EXHIBIT 1.1
SAXON ASSET SECURITIES COMPANY
ASSET BACKED CERTIFICATES
STANDARD TERMS TO UNDERWRITING AGREEMENT
(August 1996 Edition)
PRELIMINARY STATEMENT
Saxon Asset Securities Company, a Virginia corporation (the "Company"),
proposes to issue Asset Backed Certificates (the "Certificates") in various
series (each, a "Series") in one or more offerings on terms determined at the
time of sale. The Certificates of each Series will be issued pursuant to a Trust
Agreement with respect to such Series among the Company, a bank or mortgage
banking company, as master servicer (in such capacity, the "Master Servicer"),
and a bank or trust company, as trustee (in such capacity, the "Trustee"), which
Trust Agreement will incorporate by reference certain Standard Terms to Trust
Agreement identified therein (each such Trust Agreement with the Standard Terms
so incorporated, the "Trust Agreement").
The Company is a wholly owned limited purpose financing subsidiary of
Dominion Mortgage Services, Inc. ("DMSI").
The Company engages in transactions with DMSI, Saxon Mortgage, Inc.
("Saxon Mortgage"), a subsidiary of DMSI, and other companies (collectively, the
"Sellers") that have entered, or will enter, into sales agreements (each a
"Sales Agreement") with the Company.
The Certificates of each Series will evidence beneficial ownership
interests in one or more segregated pools of mortgage-related assets (the
"Mortgage Assets") and certain other assets transferred by the Company to one or
more trusts (collectively, a "Trust"). The Mortgage Assets included in each
Trust will consist of the mortgage loans (the "Mortgage Loans") or
mortgage-backed securities (the "Mortgage Certificates") identified in the
related Trust Agreement.
The Company will transfer the Mortgage Assets acquired by it to the
related Trust for each Series of Certificates in exchange for the Certificates
of such Series. Certain of the Mortgage Assets may have been acquired by the
Company from one or more Servicers, the Master Servicer, or one or more
unaffiliated sellers (each, in such capacity, a "Seller"), in each case pursuant
to a sales agreement (each, a "Sales Agreement") between the Company and the
Seller of such Mortgage Assets. The net proceeds to the Company from the sale of
each Series of Certificates will be used principally to pay the purchase price
of the Mortgage Assets acquired for the related Trust. The Mortgage Loans will
be serviced pursuant to separate servicing agreements (each, a "Servicing
Agreement") with one or more servicers (each, in such capacity, a "Servicer"),
each of which must be (i) approved by the Master Servicer and (ii) either (A)
approved by and in good standing with the Federal Home Loan Mortgage Corporation
("FHLMC") or the Federal National Mortgage Association ("FNMA") or (B) an
institution the deposits of which are insured by the Federal Deposit Insurance
Corporation ("FDIC").
The Certificates are more fully described in the Registration Statement
(as hereinafter defined). Each Series of Certificates, and each class of
Certificates within such Series, may vary, among other things, as to number and
types of classes, aggregate principal amount, stated maturity dates, interest
rates, timing of interest payments, redemption provisions, if any, and any other
variable terms set forth in the Trust Agreement and in the Certificates of such
Series.
The Company may, from time to time, enter into one or more underwriting
agreements (each, an "Underwriting Agreement"), each substantially in the form
of Exhibit A attached hereto, that provide for the sale of all or a portion of
the Certificates of a Series (such Certificates to be so purchased being herein
collectively referred to as the "Underwritten Certificates") to the
underwriter(s) named in the Underwriting Agreement (the "Underwriters"). The
standard provisions set forth herein are to be incorporated by reference in any
such Underwriting Agreement. An Underwriting Agreement, including the standard
provisions set forth herein incorporated therein by reference, is herein
referred to as the "Agreement." Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings assigned to them in the Agreement and
if not defined therein shall have the meanings assigned to them in the Trust
Agreement.
The Underwriting Agreement relating to each offering of Underwritten
Certificates shall specify the exact or approximate principal amount of
Certificates to be issued and their respective interest rates or methods of
determining such interest rates, the price or prices at which the Certificates
are to be purchased by the Underwriters
from the Company, the initial public offering prices or the method by which the
prices at which the Certificates are to be sold will be determined, the names of
the firms, if any, designated as representatives of the Underwriters (the
"Representatives"), the principal amount of Certificates to be purchased by each
Underwriter and the date, time and manner of delivery of the Certificates and
payment therefor. Each such offering of Underwritten Certificates shall be
governed by the Agreement, which shall inure to the benefit of and be binding
upon the Underwriters participating in the offering of such Underwritten
Certificates.
If on the Closing Date (as hereinafter defined) for a Series of
Certificates the Mortgage Assets being transferred to the Trustee pursuant to
the Trust Agreement do not include Mortgage Loans, then all references in the
Agreement to Mortgage Loans and to any agreements, instruments or entities
related thereto shall be disregarded, and all representations and warranties,
opinions and other documents relating to the foregoing shall be deemed to be
deleted from the Agreement for purposes of such Series. If on the Closing Date
for a Series of Certificates the Mortgage Assets being transferred to the
Trustee pursuant to the Trust Agreement do not include Mortgage Certificates,
then all references in the Agreement to each type of Mortgage Certificate not
included and to any agreements, instruments or entities related thereto shall be
disregarded, and all representations and warranties, opinions and other
documents relating to the foregoing shall be deemed deleted from the Agreement
for purposes of such Series.
1. Representations and Warranties. (a) The Company represents and
warrants to, and agrees with, each Underwriter that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 for
the registration of the Certificates under the Securities Act of 1933,
as amended (the "Act"), and has filed such amendments thereto and such
additional registration statements as may have been required prior to
the date hereof. Such registration statement, as amended at the date
hereof, meets the requirements set forth in Rule 415 under the Act and
complies in all other material respects with the Act and the rules and
regulations thereunder. The registration statement has been declared
effective by the Commission. The Company proposes to file with the
Commission pursuant to Rule 424 under the Act a supplement to the form
of prospectus included in such registration statement relating to the
Certificates and the plan of distribution thereof. Such registration
statement, including the exhibits thereto, as amended at the date
hereof, and including all information, if any, filed with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference therein, is hereinafter
called the "Registration Statement"; the prospectus in the form most
recently revised and filed with the Commission pursuant to Rule 424 is
hereinafter called the "Basic Prospectus"; and the form of prospectus
supplement specifically relating to the Certificates, in the form in
which it shall be first filed with the Commission pursuant to Rule 424
(including the Basic Prospectus as so supplemented and the information,
if any, filed with the Commission pursuant to the Exchange Act and
incorporated by reference therein) is hereinafter called the "Final
Prospectus." Any preliminary form of the Final Prospectus that has
heretofore been filed pursuant to Rule 424 or, prior to the effective
date of the Registration Statement, pursuant to Rule 402(a), 424(a) or
430A, is hereinafter called a "Preliminary Final Prospectus."
(ii) As of the date of the Agreement, when the Final Prospectus
is first filed pursuant to Rule 424 under the Act, when, prior to the
Closing Date (as hereinafter defined), any amendment to the Registration
Statement becomes effective, when any supplement to the Final Prospectus
is filed with the Commission, and at the Closing Date, (A) the
Registration Statement, as amended as of any such time, and the Final
Prospectus, as amended or supplemented as of any such time, complies and
will comply in all material respects with the applicable requirements of
the Act and the rules and regulations thereunder and (B) the
Registration Statement, as amended as of any such time, does not contain
and will not contain any untrue statement of a material fact and does
not omit and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, and the Final Prospectus, as amended or supplemented as of
any such time, does not and will not include an untrue statement of a
material fact and does not omit and will not omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
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misleading; provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter, any Credit Enhancer or any unaffiliated Servicer
specifically for use in connection with the preparation of the
Registration Statement and the Final Prospectus.
(iii) As of the date of the Agreement, when the Final Prospectus
is first filed pursuant to Rule 424 under the Act, when, prior to the
Closing Date, any amendment to the Registration Statement becomes
effective, when any supplement to the Final Prospectus is filed with the
Commission, and at the Closing Date, there has not and will not have
been, to the knowledge of the Company, (A) any request by the Commission
for any further amendment of the Registration Statement or the Final
Prospectus or for any additional information, (B) any issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threat of any proceeding for
that purpose, or (C) any notification with respect to the suspension of
the qualification of the Underwritten Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(iv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia with full corporate power and authority to own
its properties and conduct its business as now conducted by it and to
enter into and perform its obligations under the Agreement and the Sales
Agreement, and has qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction that requires
such qualification wherein it owns or leases material properties, except
where the failure to so qualify would not have a material adverse effect
on the Company.
(v) The execution and delivery by the Company of the Agreement,
each Sales Agreement, the Trust Agreement and the Certificates, and the
transfer of the Trust Estate (as that term is defined in the Trust
Agreement) to the Trustee pursuant to the Trust Agreement, are within
the corporate power of the Company and have been or will have been duly
authorized by all necessary corporate action on the part of the Company,
and neither the execution and delivery by the Company of such agreements
and instruments, nor the consummation by the Company of the transactions
therein contemplated, nor compliance by the Company with the provisions
thereof, will (A) violate the articles of incorporation or bylaws of the
Company, (B) result in a breach of, or constitute a default under, any
law, governmental rule or regulation, any judgment, decree or order
binding on the Company or its properties, or any provision of any
material indenture, mortgage, deed of trust, contract or other material
instrument to which the Company is a party or by which it is bound, or
(C) result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to the terms of any such
material indenture, mortgage, deed of trust, contract or other material
instrument except the lien created by the Trust Agreement.
(vi) The Agreement and each Sales Agreement have been duly
executed and delivered by the Company, and, as of the Closing Date, the
Trust Agreement will have been duly executed and delivered by the
Company, and, assuming the due authorization, execution and delivery by
the other parties thereto, each constitutes, or will constitute, a
legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or
at law, and except that with respect to the Agreement and each Sales
Agreement the provisions relating to indemnification and contribution
may be unenforceable as against public policy.
(vii) The Underwritten Certificates and the Trust Agreement will
conform in all material respects to the descriptions thereof contained
in the Final Prospectus, and the Underwritten Certificates, when duly
and validly executed, authenticated, issued and delivered as
contemplated hereby and by the Trust Agreement, will constitute legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium
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or other laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(viii) Since the date as of which information is given in the
Registration Statement and the Final Prospectus, there has not been any
material adverse change or development involving a prospective material
adverse change in the business, operations, financial condition,
properties or assets of the Company.
(ix) There are no actions, suits or proceedings against, or
investigations of, the Company pending, or, to the knowledge of the
Company, threatened, before any court, administrative agency or other
tribunal (A) asserting the invalidity of the Agreement, any Sales
Agreement, any Servicing Agreement, the Trust Agreement or the
Underwritten Certificates, (B) seeking to prevent the issuance of the
Underwritten Certificates or the consummation of any of the transactions
contemplated by the Agreement, any Sales Agreement, any Servicing
Agreement or the Trust Agreement, (C) that might materially and
adversely affect the performance by the Company of its obligations under
the Agreement, any Sales Agreement, the Trust Agreement or the
Underwritten Certificates, or (D) seeking to affect adversely the
federal income tax attributes of the Underwritten Certificates as
described in the Final Prospectus.
(x) No filing or registration with, notice to, qualification of
or with, or consent, approval, authorization or order or other action of
any person, corporation or other organization or of any court,
supervisory or governmental authority or agency is required for the
valid and proper transfer of the Trust Estate to the Trustee pursuant to
the Trust Agreement or for the valid and proper authorization, issuance
and sale of the Certificates pursuant to the Agreement and the Trust
Agreement except (A) such as have been, or will have been prior to the
Closing Date, obtained under the Act, or state securities laws or Blue
Sky laws, or from the National Association of Securities Dealers, Inc.,
in connection with the purchase and distribution of the Underwritten
Certificates by the Underwriters, or (B) any recordations of the
assignment of Mortgage Loans to the Trustee pursuant to the Trust
Agreement that have not yet been completed.
(xi) At or prior to the Closing Date, the Company will have
transferred to the Trustee pursuant to the Trust Agreement assets that
had an Asset Value (as defined in the Trust Agreement) of not less than
the initial principal amount of the Underwritten Certificates and upon
(A) the delivery to the Trustee of the Mortgage Certificates in
certificated form (the "Certificated Mortgage Certificates"), (B) the
delivery of the Mortgage Loans duly endorsed or assigned and the
recording of the assignment thereof, and (C) the registration in the
name of the Trustee's custodial bank, and the transfer to the Trustee's
custody account, of the Mortgage Certificates in book-entry form (the
"Book-Entry Mortgage Certificates") and compliance with all other legal
requirements necessary to perfect an ownership interest in such Book-
Entry Mortgage Certificates, the Trustee will be vested with the legal
title that the transfer purports to convey.
(xii) As of the Closing Date, the Company will own the Mortgage
Assets to be transferred to the Trustee pursuant to the Trust Agreement,
free and clear of any lien, mortgage, pledge, charge, security interest
or other encumbrance, except the lien of the Trust Agreement (which lien
relates solely to the Series of Certificates issued under the Trust
Agreement and to no other Series of Certificates).
(xiii) As of the Closing Date, the Mortgage Certificates
constituting part of the Trust Estate will have been duly and validly
transferred to the Trustee and (A) in the case of the Book-Entry
Mortgage Certificates, registered in the name of the Trustee's custodial
bank and transferred to the Trustee's custody account, and all other
legal requirements necessary to transfer an ownership interest therein
will have been complied with, and (B) in the case of the Certificated
Mortgage Certificates, either duly and validly registered in the name of
the Trustee, its nominee or its agent, or delivered to the Trustee for
registration in the name of the Trustee, its nominee or its agent, and
all other steps required, other than the registration of such Mortgage
Certificates in the name of the Trustee, its nominee or its agent, will
have been taken in order to effect such registration; and the Trustee
will have acquired, when such registration is effected,
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an ownership interest in all such Mortgage Certificates subject to no
prior lien, mortgage, security interest, pledge, charge or other
encumbrance.
(xiv) As of the Closing Date, the Mortgage Loans constituting
part of the Trust Estate will be duly and validly transferred to the
Trustee and, where required in order to transfer an ownership interest
in a Mortgage Loan, upon the recordation of such assignments in the
public records in which the related mortgage or deed of trust shall have
been recorded (which recordation shall be effected by the Company unless
the Underwriters shall have received an opinion of counsel satisfactory
to them, and at the expense of the Company, that such recordation is not
required to perfect the interest of the Trustee in the related Mortgaged
Premises), the Trustee will have acquired (assuming no intervening
recordation) an ownership interest in each such Mortgage Loan, subject
to no prior lien, mortgage, security interest, pledge, charge or other
encumbrance, except as permitted under the Trust Agreement.
(xv) Under generally accepted accounting principles, the Company
will report its transfer of the Mortgage Assets to the Trustee pursuant
to the Trust Agreement and the sale of the Certificates as a sale of its
interest in the Mortgage Assets. The Company has been advised by its
independent certified public accountants, that they concur with such
treatment under generally accepted accounting principles. For federal
income tax purposes, the Company will treat the transfer of the Mortgage
Assets to the Trustee pursuant to the Trust Agreement and the sale of
the Certificates either as a transaction in which it acts as the agent
of one or more Sellers or as a sale of its interest in the Mortgage
Assets.
(xvi) As of the Closing Date, the cash and Permitted Investments
included in any accounts or funds constituting part of the Trust Estate
with respect to the Certificates will be duly and validly transferred to
the Trustee pursuant to the Trust Agreement, and the Trustee will either
own such assets or have acquired a duly and validly perfected security
interest in such assets subject to no prior lien, security interest,
pledge, charge or other encumbrance.
(xvii) Each Seller has been duly incorporated or otherwise formed
and is validly existing and, if a corporation, is in good standing under
the laws of the jurisdiction of its incorporation or formation and duly
qualified to do business under the laws of each jurisdiction that
requires such qualification wherein it owns or leases any material
properties (except where the failure so to qualify would not have a
material adverse effect on such Seller).
(xviii) At the time of the execution and delivery of a Sales
Agreement by a Seller, such execution and delivery by such Seller will
be within the legal power of such Seller and will have been duly
authorized by all necessary action on the part of such Seller, and
neither the execution and delivery of such Sales Agreement by such
Seller, nor the consummation by such Seller of the transactions therein
contemplated, nor compliance with the provisions thereof by such Seller,
will (A) violate the articles of incorporation, bylaws, partnership
agreement or other organizational agreement of such Seller, (B) result
in a breach of, or constitute a default under, any law, governmental
rule or regulation, any judgment, decree or order binding on such Seller
or its properties, or any of the provisions of any material indenture,
mortgage, deed of trust, contract or other material instrument to which
such Seller is a party or by which it is bound, or (C) result in the
creation or imposition of any lien, charge or encumbrance upon any of
its properties pursuant to the terms of any such material indenture,
mortgage, deed of trust, contract or other material instrument.
(xix) Each Sales Agreement, when executed and delivered as
contemplated thereby, will have been duly executed and delivered by the
Seller that is a party thereto, and such Sales Agreement will
constitute, when so executed and delivered, a legal, valid and binding
agreement, enforceable against such Seller in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law, and except that the provisions relating
to indemnification and contribution may be unenforceable as against
public policy.
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(xx) Under generally accepted accounting principles, each Seller
will report its transfer of the Mortgage Assets pursuant to the Sales
Agreement as a sale of its interest in the Mortgage Assets. Each Seller
has been advised by its independent certified public accountants that
they concur with such treatment under generally accepted accounting
principles and, if applicable, regulatory accounting principles. Each
Seller also will so report the transfer in all financial statements and
reports to the regulatory and supervisory agencies and authorities to
which it reports, if any. For federal income tax purposes, each Seller
will treat the transfer of the Mortgage Assets pursuant to the Sales
Agreement as a sale of its interest in the Mortgage Assets represented
by the Certificates and an exchange of the remaining interest in the
Mortgage Assets for any Certificates of any other class of the same
Series retained by such Seller.
(xxi) At the Closing Date, each Mortgage Note and Security
Instrument will constitute a legal, valid and binding instrument,
enforceable in accordance with its terms subject to bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or
at law. At the Closing Date, each Mortgage Note and Security Instrument
will meet the criteria for selection described in the Final Prospectus.
(xxii) At the Closing Date, any agreement relating to credit
enhancement will have been duly and validly authorized, executed and
delivered by, and will constitute the legal, valid and binding
obligation of, the related Credit Enhancer, subject to bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or
at law.
(xxiii) Unless otherwise specified in the Final Prospectus, each
Mortgage Loan was originated by an entity that met the requirements of
Section 3(a)(41) of the Exchange Act at the time of origination.
(xxiv) Each Servicer has been duly incorporated, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business under the laws of
each jurisdiction that requires such qualification wherein it owns or
leases any material properties or conducts any material business or in
which the performance of its duties under its Servicing Agreement would
require such qualification (except where the failure so to qualify would
not have a material adverse effect on the Servicer's performance under
the Servicing Agreement); and unless otherwise specified in the Final
Prospectus, each Servicer is approved by the U.S. Department of Housing
and Urban Development and either (i) is approved by and in good standing
with FHLMC or FNMA or (ii) is an institution the deposits of which are
insured by the FDIC.
(xxv) At the time of the execution and delivery of a Servicing
Agreement by a Servicer, such execution and delivery by such Servicer
will be within the corporate power of such Servicer and will have been
duly authorized by all necessary corporate action on the part of such
Servicer, and neither the execution and delivery of such Servicing
Agreement by such Servicer, nor the consummation by such Servicer of the
transactions therein contemplated, nor compliance with the provisions
thereof by such Servicer, will (A) violate the articles of incorporation
or bylaws of such Servicer, (B) result in a breach of or constitute a
default under, any law, governmental rule or regulation, any judgment,
decree or order binding on such Servicer or its properties, or any of
the provisions of any material indenture, mortgage, deed of trust,
contract or other material instrument to which such Servicer is a party
or by which it is bound or (C) result in the creation or imposition of
any lien, charge or encumbrance upon any of its properties pursuant to
the terms of any such material indenture, mortgage, deed of trust,
contract or other material instrument.
(xxvi) Each Servicing Agreement, when executed and delivered as
contemplated thereby, will have been duly executed and delivered by the
Servicer that is a party thereto, and such Servicing Agreement will
constitute a legal, valid and binding agreement, enforceable against
such Servicer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or
at law.
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(xxvii) At the Closing Date, the Trust Agreement will have been
duly executed and delivered by the Master Servicer and will constitute a
legal, valid and binding agreement of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in
equity or at law.
(xxviii) At the Closing Date, each GNMA Certificate, FHLMC
Certificate, and FNMA Certificate will be issued and guaranteed by GNMA,
FHLMC, and FNMA, respectively, as described in the Final Prospectus.
(xxix) At the Closing Date, each Mortgage Certificate (other than
a GNMA Certificate, FHLMC Certificate, or FNMA Certificate) will have
been duly authorized, executed and delivered by the issuer of such
Mortgage Certificate and will constitute a legal, valid and binding
instrument, enforceable in accordance with its terms, subject to
bankruptcy, insolvency reorganization, moratorium or other laws
affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in
equity or at law.
(xxx) Unless otherwise noted in the Final Prospectus, each of the
Underwritten Certificates, when issued, will constitute a "mortgage
related security" as such term is defined in Section 3(a)(41) of the
Exchange Act for so long as such Certificate is rated in one of the two
highest rating categories by a nationally recognized statistical rating
organization.
(xxxi) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the Agreement
and the Trust Agreement and the execution, delivery and sale of the
Certificates have been or will be paid at or prior to the Closing Date.
(xxxii) The Company is not, and the issuance and sale of the
Certificates in the manner contemplated by the Final Prospectus will not
cause the Company to become, subject to registration or regulation as an
Investment Company or an affiliate of an Investment Company under the
Investment Company Act of 1940, as amended.
(xxxiii) Immediately prior to the delivery of the Underwritten
Certificates to the Underwriters, the Company will own the Underwritten
Certificates free and clear of any lien, adverse claim, pledge,
encumbrance or other security interest, and will not have assigned to
any person any of its right, title or interest in the Underwritten
Certificates, and, upon consummation of the transactions contemplated in
the Agreement, the Company will transfer all its right, title and
interest in the Underwritten Certificates to the Underwriters.
(xxxiv) At the Closing Date, the representations and warranties
made by the Company in the Trust Agreement will be true and correct in
all material respects.
(b) Saxon Mortgage represents and warrants to, and agrees
with, each Underwriter that:
(i) Saxon Mortgage has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the Commonwealth of Virginia with full corporate power and
authority to own its properties and conduct its business as now
conducted by it, and to enter into and perform its obligations
under the Agreement, and has qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it
owns or leases material properties except when the failure to so
qualify would not have a material adverse effect on Saxon
Mortgage.
(ii) The execution of the Agreement is within the
corporate power of Saxon Mortgage. The Agreement has been duly
and validly authorized by all necessary action on the part of
Saxon Mortgage; and neither the execution and delivery of the
Agreement, nor the consummation of the transactions herein
contemplated, nor compliance by Saxon Mortgage with
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the provisions hereof or thereof, will (A) violate the articles
of incorporation or by-laws of Saxon Mortgage, (B) result in a
breach of, or constitute a default under, any law, governmental
rule or regulation, any judgment, decree or order binding on
Saxon Mortgage or its properties, or any of the provisions of any
indenture, mortgage, deed of trust, contract or other instrument
to which Saxon Mortgage is a party or by which it is bound, or
(C) result in the creation of any lien, charge, or encumbrance
upon any of its properties pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.
(iii) The Agreement has been duly executed and delivered
by Saxon Mortgage, and, assuming the due authorization, execution
and delivery by the other parties thereto, constitutes a legal,
valid and binding obligation of Saxon Mortgage, enforceable
against Saxon Mortgage in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a
proceeding in equity or at law, and except that the provisions
relating to indemnification and contribution may be unenforceable
as against public policy.
(iv) There are no actions, suits or proceedings against,
or investigations of, Saxon Mortgage pending, or, to the
knowledge of Saxon Mortgage, threatened, before any court,
administrative agency or other tribunal (A) asserting the
invalidity of the Agreement, (B) seeking to prevent the issuance
of the Underwritten Bonds or the consummation of any of the
transactions contemplated by the Agreement or each Sales
Agreement, each Servicing Agreement or the Trust Agreement or (C)
that might materially and adversely affect the performance by
Saxon Mortgage of its obligations under the Agreement.
(v) No filing or registration with, notice to,
qualification of or with, or consent, approval, authorization or
order or other action of any person, corporation or other
organization or of any court, supervisory or governmental
authority or agency is required for the consummation by Saxon
Mortgage of the transactions contemplated by the Agreement or
each Sales Agreement except such as have been, or will have been
prior to the Closing Date, obtained under the Act, or state
securities laws or Blue Sky laws, or from the National
Association of Securities Dealers, Inc. in connection with the
purchase and distribution of the Underwritten Bonds by the
Underwriters, or any recordations of the assignment of the
Mortgage Loans to the Trustee pursuant to the Trust Agreement
that have not yet been completed.
(vi) As of the Closing Date, each Servicing Agreement will
have been duly executed and delivered by Saxon Mortgage and,
assuming the due authorization, execution and delivery by the
other parties thereto, each constitutes, or will constitute, a
legal, valid and binding agreement of Saxon Mortgage, enforceable
against Saxon Mortgage in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
The Company and Saxon Mortgage shall be deemed not to have made the
representations and warranties contained in clauses (xvii) through (xxvii),
inclusive, of this Section 1 with respect to, and to the extent of,
representations and warranties made to the Underwriters by any Seller, any
Servicer, the Master Servicer or any Credit Enhancer as to the matters covered
in such clauses in a certificate, opinion of counsel or agreement in form
satisfactory to counsel for the Underwriters delivered to the Underwriters on
the Closing Date; provided, however, that the foregoing shall in no way limit
the rights of the Underwriters to indemnification and contribution as otherwise
provided in Section 8 hereof.
Any certificate signed by a Seller, the Master Servicer, a Servicer or a
Credit Enhancer and delivered to the Underwriters or to counsel for the
Underwriters in connection with an offering of the Certificates shall state that
it is a representation and warranty as to the matters covered thereby by such
Seller, the Master Servicer, such
8
Servicer or such Credit Enhancer, as the case may be, to each Underwriter to
whom the representations and warranties in this Section 1 are made.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the applicable purchase prices set
forth in the Agreement (plus accrued interest as therein set forth),
Underwritten Certificates in the aggregate approximate principal amounts,
notional amounts or percentage interests, as the case may be, of the various
classes of Certificates set forth in the Agreement or opposite such
Underwriter's name in an attachment to the Agreement.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Certificates shall be made at the office, on the date and at the time specified
in the Agreement, which date and time may be postponed by agreement between the
Underwriters and the Company or as provided in Section 10 hereof (such date and
time of delivery and payment for the Underwritten Certificates being herein
called the "Closing Date"). Delivery of the Underwritten Certificates shall be
made to the Underwriters against payment by the Underwriters of the purchase
price thereof to or upon the order of the Company in the type of funds specified
in the Agreement. The Underwritten Certificates shall be registered in such
names and in such authorized denominations as the Underwriters may request not
less than two full business days in advance of the Closing Date.
The Company agrees to have the Underwritten Certificates available for
inspection, checking and packaging by the Underwriters in New York, New York (or
such other location within the continental United States requested by the
Underwriters), not later than 1:00 p.m. on the Business Day prior to the Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Underwritten Certificates for sale to the
public as set forth in the Final Prospectus.
5. Agreements.
(a) The Company covenants and agrees with the several
Underwriters that:
(i) Substantially contemporaneously with the execution of
the Agreement, the Company will prepare the supplement to the
Basic Prospectus setting forth the principal amount of
Certificates covered thereby and the material terms thereof, the
initial public offering price of the Underwritten Certificates or
the manner of offering such Certificates, the price at which the
Underwritten Certificates are to be purchased by the Underwriters
from the Company, the selling concessions and reallowance, if
any, and such other information as the Underwriters and the
Company deem appropriate in connection with the offering of the
Underwritten Certificates. The Company will not file any
amendment to the Registration Statement or supplement to the
Basic Prospectus (including the supplement relating to the
Underwritten Certificates included in the Final Prospectus)
unless the Company has furnished the Underwriters a copy for
their review prior to filing and will not file any such proposed
amendment or supplement to which the Underwriters reasonably
object. Subject to the foregoing sentence, the Company will cause
the Final Prospectus to be filed with the Commission pursuant to
Rule 424 under the Act and a report on Form 8-K will be filed
with the Commission within 15 days following the Closing Date
setting forth specific information concerning the Certificates
and the Mortgage Assets and including, as an exhibit, a copy of
the Trust Agreement. In addition, to the extent that any
Underwriter provides Computational Materials to the Company
pursuant to Section 5(b) hereof, the Company will file or cause
to be filed with the Commission a report on Form 8-K containing
such Computational Materials, as soon as reasonably practicable
after the date of the Underwriting Agreement. The Company will
promptly advise the Underwriters (A) when the Final Prospectus
shall have been filed with the Commission pursuant to Rule 424
and the Form 8-K containing Computational Materials shall have
been filed with the Commission, (B) when any amendment to the
Registration Statement shall have become effective, (C) of any
request by the Commission for any amendment of the Registration
Statement or the Final Prospectus or for any additional
information, (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
9
Statement or the initiation or threatening of any proceeding for
that purpose, and (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Underwritten Certificates for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.
The Company will use its reasonable efforts to prevent the
issuance of any such stop order or suspension and, if issued, to
obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act, any event
occurs as a result of which in the opinion of counsel to the
Company or the Underwriters, the Final Prospectus, as then
amended or supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be
necessary to amend or supplement the Final Prospectus to comply
with the Act or the rules and regulations thereunder, the Company
will promptly prepare and file with the Commission, subject to
paragraph (i) of this Section 5(a), an amendment or supplement
that will correct such statement or omission or an amendment that
will effect such compliance and, if such amendment or supplement
is required to be contained in a post-effective amendment of the
Registration Statement, will use its best efforts to cause such
amendment of the Registration Statement to be made effective as
soon as possible and will promptly file all reports and any
definitive proxy or information statements required to be filed
by the Company pursuant to Sections 13, 14, and 15 of the
Exchange Act subsequent to the date of the Prospectus for so long
as the delivery of a Prospectus is required in connection with
the offering or sale of the Certificates; provided, however, that
any such amendment or update prepared more than nine months after
the Closing Date shall be at the expense of the Underwriters.
(iii) The Company will furnish to counsel for the
Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and each amendment thereto
that shall become effective on or prior to the Closing Date, and
to each Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and each such amendment and,
so long as delivery of a prospectus by an Underwriter or dealer
may be required by the Act, as many copies of any Final
Prospectus and any amendments thereof and supplements thereto as
the Underwriters may reasonably request.
(iv) The Company will apply the net proceeds from the sale
of the Underwritten Certificates in the manner set forth in the
Final Prospectus.
(v) The Company will pay all the fees and disbursements of
its counsel and of independent accountants for the Company
relating to legal review, opinions of counsel for the Company,
audits, review of unaudited financials, cold comfort review or
otherwise; the costs and expenses of printing (or otherwise
reproducing) and delivering the Agreement, the Trust Agreement
and the Certificates; the initial fees, costs and expenses of the
Trustee under the Trust Agreement and its counsel; the initial
fees, costs and expenses of any custodian of the Mortgage Assets
under a custodian agreement and such custodian's counsel; the
costs and expenses incident to the preparation, printing,
distribution and filing of the Registration Statement (including
exhibits thereto), the Basic Prospectus and the Final Prospectus,
and all amendments of and supplements to the foregoing; and the
fees of rating agencies. Except as provided in Section 7 hereof,
the Underwriters shall be responsible for paying all costs and
expenses incurred by them in connection with their purchase and
sale of the Underwritten Certificates, including, without
limitation, the fees and expenses of counsel to the Underwriters.
(vi) The Company will use its reasonable efforts to
arrange for the qualification of the Underwritten Certificates
for sale under the laws of such jurisdictions as the Underwriters
may reasonably designate in the Underwriting Agreement, to
maintain such qualifications in effect so long as required for
the distribution of the Certificates and to arrange for the
determination of the
10
legality of the Certificates for purchase by investors; provided,
however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so
subject; and provided further, that the Underwriters shall pay
all costs and expenses associated therewith.
(vii) So long as any Certificates are outstanding, the
Company will cause the Master Servicer or the Trustee to furnish
to the Underwriter, as soon as available, a copy of (A) the
annual statement of compliance delivered by the Master Servicer
to the Trustee under the Trust Agreement, (B) the annual
independent public accountants' servicing report furnished to the
Trustee pursuant to the Trust Agreement, (C) each report,
statement or other document regarding the Certificates filed with
the Commission under the Exchange Act or mailed to the holders of
the Certificates pursuant to the Trust Agreement or otherwise,
(D) any reports provided by certified public accountants pursuant
to the Trust Agreement regarding the reports, statements or other
documents included in (B) above, and (E) from time to time, such
other information concerning the Certificates as the Underwriters
may reasonably request and that may be furnished by the Company
or the Master Servicer without undue expense. In addition, the
Company shall make or cause the Trustee to make generally
available to the Holders of the Certificates as soon as
practicable, but in any event not later than sixteen months from
the date of the Agreement, an earnings statement of the issuer of
the Certificates (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the
Commission (including, at the option of the Company, Rule 158
under the Act).
(viii) Without the consent of the Underwriters, which
shall not be unreasonably withheld, the Company will not waive
any of the conditions to its obligations to purchase Mortgage
Loans pursuant to a Sales Agreement.
(ix) Following the Closing Date, the Company will use its
reasonable efforts to take all action required to preserve and
protect the ownership interest of the Trustee in the Trust Estate
during the term of the Trust Agreement.
(b) Saxon Mortgage agrees that it shall have primary
responsibility for all financial obligations of the Company pursuant to
the Agreement, including without limitation, those set forth in Section
5(a)(v), Section 7 and Section 8, and the Underwriters acknowledge that
they may assert any claim against Saxon Mortgage at any time, but may
not assert any claim directly against the Company for payment of such
obligations until 91 days after payment in full of all securities now or
hereafter issued by the Company or by trusts established by it.
(c) Each Underwriter represents, warrants, covenants and agrees
with the Company and Saxon Mortgage that:
(i)(A) The information attached to the Underwriting
Agreement as Exhibit 1 constitutes all Computational Materials,
as defined in the letters referred to below, that are required to
be filed with the Commission pursuant to responses of the staff
of the Commission to No-Action Requests from Kidder, Peabody &
Co. and Kidder Structured Asset Corporation and Public Securities
Association (as made generally available May 20, 1994 and March
9, 1995, respectively); (B) all Computational Materials contain a
legend substantially as follows (or in such other form as may be
agreed upon prior to the date of the Underwriting Agreement):
This information does not constitute either an
offer to sell or a solicitation of an offer to buy any of
the securities referred to herein. Information contained
herein is confidential and provided for information only,
does not purport to be complete and should not be relied
upon in connection with any
11
decision to purchase the securities. This information
supersedes any prior versions hereof and will be deemed to
be superseded by any subsequent versions including, with
respect to any description of the securities or the
underlying assets, the information contained in the final
Prospectus and accompanying Prospectus Supplement. Offers
to sell and solicitations of offers to buy the securities
are made only by the final Prospectus Supplement and the
related Prospectus.
and (C) the Computational Materials contain no untrue statement
of a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(ii) The Underwriters (at their own expense) further agree
to provide to the Company any accountants' letters relating to
the Computational Materials, which accountants' letters shall be
addressed to the Company.
(iii) The Underwriters (at their own expense) will make
available to the Company the Computational Materials in an
electronic format specified by the Company so as to permit the
Company to file the Computational Materials with the Commission
pursuant to the Electronic Data Gathering, Analysis and Retrieval
system on a timely basis.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters hereunder to purchase the Underwritten
Certificates shall be subject to the following conditions:
(a) To the accuracy in all material respects on the date hereof
and on the Closing Date (as if made on such Closing Date) and as of the
date of the effectiveness of any amendment to the Registration Statement
filed prior to the Closing Date of the representations and warranties on
the part of the Company and Saxon Mortgage contained herein, and to the
extent that the Company are deemed, pursuant to Section 1 hereof, not to
make the representations and warranties in clauses (a)(xvii) through
(xxvii) inclusive of Section 1 hereof, or portions thereof, to the
accuracy in all material respects of the representations and warranties
provided by the parties making such representations and warranties as of
the date thereof, on the Closing Date (as if made on such Closing Date)
and as of the date of the effectiveness of any amendment to the
Registration Statement filed prior to the Closing Date.
(b) The Registration Statement shall have become effective, and
no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and not
withdrawn, and no proceedings for that purpose shall have been
instituted or threatened, and the Final Prospectus shall have been filed
with the Commission in accordance with Rule 424 under the Act, and all
actions required to be taken and all filings required to be made by the
Company under the Act prior to the sale of the Certificates shall have
been duly taken or made.
(c) Certificates.
(i) The Company shall have delivered to the Underwriters a
certificate, signed by the President or any Vice President or
Assistant Vice President of the Company and dated the Closing
Date, to the effect that the signer of such certificate has
carefully examined the Registration Statement, the Final
Prospectus, and the Agreement and that: (A) the representations
and warranties of the Company in the Agreement are true and
correct in all material respects at and as of the Closing Date
with the same effect as if made on the Closing Date; (B) the
Company has complied in all material respects with all the
agreements and satisfied in all material respects all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date; (C) no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; (D) nothing has come to such
officer's attention that would lead him or her to believe that
the
12
Final Prospectus contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and (E) there has been no
material adverse change or development involving a prospective
material adverse change in the business, operations, financial
condition, properties or assets of the Company.
(ii) Saxon Mortgage shall have delivered to the
Underwriters a certificate of Saxon Mortgage, signed by the
President or any Vice President or Assistant Vice President of
Saxon Mortgage and dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Agreement
and that: (A) the representations and warranties of Saxon
Mortgage in the Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if
made on the Closing Date; and (B) there has been no material
adverse change or development involving a prospective material
adverse change in the business, operations, financial condition,
properties or assets of Saxon Mortgage.
(iii) Each Seller shall have delivered to the Underwriters
a certificate, signed by the President or any Vice President or
Assistant Vice President of such Seller and dated the Closing
Date, to the effect that the signer of such certificate has
examined the Sales Agreement to which such Seller is a party and
that: (A) the representations and warranties of the Seller in the
Sales Agreement are true and correct in all material respects at
and as of the Closing Date with the same effect as if made on the
Closing Date; and (B) the Seller has complied in all material
respects with all the agreements and satisfied in all material
respects all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(iv) The Master Servicer shall have delivered to the
Underwriters a certificate, signed by the President or any Vice
President or Assistant Vice President of the Master Servicer and
dated the Closing Date, to the effect that the signer of such
certificate has examined the Trust Agreement and that: (A) the
representations and warranties of the Master Servicer in the
Trust Agreement are true and correct in all material respects at
and as of the Closing Date with the same effect as if made on the
Closing Date; and (B) the Master Servicer has complied in all
material respects with all the agreements and satisfied in all
material respects all the conditions on its part to be performed
or satisfied at or prior to the Closing Date.
(d) Accounting Comfort.
(i) The Underwriters shall have received a letter from a
nationally recognized independent accounting firm, dated the date
of the Agreement and delivered at such time, satisfactory in form
and substance to the Underwriters relating to statistical or
financial information contained in the Prospectus Supplement
regarding the Mortgage Assets or the Certificates, including any
declination tables, yield tables, and modeling assumptions.
(ii) The Underwriters shall have received from the
Company's independent certified public accountants, a letter
dated the Closing Date and satisfactory in form and substance to
the Underwriters and counsel for the Underwriters, reconfirming
or updating the letter dated the date hereof, to the further
effect that they have performed certain procedures as a result of
which they have determined that (i) the Mortgage Loans listed in
Schedule I to the Trust Agreement (A) conform with the
description thereof in the Prospectus Supplement under the
caption "The Mortgage Loan Pool" and (B) conform with the
information set forth in the Company's report on Form 8-K with
respect to such Mortgage Loans, (ii) and that a sampling of the
Mortgage Loan files relating to the Mortgage Loans conforms with
the information contained on the mortgage loan data file tape
upon which the information in the Prospectus Supplement under the
heading "The Mortgage Loan Pool" was based, and (iii) covering
such other matters relating to the Trust as the Underwriters may
reasonably request.
13
(iii) The Underwriters shall have received from the
certified public accountants of the Seller or the Servicer, as
applicable, a letter or letters dated the date hereof and
satisfactory in form and substance to the Underwriters and
counsel to the Underwriters to the effect that they have
performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial
and statistical nature set forth in the Final Prospectus under
the caption (A) "The Mortgage Loan Pool--Acquisitions" (or other
caption relating to the Seller's origination activities) agrees
with the records of the Seller; and (B) "The Mortgage Loan
Pool--Servicing of the Mortgage Loans" (or other caption relating
to the Servicer's servicing activities) agrees with the records
of the Servicer.
(iv) The Underwriters shall have received a certificate of
an accounting officer of the Company stating that the transfer of
the Mortgage Assets from the Seller to the Company pursuant to
the Sales Agreement will be classified as a sale of the Seller's
interest in the Mortgage Assets under generally accepted
accounting principles and, if applicable, under regulatory
accounting principles.
(e) Opinions.
(i) The Underwriters shall have received from (A) the
Company's and Saxon Mortgage's General Counsel, an opinion of
counsel, dated the Closing Date and satisfactory in form and
substance to counsel for the Underwriters, as to the corporate
status and authorizations of the Company and Saxon Mortgage; and
(B) opinions of outside counsel to the Company, dated the Closing
Date and reasonably satisfactory in form and substance to counsel
for the Underwriters, as to (1) the Certificates, the Trust
Agreement, the Agreement, the Registration Statement, the Final
Prospectus and other related matters as the Underwriters may
reasonably require; and (2) the applicable federal income tax
treatment of the Certificates.
(ii) The Underwriters shall have received copies of any
opinions of counsel furnished to the Rating Agencies (upon which
the Underwriters shall be entitled to rely) with respect to the
"true sale" of the Mortgage Assets and the non-consolidation of
the Company with its affiliates.
(iii) The Underwriters shall have received from counsel
for the Underwriters such opinion or opinions, dated the Closing
Date, with respect to the validity of the Certificates, the
Agreement, the Trust Agreement, the Registration Statement, the
Final Prospectus and such other related matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such
matters.
(iv) The Underwriters shall have received from counsel to
each Seller an opinion, dated the Closing Date and satisfactory
in form and substance to counsel for the Underwriters, as to the
due authorization, execution and delivery of the Sales Agreement
entered into by the Seller and its enforceability against the
Seller.
(v) The Underwriters shall have received from counsel to
the Master Servicer an opinion, dated the Closing Date and
satisfactory in form and substance to counsel for the
Underwriters, as to the due authorization, execution and delivery
of the Trust Agreement by the Master Servicer and its
enforceability against the Master Servicer.
(vi) The Underwriters shall have received from counsel to
the Trustee an opinion, dated the Closing Date and satisfactory
in form and substance to counsel for the Underwriters, as to the
due authorization, execution and delivery of the Trust Agreement
by the Trustee and its enforceability against the Trustee.
(vii) The Underwriters shall have received from counsel to
any Credit Enhancer an opinion, dated the Closing Date and
satisfactory in form and substance to counsel for the
14
Underwriters, as to the due issuance and enforceability of the
policies or other credit enhancement issued by such Credit
Enhancer.
(f) The Underwritten Certificates shall have been assigned the
ratings set forth in the Underwriting Agreement, which shall be in one
of the four highest rating categories, by one or more "nationally
recognized statistical rating organizations," as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, designated
in the Underwriting Agreement and requested by the Company to rate the
Underwritten Certificates. On the Closing Date, (i) such rating or
ratings shall not have been rescinded and there shall not have been any
downgrading, or public notification of a possible downgrading or public
notice of a possible change, without indication of direction, and (ii)
no downgrading, or public notification of a possible downgrading or
public notification of a possible change, without indication of
direction, shall have occurred in the rating accorded any of the debt
securities of any person, including the Company, providing any form of
credit enhancement for the Certificates by any "nationally recognized
statistical rating organization" designated in the Underwriting
Agreement.
(g) If applicable, and subject to the conditions set forth in the
Trust Agreement, any reserve fund to be established for the benefit of
the Certificateholders shall have been established by the Company with
the Trustee and any initial deposit thereto shall have been delivered to
the Trustee for deposit therein as contemplated by the Trust Agreement.
(h) On the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company since the date of
the Underwriting Agreement that the Underwriter concludes in the
reasonable judgment of the Underwriter materially impairs the investment
quality of the Underwritten Certificates so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Certificates as contemplated by the Final Prospectus.
(i) All proceedings in connection with the transactions
contemplated by the Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to the Underwriters and
counsel for the Underwriters, and the Underwriters and counsel for the
Underwriters shall have received such information, certificates and
documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in the Agreement, if the
Company is in breach in any material respect of any covenants or agreements
contained herein or if any of the opinions and certificates mentioned above or
elsewhere in the Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, the Agreement and all obligations of the Underwriters hereunder
may be canceled by the Underwriters at, or at any time prior to, the Closing
Date. Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph and confirmed in writing.
If the Company is advised prior to the Closing Date that the
documentation for some of the Mortgage Loans is incomplete or defective and such
defects cannot be remedied prior to the Closing Date, the Company may, with the
consent of the Underwriters, nevertheless deliver the Mortgage Loans to the
Trustee with an amount equal to the principal amount of the incomplete or
defective Mortgage Loans as of the Cut-Off Date plus one month's interest on
each such Mortgage Loan at the Mortgage Interest Rate specified in the related
Mortgage Note (less the applicable Servicing Fee Rate). If the incomplete or
defective documentation for a Mortgage Loan is remedied prior to the first
Distribution Date, the amount deposited with the Trustee on account thereof
shall be returned to the Company. If the incomplete or defective documentation
for a Mortgage Loan is not remedied prior to the first Distribution Date, the
amount will be applied in payment of the Certificates and the Mortgage Loan
released to the Company.
7. Reimbursement of Underwriters' Expenses. If for any reason (other
than a default by the Underwriters in their obligations hereunder) the sale of
the Underwritten Certificates provided for herein is not consummated, the
Company or Saxon Mortgage will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been reasonably incurred
15
by them in connection with their investigation, the preparation to market and
the marketing of the Underwritten Certificates, or in contemplation of the
performance by them of their obligations hereunder.
8. Indemnification and Contribution.
(a) The Company and Saxon Mortgage, jointly and severally, and
hereby agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act as follows:
(i) against any and all losses, claims, expenses, damages
or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Final
Prospectus, or any amendment or supplement thereto, or any
related Preliminary Final Prospectus, or arise out of, or are
based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading and to reimburse each
Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that (A) the Company and Saxon Mortgage will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission, or alleged untrue statement or omission,
made in any of such documents in reliance upon and in conformity
with written information furnished to the Company by an
Underwriter, specifically for use therein, including, without
limitation, any Computational Materials, except to the extent
that any untrue statement or alleged untrue statement therein
results (or is alleged to have resulted) from an error in the
written information concerning the characteristics of the
Mortgage Loans furnished by the Company to the Underwriters for
use in the preparation of any Computational Materials, which
error was not superseded or corrected by the delivery to the
Underwriters of corrected written or electronic information, or
for which the Company provided written notice of such error to
the Underwriters prior to the confirmation of the sale of the
Certificates (any such uncorrected mortgage loan information a
"Mortgage Pool Error"), and (B) such indemnity with respect to
any Preliminary Final Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage or
liability purchased the Certificates which are the subject
thereof if such person did not receive a copy of the Final
Prospectus (or the Final Prospectus as amended or supplemented,
excluding any documents incorporated therein by reference) at or
prior to the confirmation of the sale of such Certificates to
such person in any case where such delivery is required by the
Act and the untrue statement or omission of a material fact
contained in such Preliminary Final Prospectus was corrected in
the Final Prospectus (or the Final Prospectus as amended or
supplemented, excluding any documents incorporated therein by
reference);
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any untrue
statement or omission, or any such alleged untrue statement or
omission, for which indemnification is provided by the Company
and Saxon Mortgage under clause (i) above, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including
the fees and disbursements of counsel chosen by any Underwriter
or controlling person of such Underwriter), reasonably incurred
in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon
any untrue statement or omission, for which indemnification is
provided
16
by the Company and Saxon Mortgage under clause (i) above, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above.
This indemnity will be in addition to any liability that the Company may
otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and Saxon Mortgage, each of their directors, each of the
Company's officers who have signed the Registration Statement and each
person, if any, who controls the Company or Saxon Mortgage within the
meaning of the Act or the Exchange Act, against any and all losses,
claims, expenses, damages or liabilities to which the Company or any
such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities, (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Final Prospectus or
any amendment or supplement thereto, or any related Preliminary Final
Prospectus, or arise out of, or are based upon, the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company or Saxon Mortgage by such Underwriter
specifically for use therein, including, without limitation,
Computational Materials; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action (except that no such
indemnity shall be available for any losses, claims, damages or
liabilities, or actions in respect thereof, resulting from any Mortgage
Pool Error). This indemnity agreement will be in addition to any
liability that such Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under the Agreement. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume (at its own expense) the defense thereof,
with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party under this Section 8, such indemnifying party
shall not be liable for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section 8, for any reason other than
as specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution to the amount paid or
payable by such indemnified party as a result of the losses, claims,
expenses, damages or liabilities referred to in subsection (a) or (b)
above, except to the extent that contribution is not permitted under
Section 11(f) of the Act. In determining the amount of contribution to
which the respective parties are entitled, there shall be considered
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the parties'
relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and
prevent any untrue statement or omission, and any other equitable
considerations appropriate under the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were to be determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose)
or by any other method that does not take account of the equitable
considerations referred to in the second sentence of this subsection
(d). Notwithstanding the provisions of this subsection (d), no
Underwriter or person controlling such
17
Underwriter shall be obligated to make a contribution hereunder that in
the aggregate exceeds the total public offering price of the
Certificates purchased by such Underwriter under the Agreement, less the
aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission. The
Underwriters' obligations to contribute shall be several in proportion
to their respective underwriting obligations and not joint.
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Certificates of any Class agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under the Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions that the portion
of the Certificates of such Class set forth opposite their names in an
attachment to the Agreement bears to the aggregate amount of Certificates of
such Class set forth opposite the names of the remaining Underwriters) the
Certificates of such Class that the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
amount of Certificates of such Class that the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Certificates of such Class as set forth in the Final Prospectus, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any of, the Certificates of such Class, and if
such non-defaulting Underwriters do not purchase all the Certificates of such
Class, the Agreement will terminate without liability to any non-defaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date for such Class of Certificates shall
be postponed for such period, not exceeding seven days, as the Underwriters
shall determine in order that the required changes in the Registration Statement
and the Final Prospectus or in any other documents or arrangements may be
effected. Nothing contained in the Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and any non-defaulting
Underwriter for damages occasioned by its default hereunder.
10. Termination. The Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
delivery of and payment for all Underwritten Certificates if prior to such time
(i) trading in securities generally on the New York Stock Exchange shall have
been suspended or limited, or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared by either federal
or New York State authorities, or (iii) there shall have occurred any outbreak
or material escalation of major hostilities, any declaration of war by Congress,
or any other substantial national or international calamity or crisis, the
effect of which on the financial markets of the United States is such as to make
it, in the judgment of the Underwriters, impracticable or inadvisable to market
the Certificates.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and Saxon Mortgage or their respective officers and the Underwriters set
forth in or made pursuant to the Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Underwritten
Certificates. The provisions of this Section 11 and Sections 5(a)(v) and (vi), 7
and 8 hereof shall survive the termination or cancellation of the Agreement.
12. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to the Underwriters, will be mailed,
delivered or telecopied and confirmed to it at the office or offices set forth
in the Underwriting Agreement; or, if sent to the Company or Saxon Mortgage,
will be mailed, delivered or telecopied and confirmed to it at 4880 Cox Road,
Glen Allen, Virginia 23060, Attention: President.
13. Successors. The Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and their
successors and assigns, and no other person will have any right or obligation
hereunder.
14. Applicable Law. The Agreement will be governed by and construed
in accordance with the laws of the jurisdiction specified in the Agreement. The
Agreement may be executed in any number of counterparts,
18
each of which shall for all purposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
15. Miscellaneous. Time shall be of the essence of the Agreement. The
Agreement supersedes all prior or contemporaneous agreements and understandings
relating to the subject matter hereof. Neither the Agreement nor any term hereof
may be changed, waived, discharged or terminated except by a writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought. The Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
19
Exhibit A
Asset Backed Certificates
--------------------------
UNDERWRITING AGREEMENT
Dated: [____________], 199[_]
To: [____________________]
Re: Underwriting Agreement Standard Provisions (June 1996 Edition) (the
"Agreement").
Series Designation: Series 199[_]-[_].
Underwriting Agreement: Subject to the terms and conditions set
forth and incorporated by reference herein, the Company hereby
agrees to issue and sell to the Underwriters and each Underwriter
agrees, severally and not jointly, to purchase from the Company
the principal amount of the Series 199[_]-[_] Certificates (the
"Certificates") set forth opposite its name on Annex A attached
hereto at the purchase prices and terms set forth below;
provided, however, that the obligations of the Underwriters are
subject to receipt by the Company of a [AAA] [AA] rating by
[Rating Agency] with respect to the Class [___] Certificates.
The Prospectus Supplement relating to the Certificates describes
the characteristics of the Mortgage Assets that will be
transferred on the Closing Date to the Trustee pursuant to the
Trust Agreement. The Company specifically covenants to transfer
to the Trustee on the Closing Date Mortgage Assets having the
characteristics described in the Prospectus Supplement relating
to the Certificates; provided, however, that the actual Mortgage
Assets delivered on the Closing Date may vary in nonmaterial
respects from the description of the Mortgage Assets in the
Prospectus Supplement. It is understood that if any of the
Mortgage Assets proposed to be transferred is not delivered on
the Closing Date, the Company will deposit cash on an interim
basis pending such delivery with the Trustee in an amount equal
to the Asset Value (as defined in the Trust Agreement) of the
Mortgage Assets not delivered plus interest on that amount for
the first interest period. If any of such Mortgage Assets are not
delivered, the cash deposited with the Trustee will be applied to
redeem Certificates. It is further understood that the Asset
Value of the Mortgage Assets to be transferred on the Closing
Date together with any cash deposited with the Trustee will be
not less than the principal amount of the Certificates.
Registration Statement: References in this Agreement to the
Registration Statement will be deemed to include Registration
Statement No. 333-4127.
II-
Terms of the Certificates and Underwriting Compensation.
Original
Stated Principal Interest Price to Underwriting
Class Maturity (1) Amount Rate Public (2) Discount
------------ ------ ---- ---------- --------
$ % % %
$ % % %
$ % % %
$ % % %
(1) Assuming no prepayments on the Mortgage Assets.
(2) Plus accrued interest, if any, at the applicable
rate from [____________].
Certificate Rating: [___] by [____________________].
Mortgage Assets. The [Mortgage Loans] [Mortgage Certificates] to be
included in the Trust are as described in the Prospectus Supplement.
Distribution Dates: The [_____] day of each month (or, if such day
is not a Business Day, the next succeeding Business Day).
Purchase Price: Payment of the purchase price for the Certificates
shall be made to the Company [by certified or official bank check or in New York
Clearing House or similar next-day funds] [in Federal or similar immediately
available funds payable to the order of the Company].
Closing Date and Location: [_____________________].
Computational Materials: The Underwriters' Computational Materials,
if any, are attached hereto as Exhibit 1.
Applicable Law: The Agreement shall be governed and construed in
accordance with the laws of [------------].
The Underwriters named in Annex A attached hereto agree, severally
and not jointly, subject to the terms and provisions of the Agreement, a copy of
which is attached, and which is hereby 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 principal amount of the
Certificates set forth opposite their names in Annex A attached hereto.
Each Annex and Exhibit attached hereto is incorporated herein by
reference and made a part hereof.
[NAME]
By__________________________
Its_________________________
II-
[NAME]
By__________________________
Its_________________________
[NAME]
By:
------------------------
Its:
------------------------
Acting on behalf of
themselves and the other
named Underwriters.
Accepted:
SAXON ASSET SECURITIES COMPANY
By:
---------------------------------------
Its:
---------------------------------------
SAXON MORTGAGE, INC.
By:
---------------------------------------
Its:
---------------------------------------
II-
Annex A
UNDERWRITING
$ Principal Amount of Series
Class: Class: Class: Class:
[NAME]__________________________ $ $ $ $
[NAME]__________________________ $ $ $ $
[NAME]__________________________ $ $ $ $
II-
Exhibit 1
COMPUTATIONAL MATERIALS
II-
EXECUTION
Saxon Asset Securities Company
Mortgage Loan Asset Backed Certificates,
Series 1996-1
UNDERWRITING AGREEMENT
Dated: August 8, 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 1996-1, Class
A-1, Class A-2, Class A-3 and Class R (collectively the
"Certificates"). The Class A-1, Class A-2 and Class A-3
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 Lehman Brothers Inc. and PaineWebber Incorporated (the
"Underwriters"), and the Underwriters hereby agree to purchase from the Company,
on or about August 15, 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 McGraw-Hill Companies
Inc. ("S&P") and an "Aaa" rating by Moody's Investor Services, Inc. ("Moody's";
together with S&P, the "Rating Agencies") with respect to the Class A-1, Class
A-2 and Class A-3 Certificates; (ii) receipt of a Prospectus Supplement in form
and substance satisfactory to the Underwriters; and (iii) the Sales Agreement
dated as of August 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 August 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, first lien 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 Mortgage Loans:
Approximately $234,190,000 (as of the Cut-off Date), including approximately
$52,613,000 of fixed-rate Mortgage Loans and of $181,577,000 variable-rate
Mortgage Loans (in each case as of the Cut-off Date).
Cut-Off Date: As of the close of business July 17, 1996.
Terms of the Certificates:
============================================================================================================
Proposed
Initial Ratings by
Series 1996-1 Principal Pass-Through S&P and Sale of the
Designation Amount(1) Rate Moody's(2) CUSIP Number Certificates
- ------------------------------------------------------------------------------------------------------------
Class A-1........ $43,000,000 7.38% AAA/Aaa 80559 AA9 (3)
- ------------------------------------------------------------------------------------------------------------
Class A-2........ 9,613,000 (4) AAA/Aaa 80559 AB7 (3)
- ------------------------------------------------------------------------------------------------------------
Class A-3 181,577,000 (5) AAA/Aaa 80559 AC5 (3)
- ------------------------------------------------------------------------------------------------------------
Class R.......... N/A N/A (6) N/A (7)
============================================================================================================
- -------------------------
(1) The Variable Rate and Fixed Rate Certificates are, in each case, subject
to a permitted variance of plus or minus 2%
(2) It is a condition to the issuance of the Underwritten Certificates that
each Class of Underwritten Certificates be assigned a rating no lower
than that set forth in this table by both S&P and Moody's.
(3) 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.
(4) As to any Distribution Date, the lesser of 8.06% and the Fixed Rate
Available Funds Cap as calculated in the Prospectus Supplement.
(5) On each Distribution Date, Pass-Through Rate on the Class A-3
Certificates will equal the lesser of (i) LIBOR plus .34% and (ii) 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.
(6) No ratings have been requested by the Underwriters for the Class R
Certificates.
(7) The Class R Certificates will be sold to Saxon Mortgage, Inc. and Texas
Commerce Bank National Association in a privately negotiated
transaction.
Underwritten Certificates Ratings: An "AAA" rating by S&P and an
Aaa rating by Moody's with respect to the Class A-1, A-2 and Class A-3
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.
2
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 August 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: Each Underwriter hereby agrees, severally and not
jointly, to purchase from the Company the principal amount of Underwritten
Securities set forth opposite such Underwriter's name at the applicable purchase
price so indicated, plus, in the case of the Class A-1 and Class A-2
Certificates, accrued interest at the applicable Pass-Through Rate from the
close of business on July 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.
Principal Amount Purchased:
Lehman Brothers PaineWebber
Purchase Price Inc. Incorporated
----------------- ------------------ ------------------
Class A-1 99.65% $ 43,000,000 $ 0
Class A-2 99.65% $ 9,613,000 $ 0
Class A-3 99.65% $126,577,000 --
Class A-3 99.75% -- $55,000,000
Closing Date and Location: 10:00 a.m. Eastern Time on August 15,
1996, at the offices of Arter & Hadden, 1801 K Street, N.W., Suite 400K,
Washington, D.C. 20006- 1301. 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 August 15, 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
3
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' 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" (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 in electronic form and attached hereto as
Exhibit B, if any, constitutes all "Structural Term Sheets" and "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 specify, and the
parties intend to qualify the Underwritten Certificates in New York pursuant to
the Agreement.
State Law Tax Opinion: At Closing, the Underwriters shall have
received from Arter & Hadden and Liddell, Sapp 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 Lehman
Brothers, Inc., Three World Financial Center, 20th Floor, New York, New York
10285, Attn: Prue Larocca and to PaineWebber Incorporated at 1285 Avenue of the
Americas, New York, New York 10019, Attn: Barbara J. Dawson.
4
Variances: The Company shall obtain the 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 2% to reflect a change in the actual
Scheduled Principal Balance of the Mortgage Loans as of the Cut-Off Date.
* * * * *
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.
LEHMAN BROTHERS INC.
By:/s/ Martin P. Harding
Name:
Title:
PAINEWEBBER INCORPORATED
By:/s/ Barbara Dawson
Name:
Title:
Accepted and Acknowledged
As of the Date First Above
Written:
SAXON ASSET SECURITIES COMPANY
By:/s/ Brad Adams
Name:
Title:
SAXON MORTGAGE, INC.
By:/s/ Brad Adams
Name:
Title:
DOMINION MORTGAGE SERVICES, INC.
By:/s/ Hayden McMillian
Name:
Title: