DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
____________________
Pass-Through Certificates
(Issuable in Series)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
____________________
June 1997
Deutsche Financial Capital Securitization LLC, a North Carolina limited
liability company (the "Company"), proposes to sell Pass-Through Certificates
("Certificates") in various series (each a "Series"), in one or more offerings
on terms to be determined at the time of sale, each to be issued by a separate
trust (a "Trust") under a pooling and servicing agreement for such Series that
incorporates by reference standard terms (such agreement collectively with such
standard terms, the "Pooling and Servicing Agreement"), among the Company,
Oakwood Acceptance Corporation, a North Carolina corporation, as Servicer (the
"Servicer"), and the trustee named therein (the "Trustee"). The certificates of
each Series (the "Certificates") will represent in the aggregate the entire
beneficial ownership interest in a segregated pool of manufactured housing
installment sales contracts ("Contracts") secured by units of manufactured
housing ("Manufactured Homes") and/or mortgage loans ("Mortgage Loans" and,
collectively with Contracts, "Assets") secured by first liens on real estate to
which the related Manufactured Homes are deemed permanently affixed ("Mortgaged
Properties").
The Trustee may make one or more elections to have Trust Assets or
portions thereof treated as real estate mortgage investment conduits (each, a
"REMIC") under the Internal Revenue Code of 1986, as amended (the "Code"). In
the event that more than one REMIC is created for a Series, all references
herein to a REMIC shall be deemed to refer to all related REMICs, unless the
context otherwise requires.
The Company will sell, assign and transfer the Assets acquired by it to
the related Trust, all in exchange for the Certificates of the related Series
issued by that Trust. The Assets will have been acquired by the Company from
Deutsche Financial Capital Limited Liability Company, a North Carolina limited
liability company ("DFC") or from one or more unaffiliated sellers (each, in
such capacity, a "Seller"), in each case pursuant to a sales agreement (each, a
"Sales Agreement") between the Company and the Seller of such Assets. The net
proceeds to the Company from the sale of each Series of the Certificates
principally will be used to pay the purchase price of the Assets acquired for
the related Trust.
The Certificates are more fully described in the Registration Statement
(as hereinafter defined). Each Series of Certificates, and any classes of
Certificates within each Series, may vary, among other things, as to number and
types of classes, aggregate principal amount, final stated distribution dates,
the rate or rates of interest accruing thereon, and the allocation, priority and
timing of distributions thereon.
From time to time, the Company may enter into one or more terms
agreements (each, a "Terms Agreement") substantially in the form of the Form of
Terms Agreement attached hereto as Exhibit A, which Terms Agreements provide for
the sale of all or a portion of certain classes of a Series of Certificates
(such certificates to be so purchased being herein collectively referred to as
the "Underwritten Certificates") to the underwriters named in the related
underwriting agreement (the "Underwriters"). The standard provisions set forth
herein are to be incorporated by reference in any such Terms Agreement. A Terms
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as an "Underwriting Agreement" or an "Agreement." Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings assigned to them in the Terms Agreement into which the standard
provisions are incorporated and if not defined therein shall have the meanings
assigned to them in the related Pooling and Servicing Agreement.
The Terms Agreement relating to each offering of Underwritten
Certificates shall specify, among other things, the principal amount of the
Underwritten Certificates to be issued and their terms not otherwise specified
in the related Pooling and Servicing Agreement, the price or prices at which the
Underwritten Certificates are to be purchased by the Underwriters from the
Company, the initial public offering price or the method by which the price at
which such Underwritten Certificates are to be sold will be determined, the
names of the firms, if any, designated as representatives of the Underwriters
(the "Representatives"), and the principal amount of the Underwritten
Certificates to be purchased by
-2-
each Underwriter, and shall set forth the date, time and manner of delivery of
the Underwritten Certificates and payment therefor.
The Company is a limited-purpose limited liability company whose
members are Deutsche Financial Capital I Corp. (the "Manager"), a North Carolina
corporation, and DFC. Each of the Manager and DFC are owned in equal shares by
Deutsche Financial Services Corporation, a Nevada corporation, and OAC. Deutsche
Financial Services Corporation is an indirect wholly-owned subsidiary of
Deutsche Bank AG, and OAC is a wholly-owned subsidiary of Oakwood Homes
Corporation, a North Carolina corporation.
1. Representations and Warranties. (a) The Company and DFC represent
and warrant to, and agree with, each Underwriter that:
i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 for
the registration of the Underwritten Certificates under the Securities
Act of 1933, as amended (the "Act"), which registration statement has
become effective, and has filed such amendments thereto as may have
been required to the date hereof. Such registration statement, as
amended at the date hereof, meets the requirements set forth in Rule
415 under the Act and complies in all other material respects with the
Act and the rules and regulations thereunder. The Company proposes to
file with the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in such registration
statement relating to the Underwritten Certificates and the plan of
distribution thereof. Such registration statement, including the
exhibits thereto, as amended at the date hereof, is hereinafter called
the "Registration Statement;" the latter of such prospectus in the form
in which it appears in the Registration Statement or in the form most
recently revised and filed with the Commission pursuant to Rule 424 is
hereinafter called the "Basic Prospectus;" and the form of prospectus
supplement specifically relating to the Underwritten Certificates, in
the form in which it shall be first filed with the Commission pursuant
to Rule 424 (including the Basic Prospectus as so supplemented and the
information, if any, filed with the Commission pursuant to the Exchange
Act and incorporated by reference therein) is hereinafter called the
"Final Prospectus." Any preliminary form of the Final Prospectus which
has heretofore been filed pursuant to Rule 424 or, prior to the
effective date of the Registration Statement, pursuant to Rule 402(a),
424(a) or 430A, is hereinafter called a "Preliminary Final Prospectus."
Any supplement to the Basic Prospectus specifically relating to the
Underwritten Certificates shall be referred to by itself as the
"Prospectus Supplement."
(ii) As of the date of this Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act, when,
prior to the Closing Date (as hereinafter defined), any amendment to
the Registration Statement becomes effective, when any supplement to
the Final Prospectus is filed with the Commission, and at the Closing
Date, (A) the Registration Statement, as amended as of any such time,
and the Final Prospectus, as amended or supplemented as of any such
time, complies and will comply in all material respects with the
applicable requirements of the Act and the rules and regulations
thereunder and (B) the Registration Statement, as amended as of any
such time, does not contain and will not contain any untrue statement
of a material fact and does not omit and will not omit to state any
material fact required to be stated therein or necessary in order to
make the statements made therein not misleading and the Final
Prospectus, as amended or supplemented as of any such time, does not
and will not include an untrue statement of a material fact and does
not omit and will not omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted
-3-
from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter specifically for use in connection with
the preparation of the Registration Statement and the Final Prospectus.
(iii) As of the date of this Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act, when,
prior to the Closing Date, any amendment to the Registration Statement
becomes effective, when any supplement to the Final Prospectus is filed
with the Commission, and at the Closing Date, there has not and will
not have been (A) any request by the Commission for any further
amendment of the Registration Statement or the Final Prospectus or for
any additional information, (B) any issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation or threat of any proceeding for that purpose, or (C)
any notification with respect to the suspension of the qualification of
the Underwritten Certificates for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(iv) The Company has been duly organized and is validly
existing as a limited liability company under the laws of the State of
North Carolina with full legal power and authority (corporate and
other) to own its properties and to conduct its business as it is now
conducted and as described in the Final Prospectus, and to enter into
and perform its obligations under the Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement, and has
qualified to do business under the laws of each jurisdiction that
requires such qualification wherein it owns or leases material
properties, except where the failure so to qualify would not have a
material adverse effect on the Company. The Company holds all material
licenses, certificates, franchises, and permits from all governmental
authorities necessary for the conduct of its business as it is now
conducted and as described in the Final Prospectus, and has received no
notice of proceedings relating to the revocation of any such license,
certificate or permit, that, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would affect materially
and adversely the conduct of the business, results of operations, net
worth or condition (financial or otherwise) of the Company.
(v) The execution of the Terms Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement are within
the power of the Company. The Agreement has been and as of the Closing
Date the related Pooling and Servicing Agreement and each related Sales
Agreement will have been, duly and validly authorized, executed and
delivered by the Company, and assuming the valid authorization,
execution and delivery by the other parties thereto, each constitutes,
or will constitute, a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is sought
in a proceeding in equity or at law, and except that with respect to
the Agreement the provisions relating to indemnification of the
Underwriters may be unenforceable as against public policy.
(vi) Neither the issuance and sale of the Underwritten
Certificates, nor the execution and delivery by the Company of this
Agreement, any related Sales Agreement or the related Pooling and
Servicing Agreement, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by the
Company with the provisions hereof or thereof, will (A) conflict with
or result in a breach of, or constitute a default under, any of the
provisions of the articles of organization or operating agreement of
the Company or any law, governmental rule or regulation or any
judgment, decree or order binding
-4-
on the Company or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which the Company is a party or by which it is bound, or (B) result in
the creation or imposition of any lien, charge, or encumbrance upon any
of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.
(vii) No filing or registration with, notice to, qualification
of or with, or consent, approval, authorization or order or other
action of any person, corporation or other organization or of any
court, supervisory or governmental authority or agency is required for
the consummation by the Company of the transactions contemplated by
this Agreement or the related Pooling and Servicing Agreement except
such as have been, or will have been prior to the Closing Date,
obtained under the Act, or state securities laws or "Blue Sky" laws, or
from the National Association of Securities Dealers, Inc. in connection
with the purchase and distribution of the Underwritten Certificates by
the Underwriters, or any recordations of the assignment of the related
Mortgage Loans to the Trustee pursuant to the related Pooling and
Servicing Agreement that have not yet been completed.
(viii) There are no actions, suits or proceedings against, or
investigations of, the Company pending, or, to the knowledge of the
Company, threatened, before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, the related
Pooling and Servicing Agreement, any related Sales Agreement or the
Certificates of the related Series, (B) seeking to prevent the issuance
of the Certificates of the related Series or the consummation of any of
the transactions contemplated by the Agreement, any related Sales
Agreement or the related Pooling and Servicing Agreement, (C) which
might materially and adversely affect the business, operations,
financial condition (including, if applicable, on a consolidated
basis), properties or assets of the Company, performance by the Company
of its obligations under, or the validity or enforceability of, the
Agreement, the related Pooling and Servicing Agreement, any related
Sales Agreement, or the validity or enforceability of the Certificates
of the related Series or (D) seeking to affect adversely the federal or
state income tax attributes of the Underwritten Certificates as
described in the Final Prospectus.
(ix) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there has
not been any material adverse change or development involving a
prospective material adverse change in the business, operations,
financial condition, properties or assets of the Company.
(x) The Underwritten Certificates and Pooling and Servicing
Agreement will conform in all material respects to the descriptions
thereof contained in the Final Prospectus, and the Underwritten
Certificates, when duly and validly executed and authenticated by the
Trustee and delivered to and paid for by the Underwriters as provided
herein, will be validly issued and entitled to the benefits of the
related Pooling and Servicing Agreement, and will be binding
obligations of the Trust to the extent provided in the related Pooling
and Servicing Agreement.
(xi) At the time of execution of the related Pooling and
Servicing Agreement, the Company will own the Assets being transferred
to the Trustee pursuant to the related Pooling and Servicing Agreement,
free and clear of any lien, adverse claim, mortgage, charge, pledge or
other encumbrance or security interest, and will not have assigned to
any other person any of its right, title or interest in such Assets,
and, upon the execution of the related Pooling and Servicing Agreement,
the Company will have transferred all its right, title and interest in
such Assets to the Trustee, provided that the Company will not be
deemed to be in breach of this
-5-
representation and warranty to the extent that a court of competent
jurisdiction holds that at the time of the execution of the related
Pooling and Servicing Agreement the Company had a first priority
perfected security interest in such Assets or that the Company granted
to the Trust a first priority perfected security interest in such
Assets.
(xii) Under generally accepted accounting principles, the
Company will report its transfer of the Assets to the Trustee pursuant
to the related Pooling and Servicing Agreement and the sale of the
Certificates of the related Series as a sale of its interest in such
Assets. The Company has been advised by its independent certified
public accountants that it concurs with such treatment under generally
accepted accounting principles. For federal income tax purposes, the
Company will treat the transfer of the Assets to the Trustee and the
sale of the Underwritten Certificates either as a transaction in which
it acts as the agent of one or more Sellers or as a sale of its
interest in the Assets.
(xiii) As of the Closing Date, the Assets will be duly and
validly assigned to the Trustee or its nominee, UCC-1 financing
statements describing any Contracts as collateral and (i) naming the
Seller as "debtor," the Company as "secured party" and the Trustee as
"assignee" and (ii) naming the Company as "debtor" and the Trustee as
"secured party," will be filed in all filing offices where such filing
is necessary to perfect the Trustee's ownership or security interest in
any related Contracts, and any related Mortgage Notes will be endorsed
without recourse to the Trustee or to its nominee and delivered to the
Trustee or to an agent on its behalf and, where required in order to
transfer all right, title and interest to a Mortgage Loan. Upon
completion of the aforementioned actions, upon the stamping of the face
of each related Contract with a legend giving notice of the assignment
of such Contract to the Trustee, and, where required in order to
transfer a lien on a Mortgaged Property, upon the recordation of
assignments to the Trustee of any related Mortgages in the public
records in which such Mortgages shall have been recorded (which
recordation shall be effected unless the Underwriters receive an
opinion of counsel satisfactory to them (at the Company's expense) that
such recording is not required under applicable law to perfect the
Trustee's security interest in the related Mortgaged Property), the
Trustee will own each related Asset, subject to no prior lien,
mortgage, security interest, pledge, charge or other encumbrance,
except as permitted under the related Pooling and Servicing Agreement;
provided that the Company will not be deemed to be in breach of this
representation and warranty as to any Asset to the extent that a court
of competent jurisdiction holds that the Trustee has a first priority
perfected security interest in such Asset or that the Company assigned
to the Trust a first priority perfected security interest in such
Asset.
(xiv) As of the Closing Date, any letter of credit or surety
bond included in any accounts or funds constituting part of the Trust
with respect to the Underwritten Certificates will name the Trustee as
the beneficiary thereof and will be delivered to the Trustee, any cash
will be delivered to the Trustee and any Eligible Investments (as
defined in the related Pooling and Servicing Agreement) will be made in
the Trustee's name, and delivered to and/or assigned to the Trustee,
and the Trustee either will own such assets, or have a first priority
perfected security interest therein, in either case subject to no prior
lien, security interest, pledge, charge or other encumbrance.
-6-
(xv) Each Seller has been duly incorporated or otherwise
formed and is validly existing and duly qualified under the laws of the
jurisdiction of its incorporation or formation and each jurisdiction
that requires such qualification wherein it owns or leases any material
properties (except where the failure so to qualify would not have a
material adverse effect on such Seller).
(xvi) At the time of the execution and delivery of a Sales
Agreement by each Seller, such execution and delivery by such Seller
will be within the legal power of such Seller and will have been duly
authorized by all necessary action on the part of such Seller; and
neither the execution and delivery of such Sales Agreement by such
Seller, nor the consummation by such Seller of the transactions therein
contemplated, nor compliance with the provisions thereof by such
Seller, will (A) conflict with or result in a breach of, or constitute
a default under, any of the provisions of the articles of
incorporation, by-laws, partnership agreement or other organizational
documents of such Seller, or any law, governmental rule or regulation,
or any judgment, decree or order binding on such Seller or any of its
properties, or any of the provisions of any indenture, mortgage, deed
of trust, contract or other instrument to which such Seller is a party
or by which it is bound, or (B) result in the creation or imposition of
any lien, charge or encumbrance upon any of its properties pursuant to
the terms of any such indenture, mortgage, deed of trust, contract or
other instrument.
(xvii) Each related Sales Agreement, when executed and
delivered as contemplated thereby, will have been duly executed and
delivered by the Seller that is a party thereto, and each will
constitute, when so executed and delivered, a legal, valid and binding
agreement, enforceable against such Seller in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is sought
in a proceeding in equity or at law, and except that the provisions of
indemnity contained therein may be unenforceable as against public
policy.
(xviii) Under generally accepted accounting principles, each
Seller will report its transfer of the Assets pursuant to its Sales
Agreement as a sale of its interest in such Assets. Each Seller has
been advised by its independent certified public accountants that they
concur with such treatment under generally accepted accounting
principles and, if applicable, regulatory accounting principles. Each
Seller also will so report the transfer in all financial statements and
reports to the regulatory and supervisory agencies and authorities to
which it reports, if any. For federal income tax purposes, each Seller
will treat the transfer of the Assets pursuant to the related Sales
Agreement as a sale of the interest in the Assets represented by the
Certificates of the related Series not held by such Seller and as an
exchange of the remaining interest in the Assets for any Certificates
of such Series retained by such Seller.
(xix) At the Closing Date, each Contract, Mortgage Note and
Mortgage will constitute a legal, valid and binding instrument,
enforceable against the related Obligor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and to general
principles of equity (whether considered in a proceeding at law or in
equity), and will meet the criteria for selection described in the
Final Prospectus.
(xx) At the Closing Date, any Primary Mortgage Insurance
Policies and Standard Hazard Insurance Policies (as such terms are
defined in the related Pooling and Servicing Agreement) that are
required to be maintained with respect to any of the related Assets
-7-
pursuant to the related Pooling and Servicing Agreement will have been
duly and validly authorized, executed and delivered by, and will
constitute legal, valid and binding obligations of the issuers of such
Primary Mortgage Insurance Policies and Standard Hazard Insurance
Policies (collectively, the "Insurers"), as the case may be, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and to general principles of
equity, regardless of whether enforcement is sought in a proceeding in
equity or at law.
(xxi) Each Contract and Mortgage Loan was originated by an
entity that met the mortgagee criteria specified in Section 3(a)(41) of
the Securities Exchange Act of 1934 (the "Exchange Act") for the
related Certificates to constitute "mortgage related securities"
(assuming all other requirements of such Section 3(a)(41) are also met
in respect of such Certificate for such Certificates to be "mortgage
related securities" as so defined) at the time of origination of such
Contract or Mortgage Loan.
(xxii) Each of the Underwritten Certificates, when issued,
will constitute a "mortgage related security" as such term is defined
in Section 3(a)(41) of the Exchange Act for so long as such Certificate
is rated in one of the two highest rating categories by a nationally
recognized statistical rating organization.
(xxiii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement
and the related Pooling and Servicing Agreement and the execution,
delivery and sale of the Underwritten Certificates have been or will be
paid at or prior to the Closing Date.
(xxiv) Neither the Company nor the Trust is, and the issuance
and sale of the Underwritten Certificates in the manner contemplated
by the Final Prospectus will not cause the Company or the Trust to
become, subject to registration or regulation as an "investment
company" or an affiliate of an "investment company" under (and as
defined in) the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(xxv) Immediately prior to the delivery of the Underwritten
Certificates to the Underwriters, the Company will own the Underwritten
Certificates free and clear of any lien, adverse claim, pledge,
encumbrance or other security interest, and will not have assigned to
any person any of its right, title or interest in the Underwritten
Certificates, and, upon consummation of the transactions contemplated
in this Agreement, the Company will have transferred all its right,
title and interest in the Underwritten Certificates to the
Underwriters.
(xxvi) At the Closing Date, the representations and warranties
made by the Company in the related Pooling and Servicing Agreement will
be true and correct in all material respects.
(b) DFC further represents and warrants to, and agrees with, each
Underwriter that:
(i) DFC has been duly organized and is validly existing as a
limited liability company under the laws of the State of North Carolina
with full legal power and authority to own its properties and conduct
its business as it is now conducted by DFC, and has qualified to do
business and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties except when the failure to so qualify would not have a
material adverse effect on DFC.
(ii) The execution of the Agreement and the related Sales
Agreement are within the power of DFC. This Agreement has been, and as
of the Closing Date the related Sales
-8-
Agreement will have been, duly and validly authorized, executed and
delivered by DFC, and assuming the valid authorization, execution and
delivery of each such agreement by the other parties thereto, each of
such agreements constitutes a legal, valid and binding obligation of
DFC, enforceable against DFC in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is sought in a
proceeding in equity or at law, and except that the provisions relating
to indemnification of the Underwriters may be unenforceable as against
public policy.
(iii) Neither the issuance and sale of the Underwritten
Certificates, nor the execution and delivery by DFC of this Agreement
or any related Sales Agreement, nor the consummation by DFC of any of
the transactions herein or therein contemplated, nor compliance by DFC
with the provisions hereof or thereof, will (A) conflict with or result
in a breach of, or constitute a default under, any of the provisions of
the articles of organization or operating agreement of DFC or any law,
governmental rule or regulation or any judgment, decree or order
binding on DFC or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which DFC is a party or by which it is bound, or (B) result in the
creation of any lien, charge, or encumbrance upon any of its properties
pursuant to the terms of any such indenture, mortgage, deed of trust,
contract or other instrument.
(iv) There are no actions, suits or proceedings against, or
investigations of, DFC pending, or, to the knowledge of DFC,
threatened, before any court, administrative agency or other tribunal
(i) asserting the invalidity of this Agreement or any related Sales
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any related Sales
Agreement, (iii) which might materially and adversely affect the
business, operations, financial condition (including, if applicable, on
a consolidated basis), properties or assets of DFC, performance by DFC
of its obligations under, or the validity or enforceability of, this
Agreement or any related Sales Agreement or (iv) seeking to affect
adversely the federal or state income tax attributes of the
Underwritten Certificates as described in the Final Prospectus.
(v) No filing or registration with, notice to, qualification
of or with, or consent, approval, authorization or order or other
action of any person, corporation or other organization or of any
court, supervisory or governmental authority or agency is required for
the consummation by DFC of the transactions contemplated by this
Agreement except such as have been, or will have been prior to the
Closing Date, obtained under the Act, or state securities laws or "Blue
Sky" laws, or from the National Association of Securities Dealers, Inc.
in connection with the purchase and distribution of the Underwritten
Certificates by the Underwriters, or any recordations of the assignment
of the related Mortgage Loans to the Trustee pursuant to the related
Pooling and Servicing Agreement that have not yet been completed.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the applicable purchase prices set
forth in the related Terms Agreement (plus accrued interest as therein set
forth), Underwritten Certificates representing the respective aggregate
approximate principal amounts, notional amounts or percentage interests, as the
case may be, of the various classes of Underwritten Certificates set forth in
the Terms Agreement or opposite such Underwriter's name in an attachment to the
Terms Agreement.
-9-
3. Delivery and Payment. Delivery of and payment for the Underwritten
Certificates shall be made at the office, on the date and at the time specified
in the related Terms Agreement, which date and time may be postponed by
agreement between the Underwriters and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the Underwritten
Certificates being herein called the "Closing Date"). Delivery of the
Underwritten Certificates shall be made to the Underwriters against payment by
the Underwriters of the purchase price thereof to or upon the order of the
Company in the type of funds specified in the Terms Agreement. The Underwritten
Certificates shall be registered in such names and in such authorized
denominations as the Underwriters may request in writing not less than two full
business days in advance of the Closing Date.
The Company agrees to have the Underwritten Certificates available for
inspection, checking and packaging by the Underwriters in New York, New York (or
such other location within the continental United States requested by the
Underwriters), not later than 1:00 p.m. on the business day prior to the Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Underwritten Certificates of such Series for
sale to the public as set forth in the related Final Prospectus.
-10-
5. Agreements. (a) The Company covenants and agrees with the several
Underwriters that:
(i) Substantially contemporaneously with the execution of a
terms agreement, the Company will prepare the supplement to the Basic
Prospectus setting forth the principal amount of Underwritten
Certificates covered thereby and the material terms thereof, the
initial public offering price of the Underwritten Certificates or the
manner of offering such Underwritten Certificates, the price at which
the Underwritten Certificates are to be purchased by the Underwriters
from the Company, the selling concessions and reallowance, if any, and
such other information as the Underwriters and the Company deem
appropriate in connection with the offering of such Underwritten
Certificates. The Company will not file any amendment or supplement to
the Final Prospectus relating to the Underwritten Certificates unless
the Company has furnished the Underwriters a copy for their review
prior to filing and will not file any such proposed amendment or
supplement to which the Underwriters reasonably object. Subject to the
foregoing sentence, the Company will cause the Final Prospectus to be
filed with the Commission pursuant to Rule 424 under the Act and a
report on Form 8-K will be filed with the Commission within 15 days
following the Closing setting forth specific information concerning the
Underwritten Certificates and the related Assets and including, as an
exhibit, a copy of the related Pooling and Servicing Agreement. In
addition, to the extent that any Underwriter (i) has provided
Collateral Term Sheets to the Company that such Underwriter has
provided to a prospective investor, the Company has filed such
Collateral Term Sheets as an Exhibit to Form 8-K within two business
days of its receipt thereof, (ii) has provided Structural Term Sheets
or Computational Materials to the Company that such Underwriter has
provided to a prospective investor, the Company will file or cause to
be filed with the Commission a report on Form 8-K containing such
Structural Term Sheets and Computational Materials, as soon as
reasonably practicable after the date of the Underwriting Agreement,
but in any event, not later than the date on which the Final Prospectus
is filed with the Commission pursuant to Rule 424 under the Act, or
(iii) has provided Series Term Sheets to the Company that such
Underwriter has provided to a prospective investor, the Company has
filed such Series Term Sheets as an Exhibit to Form 8-K within two
business days of its receipt thereof. The Company will promptly advise
the Underwriters (A) when the Final Prospectus shall have been filed
with the Commission pursuant to Rule 424 and the Form 8-K shall have
been filed with the Commission, (B) when any amendment to the
Registration Statement shall have become effective, (C) of any request
by the Commission for any amendment of the Registration Statement or
the Final Prospectus or for any additional information, (D) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, and (E) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Underwritten Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or suspension and, if issued, to obtain
the withdrawal thereof as soon as possible.
(ii) If, at any time when a prospectus relating to the
Underwritten Certificates is required to be delivered under the Act,
any event occurs as a result of which, in the opinion of counsel to the
Company or the Underwriters, the Final Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the rules and regulations
thereunder, the
-11-
Company will promptly prepare and file with the Commission, subject to
paragraph (i) of this Section 5, an amendment or supplement that will
correct such statement or omission or an amendment that will effect
such compliance and, if such amendment or supplement is required to be
contained in a post-effective amendment of the Registration Statement,
will use its best efforts to cause such amendment of the Registration
Statement to be made effective as soon as possible and will promptly
file all reports and any definitive proxy or information statements
required to be filed by the Company pursuant to Sections 13, 14 and 15
of the Exchange Act subsequent to the date of the Prospectus for so
long as the delivery of a Prospectus is required in connection with the
offering or sale of the Underwritten Certificates; provided, however,
that any such amendment or update prepared more than nine months after
the Closing Date shall be at the expense of the Underwriters.
(iii) The Company will furnish to counsel for the
Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and each amendment thereto which
shall become effective on or prior to the Closing Date, and to each
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and each such amendment and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Underwriters may reasonably request.
(iv) The Company will apply the net proceeds from the sale of
the Underwritten Certificates in the manner set forth in the related
Final Prospectus.
(v) The Company or DFC will pay or cause to be paid all the
fees and disbursements of the Company's counsel and of independent
accountants for the Company relating to legal review, opinions of
counsel for the Company, audits, review of unaudited financial
statements, cold comfort review or otherwise; the costs and expenses of
printing (or otherwise reproducing) and delivering the Agreement, the
related Pooling and Servicing Agreement and the Underwritten
Certificates; the initial fees, costs and expenses of or relating to
the Trustee under the related Pooling and Servicing Agreement and its
counsel; the initial fees, costs and expenses of or relating to any
custodian of the Contracts or Mortgage Loans under a custodial
agreement and such custodian's counsel; the costs and expenses incident
to the preparation, printing, distribution and filing of the
Registration Statement (including exhibits thereto), the Basic
Prospectus, the Preliminary Final Prospectus and the Final Prospectus,
and all amendments of and supplements to the foregoing, and of the
Underwritten Certificates; and the fees of rating agencies. Except as
provided in Section 7 hereof, the Underwriters shall be responsible for
paying all costs and expenses incurred by them in connection with their
purchase and sale of the Underwritten Certificates.
(vi) The Company will use its best efforts to arrange for the
qualification of the Underwritten Certificates for sale under the laws
of such jurisdictions as the Underwriter may designate in the Terms
Agreement, to maintain such qualifications in effect so long as
required for the distribution of the Underwritten Certificates and to
arrange for the determination of the legality of the Underwritten
Certificates for purchase by investors; provided, however, that the
Company shall not be required to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to general or unlimited service of process in
any jurisdiction where it is not now so subject, and provided further,
that the Underwriter shall pay all costs and expenses associated
therewith.
(vii) So long as any Underwritten Certificates are
outstanding, the Company will
-12-
cause the related Servicer or Trustee to furnish to the Underwriter, as
soon as available, a copy of (A) the annual statement of compliance
delivered by the Servicer to the Trustee under the related Pooling and
Servicing Agreement, (B) the annual independent public accountants'
servicing report furnished to the Trustee pursuant to the related
Pooling and Servicing Agreement, (C) each report, statement or other
document regarding the Underwritten Certificates filed with the
Commission under the Exchange Act or mailed to the holders of the
Underwritten Certificates, pursuant to the related Pooling and
Servicing Agreement or otherwise, (D) any reports provided by certified
public accountants pursuant to the related Pooling and Servicing
Agreement regarding the reports, statements or other documents included
in clause (C) above, and (E) from time to time, such other information
concerning the Underwritten Certificates as the Underwriter may
reasonably request and which may be furnished by the Company or the
Servicer without undue expense. In addition, the Company shall make or
cause the Trustee to make generally available to the holders of the
Underwritten Certificates as soon as practicable, but in any event not
later than sixteen months from the date of this Agreement, an earnings
statement of the issuer of the Underwritten Certificates (which need
not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission (including at the option of the
Company, Rule 158).
(vii) Without the consent of the Underwriters, the Company
will not waive any of the conditions to its obligations to purchase the
Assets pursuant to the related Sales Agreement.
(ix) If a REMIC election is to be made with respect to some or
all of the related Assets ("REMIC Assets"), the Company will make or
cause to be made all filings necessary to establish and maintain the
status of such REMIC Assets as a REMIC.
(b) Each Underwriter represents, warrants, covenants and agrees with
the Company and DFC that:
(i) It either (A) has not provided any potential investor with
a Collateral Term Sheet (that is required to be filed with the
Commission within two business days of first use under the terms of the
Public Securities Association Letter as described below), or (B) has,
substantially contemporaneously with its first delivery of such
Collateral Term Sheet to a potential investor, delivered such
Collateral Term Sheet to the Company, which Collateral Term Sheet, if
any, is attached to the Underwriting Agreement as Exhibit A.
(ii) It either (A) has not provided any potential investor
with a Structural Term Sheet, Series Term Sheets or Computational
Materials, or (B) has promptly provided any such Structural Term Sheet,
Series Term Sheets or Computational Materials to the Company, which
Structural Term Sheets, Series Term Sheets and Computational Materials,
if any, are attached to the Underwriting Agreement as Exhibit B.
(iii) Each Collateral Term Sheet bears a legend indicating
that the information contained therein will be superseded by the
description of the collateral contained in the Prospectus Supplement
and, except in the case of the initial Collateral Term Sheet, that such
information supersedes the information in all prior Collateral Term
Sheets.
(iv) Each Structural Term Sheet, Series Term Sheet and all
Computational Materials bear a legend substantially as follows (or in
such other form as may be agreed prior to the date of the Underwriting
Agreement):
This information does not constitute either an offer to sell
or a solicitation of an
-13-
offer to buy any of the securities referred to herein. Information
contained herein is confidential and provided for information only,
does not purport to be complete and should not be relied upon in
connection with any decision to purchase the securities. This
information supersedes any prior versions hereof and will be
deemed to be superseded by any subsequent versions including, with
respect to any description of the securities or the underlying assets,
the information contained in the final Prospectus and accompanying
Prospectus Supplement. Offers to sell and solicitations of offers to
buy the securities are made only by the final Prospectus and the
related Prospectus Supplement.
(v) It (at its own expense) agrees to provide to the Company
any accountants' letters obtained relating to the Collateral Term
Sheets, Structural Term Sheets, Series Term Sheets and Computational
Materials, which accountants' letters shall be addressed to the
Company.
(vi) It has not, and will not, without the prior written
consent of the Company, provide any Collateral Term Sheets, Structural
Term Sheets, Series Term Sheets or Computational Materials to any
investor after the date of the Agreement.
(vii) Any Series Term Sheets, Collateral Term Sheet,
Structural Term Sheet, Series Term Sheet or Computational Materials do
not contain any untrue statement of a material fact and do not omit to
state any 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 to the extent that any
such misstatement or omission results from an Asset Pool Error (as
defined in Section 8(a)(i) below).
For purposes of this Agreement, Series Term Sheets, Collateral Term
Sheets and Structural Term Sheets shall have the respective meanings assigned to
them (a) in the case of Series Term Sheets, in the no-action letter addressed to
Greenwood Trust Company, Discover Card Master Trust I dated April 5, 1996, and
(b) in the case of Collateral Term Sheets and Structural Term Sheets, in the
February 13, 1995 letter of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, are publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. Computational
Materials has the meaning assigned to it in the May 17, 1994 letter of Xxxxx &
Wood on behalf of Xxxxxx, Xxxxxxx & Co., Inc. (which letter, and the SEC staff's
response thereto, are publicly available May 20, 1994).
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters hereunder to purchase the Underwritten Certificates of any
Series to which this Agreement applies shall be subject to the following
conditions:
(a) To the accuracy on the date hereof and on the Closing Date
(as if made on such Closing Date), and as of the date of the
effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date, of the representations and warranties on the
part of the Company and DFC contained herein and to the extent that
this Agreement provides that the Company and DFC are not making certain
representations and warranties, to the accuracy of the representations
and warranties provided by the parties making such representations and
warranties as of the date thereof and on the Closing Date (as if made
on such Closing Date) and as of the date of the effectiveness of any
amendment to the Registration Statement filed prior to the Closing
Date.
-14-
(b) The Registration Statement shall have become effective and
no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and not
withdrawn and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or mailed for filing with the Commission in accordance with Rule
424 under the Act, and all actions required to be taken and all filings
required to be made by the Company under the Act prior to the sale of
the Underwritten Certificates shall have been duly taken or made.
(c) Certificates.
(i) The Company shall have delivered to the
Underwriters a certificate of the Company, signed on behalf of
the Company by the President or any Vice President or
Assistant Vice President of the Manager and dated the Closing
Date, to the effect that the signer of such certificate has
carefully examined the Registration Statement, the Final
Prospectus, and this Agreement and that: (A) the
representations and warranties of the Company in this
Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the
Closing Date; (B) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; (C) no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge,
threatened; and (D) nothing has come to such Officer's
attention that would lead him or her to believe that the Final
Prospectus contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make
the statements, in the light of the circumstances under which
they were made, not misleading; and (E) there has been no
material adverse change or development involving a prospective
material adverse change in the business, operations, financial
condition, properties or assets of the Company.
(ii) DFC shall have delivered to the Underwriters a
certificate of DFC, signed by an authorized signatory of DFC
and dated the Closing Date, to the effect that the signer of
such certificate has carefully examined this Agreement, the
related Sales Agreement and that: (A) the representations and
warranties of DFC in this Agreement, the related Sales
Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the
Closing Date and (B) there has been no material adverse change
or development involving a prospective material adverse change
in the business, operations, financial condition, properties
or assets of DFC.
(d) Opinions.
(i) The Underwriters shall have received from Hunton
& Xxxxxxxx opinions of counsel, each dated the Closing Date
and satisfactory in form and substance to counsel for the
Underwriters, as to (A) various matters relating, among other
things, to the corporate status and authorization of the
Company and DFC, substantially in the form of Exhibit B-1
hereto; (B) various matters relating to the lien of the
trustee in the assets, substantially in the form of
Exhibit B-2 hereto; and (C) the applicable federal income tax
treatment of the Certificates.
-15-
(ii) The Underwriters shall have received copies of
any opinions of counsel furnished to the Rating Agencies (upon
which the Underwriters shall be entitled to rely) with respect
to the non-consolidation of the Company with its affiliates
and the "true sale" of the Assets, or, in the absence of such
true sale, that the Trustee has a perfected security interest
in the Assets, subject to no prior liens or encumbrances.
(iii) The Underwriters shall have received from
reputable counsel an opinion or opinions of counsel dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the income tax treatment of the
Securities in those states specified in the Terms Agreement.
(iv) The Underwriters shall have received from
counsel for the Underwriters such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Certificates, the Pooling and Servicing Agreement, this
Agreement, the Registration Statement, the Final Prospectus
and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(v) The Company shall have furnished to the
Underwriters the opinions of counsel to each Seller, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriter, as to the due authorization, execution
and delivery of each of the related Sales Agreements by the
related Seller and its enforceability against the related
Seller.
(vi) The Company shall have furnished to the
Underwriters the opinions of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due authorization, execution
and delivery of the Pooling and Servicing Agreement by the
Trustee.
(vii) The Company shall have furnished to the
Underwriters the opinions of counsel to any Insurer, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due issuance and
enforceability of the policies issued by such Insurer.
(e) The Underwritten Securities shall have been assigned the
ratings set forth in the Terms Agreement, which shall be in one of the
four highest rating categories, by one or more "nationally recognized
statistical rating organizations," as that term is defined by the
Commission from time to time, designated in the Terms Agreement. On the
Closing Date, (i) such rating or ratings shall not have been rescinded
and there shall not have been any downgrading, or public notification
of a possible downgrading or public notice of a possible change,
without indication of direction, and (ii) no downgrading, or public
notification of a possible downgrading or public notification of a
possible change, without indication of direction, shall have occurred
in the rating accorded any of the debt securities of any person
providing any form of credit enhancement for the Certificates by any
"nationally recognized statistical rating organization."
(f) The Underwriters shall have received from Price Waterhouse
LLP, certified public accountants, two letters, (i) one dated the date
hereof and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters to the effect that they have
-16-
performed certain specified procedures as a result of which they have
determined that the Assets listed in Schedule I to each related Sales
Agreement conform with the description thereof in the Prospectus
Supplement under "The Asset Pool" and that a sampling of the Contract
Files relating to the Contracts and of the Trustee Mortgage Loan Files
relating to the Mortgage Loans conforms with the information contained
on the contract and mortgage loan data file tape upon which the
information in the Prospectus Supplement under the caption "The Asset
Pool" was based; and (ii) the other letter dated the Closing Date and
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters, reconfirming or updating the letter dated the date
hereof; to the further effect that they have performed certain
procedures as a result of which they have determined that the Assets
listed in Schedule I to the related Pooling and Servicing Agreement (A)
conform with the description thereof in the Prospectus Supplement under
the caption "The Asset Pool" and (B) conform with the information, if
any, set forth in the Company's report on Form 8-K with respect to such
Assets; and covering such other matters relating to the Trust as the
Underwriters may reasonably request.
(g) The Underwriters shall have received from the certified
public accountants of the Seller or Servicer, as applicable, a letter
or letters dated the date hereof and satisfactory in form and substance
to the Underwriters and counsel to the Underwriters to the effect that
they have performed certain specified procedures as a result of which
they determined that certain information of an accounting, financial
and statistical nature set forth in the Final Prospectus under the
caption "The Servicer" (or other caption relating to the Servicer's
servicing activities) agrees with the records of the Servicer.
(h) If applicable, and subject to the conditions set forth in
the related Pooling and Servicing Agreement, any reserve fund to be
established for the benefit of the holders of any related Certificates
shall have been established by the Company with the Trustee and any
initial deposit required to be made therein shall have been delivered
to the Trustee for deposit therein as contemplated by the related
Pooling and Servicing Agreement.
(i) On the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company since the date of
the Terms Agreement which the Underwriter concludes in the reasonable
judgment of the Underwriter materially impairs the investment quality
of the Underwritten Certificates so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Certificates as contemplated by the Final Prospectus.
(j) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, and the Underwriters and counsel for the
Underwriters shall have received such information, certificates and
documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
if the Company is in breach of any covenants or agreements contained herein or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in all material respects and in
form and substance reasonably satisfactory to the Underwriters and counsel for
the Underwriters, the Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Underwriters. Notice of any such cancellation shall be given to the Company in
writing, or by telephone or telegraph and confirmed in writing.
-17-
7. Reimbursement of Underwriters' Expenses. If for any reason, other
than a default by the Underwriters pursuant to Section 9 hereof, the sale of the
Underwritten Certificates provided for herein is not consummated, the Company or
DFC will reimburse the Underwriters severally upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been reasonably incurred by them in connection with their investigation,
the preparation to market and the marketing of the Underwritten Certificates, or
in contemplation of the performance by them of their obligations hereunder.
8. Indemnification and Contribution. (a) The Company and DFC, jointly
and severally, indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Final Prospectus, or any amendment or
supplement thereto, or any related Preliminary Final Prospectus, or
arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading; will
reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that (A) the Company and DFC will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
omission, or alleged untrue statement or omission, made in any of such
documents in reliance upon and in conformity with written information
furnished to the Company by an Underwriter, specifically for use
therein, except to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from
an error or material omission in the information concerning the
characteristics of the Assets furnished by the Company to the
Underwriters for use in the preparation of any Collateral Term Sheet,
Structural Term Sheet, Series Term Sheet or Computational Materials,
which error was not superseded or corrected by the delivery to the
Underwriters of corrected written or electronic information, or for
which the Company provided written notice of such error to the
Underwriters prior to the confirmation of the sale of the applicable
Certificates (any such uncorrected Asset information an "Asset Pool
Error"), and (B) such indemnity with respect to any Preliminary Final
Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Underwritten
Certificates which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus as
amended or supplemented, excluding any documents incorporated therein
by reference) at or prior to the confirmation of the sale of such
Underwritten Certificates to such person in any case where such
delivery is required by the Act and the untrue statement or omission of
a material fact contained in such Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as amended
or supplemented, excluding any documents incorporated therein by
reference);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue
-18-
statement or omission, (A) if such settlement is effected with the
written consent of the Company or (B) if such settlement is effected
without the written consent of the Company, but only if the Company has
received a notice from the Underwriters of such proposed settlement,
substantially reflecting the terms of such proposed settlement, and the
Company has not responded to such notice for 30 days after its receipt
thereof and has not responded as of the effective date of such
settlement; and
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you), reasonably incurred
in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its members, each of the Manager's
officers and directors who have signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, against any and all losses, claims, expenses, damages or
liabilities to which the Company or any such member, director, officer or
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Final
Prospectus or any amendment or supplement thereto, or any related Preliminary
Final Prospectus, or arise out of, or are based upon, the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such member, director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action described therein, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party otherwise than under this Agreement. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish to do so, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party under this
Section 8, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and in respect of which
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any
-19-
claims that are the subject matter of such action.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 8, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to the amount paid or payable by such indemnified party as a
result of the losses, claims, expenses, damages or liabilities referred to in
subsection (a) or (b) above, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the relative opportunities of the Company and the Underwriters to
correct and prevent any untrue statement or omission, the relative benefits
received by each party from the offering of the Underwritten Certificates
(taking into account the portion of the proceeds of the offering (before
deducting expenses) realized by each), and any other equitable considerations
appropriate under the circumstances. The Company and the Underwriters agree that
it would not be equitable if the amount of such contribution were to be
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method that does not
take account of the equitable considerations referred to in the second sentence
of this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter or person controlling such Underwriter shall be obligated to make
contribution hereunder that in the aggregate exceeds the total public offering
price of the Underwritten Certificates purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages which such Underwriter and
its controlling persons have otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission. The Underwriters'
obligations to contribute shall be several in proportion to their respective
underwriting obligations and not joint.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Underwritten Certificates of any Class
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the portion of the Underwritten Certificates of such Class set forth opposite
their names in the Terms Agreement or in an attachment to the Terms Agreement
bears to the aggregate amount of Underwritten Certificates of such Class set
forth opposite the names of the remaining Underwriters) the Underwritten
Certificates of such Class which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
amount of Underwritten Certificates of such Class which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Underwritten Certificates of such Class as set forth in
the Final Prospectus, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Underwritten Certificates of such Class, and if such non-defaulting Underwriters
do not purchase all the Underwritten Certificates of such Class, this Agreement
will terminate without liability to any non-defaulting Underwriter or the
Company. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company for damages occasioned by
its default hereunder.
-20-
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
delivery of and payment for all Underwritten Certificates if prior to such time
(i) trading in securities generally on the New York Stock Exchange or American
Stock Exchange shall have been suspended or limited, or minimum approximate
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared by either federal or New York State authorities;
(iii) there shall have occurred any outbreak or escalation of hostilities or
other calamity or crisis, the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Underwriters,
impracticable or inadvisable to market the Underwritten Certificates; or (iv)
there has been, since the date of the Terms Agreement or since the respective
dates as of which information is given in the Registration Statement or the
Final Prospectus any change in, or any development involving a prospective
change in, or affecting, the condition, financial or otherwise, earnings,
affairs or business of the Company, whether arising in the ordinary course of
business or otherwise, which in the reasonable judgment of the Underwriters
would materially impair the market for, or the investment quality of, the
Underwritten Certificates..
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and DFC or their respective representatives and the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or DFC or any of the members, officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Underwritten Certificates. The provisions of this Section 11 and
Sections 5(a)(v), 7 and 8 hereof shall survive the termination or cancellation
of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to it at the office or offices set forth
in the Terms Agreement; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it, Care of the Manager, at 0000 XxXxxxx Xxxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Treasurer; or, if sent to DFC,
will be mailed, delivered or telegraphed and confirmed to it at 0000 XxXxxxx
Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Treasurer. Copies of all
such notices also shall be mailed, delivered or telegraphed and confirmed to
Deutsche Financial Services Corporation, 000 Xxxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxx,
XX 00000-0000, Attention: Treasurer.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the members,
officers and directors and controlling persons referred to in Section 8 hereof,
and their successors and assigns, and no other person will have any right or
obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the jurisdiction as may be specified in the Terms
Agreement. The Terms Agreement may be executed in any number of counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
15. Miscellaneous. Time shall be of the essence of this Agreement. This
Agreement supersedes all prior or contemporaneous agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against whom enforcement of such change, waiver, discharge
or termination is sought. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
-21-
Exhibit A
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates
FORM OF TERMS AGREEMENT
Dated: ____________, 19__
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 19__-__,
Classes ________ _________________________ (collectively, the
"Certificates"). The Classes _______________ 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
______________________ (the "Underwriter"), and the Underwriter hereby agrees to
purchase from the Company, on ______________, 19__, the Underwritten Securities
at the purchase price and on the terms set forth below; provided, however, that
the obligations of the Underwriter are subject to: (i) receipt by the Company of
the ratings on the Certificates as set forth herein, (ii) receipt by the
Underwriter of the Sales Agreement (the "Sales Agreement"), dated as of
_______________, 19__, 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 Underwriter.
The Certificates will be issued by DFC Securitization Trust 19__-__
pursuant to a Pooling and Servicing Agreement, to be dated as of ______________,
19__ among the Company, Oakwood Acceptance Corporation, as servicer (the
"Servicer") and _______________________, 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 retail installment sales contracts secured by units of manufactured
housing (the "Contracts") with original terms to maturity not exceeding 30 years
[and] conventional, one- to four-family, fully amortizing, [fixed][adjustable]
rate, first-lien residential mortgage loans (the "Mortgage Loans" and, together
with the Contracts, the "Assets") with original terms to maturity not exceeding
30 years, in each case having the characteristics described in the Prospectus
Supplement.
A-1
The Company and the Servicer specifically covenant to make available on
the Closing Date for sale, transfer and assignment to the Trust, Contracts and
Mortgage Loans having the characteristics described in the Prospectus
Supplement; provided, however, that there may be nonmaterial variances from the
description of the Contracts [and] Mortgage Loans in the Prospectus Supplement
and the Contracts and Mortgage Loans 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 SCHEDULE PRINCIPAL BALANCE OF ASSETS: Approximately
$_____________
CUT-OFF DATE: ___________________, 19__
TERMS OF THE CERTIFICATES:
====================================================================================================================
Original
Principal Purchase
Class Balance Pass-Through Price of the
Designation (approximate)(1) Rate Rating Certificates
====================================================================================================================
[Specify Rating
Agency and Rating]
====================================================================================================================
(1) Subject to a permitted variance of plus or minus 5% depending on the
Contracts and Mortgage Loans actually acquired by the Trust.
SUBORDINATION FEATURES: Losses and Shortfalls on the Contracts and
Mortgage Loans will be allocated among the Certificates as described in the
Prospectus Supplement. [Except as otherwise specified in the Prospectus
Supplement, the Class __ Certificates are subordinated to the rights of the
Class __ Certificates for purposes of the allocation of Realized Losses on the
Contracts and Mortgage Loans, as described in the Prospectus Supplement.]
RESERVE FUNDS:
DISTRIBUTION DATES: Each Distribution Date shall be the [___] day of
each month, or if such day is not a business day, on the next succeeding
business day, commencing in _______________ 19__.
[REMIC ELECTION: An election will be made to treat some or all of the
assets of the Trust as a real estate mortgage investment conduit for federal
income tax purposes (the "REMIC"). The Classes _______ Certificates will be
designated as "regular interests" in the REMIC and the Class R Certificates will
be designated as the "residual interest" in the REMIC.]
PURCHASE PRICE: The Underwriter has agreed to purchase the Underwritten
Certificates from the Company for a purchase price of ___________% of the
initial aggregate principal amount thereof, plus accrued interest thereon from
___________, 19__. 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] [certificated,
A-2
fully-registered] form in minimum denominations of $_________ and integral
multiples of $_________ in excess thereof, except that one Certificate of each
Class of the Underwritten Certificates may be issued in a different
denomination.
FEES: It is understood that servicing fees will 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.
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on ___________,
19__, at the offices of Hunton & Xxxxxxxx, Riverfront Plaza, East Tower, 000
Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000-0000. [The Company will deliver the
Underwritten Certificates in certificated, fully-registered form at the offices
of the Underwriter in __________, ______________ on ______________, 19__.] [The
Company will deliver the Underwritten Securities in book-entry form only,
through the same-day funds settlement system of The Depository Trust Company on
the Closing Date.]
CONDITIONS:
ADDITIONAL CONDITIONS:
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriter
has the right to inspect the Contract Files [and] Trustee Mortgage Loan Files,
the related manufactured homes [and] mortgaged properties and the related loan
origination procedures 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 Underwriter 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.
SERIES TERM SHEETS, COLLATERAL TERM SHEETS, STRUCTURAL TERM SHEETS AND
COMPUTATIONAL MATERIALS: The Underwriter hereby represents and warrants that (i)
information provided by it and attached hereto as Exhibit A constitutes all
"Collateral Term Sheets" (that are required to be filed with the Commission
within two business days of first use under the terms of the Public Securities
Association letter) disseminated by it in connection with the Underwritten
Certificates, (ii) information provided by it and attached hereto as Exhibit B
constitutes all "Structural Term Sheets" and "Computational Materials"
disseminated by it in connection with the Underwritten Certificates and (iii)
information provided by it and attached hereto as Exhibit C constitutes all
"Series Term Sheets" disseminated by it in connection with the Underwritten
Certificates.
INFORMATION PROVIDED BY THE UNDERWRITER: It is understood and agreed
that the information (i) set forth under the heading "Underwriting" in the
Prospectus Supplement and the sentence regarding the Underwriter's intention to
establish a market in the Underwritten Certificates on the Cover Page of the
Prospectus Supplement, and (ii) classified as Collateral Terms Sheets,
Structural Terms Sheets or Computational Materials, is the only information
furnished by the Underwriter for inclusion in the Registration Statement and the
Final Prospectus.
TRUSTEE: _________________________ will act as Trustee of the Trust.
[CUSTODIAN:]
BLUE SKY QUALIFICAITONS: The Underwriter specifies no jurisdictions and
the parties do not
A-3
intend to qualify the Underwritten Securities in any jurisdiction.
STATE TAX OPINIONS:
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, if sent to the Underwriter, will be mailed, delivered or
telegraphed and confirmed to the Underwriter at
___________________________________, Attention: ______________.
REQUEST FOR OPINIONS: (a) The Company and DFC hereby request and
authorize Hunton & Xxxxxxxx, as their counsel in this transaction, to issue on
behalf of the Company and DFC, such legal opinions to the Underwriter, its
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 Underwriter hereby requests and authorizes
________________________________, as its special counsel in this transaction, to
issue on behalf of the Underwriter such legal opinions to the Company, DFC and
Hunton & Xxxxxxxx, as counsel to the Company and DFC, as may be required by any
and all documents, certificates or agreements executed in connection with this
Agreement.
A-4
The 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.
[NAME OF UNDERWRITER]
By:________________________
Name:
Title:
Accepted and Acknowledged
As of the Date First
Above Written:
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL CAPITAL I CORP.
By:_______________________
Name:
Title:
DEUTSCHE FINANCIAL CAPITAL LIMITED LIABILITY COMPANY
By: OAKWOOD ACCEPTANCE CORPORATION, member
By:
Name:
Title:
By: DEUTSCHE FINANCIAL SERVICES CORPORATION, member
By:
Name:
Title:
X-0
Xxxxxxx X-0
_____________, 19__
[Name and Address
of Underwriter(s)]
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates, Series
Ladies and Gentlemen:
We have acted as special counsel to Deutsche Financial Capital
Securitization LLC, a North Carolina limited liability company ("DFC"), in
connection with the formation by it of DFC Securitization Trust 199_-_ (the
"Trust"), which consists primarily of a pool of retail installment sales
contracts (the "Contracts") secured by units of manufactured housing
("Manufactured Homes") and mortgage loans (the "Mortgage Loans" and, together
with the Contracts, the "Assets") secured by first liens on the real estate to
which the related Manufactured Homes are deemed permanently affixed.
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of _____ 1, 199_, by and among DFC, Oakwood
Acceptance Corporation, as servicer of the Assets (the "Servicer"), and
______________, National Association, as trustee (the "Trustee"), which
incorporates by reference DFC's Standard Terms to Pooling and Servicing
Agreement (June 1997 Edition) (together with the Series Agreement, the "Pooling
and Servicing Agreement"). We also have acted as special counsel to OAC in
connection with its role as Servicer for the Trust and to Deutsche Financial
Capital Limited Liability Company, a North Carolina limited liability company
(the "Seller"), as seller of the Assets to DFC. Capitalized terms used herein
but not defined herein shall have the meanings assigned to them in the Pooling
and Servicing Agreement.
The Trust is issuing today _________ Classes of Senior/Subordinated
Pass-Through Certificates, Series 199_-_ (collectively, the "Certificates"),
which Classes are described in the Pooling and Servicing Agreement. 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, Class M
Certificates and Class B-1 Certificates (collectively, the "Offered
Certificates"), are being sold to you today pursuant to a terms agreement, dated
as of ________ __, 199_, among DFC, the Seller and each of you (the "Terms
Agreement"). This opinion is furnished to you in accordance with Section 6(d)(i)
of DFC's Underwriting Agreement Standard Provisions, June 1997 (the "Standard
Provisions"), the terms of which are incorporated by reference into the Terms
Agreement (the Terms Agreement together with the Standard Provisions being
referred to herein collectively as the "Underwriting Agreement").
In rendering the opinions expressed below, we have made such legal and
factual examinations and inquiries as we have deemed necessary or advisable for
the purpose of rendering this opinion, including but not limited to the
examination of the following:
a. DFC's registration statement on Form S-3 (No.
333-________), as amended (the
B1-1
[Name of Underwriter(s)]
____________,19___
Page 2
"Registration Statement"), filed under the Securities Act of 1933, as
amended (the "Act"), and the Prospectus, dated ____ __, 1997 (the "Base
Prospectus"), and the Prospectus Supplement, dated ____ __, 1997 (the
"Prospectus Supplement," and collectively with the Base Prospectus, the
"Prospectus"), all relating to the Offered Certificates;
b. The Pooling and Servicing Agreement;
c. The form of the Certificate evidencing each Class of the
Certificates;
d. The sales agreement, dated as of ____ 1, 199_ (the "Sales
Agreement"), between the Seller and DFC (and acknowledged and agreed to
by the Trustee and by PNC Mortgage Bank, National Association, as
custodian), pursuant to which DFC acquired the Assets;
e. The Guaranty, dated the date hereof, of each of Deutsche
Financial Services Corporation, a Nevada corporation (the "Deutsche
Guaranty"), and Oakwood Acceptance Corporation, a North Carolina
corporation (the "OAC Guaranty"), relating to the representations and
warranties made in the Sales Agreement;
f. The Underwriting Agreement (together with the Limited
Guarantee, the Sales Agreement and the Pooling and Servicing Agreement,
the "Agreements");
g. The Articles of Organization, Certificate of Existence and
Operating Agreement of each of DFC and the Seller;
h. The Articles of Incorporation, as amended, and Bylaws of
each of OAC and Deutsche Financial Capital I Corp. (the "Manager"), the
Manager of DFC, together with a certificate of existence from the State
of North Carolina with respect to each of OAC and the Manager; and
i. Actions by Unanimous Written Consent of the Boards of
Directors of OAC and the Manager, respectively, pertaining to the
transactions described herein.
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity and binding effect thereof
(other than the authorization, execution and delivery of documents by DFC, OAC,
the Manager and the Seller, and the validity and binding effect thereof upon
DFC, OAC, the Manager and the Seller, to the extent we express our opinion on
such subjects below).
In addition, we have relied, as to factual matters, upon
representations included in the Agreements and other agreements and documents
delivered at the closing, and upon certificates of officers of DFC, OAC, the
Manager, Seller and the Trustee, and upon certificates of public officials.
Whenever the phrase "to our knowledge" or "known to us" is used in this opinion
letter, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of DFC, OAC, the Manager
B1-2
[Name of Underwriter(s)]
____________,19___
Page 3
and the Seller in connection with the transactions described herein without
independent investigation.
The obligations of the parties with respect to the Agreements are
subject, with respect to their enforceability, to the provisions of federal and
other applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting the enforcement of creditors' rights generally,
now or hereafter in effect. Such obligations also are subject to usual equity
principles, which may limit enforcement under state law of certain remedies, but
which do not affect the validity of such documents. In addition, no opinion is
expressed as to the enforceability of any indemnification or contribution
provisions contained in the Agreements.
We do not purport to express an opinion on any laws other than those of
the States of North Carolina and New York and the United States of America. With
respect to the opinions expressed in numbered paragraphs 2 through 6 below, we
have, with your permission, relied upon the opinion of Xxxxx X. Xxxxxxxx,
General Counsel to OAC, dated the date hereof to you as to matters relating to
OAC covered by such opinions. With respect to the opinion expressed in numbered
paragraph 4 below with respect to the Deutsche Guaranty, we have assumed the due
authorization, execution and delivery by Deutsche Financial Services Corporation
of the Deutsche Guaranty.
With respect to the opinions expressed in numbered paragraphs 6(a) and
(b) of Part I of our opinion below, we have not examined Mortgage Loan Documents
relating to the Mortgage Loans, and we express no opinion concerning such
documents, including the conformity of any of the foregoing to the requirements
of the Agreements. We have assumed that (i) for purposes of North Carolina law,
the Mortgages are deeds of trust, (ii) the Mortgage Loan Documents do not
prohibit the mortgagee from assigning or otherwise transferring any or all of
its rights thereunder and (iii) the Mortgage Notes will be continuously in the
State of Illinois in the possession of the Custodian.
I.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all the assumptions and qualifications set forth herein, we are of
the opinion that:
1. Each of DFC and the Seller is a limited liability company
organized and existing under the laws of the State of North Carolina,
and has the entity power to own its properties and to enter into the
transactions contemplated by the Agreements to which it is a party.
2. Each of OAC and the Manager is a corporation incorporated
and existing under the laws of the State of North Carolina, and has the
corporate power to own its properties and to enter into the
transactions contemplated by the Agreements to which it is a party.
3. Each of DFC, OAC, the Seller and the Manager has taken all
necessary entity action to authorize its execution and delivery of and
performance under the Agreements to which it is a party, and each such
Agreement has been duly authorized, executed and delivered by each of
DFC, OAC, the Seller and the Manager, as the case may be.
4. The Sales Agreement constitutes the legal, valid and
binding obligations of each
B1-3
[Name of Underwriter(s)]
____________,19___
Page 4
of DFC and the Seller, as the case may be, enforceable against DFC and
the Seller, as the case may be, in accordance with its terms under
North Carolina law. The Pooling and Servicing Agreement constitutes the
legal, valid and binding obligations of each of DFC and OAC, as the
case may be, enforceable against DFC and OAC, as the case may be, in
accordance with its terms under New York law. The Deutsche Guaranty
constitutes the legal, valid and binding obligation of Deutsche
Financial Services Corporation, enforceable against it in accordance
with its terms under New York law. The OAC Guaranty constitutes the
legal, valid and binding obligation of Oakwood Acceptance Corporation,
enforceable against it in accordance with its terms under New York law.
5. To our knowledge, there is no investigation, action,
litigation or administrative proceeding of or before any court,
tribunal or governmental body currently pending or threatened against
DFC, OAC or the Seller (a) asserting the invalidity of the Agreements
or the Certificates, (b) seeking to prevent the consummation of any of
the transactions contemplated by the Agreements, (c) that would be
likely to impair materially the ability of DFC, OAC or the Seller, as
the case may be, to perform its obligations under any of the Agreements
or to affect materially and adversely the validity or enforceability of
any of the Agreements or the Certificates, or (d) that could reasonably
be expected to result in any material adverse change in the business,
operations, financial conditions, properties or assets of DFC, OAC or
the Seller, or the ability of DFC, OAC or the Seller to carry on its
business substantially as it is now conducted.
6. The execution, delivery and performance by each of DFC, OAC
and the Seller of the Agreements to which it is a party and the
transactions contemplated thereby will not (a) violate any provision of
the organizational documents of DFC, OAC or the Seller, or any existing
law or regulation, (b) to our knowledge, result in any breach of, or
constitute a default under, any order, judgment, writ, injunction or
decree of any court or governmental authority applicable to DFC, OAC or
the Seller, or (c) to our knowledge, conflict materially with or
constitute a material breach of, or a default under, any mortgage,
indenture, contract or other agreement to which DFC, OAC or the Seller
is a party or by which DFC, OAC or the Seller may be bound.
7. Upon due execution and authentication by the Trustee of
each Class of the Offered Certificates in accordance with the terms of
the Pooling and Servicing Agreement, and upon payment for the Offered
Certificates as provided for in the Underwriting Agreement, the Offered
Certificates will be validly issued and outstanding and the holders
thereof will be entitled to the benefits provided to Certificateholders
pursuant to the Pooling and Servicing Agreement.
8. (a) Assuming that the transfer of the Mortgage Notes and
the applicable Mortgages to the Trustee as contemplated by the Pooling
and Servicing Agreement is a sale and that the Mortgage Notes have been
duly endorsed and transferred to the Trustee as provided in the Sales
Agreement, the Trustee will obtain, under the laws of North Carolina,
all of the respective sellers' rights under the applicable Mortgages
(including whatever right the applicable sellers have to require the
trustee under the Mortgage to foreclose thereunder) when such Mortgage
Notes are delivered to the Trustee against payment therefor. In North
Carolina,
B1-4
[Name of Underwriter(s)]
____________,19___
Page 5
when a mortgagee assigns or negotiates a note secured by a deed of
trust to a third party, the deed of trust is also automatically
assigned. Accordingly, the laws of North Carolina do not require the
recordation of an assignment or similar instrument as to the Mortgages
in the official land records to transfer to the Trustee the rights of
the applicable sellers in, to and under the Mortgages.
(b) If the transfer to the Trustee of Mortgage Notes and
the applicable Mortgages is deemed to be a grant of a security interest
therein to the Trustee and assuming that the Mortgage Notes have been
duly endorsed and delivered to the Trustee as provided in the Sales
Agreement, execution and recordation of assignments or similar
instruments as to the Mortgages are not required under the laws of
North Carolina to create or perfect such a security interest in the
Mortgage Notes and assuming that the Mortgage Notes have been duly
endorsed and delivered to the Trustee as provided in the Sales
Agreement, the beneficiary's rights under the applicable Mortgages will
inure to the Trustee when the Trustee becomes the owner and holder of
the Mortgage Notes after proper realization upon the Trustee's security
interest in such Mortgage Notes.
9. No consent, approval, authorization or order of,
registration or filing with, or notice to, any court or governmental
agency or body or official is required under the laws of the United
States of America or the State of North Carolina that, in our
experience, are normally applicable to transactions of the type
contemplated by the Agreements, for the consummation by each of DFC,
OAC and the Seller of the transactions contemplated by the Agreements
to which it is a party, except such as may be required under state
securities or "blue sky" laws of any jurisdiction in connection with
the purchase and distribution by each Underwriter of the Offered
Certificates.
10. The Trust established pursuant to the Pooling and
Servicing Agreement is not required, as a result of the offer and sale
of the Offered Certificates as contemplated by the Underwriting
Agreement, to be registered under the Investment Company Act of 1940,
as amended.
11. The Registration Statement has become effective under the
Act, and, to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
12. The statements in the Base Prospectus under the captions
"Description of the Certificates," "The Pooling and Servicing
Agreements" and "ERISA Considerations," and the statements in the
Prospectus Supplement under the captions "The Trust," "Description of
the Offered Certificates" and "ERISA Considerations," insofar as such
statements constitute a summary of the documents referred to therein,
fairly summarize such documents and present the information called for
by the Act and the rules and regulations promulgated under the Act.
II.
We have participated in various conferences with the officers and
directors of DFC and its
B1-5
[Name of Underwriter(s)]
____________,19___
Page 6
independent certified public accountants. In some conferences you and your
counsel also participated. At those conferences, the contents of the
Registration Statement and Prospectus were discussed and revised. Since the
dates of those conferences, we have inquired of certain officers whether there
has been any material change in the affairs of DFC.
Because of the inherent limitations in the independent verification of
factual matters, and the character of determinations involved in the preparation
of registration statements under the Act, we are not passing upon, and do not
assume any responsibility for, and make no representation that we have
independently verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except as
specifically set forth in paragraph 12 of Part I of our opinion above. Also, we
do not express any opinion or belief as to the financial statements or other
financial or statistical information contained or incorporated by reference into
the Registration Statement. However, subject to the foregoing, on the basis of
our participation in the conferences referred to above and our examination of
the documents referred to herein, we advise you that: (a) in our opinion, the
Registration Statement, when it became effective, and the Prospectus, as of its
date and as of the date hereof (other than the financial statements, schedules
and other financial data included therein or excluded therefrom or included in
or excluded from the exhibits to the Registration Statement or incorporated
therein by reference, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules and
regulations promulgated thereunder; and (b) to our knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required. We note that
the Pooling and Servicing Agreement will be filed as an exhibit to a Current
Report of DFC on Form 8-K within 15 days after the date hereof. Further, nothing
has come to our attention that leads us to believe that the Registration
Statement, when it became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein not misleading; or that
the Prospectus, as of its date and as of the date hereof, contained or contains
any untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading; except that we make no statement with respect to the financial
statements or other financial or statistical data included therein or
incorporated therein by reference, including, but not limited to, the
information relating to the Assets, under the heading "The Asset Pool" and the
information relating to the Assets and financial data under the headings
"Maturity and Prepayment Considerations" and "Yield on the Offered Certificates"
in the Prospectus Supplement and the information set forth in the Prospectus
under the headings "Maturity and Prepayment Considerations" and "Yield
Considerations."
We consent to reliance on this opinion letter by you and by (i) the
Trustee, (ii) Fitch Investors Service, L.P. and Xxxxx'x Investors Service, Inc.,
each for the purpose of issuing a letter rating the Offered Certificates, and
(iii) Xxxxxxx Xxxxxxx & Xxxxxxxx, with respect to all matters of North Carolina
law covered hereby, for the purpose of rendering their opinion to the
Underwriters. Except as provided in the preceding sentence, this opinion letter
may not be relied upon by, nor may copies be delivered to, any person without
our prior written consent.
Very truly yours,
B1-6
[Name of Underwriter(s)]
__________ __, 19 __
Page 7
B1-7
Exhibit B-2
__________ __, 19__
[Name and Address
of Underwriter(s)]
[Name and Address
of Rating Agency]
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates, Series
Ladies and Gentlemen:
We have acted as special counsel to Deutsche Financial Capital
Securitization LLC, a North Carolina limited liability company (the "Issuer"),
in connection with the formation by it of DFCS Trust 19__-__ (the "Trust"), the
assets of which consist primarily of a pool of retail installment sales
contracts (the "Contracts") secured by units of manufactured housing
("Manufactured Homes") [and] mortgage loans (the "Mortgage Loans," and, together
with the Contracts, the "Assets") secured by first liens on one-to-four-family
residential real properties (the "Mortgaged Properties").
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of _________ __, 19__, by and among the
Issuer, Oakwood Acceptance Corporation ("OAC") in its capacity as servicer of
the Contracts (the "Servicer"), and _____________________________, as trustee
(the "Trustee"). The Series Agreement incorporates by reference the Issuer's
Standard Terms to Pooling and Servicing Agreement (June 1997 Edition) (the
"Standard Terms," and, together with the Series Agreement, the "Pooling and
Servicing Agreement"). We also have acted as special counsel to OAC in
connection with its role as Servicer for the Trust. Capitalized terms used
herein but not defined herein shall have the meanings assigned to them in the
Pooling and Servicing Agreement.
The Trust is issuing today [number] classes of certificates
(collectively, the "Certificates"), which Classes are described in the Pooling
and Servicing Agreement. The Classes ________________ Certificates (the
"Underwritten Certificates") are being sold to you today pursuant to a terms
agreement (the "Terms Agreement") dated ___________ __, 19__, among you (the
"Underwriter"), the Issuer and Deutsche Financial Capital Limited Liability
Company, a North Carolina limited liability company ("DFC"). This opinion is
furnished to you in accordance with Section 6(e) of the Issuer's Underwriting
Agreement Standard Provisions (June 1997) (the "Standard Provisions"), the terms
of which are incorporated by reference into the Terms Agreement (the Terms
Agreement together with the Standard Provisions being referred to collectively
as the "Underwriting Agreement").
In rendering the opinions expressed below, we have examined the
following documents:
B2-1
[Name of Underwriter(s)]
____________,19___
Page 2
(a) The Pooling and Servicing Agreement;
(b) The Sales Agreement, dated as of _____________ __, 19__
(the "Sales Agreement"), by and between DFC [OAC], as
seller, and the Issuer, as purchaser, pursuant to which
the Issuer acquired the Assets;
(c) Financing statements (the "Financing Statements") (1)
relating to the Contracts and the payments thereon and
proceeds thereof, naming [OAC] as debtor, DFC [OAC] as
secured party and the Issuer as assignee, (2) relating to
the Assets and the payments thereon and proceeds thereof,
naming DFC [OAC] as debtor, the Issuer as secured party
and the Trustee as assignee, and (3) relating to the
Assets and the payments thereon and proceeds thereof, the
Issuer's rights under the Sales Agreement and to the
[specify any reserve or other funds pledged or conveyed
to the Trustee by the Issuer], naming the Issuer as
debtor and the Trustee as secured party;
(d) The Underwriting Agreement (together with the Pooling and
Servicing Agreement and the Sales Agreement, the
"Agreements"); and
(e) The Purchase Agreement (the "Purchase Agreement"), dated
as of ____________ __, 19__, between the Issuer and
[Oakwood Financial Corporation, a Delaware corporation
("OFC")], pursuant to which [OFC] is purchasing the Class
________________ Certificates.
For the purposes of this opinion:
(i) the "North Carolina UCC" means the Uniform
Commercial Code as in effect in the State of
North Carolina;
(ii) "Money" means "money" as defined in Section
1-201 of the North Carolina UCC;
(iii) "Instruments" means "instruments" as defined
in Section 9-105(1)(i) of the North Carolina
UCC;
(iv) "General Intangibles" means "general
intangibles" as defined in Section 9-106 of
the North Carolina UCC; and
(v) "Chattel Paper" means "chattel paper" as
defined in Section 9-105(1)(b) of the North
Carolina UCC.
B2-2
[Name of Underwriter(s)]
____________,19___
Page 3
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity, binding effect and
enforceability thereof. We note that you have received today our opinion with
respect to certain of the matters set forth in clause (v) of the preceding
sentence. Whenever the phrase "to our knowledge" or "known to us" is used
herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of the Issuer, DFC and OAC in connection with the
transactions described herein without independent investigation.
We have not examined the actual Contracts [or] Mortgage Notes, the
assignments of the Contracts [or] the endorsements of the Mortgage Notes, any
Mortgages or assignments thereof or any other Contract Documents or Mortgage
Loan Documents (collectively, the "Asset Documents"), and we express no opinion
concerning the conformity of any of the foregoing to the requirements of any of
the Agreements. We have not examined the certificate of title, if any,
pertaining to the ownership or status of title to the property securing any
Contract and we express no opinion thereon. We also have not examined any title
records as they pertain to ownership or status of title to the Mortgaged
Property securing any Mortgage Note or the Real Property securing any Land
Secured Contract. [We call to your attention that the Initial Certification of
the Trustee delivered pursuant to Section 2.03(c)(1) of the Standard Terms
identifies certain document deficiencies with respect to the Mortgage Loan
Documents for certain Mortgage Loans. Consequently, certain assumptions made
herein regarding the conformity of the Asset Documents to the requirements of
any of the Agreements may not be true. We note that the Sales Agreement provides
that, in some but not all circumstances, DFC [OAC] is required to repurchase or
replace Assets to the extent of document deficiencies that are not cured.]
We have requested CSC Networks (formerly known as Prentice Hall Legal &
Financial Services) to review the UCC records maintained by the North Carolina
Secretary of State and the Register of Deeds of Guilford County, North Carolina
with respect to financing statements naming Oakwood Homes Corporation, [Oakwood
Mobile], or the Issuer, as debtor. Our opinion expressed in numbered paragraph 3
below is rendered in reliance upon the results of that search and upon a
certificate of officers of the respective companies relating thereto, dated the
date hereof (the "Officers' Certificate"), and is based upon the assumptions (i)
that no financing statements were filed against any of the aforementioned
companies as of the dates through which the respective related search reports
are current, which is no earlier than ____________ __, 19__, other than those
reflected in such search reports, and (ii) that no financing statements have
been filed against such companies since ______________ __, 19__. We assume no
liability for the search reports. Each of DFC [OAC] and the Issuer has
represented that the Assets formerly owned by it are subject to no liens, claims
or encumbrances having priority over the Trustee's lien thereon.
We do not purport to express an opinion on any laws other than those of
the State of North Carolina and the United States of America.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all other assumptions and
B2-3
[Name of Underwriter(s)]
____________,19___
Page 4
qualifications set forth herein, we are of the opinion that:
1. In the event that either the transfer of the Assets by DFC
[and OAC] to the Issuer or the transfer of the Assets by the Issuer to
the Trustee is found not to be a "true sale," (a) DFC [and OAC] (i) has
granted to the Issuer a valid security interest under Article 9 of the
North Carolina UCC in the Contracts and the Mortgage Notes, and in the
proceeds thereof to the extent provided in Section 9-306 of the North
Carolina UCC, and (ii) has assigned to the Issuer a security interest
in the Manufactured Homes, and (b) the Issuer (i) has either granted or
assigned to the Trustee a valid security interest under Article 9 of
the North Carolina UCC in the Contracts and the Mortgage Notes, and in
the proceeds thereof to the extent provided in Section 9-306 of the
North Carolina UCC, and (ii) has assigned to the Trustee a security
interest in the Manufactured Homes securing the Contracts.
[2. The Issuer has granted to the Trustee a valid security
interest in the Money and Instruments comprising the [specify any fund
pledged to the Trustee], and in the proceeds thereof to the extent
provided in Section 9-306 of the North Carolina UCC.]
3. The Financing Statements are in appropriate form for filing
in the office of the North Carolina Secretary of State and in the
office of the Register of Deeds of Guilford County, North Carolina, and
the due indexing of the Financing Statements among the UCC financing
statement records in the office of the North Carolina Secretary of
State and in the office of the Register of Deeds of Guilford County,
North Carolina will be sufficient to perfect the security interests
created by the Sales Agreement and by the Pooling and Servicing
Agreement in the Contracts and in the proceeds thereof (to the extent a
security interest in proceeds of the Contracts was created as provided
in Section 9-306 of the North Carolina UCC) [and in that portion of the
[specify any fund pledged by the Issuer to the Trustee] consisting of
those items and types of collateral a security interest in which may be
perfected by filing a financing statement under the North Carolina
UCC]. Upon perfection of the Issuer's security interest in the
Contracts and of the Trustee's security interest in the Contracts, no
other security interest will be equal or prior to the Trustee's
security interest in the Contracts and in the proceeds thereof to the
extent provided in Section 9-306 of the North Carolina UCC.
B2-4
[Name of Underwriter(s)]
____________,19___
Page 5
[4. Manufactured Homes located in Virginia, North Carolina and
South Carolina that do not become affixed to real estate are subject to
the Virginia Motor Vehicle Code, the North Carolina Motor Vehicle Code
and Chapter 19 of Title 56 of the Code of Laws of South Carolina,
respectively. As such, a security interest in a Manufactured Home
subject to the Virginia Motor Vehicle Code, the North Carolina Motor
Vehicle Code or Chapter 19 of Title 56 of the Code of Laws of South
Carolina generally is required to be noted on the certificate of title
for such Manufactured Home issued by the Virginia Department of Motor
Vehicles, the North Carolina Department of Motor Vehicles or the South
Carolina Department of Highways and Public Transportation,
respectively. [Based upon a representation from DFC [OAC] that each
certificate of title or application therefor relating to Manufactured
Homes located in Virginia, North Carolina or South Carolina lists DFC
[OAC] or the Trustee as the first secured party or first lienor, DFC
[OAC] or the Trustee has (or with respect to applications, will have
upon issuance of a certificate of title identifying DFC [OAC] or the
Trustee as first secured party or first lienor) a validly perfected
first priority security interest in each Manufactured Home located in
Virginia, North Carolina or South Carolina, and no other filing is
required in order to continue such perfection.] ]
[5. The security interest of the Trustee in the Mortgage Notes
and in those portions of the [specify any fund to be pledged by the
Issuer to the Trustee] that constitute Money or Instruments and in the
proceeds thereof (but only to the extent provided in Section 9-306 of
the [applicable] UCC) will be perfected upon the delivery of the
Mortgage Notes and such Money or Instruments to the Trustee. Upon such
delivery, no other security interest will be equal or prior to the
security interest of the Trustee in the Mortgage Notes and such Money
or Instruments. No opinion is expressed with respect to the continued
perfection of such security interest in the Mortgage Notes or such
Money or Instruments in the event that the Trustee relinquishes
possession thereof.]
Our opinions with respect to the security interests of the Trustee in
items of collateral other than the Manufactured Homes are subject to the
following qualifications:
(a) we call to your attention that a security interest in
proceeds is limited to the extent set forth in Section 9-306 of the
North Carolina UCC;
(b) we have assumed, based on the certifications contained in
the Officer's Certificate, that each item of collateral described
herein exists and that DFC [OAC] has sufficient rights in all such
collateral for the security interests therein granted to the Issuer
pursuant to the Sales Agreement to attach and that the Issuer has
sufficient rights in all such collateral for the security interests
therein granted or assigned pursuant to the Pooling and Servicing
Agreement to attach;
(c) we have assumed that payment for the Certificates has been
made in accordance with the Underwriting Agreement and the Purchase
Agreement and that payment for the Assets has been made in accordance
with the Sales Agreement;
B2-5
[Name of Underwriter(s)]
____________,19___
Page 6
(d) we have assumed that the Contracts are Chattel Paper under
the North Carolina UCC and the Mortgage Notes are Instruments as
defined in the North Carolina UCC (but excluding any Instrument
constituting a "certificated security" as defined in Section 8-102 of
the North Carolina UCC);
(e) we have assumed, based on the certifications in the
Officer's Certificate, that each Contract validly created a security
interest in DFC [OAC] in the underlying Manufactured Home, which
security interest attached;
(f) we have assumed (i) that payment for the Offered
Certificates has been made in accordance with the Underwriting
Agreement and (ii) that [Oakwood Financial Corporation (a Nevada
corporation) ("OFC")] has made payment for the [Class X and Class R]
Certificates to the Issuer in accordance with the agreement between the
Issuer and [OFC] providing for such purchase and that the [Class X and
Class R] Certificates have been executed and authenticated by the
Trustee and delivered to [OFC] or its designee;
(g) we have assumed that each Contract is in one of the forms
supplied by DFC [OAC] in the Officers' Certificate, in which case the
Contracts are Chattel Paper under the North Carolina UCC;
(h) we have assumed, based upon the certifications in the
Officer's Certificate, the due execution of each endorsement of each
Mortgage Note, of an assignment or assignments of the Contracts and of
an assignment in recordable form of each Mortgage (an "Assignment"), in
each case from the originators thereof through any intervening
endorsees or assignees to the Issuer and the validity of each such
endorsement and assignment under relevant state law;
(i) we have assumed that, to the extent required by applicable
state law, each Assignment of a Mortgage securing a Mortgage Loan
necessary to reflect the transfer of such Mortgage from the related
originator to the Trustee has been duly recorded in the proper
recording office subject to no intervening recordations prior to the
date of recordation of such Assignment. We note that Section _______ of
the Standard Terms requires that the Issuer arrange for the recordation
of such Assignments promptly following closing and, in any event,
within one year after the Closing Date;
(j) we call to your attention that Section 552 of Title 11 of
the United States Code (the "Bankruptcy Code") limits the extent to
which property acquired by a debtor after the commencement of a
proceeding under the Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the debtor
before the commencement of such a proceeding;
(k) we have assumed that any collateral subject to a security
interest that is perfected by delivery to or possession by the Trustee
is, and will be continuously, located in the [state where Trustee is
holding such collateral] and in the possession of the Trustee; we call
to your attention that the perfection and the effect of perfection and
non-perfection of the security interest of the Trustee may be governed
by laws other than the laws of such state to the extent that collateral
becomes located in a jurisdiction other than such state;
B2-6
[Name of Underwriter(s)]
____________,19___
Page 7
(l) we have assumed, based on Section 204 of the Standard
Terms, that the Trustee has not received any notice as to any security
interest in the Contracts or Mortgage Notes [specify any fund pledged
to the Trustee], other than a notice with respect to the security
interest of the Trustee;
(m) we have assumed based on the certifications in the
Officer's Certificate, that each Mortgage Note is evidenced by only one
original document; and
(n) we have assumed based on the certifications in the
Officer's Certificate, that there are no agreements or understandings
among the Issuer, DFC, the Trustee, the Servicer or any other party
which would modify, release, terminate or delay the attachment of the
security interest granted to the Trustee under the Pooling and
Servicing Agreement.
As to factual matters, we have relied upon representations included in
the Agreements, in documents delivered at the closing, upon certificates of
officers of OAC, the Issuer, DFC and the Trustee, and upon certificates of
public officials. Without limiting the foregoing, we have relied upon
representations and warranties in the Agreements or upon certificates of OAC,
the Issuer, DFC or the Trustee:
(a) that DFC [OAC] has the full right to sell each Asset to
the Issuer and that the Issuer has the full right to sell each Asset to
the Trustee, and that, upon authorization, execution and delivery of
the Sales Agreement by all parties thereto, the Issuer will be the sole
beneficial owner of each Asset free and clear of liens, encumbrances
(except the lien created by the Pooling and Servicing Agreement), and
that the Issuer has not assigned any interest or participation in any
Asset other than to the Trustee that has not been released;
(b) that each Asset was acquired by each of DFC, [OAC,] the
Issuer and the Trustee in the ordinary course of their respective
businesses, in good faith, for value and without notice that it is
overdue or has been dishonored or of any defense against or claim to it
on the part of any person;
(c) as to the absence of any actual or constructive knowledge
or notice by DFC, [OAC,] the Issuer or the Trustee of any interest
contrary to the Trustee's interests under the Pooling and Servicing
Agreement;
(d) that the Trustee is not an affiliate of the Issuer; and
(e) that the Obligor's debt evidenced by any Contract is not
separately evidenced by any promissory note or other Instrument.
We do not express any opinion as to:
B2-7
[Name of Underwriter(s)]
____________,19___
Page 8
(1) the priority of any security interest as against any claim
or lien in favor of the United States or any State or any agency or
instrumentality of the United States or any State (including, without
limitation, federal tax liens, liens under the Employee Retirement
Income Security Act of 1974, as amended, or claims given priority
pursuant to 31 U.S.C. 3713);
(2) the priority of any security interest as against any
liens, claims, or other interests that arise by operation of law and do
not require any filing or similar action in order to take priority over
a prior perfected security interest under the UCC of any relevant
jurisdiction;
(3) the priority of any security interest as against the
rights of any purchaser of any of the Assets who gives new value for
and takes possession of such Assets in the ordinary course of his
business without knowledge that any such Asset is subject to a security
interest as described in Section 9-308 of the North Carolina UCC or
against a purchaser of any of the Assets (including a secured party)
who could be afforded priority under Section 9-309 of the North
Carolina UCC;
(4) the priority of any security interest as against a lien
creditor (as defined in Section 9-301(3) of the North Carolina UCC) who
attached or levied prior to the perfection of the security interest of
the Trustee;
(5) the priority of any security interest as against a lien
creditor to the extent the security interest purports to secure future
advances or other extensions of credit subsequent to the date hereof
other than advances made pursuant to commitments existing on the date
of attachment by such lien creditor;
(6) the priority of any security interest in collateral
constituting proceeds of collateral subject to a third party's security
interest;
(7) the priority of any security interest as against another
secured party in possession of the related collateral prior to the
perfection of the Trustee's security interest through filing of the
Financing Statements;
(8) the priority of any security interest as against a
security interest perfected (i) without possession pursuant to Sections
8-313(1)(i) and 8-321 of the North Carolina UCC or Sections 9-304(4) or
(5) of the North Carolina UCC or (ii) without filing pursuant to
Sections 9-304(4) or (5) of the North Carolina UCC;
(9) the priority of any security interest as against a
purchase money security interest that could be perfected without
possession pursuant to Section 8-313(1)(h) of the North Carolina UCC or
that could be afforded priority under Section 9-312(4) of the North
Carolina UCC;
(10) the priority of any security interest as against the
rights of any person against whom the transfer to DFC, [OAC,] the
Issuer or the Trustee was "wrongful" within the meaning of Section
8-315 of the North Carolina UCC;
B2-8
[Name of Underwriter(s)]
____________,19___
Page 9
(11) the priority of any security interest as against a
security interest perfected under the laws of another jurisdiction to
the extent the collateral subject to such security interest was located
in such jurisdiction within four months prior to the perfection of the
security interest of the Issuer or the Trustee;
(12) the priority of any security interest as against any
person who has entered into a subordination agreement or intercreditor
agreement with the Issuer or the Trustee with respect to any of the
collateral covered by the opinions set forth above; and
(13) whether or to what extent particular items included in
the [specify any fund pledged to Trustee] may constitute Money or
Instruments.
With respect to the Financing Statements, we call your attention to the
fact that the effectiveness of the Financing Statements will terminate (i)
unless appropriate continuation statements are filed within the time period
prescribed by relevant state law; (ii) with respect to collateral acquired more
than four months after any name change by the debtor, unless new appropriate
financing statements indicating the new name of the debtor are properly filed
before the expiration of four months after the debtor changes its name; and
(iii) four months after any relocation by the debtor of its chief executive
office or principal place of business to a new jurisdiction, unless such
security interest is perfected in such new jurisdiction within such time.
[We do not purport to express an opinion on any laws other than those
of the Commonwealth of Virginia, the State of North Carolina and the United
States of America, except to the extent that the opinion expressed in numbered
paragraph 4 above relates to matters of South Carolina law.]
We consent to reliance on this opinion letter by you and by (i) the
Trustee and (ii) [Underwriters' counsel], with respect to all matters of North
Carolina, South Carolina and Virginia law covered hereby, for the purpose of
rendering their opinion to the Underwriters. Except as provided in the preceding
sentence, this opinion letter is for your benefit only and may not be relied
upon by, nor may copies be delivered to, any other person without our prior
written consent.
Very truly yours,
B2-9
