SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 29, 1998.
Deutsche Financial Capital Securitization LLC
(Exact name of registrant as specified in charter)
North Carolina 333-24351 56-2018645
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7800 McCloud Road, Greensboro, North Carolina 27409-9634
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (910) 664-2400
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
On January 29, 1998, the Registrant caused the issuance and sale of
$229,392,046 aggregate initial principal amount of Senior/Subordinated
Pass-Through Certificates, Series 1998-I (the "Certificates") pursuant to the
Series 1998-I Pooling and Servicing Agreement, dated as of January 1, 1998 (the
"Pooling and Servicing Agreement"), among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National Association, as Trustee, and
the related Standard Terms to the Pooling and Servicing Agreement (June 1997
Edition) (the "Standard Terms"). The Certificates were issued in twelve Classes
with Pass-Through Rates and initial Certificate Principal Balances as set forth
below:
Initial Certificate
Designation Pass-Through Rate Principal Balance
- ----------- ----------------- -----------------
Class A-1................ 6.050% $51,500,000
Class A-2................ 6.000% $39,300,000
Class A-3................ 6.100% $27,150,000
Class A-4................ 6.375% $6,000,000
Class A-5................ 6.600% $14,000,000
Class A-6................ (1) $12,000,000
Class A-7................ (2) $31,269,000
Class M.................. (3) $18,352,000
Class B-1................ (4) $20,645,000
Class B-2................ (5) $9,176,046
Class X.................. (6) (6)
Class R.................. (7) (7)
(1) The Pass-Through Rate on the Class A-6 Certificates for any Distribution
Date shall be equal to the lesser of (i) 6.825% per annum and (ii) the
Weighted Average Net Asset Rate.
(2) The Pass Through Rate on the Class A-7 Certificates for any Distribution
Date shall be equal to the lesser of (i) 6.650% per annum and (ii) the
Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class M Certificates for any Distribution Date
shall be equal to the lesser of (i) 6.800% per annum and (ii) the Weighted
Average Net Asset Rate.
(4) The Pass-Through Rate on the Class B-1 Certificates for any Distribution
Date shall be equal to the lesser of (i) 7.275% per annum and (ii) the
Weighted Average Net Asset Rate.
(5) The Pass-Through Rate on the Class B-2 Certificates for any Distribution
Date shall be equal to the lesser of (i) 8.715% per annum and (ii) the
Weighted Average Net Asset Rate.
(6) The Class X Certificates have no Certificate Principal Balance and no
Pass-Through Rate.
(7) The Class R Certificates have no Certificate Principal Balance and no
Pass-Through Rate.
The Certificates evidence, in the aggregate, the entire beneficial
ownership interest in DFC Securitization Trust 1998-I (the "Trust"), which
consists primarily of a pool of Assets
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<PAGE>
transferred to the Trust by the Registrant pursuant to the Pooling and Servicing
Agreement. The Assets were purchased by the Registrant in a privately-negotiated
transaction with Deutsche Financial Capital Limited Liability Company (the
"Seller") pursuant to a Sales Agreement, dated as of January 1, 1998, between
the Registrant and the Seller. Elections will be made to treat certain assets
owned by the Trust as "real estate mortgage investment conduits" (each, a
"REMIC") under the Internal Revenue Code of 1986, as amended. The Certificates,
except for the Class R Certificates, will be designated as the "regular
interests" in one of such REMICs. The Class R Certificates will be designated as
the "residual interests" in each of the REMICs.
The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class M and Class B-1 Certificates are collectively referred to herein as
the "Offered Certificates." The Offered Certificates are senior to the Class
B-2, Class X and Class R Certificates. The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6 and Class A-7 Certificates are senior to the
Class M, Class B-1 and Class B-2 Certificates.
The Offered Certificates have been sold by the Registrant to Credit Suisse
First Boston Corporation and Deutsche Morgan Grenfell Inc. (the "Underwriters")
pursuant to a Terms Agreement, dated as of January 22, 1998, among the
Underwriters, the Registrant and the Seller, which incorporates by reference the
Registrant's Underwriting Agreement Standard Provisions, June 1997. A 50%
interest in each of the Class B-2, Class X and Class R Certificates have been
transferred to each of DFC Residual Corp., a Nevada corporation and to Oakwood
Financial Corporation, a Nevada corporation, respectively.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement or, if not defined in
the Pooling and Servicing Agreement, the meanings assigned to them in the
Standard Terms.
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<PAGE>
Exhibits
1.1 Terms Agreement, dated January 22, 1998, among the Registrant,
Deutsche Financial Capital Limited Liability Company, Credit Suisse
First Boston Corporation and Deutsche Morgan Grenfell Inc., as
Underwriters, relating to the Offered Certificates (without exhibits).
4.1 Copy of the Series 1998-I Pooling and Servicing Agreement, dated as of
January 1, 1998, by and among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National Association, as
Trustee. (related exhibits available upon request of the Trustee).
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<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
January 29, 1998 DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL CAPITAL
I CORP.
By: /s/ Doug R. Muir
Name: Doug R. Muir
Title: Treasurer, Assistant Secretary and
Vice President
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<PAGE>
INDEX TO EXHIBITS
-----------------
Tab
---
1.1 Terms Agreement, dated January 22, 1998, among the
Registrant, Deutsche Financial Capital Limited
Liability Company, Credit Suisse First Boston
Corporation, and Deutsche Morgan Grenfell Inc., as
Underwriters, relating to the Offered Certificates
(without exhibits) ................................................
4.1 Copy of the Series 1998-I Pooling and Servicing
Agreement, dated as of January 1, 1998, by and
among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National
Association (related exhibits available upon
request of the Trustee) ...........................................
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Exhibit 1.1
-----------
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
PASS-THROUGH CERTIFICATES
1998-I TERMS AGREEMENT
Dated: January 22, 1998
To: Deutsche Financial Capital Securitization LLC (the "Company")
Deutsche Financial Capital Limited Liability Company ("DFC")
Re: Underwriting Agreement Standard Provisions dated
June 1997 (the "Standard Provisions")
Series
Designation: Pass-Through Certificates, Series 1998-I, Classes A-1, A-2, A-3,
A-4, A-5, A-6, A-7, M, B-1, B-2, X and R (collectively, the
"Certificates"). The Class A-1, A-2, A-3, A-4, A-5, A-6, A-7, M
and B-1 Certificates are collectively referred to herein as the
"Underwritten Certificates."
Underwriting Agreement: Subject to the terms and conditions set forth
herein and to the terms of the Standard Provisions, which are incorporated by
reference herein, the Company hereby agrees to issue and sell to Credit Suisse
First Boston Corporation and Deutsche Morgan Grenfell Inc. (the "Underwriters"),
and the Underwriters hereby severally agree to purchase from the Company, on
January 29, 1998, the aggregate outstanding principal amount of the Underwritten
Certificates set forth in Schedule A hereto 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 the ratings on the
Certificates as set forth herein, (ii) receipt by the Underwriters of the Sales
Agreement (the "Sales Agreement"), dated as of January 1, 1998, by and between
the Company and DFC, and the Pooling and Servicing Agreement (as defined below),
each being in form and substance satisfactory to the Underwriters.
The Certificates will be issued by a trust (the "Trust") to be established
by the Company pursuant to a Pooling and Servicing Agreement, to be dated as of
January 1, 1998, among the Company, Oakwood Acceptance Corporation, as servicer
(the "Servicer") and PNC Bank, National Association, as Trustee (the "Trustee"),
which incorporates by reference the Company's Standard Terms to Pooling and
Servicing Agreement (June 1997 Edition) (collectively, the "Pooling and
Servicing Agreement"). The Certificates will represent in the aggregate the
entire beneficial ownership interest in the assets of the Trust which will
consist primarily of (i) installment sales contracts (the "Contracts") secured
by security interests in manufactured homes and, with respect to certain of the
Contracts, secured by liens on the real estate on which the related manufactured
homes are located, and (ii) mortgage loans secured by first-liens on the real
estate to which the related manufactured homes are deemed permanently affixed
(the "Mortgage Loans" and, together with the Contracts, the "Assets") with
original terms to maturity not exceeding 30 years and, in each case, having the
characteristics described in the final Prospectus Supplement, dated January 22,
1998, relating to the Underwritten Certificates (the "Prospectus Supplement").
The Company and the Servicer specifically covenant to make available on the
Closing Date for sale, transfer and assignment to the Trust, Assets having the
characteristics described in the Prospectus Supplement; provided, however, that
there may be nonmaterial variances from the description of the Assets in the
Prospectus Supplement and the Assets actually delivered on the Closing Date.
Registration Statement: References in the Standard Provisions to the
Registration Statement shall be deemed to include registration statement No.
333-24351.
Initial Aggregate Scheduled Principal Balance of Assets: $229,392,046.05
Cut-Off Date: January 1, 1998.
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<PAGE>
Terms of the Certificates:
<TABLE>
<CAPTION>
================================================================================================================
Class Initial Principal Pass-Through Ratings Purchase
Designation Amount Rate Fitch Moody's Price
----------- ----------------- ------------- ----- ------- -------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A-1 $51,500,000 6.050% "AAA" "Aaa" 99.761617%
A-2 37,300,000 6.000% "AAA" "Aaa" 99.696339%
A-3 27,150,000 6.100% "AAA" "Aaa" 99.505191%
A-4 $6,000,000 6.375% "AAA" "Aaa" 99.531101%
A-5 $14,000,000 6.600% "AAA" "Aaa" 99.518103%
A-6 $12,000,000 (1) "AAA" "Aaa" 99.313840%
A-7 $31,269,000 (1) "AAA" "Aaa" 99.463616%
M $18,352,000 (1) "AA" "Aa3" 99.499708%
B-1 $20,645,000 (1) "BBB" "Baa2" 99.362604%
================================================================================================================
</TABLE>
(1) The Pass-Through Rate for the (i) Class A-6 Certificates will equal the
lesser of 6.825% or the Weighted Average Net Asset Rate, (ii) Class A-7
Certificates will equal the lesser of 6.650% or the Weighted Average Net
Asset Rate, (iii) Class M Certificates will equal the lesser of 6.800% or
the Weighted Average Net Asset Rate and (iv) Class B-1 Certificates will
equal the lesser of 7.275% or the Weighted Average Net Asset Rate.
Subordination Features: The Class M Certificates will be subordinated to the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and Class A-7
Certificates (collectively, the "Class A Certificates") and the Class B-1
Certificates will be subordinated to the Class A Certificates and the Class M
Certificates, all as described in the Prospectus Supplement.
Distribution Dates: Each Distribution Date shall be the 15th day of each month,
or if such day is not a business day, on the next succeeding business day,
commencing in February 1998.
REMIC Election: An election will be made to treat some or all of the assets of
the Trust as one or more real estate mortgage investment conduits for federal
income tax purposes (the "REMIC"). The Underwritten Certificates will be
designated as "regular interests" in the REMIC.
Purchase Price: The Underwriters have severally agreed to purchase the
Underwritten Certificates of each Class from the Company for the respective
purchase prices expressed in the table above as percentages of the initial
Certificate Principal Balance of each such Class. Payment of the purchase price
for the Underwritten Certificates shall be made to the Company in federal or
similar immediately available funds payable to the order of the Company.
Denominations: The Underwritten Certificates will be issued in book-entry form
in minimum denominations of $1,000 and integral multiples of $1 in excess
thereof.
Fees: It is understood that servicing fees may be withheld from the payments on
the Assets in each month prior to distributions on the Certificates on the
Distribution Date occurring in such month to the extent permissible under the
Pooling and Servicing Agreement.
Closing Date and Location: 10:00 a.m. Eastern Time on January 29, 1998, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219-4074. The Company will deliver the Underwritten
Certificates in book-entry form only, through the same-day funds
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<PAGE>
settlement system of The Depository Trust Company on the Closing Date.
Due Diligence: At any time prior to the Closing Date, the Underwriters have the
right to inspect the Asset Files and the related loan origination procedures and
to confirm the existence of the related manufactured homes or mortgaged
properties to ensure conformity with the Final Prospectus and the Prospectus
Supplement.
Controlling Agreement: This Terms Agreement sets forth the complete agreement
among the Company, DFC and the Underwriters and fully supersedes all prior
agreements, both written and oral, relating to the issuance of the Underwritten
Certificates and all matters set forth herein. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Standard Provisions or the Prospectus Supplement.
Computational Materials: Each Underwriter hereby represents and warrants that
(i) any information attached hereto as Exhibit 1 constitutes all "Collateral
Term Sheets" (as such term is defined in the no-action letters addressed to
Kidder, Peabody Acceptance Corporation I, et al. dated May 20, 1994 and to the
Public Securities Association dated February 17, 1995 (collectively, the "PSA
Letters")) disseminated by it in connection with the Underwritten Certificates;
(ii) any information attached hereto as Exhibit 2 constitutes all "Structural
Term Sheets" and "Computational Materials" disseminated by it in connection with
the Underwritten Certificates and (iii) any information attached hereto as
Exhibit 3 constitutes all "Series Term Sheets" (as such term is defined in the
no-action letter addressed to Greenwood Trust Company, Discover Card Master
Trust I dated April 5, 1996) disseminated by it in connection with the
Underwritten Certificates.
For purposes hereof, as to each Underwriter, the term "Derived Information"
means such information, if any, in the Series Term Sheets, Collateral Term
Sheets, Structural Term Sheets and/or Computational Materials that is not
contained in either (i) the Prospectus taking into account information
incorporated therein by reference (other than information incorporated by
reference from the Series Term Sheets, Collateral Term Sheets, Structural Term
Sheets and/or Computational Materials) or (ii) any computer tape furnished by
the Company (the "Computer Tape"). Each Underwriter severally agrees, assuming
(i) all information provided by the Company (including the Computer Tape) is
accurate and complete in all material respects and (ii) the Company's
independent public accountants have determined that the Derived Information
agrees with the Computer Tape, to indemnify and hold harmless the Company, each
of the Company's officers and directors and each person who controls the Company
within the meaning of Section 15 of the Act against any and all losses, claims,
damages or liabilities, joint or several, to which they 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
of a material fact contained in the Derived Information prepared by such
Underwriter and incorporated by reference into the Registration Statement, or
arise out of or are based upon the omission or alleged omission to state in such
Derived Information a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (except that no such indemnity shall be
available for any losses, claims, damages or liabilities, or actions in respect
thereof to the extent any such untrue statement or alleged untrue statement
therein results directly from an error in the information on the Computer Tape
or in any other information concerning the Mortgage Loans or the Contracts
provided by the Company to any Underwriter in writing or through electronic
transmission) and agrees to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending or preparing to defend any such
-9-
<PAGE>
loss, claim, damage, liability or action as such expenses are incurred. The
obligations of an Underwriter under this paragraph shall be in addition to any
liability which such Underwriter may otherwise have. Notwithstanding the
provisions of this paragraph, no Underwriter shall be required to pay any amount
with respect to the indemnities provided hereunder in excess of the underwriting
discount or commission applicable to the Certificates purchased by it hereunder.
Information Provided by each Underwriter: It is understood and agreed that the
information set forth under the heading "Underwriting" in the Prospectus
Supplement and the sentence regarding each Underwriter's intention to establish
a market in the Underwritten Certificates on the Cover Page of the Prospectus
Supplement is the only information furnished by the Underwriters for inclusion
in the Registration Statement and the Final Prospectus.
Trustee: PNC Bank, National Association will act as Trustee of the Trust.
Blue Sky Qualifications: The Underwriters specify no jurisdictions and the
parties do not intend to qualify the Underwritten Securities in any
jurisdiction. The Company has agreed to pay all costs and expenses incurred in
connection with the preparation of a blue sky survey to be delivered on or prior
to the Closing Date.
State Tax Opinions: The Company shall deliver to the Underwriters an opinion of
counsel pursuant to Section 6(d)(iii) of the Standard Provisions with respect to
the State of North Carolina and the Commonwealth of Pennsylvania.
Blackout Period: None.
Applicable Law: THIS 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 will be in writing and effective only upon
receipt and will be mailed, delivered or telegraphed and confirmed to the
parties at:
Deutsche Financial Capital Securitization LLC and
Deutsche Financial Capital Limited Liability Company
7800 McCloud Road (27409-9634)
P.O. Box 27081
Greensboro, North Carolina 27425-7081
Attention: Treasurer
Credit Suisse First Boston Corporation
11 Madison Avenue
20th Floor
New York, New York 10010
Attention: Fiachra O'Driscoll
Deutsche Morgan Grenfell Inc.
31 West 52nd Street, 23rd Floor
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<PAGE>
New York, NY 10019
Attention: Vijay Radhakishum
Request for Opinions: (a) The Company and DFC hereby request and authorize
Hunton & Williams as their counsel in this transaction, to issue on behalf of
the Company and DFC, such legal opinions to the Underwriters, their respective
counsel, the Trustee and the Rating Agencies as may be required by any and all
documents, certificates or agreements executed in connection with this
Agreement.
(b) The Underwriters hereby request and authorize Simpson Thacher & Bartlett, as
their special counsel in this transaction, to issue to the Underwriters such
legal opinions as they may require, and the Company shall have furnished to
Simpson Thacher & Bartlett such documents as they may request for the purpose of
enabling them to pass upon such matters.
Each Underwriter agrees, subject to the terms and provisions of the Standard
Provisions, a copy of which is attached hereto, 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.
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<PAGE>
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Fiachra O'Driscoll
---------------------------------
Name: Fiachra O'Driscoll
Title: Director
DEUTSCHE MORGAN GRENFELL INC.
By: /s/ Vijay S. Radhakishun
---------------------------------
Name: Vijay S. Radhakishun
Title: Vice President
By: /s/ Rich Uhlig
---------------------------------
Name: Rich Uhlig
Title: Director
Accepted and acknowledged
As of the Date First Above Written:
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL CAPITAL I CORP.
By: /s/ Douglas R. Muir
-----------------------------------
Name: Douglas R. Muir
Title: Vice President
DEUTSCHE FINANCIAL CAPITAL LIMITED LIABILITY COMPANY
By: OAKWOOD ACCEPTANCE CORPORATION, member
By: /s/ Douglas R. Muir
-----------------------------------
Name: Douglas R. Muir
Title: Vice President
By: DEUTSCHE FINANCIAL SERVICES CORPORATION, member
By: /s/ Naran Burchinow
-----------------------------------
Name: Naran Burchinow
Title: Senior Vice President
<PAGE>
SCHEDULE A
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class M and Class B-1 Certificates
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Class A-1 Class A-2 Class A-3
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Credit Suisse First Boston Corporation....................... $25,750,000 $19,650,000 $13,575,000
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell Inc................................. $25,750,000 $19,650,000 $13,575,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total....................................................... $51,500,000 $39,300,000 $27,150,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Class A-4 Class A-5 Class A-6
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corporation ...................... $3,000,000 $ 7,000,000 $ 6,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell Inc................................. $3,000,000 $ 7,000,000 $ 6,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total....................................................... $6,000,000 $14,000,000 $12,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Class A-7 Class M Class B-1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corporation ...................... $15,634,500 $ 9,176,000 $10,332,500
- ----------------------------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell Inc................................. $15,634,500 $ 9,176,000 $10,332,500
- ----------------------------------------------------------------------------------------------------------------------------------
Total........................................................ $31,269,000 $18,352,000 $20,645,000
</TABLE>
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Exhibit 4.1
-----------
================================================================================
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC,
OAKWOOD ACCEPTANCE CORPORATION
AND
PNC BANK, NATIONAL ASSOCIATION
TRUSTEE
----------
SERIES 1998-I POOLING AND SERVICING AGREEMENT
Dated as of January 1, 1998
----------
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC,
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1998-I
================================================================================
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<PAGE>
THIS SERIES 1998-I POOLING AND SERVICING AGREEMENT, dated as of January 1,
1998, is made with respect to the formation of DFC Securitization Trust 1998-I
(the "Trust") among DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC, a North
Carolina limited liability company (the "Company"), OAKWOOD ACCEPTANCE
CORPORATION, a North Carolina corporation (the "Servicer"), and PNC BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee"), under this Agreement and the Standard Terms to Pooling and Servicing
Agreement, June 1997 Edition (the "Standard Terms"), all the provisions of which
are incorporated herein as modified hereby and shall be a part of this Agreement
as if set forth herein in full (this Agreement with the Standard Terms so
incorporated, the "Pooling and Servicing Agreement"). Capitalized terms used and
not otherwise defined herein shall have the respective meanings given them in
the Standard Terms.
PRELIMINARY STATEMENT
The Company has duly authorized the formation of the Trust to issue a
Series of Certificates with an aggregate initial principal amount of
$229,392,046, to be known as the Senior/Subordinated Pass-Through Certificates,
Series 1998-I (the "Certificates"). The Certificates consist of 12 Classes that
in the aggregate evidence the entire beneficial ownership interest in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee will
make an election to treat all of the assets of the Trust as two real estate
mortgage investment conduits (each, a "REMIC" and, individually, the "Pooling
REMIC" and the "Issuing REMIC") for federal income tax purposes. The Pooling
REMIC will consist of the Distribution Account and the Assets listed on the
Asset Schedule attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the ten Subaccounts designated as provided herein. The
"startup day" of each REMIC for purposes of the REMIC Provisions is the Closing
Date.
1998-I Pooling & Servicing Agreement
S - 2
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<PAGE>
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
the Company hereby bargains, sells, conveys, assigns and transfers to the
Trustee, in trust and as provided in this Pooling and Servicing Agreement,
without recourse and for the exclusive benefit of the Holders of the
Certificates, all of the Company's right, title and interest in and to, and any
and all benefits accruing to the Company from, (a) the Contracts listed in
Schedule IA hereto and the Mortgage Loans (together with the Contracts, the
"Assets") listed in Schedule IB hereto (Schedule IA and Schedule IB shall be
collectively referred to herein as "Schedule I"), together with the related
Asset Documents, and all payments thereon and proceeds of the conversion,
voluntary or involuntary, of the foregoing, including, without limitation, all
rights to receive all principal and interest payments due on the Assets after
the Cut-off Date, including such scheduled payments received by the Company or
Seller on or prior to the Cut-off Date, and Principal Prepayments, Net Insurance
Proceeds, Net Liquidation Proceeds, Repurchase Prices and other unscheduled
collections received on the Assets on and after the Cut-off Date; (b) the
security interests in the Manufactured Homes, Mortgaged Properties and Real
Properties granted by the Obligors pursuant to the related Assets; (c) all
funds, other than investment earnings, relating to the Assets on deposit in the
Certificate Account or the Distribution Account for the Certificates and all
proceeds thereof, whether in the form of cash, instruments, securities or other
properties; (d) any and all rights, privileges and benefits accruing to the
Company under the Sales Agreement with respect to the Assets (provided that the
Company shall retain its rights to indemnification from the Seller under such
Sales Agreement, but also hereby conveys its rights to such indemnification to
the Trustee as its assignee), including the rights and remedies with respect to
the enforcement of any and all representations, warranties and covenants under
such Sales Agreement; and (e) proceeds of all the foregoing (including, but not
by way of limitation, all proceeds of any Standard Hazard Insurance Policy or
FHA Insurance, or any other insurance policy relating to any of the Assets, cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables that at any time constitute all or
part or are included in the proceeds of any of the foregoing) to make
distributions on the Certificates as specified herein (the items referred to in
clauses (a) through (e) above shall be collectively referred to herein as the
"Trust Estate").
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required to the best of its ability to the
end that the interests of the Holders of the Certificates may be adequately and
effectively protected.
1998-I Pooling & Servicing Agreement
S - 3
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<PAGE>
Section 1. Standard Terms.
The Company, the Servicer and the Trustee acknowledge that the Standard
Terms prescribe certain obligations of the Company, the Servicer and the Trustee
with respect to the Certificates. The Company, the Servicer and the Trustee
agree to observe and perform such prescribed duties, responsibilities and
obligations, and acknowledge that, except to the extent inconsistent with the
provisions of this Pooling and Servicing Agreement, the Standard Terms are and
shall be a part of this Pooling and Servicing Agreement to the same extent as if
set forth herein in full.
Section 2. Defined Terms.
With respect to the Certificates and in addition to or in replacement for
the definitions set forth in Section 1.01 of the Standard Terms, the following
definitions shall be assigned to the defined terms set forth below:
"Accelerated Principal Distribution Amount": With respect to any
Distribution Date, the positive difference, if any, between the Target
Overcollateralization Amount and the Current Overcollateralization Amount.
"Accrual Date": The Accrual Date shall be January 1, 1998.
"Adjusted Certificate Principal Balance": With respect to each Class of
Subordinated Certificates on any date of determination, its Certificate
Principal Balance immediately following the most recently preceding Distribution
Date reduced by all Writedown Amounts allocated to such Class on such
Distribution Date.
"Adjusted Subaccount Principal Balance": With respect to each of the
Corresponding Subaccounts relating to the Subordinated Certificates, on any date
of determination, its Subaccount Principal Balance immediately following the
most recently preceding Distribution Date reduced by all Writedown Amounts
allocated to such Subaccount on such Distribution Date.
"Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Manufactured Home, Real Property or
Mortgage Property has been repossessed or foreclosed upon but not yet disposed
of) as to which a Monthly Payment thereon is delinquent 60 days or more as of
the end of the related Collection Period, and the denominator of which is the
Pool Scheduled Principal Balance for such Distribution Date.
"Average Thirty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Thirty-Day Delinquency Ratios for such
Distribution Date and the two
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preceding Distribution Dates. The "Thirty-Day Delinquency Ratio" for a
Distribution Date is the percentage derived from the fraction, the numerator of
which is the aggregate Scheduled Principal Balance (as of the end of the
preceding Prepayment Period) of all Assets (including Assets in respect of which
the related Manufactured Home, Real Property or Mortgage Property has been
repossessed or foreclosed upon but not yet disposed of) as to which a Monthly
Payment thereon is delinquent 30 days or more as of the end of the related
Collection Period, and the denominator of which is the Pool Scheduled Principal
Balance for such Distribution Date.
"Book-Entry Certificates": The Class A, Class M and Class B-1 Certificates.
"Carryover Interest Distribution Amount": With respect to each Class of
Certificates, except the Class X Certificates and the Residual Certificates, and
each Distribution Date, all amounts that were distributable on such Class as
Interest Distribution Amounts and as Carryover Interest Distribution Amounts on
the previous Distribution Date but not previously distributed, together with
interest accrued on such amount at the Pass-Through Rate in effect for such
Class during the related Interest Accrual Period. With respect to each
Subaccount on each Distribution Date, all amounts that were allocable to such
Subaccount as Priority Interest Distribution Amounts and as Carryover Interest
Distribution Amounts on the previous Distribution Date but not previously
distributed, together with interest accrued on any such amount at the
Pass-Through Rate in effect for the Corresponding Certificates with respect to
such Subaccount during 1998-I Pooling & Servicing Agreement the related Interest
Accrual Period.
"Carryover Non-Priority Interest Distribution Amount": For any Subaccount,
on any Distribution Date, all amounts that were distributable on such Subaccount
as Non-Priority Interest Distribution Amounts on previous Distribution Dates
that remain unpaid.
"Carryover Writedown Interest Distribution Amount": With respect to each
Distribution Date and each related Class or Subaccount, all amounts that were
distributable on such Class or Subaccount as Writedown Interest Distribution
Amounts and Carryover Writedown Interest Distribution Amounts on the previous
Distribution Date but not previously distributed, plus interest accrued on any
such amount during the related Interest Accrual Period at the then applicable
Pass-Through Rate.
"Class A Certificates": The Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class
A-6 Certificates and Class A-7 Certificates.
"Class A Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the Class A Certificate Principal Balance, the Class M
Adjusted Certificate Principal Balance, the Class B-1 Adjusted Certificate
Principal Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
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"Class A-7 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class A-7 Certificate Principal Balance immediately
prior to such Distribution Date and the denominator of which is the sum of the
Class A-4 Certificate Principal Balance, the Class A-5 Certificate Principal
Balance, the Class A-6 Certificate Principal Balance and the Class A-7
Certificate Principal Balance, each immediately prior to such Distribution Date;
"Class A Principal Distribution Amount": For any Distribution Date, will
equal (i) prior to the Cross-over Date, the entire Principal Distribution
Amount, (ii) on any Distribution Date as to which the Principal Distribution
Tests are not met, the entire Principal Distribution Amount, or (iii) on any
other Distribution Date, the Class A Percentage of the Principal Distribution
Amount. For any Distribution Date, if the Class A Principal Distribution Amount
exceeds the Class A Certificate Principal Balance less the Principal
Distribution Shortfall Carryover Amount with respect to such Class and
Distribution Date, then such excess amount shall be allocated to the Class M
Principal Distribution Amount.
"Class A Subaccounts": Any or all, as appropriate, of the Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6 or Class A-7 Subaccounts.
"Class B Certificates": The Class B-1 Certificates and Class B-2
Certificates.
"Class B Subaccounts": Any or all, as appropriate, of the Class B-1 or
Class B-2 Subaccounts.
"Class B-1 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Adjusted Certificate Principal Balance of the Class
B-1 Certificates immediately prior to such Distribution Date and the denominator
of which is the sum of the Class A Certificate Principal Balance, the Class M
Adjusted Certificate Principal Balance, the Class B-1 Adjusted Certificate
Principal Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class B-1 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance and the Class M
Certificate Principal Balance have not been reduced to zero and prior to the
Cross-over Date, zero, (ii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance and
the Class M Certificate Principal Balance have not been reduced to zero, zero,
(iii) on any Distribution Date as to which the Principal Distribution Tests are
not met and the Class A Certificate Principal Balance and the Class M
Certificate Principal Balance each have been reduced to zero, the Principal
Distribution Amount, or (iv) on any other Distribution Date, the Class B-1
Percentage of the Principal Distribution Amount. For any Distribution Date, if
the Class B-1 Principal Distribution Amount exceeds the Class B-1 Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and
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Distribution Date, then such excess amount shall be allocated to the Class B-2
Principal Distribution Amount.
"Class B-2 Floor Amount": With respect to any Distribution Date, either (a)
1.25% of the aggregate principal balance of the Assets as of the Cut-off Date,
if the Class A Certificate Principal Balance, the Class M Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have not been reduced to
zero immediately prior to such Distribution Date, and (b) zero, if the Class A
Certificate Principal Balance, the Class M Certificate Principal Balance and the
Class B-1 Certificate Principal Balance have been reduced to zero immediately
prior to such Distribution Date.
"Class B-2 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class B-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M Adjusted
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class B-2 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance, the Class M
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have not been reduced to zero and prior to the Crossover Date, zero, (ii) on any
Distribution Date as to which the Principal Distribution Tests are
not met and the Class A Certificate Principal Balance, the Class M Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have not been
reduced to zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance,
the Class M Certificate Principal Balance and the Class B-1 Certificate
Principal Balance each have been reduced to zero, the Principal Distribution
Amount, or (iv) on any other Distribution Date, the Class B-2 Percentage of the
Principal Distribution Amount. If the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have not been reduced to zero on or before a Distribution Date, then
amounts otherwise allocable as Class B-2 Principal Distribution Amounts shall be
allocated first to the Class B-1 Principal Distribution Amount, next to the
Class M Principal Distribution Amount, and finally to the Class A Principal
Distribution Amount, to the extent that allocation of such amounts to the Class
B-2 Principal Distribution Amount would reduce the Class B-2 Certificate
Principal Balance below the Class B-2 Floor Amount. On any Distribution Date,
the Class B-2 Principal Distribution Amount shall not exceed the Class B-2
Certificate Principal Balance less the Principal Distribution Shortfall
Carryover Amount with respect to such Class and such Distribution Date.
"Class M Certificates": The Class M Certificates.
"Class M Percentage": With respect to any Distribution Date, the percentage
derived from the fraction (which shall not be greater than 1), the numerator of
which is the Class M
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Adjusted Certificate Principal Balance immediately prior to such Distribution
Date and the denominator of which is the sum of the Class A Certificate
Principal Balance, the Class M Adjusted Certificate Principal Balance, the Class
B-1 Adjusted Certificate Principal Balance and the Class B-2 Adjusted
Certificate Principal Balance, each immediately prior to such Distribution Date.
"Class M Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance has not been
reduced to zero and prior to the Cross-over Date, zero, (ii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A
Certificate Principal Balance has not been reduced to zero, zero, (iii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A Certificate Principal Balance has been reduced to zero, the
Principal Distribution Amount, or (iv) on any other Distribution Date, the Class
M Percentage of the Principal Distribution Amount. For any Distribution Date, if
the Class M Principal Distribution Amount exceeds the Class M Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such excess amount shall
be allocated to the Class B-1 Principal Distribution Amount.
"Class M Subaccount": The Class M Subaccount.
"Class R Certificates": The Class R Certificates, which comprise both the
Pooling REMIC Residual Interest and the Issuing REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two rately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-1 Certificates,
which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 9(b) hereof, the Class R-2 Certificates,
which will represent the Pooling REMIC Residual Interest.
"Class X Carryover Strip Amount": With respect to the Class X Certificates
on each Distribution Date, all amounts that were distributable on such Class as
Class X Strip Amounts on previous Distribution Dates that remain unpaid.
"Class X Certificates": The Class X Certificates created pursuant to
Section 3 hereof.
"Class X Strip Amount": With respect to any Distribution Date, 30 days'
interest on the Subaccount Principal Balance of the Class A, Class B and Class M
Subaccounts, at a rate equal to the difference, if any, between the Weighted
Average Net Asset Rate and the weighted average of the Pass-Through Rates on the
Class A, Class M and Class B Subaccounts. Solely for purposes of this
calculation, the Pass-Through Rates of the Class A, Class M and Class B
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Subaccounts shall be the Pass-Through Rates on the respective Corresponding
Certificates.
"Closing Date": January 29, 1998.
"Corporate Trust Office": The address set forth herein below under
"Trustee".
"Corresponding Certificates": For any Subaccount, the Class of Certificates
bearing the same letter and numerical designation as that borne by such
Subaccount.
"Corresponding Subaccount" For any Class of Certificates, the Subaccount
bearing the same letter and numerical designation as that borne by such Class.
"Cross-over Date": The later to occur of (a) the Distribution Date
occurring in August 2002 or (b) the first Distribution Date on which the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the aggregate Adjusted Certificate Principal Balance of
the Subordinated Certificates plus the Current Overcollateralization Amount for
such Distribution Date and the denominator of which is the Pool Scheduled
Principal Balance on such Distribution Date, equals or exceeds 1.75 times the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the initial aggregate Adjusted Certificate Principal
Balance of the Subordinated Certificates and the denominator of which is the
Pool Scheduled Principal Balance as of the Cut-off Date.
"Cumulative Realized Losses": With respect to any Distribution Date, the
aggregate Realized Losses incurred on the Assets during the period from the
Cut-off Date through the end of the related Prepayment Period.
"Current Overcollateralization Amount": As of any Distribution Date, the
positive difference, if any, between the Scheduled Principal Balance of the
Assets and the Certificate Principal Balance of all then outstanding Classes of
Certificates.
"Current Realized Loss Ratio": With respect to any Distribution Date, the
annualized percentage derived from the fraction, the numerator of which is the
sum of the aggregate Realized Losses for the three preceding Prepayment Periods
and the denominator of which is the arithmetic average of the Pool Scheduled
Principal Balances for such Distribution Date and the preceding two Distribution
Dates.
"Cut-off Date": January 1, 1998.
"ERISA Restricted Certificates": The Class M, Class B-1, Class B-2, Class X
and Class R Certificates.
"Institutional Holder": An insurance company whose long-term debt is rated
at least A- by a Rating Agency, or an equivalent rating from any other
nationally recognized statistical rating organization.
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"Interest Distribution Amount": On each Distribution Date, an amount equal
to interest accrued at the applicable Pass-Through Rate for the related Interest
Accrual Period on (i) in the case of the Class A Certificates or the Class A
Subaccounts, the Certificate Principal Balance of such Class or the Subaccount
Principal Balance of such Subaccount, respectively, immediately prior to that
Distribution Date and (ii) in the case of the Subordinated Certificates or the
Corresponding Subaccounts, on the Adjusted Certificate Principal Balance of such
Class or the Subaccount Principal Balance of such Subaccount, respectively,
immediately prior to that Distribution Date.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts.
"Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.
"Non-Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the positive difference, if any, between
(i) the related Interest Distribution Amount for such Subaccount and (ii) the
related Priority Interest Distribution Amount for such Subaccount.
"Notional Principal Balance": The Notional Principal Balance of the Class X
Certificates on any date shall equal the sum of all of the Subaccount Principal
Balances on such date.
"Offered Subordinated Certificates": The Class M and Class B-1
Certificates.
"Overcollateralization Reduction Amount" : For any Distribution Date, the
positive difference, if any, between the Current Overcollateralization Amount
and the Target Overcollateralization Amount.
"Pass-Through Rate": With respect to each Class of Certificates (except the
Class X Certificates and the Residual Certificates) on any Distribution Date,
the per annum rate for such Class set forth in the table in Section 3 hereof.
With respect to any Subaccount on any Distribution Date, the then applicable
Weighted Average Net Asset Rate.
"Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.
"Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Amount": On any Distribution Date other than the
Distribution Date that is the Termination Date, the sum of the following
amounts: (a) the sum of the principal components of all Monthly Payments
scheduled to be made on the Due Date occurring during the related Collection
Period on the related Assets that were Outstanding at the opening of business
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on such Due Date (regardless of whether such Monthly Payments were received by
the Servicer from the related Obligors), not including any Monthly Payments due
on Liquidated Loans or repurchased Assets; (b) the sum of the amounts of all
Principal Prepayments received by the Servicer on the related Assets during the
related Prepayment Period; (c) with respect to any related Asset that became a
Liquidated Loan during the related Prepayment Period, the Scheduled Principal
Balance thereof on the date of liquidation thereof (determined without giving
effect to such liquidation); and (d) with respect to any related Asset that was
purchased or repurchased by the Servicer, the Seller or the Company pursuant to
Section 2.06 of the Standard Terms during the related Prepayment Period, the
Scheduled Principal Balance thereof on the date of purchase or repurchase
thereof (determined without giving effect to such purchase or repurchase); less
(e) the Overcollateralization Reduction Amount.
On the Distribution Date that is the Termination Date, the Pool Scheduled
Principal Balance for such Distribution Date.
"Principal Distribution Shortfall Carryover Amount": With respect to each
Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates.
"Principal Distribution Tests": With respect to each Distribution Date: (a)
the Average Sixty-Day Delinquency Ratio as of such Distribution Date does not
exceed 5%; (b) the Average Thirty-Day Delinquency Ratio as of such Distribution
Date does not exceed 7%; (c) the Cumulative Realized Losses as of such
Distribution Date do not exceed an amount equal to the percentage set forth
below of the initial aggregate Certificate Principal Balance of all the
Certificates:
Distribution Dates Percentage
------------------ ----------
August 2002 through January 2004 7%
February 2004 through January 2005 8%
February 2005 and after 9%;
and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
"Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the Interest Distribution Amount for the
Corresponding Certificates.
"Private Certificates": The Class B-2, Class X Certificates and Residual
Certificates.
"Qualified Bidders": Firms and institutions that are engaged in the
business of buying
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and selling manufactured housing paper.
"Rating Agency": Each of Fitch IBCA, Inc. (One State Street Plaza, New
York, New York 10004, and Moody's Investors Service, Inc. (99 Church Street, New
York, New York 10004).
"Regular Certificates": The Class A Certificates, Class M Certificates,
Class B Certificates and Class X Certificates.
"Residual Certificates": The Class R Certificates or, following the
division of the C-lass R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 9(b)
hereof, the Class R-1 Certificates and Class R-2 Certificates.
"Rule 144A Certificates": The Class B-2, Class X and Residual Certificates.
"Servicing Fee Rate": 1.00% per annum.
"Subaccount": Each of the following ten subaccounts established solely for
purposes of the REMIC Provisions by the Trustee, which have the Pass-Through
Rates and initial Subaccount Principal Balances set forth below:
Initial
Pass-Through Subaccount
Subaccount Rate Principal Balance
---------- ---- -----------------
A-1 (1) $51,500,000
A-2 (1) $39,300,000
A-3 (1) $27,150,000
A-4 (1) $6,000,000
A-5 (1) $14,000,000
A-6 (1) $12,000,000
A-7 (1) $31,269,000
M (1) $18,352,000
B-1 (1) $20,645,000
B-2 (1) $9,176,046
(1) The Pass-Through Rate on each Subaccount for any Distribution Date
shall be equal to the Weighted Average Net Asset Rate.
The final scheduled Distribution Date for each Subaccount is the April 2028
Distribution Date. For purposes of Treasury Regulation ss.1.860G-1(a)(4), the
latest possible maturity date for each of the Subaccounts shall be the April
2028 Distribution Date.
"Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such
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Subaccount in the definition of "Subaccount" above, minus all amounts allocated
to such Subaccount in reduction of its Subaccount Principal Balance pursuant to
Sections 5(a) and 7 hereof.
"Subordinated Certificates": The Class M, Class B-1, Class B-2, Class X and
Residual Certificates.
"Target Overcollateralization Amount": For any Distribution Date, 0.75% of
the Scheduled Principal Balance as of the Cut-off Date.
"Trustee": PNC Bank, National Association, not in its individual capacity
but solely as Trustee under this Pooling and Servicing Agreement, or any
successor trustee appointed as herein provided. Notices to the Trustee shall be
sent to Corporate Trust Department, 1600 Market Street, 30th Floor,
Philadelphia, Pennsylvania 19103, Attn: DFC Securitization Trust 1998-I (the
"Corporate Trust Office"), or its successor in interest.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
"Underwriters": Credit Suisse First Boston Corporation (whose address is 11
Madison Avenue, 20th Floor, New York, New York 10010), and Deutsche Morgan
Grenfell Inc. (whose address is 31 West 52nd Street, 23rd Floor, New York, New
York 10019).
"Weighted Average Net Asset Rate": With respect to any Distribution Date,
the weighted average of the Asset Rates applicable to the Monthly Payments that
were due during the related Collection Period on Assets that were Outstanding at
the beginning of the related Prepayment Period, less the Servicing Fee Rate.
"Writedown Amount": With respect to each Distribution Date, the amount, if
any, by which (i) the aggregate Certificate Principal Balance of all the
Certificates, after all distributions have been made on the Certificates on such
Distribution Date pursuant to Section 5(b) hereof, exceeds (ii) the Pool
Scheduled Principal Balance of the Assets for the next Distribution Date.
"Writedown Interest Distribution Amount": With respect to each Distribution
Date and each Class of Subordinated Certificates, interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on any
related Writedown Amount. With respect to each Distribution Date and each
Corresponding Subaccount, interest accrued during the related Interest Accrual
Period on any related Writedown Amount at the Pass-Through Rate applicable to
the Corresponding Certificates.
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Section 3. Certificates.
The aggregate initial principal amount of Certificates that may be executed
and delivered under this Pooling and Servicing Agreement is limited to
229,392,046, except for Certificates executed and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Certificates pursuant to
Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued in
twelve Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
Initial Final
Certificate Scheduled
Principal Pass Through Distribution
Designation Balance Rate Date(8)
- ----------- ------- ---- -------
A-1 $51,500,000 6.050% April 15, 2028
A-2 $39,300,000 6.000% April 15, 2028
A-3 $27,150,000 6.100% April 15, 2028
A-4 $6,000,000 6.375% April 15, 2028
A-5 $14,000,000 6.600% April 15, 2028
A-6 $12,000,000 (1) April 15, 2028
A-7 $31,269,000 (2) April 15, 2028
M $18,352,000 (3) April 15, 2028
B-1 $20,645,000 (4) April 15, 2028
B-2 $9,176,046 (5) April 15, 2028
X (6) (6) April 15, 2028
R (7) (7) April 15, 2028
(1) The Pass-Through Rate on the Class A-6 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.825% per annum and
(ii) the Weighted Average Net Asset Rate.
(2) The Pass-Through Rate on the Class A-7 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.650% per annum and
(ii) the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class M Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.800% per annum and
(ii) the Weighted Average Net Asset Rate.
(4) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.275% per annum and
(ii) the Weighted Average Net Asset Rate.
(5) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.715% per annum and
(ii) the Weighted Average Net Asset Rate.
(6) The Class X Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate. The Class X Certificates will represent
the right to receive, on each Distribution Date, the applicable
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Class X Strip Amount and any Class X Carryover Strip Amount.
(7) The Class R Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate, and shall represent the residual interest
in both the Pooling REMIC and the Issuing REMIC. Following the division of
the Class R Certificates into two separately transferable, certificated and
fully registered certificates in accordance with Section 9(b) hereof, the
Class R-1 and Class R-2 Certificates shall have no Certificate Principal
Balances and no Pass-Through Rates and shall represent the residual
interest in the Issuing REMIC and the Pooling REMIC, respectively.
(8) For purposes of Treasury Regulation ss.1.860G-1(a)(4), the latest
possible maturity date of each Class of Certificates shall be the Final
Scheduled Distribution Date.
Section 4. Denominations.
The Book-Entry Certificates will be registered as one or more certificates
in the name of the Clearing Agency or its nominee. Beneficial interests in the
Book-Entry Certificates will be held by the Beneficial Owners through the
book-entry facilities of the Clearing Agency, in minimum denominations of $1,000
and integral multiples of $1 in excess thereof.
The Class B-2 Certificate, the Class X Certificates and the Residual
Certificates will be issued in certificated, fully registered form. The Class
B-2 Certificates will be issued in minimum denominations of $100,000 and
integral multiples of $1,000 in excess thereof, except that one Certificate may
be issued in a different denomination that evidences the remainder of the
aggregate initial Certificate Principal Balance of such Class. The Class X
Certificates and the Residual Certificates will be issued in minimum Percentage
Interests equal to 10%.
Section 5. Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall allocate the Available Distribution Amount to the various
Subaccounts, and, where applicable, the Servicer, to the extent of the amount
thereof remaining after application pursuant to clauses (1) through (4) of
Section 4.03 of the Standard Terms, in the following manner and in the following
order of priority:
(i) First, concurrently, to each Class A Subaccount, (A) first, its
Priority Interest Distribution Amount for such Distribution Date, with the
Available Distribution Amount being allocated among the Class A Subaccounts
pro rata based on their respective Priority Interest Distribution Amounts,
and (B) second, the related Carryover Interest Distribution Amount for such
Distribution Date, if any, in each case with the Available Distribution
Amount being allocated among the Class A Subaccounts pro rata based on
their respective Carryover Interest Distribution Amounts;
(ii) Second, to the Class M Subaccount, (A) first, the related
Priority Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Interest Distribution Amount for such
Distribution Date;
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(iii) Third, to the Class B-1 Subaccount, (A) first, the related
Priority Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iv) Fourth, to the Class B-2 Subaccount, (A) first, the related
Priority Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(v) Fifth, concurrently, to each Class A Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class A
Subaccounts, if any, for such Distribution Date, allocated among the Class
A Subaccounts pro rata based on the Certificate Principal Balances of their
respective Corresponding Certificates;
(vi) Sixth, to the Class A Subaccounts, the Class A Principal
Distribution Amount allocated in the following manner and in the following
order of priority:
(a) to the Class A-1 Subaccount, the entire Class A Principal
Distribution Amount in reduction of the Class A-1 Subaccount Principal
Balance, until the Class A-1 Certificate Principal Balance has been
reduced to zero;
(b) to the Class A-2 Subaccount, the entire Class A Principal
Distribution Amount in reduction of the Class A-2 Subaccount Principal
Balance, until the Class A-2 Certificate Principal Balance has been
reduced to zero;
(c) to the Class A-3 Subaccount, the entire Class A Principal
Distribution Amount in reduction of the Class A-3 Subaccount Principal
Balance, until the Class A-3 Certificate Principal Balance has been
reduced to zero; and
(d) concurrently, (i) to the Class A-7 Subaccount, the Class A-7
Percentage of the Class A Principal Distribution Amount remaining
after all allocations pursuant to (6)(a) through (c) above have been
made, in reduction of the Class A-7 Subaccount Principal Balance,
until the Class A-7 Subaccount Principal Balance has been reduced to
zero; and (ii) the balance of the Class A Principal Distribution
Amount, allocated sequentially to the Class A-4 Subaccount, the Class
A-5 Subaccount and the Class A-6 Subaccount, in that order, until the
Certificate Principal Balance of each Class of Corresponding
Certificates is reduced to zero;
provided, however, that on any Distribution Date on which the Pool
Scheduled Principal Balance is less than the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date, the Class A Principal Distribution Amount will be
allocated among the Class A Subaccounts pro rata based upon the Certificate
Principal Balances of their respective Corresponding Certificates;
(vii) Seventh, to the Class M Subaccount, (A) first, any related
Writedown
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Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Writedown Interest Distribution Amount for such
Distribution Date;
(viii) Eighth, to the Class M Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class M Subaccount, if any,
for such Distribution Date;
(ix) Ninth, to the Class M Subaccount, the Class M Principal
Distribution Amount, in reduction of the Subaccount Principal Balance of
such Class, until it is reduced to zero;
(x) Tenth, to the Class B-1 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date;
(xi) Eleventh, to the Class B-1 Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class B-1 Subaccount, if
any, for such Distribution Date;
(xii) Twelfth, to the Class B-1 Subaccount, the Class B-1 Principal
Distribution Amount, in reduction of the Subaccount Principal Balance of
such Class, until it is reduced to zero;
(xiii) Thirteenth, to the Class B-2 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date;
(xiv) Fourteenth, to the Class B-2 Subaccount, the related Principal
Distribution Shortfall Carryover Amount for the Class B-2 Subaccount, if
any, for such Distribution Date;
(xv) Fifteenth, to the Class B-2 Subaccount, the Class B-2 Principal
Distribution Amount, in reduction of the Subaccount Principal Balance of
such Class, until it is reduced to zero;
(xvi) Sixteenth, if Oakwood Acceptance Corporation is the Servicer, to
the Servicer in the following sequential order: (A) the Servicing Fee with
respect to such Distribution Date; and (B) any Servicing Fees from previous
Distribution Dates remaining unpaid;
(xvii) Seventeenth, to each Subaccount, (i) first, its Carryover
Non-Priority Interest Distribution Amount for such Distribution Date, (ii)
second, its Non-Priority Interest Distribution Amount for such Distribution
Date, and (iii) its remaining Subaccount Principal Balance in each case
with the Available Distribution Amount being
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allocated among the Subaccounts pro rata based upon the total amount
remaining to be paid with respect to each Subaccount under each clause of
this provision; and
(xviii) Finally, any remainder to Holders of the Pooling REMIC
Residual Interest.
(b) On each Distribution Date, after all Subaccount allocations have been
made as described in Section 5(a) above and Section 6 below, the Trustee (or the
Paying Agent on behalf of the Trustee) shall withdraw all amounts allocated to
the various Subaccounts, and shall distribute such amounts in the following
manner and in the following order of priority:
(i) First, concurrently, to each Class of Class A Certificates, (A)
first, its Interest Distribution Amount for such Distribution Date, with
the Available Distribution Amount being allocated among such Classes pro
rata based on their respective Interest Distribution Amounts, and (B)
second, the related Carryover Interest Distribution Amount, if any, for
such Distribution Date, in each case with the Available Distribution Amount
being allocated among the Classes of Class A Certificates pro rata based on
their respective Carryover Interest Distribution Amounts;
(ii) Second, to the Class M Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such Distribution
Date;
(iii) Third, to the Class B-1 Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date, and (B) second,
any related Carryover Interest Distribution Amount for such Distribution
Date;
(iv) Fourth, to the Class B-2 Certificates, (A) first, the related
Interest Distribution Amount for such Distribution Date and (B) second, any
related Carryover Interest Distribution Amount for such Distribution Date;
(v) Fifth, concurrently, to each Class of Class A Certificates, the
related Principal Distribution Shortfall Carryover Amount for the Class A
Certificates, if any, for such Distribution Date, allocated among the Class
A Certificates pro rata based on their respective Certificate Principal
Balances;
(vi) Sixth, to the Class A Certificates, the Class A Principal
Distribution Amount allocated in the following manner and in the following
order of priority:
(a) to the Class A-1 Certificates, the entire Class A Principal
Distribution Amount in reduction of the Class A-1 Certificate
Principal Balance, until the Class A-1 Certificate Principal Balance
has been reduced to zero;
(b) to the Class A-2 Certificates, the entire Class A Principal
Distribution Amount in reduction of the Class A-2 Certificate
Principal Balance, until the Class A-2
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Certificate Principal Balance has been reduced to zero;
(c) to the Class A-3 Certificates, the entire Class A Principal
Distribution Amount in reduction of the Class A-3 Certificate
Principal Balance, until the Class A-3 Certificate Principal Balance
has been reduced to zero; and
(d) concurrently, (i) to the Class A-7 Certificates, the Class
A-7 Percentage of the Class A Principal Distribution Amount remaining
after all allocations pursuant to (6)(a) through (c) above have been
made, in reduction of the Class A-7 Certificate Principal Balance,
until the Class A-7 Certificate Principal Balance has been reduced to
zero; and (ii) the balance of the Class A Principal Distribution
Amount, allocated sequentially to the Class A-4 Certificates, the
Class A-5 Certificates and the Class A-6 Certificates, in that order,
in reduction of the Certificate Principal Balance of each such Class,
until the Certificate Principal Balance thereof is reduced to zero;
provided, however, that on any Distribution Date on which the Pool
Scheduled Principal Balance is less than the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date, the Class A Principal Distribution Amount will be
allocated among the Class A Certificates pro rata based upon their
respective Certificate Principal Balances;
(vii) Seventh, to the Class M Certificates, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date;
(viii) Eighth, to the Class M Certificates, the related Principal
Distribution Shortfall Carryover Amount for the Class M Certificates, if
any, for such Distribution Date;
(ix) Ninth, to the Class M Certificates, the Class M Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class , until it is reduced to zero;
(x) Tenth, to the Class B-1 Certificates, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and (B)
second, any related Carryover Writedown Interest Distribution Amount for
such Distribution Date;
(xi) Eleventh, to the Class B-1 Certificates, the related Principal
Distribution Shortfall Carryover Amount for the Class B-1 Certificates, if
any, for such Distribution Date;
(xii) Twelfth, to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class , until it is reduced to zero;
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(xiii) Thirteenth, to the Class B-2 Certificates, (A) first, any
related Writedown Interest Distribution Amount for such Distribution Date,
and (B) second, any related Carryover Writedown Interest Distribution
Amount for such Distribution Date;
(xiv) Fourteenth, to the Class B-2 Certificates, the related Principal
Distribution Shortfall Carryover Amount for the Class B-2 Certificates, if
any, for such Distribution Date;
(xv) Fifteenth, to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount, in reduction of the Certificate Principal Balance of
such Class , until it is reduced to zero;
(xvi) Sixteenth, to each Class of the Class A Certificates in the
manner provided in subsection (b)(vi) herein above, the Accelerated
Principal Distribution Amount for such Distribution Date, in reduction of
the Certificate Principal Balance of each such Class, until reduced to
zero;
(xvii) Seventeenth, to the Class X Certificates in the following
sequential order:
(A) the current Class X Strip Amount; and
(B) any Class X Carryover Strip Amount; and
(xviii) Finally, any remainder to the holders of the Issuing REMIC
Residual Interest.
(c) All distributions or allocations made with respect to each Class on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates of such Class based on their respective Percentage Interests. So
long as the Book-Entry Certificates are registered in the name of a Clearing
Agency or its nominee, the Trustee shall make all distributions or allocations
on such Certificates by wire transfers of immediately available funds to the
Clearing Agency or its nominee. In the case of Certificates issued in
fully-registered, certificated form, payment shall be made either (i) by check
mailed to the address of each Certificateholder as it appears in the Certificate
Register on the Record Date immediately prior to such Distribution Date or (ii)
by wire transfer of immediately available funds to the account of a Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and such Holder
is (A) with respect to any Class A or Class B Certificates issued after the
Closing Date in certificated, fully-registered form, the registered owner of
Class A or Class B Certificates with an aggregate initial Certificate Principal
Balance of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its
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standard wire transfer fee for any payment made by wire transfer. Final
distribution on the Certificates will be made only upon surrender of the
Certificates at the offices of the Trustee set forth in the notice of such final
distribution sent by the Trustee to all Certificateholders pursuant to Section
9.01 of the Standard Terms.
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any Distribution Date after
all distributions required to be made by this Pooling and Servicing Agreement
have been made, and any amounts remaining in the Issuing REMIC after payment in
full of the Regular Interests therein and any administrative expenses associated
with the Trust, will be distributed to the Holders of the Issuing REMIC Residual
Interest.
Section 6. Allocation of Writedown Amounts.
On each Distribution Date, after all required distributions have been made
on the Certificates pursuant to Section 5 above, the Writedown Amount, if any,
shall be allocated on such Distribution Date in the following manner and in the
following order of priority:
(a) First, to the Class B-2 Subaccount, to be applied in reduction of
the Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero;
(b) Second, to the Class B-1 Subaccount, to be applied in reduction of
the Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero; and
(c) Finally, to the Class M Subaccount, to be applied in reduction of
the Adjusted Subaccount Principal Balance of such Subaccount, until the
Adjusted Subaccount Principal Balance has been reduced to zero.
(d) Writedown Amounts allocated to the Class B-2, Class B-1 and Class
M Subaccounts pursuant to this Section 6 shall be allocated to the Class
B-2, Class B-1 and Class M Certificates, respectively, until the Adjusted
Certificate Principal Balance of each such Class has been reduced to zero.
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Section 7. Remittance Reports.
(a) The Remittance Report for each Distribution Date shall identify the
following items, in addition to the items specified in Section 4.01 of the
Standard Terms:
(1) the Interest Distribution Amount for each Class of the
Certificates for such Distribution Date (which shall equal the Priority
Interest Distribution Amount for the Corresponding Subaccount) and the
Carryover Interest Distribution Amount, as well as any Writedown Interest
Distribution Amount and any Carryover Writedown Interest Distribution
Amount, for each Class of the Certificates for such Distribution Date, and
the amount of interest of each such category to be distributed on each such
Class based upon the Available Distribution Amount for such Distribution
Date;
(2) the amount to be distributed on such Distribution Date on each
Class of the Certificates to be applied to reduce the Certificate Principal
Balance of such Class (which will be equal to the amount to be allocated on
such Distribution Date on the Corresponding Subaccount to be applied to
reduce the Subaccount Principal Balance of such Subaccount), separately
identifying any portion of such amount attributable to any prepayments, the
amount to be distributed to reduce the Principal Distribution Shortfall
Carryover Amount on each such Class based upon the Available Distribution
Amount for such Distribution Date and separately identifying any
Accelerated Principal Distribution Amount to be distributed on the Class A
Certificates or any Overcollateralization Reduction Amount;
(3) the aggregate amount, if any, to be distributed on the Residual
Certificates;
(4) the amount of any Writedown Amounts to be allocated to reduce the
Certificate Principal Balance of any Class of Subordinated Certificates
(which will be equal to the amount of any Writedown Amount to be allocated
to the Corresponding Subaccount) on such Distribution Date;
(5) the Certificate Principal Balance of each Class of the
Certificates (which will be equal to the Subaccount Principal Balance of
the Corresponding Subaccount) and the Adjusted Certificate Principal
Balance of each Class of the Subordinated Certificates (which will be equal
to the Adjusted Subaccount Principal Balance of the Corresponding
Subaccount) after giving effect to the distributions to be made (and any
Writedown Amounts to be allocated) on such Distribution Date;
(6) the aggregate Interest Distribution Amount remaining unpaid, if
any, and the aggregate Carryover Interest Distribution Amount remaining
unpaid, if any, for each Class of Certificates (which will be equal to the
Priority Interest Distribution Amount and Carryover Interest Distribution
Amount remaining unpaid on the Corresponding Subaccount), after giving
effect to all distributions to be made on such Distribution Date;
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(7) the aggregate Writedown Interest Distribution Amount remaining
unpaid, if any, and the aggregate Carryover Writedown Interest Distribution
Amount remaining unpaid, if any, for each Class of Certificates (which will
be equal to such amounts remaining unpaid on the Corresponding Subaccount),
after giving effect to all distributions to be made on such Distribution
Date; and
(8) the aggregate Principal Distribution Shortfall Carryover Amount
remaining unpaid, if any, for each Class of Certificates, after giving
effect to the distributions to be made on such Distribution Date.
In the case of information furnished pursuant to clauses (1), (2) and (3)
above, the amounts shall be expressed, with respect to any Class A, Class M or
Class B Certificate, as a dollar amount per $1,000 denomination.
(b) In addition to mailing a copy of the related Remittance Report to each
Certificateholder on each Distribution Date in accordance with Section 4.01 of
the Standard Terms, on each Distribution Date, the Trustee shall mail a copy of
the related Remittance Report to each Underwriter (to the attention of the
person, if any, reported to the Trustee by the applicable Underwriter), to the
Seller and to The Bloomberg (to the address and to the person, if any specified
to the Trustee by Credit Suisse First Boston Corporation). The Trustee shall not
be obligated to mail any Remittance Report to The Bloomberg unless and until
Credit Suisse First Boston Corporation shall have notified the Trustee in
writing of the name and address to which such reports are to be mailed, which
notice, once delivered, will be effective for all Distribution Dates after the
date such notice is received by the Trustee unless and until superseded by a
subsequent notice.
Section 8. Limited Right of Servicer to Retain Servicing Fees from
Collections.
The Servicer may retain its Servicing Fee and any other servicing
compensation provided for herein and in the Standard Terms from gross interest
collections on the Assets prior to depositing such collections into the
Certificate Account; provided, however, that Oakwood Acceptance Corporation as
Servicer may only so retain its Servicing Fee in respect of a Distribution Date
from gross interest collections on the Assets to the extent that the amounts on
deposit in the Certificate Account and attributable to the Available
Distribution Amount for such Distribution Date exceed the sum of all amounts to
be allocated and distributed on such Distribution Date pursuant to clauses (i)
through (xvi) under Section 5(b) hereof.
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Section 9. REMIC Administration.
(a) For purposes of the REMIC Provisions, all of the Certificates (except
the Residual Certificates) will be designated as the "regular interests" in the
Issuing REMIC, the ten Subaccounts will be designated as the "regular interests"
in the Pooling REMIC, the Class R Certificates will be designated as the
"residual interest" in each of the Issuing REMIC and the Pooling REMIC and,
following the division of the Class R Certificates into two separately
transferable, certificated and fully registered certificates in accordance with
Section 9(b) below, the Class R-1 Certificates will be designated as the
"residual interest" in the Issuing REMIC and the Class R-2 Certificates will be
designated as the "residual interest" in the Pooling REMIC.
(b) Upon the request of any registered Holder of a Class R Certificate, the
Trustee shall issue to such Holder two separately transferable, certificated and
fully registered Certificates (a Class R-1 Certificate and a Class R-2
Certificate), in substantially the forms of Exhibit R-1 and Exhibit R-2 attached
hereto. In the event that the Class R Certificates are exchanged for separately
transferrable Class R-1 and Class R-2 Certificates: (1) the Class R-1
Certificates will be designated as the residual interest in the Issuing REMIC,
(2) the Class R-2 Certificates will be designated as the residual interest in
the Pooling REMIC, (3) the Holders of a majority of the Percentage Interest in
the Class R-1 Certificates together with the Holders of a majority of the
Percentage Interest in the Class R-2 Certificates will have the option to make a
Terminating Purchase given to the Holders of a majority of the Percentage
Interest in the Residual Certificates pursuant to Section 9.01 of the Standard
Terms, and (4) the restrictions on the transfer of a Residual Certificate
provided in the Standard Terms will apply to both the Class R-1 and the Class
R-2 Certificates.
Section 10. Modifications of Standard Terms
The following modifications to the Standard Terms shall be in effect with
respect to the Certificates only.
(a) Section 1.01 of the Standard Terms is hereby amended as follows:
(i) the definition of "Contract Loan-to-Value Ratio" is hereby
deleted in its entirety and replaced with the following:
"Contract Loan-to-Value Ratio": Means, (i) as to each Contract
with respect to which a lien on land is required for underwriting
purposes, the ratio, expressed as a percentage, of the principal
amount of such Contract to the sum of the purchase price of the home
(including taxes, insurance and any land improvements), the tax value
or appraised value of the land and the amount of any prepaid finance
charges or closing costs that are financed; and (ii) as to each other
Contract, the ratio, expressed as a percentage, of the principal
amount of such Contract to the purchase price of the home (including
taxes, insurance and any
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land improvements) and the amount of any prepaid finance charges or
closing costs that are financed.
(ii) the definition of "Eligible Investments" is hereby amended
by deleting clauses (e) and (f) in their entirety and replaced with
the following:
(e) money market accounts or money market funds rated in the
highest rating category of each Rating Agency; or
(f) money market accounts or money market mutual funds
investing primarily in obligations of the United States
government, and further investing exclusively in debt
obligations, provided, however, that such money market accounts
or money market mutual funds shall be rated by each Rating Agency
in the highest rating category sufficient to support the initial
ratings assigned to a related Series of Certificates.
(iii) the definition of "Mortgage Loan-to-Value Ratio" is hereby
deleted in its entirety and replaced with the following:
"Mortgage Loan-to-Value Ratio": Means, as to a Mortgage Loan, the
ratio, expressed as a percentage, of the principal amount of such
Mortgage Loan at the time of determination, to either (i) the sum of
the appraised value of the land and improvements, and the amount of
any prepaid finance charges or closing costs that are financed or (ii)
the sum of the purchase price of the home (including taxes, insurance
and any land improvements), the appraised value of the land and the
amount of any prepaid finance charges or closing costs that are
financed.
(iv) the definition of "Qualified Substitute Asset" is hereby
amended by (A) deleting clause (A) in the third sentence thereof in
its entirety and replacing it with the following "(A) the Obligor
shall not be 30 or more days delinquent in payment on the Qualified
Substitute Asset"; and (B) adding after the final sentence thereof the
following: "In addition to all other requirements stated in this
paragraph, any Replaced Asset that is a Mortgage Loan may only be
replaced by another Mortgage Loan."
(v) the definition of "Servicing Fee" is hereby deleted in its
entirety and replaced with the following:
"Servicing Fee": On each Distribution Date, the product obtained
by multiplying (a) one-twelfth of the Servicing Fee Rate by (b) the
aggregate Scheduled Principal Balance of the Assets immediately prior
to the preceding Collection Period (without giving effect to any
Principal Prepayments, Net Liquidation Proceeds and Repurchase Prices
received (or Realized Losses incurred) on the day preceding the
beginning of such Collection Period).
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(vi) the definition of "Termination Price" is hereby amended by
deleting the word "Servicing" in clause (1)(b) thereof, resulting in
that clause reading in its entirety as follows: "(b) all amounts
required to be reimbursed or paid to the Servicer in respect of
previously unreimbursed Advances, plus".
(b) Section 3.10(c) of the Standard Terms is hereby amended by adding after
the final sentence thereof the following: "Upon the request of the Servicer, the
Trustee shall execute and deliver to the Servicer one or more limited powers of
attorney that constitutes and appoints the Servicer as the Trustee's true and
lawful attorney-in-fact and agent with respect to the commencement of certain
actions, in the name and on behalf of the Trustee, for the benefit of the
Certificateholders, pursuant to the provisions hereof and to execute and
deliver, in the Trustee's name, place and stead such papers as the Servicer may
at any time or from time to time deem necessary or desirable to carry out the
foregoing, at all times consistent with the Pooling and Servicing Agreement."
(c) Section 4.01(1) of the Standard Terms is hereby amended by deleting the
"and" immediately before subclause "(I)" and by adding after the final sentence
thereof the following:
"(J) the aggregate number and the aggregate Unpaid Principal
Balance of Outstanding Contracts and Outstanding Mortgage
Loans, stated separately, for which the Obligor is also a
debtor, whether voluntary or involuntary, in a proceeding
under the Bankruptcy Code; and (K) the aggregate number and
the aggregate Unpaid Principle Balance of Outstanding
Contracts and Outstanding Mortgage Loans for which the
Obligor is also a debtor, whether voluntary or involuntary,
in a proceeding under the Bankruptcy Code, stated
separately, that are (i) delinquent one month (i.e., 30 to
59 days) as of the end of the related Prepayment Period,
(ii) delinquent two months (i.e., 60 to 89 days) as of the
end of the related Prepayment Period, and (iii) delinquent
three months (i.e., 90 days or longer) as of the end of the
related Prepayment Period;".
(d) Section 5.05(b)(1) of the Standard Terms is amended to read in its
entirety as follows:
(1) Book-Entry Certificates. No transfer of all or any portion of any
Class of Book-Entry Certificates that are ERISA Restricted Certificates
shall be made to a transferee that is a Plan Investor unless such Plan
Investor qualifies for an exemption from Sections 406 and 407 of ERISA and
Section 4975 of the Code, and each Beneficial Owner of such a Certificate
shall be deemed to have represented, by virtue of its acquisition of such a
Certificate, either (i) that it is not a Plan Investor or (ii) that an
exemption from Sections 406 and 407 of ERISA and Section 4975 of the Code
will apply to the
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acquisition, holding and resale of such Certificates by the Beneficial
Owner thereof.
Section 11. Auction Call.
(a) If neither the Servicer nor the Residual Majority exercises its
optional termination right as described in Section 9.01 of the Standard Terms
within 90 days after it first becomes entitled to do so, the Trustee shall use
commercially reasonable efforts to solicit bids for the purchase of all Assets,
REO Properties and Repo Properties remaining in the Trust from no fewer than two
prospective purchasers that it believes to be Qualified Bidders. If OAC is then
the Servicer of the Assets, the solicitation of bids shall be conditioned upon
the continuation of OAC as the servicer of the Assets on terms and conditions
substantially similar to those in the Pooling and Servicing Agreement, except
that it shall not be required to pay compensating interest or make Advances.
(b) If the Trustee receives bids from at least two Qualified Bidders and
the net proceeds of the highest bid are equal to or greater than the Termination
Price, the Trustee shall promptly advise the Servicer of the highest bid and the
terms of purchase, and the Servicer shall have three Business Days, at its
option, to match the terms of such bid. The Trustee shall thereafter sell the
Assets, REO Properties and Repo Properties either (i) to the Servicer, if it
shall so elect, or (ii) to the highest bidder, and in either case the Trustee
shall distribute the net proceeds of such sale in redemption of the Certificates
in compliance with Article IX of the Standard Terms and Section 5 hereof. Any
such sale must also comply with the requirements applicable to a Terminating
Purchase set forth in Section 9.02 of the Standard Terms.
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets,
REO Properties and Repo Properties in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would at
least equal the Termination Price, it shall not sell the Assets, REO Properties
and Repo Properties, and shall thereafter have no obligation to attempt to sell
same.
(e) The Servicer shall cooperate with and provide necessary information to
the Trustee in connection with any auction sale as described herein.
Section 12. Voting Rights.
The Voting Rights applicable to the Certificates shall be allocated 0.5% to
the Class R Certificates, 0.5% to the Class X Certificates and 99% to the other
Certificates in proportion with their respective Certificate Principal Balance.
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Section 13. Governing Law.
The Pooling and Servicing Agreement shall be construed in accordance
with and governed by the laws of the State of North Carolina applicable to
agreements made and to be performed therein. The parties hereto agree to submit
to the personal jurisdiction of all federal and state courts sitting in the
State of North Carolina and hereby irrevocably waive any objection to such
jurisdiction. In addition, the parties hereto hereby irrevocably waive any
objection that they may have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any federal or state
court sitting in the State of North Carolina, and further irrevocably waive any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
Section 14. Forms of Certificates.
Each of the Schedules and Exhibits attached hereto or referenced herein are
incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
Section 15. Counterparts.
This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
Section 16. Entire Agreement.
This Pooling and Servicing Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
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<PAGE>
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have caused
this Pooling and Servicing Agreement to be duly executed by their respective
officers thereunto duly authorized and their respective signatures duly attested
all as of the day and year first above written.
DEUTSCHE FINANCIAL CAPITAL
SECURITIZATION LLC
BY: DEUTSCHE FINANCIAL CAPITAL
I CORP., as manager
By:/s/ Douglas R. Muir
-------------------------------------
Name: Douglas R. Muir
Title: Treasurer, Assistant Secretary
and Vice President
OAKWOOD ACCEPTANCE CORPORATION
By: /s/ Douglas R. Muir
-------------------------------------
Name: Douglas R. Muir
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Trustee
By:/s/ Judy A. Wisniewski
-------------------------------------
Name: Judy A. Wisniewski
----------------------------------
Title: Assistant Vice President
---------------------------------
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<PAGE>
STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Guilford this 21st day of January, 1998 by Douglas R. Muir, Treasurer, Assistant
Secretary and Vice President of Deutsche Financial Capital I Corp., a North
Carolina corporation, on behalf of the corporation, in its capacity as Manager
of Deutsche Financial Capital Securitization LLC.
/s/ Rebecca Waddell
-------------------
Notary Public
My Commission expires: March 4, 2002
STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Guilford this 21st day of January, 1998 by Douglas R. Muir, Vice President of
Oakwood Acceptance Corporation, a North Carolina corporation, on behalf of the
corporation.
/s/ Rebecca Waddell
-------------------
Notary Public
My Commission expires: March 4, 2002
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<PAGE>
STATE OF PENNSYLVANIA )
) s.
CITY OF PHILADELPHIA )
The foregoing instrument was acknowledged before me in the City of
Philadelphia, this 26th day of January, 1998, by Judy A. Wisniewski, Assisstant
Vice President of PNC Bank, National Association, a national banking
association, on behalf of the association.
/s/ Joan F. Wilson
------------------
Notary Public
My Commission expires: February 12, 2001
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<PAGE>
INDEX TO SCHEDULES AND EXHIBITS
Schedule IA Contract Schedule
Schedule IB Mortgage Loan Schedule
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class A-3 Certificate
Exhibit A-4 Form of Class A-4 Certificate
Exhibit A-5 Form of Class A-5 Certificate
Exhibit A-6 Form of Class A-6 Certificate
Exhibit A-7 Form of Class A-7 Certificate
Exhibit M Form of Class M Certificate
Exhibit B-1 Form of Class B-1 Certificate
Exhibit B-2 Form of Class B-2 Certificate
Exhibit X Form of Class X Certificate
Exhibit R Form of Class R Certificate
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