 1: Form of Class AF-1 Certificate
2: Form of Class AF-2 Certificate
3: Form of Class AF-3 Certificate
4: Form of Class AF-4 Certificate
5: Form of Class AF-5 Certificate
6: Form of Class AF-6 Certificate
Exhibit MF: 1: Form of Class MF-1 Certificate
2: Form of Class MF-2 Certificate
Exhibit BF: 1: Form of Class BF-1 Certificate
2: Form of Class BF-1A Certificate
Exhibit AV 1: Form of Class AV-1 Certificate
2: Form of Class AV-2 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
TRUST AGREEMENT
THIS TRUST AGREEMENT dated as of August 1, 1999 (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 (July 1998 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 $849,999,750 to be known as
the Saxon Asset Securities Trust 1999-3, Mortgage Loan Asset Backed
Certificates, Series 1999-3 (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 AV-2, 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 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.
(d) The definition of "Guide" in the Standard Terms is amended to read as
follows:
"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."
(e) The definition of "Trustee Mortgage Loan File" in the Standard Terms
is amended to:
(i) add the following immediately after the words "original
Mortgage Note" in subparagraph (a):
"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;
(ii) add the following immediately after the words "buydown
agreement" in subparagraph (a) and immediately after the words
"or riders thereto" in subparagraph (b):
"in each case as has been identified on the Mortgage Loan
Schedule"
(iii) add the following immediately after the words "endorsements
from the originator" in subparagraph (a) and immediately after
the words "related Services, Trustee or Custodian, as
applicable," in subparagraph (c):
"(provided, however, that SMI may direct such originator to
endorse the Mortgage Note directly to the Custodian pursuant to
the Guide)" and
(iv) add the following immediately after the words "assignment of
the Security Instrument" in subparagraph (c) and (d) :
",regardless of the date of such assignment or the date of the
acknowledgment thereon,"
(f) Section 2.02(b)(iv) of the Standard Terms is amended to read as
follows:
"(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"
(g) Section 2.02 of the Standard Terms is amended by adding a new
paragraph (g) at the end to read as follows:
"(g) During the Custodian"s review, the Custodian will report the
exceptions set forth on Exhibit I hereto 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."
(h) Section 2.02(b)(v)(D) of the Standard Terms is amended to add the
following immediately after the words "Instrument from the Seller":
", or from the originator of the related Mortgage Loan to the
Custodian as the case may be,"
(i) Section 3.06 of the Standard Terms is amended by adding a new
paragraph at the end to read as follows:
"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 a
manual signature."
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Section 1.02. Defined Terms.
Capitalized terms used but not defined in this Agreement shall have the
respective meanings assigned to them in Section 1.01 of the Standard Terms. In
addition, the following provisions shall govern the defined terms set forth
below for the Trust Agreement. If a term defined in the Standard Terms is also
defined herein, the definition herein shall control.
"Accrual Period": With respect to the Group I Certificates (other than the
Class AF-1 Certificates) and the Class 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 Class AF-I
Certificates and the Group II Certificates (other than the Class BV-1A
Certificates) and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
the current Distribution Date. All calculations of interest on the Group I
Certificates (other than the Class AF-1 Certificates) and the Class 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 Class AF-I
Certificates and 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 in 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 AV-2, 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.
"Capitalized Interest Account": The account created and maintained with the
Paying Agent by the Trust pursuant to Section 2.03.
"Capitalized Interest Requirement": With respect to each Distribution Date
to and including the Distribution Date immediately following the end of the
Funding Period, the excess of (i) the Current Interest for such Distribution
Date over (ii) the Interest Funds for the related Master Servicer Remittance
Date.
"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 AV-2, 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
AV-2, 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 "Class AF-2 Certificate": Any "Class AF-3 Certificate": Any
Certificate designated as a Certificate designated as a Certificate designated as a
"Class AF-1 Certificate" on "Class AF-2 Certificate" on the "Class AF-3 Certificate" on the
the face thereof, in the form face thereof, in the form of face thereof, in the form of
of Exhibit AF-1 hereto, Exhibit AF-2 hereto, representing Exhibit AF-3 hereto, representing
representing the right to the right to distributions as set the right to distributions as set
distributions as set forth forth herein. forth herein.
herein.
"Class AF-1 Certificate "Class AF-2 Certificate Principal "Class AF-3 Certificate Principal
Principal Balance": The Balance": The Certificate Balance": The Certificate
Certificate Principal Balance Principal Balance of the Class Principal Balance of the Class
of the Class AF-1 Certificates. AF-2 Certificates. AF-3 Certificates.
"Class AF-1 Current Interest": "Class AF-2 Current Interest": "Class AF-3 Current Interest":
With respect to any With respect to any Distribution With respect to any Distribution
Distribution Date, the interest Date, the interest accrued on the Date, the interest accrued on the
accrued on the Class AF-1 Class AF-2 Certificate Principal Class AF-3 Certificate Principal
Certificate Principal Balance Balance immediately prior to such Balance immediately prior to such
immediately prior to such Distribution Date during the Distribution Date during the
Distribution Date during the related Accrual Period at the related Accrual Period at the
related Accrual Period at the Class AF-2 Pass-Through Rate plus Class AF-3 Pass-Through Rate plus
Class AF-1 Pass-Through Rate any amount previously distributed any amount previously distributed
plus any amount previously with respect to interest with
distributed with respect to
interest
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for Class AF-1 that is for Class AF-2 that is recovered with respect to interest for
recovered during the related during the related Accrual Period during the Class AF-3 that is
Accrual Period as a voidable as a voidable preference by a recovered related Accrual Period
preference by a trustee in trustee in bankruptcy pursuant to as a voidable preference by a
bankruptcy pursuant to a final a final non-appealable order. trustee in bankruptcy pursuant to
non-appealable order. a final non-appealable order.
"Class AF-1 Interest Carry "Class AF-2 Interest Carry "Class AF-3 Interest Carry
Forward Amount": With respect Forward Amount": With respect to Forward Amount": With respect to
to each Distribution Date, the each Distribution Date, the sum each Distribution Date, the sum
sum of (i) the excess of (A) of (i) the excess of (A) Class of (i) the excess of (A) Class
Class AF-1 Current Interest AF-2 Current Interest with AF-3 Current Interest with
with respect to prior respect to prior Distribution respect to prior Distribution
Distribution Dates over (B) the Dates over (B) the amount Dates over (B) the amount
amount actually distributed to actually distributed to Class actually distributed to Class
Class AF-1 with respect to AF-2 with respect to interest on AF-3 with respect to interest on
interest on such prior such prior Distribution Dates and such prior Distribution Dates and
Distribution Dates and (ii) (ii) interest thereon at the (ii) interest thereon at the
interest thereon at the Class Class AF-2 Pass-Through Rate for Class AF-3 Pass-Through Rate for
AF-1 Pass-Through Rate for the the related Accrual Period. the related Accrual Period.
related Accrual Period.
"Class AF-1 Pass-Through Rate": "Class AF-2 Pass-Through Rate": "Class AF-3 Pass-Through Rate":
With respect to any With respect to each Distribution With respect to each Distribution
Distribution Date, the lesser Date, 7.010% per annum. Date, 7.205% per annum.
of (x) One Month LIBOR plus
0.250% per annum and (y) the
Group I Available Funds Cap for
such Distribution Date.
"Class AF-4 Certificate": Any "Class AF-5 Certificate": Any "Class AF-6 Certificate": Any
Certificate designated as a Certificate designated as a Certificate designated as a
"Class AF-4 Certificate" on "Class AF-5 Certificate" on the "Class AF-6 Certificate" on the
the face thereof, in the form face thereof, in the form of face thereof, in the form of
of Exhibit AF-4 hereto, Exhibit AF-5 hereto, representing Exhibit AF-6 hereto, representing
representing the right to the right to distributions as set the right to distributions as set
distributions as set forth forth herein. forth herein.
herein.
"Class AF-4 Certificate "Class AF-5 Certificate Principal "Class AF-6 Certificate Principal
Principal Balance": The Balance": The Certificate Balance": The Certificate
Certificate Principal Balance Principal Balance of the Class Principal Balance of the Class
of the Class AF-4 Certificates. AF-5 Certificates. AF-6 Certificates.
"Class AF-4 Current Interest": "Class AF-5 Current Interest": "Class AF-6 Current Interest":
With respect to any With respect to any Distribution With respect to any Distribution
Distribution Date, the interest Date, the interest accrued on the Date, the interest accrued on the
accrued on the Class AF-4 Class AF-5 Certificate Principal Class AF-6 Certificate Principal
Certificate Principal Balance Balance immediately prior to such Balance immediately prior to such
immediately prior to such Distribution Date during the Distribution Date during the
Distribution Date during the related Accrual Period at the related Accrual Period at the
related Accrual Period at the Class AF-5 Pass-Through Rate plus Class AF-6 Pass-Through Rate plus
Class AF-4 Pass-Through Rate any amount previously distributed any amount previously distributed
plus any amount previously with respect to interest for with respect to interest for
distributed with respect to Class AF-5 that is recovered Class AF-6 that is recovered
interest for Class AF-4 that is during the related Accrual Period during the related Accrual Period
recovered during the related as a voidable preference by a as a voidable preference by a
Accrual Period as a voidable trustee in bankruptcy pursuant to trustee in bankruptcy pursuant to
preference by a trustee in a final non-appealable order. a final non-appealable order.
bankruptcy pursuant to a final
non-appealable order.
4
"Class AF-4 Interest Carry "Class AF-5 Interest Carry "Class AF-6 Interest Carry
Forward Amount": With respect Forward Amount": With respect to Forward Amount": With respect to
to each Distribution Date, the each Distribution Date, the sum each Distribution Date, the sum
sum of (i) the excess of (A) of (i) the excess of (A) Class of (i) the excess of (A) Class
Class AF-4 Current Interest AF-5 Current Interest with AF-6 Current Interest with
with respect to prior respect to prior Distribution respect to prior Distribution
Distribution Dates over (B) the Dates over (B) the amount Dates over (B) the amount
amount actually distributed to actually distributed to Class actually distributed to Class
Class AF-4 with respect to AF-5 with respect to interest on AF-6 with respect to interest on
interest on such prior such prior Distribution Dates and such prior Distribution Dates and
Distribution Dates and (ii) (ii) interest thereon at the (ii) interest thereon at the
interest thereon at the Class Class AF-5 Pass-Through Rate for Class AF-6 Pass-Through Rate for
AF-4 Pass-Through Rate for the the related Accrual Period. the related Accrual Period.
related Accrual Period.
"Class AF-4 Pass-Through Rate": "Class AF-5 Pass-Through Rate": "Class AF-6 Pass-Through Rate":
With respect to each With respect to each Distribution With respect to each Distribution
Distribution Date, 7.550% per Date, the lesser of (i) 7.900% Date, the lesser of (i) 7.525%
annum. per annum plus, after the Initial per annum and (ii) the Group I
Optional Termination Date, 0.50% Net Rate for such date.
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:
Distribution Date Percentage
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September 1999 " August 2002 0%
September 2002 " August 2004 45%
September 2004 " August 2005 80%
September 2005 " August 2006 100%
September 2006 and thereafter 300%
"Class MF-1 Applied Realized "Class MF-2 Applied Realized Loss "Class BF-1 Applied Realized Loss
Loss Amount": As to any Amount": As to any Distribution Amount": As to any Distribution
Distribution Date, the sum of Date, the sum of the Realized Date, the sum of the Realized
the Realized Losses with Losses with respect to Group I Losses with respect to Group I
respect to Group I which have which have been applied in which have been applied in
been applied in reduction of reduction of the Certificate reduction of the Certificate
the Certificate Principal Principal Balance of the Class Principal Balance of the Class
Balance of the Class MF-1 MF-2 Certificates pursuant to BF-1 Certificates pursuant to
Certificates pursuant to Section 3.02(h) hereof. Section 3.02(h) hereof.
Section 3.02(h) hereof.
"Class MF-1 Certificate": Any "Class MF-2 Certificate": Any "Class BF-1 Certificate": Any
Certificate designated as a Certificate designated as a Certificate designated as a
"Class MF-1 Certificate" on "Class MF-2 Certificate" on the "Class BF-1 Certificate" on the
the face thereof, in the form face thereof, in the form of face thereof, in the form of
of Exhibit MF-1 hereto, Exhibit MF-2 hereto, representing Exhibit BF-1 hereto, representing
representing the right to the right to distributions as set the right to distributions as set
distributions as set forth forth herein. forth herein.
herein.
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"Class MF-1 Certificate "Class MF-2 Certificate Principal "Class BF-1 Certificate Principal
Principal Balance": The Balance": The Certificate Balance": The Certificate
Certificate Principal Balance Principal Balance of the Class Principal Balance of the Class
of the Class MF-1 Certificates MF-2 Certificates less any Class BF-1 Certificates less any Class
less any Class MF-1 Unpaid MF-2 Unpaid Realized Loss Amount. BF-1 Unpaid Realized Loss Amount.
Realized Loss Amount.
"Class MF-1 Current Interest": "Class MF-2 Current Interest": "Class BF-1 Current Interest":
With respect to any With respect to any Distribution With respect to any Distribution
Distribution Date, the interest Date, the interest accrued on the Date, the interest accrued on the
accrued on the Class MF-1 Class MF-2 Certificate Principal Class BF-1 Certificate Principal
Certificate Principal Balance Balance immediately prior to such Balance immediately prior to such
immediately prior to such Distribution Date during the Distribution Date during the
Distribution Date during the related Accrual Period at the related Accrual Period at the
related Accrual Period at the Class MF-2 Pass-Through Rate plus Class BF-1 Pass-Through Rate plus
Class MF-1 Pass-Through Rate any amount previously distributed any amount previously distributed
plus any amount previously with respect to interest for with respect to interest for
distributed with respect to Class MF-2 that is recovered Class BF-1 that is recovered
interest for Class MF-1 that is during the related Accrual Period during the related Accrual Period
recovered during the related as a voidable preference by a as a voidable preference by a
Accrual Period as a voidable trustee in bankruptcy pursuant to trustee in bankruptcy pursuant to
preference by a trustee in a final non-appealable order. a final non-appealable order.
bankruptcy pursuant to a final
non-appealable order.
"Class MF-1 Interest Carry "Class MF-2 Interest Carry "Class BF-1 Interest Carry
Forward Amount": With respect Forward Amount": With respect to Forward Amount": With respect to
to each Distribution Date, the each Distribution Date, the sum each Distribution Date, the sum
sum of (i) the excess of (A) of (i) the excess of (A) Class of (i) the excess of (A) Class
Class MF-1 Current Interest MF-2 Current Interest with BF-1 Current Interest with
with respect to prior respect to prior Distribution respect to prior Distribution
Distribution Dates over (B) the Dates over (B) the amount Dates over (B) the amount
amount actually distributed to actually distributed to Class actually distributed to Class
Class MF-1 with respect to MF-2 with respect to interest on BF-1 with respect to interest on
interest on such prior such prior Distribution Dates and such prior Distribution Dates and
Distribution Dates and (ii) (ii) interest thereon at the (ii) interest thereon at the
interest thereon at the Class Class MF-2 Pass-Through Rate for Class BF-1 Pass-Through Rate for
MF-1 Pass-Through Rate for the the related Accrual Period. the related Accrual Period.
related Accrual Period.
"Class MF-1 Pass-Through Rate": "Class MF-2 Pass-Through Rate": "Class BF-1 Pass-Through Rate":
With respect to each With respect to each Distribution With respect to each Distribution
Distribution Date, the lesser Date, the lesser of (i) 8.285% Date, the lesser of (i) 9.450%
of (i) 7.745% per annum plus, per annum plus, after the Initial per annum and (ii) the Group I
after the Initial Optional Optional Termination Date, 0.50% Net Rate on such date.
Termination Date, 0.50% and and (ii) the Group I Net Rate on
(ii) the Group I Net Rate on such date.
such date.
"Class MF-1 Unpaid Realized Loss "Class MF-2 Unpaid Realized Loss "Class BF-1 Unpaid Realized Loss
Amount": As to any Amount": As to any Distribution Amount": As to any Distribution
Distribution Date, the excess Date, the excess of (i) the Class Date, the excess of (i) the Class
of (i) the Class MF-1 Applied MF-2 Applied Realized Loss Amount BF-1 Applied Realized Loss Amount
Realized Loss Amount over (ii) over (ii) the sum of all over (ii) the sum of all
the sum of all increases in the increases in the Class MF-2 increases in the Class BF-1
Class MF-1 Certificate Certificate Principal Balance on Certificate Principal Balance on
Principal Balance on all all previous Distribution Dates all previous Distribution Dates
previous Distribution Dates pursuant to Section 3.02(j) hereof. pursuant to Section 3.02(j)
pursuant to Section 3.02(j) hereof.
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) 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.
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"Class BF-1A Certificate
Principal Balance": The
Certificate Principal Balance
of the Class BF-1A Certificates
less any Class BF-1A Unpaid
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) 8.635% 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 increases in the
Class BF-1A Certified Principal
Balance on all previous
Distribution Dates pursuant to
Section 3.02(j) hereof.
"Group II Certificates":
"Class AV-1 Certificate": Any Certificate "Class AV-2 Certificate": Any Certificate
designated as a "Class AV-1 Certificate" on the designated as a "Class AV-2 Certificate" on the
face thereof, in the form of Exhibit AV-1 face thereof, in the form of Exhibit AV-2 hereto
hereto representing the right to distributions representing the right to distributions as set
as set forth herein. forth herein.
"Class AV-1 Certificate Principal Balance": The "Class AV-2 Certificate Principal Balance": The
Certificate Principal Balance of the Class AV-1 Certificate Principal Balance of the Class AV-2
Certificates. Certificates.
"Class AV-1 Certificates Carryover": If on any "Class AV-2 Certificates Carryover": If on any
Distribution Date the Class AV-1 Pass-Through Distribution Date the Class AV-2 Pass-Through Rate
Rate is based upon the Group II Available Funds is based upon the Group II Available Funds Cap, the
Cap, the excess of (i) the amount of interest excess of (i) the amount of interest the Class AV-2
the Class AV-1 Certificates would be entitled Certificates would be entitled to receive on such
to receive on such Distribution Date had the Distribution Date had the Class AV-2 Pass-Through
Class AV-1 Pass-Through Rate not been Rate not been calculated based on the Group II
calculated based on the Group II Available Available Funds Cap (but not more than the weighted
Funds Cap (but not more than the weighted average of the Maximum Lifetime Mortgage Interest
average of the Maximum Lifetime Mortgage Rates on the Mortgage
Interest Rates on the Mortgage
7
Loans in Group II less the Group II Servicing Fee Rate Loans in Group II less the Group II Servicing Fee Rate
and the Group II Master Servicing Fee Rate) over (ii) and the Group II Master Servicing Fee Rate) over (ii)
the amount of interest such Certificates received on the amount of interest such Certificates received
such Distribution Date based on the Group II Available on such Distribution Date based on the Group II
Funds Cap, together with the unpaid portion of any such Available Funds Cap, together with the unpaid portion of
excess from prior Distribution Dates (and interest accrued any such excess from prior Distribution Dates (and
thereon at the then applicable Pass-Through Rate, without interest accrued thereon at the then applicable Pass-Through
giving effect to the Group II Available Funds Cap). Rate, without giving effect to the Group II Available Funds Cap).
"Class AV-1 Current Interest": With respect to any "Class AV-2 Current Interest": With respect to any
Distribution Date, the interest accrued on the Class Distribution Date, the interest accrued on the Class
AV-1 Certificate Principal Balance immediately prior AV-2 Certificate Principal Balance immediately prior to
to such Distribution Date during the related Accrual such Distribution Date during the related Accrual Period
Period at the Class AV-1 Pass Through Rate plus any at the Class AV-2 Pass Through Rate plus any amount
amount previously distributed with respect to interest previously distributed with respect to interest for Class
for Class AV-1 that is recovered during the related AV-2 that is recovered during the related Accrual Period
Accrual Period as a voidable preference by a trustee in as a voidable preference by a trustee in bankruptcy pursuant
bankruptcy pursuant to a final, nonappealable order; to a final, nonappealable order; provided, however, Class
provided, however, Class AV-1 Current Interest shall not AV-2 Current Interest shall not include any Class AV-2
include any Class AV-1 Certificates Carryover. Certificates Carryover.
"Class AV-1 Interest Carry Forward Amount" "Class AV-2 Interest Carry Forward Amount":
With respect to any Distribution Date, the sum of With respect to any Distribution Date, the sum of
(i) the excess of (A) Class AV-1 Current Interest with (i) the excess of (A) Class AV-2 Current Interest
respect to prior Distribution Dates (excluding any with respect to prior Distribution Dates (excluding
Class AV-1 Certificates Carryover) over (B) the amount any Class AV-2 Certificates Carryover) over (B) the
actually distributed to Class AV-1 with respect to amount actually distributed to Class AV-2 with
interest (other than in respect of Class AV-1 respect to interest (other than in respect of Class
Certificate Carryover) on such prior Distribution AV-2 Certificate Carryover) on such prior Distribution
Dates and (ii) interest on such excess at the Class Dates and (ii) interest on such excess at the Class AV-2
AV-1 Pass-Through Rate for the related Accrual Period. Pass-Through Rate for the related Accrual Period.
"Class AV-1 Pass-Through Rate": With respect to any "Class AV-2 Pass-Through Rate": With respect to
Distribution Date, the lesser of (x) One Month LIBOR any Distribution Date, the lesser of (x) One Month
plus, in the case of any Distribution Date prior LIBOR plus, in the case of any Distribution Date prior
to the Initial Optional Termination Date, 0.320% per to the Initial Optional Termination Date, 0.370% per
annum, or in the case of any Distribution Date that annum, or in the case of any Distribution Date that
occurs on or after the Initial Optional Termination occurs on or after the Initial Optional Termination
Date, plus 0.640% per annum and (y) the Group II Date, plus 0.740% per annum and (y) the Group II
Available Funds Cap for such Distribution Date. Available Funds Cap for such Distribution Date.
"Class MV-1 Applied Realized Loss Amount": As "Class MV-2 Applied Realized Loss Amount": As
to any Distribution Date, the sum of the Realized to any Distribution Date, the sum of the Realized
Losses with respect to Group II which have been Losses with respect to Group II which have been applied in
applied in reduction of the Certificate Principal reduction of the Certificate Principal Balance of the
Balance of the Class MV-1 Certificates pursuant to Class MV-2 Certificates pursuant to Section 3.02(i) hereof.
Section 3.02(i) hereof.
"Class MV-1 Certificate": Any Certificate "Class MV-2 Certificate": Any Certificate
designated as a "Class MV-1 Certificate" on the designated as a "Class MV-2 Certificate" on the
face thereof, in the form of Exhibit MV-1 hereto face thereof, in the form of Exhibit MV-2 hereto
representing the right to distributions as set representing the right to distributions as set
forth herein. forth herein.
"Class MV-1 Certificate Principal Balance": The "Class MV-2 Certificate Principal Balance":
Certificate Principal Balance of the Class MV-1 The Certificate Principal Balance of the Class
Certificates less any Class MV-1 Unpaid Realized MV-2 Certificates less any Class MV-2 Unpaid
Loss Amount. Realized Loss Amount.
"Class MV-1 Certificates Carryover": If on any "Class MV-2 Certificates Carryover": If on any
Distribution Date the Class MV- 1 Pass-Through Rate Distribution Date the Class MV-2 Pass-Through Rate
is based upon the Group II Available Funds Cap, the is based upon the Group II Available Funds Cap, the excess
excess of (i) the amount of interest the Class MV-1 of (I) the amount of interest the Class MV-2
Certificates would be entitled to receive on such Certificates would be entitled to receive on such
Distribution Date had the Class MV-1 Pass-Through Distribution Date had the Class MV-2 Pass-Through
Rate not been calculated based on the Group II Rate not been calculated based on the Group II
Available Funds Cap (but not more than the weighted Available Funds Cap (but not more than the weighted
average of the Maximum Lifetime Mortgage Interest average of the Maximum Lifetime Mortgage
Rates on the Mortgage Loans in Group II less the Group Interest Rates on the Mortgage Loans in Group II
II Servicing Fee Rate and the Group II Master Servicing less the Group II Servicing Fee Rate and the Group
Fee Rate) over (ii) the amount of interest such II Master Servicing Fee Rate) over (ii) the amount
Certificates received on such Distribution Date of interest such Certificates received
based on the Group on such Distribution Date based on the Group
8
II Available Funds Cap, together with the unpaid II Available Funds Cap, Cap, together with the unpaid
portion of any such excess from Distribution Dates portion of any such excess from prior Distribution
(and interest accrued thereon at the then applicable prior Dates (and interest accrued thereon at the then
Pass-Through Rate, without giving effect to the applicable Pass-Through Rate, without giving effect
Group II Available Funds Cap). to the Group II Available Funds Cap).
"Class MV-1 Current Interest": With respect to "Class MV-2 Current Interest": With respect to any
any Distribution Date, the interest accrued on the Distribution Date, the interest accrued on the Class
Class MV-1 Certificate Principal Balance immediately MV-2 Certificate Principal Balance immediately
prior to such Distribution Date during the related prior to such Distribution Date during the related
Accrual Period at the Class MV-1 Pass Through Rate Accrual Period at the Class MV-2 Pass Through Rate
plus any amount previously distributed with respect to plus any amount previously distributed with respect to
interest for Class MV-1 that is recovered during the interest for Class MV-2 that is recovered during the
related Accrual Period as a voidable preference by a related Accrual Period as a voidable preference by a
trustee in bankruptcy pursuant to a final, trustee in bankruptcy pursuant to a final, nonappealable
nonappealable order; provided, however, Class MV-1 order; provided, however, Class MV-2 Current Interest shall not
Current Interest shall not include any Class MV-1 include any Class MV-2 Certificates Carryover.
Certificates Carryover.
"Class MV-1 Interest Carry Forward Amount": With "Class MV-2 Interest Carry Forward Amount": With
respect to any Distribution Date, the sum of (i) the respect to each Distribution Date, the sum of (i) the
excess of (A) Class MV-1 Current Interest with respect to excess of (A) Class MV-2 Current Interest with respect
prior Distribution Dates (excluding any Class MV-1 to prior Distribution Dates (excluding any Class MV-2
Certificates Carryover) over (B) the amount actually Certificates Carryover) over (B) the amount actually
distributed to Class MV-1 with respect to interest (other distributed to Class MV-2 with respect to interest
than in respect of Class MV-1 Certificate Carryover) on (other than in respect of Class MV-2 Certificate
such prior Distribution Dates and (ii) interest on such Carryover) on such prior Distribution Dates and (ii)
excess at the Class MV-1 Pass-Through Rate for the interest on such excess at the Class MV-2 Pass-Through
related Accrual Period. Rate for the related Accrual Period.
"Class MV-1 Pass-Through Rate": With respect to any "Class MV-2 Pass-Through Rate": With respect to any
Distribution Date, the lesser of (x) One Month LIBOR Distribution Date, the lesser of (x) One Month LIBOR
plus, in the case of any Distribution Date prior to the plus, in the case of any Distribution Date prior to the
Initial Optional Termination Date, 0.590% per annum, or Initial Optional Termination Date, 1.150% per annum, or
in the case of any Distribution Date that occurs on or in the case of any Distribution Date that occurs on or
after the Initial Optional Termination Date, plus 0.885% after the Initial Optional Termination Date, plus
per annum and (y) the Group II Available Funds Cap for 1.725% per annum and (y) the Group II Available Funds
such Distribution Date. Cap for such Distribution Date.
"Class MV-1 Unpaid Realized Loss Amount": As to any "Class MV-2 Unpaid Realized Loss Amount": As to
Distribution Date, the excess of (i) the Class MV-1 any Distribution Date, the excess of (i) the Class MV-2
Applied Realized Loss Amount over (ii) the sum of all Applied Realized Loss Amount over (ii) the sum of all
increases in the Class MV-1 Certificate Principal Balance increases in the Class MV-2 Certificate Principal
on all previous Distribution Dates pursuant to Section Balance on all previous Distribution Dates pursuant to
3.02(k) hereof. Section 3.02(k) hereof.
"Class BV-1A Applied Realized Loss Amount: As to any "Class BV-1A Applied Realized Loss Amount: As to any
Distribution Date, the sum of the Realized Losses with Distribution Date, the sum of the Realized Losses with
respect to Group II which have been applied in respect to Group II which have been applied in
reduction of the Certificate Principal Balance of the reduction of the Certificate Principal Balance of the
Class BV-1 Certificates pursuant to Section 3.02(i) Class BV-1A Certificates pursuant to Section 3.02(i)
hereof. hereof.
"Class BV-1 Certificate": Any Certificate designated "Class BV-1A Certificate": Any Certificate
as a "Class BV-1 Certificate" on the face thereof, in the designated as a "Class BV-1A Certificate" on the face
form of Exhibit BV-1 hereto representing the right to thereof, in the form of Exhibit BV-1A hereto
distributions as set forth herein. representing the right to distributions as set forth
herein.
"Class BV-1 Certificate Principal Balance": The "Class BV-1A Certificate Principal Balance": The
Certificate Principal Balance of the Class BV-1 Certificate Principal Balance of the Class BV-1A
Certificates less any Class BV-1 Unpaid Realized Loss Certificates less any Class BV-1A Unpaid Realized Loss
Amount. Amount.
9
"Class BV-1 Certificates Carryover": If on any "Class BV-1A Certificates Carryover": If on any
Distribution Date the Class BV-1 Pass-Through Rate is Distribution Date the Class BV-1A Pass-Through Rate is
based upon the Group II Available Funds Cap, the excess based upon the Group II Available Funds Cap, the excess
of (i) the amount of interest the Class BV-1 Certificates of (I) the amount of interest the Class BV-1A
would be entitled to receive on such Distribution Date Certificates would be entitled to receive on such
had the Class BV-1 Pass-Through Rate not been calculated Distribution Date had the Class BV-1A Pass-Through Rate
based on the Group II Available Funds Cap (but not more not been calculated based on the Group II Available
than the weighted average of the Maximum Lifetime Funds Cap (but not more than the weighted average of
Mortgage Interest Rates on the Mortgage Loans in Group II the Maximum Lifetime Mortgage Interest Rates on the
less the Group II Servicing Fee Rate and the Group II Mortgage Loans in Group II less the Group II Servicing
Master Servicing Fee Rate) over (ii) the amount of Fee Rate and the Group II Master Servicing Fee Rate)
interest such Certificates received on such Distribution over (ii) the amount of interest such Certificates
Date based on the Group II Available Funds Cap, together received on such Distribution Date based on the Group
with the unpaid portion of any such excess from prior II Available Funds Cap, together with the unpaid
Distribution Dates (and interest accrued thereon at the portion of any such excess from prior Distribution
then applicable Pass-Through Rate, without giving effect Dates (and interest accrued thereon at the then
to the Group II Available Funds Cap). applicable Pass-Through Rate, without giving effect to
the Group II Available Funds Cap).
"Class BV-1 Current Interest": With respect to any "Class BV-1A Current Interest": With respect to any
Distribution Date, the interest accrued on the Class BV-1 Distribution Date, the interest accrued on the Class
Certificate Principal Balance immediately prior to such BV-1A Certificate Principal Balance immediately prior
Distribution Date during the related Accrual Period at to such Distribution Date during the related Accrual
the Class BV-1 Pass Through Rate plus any amount Period at the Class BV-1A Pass Through Rate plus any
previously distributed with respect to interest for Class amount previously distributed with respect to interest
BV-1 that is recovered during the related Accrual Period for Class BV-1A that is recovered during the related
as a voidable preference by a trustee in bankruptcy Accrual Period as a voidable preference by a trustee in
pursuant to a final, nonappealable order; provided, bankruptcy pursuant to a final, nonappealable order;
however, Class BV-1 Current Interest shall not include provided, however, Class BV-1A Current Interest shall
any Class BV-1 Certificates Carryover. not include any Class BV-1A Certificates Carryover.
"Class BV-1 Interest Carry Forward Amount": With "Class BV-1A Interest Carry Forward Amount": With
respect to each Distribution Date, the sum of (i) the respect to each Distribution Date, the sum of (i) the
excess of (A) Class BV-1 Current Interest with respect to excess of (A) Class BV-1A Current Interest with respect
prior Distribution Dates (excluding any Class BV-1 to prior Distribution Dates (excluding any Class BV-1A
Certificates Carryover) over (B) the amount actually Certificates Carryover) over (B) the amount actually
distributed to Class BV-1 with respect to interest (other distributed to Class BV-1A with respect to interest
than in respect of Class BV-1 Certificate Carryover) on (other than in respect of Class BV-1A Certificate
such prior Distribution Dates and (ii) interest on such Carryover) on such prior Distribution Dates and (ii)
excess at the Class BV-1 Pass-Through Rate for the interest on such excess at the Class BV-1A Pass-Through
related Accrual Period. Rate for the related Accrual Period.
"Class BV-1 Pass-Through Rate": With respect to any "Class BV-1A Pass-Through Rate": With respect to any
Distribution Date, the lesser of (x) One Month LIBOR Distribution Date, the lesser of (x) 9.200% per annum
plus, in the case of any Distribution Date prior to the and (y) the Group II Available Funds Cap for such
Initial Optional Termination Date, 3.000% per annum, or Distribution Date.
in the case of any Distribution Date that occurs on or
after the Initial Optional Termination Date, plus 4.500%
per annum and (y) the Group II Available Funds Cap for
such Distribution Date.
"Class BV-1 Unpaid Realized Loss Amount": As to any "Class BV-1A Unpaid Realized Loss Amount": As to
Distribution Date, the excess of (i) the Class BV-1 any Distribution Date, the excess of (i) the Class
Applied Realized Loss Amount over (ii) the sum of all BV-1A Applied Realized Loss Amount over (ii) the sum of
increases in the Class BV-1 Certificate Principal Balance all increases in the Class BV-1A Certificate Principal
on all previous Distribution Dates pursuant to Section Balance on all previous Distribution Dates pursuant to
3.02(k) hereof. Section 3.02(k) 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;
10
(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": August 18, 1999.
"Current Interest": As to any Class, the definition therefor having the
corresponding designation as such Class.
"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 August 1, 1999.
"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 September 27, 1999.
"Fitch": Fitch IBCA, Inc., and its successors (One ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10004).
"Funding Period": The period commencing on the Closing Date and ending on
the earliest to occur of (i) the date on which the amount on deposit in the Pre-
Funding Account (exclusive of any investment earnings) is less than $10,000,
(ii) the date on which an Event of Default occurs and (iii) November 16, 1999.
11
Group Definitions:
"Group I": The pool of Mortgage Loans identified in "Group II": The pool of Mortgage Loans identified
the related Schedules of Mortgage Loans as having been in the related Schedules of Mortgage Loans as having
assigned to Group I, including any Group I Subsequent been assigned to Group II, including any Group II
Mortgage Loans and any Group I Qualified Substitute Subsequent Mortgage Loans and any Group II Qualified
Mortgage Loans delivered in replacement thereof. Substitute Mortgage Loans delivered in replacement
thereof.
"Group I Applicable Percentage": For each "Group II Applicable Percentage": For each
Distribution Date, and as to Group I, the percentage set Distribution Date, and as to Group II, the percentage
out below with respect to such Distribution Date: set out below with respect to such Distribution Date:
Distribution Date (inclusive) Distribution Date (inclusive)
September 1999 - August 2001 67.5% September 1999 - August 2001 67.5%
September 2001 and thereafter 100% September 2001 and thereafter 100%
; provided, however, that (i) if the average of the Group ; provided, however, that (i) if the average of the
I Realized Loss Percentages for the immediately preceding Group II Realized Loss Percentages for the immediately
three Distribution Dates exceeds the percentage set forth preceding three Distribution Dates exceeds the
below with respect to such Distribution Date or (ii) if percentage set forth below with respect to such
the average of the Group I Delinquency Percentages for Distribution Date or (ii) if the average of the Group II
the immediately preceding three Distribution Dates Delinquency Percentages for the immediately preceding
exceeds the percentage set forth below with respect to three Distribution Dates exceeds the percentage set
such Distribution Date, the Group I Applicable Percentage forth below with respect to such Distribution Date, the
will be as set forth below: Group II Applicable Percentage will be as set forth below
Distribution Applicable Distribution Applicable
Date Losses % Delinquency % Percentage Date Losses % Delinquency % Percentage
---- -------- ------------- ---------- ---- -------- ------------- -----------
09/99-11/99 0.03% 2.00% 100% 09/99-11/99 0.10% 4.00% 100%
12/99-02/00 0.05% 3.00% 100% 12/99-02/00 0.15% 5.00% 100%
03/00-05/00 0.10% 3.50% 100% 03/00-05/00 0.20% 6.50% 100%
06/00-08/00 0.15% 4.25% 100% 06/00-08/00 0.25% 9.00% 100%
09/00-11/00 0.30% 5.00% 100% 09/00-11/00 0.50% 12.00% 100%
12/00-02/01 0.50% 6.00% 100% 12/00-02/01 0.60% 14.00% 100%
03/01-05/01 0.60% 7.50% 100% 03/01-05/01 0.75% 15.00% 100%
06/01-08/01 0.80% 9.00% 100% 06/01-08/01 0.90% 16.00% 100%
"Group I Available Funds Cap": As of any "Group II Available Funds Cap": As of any
Distribution Date, the weighted average of the Net Rates Distribution Date, the weighted average of the Net Rates
on the Mortgage Loans in Group I (weighted on the basis on the Mortgage Loans in Group II (weighted on the basis
of the principal balances thereof as of the first day of of the principal balances thereof as of the first day of
the month preceding the month of such Distribution Date). the month preceding the month of such Distribution Date).
"Group I Certificate": Any of the Class AF-1, Class "Group II Certificate": Any of the Class AV-1,
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AV-2, Class MV-1, Class MV-2, Class BV-1 and Class
Class MF-1, Class MF-2, Class BF-1 and Class BF-1A BV-1A Certificates.
Certificates.
12
"Group I Certificate Principal Balance": The sum of "Group II Certificate Principal Balance": The sum
the Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class of the Class AV-1, Class AV-2, Class MV-1, Class MV-2,
AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1 and Class BV-1 and Class BV-1A Certificate Principal
Class BF-1A Certificate Principal Balances. Balances.
"Group I Class A Certificate Principal Balance": The "Group II Class A Certificate Principal Balance":
sum of the Class AF-1, Class AF-2, Class AF-3, Class The sum of the Class AV-1 and Class AV-2 Certificate
AF-4, Class AF-5 and Class AF-6 Certificate Principal Principal Balance.
Balances.
"Group I Class A Principal Distribution Amount": With "Group II Class A Principal Distribution Amount":
respect to any Distribution Date before the Group I With respect to any Distribution Date before the Group
Stepdown Date or as to which a Group I Trigger Event has II Stepdown Date or as to which a Group II Trigger Event
occurred, 100% of the Group I Principal Distribution has occurred, 100% of the Group II Principal
Amount for such Distribution Date and with respect to any Distribution Amount for such Distribution Date and with
Distribution Date on or after the Stepdown Date and as to respect to any Distribution Date on or after the
which a Group I Trigger Event has not occurred, the Stepdown Date and as to which a Group II Trigger Event
excess of (i) the Group I Class A Certificate Principal has not occurred, the excess of (i) the Group II Class A
Balance immediately prior to such Distribution Date over Certificate Principal Balance immediately prior to such
(ii) the lesser of (A) 71.00% of the Schedule Principal Distribution Date over (ii) the lesser of (A) 57.00% of
Balances of Group I on the preceding Due Date and (B) the the Schedule Principal Balances of Group II on the
excess of (I) the Scheduled Principal Balances of Group I preceding Due Date and (B) the excess of (I) the
on the preceding Due Date over (II) $2,463,926. Scheduled Principal Balances of Group II on the
preceding Due Date over (II) $1,786,073.
"Group I Class MF-1 Principal Distribution Amount": "Group II Class MV-1 Principal Distribution Amount":
With respect to any Distribution Date on and after the With respect to any Distribution on and, after the Group
Group I Stepdown Date and as long as a Group I Trigger II Stepdown Date and as long as a Group II Trigger Event
Event is not in effect (subject to the proviso set forth is not in effect (subject to the proviso set forth in
in Section 3.02(c) hereof), the excess of (i) the sum of Section 3.02(d) hereof), the excess of (i) the sum of
(A) the Group I Class A Certificate Principal Balance and (A) the Group II Class A Certificate Principal Balance
(B) the Class MF-1 Certificate Principal Balance and (B) the Class MV-1 Certificate Principal Balance
immediately prior to such Distribution Date over (ii) the immediately prior to such Distribution Date over (ii)
lesser of (A) 81.00% of the aggregate Scheduled Principal the lesser of (A) 72.50% of the Scheduled Principal
Balances of Group I on the preceding Due Date and (B) the Balances of Group II on the preceding Due Date and (B)
excess of (I) the Scheduled Principal Balances of Group I the excess of (I) the Scheduled Principal Balances of
on the preceding Due Date over (II) $2,463,926. Group II on the preceding Due Date over (II) $1,786,073.
13
"Group I Class MF-2 Principal Distribution Amount": "Group II Class MV-2 Principal Distribution Amount":
With respect to any Distribution Date on and after the With respect to any Distribution on and after the Group
Group I Stepdown Date and as long as a Group I Trigger II Stepdown Date and as long as a Group II Trigger Event
Event is not in effect (subject to the proviso set forth is not in effect (subject to the proviso set forth in
in Section 3.02(c) hereof), the excess of (i) the sum of Section 3.02(d) hereof), the excess of (i) the sum of
(A) the Group I Class A Certificate Principal Balance, (A) the Group II Class A Certificate Principal Balance,
(B) the Class MF-1 Certificate Principal Balance and (C) (B) the Class MV-1 Certificate Principal Balance and (C)
the Class MF-2 Certificate Principal Amount immediately the Class MV-2 Certificate Principal Amount immediately
prior to such Distribution Date over (ii) the lesser of prior to such Distribution Date over (ii) the lesser of
(A) 89.00% of the Scheduled Principal Balances of Group I (A) 85.50% of the Scheduled Principal Balances of Group
on the preceding Due Date and (B) the excess of (I) the II on the preceding Due Date and (B) the excess of (I)
Scheduled Principal Balances of Group I over on the the Scheduled Principal Balances of Group II on the
preceding Due Date over (II) $2,463,926. preceding Due Date over (II) $1,786,073.
"Group I Class BF-1 Principal Distribution Amount": "Group II Class BV-1 Principal Distribution Amount":
With respect to any Distribution on and after the Group I With respect to any Distribution Date on and after the
Stepdown Date and as long as a Group I Trigger Event is Group II Stepdown Date and as long as a Group II Trigger
not in effect (subject to the proviso set forth in Event is not in effect (subject to the proviso set forth
Section 3.02(c) hereof), the excess of (i) the sum of (A) in Section 3.02(d) hereof), the excess of (i) the sum of
the Group I Class A Certificate Principal Balance, (B) (A) the Group II Class A Certificate Principal Balance,
the Class MF-1 Certificate Principal Balance, (C) the (B) the Class MV-1 Certificate Principal Balance, (C)
Class MF-2 Certificate Principal Balance and (D) the the Class MV-2 Certificate Principal Balance and (D) the
Class BF-1 Certificate Principal Balance immediately Class BV-1 Certificate Principal Balance immediately
prior to such Distribution Date over (ii) the lesser of prior to such Distribution Date over (ii) the lesser of
(A) 95.00% of the Scheduled Principal Balances of Group I (A) 93.50% of the Scheduled Principal Balances of Group
on the preceding Due Date and (B) the excess of (I) the II on the preceding Due Date and (B) the excess of (I)
Scheduled Principal Balances of Group I on the preceding the Scheduled Principal Balances of Group II on the
Due Date over (II) $2,463,926. preceding Due Date over (II) $1,786,073.
"Group I Class BF-1A Principal Distribution Amount": "Group II Class BV-1A Principal Distribution
With respect to any Distribution Date on and after the Amount": With respect to any Distribution Date on and
Group I Stepdown Date and as long as a Group I Trigger after the Group II Stepdown Date and as long as a Group
Event is not in effect (subject to the proviso set forth II Trigger Event is not in effect (subject to the
in Section 3.02(c) hereof), the excess of (i) the Group I proviso set forth in Section 3.02(d) hereof), the
Principal Distribution Amount for such day over (ii) the excess of (i) the Group II Principal Distribution
sum of (A) the Group I Class A Principal Distribution Amount for each day over (ii) the sum of (A) the Group
Amount, (B) the Class MF-1 Principal Distribution Amount, II Class A Principal Distribution Amount, (B) the
(C) the Class MF-2, Principal Distribution Amount and (D) Class MV-1 Principal Distribution Amount, (C) the Class
the Class BF-1 Principal Distribution Amount. MV-2 Principal Distribution Amount and (D) the Class
BV-1 Principal Distribution Amount.
"Group I Delinquency Percentage": For each "Group II Delinquency Percentage": For each
Distribution Date and as to Group I , the Scheduled Distribution Date and as to Group II , the Scheduled
Principal Balance of the Mortgage Loans in Group I that, Principal Balance of the Mortgage Loans in Group II
as of such Distribution Date, are 60 or more days that, as of such Distribution Date, are 60 or more days
Delinquent as a percentage of the Scheduled Principal Delinquent as a percentage of the Scheduled Principal
Balance of the Mortgage Loans in Group I. Balance of the Mortgage Loans in Group II.
14
"Group I Extra Principal Distribution Amount": With "Group II Extra Principal Distribution Amount":
respect to any Distribution Date, to the extent of Group With respect to any Distribution Date, to the extent of
I Interest Funds pursuant to Section 3.02(a)(v) and Group Group II Interest Funds pursuant to Section 3.02(b)(v)
II Interest Funds available for the purpose pursuant to and Group I Interest Funds available for the purpose
Section 3.02(f)(v) hereof, an amount equal to the excess pursuant to Section 3.02(e)(v) hereof, an amount equal
of (i) all Realized Losses with respect to Group I to the excess of (i) all Realizes Losses with respect
(including any such losses for such date) over (ii) all to Group II (including any such losses for such date)
Extra Principal Distribution Amounts for Group I on the over (ii) all Extra Principal Distribution Amounts for
preceding Due Date. Group II on the preceding Due Date.
"Group I Interest Funds": With respect to Group I "Group II Interest Funds": With respect to Group
and any Master Servicer Remittance Date, to the extent II and any Master Servicer Remittance Date, to the
actually deposited in the Master Servicer Custodial extent actually deposited in the Master Servicer
Account, the sum, without duplication, of (i) all Custodial Account, the sum, without duplication, of (i)
scheduled interest collected during the related Due all scheduled interest collected during the related Due
Period with respect to Group I less the Group I Servicing Period with respect to Group II less the Group II
Fee and the Group I Master Servicing Fee, (ii) all Servicing Fee and the Group II Master Servicing Fee,
Advances relating to interest with respect to Group I, (ii) all Advances relating to interest with respect to
(iii) all Month End Interest with respect to Group I and Group II, (iii) all Month End Interest with respect to
(iv) Liquidation Proceeds with respect to Group I (to the Group II and (iv) Liquidation Proceeds with respect to
extent such Liquidation Proceeds relate to interest) less Group II (to the extent such Liquidation Proceeds
all Non-Recoverable Advances relating to interest and relate to interest) less all Non-Recoverable Advances
expenses pursuant to Section 6.03 of the Standard Terms. relating to interest and expenses pursuant to Section
6.03 of the Standard Terms.
"Group I Master Servicing Fee": With respect to each "Group II Master Servicing Fee": With respect to
Master Servicer Remittance Date, an amount payable (or each Master Servicer Remittance Date, an amount payable
allocable) to the Master Servicer equal to the product of (or allocable) to the Master Servicer equal to the
one-twelfth of the Group I Master Servicing Fee Rate and product of one-twelfth of the Group II Master Servicing
the aggregate Scheduled Principal Balance of Group I on Fee Rate and the aggregate Scheduled Principal Balance
the first day of the Due Period preceding such Master of Group II on the first day of the Due Period
Servicer Remittance Date. preceding such Master Servicer Remittance Date.
"Group I Master Servicing Fee Rate": 0.05% per annum. "Group II Master Servicing Fee Rate": 0.05% per
annum.
"Group I Net Rate": The weighted average Net Rate "Group II Net Rate": The weighted average Net Rate
for Group I. for Group II.
"Group I Original Pre-Funded Amount": $118,159,181. "Group II Original Pre-Funded Amount": $86,249,706.
"Group I Overcollateralization Amount": With respect "Group II Overcollateralization Amount": With
to any Distribution Date the sum of (i) the excess of the respect to any Distribution Date the sum of (i) the
aggregate Scheduled Principal Balance of the Group I excess of the aggregate Scheduled Principal Balance of
Mortgage Loans over the Group I Certificate Principal the Group II Mortgage Loans over the Group II
Balance and (ii) the Class BF-1A Certificate Principal Certificate Principal Balance and (ii) the Class BV-1A
Balance. Certificate Principal Balance.
15
"Group I Pre-Funded Amount": With respect to any "Group II Pre-Funded Amount": With respect to any
Master Servicer Reporting Date, the amount remaining on Master Servicer Reporting Date, the amount remaining on
deposit in the Pre-Funding Account with respect to Group deposit in the Pre-Funding Account with respect to
I (exclusive of any Group I Pre-Funding Account Earnings). Group II (exclusive of any Group II Pre-Funding Account
Earnings).
"Group I Principal Distribution Amount": With "Group II Principal Distribution Amount": With
respect to any Distribution Date, the excess of (A) the respect to any Distribution Date, the excess of (A) the
sum of (i) the Group I Principal Funds and (ii) the Group sum of (i) the Group II Principal Funds and (ii) the
I Extra Principal Distribution Amount over (B) the Group Group II Extra Principal Distribution Amount over (B)
I Released Principal Amount. the Group II Released Principal Amount.
"Group I Principal Funds": With respect to Group I "Group II Principal Funds": With respect to Group
and any Master Servicer Remittance Date, to the extent II and any Master Servicer Remittance Date, to the
actually deposited in the Master Servicer Custodial extent actually deposited in the Master Servicer
Account, the sum, without duplication, of (i) all Custodial Account, the sum, without duplication, of (i)
scheduled principal with respect to Group I collected by all scheduled principal with respect to Group II
the Servicers during the related Due Period or advanced collected by the Servicers during the related Due
on or before such Master Servicer Remittance Date, (ii) Period or advanced on or before such Master Servicer
prepayments with respect to Group I collected by the Remittance Date, (ii) prepayments with respect to Group
Servicers in the related Prepayment Period, (iii) the II collected by the Servicers in the related Prepayment
Scheduled Principal Balance of each Mortgage Loan in Period, (iii) the Scheduled Principal Balance of each
Group I repurchased by the Depositor, (iv) any Mortgage Loan in Group II repurchased by the Depositor,
Substitution Shortfall with respect to Group I and (v) (iv) any Substitution Shortfall with respect to Group
all Liquidation Proceeds with respect to Group I II and (v) all Liquidation Proceeds with respect to
collected by the Servicer during the related Due Period Group II collected by the Servicer during the related
(to the extent such Liquidation Proceeds related to Due Period (to the extent such Liquidation Proceeds
principal) less all non-recoverable Advances relating to related to principal) less all non-recoverable Advances
principal with respect to Group I reimbursed during the relating to principal with respect to Group II
related Due Period. reimbursed during the related Due Period.
"Group I Realized Loss Percentage": For each "Group II Realized Loss Percentage": For each
Distribution Date and as to Group I, Realized Losses Distribution Date and as to Group II, Realized Losses
since the Cut-Off Date with respect to the Mortgage Loans since the Cut-Off Date with respect to the Mortgage
in Group I as a percentage of the Scheduled Principal Loans in Group II as a percentage of the Scheduled
Balance of Group I as of the Cut-Off Date. Principal Balance of Group II as of the Cut-Off Date.
"Group I Released Principal Amount": With respect to "Group II Released Principal Amount": With respect
any Distribution Date (i) if a Group I Subordinated to any Distribution Date (i) if a Group II Subordinated
Trigger Event exists, zero and (ii) if a Group I Trigger Event exists, zero and (ii) if a Group II
Subordinated Trigger Event does not exist, the amount by Subordinated Trigger Event does not exist, the amount
which the Group I Overcollateralization Amount exceeds by which the Group II Overcollateralization Amount
the Group I Required Overcollateralization Amount. exceeds the Group II Required Overcollateralization
Amount.
"Group I Required Overcollateralization Amount": "Group II Required Overcollateralization Amount":
With respect to any Distribution Date (i) prior to the With respect to any Distribution Date (i) prior to the
Group I Stepdown Date, 2.50% of the Scheduled Principal Group II Stepdown Date, 3.25% of the Scheduled
Balance of the Mortgage Loans in Group I as of the Principal Balance of the Mortgage Loans in Group II as
Cut-Off Date and (ii) on and after the Group I Stepdown of the Cut-Off Date and (ii) on and after the Group II
Date the greater of (x) the lesser of (I) 2.50% of the Stepdown Date the greater of (x) the lesser of (I)
Scheduled Principal Balance of the Mortgage Loans in 3.25% of the Scheduled Principal Balance of the
Group I with respect to the Cut-Off Date and (II) 5.00% Mortgage Loans in Group II with respect to the Cut-Off
of the Scheduled Principal Balance of the Mortgage Loans Date and (II) 6.50% of the Scheduled Principal Balance
in Group I on such Distribution Date and (y) 0.50% of the of the Mortgage Loans in Group II on such Distribution
Scheduled Principal Balance of the Mortgage Loans in Date and (y) 0.50% of the Scheduled Principal Balance
Group I as of the Cut-Off Date. of the Mortgage Loans in Group II as of the Cut-Off
Date.
16
"Group I Servicing Fee": With respect to each "Group II Servicing Fee": With respect to each
Mortgage Loan in Group I and each Remittance Date, the Mortgage Loan in Group II and each Remittance Date, the
product of (x) one-twelfth of the Servicing Fee Rate and product of (x) one-twelfth of the Servicing Fee Rate
(y) aggregate Scheduled Principal Balance of such and (y) aggregate Scheduled Principal Balance of such
Mortgage Loan as of the opening of business on the first Mortgage Loan as of the opening of business on the
day of the Due Period preceding such Remittance Date. first day of the Due Period preceding such Remittance
Date.
"Group I Servicing Fee Rate": With respect to each "Group II Servicing Fee Rate": With respect to each
Mortgage Loan in Group I, the fixed per annum rate Mortgage Loan in Group II, the fixed per annum rate
payable to the Servicer as set out on Schedule IA to this payable to the Servicer as set out on Schedule IB to
Agreement. this Agreement.
"Group I Stepdown Date": With respect to Group I, the "Group II Stepdown Date": With respect to Group II,
earlier to occur of (i) the later to occur of (A) the the earlier to occur of (i) the later to occur of (A)
Distribution Date in September 2002 and (B) the first the Distribution Date in September 2002 and (B) the
Distribution Date on which the Group I Class A first Distribution Date on which the Group II Class A
Certificate Principal Balance immediately prior to such Certificate Principal Balance immediately prior to such
Distribution Date (less the Group I Principal Funds for Distribution Date (less the Group II Principal Funds
such Distribution Date) is less than or equal to 71.00% for such Distribution Date) is less than or equal to
of the Scheduled Principal Balances of Group I and (ii) 57.00% of the Scheduled Principal Balances of Group II
the Distribution Date on which the Group I Class A and (ii) the Distribution Date on which the Group II
Certificate Principal Balance has been reduced to zero. Class A Certificate Principal Balance has been reduced
to zero.
"Group I Subordinated Certificates": The Class MF-1, "Group II Subordinated Certificates": The Class
Class MF-2, Class BF-1 and Class BF-1A Certificates. MV-1, Class MV-2, Class BV-1 and Class BV-1A
Certificates.
"Group I Subordinated Trigger Event": With respect "Group II Subordinated Trigger Event": With
to Group I, any Distribution Date after the Group I respect to Group II, any Distribution Date after the
Stepdown Date on which: Group II Stepdown Date on which:
(a) Realized Losses since the Cut-Off Date with (a) Realized Losses since the Cut-Off Date
respect to the Mortgage Loans in Group I as a percentage with respect to the Mortgage Loans in Group II as a
of the Scheduled Principal Balance of Group I as of the percentage of the Scheduled Principal Balance of Group
Cut-Off Date exceed the percentage set out below with II as of the Cut-Off Date exceed the percentage set out
respect to such Distribution Date: below with respect to such Distribution Date:
Distribution Date (inclusive) Distribution Date (inclusive)
October 2001 - September 2002 1.40% October 2001 - September 2002 2.00%
October 2002 - September 2003 2.40 October 2002 - September 2003 3.30
October 2003 - September 2004 3.00 October 2003 - September 2004 4.00
October 2004 - September 2005 3.40 October 2004 - September 2005 4.30
October 2005 - September 2006 3.70 October 2005 - September 2006 4.50
October 2006 and thereafter 4.00 October 2006 and thereafter 5.00
and and
17
(b) the Scheduled Principal Balance of the (b) the Scheduled Principal Balance of the
Mortgage Loans in Group I that, as of such Distribution Mortgage Loans in Group II that, as of such
Date, are 60 or more days Delinquent as a percentage of Distribution Date, are 60 or more days Delinquent as a
the Scheduled Principal Balance of the Mortgage Loans in percentage of the Scheduled Principal Balance of the
Group I exceeds the percentage set out below with respect Mortgage Loans in Group II exceeds the percentage set
to such Distribution Date: out below with respect to such Distribution Date:
Distribution Date (inclusive) Distribution Date (inclusive)
October 2001 - September 2002 4.00% October 2001 - September 2002 6.00%
October 2002 - September 2003 4.00 October 2002 - September 2003 6.00
October 2003 - September 2004 6.50 October 2003 - September 2004 9.00
October 2004 - September 2005 6.50 October 2004 - September 2005 9.00
October 2005 - September 2006 8.00 October 2005 - September 2006 12.00
October 2006 and thereafter 8.00 October 2006 and thereafter 12.00
"Group I Subsequent Mortgage Loans": The Mortgage "Group II Subsequent Mortgage Loans": The Mortgage
Loans in Group I sold to the Trust pursuant to Section Loans in Group II sold to the Trust pursuant to Section
2.02 hereof, which shall be listed on the Schedule of 2.02 hereof, which shall be listed on the Schedule of
Mortgage Loans attached to the related Subsequent Sales Mortgage Loans attached to the related Subsequent Sales
Agreement. Agreement.
"Group I Trigger Event": With respect to Group I and "Group II Trigger Event": With respect to Group II
any Distribution Date after the Group I Stepdown Date, a and any Distribution Date after the Group II Stepdown
Group I Trigger Event exists if two times the quotient of Date, a Group II Trigger Event exists if 2.5 times the
(i) the Scheduled Principal Balances of all 60 or more quotient of (i) the Scheduled Principal Balances of all
days Delinquent Mortgage Loans in Group I and (ii) the 60 or more days Delinquent Mortgage Loans in Group II
Scheduled Principal Balances of Group I as of the and (ii) the Scheduled Principal Balances of Group II
preceding Master Servicer Remittance Date equals or as of the preceding Master Servicer Remittance Date
exceeds 29.00%. equals or exceeds 43.00%.
"Initial Capitalized Interest Amount": $1,790,528.
"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 the sum of (i)
their aggregate Scheduled Principal Balances as of the Cut-Off Date, in the case
of the Mortgage Loans, and as of the related Subsequent Cut-Off Date, in the
case of Subsequent Mortgage Loans and (ii) any amounts on deposit in the Pre-
Funding Account (exclusive of any interest or other investment earnings).
"Interest Carry Forward Amount": As to any Class, the definition therefor
having the corresponding designation as such Class.
"Interest Determination Date": With respect to the first Accrual Period for
the Class AF-1 Certificates and the Group II Certificates (other than the Class
BV-1A Certificates) August 16, 1999, and with respect to any subsequent Accrual
Period for the Class AF-1 Certificates and 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.
18
"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": ▇▇▇▇▇'▇ Investors Service, Inc., and its successors (99 ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇).
"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
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(ii) If to the Master Servicer:
Saxon Mortgage, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(iii) If to the Trustee:
Chase Bank of Texas, National Association
600 ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Fiduciary Services _ Saxon 1999-3
"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 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.
"Overfunded Interest Amount": With respect to each Subsequent Sales Date,
the excess of (i) interest accruing from the related Subsequent Cut-Off Date to
the Distribution Date immediately following the last date on which the Funding
Period may then end on the aggregate Scheduled Principal Balances of the
Subsequent Mortgage Loans acquired by the Trust on such Subsequent Transfer
Date, calculated at a rate equal to the Net Rate on such Subsequent
19
Mortgage Loans over (ii) interest accruing from such Subsequent Cut-Off Date to
such Distribution Date on the aggregate Scheduled Principal Balances of the
Subsequent Mortgage Loans acquired by the Trust on such Subsequent Sales Date,
calculated at the rate at which moneys in the Pre-Funding Account are invested
as of such Subsequent Sales Date.
"Paying Agent": Chase Bank of Texas, National Association, a national
banking association, and its successors and assigns in such capacity.
"Pre-Funded Amount": As of any Distribution Date, the sum of the Group I
Pre-Funded Amount and the Group II Pre-Funded Amount.
"Pre-Funding Account": The account created and maintained with the Paying
Agent by the Trust pursuant to Section 2.03.
"Pre-Funding Account Earnings": With respect to each Distribution Date to
and including the date immediately preceding the Distribution Date immediately
following the end of the Funding Period, the actual investment earnings during
the related Prepayment Period on the Pre-Funded Amount as calculated by the
Master Servicer (based on information supplied by the Trustee) pursuant to
Section 2.03(c) hereof.
"Private Certificate": Any of the Class 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 ▇▇▇▇▇"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 July 30, 1999, 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.
20
Group I:
"AF-1 Balance" : The "AF-2 Balance" : The Balance of "AF-3 Balance" : The Balance of
Balance of the Subaccount Subaccount AF-2. Subaccount AF-3.
AF-1.
"AF-1 Monthly Interest "AF-2 Monthly Interest Amount": "AF-3 Monthly Interest Amount":
Amount": With respect to With respect to any Distribution With respect to any Distribution
any Distribution Date, the Date, the interest accrued on the Date, the interest accrued on the
interest accrued on the AF- AF-2 Balance during the Accrual AF-3 Balance during the Accrual
1 Balance during the Period for the Class AF-2 Period for the Class AF-3
Accrual Period for the Certificates for that Certificates for that
Class AF-1 Certificates Distribution Date at the Group I Distribution Date at the Group I
for that Distribution Date Net Rate. Net Rate.
at the Group I Net Rate.
"Subaccount AF-1": The "Subaccount AF-2": The Subaccount "Subaccount AF-3": The
Subaccount by that name by that name created pursuant to Subaccount by that name created
created pursuant to Section Section 5.03(a)(i) hereof. pursuant to Section 5.03(a)(i)
5.03(a)(i) hereof. hereof.
"AF-4 Balance" : The Balance of "AF-5 Balance" : The Balance of "AF-6 Balance" : The Balance of
the Subaccount AF-4. Subaccount AF-5. Subaccount AF-6.
"AF-4 Monthly Interest Amount": "AF-5 Monthly Interest Amount": "AF-6 Monthly Interest Amount":
With respect to any With respect to any Distribution With respect to any Distribution
Distribution Date, the Date, the interest accrued on the Date, the interest accrued on the
interest accrued on the AF-4 AF-5 Balance during the Accrual AF-6 Balance during the Accrual
Balance during the Accrual Period for the Class AF-5 Period for the Class AF-6
Period for the Class AF-4 Certificates for that Certificates for that
Certificates for that Distribution Date at the Group I Distribution Date at the Group I
Distribution Date at the Group Net Rate. Net Rate.
I Net Rate.
"Subaccount AF-4": The "Subaccount AF-5": The Subaccount "Subaccount AF-6": The Subaccount
Subaccount by that name by that name created pursuant to by that name created pursuant to
created pursuant to Section Section 5.03(a)(i) hereof. Section 5.03(a)(i) hereof.
5.03(a)(i) hereof.
"MF-1 Balance" : The Balance of "MF-2 Balance" : The Balance of "BF-1 Balance" : The Balance of
Subaccount MF-1. Subaccount MF-2. Subaccount BF-1.
"MF-1 Monthly Interest Amount": "MF-2 Monthly Interest Amount": "BF-1 Monthly Interest Amount":
With respect to any With respect to any Distribution With respect to any Distribution
Distribution Date, the Date, the interest accrued on the Date, the interest accrued on the
interest accrued on the MF-1 MF-2 Balance during the Accrual BF-1 Balance during the Accrual
Balance during the Accrual Period for the Class MF-2 Period for the Class BF-1
Period for the Class MF-1 Certificates for that Certificates for that
Certificates for that Distribution Date at the Group I Distribution Date at the Group I
Distribution Date at the Group Net Rate. Net Rate.
I Net Rate.
"Subaccount MF-1": The "Subaccount MF-2": The Subaccount "Subaccount BF-1": The Subaccount
Subaccount by that name by that name created pursuant to by that name created pursuant to
created pursuant to Section Section 5.03(a)(i) hereof. Section 5.03(a)(i) hereof.
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
21
Group I Net Rate.
"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-2 Balance": The Balance of the Subaccount AV-1.
AV-1.
"AV-1 Monthly Interest Amount": With respect to "AV-2 Monthly Interest Amount": With respect to any
any Distribution Date, the interest accrued on Distribution Date, the interest accrued on the AV-1
the AV-1 Balance during the Accrual Period for Balance during the Accrual Period for the Class
the Class AV-1 Certificates for that AV-1 Certificates for that Distribution Date at the
Distribution Date at the Group II Net Rate. Group II Net Rate.
"Subaccount AV-1": The Subaccount by that name "Subaccount AV-2": The Subaccount by that name
created pursuant to Section 5.03(a)(i) hereof. created pursuant to Section 5.03(a)(i) hereof.
"MV-1 Balance": The Balance of Subaccount MV-1. "MV-2 Balance": The Balance of Subaccount MV-2.
"MV-1 Monthly Interest Amount": With respect to "MV-2 Monthly Interest Amounts": With respect to
any Distribution Date, the interest accrued on any Distribution Date, the interest accrued on the
the MV-1 Balance during the Accrual Period for MV-2 Balance during the Accrual Period for the
the Class MV-1 Certificates for that Class MV-2 Certificates for that Distribution Date
Distribution Date at the Group II Net Rate. at the Group II Net Rate.
"Subaccount MV-1": The Subaccount by that name "Subaccount MV-2": The Subaccount by that name
created pursuant to Section 5.03(a)(i) hereof. created pursuant to Section 5.03(a)(i) hereof.
"BV-1 Balance": The Balance of Subaccount BV-1. "BV-1A Balance": The Balance of Subaccount BV-1A.
"BV-1 Monthly Interest Amount": With respect "BV-1A Monthly Interest Amount": With respect to
to any Distribution Date, the interest accrued any Distribution Date, the interest accrued on the
on the BV-1 Balance during the Accrual Period BV-1A Balance during the Accrual Period for the
for the Class BV-1 Certificates for that Class BV-1A Certificates for that Distribution Date
Distribution Date at the Group II Net Rate. at the Group II Net Rate.
"Subaccount BV-1": The Subaccount by that name "Subaccount BV-1A": The Subaccount by that name
created pursuant to Section 5.03(a)(i) hereof. 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.
"Subgroup A": The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Group II, Subgroup A,
including any Group II Subsequent Mortgage Loans included in Subgroup A and,
including any Group II Qualified Substitute Mortgage Loans delivered in
replacement thereof.
"Subgroup B": The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Group II, Subgroup B,
including any Group II Subsequent Mortgage Loans included in Subgroup B and,
including any Group II Qualified Substitute Mortgage Loans delivered in
replacement thereof.
"Subsequent Cut-Off Date": The time and date specified in a Subsequent
Sales Agreement with respect to those Subsequent Mortgage Loans which are
transferred and assigned to the Trust pursuant to the related Subsequent Sales
Agreement.
22
"Subsequent Mortgage Loans": The Group I Subsequent Mortgage Loans and the
Group II Subsequent Mortgage Loans.
"Subsequent Sales Agreement": Each Subsequent Sales Agreement dated as of
a Subsequent Sales Date executed by the Master Servicer, the Seller and Saxon
Mortgage substantially in the form of Schedule III hereto, by which Subsequent
Mortgage Loans are sold and assigned to the Trust.
"Subsequent Sales Date": The date specified in each Subsequent Sales
Agreement which shall be a date no later than the end of the Prepayment Period
preceding the first Distribution Date after the end of the Funding Period.
"Tax Matters Person": 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 Dow
▇▇▇▇▇ Telerate Service (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": ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Banc of
America Securities LLC, Prudential Securities Incorporated, and Banc One Capital
Markets, Inc.
"Underwriting Agreement": The Underwriting Agreement dated July 30, 1999,
between the Depositor and SMI and the Underwriters.
23
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, the Pre-Funding Account, the
Capitalized Interest 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.
Section 2.02. Purchase of Subsequent Mortgage Loans.
(a) Subject to the satisfaction of the conditions set forth in paragraph
(b) below (based on the Master Servicer"s review of such conditions) in
consideration of the delivery on a Subsequent Sales Date to or upon the order of
the Seller of all or a portion of the Group I Pre-Funded Amount or the Group II
Pre-Funded Amount, as the case may be, the Seller shall on such Subsequent Sales
Date sell, transfer, assign, set over and otherwise convey without recourse, to
the Trust, and the Trustee shall purchase on behalf of the Trust, all the
Seller"s right, title and interest in and to the Subsequent Mortgage Loans,
together with the related Trustee Mortgage Loan Files, covered by the Subsequent
Sales Agreement delivered on such date.
(b) The obligation of the Trust to acquire Subsequent Mortgage Loans is
subject to the satisfaction of each of the following conditions on or prior to
the related Subsequent Sales Date:
(i) the Seller shall have delivered to the Trustee with a copy to the
Master Servicer a duly executed written Subsequent Sales
Agreement in substantially the form of Schedule III hereto, which
shall include a Schedule of Subsequent Mortgage Loans, listing
separately the Group I Subsequent Mortgage Loans and Group II
Subsequent Loans and specifying the amount to be withdrawn from
the Group I Pre-Funded Amount and the Group II Pre-Funded Amount;
(ii) the remaining term to maturity of each Subsequent Mortgage Loan
may not exceed 30 years;
24
(iii) no Subsequent Mortgage Loan will have been selected in a manner
adverse to the interests of Certificateholders;
(iv) receipt by the Trustee of a letter from each Rating Agency
confirming that the addition of the Subsequent Mortgage Loans
will not result in the reduction, qualification or withdrawal of
the then current ratings of the Certificates;
(v) no Subsequent Mortgage Loan may be more than 30 days delinquent
as of the related Cut-Off Date;
(vi) no Subsequent Mortgage Loan may have a Loan-to-Value Ratio
greater than 101.00%;
(vii) each Subsequent Mortgage Loan will be underwritten in
accordance with the Seller's underwriting guidelines;
(viii) after giving effect to the acquisition of the Subsequent Mortgage
Loans, the Mortgage Loans in Group I (which shall all have fixed
interest rates):
(A) will have a weighted average Mortgage Interest Rate not less
than 9.90% per annum;
(B) the aggregate Scheduled Principal Balances of the Mortgage
Loans with a combined Loan to Value Ratio greater than 80%
will not exceed 36% of the aggregate Scheduled Principal
Balances of the Mortgage Loans; and the weighted average
Loan to Value ratio of the Mortgage Loans will not exceed
80%;
(C) the weighted average remaining amortization term of the
Mortgage Loans shall not be less than 335 months;
(D) may not exceed any of the following restrictions:
Categories of Restriction (Based on
Mortgage Loans Scheduled Principal Balances)
-------------- -----------------------------
Mortgage Loans secured by owner occupied dwellings 88.00%
Mortgage Loans with balloon payments 55.00%
Mortgage Loans secured by junior liens 2.50%
Mortgage Loans secured by investor-owned Mortgaged Premises 8.00%
(E) no more than 0.75% of the Mortgage shall have balances in
excess of $500,000; Loans (by Scheduled Principal Balance)
(F) no more than 15.50%, 9.75% and 2.25% of Principal Balance)
shall be classified by respectively; and the Mortgage Loans
(by Scheduled Saxon Mortgage as "B", "C" and "D",
(G) not less than 75% of the Mortgage Loans shall be secured by
single family (detached and attached) residences.
(ix) after giving effect to the acquisition of the Subsequent Mortgage
Loans, the Mortgage Loans in Group II (which shall all be ARM
Loans):
25
(A) will have a weighted average current Mortgage Interest Rate
of not less than 9.80% and a weighted average margin of at
least 6.15%;
(B) the Mortgage Loans with a Loan to Value Ratio greater than
80% will not exceed 37.0% of the aggregate Scheduled
Principal Balances of the Mortgage Loans and the weighted
average Loan to Value Ratio of the Mortgage Loans will not
exceed 80.0%;
(C) the weighted average remaining amortization term of the
Mortgage Loans shall not be less than 354 months;
(D) may not exceed any of the following restrictions:
Categories of Restriction (Based on
Mortgage Loans Scheduled Principal Balances)
-------------- ----------------------------
Mortgage Loans secured by owner occupied dwellings 90.00%
Mortgage Loans secured by investor-owned Mortgaged Premises 6.00%
(E) no more than 4.00% of the Mortgage Loans shall have balances
in excess of $600,000; (by Scheduled Principal Balance)
(F) no more than 25.00%, 17.25% and 5.25% of Principal Balance)
shall be classified by respectively; the Mortgage Loans (by
Scheduled Saxon Mortgage as "B", "C" and "D",
(G) not less than 75% of the Mortgage Loans secured by single
family (detached and (by Scheduled Principal Balance ) shall
be attached) residences; and
(H) each Mortgage Loan in Subgroup A will adhere to FNMA and
FHLMC conforming balance guidelines.
For purposes of making all calculations required by clauses
(viii) and (ix), the Scheduled Principal Balances of the Initial
Mortgage Loans at the Cut-Off Date and of the Subsequent Mortgage
Loans as of their respective Subsequent Cut-Off Dates shall be
used.
(x) the Seller shall have provided the Master Servicer and the
Trustee any information reasonably requested by any of them with
respect to the Subsequent Mortgage Loans then to be sold to the
Trust;
(xi) the Seller shall have delivered to the Master Servicer for
deposit in the Master Servicer Custodial Account all principal
and interest due in respect of such Subsequent Mortgage Loans
after the related Subsequent Cut-Off Date;
(xii) the Depositor shall have delivered to the Trustee, the
Underwriters and the Rating Agencies a letter from an independent
accountant stating whether or not the characteristics of the
Subsequent Mortgage Loans conform to the characteristics of the
Mortgage Loans listed on Schedule I;
(xiii) as of each Subsequent Sales Date, neither the Seller nor Saxon
Mortgage shall be insolvent, nor will either of them be made
insolvent by such transfer;
(xiv) the Funding Period shall not have ended; and
(xv) the Seller and Saxon Mortgage each shall have delivered to the
Master Servicer and the Trustee an Officer's certificate
confirming the satisfaction of each condition precedent
26
specified in this paragraph (b) and in the related Subsequent
Sales Agreement and opinions of counsel with respect to
corporate, bankruptcy and tax matters relating to the transfer of
Subsequent Mortgage Loans in the forms substantially similar to
those delivered on the Closing Date, and the Certificate Insurer
shall have consented to such acquisition.
(c) Pursuant to Section 2.03(b) hereof, the Trustee shall remit on each
Subsequent Sales Date to or upon the order of the Seller from the Pre-Funding
Account the amount specified by the Master Servicer only upon the Trustee's
receipt of: (i) a fully executed Subsequent Sales Agreement; (ii) the two
Officer's certificates required by Section 2.02(b)(xv) hereof; (iii) an Opinion
or Opinions of Counsel from each of the Seller and Saxon Mortgage required by
Section 2.02(b)(xv), and (iv) a letter from each Rating Agency as required by
Section 2.02 (b)(iv), (v) a letter from an independent accountant as required by
Section 2.02(b)(xii); and (vi) the written instruction from the Master Servicer
setting forth the amounts to be paid as required by Section 2.03(b) hereof. The
Trustee may rely and shall be protected in relying on all such officer's
certificates as evidencing full compliance with all conditions precedent
specified in Section 2.02(b), without any further duty of inquiry with respect
thereto.
(d) On each Subsequent Sales Date and on the Master Servicer Reporting
Date immediately following the end of the Funding Period, the Master Servicer
shall determine: (i) the amount and correct disposition of the Pre-Funded Amount
(and the portion thereof to be allocated to Group I Available Funds and the
portion thereof to be allocated to Group II Available Funds), and the amount
remaining in the Capitalized Interest Account and (ii) any other necessary
matters in connection with the administration of the Pre-Funded Account and the
Capitalized Interest Account. With respect to each Subsequent Sales Date the
Master Servicer shall determine the Overfunded Interest Amount. If any amounts
are released as a result of an error in calculation to the Holders or the Seller
from the Pre-Funding Account or from the Capitalized Interest Account, the
Seller shall immediately repay such amounts to the Master Servicer or, in the
case of the Holders, the Master Servicer shall have the right to cause the
Trustee to withhold such amounts from future distributions on such Certificates
for redeposit in the Pre-Funding Account or Capitalized Interest Account, as the
case may be.
Section 2.03. Pre-Funding Account and Capitalized Interest Account.
(a) The Trustee shall establish and maintain the Pre-Funding and the
Capitalized Interest Account, each to be held in trust for the benefit of the
Certificateholders. Each of the Pre-Funding Account and the Capitalized
Interest Account shall be an Eligible Account. On the Closing Date, Saxon will
cause to be deposited in the Pre-Funding Account the Group I Original Pre-Funded
Amount and the Group II Original Pre-Funded Amount and in the Capitalized
Interest Account the Initial Capitalized Interest Amount.
(b) On any Subsequent Sales Date, the Master Servicer shall instruct the
Trustee, with a copy to the Seller, (i) to withdraw from the Group I Pre-Funded
Amount in the Pre-Funding Account an amount equal to 100% of the aggregate
Scheduled Principal Balances of the Group I Subsequent Mortgage Loans as of the
applicable Subsequent Cut-Off Date sold to the Trust on such Subsequent Sales
Date; (ii) to withdraw from the Group II Pre-Funded Amount in the Pre-Funding
Account an amount equal to 100% of the aggregate Scheduled Principal Balances of
the Group II Subsequent Mortgage Loans as of the applicable Subsequent Cut-Off
Date sold to the Trust on such Subsequent Sales Date; and (iii) to pay such
amounts to or upon the order of the Seller upon satisfaction of the conditions
set forth in Section 2.02(c) hereof with respect thereto. In no event shall the
Trustee withdraw from the Pre-Funding Account an amount in excess of the Group I
Original Pre-Funded Amount with respect to Group I Mortgage Loans or an amount
in excess of the Group II Original Pre-Funded Amount with respect to Group II
Mortgage Loans.
(c) On each Master Servicer Remittance Date to and including the
Distribution Date immediately following the end of the Funding Period, the
Master Servicer shall instruct the Paying Agent to transfer: (i) to the
Capitalized Interest Account from the Pre-Funding Account, the Pre-Funding
Account Earnings; and (ii) to the Asset Proceeds Account from the Capitalized
Interest Account, the Capitalized Interest Requirement.
(d) On each Subsequent Sales Date the Master Servicer shall instruct the
Trustee to distribute the Overfunded Interest Amount, if any, to the Seller. At
the end of the Funding Period, all amounts, if any, remaining in the Capitalized
Interest Account shall be transferred to the Seller and the Capitalized Interest
Account shall be closed.
27
(e) On the Master Servicer Remittance Date immediately following the end
of the Funding Period, the Master Servicer shall instruct the Trustee to
transfer the Pre-Funded Amount to the Asset Proceeds Account for distribution to
the Holders of the Class A Certificates in accordance with Section 3.02 hereof.
(f) The Pre-Funding Account and the Capitalized Interest Account shall not
be assets of either REMIC created pursuant to this Agreement.
Article III
Remitting to Certificateholders
Section 3.01 Subaccount Distributions.On each Distribution Date, the
Trustee shall 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 ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-
▇, ▇▇-▇ and BV-1A, in the following order: first, pro rata, the AV-1 and AV-2
Monthly Interest Amounts, 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;
(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 and
increased in the same order and manner that the Class of Certificates
having the corresponding class designation is increased or 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 AV-2 until the AV-2 Balance is reduced to zero;
(C) to Subaccount MV-1 until the MV-1 Balance is reduced to zero;
(D) to Subaccount MV-2 until the MV-2 Balance is reduced to zero;
(E) to Subaccount BV-1 until the BV-1 Balance is reduced to zero;
and
28
(F) to Subaccount BV-1A until the BV-1A Balance is reduced to
zero;
provided, however, that (a) such Balances shall be reduced and
increased in the same order and manner that the Class of Certificates
having the corresponding class designation is increased or 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 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
and any amounts transferred from the Capitalized Interest
Account for the Group I Mortgage Loans are not sufficient to
make a full distribution of the Current Interest and any
Interest Carry Forward Amount with respect to all the Group I
Class A Certificates, 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 and any amounts transferred from the
Capitalized Interest Account for the Group I Mortgage Loans are
not sufficient to make a full distribution of the Current
Interest 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
(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; provided, however, if the Group II Interest Funds
and any amounts transferred from the Capitalized Interest
Account for the Group II Mortgage Loans are not sufficient to
make a full distribution of the Current Interest and any
Interest Carry Forward Amount with respect to all the Group II
Class A Certificates, such amount will be distributed pro rata
among each Class of the Group II Class A Certificates based on
the ratio of (x) the Current Interest and Interest Carry Forward
Amount for each Class of the Group II Class A Certificates to
(y) the total amount of 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;
29
(iv) pro rata, 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 and any amounts transferred from
the Capitalized Interest Account for the Group II Mortgage Loans
are not sufficient to make a full distribution of the Current
Interest 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 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;
provided, however, that, if a Group I Trigger Event is in effect on any
Distribution Date: (a) after the Certificate Principal Balance of the Group I
Class A Certificates has been reduced to zero, the Class MF-1 Principal
Distribution Amount shall equal the Group I Principal Distribution Amount for
such Distribution Date; (b) after the Certificate Principal Balance of the Class
MF-1 Certificates has been reduced to zero, the Class MF-2 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-2 Certificates has been reduced to zero, the Class BF-1 Principal
Distribution Amount shall equal the Group I Principal Distribution Amount, and
(d) after the Certificate Principal Balance of the Class BF-1 Certificates has
been reduced to zero, the Class BF-1A Principal Distribution Amount shall equal
the Group I Principal Distribution Amount;
(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
30
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 Group II Class A
Principal Distribution Amount to be distributed as follows:
amounts constituting Principal Funds attributable to Subgroup A
to the Class AV-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero and amounts
constituting Principal Funds attributable to Subgroup B to the
Class AV-2 Certificates until the Certificate Principal Balance
thereof has been reduced to zero, and any excess of the Group II
Class A Principal Distribution Amount over the amounts
distributed in the preceding clause will be prorated between the
Class AV-1 and Class AV-2 Certificates; provided, however, if
the Certificate Principal Balance of the Class AV-1 Certificates
or the Class AV-2 Certificates is reduced to zero, the Class A
Principal Distribution Amount shall be distributed to the
remaining Class A Group II Certificates until the Certificate
Principal Balance of such Class 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;
provided, however, that, if a Group II Trigger Event is in effect on any
Distribution Date: (a) 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; (b) after the Certificate Principal Balance of the Class
MV-1 Certificates has been reduced to zero, the Class MV-2 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-2 Certificates has been reduced to zero, the Class BV-1 Principal
Distribution Amount shall equal the Group II Principal Distribution Amount for
such Distribution Date; and (d) after the Certificate Principal Balance of the
Class BV-1 Certificates has been reduced to zero, the 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 (iv) of this Section 3.02(e), Section 3.02(f)(v)
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-2 Certificates, the Class MF-2 Interest Carry
Forward Amount;
(iv) pro rata, to the Class BF-1 and Class BF-1A Certificates, the
Class BF-1 and Class BF-1A Interest Carry Forward Amount;
31
(v) to the extent required to make the allocations set forth in
clauses (i) through (iv) of Section 3.02(f) hereof, pursuant to
Section 3.02(f) hereof;
(vi) to the Class BF-1A Certificates, an amount equal to the Group I
Applicable Percentage of the remaining amount, in reduction of
the Certificate Principal Balance thereof, until the Class BF-
1A Certificate Principal Balance has been reduced to zero; and
(vii) the remainder pursuant to Section 3.02(g) hereof.
(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 (iv) of this Section 3.02(f), Section 3.02(e)(v)
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-2 Certificates, the Class MV-2 Interest Carry
Forward Amount;
(iv) pro rata, to the Class BV-1 and Class BV-1A Certificates, the
Class BV-1 and Class BV-1A Interest Carry Forward Amount;
(v) to the extent required to make the allocations set forth in
clauses (i) through (iv) of Section 3.02(e) hereof;
(vi) 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;
(vii) 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;
(viii) 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;
(ix) 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;
(x) on any Distribution Date on or before the last Distribution
Date with respect to the Class BV-1A Certificates, the Class
BV-1A Certificates Carryover;
(xi) to the Class BV-1A Certificates, an amount equal to the Group
II Applicable Percentage of the remaining amount, in reduction
of the Certificate Principal Balance thereof, until the Class
BV-1A Certificate Principal Balance has been reduced to zero;
and
(xii) 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)(vii) and (f)(xii) 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 Group I to reduce the Certificate Principal Balances of the Group I
Subordinated Certificates in the following order of priority:
(i) to the Class BF-1A Certificates until the Class BF-1A
Certificate Principal Balance is reduced to zero;
32
(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 Group II Certificate Principal Balance over the Scheduled Principal Balances
of 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.
(j) On each Distribution Date, the Trustee shall allocate an amount equal
to the Group I Extra Principal Distribution Amount for such Distribution Date as
an increase in the Certificate Principal Balances of the Group I Subordinated
Certificates in the following order of priority:
(i) to the Class MF-1 Certificates in an amount up to the Class MF-1
Unpaid Realized Loss Amount;
(ii) to the Class MF-2 Certificates in an amount up to the Class MF-2
Unpaid Realized Loss Amount;
(iii) to the Class BF-1 Certificates in an amount up to the Class BF-1
Unpaid Realized Loss Amount; and
(iv) to the Class BF-1A Certificates in an amount up to the Class
BF-1A Unpaid Realized Loss Amount.
(k) On each Distribution Date, the Trustee shall allocate an amount equal
to the Group II Extra Principal Distribution Amount for such Distribution Date
as an increase in the Certificate Principal Balances of the Group II
Subordinated Certificates in the following order of priority:
(i) to the Class MV-1 Certificates in an amount up to the Class MV-1
Unpaid Realized Loss Amount;
(ii) to the Class MV-2 Certificates in an amount up to the Class MV-2
Unpaid Realized Loss Amount;
(iii) to the Class BV-1 Certificates in an amount up to the Class BV-1
Unpaid Realized Loss Amount; and
(iv) to the Class BV-1A Certificates in an amount up to the Class BV-
1A Unpaid Realized Loss Amount.
Section 3.03. Reports to the Depositor:
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):
33
(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;
(d) whether a Group I or Group II Trigger Event or a Group I or Group II
Subordinated Trigger Event has occurred; and
(e) for each Distribution Date during the Funding Period, (i) the Group I
Pre-Funded Amount and the Group II Pre-Funded Amount previously used to acquire
Subsequent Mortgage Loans, (ii) the Group I Pre-Funded Account Earnings and the
Group II Pre-Funded Account Earnings transferred to the Asset Proceeds Account,
(iii) the Group I Capitalized Interest Requirement and the Group II Capitalized
Interest Requirement transferred to the Asset Proceeds Account; and (iv) the
Group I Pre-Funded Amount and the Group II Pre-Funded Amount; and for the
Distribution Dated following the end of the Funding Period, the Group I Pre-
Funded Amount distributed as a part of a Group I Principal Distribution and the
Group II Pre-Funded Amount distributed as a part of a Group II Principal
Distribution Amount.
Section 3.04. 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 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 AV-2, Class MV-1,
Class MV-2, Class BV-1 and Class BV-1A Interest Carry Forward Amount
or any Class AV-1, Class AV-2, Class MV-1, Class MV-2, Class BV-1 and
Class BV-1A 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;
34
(vii) the Pass-Through Rates for the Group II Certificates for the
current Accrual Period and, if the Pass-Through Rates for any Class of the
Group I Certificates for the current Accrual Period is based on the Group I
Net Rate, the Pass-Through Rates for the Group I Certificates with respect
to which the Group I Net Rate applies; and.
(viii) for each Distribution Date during the Funding Period, the Pre-
Funded Amount allocable to each Group.
(b) On each Distribution Date, based on information provided by the
Servicer, the Master Servicer will distribute to the Depositor, each Holder, the
Underwriters, the Rating Agencies and the Trustee, together with the information
described in subsection (a) preceding, the following information with respect to
each Mortgage Loan Group in hard copy:
(i) the number and aggregate principal balances of Mortgage Loans
in each Group (a) 30-59 days Delinquent, (b) 60-89 days Delinquent and (c)
90 or more days Delinquent, as of the close of business as of the end of
the related prepayment period;
(ii) the percentage that each of the Scheduled Principal Balances
set forth pursuant to clauses (a), (b) and (c) of paragraph (i) above
represent with respect to all Mortgage Loans in each Group;
(iii) the number and Scheduled Principal Balance of all Mortgage
Loans in each Group in foreclosure proceedings as of the close of business
as of the end of the related Prepayment Period and in the immediately
preceding Prepayment Period;
(iv) the number of Mortgagors and the Scheduled Principal Balances
of Mortgage Loans in each Group involved in bankruptcy proceedings as of
the close of business as of the end of the related Prepayment Period;
(v) the aggregate number and aggregate book value of any REO
Property in each Group as of the close of business as of the end of the
related Prepayment Period; and
(vi) the number and amount by principal balance of 60+ Day
Delinquent Loans in each Group, in each case by Servicer and as of the end
of the related Prepayment Period.
(c) All allocations made by the Trustee shall be based on information the
Trustee receives from the Master Servicer which the Trustee shall be protected
in relying on.
(d) At the request of any Holder of any Private Certificate and a
prospective purchaser of a Private Certificate designated by any such Holder,
the Master Servicer on behalf of the Depositor will furnish to such persons a
copy of the Confidential Private Placement Memorandum, prepared by the Depositor
with respect to the private offering of such Certificates and copies of the
reports required to be furnished to Certificateholders pursuant to Section 3.04
hereof for the preceding two years (or such shorter period commencing August 1,
1999) pursuant to Section 5.05 of the Standard Terms.
Article IV
The Certificates
Section 4.01. The Certificates.
The Certificates shall be designated generally as the Mortgage Loan Asset
Backed Certificates, Series 1999-3. The aggregate principal amount of
Certificates that may be executed and delivered under this Agreement is limited
to $849, 999,750, 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 and the initial
Certificate Principal Balance for each such Class:
35
Initial Certificate
Class Principal Balance
Group I - Fixed Rate Mortgage Loans
AF-1 $154,198,250
AF-2 $ 70,000,000
AF-3 $ 67,000,000
AF-4 $ 56,000,000
AF-5 $ 32,000,000
AF-6 $ 42,133,000
MF-1 $ 24,639,000
MF-2 $ 19,711,000
BF-1 $ 14,784,000
BF-1A $ 12,320,000
Group II - Adjustable Rate Mortgage Loans
AV-1 $202,526,000
AV-2 $ 77,887,500
MV-1 $ 27,684,000
MV-2 $ 23,219,000
BV-1 $ 14,289,000
BV-1A $ 11,609,000
C (1)
R (2)
__________
/(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 and in denominations of $250,000 and
integral multiples of $1,000 in excess thereof in the case of the Private
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.
36
Article V
Miscellaneous Provisions
Section 5.01. Request for Opinions.
(a) The Depositor and the Master Servicer hereby request and authorize
McGuire, Woods, Battle & ▇▇▇▇▇▇ 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.
37
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:
Type of Interest
Pooling Interest Initial Subaccount Pass-Through For Purposes of
Designation Balance Rate REMIC Provisions
Group I
Subaccount AF-1 $154,198,250 (1) Regular
Subaccount AF-2 $ 70,000,000 (1) Regular
Subaccount AF-3 $ 67,000,000 (1) Regular
Subaccount AF-4 $ 56,000,000 (1) Regular
Subaccount AF-5 $ 32,000,000 (1) Regular
Subaccount AF-6 $ 42,133,000 (1) Regular
Subaccount MF-1 $ 24,639,000 (1) Regular
Subaccount MF-2 $ 19,711,000 (1) Regular
Subaccount BF-1 $ 14,784,000 (1) Regular
Subaccount BF-1A $ 12,320,000 (1) Regular
Group II
Subaccount AV-1 $202,526,000 (2) Regular
Subaccount AV-2 $ 77,887,500 (2) Regular
Subaccount MV-1 $ 27,684,000 (2) Regular
Subaccount MV-2 $ 23,219,000 (2) Regular
Subaccount BV-1 $ 14,289,000 (2) Regular
Subaccount BV-1A $ 11,609,000 (2) Regular
Subaccount R (3) (3) Residual
(1) On any Distribution Date, the Group I Net Rate.
(2) On any Distribution Date, the Group II Net Rate.
(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 AV-2, 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.
38
(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 December 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, a plan of complete liquidation as contemplated by
Section 860F(a)(4) of the Code and as prepared by the Master Servicer, and shall
provide to the Trustee an Opinion of Counsel experienced in federal income tax
matters acceptable to the Trustee to the effect that such purchase and
liquidation constitutes, as to each REMIC, a Qualified Liquidation. In addition,
the Master Servicer shall provide to the Trustee an Opinion of Counsel
acceptable to the Trustee to the effect that such purchase and liquidation does
not constitute a preference payment pursuant to the United States Bankruptcy
Code.
(c) Promptly following any purchase described in this Section 5.04, the
Trustee will release the Trustee Mortgage Loan File to the Master Servicer or
otherwise upon its order.
Section 5.05. 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.
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 August
1, 1999.
SAXON ASSET SECURITIES COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
SAXON MORTGAGE, INC.
as Master Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
as Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
COMMONWEALTH OF VIRGINIA )
) ss.:
COUNTY OF HENRICO )
The foregoing instrument was acknowledged before me August 17, 1999, by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a Vice President of Saxon Asset Securities Company, a Virginia
corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Notary Public
My Commission expires: 9/30/02
COMMONWEALTH OF VIRGINIA )
) ss.:
COUNTY OF HENRICO )
The foregoing instrument was acknowledged before me on August 17, 1999,
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President of Saxon Mortgage, Inc., a Virginia
corporation, on behalf of the corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Notary Public
My Commission expires: 9/30/02
CITY OF RICHMOND )
) ss.:
COMMONWEALTH OF VIRGINIA )
The foregoing instrument was acknowledged before me August 18, 1999, by
▇▇▇▇ ▇. ▇▇▇▇▇▇, a Vice President of Chase Bank of Texas, National Association, a
national banking association, on behalf of the bank.
/s/ ▇▇▇▇▇ ▇. Childress
------------------------------------
Notary Public
My Commission expires: February 28, 2003
Schedule I
Mortgage Loans
--------------
A. Group I Mortgage Loans.
B. Group II Mortgage Loans.
Schedule II
Sales Agreement
---------------
Schedule III
Form of Subsequent Sales Agreement
----------------------------------