EXHIBIT 1
---------
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES,
SERIES 1999-2
UNDERWRITING AGREEMENT
----------------------
Dated: April 30, 1999
To: Saxon Asset Securities Company (the "Company")
Saxon Mortgage Inc. ("SMI")
Re: Standard Terms to Underwriting Agreement (June 1997 Edition)
Series
Designation: Mortgage Loan Asset Backed Certificates, Series 1999-2, Class AF-
-----------
1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6,
Class MF-1, Class MF-2, Class BF-1, Class BF-1A, Class AV-1,
Class MV-1, Class MV-2, Class BV-1, Class BV-1A, Class C and
Class R (collectively the "Certificates"). The Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1,
Class MF-2, Class BF-1, Class BF-1A, Class AV-1, Class MV-1,
Class MV-2, Class BV-1 and Class BV-1A Certificates are referred
to herein as the "Underwritten Certificates."
UNDERWRITING AGREEMENT: Subject to the terms and conditions set
forth and incorporated by reference herein, the Company hereby agrees to issue
and sell to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC, Prudential Securities Incorporated, and Chase
Securities Inc. (collectively, the "Underwriters"), and the Underwriters hereby
agree to purchase from the Company, on or about May 11, 1999, the Underwritten
Certificates at the purchase price and on the terms set forth below; provided,
--------
however, that the obligations of the Underwriters are subject to: (i) receipt by
-------
the Company of (a) the ratings specified in the table below by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's") and Fitch Investors Service, L.P. ("Fitch" and
together with Moody's, the "Rating Agencies") with respect to each of the
Classes of Certificates; (ii) receipt of a Prospectus Supplement in form and
substance satisfactory to the Underwriters; and (iii) the Sales Agreement dated
as of April 30, 1999 by and between the Company and Saxon Mortgage, Inc. ("SMI")
and the Trust Agreement (as defined below) each being in form and substance
satisfactory to the Underwriters.
The Certificates will be issued pursuant to a Trust Agreement,
dated as of May 1, 1999 (the "Trust Agreement"), by and among the Company, SMI,
as Master Servicer (the "Master Servicer"), and Chase Bank of Texas, National
Association, as Trustee (the "Trustee"). The Certificates will represent in the
aggregate the entire beneficial ownership interest in the assets of the Trust
created under the Trust Agreement (the "Trust"), which will consist primarily of
two pools of conventional, one- to four-family, mortgage loans (the "Mortgage
Loans") with
original terms to stated maturity of not more than 30 years which have the
characteristics described in the Prospectus Supplement.
The Company and SMI specifically covenant to make available on the
Closing Date for sale, transfer and assignment to the Trust, Mortgage Loans
having the characteristics described in the Prospectus Supplement; provided,
however, that there may be immaterial variances from the description of the
Mortgage Loans in the Prospectus Supplement and the actual Mortgage Loans
delivered on the Closing Date. Upon delivery of the Mortgage Loans to the
Company, the Company will deliver such Mortgage Loans to the Trust.
REGISTRATION STATEMENT: References in the Agreement (as defined below)
to the Registration Statement shall be deemed to include registration statement
no. 333-59479.
AGGREGATE SCHEDULED PRINCIPAL BALANCE OF INITIAL MORTGAGE LOANS:
Approximately $474,049,674 (as of the Cut-off Date), including approximately
$248,983,839 of fixed-rate Mortgage Loans and approximately $225,065,835 of
Variable Rate Mortgage Loans (in each case as of the Cut-off Date).
CUT-OFF DATE: As of the close of business May 1, 1999.
TERMS OF THE CERTIFICATES:
------------------------------------------------------------------------------------------------------------------
Initial Proposed
Series 1999-2 Principal Pass-Through Ratings by CUSIP Number Sale of the
Designation Amount Rate Moody's and Certificates
Fitch
------------------------------------------------------------------------------------------------------------------
Class AF-1 $ 80,000,000 %(2) Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AF-2 $ 33,000,000 5.970% Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AF-3 $ 36,000,000 6.105% Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AF-4 $ 27,000,000 6.445% Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AF-5 $ 16,713,000 6.815%(3) Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AF-6 $ 21,412,800 6.415% Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class MF-1 $ 12,449,000 6780%(3) Aa2/AA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class MF-2 $ 9,337,000 7.175%(3) A2/A ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class BF-1 $ 8,092,000 8.410%(3) Baa2/BBB ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class BF-1A $ 4,980,000 7.925% Baa2/BBB ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class AV-1 $177,840,800 %(2)(4) Aaa/AAA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class MV-1 $ 16,884,000 %(2)(4) Aa2/AA ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class MV-2 $ 14,070,000 %(2)(4) A2/A ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class BV-1 $ 9,567,000 %(2)(4) Baa2/BBB ▇▇▇▇▇▇▇▇▇ (1)
------------------------------------------------------------------------------------------------------------------
Class BV-1A $ 6,704,000 8.305% Baa2/BBB ▇▇▇▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Class C N/A N/A (5) N/A (6)
------------------------------------------------------------------------------------------------------------------
Class R N/A N/A (5) N/A (7)
------------------------------------------------------------------------------------------------------------------
_________________________
(1) The Underwritten Certificates will be purchased by the Underwriters from
the Company and will be offered by the Underwriters to the public from time
to time in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
(2) On each Distribution Date, the Variable Rate Pass-Through Rates per annum
will equal the least of: (i) One Month LIBOR plus the related spread; (ii)
the weighted Average of, (A) in the case of the Class AF-1 Certificates,
the maximum lifetime Mortgage Interest Rates on the Mortgage Loans in the
Fixed Rate Group and, (B) in the case of the ▇▇-▇, ▇▇-▇, ▇▇-▇ and BV-1
Certificates, the maximum lifetime Mortgage Interest Rates on the Mortgage
Loans in the Variable Rate Group, in each case less the Servicing Fee Rate
and Master Servicing Fee Rate; and (iii) the applicable Available Funds Cap
(as further described in the Prospectus Supplement).
(3) On any Distribution Date, the Pass-Through Rates for the Class AF-5, Class
MF-1, Class MF-2 and Class BF-1 Certificates will equal the lesser of (i)
the Pass-Through Rate set forth above (subject, in the case of the AF-5
Certificates, to a 0.50% increase for any Distribution Date after the
Initial Optional Redemption Date) and (ii) the Weighted Average Interest
Rates on the Mortgage Loans in the Fixed Rate Group less the Servicing Fee
Rate and Master Servicing Fee Rate per annum (as further described in the
Prospectus Supplement).
(4) The Applicable Spread for these Classes are subject to adjustment on or
after the Step-Up Date, as further described in the Prospectus Supplement.
(5) No ratings have been requested by the Underwriters for the Class C and
Class R Certificates.
(6) The Class C Certificates will be sold to the Company in a privately
negotiated transaction.
(7) The Class R Certificates will be sold to the Company in a privately
negotiated transaction.
UNDERWRITTEN CERTIFICATES RATINGS: It is agreed that as a further
condition of the Underwriters' obligation to purchase the Underwritten
Certificates, the ratings indicated above by the Rating Agencies on the
Underwritten Certificates shall not have been rescinded and there shall not have
occurred any downgrading, or public notification of a possible downgrading or
public notice of a possible change, without indication of direction, in the
ratings accorded the Underwritten Certificates.
MORTGAGE LOANS: Mortgage Loans having the approximate characteristics
described in the Prospectus Supplement with the final schedule attached as
Schedule I to the Trust Agreement.
PRINCIPAL AND INTEREST DISTRIBUTION DATES: Each Distribution Date
shall be the 25th day of each month, or if such day is not a business day, the
next succeeding business day, commencing in June 1999.
REMIC ELECTION: One or more elections will be made to treat the
Mortgage Loans and related assets of the Trust as a real estate mortgage
investment conduit (the "REMIC"). The Underwritten Certificates and the Class C
Certificates will be designated as "regular interests" in the REMIC. The Class
R Certificates will be designated as the "residual interest" in the REMIC.
PURCHASE PRICE: The Underwriters hereby agree to purchase each Class
of Underwritten Securities from the Company at the applicable purchase price set
forth below, plus, in the case of the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1 and BF-1A
Certificates, accrued interest at the applicable Pass-Through Rate from the
close of business on May 1 through the Closing Date. Each such purchase price is
expressed as a percentage of the initial principal amount of the related
Mortgage Loan pool.
Purchase Price
---------------
Class AF-1 100.000000%
Class AF-2 99.995292%
Class AF-3 99.995273%
Class AF-4 99.999590%
Class AF-5 99.986286%
Class AF-6 99.999510%
Class MF-1 99.986530%
Class MF-2 99.982296%
Class BF-1 99.987682%
Class BF-1A 99.999506%
Class AV-1 100.000000%
Class MV-1 100.000000%
Class MV-2 100.000000%
Class BV-1 100.000000%
Class BV-1A 99.998963%
Each of the Underwriters agrees, severally and not jointly, subject to the
terms and conditions contained herein and in the Standard Terms to Underwriting
Agreement (June 1997 Edition), to purchase the principal balances of the Classes
of Certificates specified opposite its name below:
---------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Lynch, Pierce, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Prudential Chase
Series 1999-2 ▇▇▇▇▇▇ & ▇▇▇▇▇ Securities LLC Securities Securities Inc.
Designation Incorporated Incorporated
---------------------------------------------------------------------------------------------------------------------
Class AF-1 $24,000,000.00 $20,000,000.00 $20,000,000.00 $16,000,000.00
---------------------------------------------------------------------------------------------------------------------
Class AF-2 $ 9,900,000.00 $ 8,250,000.00 $ 8,250,000.00 $ 6,600,000.00
---------------------------------------------------------------------------------------------------------------------
Class AF-3 $10,800,000.00 $ 9,000,000.00 $ 9,000,000.00 $ 7,200,000.00
---------------------------------------------------------------------------------------------------------------------
Class AF-4 $ 8,100,000.00 $ 6,750,000.00 $ 6,750,000.00 $ 5,400,000.00
---------------------------------------------------------------------------------------------------------------------
Class AF-5 $ 5,013,900.00 $ 4,178,250.00 $ 4,178,250.00 $ 3,342,600.00
---------------------------------------------------------------------------------------------------------------------
Class AF-6 $ 6,423,840.00 $ 5,353,200.00 $ 5,353,200.00 $ 4,282,560.00
---------------------------------------------------------------------------------------------------------------------
Class MF-1 $ 3,734,700.00 $ 3,112,250.00 $ 3,112,250.00 $ 2,489,800.00
---------------------------------------------------------------------------------------------------------------------
Class MF-2 $ 2,801,100.00 $ 2,334,250.00 $ 2,334,250.00 $ 1,867,400.00
---------------------------------------------------------------------------------------------------------------------
Class BF-1 $ 2,427,600.00 $ 2,023,000.00 $ 2,023,000.00 $ 1,618,400.00
---------------------------------------------------------------------------------------------------------------------
Class BF-1A $ 4,980,000.00 - - -
---------------------------------------------------------------------------------------------------------------------
Class AV-1 $53,352,240.00 $44,460,200.00 $44,460,200.00 $35,568,160.00
---------------------------------------------------------------------------------------------------------------------
Class MV-1 $ 5,065,200.00 $ 4,221,000.00 $ 4,221,000.00 $ 3,376,800.00
---------------------------------------------------------------------------------------------------------------------
Class MV-2 $ 4,221,000.00 $ 3,517,500.00 $ 3,517,500.00 $ 2,814,000.00
---------------------------------------------------------------------------------------------------------------------
Class BV-1 $ 2,870,100.00 $ 2,391,750.00 $ 2,391,750.00 $ 1,913,400.00
---------------------------------------------------------------------------------------------------------------------
Class BV-1A $ 6,704,000.00 - - -
---------------------------------------------------------------------------------------------------------------------
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on May 11, 1999, at
the offices of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, One ▇▇▇▇▇ Center, ▇▇▇ ▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Company will deliver the Underwritten
Certificates in book-entry form only through the same day funds settlement
system of the relevant Depositories, and the Class C and Class R Certificates in
certificated, fully registered form on May 11, 1999.
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriters
have the right to inspect the Mortgage Loan files, the related mortgaged
properties and the loan origination procedures to ensure conformity with the
Prospectus and the Prospectus Supplement.
CONTROLLING AGREEMENT: This Underwriting Agreement, together with the
Standard Terms to Underwriting Agreement (June 1997 Edition) (together, the
"Agreement"), completely sets forth the agreements between the Company and SMI
and the Underwriters and fully supersedes all prior agreements, both written and
oral, relating to the issuance of the Underwritten Certificates and all matters
set forth herein. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement. Notwithstanding
the foregoing, the Standard Terms are hereby amended for purposes of the
Agreement such that there shall be added to the final sentence of Section 1(ii)
thereof the words ", the Trustee, DTC," immediately following the phrase "any
Credit Enhancer" therein.
INFORMATION PROVIDED BY THE UNDERWRITERS: It is understood and agreed
that the information set forth under the heading "Underwriting" in the
Prospectus Supplement and the sentence regarding the Underwriters's intention to
establish a market in the Underwritten Certificates on the inside front Cover
Page of the Prospectus Supplement is the only information furnished by the
Underwriters to the Company for inclusion in the Registration Statement and the
Final Prospectus.
COLLATERAL TERM SHEETS, STRUCTURAL TERM SHEETS AND COMPUTATIONAL
MATERIALS: The Underwriters hereby represent and warrant that (i) a hard copy of
the information provided by the Underwriters to the Company in electronic form
and attached hereto as Exhibit A, if any, constitutes all "Collateral Term
Sheets" or "Structural Term Sheets" (that are required to be filed with the
Commission within two business days of first use under the terms of the Public
Securities Association letter) disseminated by the Underwriters to investors in
connection with the Underwritten Certificates and (ii) a hard copy of the
information provided by the Underwriters to the Company and attached hereto as
Exhibit B, if any, constitutes all "Computational Materials" disseminated by the
Underwriters in connection with the Underwritten Certificates.
TRUSTEE: Chase Bank of Texas, National Association will act as Trustee
of the Trust.
BLUE SKY QUALIFICATIONS: The Underwriters specify, and the parties
intend to qualify the Underwritten Certificates in, no jurisdictions pursuant to
the Agreement.
STATE LAW TAX OPINION: At Closing, the Underwriters shall have
received from ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP an opinion dated the Closing Date and
satisfactory in form and substance to the Underwriters, as to the tax treatment
of the Certificates under Texas law.
APPLICABLE LAW: THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
NOTICES: All communications hereunder, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇.
* * * * *
The Underwriters agree, subject to the terms and provisions of the
Agreement, a copy of which is attached, and which is incorporated by reference
herein in its entirety and made a part hereof to the same extent as if such
provisions had been set forth in full herein, to purchase the Underwritten
Certificates.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
on behalf of the Underwriters
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SAXON MORTGAGE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
