Saxon Asset Securities Company
Mortgage Loan Asset Backed Certificates,
Series 1999-1
UNDERWRITING AGREEMENT
Dated: February 18, 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 1999-1, Class
AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class
AF-6, Class MF-1, Class MF-2, Class BF-1, Class BF-2, Class
BF-3, Class AV-1, Class MV-1, Class MV-2, Class BV-1, Class
BV-2, Class BV-3, 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 AV-1, Class MV-1 and Class MV-2 and certain of the
Class BV-1 Certificates are referred to herein as the
"Underwritten Certificates."
Underwriting Agreement: Subject to the terms and conditions
set forth and incorporated by reference herein, the Company hereby agrees to
issue and sell to Prudential Securities Incorporated, NationsBanc Xxxxxxxxxx
Securities LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, First
Chicago Capital Markets, Inc. and Chase Securities Inc. (collectively, the
"Underwriters"), and the Underwriters hereby agree to purchase from the Company,
on or about February 25, 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 Xxxxx'x Investors Service, Inc.
("Moody's") and Fitch Investors Service, L.P. ("Fitch" and together with
Moody's, the "Rating Agencies") with respect to each of the Classes of
Certificates; (ii) receipt of a Prospectus Supplement in form and substance
satisfactory to the Underwriters; and (iii) the Sales Agreement dated as of
February 18, 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 February 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 $509,057,409 (as of the Cut-off Date), including
approximately $257,819,978 of fixed-rate Mortgage Loans and approximately
$251,231,431 of Variable Rate Mortgage Loans (in each case as of the Cut-off
Date).
Cut-Off Date: As of the close of business February 1, 1999.
Terms of the Certificates:
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Series 1999-1 Initial Pass-Through Proposed CUSIP Number Sale of the
Designation Principal Rate Ratings by Certificates
Amount Moody's and
Fitch
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Class AF-1 $80,000,000 %(2) Aaa/AAA 805584 CU 3 (1)
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Class AF-2 $38,000,000 5.980% Aaa/AAA 805584 CV 1 (1)
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Class AF-3 $35,000,000 6.170% Aaa/AAA 805584 CW 9 (1)
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Class AF-4 $28,000,000 6.350% Aaa/AAA 805584 CX 7 (1)
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Class AF-5 $17,389,000 6.775%(3) Aaa/AAA 805584 CY 5 (1)
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Class AF-6 $22,043,000 6.350% Xxx/XXX 000000 XX 0 (0)
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Class MF-1 $14,825,000 6.645%(3) Aa2/AA 805584 CZ 2 (1)
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Class MF-2 $10,958,000 7.190%(3) A2/A 805584 DA 6 (1)
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Class BF-1 $6,446,000 8.475%(3) Baa2/BBB 805584 DB 4 (1)
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Class AV-1 $200,358,000 %(2)(4) Aaa/AAA 805584 DC 2 (1)
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Class MV-1 $20,728,000 %(2)(4) Aa2/AA 805584 DD 0 (1)
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Class MV-2 $16,331,000 %(2)(4) A2/A 805584 DE 8 (1)
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Class BV-1 $4,000,000 %(2)(4) Baa2/BBB 805584 DF 5 (1)
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Class C N/A N/A (5) N/A (6)
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Class R N/A N/A (5) N/A (7)
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(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
XX-0, XX-0, XX-0 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
privatel 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 and the Class BF-2, Class BF-3, Class BV-2 and Class
BV-3 Certificates shall not have been rescinded and there shall not have
occurred any downgrading, or public notification of a possible downgrading or
public notice of a possible change, without indication of direction, in the
ratings accorded the Underwritten Certificates.
Mortgage Loans: Mortgage Loans having the approximate
characteristics described in the Prospectus Supplement with the final schedule
attached as Schedule I to the Trust Agreement.
Principal and Interest Distribution Dates: Each Distribution
Date shall be the 25th day of each month, or if such day is not a business day,
the next succeeding business day, commencing in March 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, the Class BF-1,
Class BV-1, Class BF-2, Class BV-2, Class BF-3, Class BV-3 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 and Class BF-1
Certificates, accrued interest at the applicable Pass-Through Rate from the
close of business on February 1 through the Closing Date. Each such purchase
price is expressed as a percentage of the initial principal amount of the
related Mortgage Loan pool.
Purchase Price
Class AF-1 %99.75
Class AF-2 %99.75
Class AF-3 %99.75
Class AF-4 %99.75
Class AF-5 %99.75
Class AF-6 %99.75
Class MF-1 %99.65
Class MF-2 %99.65
Class BF-1 %99.50
Class AV-1 %99.75
Class MV-1 %99.65
Class MV-2 %99.65
Class BV-1 %99.50
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:
------------------ ---------------------- ---------------------- ----------------- ---------------- -----------------
Xxxxxxx Lynch,
Pierce, NationsBanc First Chicago
Series 1999-1 Prudential Securities Xxxxxx & Xxxxx Xxxxxxxxxx Capital Chase
Designation Incorporated Incorporated Securities LLC Markets Inc. Securities Inc.
------------------ ---------------------- ---------------------- ----------------- ---------------- -----------------
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Class AF-1 $24,000,000.00 $16,000,000.00 $14,000,000.00 $14,000,000.00 $12,000,000.00
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Class AF-2 $11,400,000.00 $7,600,000.00 $6,650,000.00 $6,650,000.00 $5,700,000.00
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Class AF-3 $10,500,000.00 $7,000,000.00 $6,125,000.00 $6,125,000.00 $5,250,000.00
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Class AF-4 $8,400,000.00 $5,600,000.00 $4,900,000.00 $4,900,000.00 $4,200,000.00
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Class AF-5 $5,216,700.00 $3,477,800.00 $3,043,075.00 $3,043,075.00 $2,608,350.00
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Class AF-6 $6,612,900.00 $4,408,600.00 $3,857,525.00 $3,857,525.00 $3,306,450.00
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Class MF-1 $4,447,500.00 $2,965,000.00 $2,594,375.00 $2,594,375.00 $2,223,750.00
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Class MF-2 $3,287,400.00 $2,191,600.00 $1,917,650.00 $1,917,650.00 $1,643,700.00
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Class BF-1 $1,933,800.00 $1,289,200.00 $1,128,050.00 $1,128,050.00 $966,900.00
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Class AV-1 $60,107,400.00 $40,071,600.00 $35,062,650.00 $35,062,650.00 $30,053,700.00
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Class MV-1 $6,218,400.00 $4,145,600.00 $3,627,400.00 $3,627,400.00 $3,109,200.00
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Class MV-2 $4,899,300.00 $3,266,200.00 $2,857,925.00 $2,857,925.00 $2,449,650.00
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Class BV-1 $1,200,000.0 $800,000.00 $700,000.00 $700,000.00 $600,000.00
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Closing Date and Location: 10:00 a.m. Eastern Time on February
25, 1999, at the offices of McGuire, Woods, Battle & Xxxxxx LLP, One Xxxxx
Center, 000 X. Xxxx Xxxxxx, Xxxxxxxx, XX 00000. 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 February 25, 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 Enchancer" 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 Xxxxx, Xxxxxxx & Xxxx LLP an opinion dated the Closing Date and
satisfactory in form and substance to the Underwriters, as to the tax treatment
of the Certificates under Texas law.
Applicable Law: THE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
Notices: All communications hereunder, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to
Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attention: Xxxxxxx Xxxxx.
* * * * *
The Underwriters agree, subject to the terms and provisions of
the Agreement, a copy of which is attached, and which is incorporated by
reference herein in its entirety and made a part hereof to the same extent as if
such provisions had been set forth in full herein, to purchase the Underwritten
Certificates.
PRUDENTIAL SECURITIES INCORPORATED
on behalf of the Underwriters
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SAXON MORTGAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
