Exhibit 1.2
EXECUTION
DEUTSCHE RECREATIONAL ASSET FUNDING CORPORATION
DISTRIBUTION FINANCIAL SERVICES MARINE TRUST 1999-2
Asset Backed Securities
TERMS AGREEMENT
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May 20, 1999
To: Deutsche Recreational Asset Funding Corporation, as Depositor under the
Trust Agreement dated as of May 1, 1999 (the "Trust Agreement").
Re: Underwriting Agreement dated March 12, 1999 (the "Standard Terms," and
together with this Terms Agreement, the "Agreement").
Series Designation: Series 1999-2.
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Terms of the Series 1999-2 Securities: Distribution Financial Services
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Marine Trust 1999-2 Asset Backed Notes, Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class B, and Class C Notes (the "Securities") will evidence
beneficial ownership interest in a pool of Receivables having the
characteristics described in the Prospectus Supplement dated the date hereof.
Only the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class B, and
Class C Notes (collectively, the "Offered Securities") are being sold pursuant
to the terms hereof.
Registration Statement: File Number 333-56303.
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Certificate Ratings: It is a condition of Closing that at the Closing Date
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the Class A-1, Class A-2, Class A-3, Class A-4, and Class A-5 Securities be
rated "AAA" by Standard & Poor's Ratings Services, a division of the McGraw-Hill
Companies, Inc. ("S&P") and by Fitch IBCA, Inc. ("Fitch") and "Aaa" by Moody's
Investors Service ("Moody's"); that the Class B Securities be rated "A" by S&P
and by Fitch and "A2" by Moody's; and that the Class C Securities be rated "BBB"
by S&P and by Fitch and "Baa3" by Moody's.
Terms of Sale of Offered Securities: The Depositor agrees to sell to
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Deutsche Bank Securities Inc., Chase Securities Inc. and Morgan Stanley & Co.
Incorporated (the "Underwriters") and Deutsche Bank Securities Inc., Chase
Securities Inc. and Morgan Stanley & Co. Incorporated each agree, severally and
not jointly, to purchase from the Depositor the
Offered Securities in the principal amounts and prices set forth beneath their
respective names on Schedule 1. The purchase price for each class of the Offered
Securities shall be the applicable Purchase Price Percentage set forth in
Schedule 1 multiplied by the applicable principal amount.
Cut-off Date: May 1, 1999.
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Closing Date: 10:00 A.M., New York time, on or about May 27, 1999. On the
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Closing Date, the Depositor will deliver the Offered Securities to the
Underwriters against payment therefor.
Underwriter-Provided Information: The Depositor and DFS each acknowledge
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and agree that the information set forth in (i) the table immediately following
the first paragraph under the caption "Underwriting" in the Prospectus
Supplement dated May 20, 1999, (ii) the second and third paragraphs under such
caption in such Prospectus Supplement and (iii) the table immediately following
the third paragraph under such caption in such Prospectus Supplement, as such
information relates to the Securities, constitute the only information furnished
in writing by or on behalf of the Underwriters for inclusion in the Registration
Statement, the Prospectus or the Prospectus Supplement, and the Underwriters
confirm that such statements are correct.
Incorporation of the Standard Terms: Each of the provisions of the
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Standard Terms is incorporated herein by reference in its entirety and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein and each of the representations and
warranties set forth therein shall be deemed to have been made on and as of the
date of this Terms Agreement, and the Standard Terms and this Terms Agreement
shall be construed as, together, one and the same agreement. Without limiting
the foregoing, Sections 14 through 17 of the Standard Terms are incorporated
herein by reference in their entirety.
2
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the undersigned a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
Underwriters, Deutsche Recreational Asset Funding Corporation and Deutsche
Financial Services Corporation.
Very truly yours,
DEUTSCHE BANK SECURITIES INC.
By: /s/ James Rothman
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Name: James Rothman
Title: Vice President
By: /s/ David Bondy
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Name: David Bondy
Title: Director
Acting on behalf of itself and as the Representative
of the Underwriters named herein.
Accepted in New York, New York,
as of the date hereof:
DEUTSCHE RECREATIONAL ASSET FUNDING
CORPORATION
By: /s/ Richard C. Goldman
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Name: Richard C. Goldman
Title: Vice President
By: /s/ Richard H. Schumacher
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Name: Richard H. Schumacher
Title: Vice President
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Richard C. Goldman
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Name: Richard C. Goldman
Title: Senior Vice President
By: /s/ Richard H. Schumacher
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Name: Richard H. Schumacher
Title: Senior Vice President
Schedule 1
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Approximate Approximate Approximate
Amount Amount Amount Purchased by
Initial Purchase Purchased by Purchased by Morgan
Interest Principal Price Deutsche Bank Chase Securities Stanley & Co.
Class Rate Amount (1) Percentage Securities Inc. Inc. Incorporated
------ -------- --------------- ----------- --------------- --------------- -------------------
Class A-1 5.5000% $211,098,000.00 99.848165% $70,366,000.00 $70,366,000.00 $70,366,000.00
Class A-2 5.9800 55,567,000.00 99.794818 18,522,333.33 18,522,333.33 18,522,333.33
Class A-3 6.2000 108,129,000.00 99.738729 36,043,000.00 36,043,000.00 36,043,000.00
Class A-4 6.4800 66,207,000.00 99.678057 22,069,000.00 22,069,000.00 22,069,000.00
Class A-5 6.6656 53,999,000.00 99.650000 17,999,666.67 17,999,666.67 17,999,666.67
Class B 6.9300 33,000,000.00 99.521664 11,000,000.00 11,000,000.00 11,000,000.00
Class C 7.6100 22,000,000.00 99.337069 7,333,333.33 7,333,333.33 7,333,333.33
Total $550,000,000.00
(1) Approximate.