EXECUTION
Saxon Asset Securities Company
Mortgage Loan Asset Backed Certificates,
Series 1996-2
UNDERWRITING AGREEMENT
Dated: November 27, 1996
To: Saxon Asset Securities Company (the "Company")
Saxon Mortgage Inc. ("SMI")
Dominion Mortgage Services, Inc. ("Dominion")
Re: Standard Terms to Underwriting Agreement (August 1996 Edition)
Series
Designation: Mortgage Loan Asset Backed Certificates, Series 1996-2,
Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class A-5,
Class A-6 and Class R (collectively the "Certificates").
The Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5 and Class A-6 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, Xxxxxx
Brothers Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, and
PaineWebber Incorporated, (collectively, the "Underwriters"), and the
Underwriters hereby agree to purchase from the Company, on or about December 5,
1996, 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) an "AAA" rating by Standard &
Poor's Rating Service, a division of The XxXxxx-Xxxx Companies Inc. ("S&P") and
an "Aaa" rating by Xxxxx'x Investors Service, Inc. ("Moody's"; together with
S&P, the "Rating Agencies") with respect to the Class X-0, Xxxxx X-0, Class A-3,
Class A-4, Class A-5 and Class A-6 Certificates; (ii) receipt of a Prospectus
Supplement in form and substance satisfactory to the Underwriters; and (iii) the
Sales Agreement dated as of November 1, 1996 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 November 1, 1996 (the "Trust Agreement"), by and among
the Company, Texas Commerce Bank National Association, as Master Servicer (the
"Master Servicer"), and Citibank, N.A., 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, fully amortizing, 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, SMI and Dominion 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. 333-4127.
Initial Aggregate Scheduled Principal Balance of
Initial Mortgage Loans: Approximately $353,238,000 (as of the Cut-off Date),
including approximately $125,829,000 of fixed-rate Mortgage Loans and of
$227,409,000 variable-rate Mortgage Loans (in each case as of the Cut-off Date).
Cut-Off Date: As of the close of business November 20,
1996 (except that, as further described in the Prospectus Supplement, the
interest portion of the payments due on December 1, 1996 on the Variable Rate
Loans will be retained by the Seller).
Terms of the Certificates:
=============== =============== ============= ================= ============== ==============
Initial Proposed
Series 1996-2 Principal Pass-Through Ratings by Sale of the
Designation Amount Rate S&P and Moody's CUSIP Number Certificates
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-1 $ 55,500,000 6.375% AAA/Aaa 80559 AD3 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-2 $ 47,500,000 6.475% AAA/Aaa 80559 AE1 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-3 $ 17,000,000 6.750% AAA/Aaa 80559 AF8 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-4 $ 20,500,000 7.025% AAA/Aaa 80559 AG6 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-5 $ 19,329,000 7.185% AAA/Aaa 80559 AH4 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class A-6 $278,409,000 5.615% XXX/Xxx 00000 XX0 (2)
--------------- --------------- ------------- ----------------- -------------- --------------
Class R N/A N/A (4) N/A (5)
=============== =============== ============= ================= ============== ==============
-------------------------
(1) The Variable Rate and Fixed Rate Certificates are, in each case,
subject to a permitted variance of plus or minus 4%.
(2) 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.
(3) On each Distribution Date, Pass-Through Rate on the Class A-6
Certificates will equal the least of (i) LIBOR plus 0.24%; (ii) the
weighted average of the maximum lifetime Mortgage Interest Rates on
the Mortgage Loans in the Variable Rate Group less 0.582% per annum;
and (iii) the Variable Rate Available Funds Cap for such date (as
each such term is defined in the Prospectus Supplement), subject to
increase as provided in the Prospectus Supplement.
(4) No ratings have been requested by the Underwriters for the Class R
Certificates.
(5) The Class R Certificates will be sold to SMI and Texas Commerce Bank
National Association in a privately negotiated transaction.
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Underwritten Certificates Ratings: An "AAA" rating by
S&P and an "Aaa" rating by Moody's with respect to the Class X-0, Xxxxx X-0,
Class A-3, Class A-4, Class A-5 and Class A-6 Certificates. It is agreed that as
a further condition of the Underwriters' obligation to purchase the Underwritten
Certificates, such ratings 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 December 1996.
REMIC Election: An election 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 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 A-1,
Class A-2, Class A-3, Class A-4 and Class A-5 Certificates, accrued interest at
the applicable Pass-Through Rate from the close of business on November 1, 1996
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 A-1 99.953125%
Class A-2 99.968750%
Class A-3 99.937500%
Class A-4 99.953125%
Class A-5 100.000000%
Class A-6 100.000000%
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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 (August 1996 Edition), to purchase the principal balances
of the Classes of Certificates specified opposite its name below: (1)
======================== ========================== ======================== ========================= ===================
Xxxxxxx Lynch, Pierce,
Series 1996-2 Prudential Security Xxxxxx Brothers Xxxxxx & Xxxxx PaineWebber
Designation(1) Incorporated Inc. Incorporated Incorporated
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-1 $ 33,300,000 -- $22,200,000 --
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-2 $ 28,500,000 -- $19,000,000 --
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-3 $ 10,200,000 -- $ 6,800,000 --
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-4 $ 12,300,000 -- $ 8,200,000 --
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-5 $ 11,597,400 -- $ 7,731,600 --
------------------------ -------------------------- ------------------------ ------------------------- -------------------
Class A-6 $111,363,600 $83,522,700 -- $83,522,700
======================== ========================== ======================== ========================= ===================
--------------------
(1) Each Class of Certificates is subject to a permitted variance of plus or
minus 4%.
Closing Date and Location: 10:00 a.m. Eastern Time on
December 5, 1996, at the offices of Xxxxx & Xxxxxx, 0000 X Xxxxxx, X.X.,
Xxxxx 000X, Xxxxxxxxxx, X.X. 00000-0000. 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 R Certificates in
certificated, fully registered form on December 5, 1996.
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 (August 1996
Edition) (together, the "Agreement"), completely sets forth the agreements
between the Company, SMI and Dominion 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.
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
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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 it in connection with the Underwritten Certificates.
Trustee: Citibank, N.A. will act as Trustee of the
Trust.
Custodian: Texas Commerce Bank National Association
will act as custodian of the Mortgage Loans.
Blue Sky Qualifications: The Underwriters specifies,
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 & Xxxxxx and Xxxxxxx, Xxxx opinions dated the
Closing Date and satisfactory in form and substance to the Underwriters, as to
the tax treatment of the Certificates under New York and Texas law,
respectively.
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.
Variances: The Company shall obtain prior approval
of the Underwriters if, at any time after the Prospectus Supplement and
Prospectus are filed with the Securities and Exchange Commission pursuant to its
Rule 424 under the Securities Act of 1933, as amended, and before or on the
Closing Date, the initial aggregate principal amount of the Underwritten
Securities is to be increased or decreased by more than 4% to reflect a change
in the actual Scheduled Principal Balance of the Mortgage Loans as of the
Cut-off Date and the amount deposited into the Pre-Funding Account.
* * * * *
5
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 Underwiters
By:_________________________________
Name:
Title:
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By:__________________________________
Name:
Title:
SAXON MORTGAGE, INC.
By:__________________________________
Name:
Title:
DOMINION MORTGAGE SERVICES, INC.
By:__________________________________
Name:
Title:
6
The Underwriters agrees, 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
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title:
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title:
SAXON MORTGAGE, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title:
DOMINION MORTGAGE SERVICES, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
-----------------------
Name: Xxxxxx X. XxXxxxxxx
Title:
