Exhibit 99.2
CERTIFICATE GUARANTY INSURANCE POLICY
Policy No. 21803
OBLIGATIONS: Saxon Asset Securities Trust 1996-1
Mortgage Loan Asset Backed Certificates, Series 1996-1
$52,600,000 Class A-1 and Class A-2
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner (as defined below) that an amount equal to each full and
complete Insured Payment will be received by Citibank, N.A., or its successor,
as trustee for the Owners (the "Trustee"), on behalf of the Owners from the
Insurer, for distribution by the Trustee (directly or through the Paying Agent)
to each Owner of each Owner's proportionate share of the Insured Payment. The
Insurer's obligations hereunder with respect to a particular Insured Payment
shall be discharged to the extent funds equal to the applicable Insured Payment
are received by the Trustee, whether or not such funds are properly applied by
the Trustee. Insured Payments shall be made only at the time set forth in this
Policy, and no accelerated Insured Payments shall be made regardless of any
acceleration of the Obligations, unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the second Business Day following receipt on a Business Day by the Fiscal Agent
(as described below) of (i) a certified copy of the order requiring the return
of a preference payment, (ii) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (iii) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment, (iv) appropriate instruments to effect
the appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer and (v) a Notice (as described below), provided that
if such documents are received after 12:00 noon, New York City time, on such
Business Day, they will be deemed to be received on the following Business Day.
Such payments shall be disbursed to the receiver or trustee in bankruptcy named
in the final order of the court exercising jurisdiction on behalf of the Owner
and not to any Owner directly unless such Owner has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy, in
which case such payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the Class A-1 and Class A-2 Distribution Amounts are due or the second Business
Day following receipt in New York, New York on a Business Day by State Street
Bank and Trust Company, N.A., as Fiscal Agent for the Insurer or any successor
fiscal agent appointed by the Insurer (the "Fiscal Agent") of a
Notice (as described below); provided that if such Notice is received after
12:00 noon, New York City time, on such Business Day, it will be deemed to be
received on the following Business Day. If any such Notice received by the
Fiscal Agent is not in proper form or is otherwise insufficient for the purpose
of making a claim hereunder, it shall be deemed not to have been received by the
Fiscal Agent for purposes of this paragraph, and the Insurer or the Fiscal
Agent, as the case may be, shall promptly so advise the Trustee and the Trustee
may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee (or upon the written request of the
Trustee, to the Paying Agent) on behalf of the Owners by wire transfer of
immediately available funds in the amount of the Insured Payment less, in
respect of Insured Payments related to Preference Amounts, any amount held by
the Trustee for the payment of such Insured Payment and legally available
therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Certificate Insurer shall be
subrogated to the rights of each Owner to receive distributions on the
Obligations to the extent of any payment by the Insurer under this Policy and
shall also be entitled to direct reimbursement of payments made under this
Policy according to the terms and in the priority set forth in the Agreement.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Trust Agreement dated as of August 1, 1996 among
Saxon Asset Securities Company, as Seller, Texas Commerce Bank National
Association, as Master Servicer and the Trustee, as Trustee, without regard to
any amendment or supplement thereto, unless the Insurer shall have consented in
writing thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee or the Paying Agent under the Agreement is
located are authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to Group I and any Distribution
Date, the excess, if any, of (a) the sum of the Class A-1 Current Interest and
Class A-2 Current Interest and the then existing Group I Subordination Deficit,
if any, over (b) Group I Total Available Funds (after applying the cross
collateralization provisions of the Agreement, after deducting the Group I
Premium Amount and without regard to any Insured Payment to be made with respect
to such Distribution Date which would otherwise be included in the Group I Total
Available Funds).
"Insured Payment" means (i) as of any Distribution Date any Deficiency
Amount and (ii) any Preference Amount.
2
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by telecopy substantially in the form of Exhibit A attached hereto,
the original of which is subsequently delivered by registered or certified mail,
from the Trustee specifying the Insured Payment which shall be due and owing on
the applicable Distribution Date.
"Owner means each Holder (as defined in the Agreement) of a Class A
Certificate who, on the applicable Distribution Date, is entitled under the
terms of the applicable Class A Certificate to payment thereunder.
"Paying Agent" means Texas Commerce Bank National Association, and its
successors and assigns.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
or modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
3
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 15th day of August, 1996.
MBIA Insurance Corporation
------------------------------
President
Attest: ______________________________
Assistant Secretary
4
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 21803
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 21803
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of , as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
21803 (the "Policy") issued by the Insurer in respect of the Saxon Asset
Securities Trust 1996-1 Mortgage Loan Asset Backed Certificates, Series 1996-1,
Class A-1 and Class A-2 Certificates (the "Obligations"), that:
(i) the Trustee is the trustee under the Trust Agreement dated as of
August 1, 1996 among Saxon Asset Securities Company, as Seller, Texas Commerce
Bank National Association, as Master Servicer and Citibank, N.A., as Trustee;
With respect to Group I:
(ii) the sum of the Class A-1 Current Interest and the Class A-2 Current
Interest for the Distribution Date occurring on (the "Applicable Distribution
Date") is $ (the "Current Interest");
(iii) the Group I Subordination Deficit, if any,for the Applicable
Distribution Date is $ (the "Subordination Deficit");
(iv) the Group I Total Available Funds (after applying the cross
collateralization provisions of the Agreement, after deducting the Group I
Premium Amount and without regard to any Insured Payment to be made with respect
to such Distribution Date which would otherwise be included in the Group I Total
Available Funds) for the Applicable Distribution Date is $ (the "Total Available
Funds");
5
(v) the sum of the Current Interest in (ii) and the Subordination
Deficit, if any, in (iii) is $ ;
(vi) the amount in (v) less the Total Available Funds in (iv) is $
(the "Deficiency Amount");
(vii) the amount of the unpaid Preference Amount due and owing under
the Policy is $ (the "Preference Amount");
(viii) the sum of the Deficiency Amount in (vi) and the Preference
Amount in (vii) is $ (the "Insured Payment");
(ix) the Trustee is making a claim under and pursuant to the terms of
the Policy for payment of the Insured Payment;
(x) the Trustee directs that payment of the Insured Payment be made
to the following account by bank wire transfer of federal or other immediately
available funds in accordance with the terms of the Policy: [TRUSTEE'S ACCOUNT]
[PAYING AGENT'S ACCOUNT]
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance
Company Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the day of , .
,as Trustee
By
Title
6
CERTIFICATE GUARANTY INSURANCE POLICY
Policy No. 21804
OBLIGATIONS: Saxon Asset Securities Trust 1996-1
Mortgage Loan Asset Backed Certificates, Series 1996-1
$181,489,000 Class A-3
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner (as defined below) that an amount equal to each full and
complete Insured Payment will be received by Citibank, N.A., or its successor,
as trustee for the Owners (the "Trustee"), on behalf of the Owners from the
Insurer, for distribution by the Trustee (directly or through the Paying Agent)
to each Owner of each Owner's proportionate share of the Insured Payment. The
Insurer's obligations hereunder with respect to a particular Insured Payment
shall be discharged to the extent funds equal to the applicable Insured Payment
are received by the Trustee, whether or not such funds are properly applied by
the Trustee. Insured Payments shall be made only at the time set forth in this
Policy, and no accelerated Insured Payments shall be made regardless of any
acceleration of the Obligations, unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMIC or the
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the second Business Day following receipt on a Business Day by the Fiscal Agent
(as described below) of (i) a certified copy of the order requiring the return
of a preference payment, (ii) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (iii) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment, (iv) appropriate instruments to effect
the appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer and (v) a Notice (as described below), provided that
if such documents are received after 12:00 noon, New York City time, on such
Business Day, they will be deemed to be received on the following Business Day.
Such payments shall be disbursed to the receiver or trustee in bankruptcy named
in the final order of the court exercising jurisdiction on behalf of the Owner
and not to any Owner directly unless such Owner has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy, in
which case such payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the Class A-3 Distribution Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent") of a Notice (as described below);
provided that if such Notice is received after 12:00 noon, New York City
7
time, on such Business Day, it will be deemed to be received on the following
Business Day. If any such Notice received by the Fiscal Agent is not in proper
form or is otherwise insufficient for the purpose of making a claim hereunder,
it shall be deemed not to have been received by the Fiscal Agent for purposes of
this paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee and the Trustee may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee (or upon written request of the
Trustee to the Paying Agent) on behalf of the Owners by wire transfer of
immediately available funds in the amount of the Insured Payment less, in
respect of Insured Payments related to Preference Amounts, any amount held by
the Trustee for the payment of such Insured Payment and legally available
therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Certificate Insurer shall be
subrogated to the rights of each Owner to receive distributions on the
Obligations to the extent of any payment by the Insurer under this Policy and
shall also be entitled to direct reimbursement of payments made under this
Policy according to the terms and in the priority set forth in the Agreement.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Trust Agreement dated as of August 1, 1996 among
Saxon Asset Securities Company, as Seller, Texas Commerce Bank National
Association, as Master Servicer and the Trustee, as Trustee, without regard to
any amendment or supplement thereto, unless the Insurer shall have consented in
writing thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee or the Paying Agent under the Agreement is
located are authorized or obligated by law or executive order to close.
"Deficiency Amount" means, with respect to Group II and any Distribution
Date, the excess, if any, of (a) the sum of the Class A-3 Current Interest and
the then existing Group II Subordination Deficit, if any, over (b) Group II
Total Available Funds (after applying the cross collateralization provisions of
the Agreement, after deducting the Group II Premium Amount and without regard to
any Insured Payment to be made with respect to such Distribution Date which
would otherwise be included in the Group II Total Available Funds).
"Insured Payment" means (i) as of any Distribution Date any Deficiency
Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by
8
telecopy substantially in the form of Exhibit A attached hereto, the original of
which is subsequently delivered by registered or certified mail, from the
Trustee specifying the Insured Payment which shall be due and owing on the
applicable Distribution Date.
"Owner" means each Holder (as defined in the Agreement) of a Class A
Certificate who, on the applicable Distribution Date, is entitled under the
terms of the applicable Class A Certificate to payment thereunder.
"Paying Agent" means Texas Commerce Bank National Association, and its
successors and assigns.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
or modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason including payment, or provision being made for
payment, prior to maturity of the Obligations.
9
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 15th day of August, 1996.
MBIA Insurance Corporation
------------------------------
President
Attest: ______________________________
Assistant Secretary
10
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 21804
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 21804
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of , as trustee (the
"Trustee"), hereby certifies to State Street Bank and Trust Company, N.A. (the
"Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with reference
to Certificate Guaranty Insurance Policy Number: 21804 (the "Policy") issued by
the Insurer in respect of the Saxon Asset Securities Trust 1996-1 Mortgage Loan
Asset Backed Certificates, Series 1996-1, Class A-3 Certificates (the
"Obligations"), that:
(i) the Trustee is the trustee under the Trust Agreement dated as of
August 1, 1996 among Saxon Asset Securities Company, as Seller, Texas Commerce
Bank National Association, as Master Servicer and Citibank, N.A., as Trustee;
With respect to Group II:
(ii) the Class A-3 Current Interest for the Distribution Date
occurring on (the "Applicable Distribution Date") is $ (the "Current
Interest");
(iii) the Group II Subordination Deficit, if any, for the Applicable
Distribution Date is $ (the "Subordination Deficit");
(iv) the Group II Total Available Funds (after applying the cross
collateralization provisions of the Agreement, after deducting the Group II
Premium Amount and without regard to any Insured Payment to be made with respect
to such Distribution Date which would otherwise be included in the Group II
Total Available Funds) for the Applicable Distribution Date is $ (the "Total
Available Funds");
11
(v) the sum of the Current Interest in (ii) and the Subordination
Deficit, if any, in (iii) is $ ;
(vi) the amount in (v) less the Total Available Funds in (iv) is $
(the "Deficiency Amount");
(vii) the amount of the unpaid Preference Amount due and owing under
the Policy is $ (the "Preference Amount");
(viii) the sum of Deficiency Amount in (vi) and the Preference Amount
in (vii) is $__________ (the "Insured Payment");
(ix) the Trustee is making a claim under and pursuant to the terms of
the Policy for payment of the Insured Payment;
(x) the Trustee directs that payment of the Insured Payment be made
to the following account by bank wire transfer of federal or other immediately
available funds in accordance with the terms of the Policy: [TRUSTEE'S ACCOUNT]
[PAYING AGENT'S ACCOUNT]
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance
Company Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the day of , .
,as Trustee
By
Title
12