Exhibit 4.2
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DEUTSCHE FLOORPLAN RECEIVABLES, L.P.
Seller
DEUTSCHE FINANCIAL SERVICES CORPORATION
Servicer
and
[ ]
Trustee
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SERIES [ ] SUPPLEMENT
Dated as of [ ]
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2000
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DISTRIBUTION FINANCIAL SERVICES FLOORPLAN MASTER TRUST
SERIES [ ]
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TABLE OF CONTENTS
PAGE
ARTICLE I
Creation of the Series [ ] Certificates
SECTION 1.1 Designation................................................................ 1
ARTICLE II
Definitions
SECTION 2.1 Definitions................................................................ 1
ARTICLE III
Servicing Fee
SECTION 3.1 Servicing Compensation..................................................... 14
ARTICLE IV
Rights of Series [ ] Certificateholders and
Allocation and Application of Collections
SECTION 4.1 Allocations; Payments to Seller............................................ 16
SECTION 4.2 Monthly Interest; Determination of Certificate Rate........................ 16
SECTION 4.3 Determination of Monthly Principal......................................... 17
SECTION 4.4 Establishment of Reserve Fund and Funding Accounts......................... 18
SECTION 4.5 Deficiency Amount.......................................................... 21
SECTION 4.6 Application of Investor Non-Principal Collections, Investment Proceeds,
Servicer Advances and Available Investor Principal Collections............. 21
SECTION 4.7 Distributions to Series [ ] Certificateholders............................ 24
SECTION 4.8 Application of Reserve Fund................................................ 26
SECTION 4.9 Investor Charge-Offs....................................................... 26
SECTION 4.10 Excess Servicing........................................................... 27
SECTION 4.11 Excess Principal Collections............................................... 27
SECTION 4.12 Excess Funding Account..................................................... 27
SECTION 4.13 Yield Supplement Account................................................... 29
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ARTICLE V
Distribution and Reports to
Series [ ] Certificateholders
SECTION 5.1 Distributions.............................................................. 29
SECTION 5.2 Reports and Statements to Series [ ] Certificateholders................... 30
ARTICLE VI
Early Amortization Events
SECTION 6.1 Additional Early Amortization Events....................................... 30
ARTICLE VII
Optional Repurchase
SECTION 7.1 Optional Repurchase........................................................ 32
ARTICLE VIII
Final Distributions
SECTION 8.1 Sale of Certificateholders' Interest Pursuant to Section 2.3 of the
Agreement; Distributions Pursuant to Section 7.1 of this Series
Supplement or Section 2.3 or 12.2(c) of the Agreement...................... 32
SECTION 8.2 Distribution of Proceeds of Sale, Disposition or Liquidation of the
Receivables Pursuant to Section 9.2 of the Agreement....................... 34
ARTICLE IX
Miscellaneous Provisions
SECTION 9.1 Securities Law Filings..................................................... 34
SECTION 9.2 Ratification of Agreement.................................................. 34
SECTION 9.3 Counterparts............................................................... 35
SECTION 9.4 Governing Law.............................................................. 35
SECTION 9.5 Limitation of Class C Certificates......................................... 35
SECTION 9.6 The Trustee; Paying Agent; Transfer Agent and Registrar.................... 39
SECTION 9.7 Instructions in Writing.................................................... 39
SECTION 9.8 Initial Funding of Reserve Fund............................................ 39
SECTION 9.9 Severability; Certificate Rate Limitation.................................. 39
SECTION 9.10 Headings................................................................... 40
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SECTION 9.11 Certain Matters Relating to Luxembourg Stock Exchange Listing.............. 40
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EXHIBITS
Exhibit A Form of Certificate
Exhibit B Distribution Date Statement
Exhibit C Form of Representation Letter
SCHEDULES
Schedule 1 Accounts
Schedule 2 Initial Principal Amounts of Certificates
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SERIES [ ] SUPPLEMENT dated as of [ ] (this "Series Supplement"), among
DEUTSCHE FLOORPLAN RECEIVABLES, L.P., a Delaware limited partnership, as Seller,
DEUTSCHE FINANCIAL SERVICES CORPORATION, a Nevada corporation, as Servicer, and
[ ], a [ ], as Trustee.
Pursuant to Section 6.3 of the Amended and Restated Pooling and Servicing
Agreement, dated as of April 1, 2000 (the "Agreement"), among the Seller, the
Servicer and the Trustee, the Seller may from time to time direct the Trustee to
issue, on behalf of the Trust, one or more new Series of Investor Certificates.
Pursuant to this Series Supplement, the Seller and the Trustee shall
create a new Series of Investor Certificates and specify the Principal Terms
thereof.
ARTICLE I
Creation of the Series [ ] Certificates
SECTION 1.1 Designation. (a) There is hereby created a Series of Investor
Certificates to be issued pursuant to the Agreement and this Series Supplement
to be known as the "Floating Rate Asset Backed Certificates, Series [ ]" or the
"Series [ ] Certificates", which shall consist of three Classes to be known,
respectively, as the "Floating Rate Asset Backed Certificates, Series [ ], Class
A," "Floating Rate Asset Backed Certificates, Series [ ], Class B" and "Floating
Rate Asset Backed Certificates, Series [ ], Class C."
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
ARTICLE II
Definitions
SECTION 2.1 Definitions. (a) Whenever used in this Series Supplement the
following words and phrases shall have the following meanings:
"Accumulation Period" shall mean, unless an Early Amortization Event shall
have occurred prior thereto (other than an Early Amortization Event which has
resulted in an Early Amortization Period which has ended as described in clause
(c) of the definition of Early Amortization Period in the Agreement), the period
commencing on the Accumulation Period Commencement Date and ending upon the
earlier of (a) the commencement of an Early Amortization Period and (b) the
Expected Final Payment Date.
"Accumulation Period Commencement Date" shall mean the first day of the
calendar month which is the fourth calendar month prior to the calendar month in
which the Expected Final Payment
Date occurs; provided, however, that upon written notice to the Trustee, the
Servicer may elect to postpone the Accumulation Period Commencement Date so that
the number of months included in the Accumulation Period shall equal or exceed
the Accumulation Period Length; provided further, however, that such election
shall only be permitted if the Accumulation Period Length is less than four
months; provided further, however, that the Accumulation Period Commencement
Date shall not be postponed beyond the first day of the calendar month which is
the second calendar month prior to the calendar month in which the Expected
Final Payment Date occurs.
"Accumulation Period Length" shall mean, as determined by the Servicer on
each Determination Date, beginning with the Determination Date occurring in the
calendar month which is the fifth calendar month prior to the calendar month in
which the Expected Final Payment Date occurs, the number of calendar months that
the Servicer expects to be required so that sufficient funds are on deposit in
the Principal Funding Account no later than the Expected Final Payment Date to
pay the outstanding principal balances of the Certificates, based on (a) the
expected monthly collections of Principal Receivables expected to be
distributable to the Series [ ] Certificateholders assuming a principal payment
rate no greater than the lowest Monthly Payment Rate on the Receivables for the
preceding three months, so that, for example, if the lowest Monthly Payment Rate
for that preceding three month period is 50% or more, the number of calendar
months required would be two; if the lowest Monthly Payment Rate for that
preceding three month period is between 33.33% and 50%, the number of calendar
months required would be three; and if the lowest Monthly Payment Rate for that
preceding three month period is between 25% and 33.33%, the number of calendar
months required would be four; and (b) the amount of principal expected to be
distributable to Investor Certificateholders of other Series which are expected
to be in their accumulation or amortization periods during the Accumulation
Period.
"Additional Early Amortization Event" shall have the meaning specified in
Section 6.1.
"Additional Interest" shall mean the sum of the Class A Additional
Interest, the Class B Additional Interest and the Class C Additional Interest.
"Adjustment Date" shall mean, with respect to any Interest Period, the
second London Business Day preceding such Interest Period; provided that with
respect to the first Interest Period, the Adjustment Date shall be [ ].
"Allocable Miscellaneous Payments" shall mean, with respect to any
Distribution Date, the product of (a) a fraction, the numerator of which is the
Series [ ] Allocation Percentage for the related Collection Period and the
denominator of which is the sum of the series allocation percentages for all
Series not in their revolving periods, and (b) Miscellaneous Payments with
respect to the related Collection Period.
"Available Investor Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) an amount equal to Investor Principal
Collections for such Distribution Date, (b) Allocable Miscellaneous Payments
with respect to such Distribution Date, (c) any funds remaining in the Yield
Supplement Account at the beginning of the Accumulation Period or upon the
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occurrence of an Early Amortization Event and (d) on the Termination Date, any
funds in the Reserve Fund after giving effect to Section 4.8.
"Carry-over Amount" shall mean the sum of the Class A Carry-over Amount,
the Class B Carry-over Amount and the Class C Carry-over Amount.
"Certificate Rate" means any of the Class A Certificate Rate, the Class B
Certificate Rate or the Class C Certificate Rate.
"Certificateholders" shall mean, collectively, the Class A
Certificateholders, the Class B Certificateholders and the Class C
Certificateholders.
"Certificateholders' Monthly Servicing Fee" shall have the meaning
specified in Section 3.1.
"Certificates" shall mean, collectively, the Class A Certificates, the
Class B Certificates and the Class C Certificates.
"Class A Additional Interest" shall have the meaning specified in Section
4.2(a).
"Class A Carry-over Amount" shall mean, with respect to a Distribution
Date an amount equal to the excess, if any, of (a) the amount equal to the Class
A Monthly Interest for such Distribution Date calculated as if the Class A
Certificate Rate for such Distribution Date were based on LIBOR rather than the
Net Receivables Rate, over (b) the actual Class A Monthly Interest for such
Distribution Date.
"Class A Carry-over Amount Additional Interest" for a Distribution Date
shall mean an amount equal to the product of:
(a) the Class A Certificate Rate for the Interest Period then ended;
(b) a fraction, the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360; and
(c) any unpaid Class A Carry-over Amount, if any, for the previous
Distribution Date.
"Class A Certificate Rate" shall mean, for an Interest Period and the
Distribution Date immediately following such Interest Period, a rate per annum
equal to the lesser of (i) LIBOR plus [ ] per annum and (ii) the related Net
Receivables Rate.
"Class A Certificateholders" shall mean the Holders of Class A
Certificates.
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"Class A Certificates" shall mean any one of the "Floating Rate Asset
Backed Certificates, Series [ ], Class A" executed by the Seller and
authenticated by the Trustee, substantially in the form of Exhibit A.
"Class A Initial Invested Amount" shall mean, for any date, the initial
principal amount of the Class A Certificates, which is set forth in Schedule 2,
plus (x) the product of (i) the Class A Percentage multiplied by (ii) the amount
of any withdrawals from the Excess Funding Account in connection with an
increase in Pool Balance since the Closing Date, minus (y) the product of (i)
the Class A Percentage multiplied by (ii) the amount of any additions to the
Excess Funding Account in connection with a reduction in the Pool Balance since
the Closing Date.
"Class A Interest Shortfall" shall have the meaning specified in Section
4.2(a).
"Class A Invested Amount" shall mean, for any date, an amount equal to the
result of (i) the Class A Initial Invested Amount, minus (ii) the aggregate
amount of principal payments made to Class A Certificateholders prior to such
date, minus (iii) the aggregate amount of all unreimbursed Class A Investor
Charge-Offs; provided that the Class A Invested Amount shall not be less than
zero.
"Class A Investor Charge-Off" shall have the meaning specified in Section
4.9.
"Class A Monthly Interest" on any Distribution Date shall be an amount
equal to the product of (i) the Class A Certificate Rate, (ii) a fraction the
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, and (iii) (A) the outstanding principal
balance of the Class A Certificates as of the close of business on the preceding
Distribution Date (after giving effect to all repayments of principal made to
Class A Certificateholders on such preceding Distribution Date, if any) or (B)
in the case of the first Distribution Date with respect to Series [ ], the
initial principal amount of the Class A Certificates as set forth in Schedule 2.
"Class A Percentage" shall mean the percentage equivalent of a fraction,
the numerator of which is the outstanding principal balance of the Class A
Certificates and the denominator of which is the outstanding principal balance
of all Certificates.
"Class A Pool Factor" shall mean, with respect to any Determination Date,
a number carried out to eleven decimals representing the ratio of the
outstanding principal balance of the Class A Certificates as of such
Determination Date (determined after taking into account any reduction in the
outstanding principal balance of the Class A Certificates which shall occur on
the following Distribution Date) to the initial principal balance of the Class A
Certificates.
"Class B Additional Interest" shall have the meaning specified in Section
4.2(a).
"Class B Carry-over Amount" shall mean, with respect to a Distribution
Date, an amount equal to the excess, if any, of (a) the amount equal to the
Class B Monthly Interest for such Distribution Date calculated as if the Class B
Certificate Rate for such Distribution Date were based
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on LIBOR rather than the Net Receivables Rate, over (b) the actual Class B
Monthly Interest for such Distribution Date.
"Class B Carry-over Amount Additional Interest" for a Distribution Date
shall mean an amount equal to the product of:
(a) the Class B Certificate Rate for the Interest Period then ended;
(b) a fraction, the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360; and
(c) any unpaid Class B Carry-over Amount, if any, for the previous
Distribution Date.
"Class B Certificate Rate" shall mean, for an Interest Period and the
Distribution Date immediately following such Interest Period, a rate per annum
equal to the lesser of (i) LIBOR plus [ ] per annum and (ii) the related Net
Receivables Rate.
"Class B Certificateholders" shall mean the Holders of Class B
Certificates.
"Class B Certificates" shall mean any one of the "Floating Rate Asset
Backed Certificates, Series [ ], Class B" executed by the Seller and
authenticated by the Trustee, substantially in the form of Exhibit A.
"Class B Initial Invested Amount" shall mean, for any date, the initial
principal amount of the Class B Certificates, which is set forth in Schedule 2,
plus (x) the product of (i) the Class B Percentage multiplied by (ii) the amount
of any withdrawals from the Excess Funding Account in connection with an
increase in Pool Balance since the Closing Date, minus (y) the product of (i)
the Class B Percentage multiplied by (ii) the amount of any additions to the
Excess Funding Account in connection with a reduction in the Pool Balance since
the Closing Date.
"Class B Interest Shortfall" shall have the meaning specified in Section
4.2(a).
"Class B Invested Amount" shall mean, for any date, an amount equal to the
result of (i) the Class B Initial Invested Amount, minus (ii) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (iii) the aggregate amount of all unreimbursed Class B Investor
Charge-Offs; provided that the Class B Invested Amount shall not be less than
zero.
"Class B Investor Charge-Off" shall have the meaning specified in Section
4.9.
"Class B Monthly Interest" on any Distribution Date shall be an amount
equal to the product of (i) the Class B Certificate Rate, (ii) a fraction the
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, and (iii) (A) the outstanding
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principal balance of the Class B Certificates as of the close of business on the
preceding Distribution Date (after giving effect to all repayments of principal
made to Class B Certificateholders on such preceding Distribution Date, if any)
or (B) in the case of the first Distribution Date with respect to Series [ ],
the initial principal amount of the Class B Certificates as set forth in
Schedule 2.
"Class B Percentage" shall mean the percentage equivalent of a fraction,
the numerator of which is the outstanding principal balance of the Class B
Certificates and the denominator of which is the outstanding principal balance
of all Certificates.
"Class B Pool Factor" shall mean, with respect to any Determination Date,
a number carried out to eleven decimals representing the ratio of the
outstanding principal balance of the Class B Certificates as of such
Determination Date (determined after taking into account any reduction in the
outstanding principal balance of the Class B Certificates which shall occur on
the following Distribution Date) to the initial principal balance of the Class B
Certificates.
"Class C Additional Interest" shall have the meaning specified in Section
4.2(a).
"Class C Carry-over Amount" shall mean, with respect to a Distribution
Date, an amount equal to the excess, if any, of (a) the amount equal to the
Class C Monthly Interest for such Distribution Date calculated as if the Class C
Certificate Rate for such Distribution Date were based on LIBOR rather than the
Net Receivables Rate, over (b) the actual Class C Monthly Interest for such
Distribution Date.
"Class C Carry-over Amount Additional Interest" for a Distribution Date
shall mean an amount equal to the product of:
(a) the Class C Certificate Rate for the Interest Period then ended;
(b) a fraction, the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360; and
(c) any unpaid Class C Carry-over Amount, if any, for the previous
Distribution Date.
"Class C Certificate Rate" shall mean, for an Interest Period and the
Distribution Date immediately following such Interest Period, a rate per annum
equal to the lesser of (i) LIBOR plus [ ] per annum and (ii) the related Net
Receivables Rate.
"Class C Certificateholders" shall mean the Holders of Class C
Certificates.
"Class C Certificates" shall mean any one of the "Floating Rate Asset
Backed Certificates, Series [ ], Class C" executed by the Seller and
authenticated by the Trustee, substantially in the form of Exhibit A.
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"Class C Initial Invested Amount" shall mean, for any date, the initial
principal amount of the Class C Certificates, which is set forth in Schedule 2,
plus (x) the product of (i) the Class C Percentage multiplied by (ii) the amount
of any withdrawals from the Excess Funding Account in connection with an
increase in Pool Balance since the Closing Date, minus (y) the product of (i)
the Class C Percentage multiplied by (ii) the amount of any additions to the
Excess Funding Account in connection with a reduction in the Pool Balance since
the Closing Date.
"Class C Interest Shortfall" shall have the meaning specified in Section
4.2(a).
"Class C Invested Amount" shall mean, for any date, an amount equal to the
result of (i) the Class C Initial Invested Amount, minus (ii) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (iii) the aggregate amount of all unreimbursed Class C Investor
Charge-Offs; provided that the Class C Invested Amount shall not be less than
zero.
"Class C Investor Charge-Off" shall have the meaning specified in Section
4.9.
"Class C Monthly Interest" on any Distribution Date shall be an amount
equal to the product of (i) the Class C Certificate Rate, (ii) a fraction the
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, and (iii) (A) the outstanding principal
balance of the Class C Certificates as of the close of business on the preceding
Distribution Date (after giving effect to all repayments of principal made to
Class C Certificateholders on such preceding Distribution Date, if any) or (B)
in the case of the first Distribution Date with respect to Series [ ], the
initial principal amount of the Class C Certificates as set forth in Schedule 2.
"Class C Percentage" shall mean the percentage equivalent of a fraction,
the numerator of which is the outstanding principal balance of the Class C
Certificates and the denominator of which is the outstanding principal balance
of all Certificates.
"Class C Pool Factor" shall mean, with respect to any Determination Date,
a number carried out to eleven decimals representing the ratio of the
outstanding principal balance of the Class C Certificates as of such
Determination Date (determined after taking into account any reduction in the
outstanding principal balance of the Class C Certificates which shall occur on
the following Distribution Date) to the initial principal balance of the Class C
Certificates.
"Closing Date" shall mean [ ].
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Controlled Accumulation Amount" shall mean the quotient obtained by
dividing the Invested Amount as of the Determination Date on which the
Accumulation Period Length is determined (after giving effect to any changes
therein on such date) by the number of months comprising the Accumulation Period
Length.
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"Controlled Deposit Amount" shall mean, for any Distribution Date with
respect to the Accumulation Period, the excess, if any, of (i) the product of
the Controlled Accumulation Amount and the number of Distribution Dates from and
including the first Distribution Date during the Accumulation Period through and
including such Distribution Date over (ii) the sum of amounts on deposit in the
Excess Funding Account and the Principal Funding Account, in each case before
giving effect to any withdrawals from or deposits to such accounts on such
Distribution Date.
"Deficiency Amount" shall have the meaning specified in Section 4.5.
"Distribution Date Statement" shall have the meaning specified in Section
5.2(a).
"Early Amortization Event" shall mean any Early Amortization Event
specified in Section 9.1 of the Agreement, together with any Additional Early
Amortization Event specified in Section 6.1 of this Series Supplement.
"Early Amortization Period" shall mean an Early Amortization Period (as
defined in the Agreement) with respect to Series [ ].
"Excess Funding Account" shall have the meaning specified in Section
4.4(d).
"Excess Principal Collections" shall mean the amounts equal to the
balances referred to as such in Sections 4.6(b)(ii) and 4.6(c)(ii).
"Excess Servicing", shall mean, with respect to any Distribution Date, the
amount, if any, specified pursuant to Section 4.6(a)(xi) with respect to such
Distribution Date.
"Expected Final Payment Date" shall mean the [ ] Distribution Date.
"Floating Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as of
the last day of the immediately preceding Collection Period and the denominator
of which is the Unconcentrated Pool Balance as of such last day; provided,
however, for the Collection Period in which the Closing Date occurs, the
Floating Allocation Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the sum of the initial principal balances of
the Series [ ] Certificates and the denominator of which is the Unconcentrated
Pool Balance on the last day of the Collection Period immediately preceding the
Closing Date.
"Initial Invested Amount" shall equal the sum of the Class A Initial
Invested Amount, the Class B Initial Invested Amount and the Class C Initial
Invested Amount.
"Interest Funding Account" shall have the meaning specified in Section
4.4(b).
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"Interest Period" shall mean, with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Invested Amount" shall mean, for any date, the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Investment Proceeds" shall mean, with respect to any Distribution Date,
all interest and other investment earnings (net of losses and investment
expenses) on the related Determination Date on funds on deposit in the Series [
] Accounts, together with an amount equal to the Series [ ] Allocation
Percentage of the interest and other investment earnings (net of losses and
investment expenses) on funds held in the Collection Account credited as of the
related Determination Date to the Collection Account pursuant to Section 4.2 of
the Agreement.
"Investor Default Amount" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the Defaulted Amount for the related
Collection Period, after giving effect to any allocation of any portion of that
Defaulted Amount to the Dealer Overconcentration Series, and (b) the Floating
Allocation Percentage for the related Collection Period.
"Investor Non-Principal Collections" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) the Floating Allocation
Percentage for the related Collection Period and (ii) Non-Principal Collections
deposited in the Collection Account for the related Collection Period after
giving effect to any allocations to the Dealer Overconcentration Series for such
Collection Period.
"Investor Principal Collections" shall mean, with respect to any
Distribution Date, the sum of (a) the product of (i) the Floating Allocation
Percentage, with respect to the Revolving Period, or the Principal Allocation
Percentage, with respect to the Accumulation Period or an Early Amortization
Period, for the related Collection Period (or the portion of the Collection
Period which occurs as part of the first Collection Period during an Early
Amortization Period), and (ii) Principal Collections for the related Collection
Period after giving effect to any allocations to the Dealer Overconcentration
Series for such Collection Period and (b) the amount, if any, of Non-Principal
Collections to be allocated with respect to the Investor Default Amount or
unreimbursed Class A, Class B or Class C Investor Charge-Offs pursuant to
Section 4.6(a)(vi) or 4.6(a)(vii); provided that in the case of clause (a), if
for any Distribution Date the sum of the Floating Allocation Percentage (if the
Revolving Period is in effect), the Principal Allocation Percentage (if the
Early Amortization Period or the Accumulation Period is in effect), the floating
allocation percentages for all other outstanding Series of Investor Certificates
in their revolving periods and the principal allocation percentages for all
other outstanding Series of Investor Certificates in their early amortization or
accumulation periods exceeds 100%, then, after giving effect to any allocations
to the Dealer Overconcentration Series, Principal Collections shall be allocated
among all Series (including Series [ ]) pari passu and pro rata on the basis of
such floating allocation percentages and principal allocation percentages.
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"LIBOR" shall mean, with respect to any Interest Period, the offered rates
for deposits in United States dollars having a maturity of one month (the "Index
Maturity") commencing on the related Adjustment Date which appears on the
Telerate Page 3750 as of approximately 11:00 A.M., London time, on the date of
calculation as determined by the Trustee. If at least two such offered rates
appear on the Telerate Page 3750, LIBOR shall be the arithmetic mean (rounded
upwards, if necessary, to the nearest one-sixteenth of a percent) of such
offered rates. If fewer than two such offered rates appear, LIBOR with respect
to such Interest Period shall be determined at approximately 11:00 A.M., London
time, on such Adjustment Date on the basis of the rate at which deposits in
United States dollars having the Index Maturity are offered to prime banks in
the London interbank market by four major banks in the London interbank market
selected by the Trustee and in a principal amount equal to an amount of not less
than U.S. $1,000,000 and that is representative for a single transaction in such
market at such time. The Trustee shall request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
banks quote rates to the Trustee, LIBOR shall be the arithmetic mean (rounded
upwards, if necessary, as aforesaid) of such quotations. If fewer than two of
such banks quote rates to the Trustee, LIBOR with respect to such Interest
Period shall be the arithmetic mean (rounded upwards as aforesaid) of the rates
quoted at approximately 11:00 A.M., New York City time, on such Adjustment Date
by three major banks in New York, New York selected by the Trustee for loans in
United States dollars to leading European banks having the Index Maturity and in
a principal amount equal to an amount of not less than U.S. $1,000,000 and that
is representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid are not providing
quotations as mentioned in this sentence, LIBOR in effect for the applicable
period shall be LIBOR in effect for the previous period. If any Certificates are
listed on the Luxembourg Stock Exchange, then, on or prior to each Distribution
Date, the Trustee shall cause the Listing Agent (pursuant to a listing agency
agreement between the Trustee and the Listing Agent which is mutually
satisfactory to the Servicer, the Trustee and the Listing Agent) to notify the
Luxembourg Stock Exchange of the interest rates applicable to such Certificates
for the Interest Period commencing on such Distribution Date.
"Listing Agent" shall mean, if the Class A Certificates or Class B
Certificates are listed on the Luxembourg Stock Exchange, Kredietbank S.A.
Luxembourgeoise, as additional Paying Agent and additional Transfer Agent and
Registrar in Luxembourg for the Class A Certificates and the Class B
Certificates, or any successor thereto.
"London Business Day" shall mean any business day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
"Monthly Interest" shall have the meaning specified in Section 4.2.
"Monthly Principal" shall have the meaning specified in Section 4.3.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.1.
"Net Receivables Rate" shall mean, with respect to each Distribution Date
immediately following an Interest Period, (i) the weighted average of the
interest rates borne by the Receivables
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during the second Collection Period preceding such Distribution Date (interest
payments on the Receivables at such rates being due and payable in the
Collection Period preceding such Distribution Date) plus (ii) the product of (x)
the Monthly Payment Rate for the Collection Period preceding such Distribution
Date, (y) the Discount Factor for such Distribution Date and (z) twelve less
(iii) 2% per annum, unless the Monthly Servicing Fee has been waived in whole or
in part for such Distribution Date, in which case, solely for that Distribution
Date, "2% per annum" will be deemed to be replaced by "0% per annum".
"Principal Allocation Percentage" shall mean, with respect to any
Collection Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as of
the last day of the Revolving Period and the denominator of which is the
Unconcentrated Pool Balance as of the last day of the immediately preceding
Collection Period.
"Principal Funding Account" shall have the meaning specified in Section
4.4(c).
"Private Holder" shall mean each holder of a right to receive interest or
principal in respect of any direct or indirect interest in the Trust, including
any financial instrument or contract the value of which is determined in whole
or part by reference to the Trust (including the Trust's assets, income of the
Trust or distributions made by the Trust), excluding any interest in the Trust
represented by any Series or Class of Certificates or any other interests as to
which the Trustee has received an Opinion of Counsel to the effect that such
Series, Class or other interest shall be treated as debt or otherwise not as an
equity interest in either the Trust or the Receivables for federal income tax
purposes (unless such interest is convertible or exchangeable into an interest
in the Trust or the Trust's income or such interest provides for payment of
equivalent value). Notwithstanding the immediately preceding sentence, "Private
Holder" shall also include any other Person that the Seller determines is a
"partner" within the meaning of Section 1.7704-1(h)(1)(ii) of the U.S. Treasury
Regulations (including by reason of Section 1.7704-1(h)(3)) or any successor
provision of law. Any Person holding more than one interest in the Trust, each
of which separately would cause such Person to be a Private Holder, shall be
treated as a single Private Holder. Each holder of an interest in a Private
Holder which is a partnership, S corporation or a grantor trust under the
Internal Revenue Code shall be treated as a Private Holder unless excepted with
the consent of the Seller (which consent shall be based on an Opinion of Counsel
generally to the effect that the action taken pursuant to the consent shall not
cause the Trust to become a publicly traded partnership treated as a
corporation). Notwithstanding anything to the contrary herein, each Class C
Certificateholder shall be considered to be a Private Holder.
"Reassignment Amount" shall mean, with respect to any Distribution Date,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date, the sum of (i) the Invested Amount on such Distribution
Date and (ii) the amounts distributable pursuant to Section 4.7(a)(i).
"Required Participation Percentage" shall mean, with respect to Series [
], 105%; provided, however, that the Seller may, upon 10 days' prior notice to
the Trustee, each Rating Agency and any
11
Enhancement Provider, reduce the Required Participation Percentage to a
percentage which shall not be less than 100%; provided, however, that the Rating
Agency Condition is satisfied.
"Reserve Fund" shall have the meaning specified in Section 4.4(a).
"Reserve Fund Deposit Amount" shall mean, with respect to any Distribution
Date, the amount, if any, by which (i) the Reserve Fund Required Amount for such
Distribution Date exceeds (ii) the amount of funds in the Reserve Fund after
giving effect to any withdrawals therefrom on such Distribution Date.
"Reserve Fund Required Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) three and one-half
percent (3.5%) and (b) the aggregate outstanding principal balance of the Series
[ ] Certificates as of such Distribution Date (after giving effect to any
changes therein on such Distribution Date).
"Revolving Period" shall mean the period beginning at the opening of
business on the Closing Date and ending on the earlier of (a) the close of
business on the day immediately preceding the Accumulation Period Commencement
Date, and (b) the close of business on the day an Early Amortization Period
commences; provided, however, that, if any Early Amortization Period ends as
described in clause (c) of the definition of Early Amortization Period in the
Agreement, the Revolving Period shall recommence as of the close of business on
the day such Early Amortization Period ends.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series [ ]" or the "Series [ ] Certificates" shall mean the Series of
Investor Certificates, the terms of which are specified in this Series
Supplement.
"Series [ ] Accounts" shall have the meaning specified in Section 4.4(f).
"Series [ ] Allocation Percentage" for a Collection Period shall mean the
percentage equivalent of a fraction, the numerator of which is the Invested
Amount on the last Business Day of the Collection Period immediately preceding
such Collection Period and the denominator of which is the Trust Invested Amount
on such last Business Day.
"Series [ ] Certificateholders" shall mean, collectively, the Class A
Certificateholders, the Class B Certificateholders and the Class C
Certificateholders.
"Series [ ] Certificateholders' Interest" shall mean that portion of the
Certificateholders' Interest evidenced by the Series [ ] Certificates.
"Series [ ] Certificates" shall mean, collectively, the Class A
Certificates, the Class B Certificates and the Class C Certificates.
12
"Series [ ] Excess Principal Collection" shall mean that portion of Excess
Principal Collections allocated to Series [ ] pursuant to Section 4.11.
"Series [ ] Principal Shortfall" with respect to any Distribution Date,
shall equal the excess of (i) (x) for any Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount or (y) for any Distribution
Date with respect to an Early Amortization Period, the Invested Amount, over
(ii) Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Excess Principal Collections).
"Servicer Advance" shall have the meaning specified in Section 3.2.
"Servicing Fee Rate" shall mean, with respect to Series [ ], two percent
(2%).
"Special Payment Date" shall mean each Distribution Date with respect to
an Early Amortization Period (other than an Early Amortization Period that has
ended as described in clause (c) of the definition of Early Amortization Period
in the Agreement).
"Telerate Page 3750" shall mean the display designated as page 3750 on
Telerate (or such other page as may replace such page on that service for the
purpose of displaying London interbank offered rates of major banks).
"Termination Date" for Series [ ] shall mean the [ ] Distribution Date.
"Termination Proceeds" shall mean any proceeds arising out of a sale of
Receivables (or interests therein) pursuant to Section 12.2(c) of the Agreement
with respect to Series [ ].
"Yield Supplement Account" shall have the meaning specified in Section
4.4(e).
"Yield Supplement Account Deposit Amount" shall mean, with respect to any
Distribution Date, the amount, if any, by which the Yield Supplement Account
Required Amount exceeds the amount on deposit in the Yield Supplement Account
after giving effect to any withdrawals from the Yield Supplement Account on that
Distribution Date.
"Yield Supplement Account Required Amount" shall mean an amount equal to
one-half of one percent (0.5%) of the aggregate initial principal balance of the
Series [ ] Certificates.
(b) Notwithstanding anything to the contrary in this Series Supplement or
the Agreement, the term "Rating Agency" shall mean, whenever used in this Series
Supplement or the Agreement with respect to Series [ ], Standard & Poor's,
▇▇▇▇▇'▇ and Fitch. As used in this Series Supplement and in the Agreement with
respect to Series [ ], "highest investment category" shall mean (i) in the case
of Standard & Poor's, AAA and A-1+, as applicable, (ii) in the case of ▇▇▇▇▇'▇,
Aaa and P-1, as applicable, and (iii) in the case of Fitch, AAA and F-1+, as
applicable.
13
(c) All capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Agreement. The definitions in Section
2.1 are applicable to the singular as well as the plural forms of such terms and
to the masculine as well as to the feminine and neuter genders of such terms.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series Supplement
as a whole and not to any particular provision of this Series Supplement;
references to any Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Series Supplement unless otherwise
specified; and the term "including" means "including without limitation".
(e) All references to any agreement (including the Agreement) shall be
understood to be references to such agreement as it may be amended, amended and
restated or otherwise modified from time to time.
ARTICLE III
Servicing Fee
SECTION 3.1 Servicing Compensation. A monthly servicing fee for your
series (the "Monthly Servicing Fee") shall be payable to the Servicer, in
arrears, on each Distribution Date in respect of any Collection Period (or
portion thereof) occurring prior to the first Distribution Date on which the
Invested Amount is zero, in an amount equal to one-twelfth of the product of (a)
the Servicing Fee Rate and (b) the product of (i) the Series [ ] Allocation
Percentage and (ii) the Pool Balance as of the last day of the second Collection
Period preceding such Distribution Date. The share of the Monthly Servicing Fee
allocable to the Series [ ] Certificateholders with respect to any Distribution
Date (the "Certificateholders' Monthly Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the Invested
Amount as of the last day of the second Collection Period second preceding such
Distribution Date and shall be payable in the manner set forth in Section 4.6
and Section 4.10; provided, however, that with respect to the first Distribution
Date for Series [ ], clause (b) of this sentence shall be deemed to refer to the
Invested Amount on the Closing Date. Notwithstanding the foregoing, with respect
to the first Distribution Date for Series [ ], each reference in the preceding
sentences of this Section to one-twelfth shall be deemed to be replaced by a
fraction, the numerator of which is the number of days from but excluding the
Closing Date to and including the last day of the month in which the Closing
Date occurs and the denominator of which is 360.
The remainder of the Monthly Servicing Fee shall be paid by the Seller
and in no event shall the Trust, the Trustee or the Series [ ]
Certificateholders be liable for the share of the Monthly Servicing Fee to be
paid by the Seller; and the remainder of the Servicing Fee shall be paid by the
Seller and the Investor Certificateholders of other Series, the Trustee and the
Series [ ] Certificateholders shall in no event be liable for the share of the
Servicing Fee to be paid by the Seller or the Investor Certificateholders of
other Series. The Certificateholders' Monthly Servicing Fee shall be payable to
the Servicer solely to the extent amounts are available for distribution in
14
accordance with the terms of this Series Supplement or to the extent that
amounts may be netted with respect thereto in accordance with the terms of this
Series Supplement or the Agreement.
The Servicer shall be permitted, in its sole discretion, to waive the
Monthly Servicing Fee for any Distribution Date, in whole or in part, by notice
to the Trustee on or before the related Determination Date; provided that the
Servicer reasonably believes that sufficient Non-Principal Collections shall be
available on any future Distribution Date to pay the waived portion of Monthly
Servicing Fee. The waived portion of such Monthly Servicing Fee shall be paid on
a future Distribution Date to the extent amounts are available therefor pursuant
to Section 4.10(a) or to the extent that amounts may be netted with respect
thereto in accordance with the terms of this Series Supplement or the Agreement;
provided, however, that, to the extent any such waived Monthly Servicing Fee is
so paid, the related portion of the Monthly Servicing Fee to be paid by the
Seller shall be paid by the Seller to the Servicer.
If the Servicer is DFS, and payment of any portion of the Monthly
Servicing Fee to DFS on a Distribution Date would require a withdrawal from the
Reserve Fund, then absent affirmative notice to the Trustee by DFS to the
contrary, DFS shall be deemed to have waived payment of that portion on that
Distribution Date; provided that a deemed waiver described in this sentence
shall not occur on more than two Distribution Dates in any twelve month period
and shall not occur on any two consecutive Distribution Dates.
SECTION 3.2 Servicer Advances. On or before each Distribution Date, the
Servicer will deposit into the Collection Account as an advance (a "Servicer
Advance") an amount equal to the amount of interest due but unpaid on any
Receivable for the related Collection Period (but only to the extent that the
Servicer reasonably expects to recover that Servicer Advance from subsequent
payments on that delinquent Receivable). No Servicer Advance shall be made by
the Servicer for the principal portion of the Receivables or for Defaulted
Receivables. The Servicer shall reimburse itself for a Servicer Advance on the
subsequent Determination Date or Distribution Date (and, if necessary, on other
Determination Dates or Distribution Dates) out of funds collected on all
Receivables prior to the deposit of funds in the Collection Account.
ARTICLE IV
Rights of Series [ ] Certificateholders and
Allocation and Application of Collections
SECTION 4.1 Allocations; Payments to Seller. (1) Subject to Section 4.3(c)
of the Agreement, and after giving effect to any allocations to the Dealer
Overconcentration Series, Collections of Non-Principal Receivables and Principal
Receivables, Miscellaneous Payments and Defaulted Amounts, as they relate to
Series [ ], shall be allocated and distributed as set forth in this Article IV.
(b) The Servicer shall instruct the Trustee to withdraw from the
Collection Account and pay (and the Trustee shall so withdraw and pay) to the
Seller on each Deposit Date any funds
15
not required to be held therein (or not required to be transferred from the
Collection Account to a deposit account for the benefit of Investor
Certificateholders of any Series).
The withdrawals to be made from the Collection Account pursuant to this
Section 4.1(b) do not apply to deposits into the Collection Account that do not
represent Collections, including Miscellaneous Payments, payment of the purchase
price for the Certificateholders' Interest pursuant to Section 2.3 of the
Agreement, payment of the purchase price for the Series [ ] Certificateholders'
Interest pursuant to Section 7.1 of this Series Supplement and proceeds from the
sale, disposition or liquidation of Receivables pursuant to Section 9.2 or 12.2
of the Agreement.
SECTION 4.2 Monthly Interest; Determination of Certificate Rate. (1)
"Monthly Interest" with respect to the Series [ ] Certificates on any
Distribution Date shall be an amount equal to the sum of the Class A Monthly
Interest, the Class B Monthly Interest and the Class C Monthly Interest.
Interest on the respective outstanding principal balance of each Class of
Certificates shall accrue at the Class A Certificate Rate, Class B Certificate
Rate or Class C Certificate Rate, as applicable, and shall be payable to
Certificateholders on each Distribution Date.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine the excess, if any (the "Class A Interest Shortfall"), of (x)
the Class A Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which shall be available to be paid to the
Class A Certificateholders as Class A Monthly Interest from the Interest Funding
Account on such Distribution Date pursuant to this Series Supplement. "Class A
Additional Interest" shall mean, as of any Distribution Date, an amount equal to
the product of (i) the Class A Certificate Rate for the Interest Period then
ended, (ii) a fraction the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360, and (iii) the Class A
Interest Shortfall, if any, for the previous Distribution Date. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable to
the Interest Funding Account or distributed to Class A Certificateholders only
to the extent permitted by applicable law.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine the excess, if any (the "Class B Interest Shortfall"), of (x)
the Class B Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which shall be available to be paid to the
Class B Certificateholders as Class B Monthly Interest from the Interest Funding
Account on such Distribution Date pursuant to this Series Supplement. "Class B
Additional Interest" shall mean, as of any Distribution Date, an amount equal to
the product of (i) the Class B Certificate Rate for the Interest Period then
ended, (ii) a fraction the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360, and (iii) the Class B
Interest Shortfall, if any, for the previous Distribution Date. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable to
the Interest Funding Account or distributed to Class B Certificateholders only
to the extent permitted by applicable law.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine the excess, if any (the "Class C Interest Shortfall"), of (x)
the Class C Monthly Interest for the Interest Period applicable to such
Distribution Date over (y) the amount which shall be available to
16
be paid to the Class C Certificateholders as Class C Monthly Interest from the
Interest Funding Account on such Distribution Date pursuant to this Series
Supplement. "Class C Additional Interest" shall mean, as of any Distribution
Date, an amount equal to the product of (i) the Class C Certificate Rate for the
Interest Period then ended, (ii) a fraction the numerator of which is the actual
number of days that Interest Period and the denominator of which is 360, and
(iii) such Class C Interest Shortfall, if any, for the previous Distribution
Date. Notwithstanding anything to the contrary herein, Class C Additional
Interest shall be payable to the Interest Funding Account or distributed to
Class C Certificateholders only to the extent permitted by applicable law.
(b) The Distribution Date Statement shall specify the applicable Net
Receivables Rate for the next Interest Period. Based on such Distribution Date
Statement (and on the Trustee's calculation of LIBOR) the Trustee shall
determine the Class A, Class B and Class C Certificate Rates for each Interest
Period on the Determination Date immediately preceding each Interest Period. The
Trustee shall notify the Servicer and the Listing Agent on each Adjustment Date
of the Trustee's determination of LIBOR. The establishment of LIBOR on each
Adjustment Date (or in the case of the date specified in the proviso to the
definition of Adjustment Date, promptly following such date) by the Trustee and
the Trustee's calculation of the Class A, Class B and Class C Certificate Rates
shall (in the absence of manifest error) be final and binding.
SECTION 4.3 Determination of Monthly Principal. The amount of monthly
principal ("Monthly Principal") distributable with respect to the Series [ ]
Certificates on each Distribution Date with respect to an Early Amortization
Period and the Accumulation Period shall be equal to the Available Investor
Principal Collections with respect to such Distribution Date; provided, however,
that for each Distribution Date with respect to the Accumulation Period, Monthly
Principal, at the option of the Seller, may be increased to include amounts
otherwise payable or distributable to the Seller (including without limitation
(i) amounts allocable to other Series but not required to be paid to such other
Series on such Distribution Date and not required to be kept in a deposit
account for such other Series after such Distribution Date and (ii) Collections
otherwise allocable to the Seller's Interest)) or may be limited to the
Controlled Deposit Amount for such Distribution Date; and provided further,
however, that Monthly Principal shall not exceed the outstanding principal
balance of the Series [ ] Certificates.
SECTION 4.4 Establishment of Reserve Fund and Funding Accounts. (1)(10 The
Trustee, for the benefit of the Series [ ] Certificateholders, shall cause to be
established and maintained in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account (the "Reserve Fund") which shall be identified as
the "Reserve Fund for the Distribution Financial Services Floorplan Master
Trust, Series [ ]" and shall bear a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series [ ]
Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the Reserve
Fund shall be invested by the Trustee in Eligible Investments selected by the
Servicer that shall mature so that such funds shall be available at the close of
business on or before the Business Day next preceding the following Distribution
Date. All Eligible Investments shall be held by the Trustee for the benefit of
the Series [ ] Certificateholders. On each Distribution Date, all interest and
other investment
17
earnings (net of losses and investment expenses) on funds on deposit in the
Reserve Fund and received prior to such Distribution Date shall be applied as
set forth in Section 4.6(a) of this Series Supplement. Funds deposited in the
Reserve Fund on the Business Day preceding a Distribution Date are not required
to be invested overnight.
(b)(i) The Trustee, for the benefit of the Series [ ] Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account (the "Interest Funding Account"), which shall be
identified as the "Interest Funding Account for the Distribution Financial
Services Floorplan Master Trust, Series [ ]" and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Series [ ] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the Interest
Funding Account shall be invested by the Trustee in Eligible Investments
selected by the Servicer that shall mature so that such funds shall be available
at the close of business on or before the Business Day next preceding the
following Distribution Date. All such Eligible Investments shall be held by the
Trustee for the benefit of the Series [ ] Certificateholders. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Interest Funding Account and
received prior to such Distribution Date shall be applied as set forth in
Section 4.6(a) of this Series Supplement. Funds deposited in the Interest
Funding Account on the Business Day preceding a Distribution Date are not
required to be invested overnight.
(c)(i) The Trustee, for the benefit of the Series [ ] Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account (the "Principal Funding Account"), which shall be
identified as the "Principal Funding Account for Distribution Financial Services
Floorplan Master Trust, Series [ ]" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series [ ] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the Principal
Funding Account shall be invested by the Trustee in Eligible Investments
selected by the Servicer that shall mature so that such funds shall be available
at the close of business on or before the Business Day next preceding the
following Distribution Date. All such Eligible Investments shall be held by the
Trustee for the benefit of the Series [ ] Certificateholders. On each
Distribution Date all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Principal Funding Account and
received prior to such Distribution Date shall be applied as set forth in
Section 4.6(a) of this Series Supplement. Funds deposited in the Principal
Funding Account on the Business Day preceding the Expected Final Payment Date
are not required to be invested overnight.
(d)(i) The Trustee, for the benefit of the Series [ ] Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account (the "Excess Funding Account"), which shall be
identified as the "Excess Funding Account for Distribution Financial Services
Floorplan Master Trust, Series [ ]" and shall bear a designation
18
clearly indicating that the funds deposited therein are held for the benefit of
the Series [ ] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the Excess
Funding Account shall be invested by the Trustee in Eligible Investments
selected by the Servicer. All such Eligible Investments shall be held by the
Trustee for the benefit of the Series [ ] Certificateholders. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Excess Funding Account and
received prior to such Distribution Date shall be applied as set forth in
Section 4.6(a) of this Series Supplement. Funds deposited in the Excess Funding
Account on any Distribution Date shall be invested in Eligible Investments that
shall mature so that such funds shall be available on or before the close of
business on the Business Day next preceding the following Distribution Date;
provided that if, pursuant to Section 4.12, deposits to and withdrawals from the
Excess Funding Account are being made on a weekly or daily basis, then such
Eligible Investments shall mature on each Business Day on a weekly or daily
basis, as the case may be; provided further that such Eligible Investments shall
still mature so that funds shall be available on or before the close of business
on the Business Day next preceding the following Distribution Date. Funds
deposited in the Excess Funding Account on the Business Day preceding a
Distribution Date are not required to be invested overnight.
(e)(i) The Trustee, for the benefit of the Series [ ] Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the Trust,
an Eligible Deposit Account (the "Yield Supplement Account"), which shall be
identified as the "Yield Supplement Account for the Distribution Financial
Services Floorplan Master Trust, Series [ ]" and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Series [ ] Certificateholders.
(ii) At the direction of the Servicer, funds on deposit in the Yield
Supplement Account shall be invested by the Trustee in Eligible Investments
selected by the Servicer that shall mature so that such funds shall be available
at the close of business on or before the Business Day next preceding the
following Distribution Date. All such Eligible Investments shall be held by the
Trustee for the benefit of the Series [ ] Certificateholders. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Yield Supplement Account and
received prior to such Distribution Date shall be applied as set forth in
Section 4.6(a) of this Series Supplement. Funds deposited in the Yield
Supplement Account on the Business Day preceding a Distribution Date are not
required to be invested overnight.
(f)(i) The Trustee shall possess all right, title and interest in and to
all funds on deposit from time to time in, and all Eligible Investments credited
to, the Reserve Fund, the Interest Funding Account, the Principal Funding
Account, the Yield Supplement Account and the Excess Funding Account
(collectively, the "Series [ ] Accounts") and in all proceeds thereof. The
Series [ ] Accounts shall be under the sole dominion and control of the Trustee
for the benefit of the Certificateholders. If, at any time, any of the Series [
] Accounts ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a
19
new Series [ ] Account meeting the conditions specified in paragraph (a)(i),
(b)(i), (c)(i), (d)(i) or (e)(i) above, as applicable, as an Eligible Deposit
Account and shall transfer any cash and/or investments to such new Series [ ]
Account. Neither the Seller, the Servicer nor any other Person or entity
claiming by, through or under the Seller, the Servicer or any such other Person
or entity shall have any right, title or interest in, or any right to withdraw
any amount from, any Series [ ] Account, except as expressly provided herein.
Schedule 1, which is hereby incorporated into and made part of this Series
Supplement, identifies each Series [ ] Account by setting forth the account
number of each such account, the account designation of each such account and
the name of the institution with which such account has been established. If a
substitute Series [ ] Account is established pursuant to this Section, the
Servicer shall provide to the Trustee an amended Schedule 1, setting forth the
relevant information for such substitute Series [ ] Account.
(ii) Pursuant to the authority granted to the Servicer in Section 3.1(a)
of the Agreement, the Servicer shall have the power, revocable by the Trustee,
to make withdrawals and payments or to instruct the Trustee to make withdrawals
and payments from the Series [ ] Accounts for the purposes of carrying out the
Servicer's or the Trustee's duties hereunder.
(g) Unless otherwise agreed to by the Rating Agencies, at no time may
funds on deposit in any Series [ ] Account in an amount greater than 10% of the
outstanding principal balance of the Certificates be invested in Eligible
Investments (other than obligations of the United States government or
investments in a mutual fund that does not have credit concentrations greater
than 10%) of any single entity or its Affiliates.
(h) Upon payment in full of all amounts payable on the Series [ ]
Certificates pursuant to this Series Supplement, or any earlier date
contemplated by this Series Supplement, any funds remaining on deposit in any
Series [ ] Account shall be paid to the Seller.
SECTION 4.5 Deficiency Amount. On each Determination Date, with respect to
the related Distribution Date (the "current Distribution Date"), the Servicer
shall determine the amount (the "Deficiency Amount"), if any, by which
(a) the sum of
(i) the Monthly Interest for the current Distribution Date,
(ii) any Monthly Interest for any prior Distribution Dates not
distributed to the Certificateholders on a prior Distribution Date,
(iii) Additional Interest, if any, for the current
Distribution Date and any Additional Interest for any prior
Distribution Date not distributed to the Certificateholders on such
prior Distribution Date (but only to the extent permitted by
applicable law),
20
(iv) the Certificateholders' Monthly Servicing Fee for the
current Distribution Date,
(v) the Investor Default Amount for the current Distribution
Date, and
(vi) the Series [ ] Allocation Percentage of the amount of any
Adjustment Payment required to be deposited in the Collection
Account pursuant to Section 3.9(a) of the Agreement with respect to
the related Collection Period that has not been so deposited as of
such Determination Date
exceeds
(b) the sum of Investor Non-Principal Collections for the current
Distribution Date plus any Investment Proceeds, if any, with respect to
such Distribution Date.
SECTION 4.6 Application of Investor Non-Principal Collections, Investment
Proceeds, Servicer Advances and Available Investor Principal Collections. The
Servicer shall direct the Trustee (by setting forth the following amounts in the
related Distribution Date Statement) to make the following distributions on each
Distribution Date (and the Trustee shall distribute):
(a) On each Distribution Date, an amount equal to the sum of Investor
Non-Principal Collections on deposit in the Collection Account (after giving
effect to repayment to the Servicer of any Servicer Advances from any previous
Distribution Dates) and any Investment Proceeds and the Servicer Advance, if
any, for such Distribution Date, with respect to such Distribution Date in the
following priority:
(i) first, an amount equal to the Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest for any
prior Distribution Dates not distributed to the Class A Certificateholders
on such prior Distribution Dates plus (but only to the extent permitted
under applicable law) the amount of any Class A Additional Interest for
the current Distribution Date and, without duplication, any Class A
Additional Interest previously due but not distributed to the Class A
Certificateholders on prior Distribution Dates, shall be deposited to the
Interest Funding Account;
(ii) second, an amount equal to the Class B Monthly Interest for
such Distribution Date, plus the amount of any Class B Monthly Interest
for any prior Distribution Dates not distributed to the Class B
Certificateholders on such prior Distribution Dates plus (but only to the
extent permitted under applicable law) the amount of any Class B
Additional Interest for the current Distribution Date and, without
duplication, any Class B Additional Interest previously due but not
distributed to the Class B Certificateholders on prior Distribution Dates,
shall be deposited to the Interest Funding Account;
(iii) third, an amount equal to the Class C Monthly Interest for
such Distribution Date, plus the amount of any Class C Monthly Interest
for any prior Distribution Dates not
21
distributed to the Class C Certificateholders on such prior Distribution
Dates plus (but only to the extent permitted under applicable law) the
amount of any Class C Additional Interest for the current Distribution
Date and, without duplication any Class C Additional Interest previously
due but not distributed to the Class C Certificateholders on prior
Distribution Dates, shall be deposited to the Interest Funding Account;
(iv) fourth, so long as DFS is not the Servicer, an amount equal to
the Certificateholders' Monthly Servicing Fee for such Distribution Date
shall be distributed to the Servicer (unless such amount has been netted
against deposits to the Collection Account);
(v) fifth, an amount equal to the Reserve Fund Deposit Amount, if
any, for such Distribution Date shall be deposited in the Reserve Fund;
(vi) sixth, an amount equal to the Investor Default Amount, if any,
for such Distribution Date shall be treated as a portion of Investor
Principal Collections for such Distribution Date;
(vii) seventh, an amount required to reimburse unreimbursed Class A
Investor Charge-Offs, Class B Investor Charge-Offs and Class C Investor
Charge-Offs pursuant to Section 4.9 shall be treated as a portion of
Investor Principal Collections for such Distribution Date;
(viii) eighth, so long as DFS is the Servicer, an amount equal to
the Certificateholders' Monthly Servicing Fee for that Distribution Date
shall be distributed to the Servicer, unless that amount has been netted
against deposits to the Collection Account by DFS or waived;
(ix) ninth, any unpaid Class A Carry-over Amount, Class B Carry-over
Amount or Class C Carry-over Amount for any previous Distribution Date,
plus to the extent permitted under applicable law, the amount of any Class
A Carry-over Amount Additional Interest, Class B Carry-over Amount
Additional Interest and Class C Carry-over Amount Additional Interest for
the current Distribution Date and, without duplication, any Class A
Carry-over Amount Additional Interest, Class B Carry-over Amount
Additional Interest and Class C Carry-over Amount Additional Interest
previously due but not distributed to the Class A Certificateholders,
Class B Certificateholders and Class C Certificateholders, respectively,
shall be deposited in the Interest Funding Account;
(x) tenth, if that Distribution Date occurs prior to the beginning
of the Accumulation Period and prior to the occurrence of an Early
Amortization Event, an amount equal to the Yield Supplement Account
Deposit Amount, if any, for that Distribution Date will be deposited in
the Yield Supplement Account; and
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(xi) eleventh, the balance, if any, shall constitute "Excess
Servicing" and shall be allocated and distributed as set forth in Section
4.10.
(b) On each Distribution Date with respect to the Revolving Period, the
Servicer shall direct the Trustee in writing by setting forth the following
amounts on the Distribution Date Statement to apply an amount equal to the
Available Investor Principal Collections deposited in the Collection Account for
the related Collection Period shall be applied in the following priority:
(i) first, if (A) the Unconcentrated Pool Balance at the end of the
preceding Collection Period is less than the Unconcentrated Pool Balance
at the end of the second preceding Collection Period and (B) the
Unconcentrated Pool Balance at the end of the preceding Collection Period
is less than the Required Participation Amount for such Distribution Date
(calculated before giving effect to any deposits to be made on such
Distribution Date to the Excess Funding Account and any excess funding
account for any other Series in their revolving periods to be made on such
Distribution Date), then the Servicer shall direct the Trustee to deposit
(and the Trustee shall deposit) Available Investor Principal Collections
into the Excess Funding Account in an amount which shall reduce the
Invested Amount such that, together with the deposits to the excess
funding accounts, if any, (and any resulting reductions in the invested
amounts) for other outstanding Series in their revolving periods for such
Distribution Date, the Unconcentrated Pool Balance is equal to the
Required Participation Amount, and
(ii) second, an amount equal to the balance (such balance being part
of "Excess Principal Collections"), if any, of such Available Investor
Principal Collections shall be applied in accordance with Section 4.4 of
the Agreement.
For purposes of determining the amount to be applied pursuant to subparagraph
(i) above, allocations of the amounts to be deposited in the Excess Funding
Account and the excess funding account for other outstanding Series shall be
made pro rata on the basis of the invested amounts (including the Invested
Amount for Series [ ]).
If the Servicer has elected in respect of a Collection Period to make
withdrawals from the Excess Funding Account on a daily or weekly basis pursuant
to Section 4.12(b), then deposits into the Excess Funding Account required by
this Section 4.6(b) shall be made on each Business Day in such Collection Period
(if daily withdrawals and deposits have been elected) or on each Wednesday (or
the next succeeding Business Day if such Wednesday is not a Business Day) in
such Collection Period (if weekly withdrawals and deposits have been elected).
In the case of such election, the Unconcentrated Pool Balance referred to in
clause (B) above shall be the Unconcentrated Pool Balance on the preceding
Business Day, in the case of an election to make daily deposits and withdrawals,
and on the Monday next preceding the related Wednesday, in the case of an
election to make weekly deposits and withdrawals.
(c) On each Distribution Date (x) with respect to the Accumulation
Period or (y) an Early Amortization Period (if a Responsible Officer of the
Trustee has actual knowledge of such
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Early Amortization Period), an amount equal to the Available Investor Principal
Collections on deposit in the Collection Account shall be distributed in the
following priority:
(i) first, an amount equal to Monthly Principal for such
Distribution Date shall be deposited by the Servicer or the Trustee into
the Principal Funding Account; and
(ii) second, for each Distribution Date with respect to the
Accumulation Period (unless an Early Amortization Event has occurred), an
amount equal to the balance (such balance being part of "Excess Principal
Collections"), if any, of such Available Investor Principal Collections
shall be applied in accordance with the written instructions of the
Servicer in accordance with Section 4.4 of the Agreement.
SECTION 4.7 Distributions to Series [ ] Certificateholders. (1) The
Servicer shall direct the Trustee (by setting forth the amounts in Section
4.7(a)(i) in the related Distribution Date Statement) to make (and the Trustee
shall make) the following distributions at the following times from the Interest
Funding Account, the Principal Funding Account and the Excess Funding Account:
(i) on each Distribution Date, available amounts on deposit in the
Interest Funding Account shall be distributed to the Series [ ]
Certificateholders in the following order of priority:
(A) first, to the Class A Certificateholders, an amount equal
to the sum of (i) the Class A Monthly Interest for the current
Distribution Date, plus (ii) any Class A Monthly Interest that was
not distributed on any prior Distribution Date to the Class A
Certificateholders, plus (iii) to the extent permitted under
applicable law, the amount of any Class A Additional Interest for
the current Distribution Date and, without duplication, any Class A
Additional Interest previously due but not distributed to the Class
A Certificateholders;
(B) second, to the Class B Certificateholders, an amount equal
to the sum of (i) the Class B Monthly Interest for the current
Distribution Date, plus (ii) any Class B Monthly Interest that was
not distributed on any Distribution Date prior to the current
Distribution Date to the Class B Certificateholders, plus (iii) to
the extent permitted under applicable law, the amount of any Class B
Additional Interest for the current Distribution Date and, without
duplication, any Class B Additional Interest previously due but not
distributed to the Class B Certificateholders;
(C) third, to the Class C Certificateholders, an amount equal
to the sum of (i) the Class C Monthly Interest for the current
Distribution Date, plus (ii) any Class C Monthly Interest that was
not distributed on any Distribution Date prior to the current
Distribution Date to the Class C Certificateholders, plus (iii) to
the extent permitted under applicable law, the amount of any Class C
Additional Interest for the current Distribution Date and, without
duplication, any Class C Additional Interest previously due but not
distributed to the Class C Certificateholders;
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(D) fourth, to the Class A Certificateholders, the sum of any
Class A Carry-over Amount for the current Distribution Date plus any
unpaid Class A Carry-over Amount for any previous Distribution Date
plus to the extent permitted under applicable law, the amount of any
Class A Carry-over Amount Additional Interest for the current
Distribution Date and, without duplication, any Class A Carry-over
Amount Additional Interest previously due but not distributed to the
Class A certificateholders;
(E) fifth, to the Class B Certificateholders, the sum of any
Class B Carry-over Amount for the current Distribution Date plus any
unpaid Class B Carry-over Amount for any previous Distribution Date
plus to the extent permitted under applicable law, the amount of any
Class B Carry-over Amount Additional Interest for the current
Distribution Date and, without duplication, any Class B Carry-over
Amount Additional Interest previously due but not distributed to the
Class B certificateholders; and
(F) sixth, to the Class C Certificateholders, the sum of any
Class C Carry-over Amount for the current Distribution Date plus any
unpaid Class C Carry-over Amount for any previous Distribution Date
plus to the extent permitted under applicable law, the amount of any
Class C Carry-over Amount Additional Interest for the current
Distribution Date and, without duplication, any Class C Carry-over
Amount Additional Interest previously due but not distributed to the
Class C certificateholders.
(ii) on each Special Payment Date (if a Responsible Officer of the
Trustee has actual knowledge of the Early Amortization Period) and on the
Expected Final Payment Date, all amounts on deposit in the Principal
Funding Account shall be distributed to the Series [ ] Certificateholders
in the following order of priority: (A) first, to the Class A
Certificateholders until the outstanding principal balance of the Class A
Certificates has been reduced to zero; (B) second, to the Class B
Certificateholders until the outstanding principal balance of the Class B
Certificates has been reduced to zero; and (C) to the Class C
Certificateholders until the outstanding principal balance of the Class C
Certificates has been reduced to zero; provided, however, that the maximum
amount distributed pursuant to this clause (ii) on any Distribution Date
shall not exceed the excess, if any, of (x) the sum of the outstanding
principal balance of the Class A, Class B and Class C Certificates, over
(y) the sum of the unreimbursed Class A Investor Charge-Offs, Class B
Investor Charge-Offs and Class C Investor Charge-Offs, each on such
Distribution Date.
(b) The distributions to be made pursuant to this Section are subject to
the provisions of Sections 2.3, 9.2, 10.1 and 12.2 of the Agreement and Section
8.1 and 8.2 of this Series Supplement.
SECTION 4.8 Application of Reserve Fund. (1) If Investor Non-Principal
Collections and Investment Proceeds on any Distribution Date (plus the amount of
any Servicer Advance for such Distribution Date) are not sufficient to make the
entire distributions required on such Distribution
25
Date by Sections 4.6(a)(i), (ii), (iii), (iv), (vi) and (viii), the Servicer
shall direct the Trustee to withdraw (and the Trustee shall withdraw) funds from
the Reserve Fund to the extent available therein, and apply such funds to
complete the distributions pursuant to Section 4.6(a)(i), (ii), (iii), (iv),
(vi) and (viii) in the numerical order thereof.
(b) On the Termination Date, any funds in the Reserve Fund shall be
treated as Available Investor Principal Collections. Upon payment in full of the
outstanding principal balance of the Series [ ] Certificates, any funds
remaining on deposit in the Reserve Fund shall be paid to the Seller.
SECTION 4.9 Investor Charge-Offs. If on any Distribution Date (after
giving effect to the allocations, distributions, withdrawals and deposits to be
made on such Distribution Date) the balance of the Reserve Fund is zero, then
the Class C Invested Amount shall be reduced by the lesser of the Deficiency
Amount for that Distribution Date and the Investor Default Amount for that
Distribution Date (the lesser of such Deficiency Amount and such Investor
Default Amount being a "Class C Investor Charge-Off"). In the event that any
such reduction of the Class C Invested Amount would cause the Class C Invested
Amount to be a negative number, the Class C Invested Amount shall be maintained
at or reduced to zero, and the Class B Invested Amount shall be reduced by the
amount of such excess (the amount of such reduction being a "Class B Investor
Charge-Off"). In the event that any such reduction of the Class B Invested
Amount would cause the Class B Invested Amount to be a negative number, the
Class B Invested Amount shall be maintained at or reduced to zero, and the Class
A Invested Amount shall be reduced by the amount of such excess but not by more
than the Class A Invested Amount on such Distribution Date (the amount of such
reduction being a "Class A Investor Charge-Off"). Class A Investor Charge-Offs,
Class B Investor Charge-Offs and Class C Investor Charge-Offs shall thereafter
be reimbursed (in that order) and the Class A Invested Amount, Class B Invested
Amount and Class C Invested Amount increased (in that order) (but not by an
amount in excess of the aggregate unreimbursed Class A Investor Charge-Offs,
Class B Investor Charge-Offs and Class C Investor Charge-Offs, as the case may
be) on any Distribution Date by the sum of (a) Allocable Miscellaneous Payments
with respect to such Distribution Date and (b) the amount allocated and
available for that purpose pursuant to Section 4.6(a)(vii). The Servicer shall
be responsible for calculating Class A, Class B and Class C Investor Charge-Offs
and shall give the Trustee notice thereof by setting forth such amounts in the
Distribution Date Statement.
SECTION 4.10 Excess Servicing. The Servicer shall direct the Trustee to
apply (and the Trustee shall so apply), on each Distribution Date, Excess
Servicing for such Distribution Date to make the following distributions in the
following priority:
(a) an amount equal to the aggregate outstanding amounts of the
Monthly Servicing Fee which have been previously waived pursuant to
Section 3.1 shall be distributed to the Servicer; and
(b) the balance, if any, shall be distributed to the Seller.
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SECTION 4.11 Excess Principal Collections.
"Series [ ] Excess Principal Collections", with respect to any
Distribution Date, shall mean an amount equal to the lesser of (a) the Series [
] Principal Shortfall, if any, for such Distribution Date and (b) an amount
equal to the product of (x) excess principal collections for all Series for such
Distribution Date and (y) a fraction, the numerator of which is the Series [ ]
Principal Shortfall for such Distribution Date and the denominator of which is
the aggregate amount of principal shortfalls for all Series for such
Distribution Date.
SECTION 4.12 Excess Funding Account. (1) Any funds on deposit in the
Excess Funding Account at the beginning of the Accumulation Period or upon the
occurrence of an Early Amortization Event shall be deposited in the Principal
Funding Account. In addition, no funds shall be deposited in the Excess Funding
Account during the Accumulation Period or any Early Amortization Period.
(b) If (i) on any Determination Date during the Revolving Period there are
any funds in the Excess Funding Account and (ii) the Unconcentrated Pool Balance
at the end of the preceding Collection Period is greater than the Unconcentrated
Pool Balance at the end of the second preceding Collection Period, then, subject
to the other provisions of this Section 4.12(b) and to Sections 4.12(c) and (d),
the Invested Amount and the invested amounts (but, in each case, not in excess
of the initial principal amount of such Series) for all other outstanding Series
that provide for an excess funding account or similar arrangement and are in
their revolving periods shall be increased such that, after giving effect to
such increases, the Required Participation Amount is at least equal to the
Unconcentrated Pool Balance. On such Determination Date, the Servicer shall
notify the Trustee of the amount, if any, of such increase in the Invested
Amount and the Trustee shall withdraw from the Excess Funding Account and pay to
the Seller or allocate to one or more other Series, on the immediately
succeeding Distribution Date, an amount equal to the amount of such increase in
the Invested Amount. To the extent that the Invested Amount is increased by any
payment to the Seller or any allocation to one or more other Series, the
Seller's Interest or such other Series' invested amount, as applicable, shall be
reduced by the amount of such payment. In addition, any increase in the Invested
Amount is subject to the condition that after giving effect to such increase the
Unconcentrated Pool Balance equals or exceeds the Required Participation Amount.
In connection with the foregoing, the Seller shall endeavor (taking into account
any seasonality experienced in the Accounts in the Trust) to minimize the
amounts on deposit, from time to time, in the Excess Funding Account.
The Seller may elect to make withdrawals from the Excess Funding Account
and the excess funding accounts or similar arrangements for other Series on a
daily or weekly basis during a Collection Period by giving the Trustee notice of
such election at least two Business Days and no more than five Business Days
prior to the commencement of such daily or weekly withdrawals. If such election
is made, then deposits into the Excess Funding Account and excess funding
accounts or similar arrangements for other Series shall be made on a similar
basis for the related Collection Period. If such election is for withdrawals on
a daily basis, then such withdrawals shall be made on each Business Day and the
Unconcentrated Pool Balance to be referenced shall be the
27
Unconcentrated Pool Balance on the next preceding Business Day. If such election
is for withdrawals on a weekly basis, then such withdrawals shall be made on
each Wednesday (or if such Wednesday is not a Business Day, then on the Business
Day next succeeding such Wednesday) and the Unconcentrated Pool Balance to be
referenced shall be the Unconcentrated Pool Balance on the preceding Monday.
(c) In the event that other Series issued by the Trust provide for excess
funding accounts or other arrangements similar to the Excess Funding Account
involving fluctuating levels of investments in Principal Receivables, (i) the
allocation of additional Principal Receivables to increase the Invested Amount
and the invested amounts of such other Series (and the related withdrawals from
the Excess Funding Account and the other excess funding or similar accounts)
shall be based on the proportion that the amount on deposit in the Excess
Funding Account bears to amounts on deposit in the excess funding accounts
(including the Excess Funding Account) of all Series providing for excess
funding accounts or such similar arrangements or to amounts otherwise similarly
available and (ii) the deposit of amounts into the Excess Funding Account and
the excess funding accounts of such other Series shall be pro rata based on the
proportion that the Invested Amount bears to the invested amounts (including the
Invested Amount) of all Series providing for excess funding accounts or such
similar arrangements.
(d) In the event that any other Series is in an amortization period, early
amortization period or accumulation period, the amounts of any withdrawals from
the Excess Funding Account shall be applied first to satisfy in full any then
applicable funding or payment requirements of such Series and second to make a
payment to the Seller. In the event that more than one other Series is in an
amortization period, early amortization period or accumulation period, the
amounts of any withdrawals from the Excess Funding Account shall be allocated
(and, if necessary, reallocated) among such Series as specified in the related
Supplements for such Series, to meet the funding or payment requirements of each
such Series first to satisfy in full all then applicable funding or payment
requirements of each such Series and second to make a payment to the Seller.
SECTION 4.13 Yield Supplement Account. On each Distribution Date prior to
the beginning of the Accumulation Period and prior to the occurrence of an Early
Amortization Event, the Trustee shall deposit Non-Principal Collections and
Investment Proceeds, if any--to the extent available pursuant to Section
4.6(a)(x)--into the Yield Supplement Account in an amount equal to the Yield
Supplement Account Deposit Amount, if any, for that Distribution Date.
If the Class A Monthly Interest, Class B Monthly Interest or Class C
Monthly Interest for any Distribution Date, determined as if the interest rate
were based on LIBOR plus the applicable margin, exceeds the applicable monthly
interest determined on the basis of the related Net Receivables Rate, the
Servicer shall direct the Trustee to withdraw (and the Trustee shall withdraw)
funds from the Yield Supplement Account, to the extent available, and apply
those funds to deposit the amount of such excess into the Interest Funding
Account first, for the benefit of the Class A Certificates, second, for the
benefit of the Class B Certificates, and third, for the benefit of the Class C
Certificates.
28
Any funds on deposit in the Yield Supplement Account at the beginning of
the Accumulation Period or upon the occurrence of an Early Amortization Event
shall be deposited in the Principal Funding Account.
ARTICLE V
Distribution and Reports to
Series [ ] Certificateholders
SECTION 5.1 Distributions. (1) On each Distribution Date, the Trustee as
paying agent shall distribute to each Series [ ] Certificateholder of record on
the preceding Record Date (other than as provided in Section 12.2 of the
Agreement respecting a final distribution) such Series [ ] Certificateholder's
pro rata share (based on the outstanding principal balances of the Series [ ]
Certificates held by such Certificateholder) of the amounts on deposit in the
Series [ ] Accounts as is payable to Series [ ] Certificateholders on such
Distribution Date pursuant to and subject to the applicable priorities set forth
in Section 4.7.
(b) Except as provided in Section 12.2 of the Agreement with respect to a
final distribution, distributions to Series [ ] Certificateholders hereunder
shall be made by check mailed to each Series [ ] Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any Series [ ] Certificate or the making of any
notation thereon; provided, however, that with respect to Series [ ]
Certificates registered in the name of a Depository, such distributions shall be
made to such Depository in immediately available funds.
(c) For so long as any of the Series [ ] Certificates are listed on the
Luxembourg Stock Exchange, the Trustee shall notify the Luxembourg Stock
Exchange in the event that any of such Series [ ] Certificates listed on the
Luxembourg Stock Exchange do not receive scheduled distributions of interest or
principal on any Distribution Date in accordance with instructions from the
Servicer (which may be standing instructions).
SECTION 5.2 Reports and Statements to Series [ ] Certificateholders. (1)
At least two Business Days prior to each Distribution Date, the Servicer shall
provide to the Trustee, the Rating Agencies and, for so long as any Series [ ]
Certificates are listed on the Luxembourg Stock Exchange, such exchange, a
statement substantially in the form of Exhibit B (a "Distribution Date
Statement"), and on each Distribution Date the Trustee shall forward to each
Series [ ] Certificateholder such statement prepared by the Servicer setting
forth certain information relating to the Trust and the Series [ ] Certificates.
(b) A copy of each statement provided pursuant to paragraph (a) and a copy
of the Pooling and Servicing Agreement (without exhibits) and this Series
Supplement shall be made available to Series [ ] Certificateholders of record
for inspection at the Corporate Trust Office during the Trustee's normal
business hours.
29
(c) On or before January 31 of each calendar year, beginning with calendar
year [ ], the Trustee shall furnish or cause to be furnished to each Person who
at any time during the preceding calendar year was a Series [ ]
Certificateholder, a statement prepared by the Servicer containing the
information which is required to be contained in the statement to Series [ ]
Certificateholders as set forth in paragraph (a) above, aggregated for such
calendar year or the applicable portion thereof during which such Person was a
Series [ ] Certificateholder, together with other information as is required to
be provided by an issuer of indebtedness under the Internal Revenue Code for the
preceding calendar year and such other customary information as is necessary to
enable the Series [ ] Certificateholders (or Certificate Owners) to prepare
their tax returns. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Internal Revenue
Code as from time to time in effect.
(d) For so long as the Class A Certificates or the Class B Certificates
are listed on the Luxembourg Stock Exchange and so long as the rules of such
exchange so require, notices to the holders of the Class A Certificates and the
Class B Certificates shall also be given by publication in an Authorized
European Newspaper. The Trustee shall have the right to cause the Listing Agent,
pursuant to a listing agency agreement between the Trustee and the Listing Agent
which is mutually satisfactory to the Servicer, the Trustee and the Listing
Agent, to give such notices by such publication.
ARTICLE VI
Early Amortization Events
SECTION 6.1 Additional Early Amortization Events. The occurrence of any of
the following events shall, immediately upon the occurrence thereof without
notice or other action on the part of the Trustee or the Series [ ]
Certificateholders, be deemed to be an Early Amortization Event solely with
respect to Series [ ] (each, an "Additional Early Amortization Event"):
(a) on any Distribution Date, the balance of the Reserve Fund is
less than [ ] percent of the aggregate outstanding principal balance of
the Series [ ] Certificates, in each case after giving effect to all
deposits, withdrawals and distributions on such Distribution Date; or
(b) any Servicer Default occurs; or
(c) a Class A Carry-over Amount, Class B Carry-over Amount or Class
C Carry-over Amount is outstanding on six consecutive Distribution Dates
(after giving effect to the distributions on each of those Distribution
Dates); or
(d) on any Determination Date, the average of the Monthly Payment
Rates for the three preceding Collection Periods is less than [ ]
percent(or a lower percentage if the Rating Agency Condition has been
satisfied with respect to that lower percentage); or
30
(e) the outstanding principal amount of the Series [ ] Certificates
is not fully repaid on the Expected Final Payment Date; or
(f) the ratio (expressed as a percentage) of (i) the average for
each month of the net losses on the Receivables (exclusive of the
Ineligible Receivables) owned by the Trust (i.e., gross losses less
recoveries on any Receivables) (including recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds) during any three consecutive
calendar months, to (ii) the average of the month-end aggregate balances
of those Receivables (without deducting therefrom the Discount Portion)
for such three-month period, exceeds five percent (5%) on an annualized
basis; provided, that the percentage in this clause (f) may be changed, or
any Early Amortization Event relating to this clause (f) may be waived, at
the direction of the Seller and without the consent of any Series [ ]
Certificateholder upon the satisfaction of the Rating Agency Condition; or
(g) the sum of all Eligible Investments and amounts on deposit in
the Excess Funding Account and any excess funding accounts for any other
Series represents more than [ ] percent of the total assets of the Trust
on each of six or more consecutive Determination Dates, after giving
effect to all payments made or to be made on the Distribution Date next
succeeding each such respective Determination Date; or
(h) the Overconcentration Amount exceeds [ ] for a period of five
Business Days after any Distribution Date, unless the Rating Agency
Condition shall have been satisfied with respect to the existence of the
Overconcentration Amount.
ARTICLE VII
Optional Repurchase
SECTION 7.1 Optional Repurchase. (1) On any Distribution Date occurring
after the date on which the Invested Amount is reduced to less than ten percent
(10%) of the initial principal amount of the Series [ ] Certificates on the
Closing Date or less, the Seller shall have the option, subject to the condition
set forth in paragraph (c), to purchase the entire, but not less than the
entire, Series [ ] Certificateholders' Interest, at a purchase price equal to
the Reassignment Amount for such Distribution Date.
(b) The Seller shall give the Servicer and the Trustee at least 10
Business Days' prior written notice of the Distribution Date on which the Seller
intends to exercise such purchase option. Not later than 12:00 noon, New York
City time, on such Distribution Date the Seller shall deposit the Reassignment
Amount into the Collection Account in immediately available funds. Such purchase
option is subject to payment in full of the Reassignment Amount and if for any
reason the Seller fails to deposit the Reassignment Amount, payments shall
continue to be made to Certificateholders as provided herein. The Reassignment
Amount shall be distributed as set forth in Section 8.1(b).
31
(c) If at the time the Seller exercises its purchase option hereunder the
Seller's unsecured debt is unrated or has a rating lower than the lowest
investment grade rating of any Rating Agency, the Seller shall deliver to the
Trustee on such Distribution Date an Opinion of Counsel (which must be an
independent outside counsel) to the effect that, in reliance on certain
certificates to the effect that the Series [ ] Certificateholders' Interest
purchased by the Seller constitutes fair value for the consideration paid
therefor and as to the Seller is solvent, the purchase of the Series [ ]
Certificateholders' Interest would not be considered a fraudulent conveyance
under applicable law.
So long as any Series [ ] Certificates are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Trustee shall cause
notice of any such optional repurchase under this Section to be published in an
Authorized European Newspaper at least one Business Day prior to the related
Distribution Date and shall cause notice to be given by first-class mail,
postage prepaid, mailed not less than ten Business Days prior to the applicable
repurchase date, to each Holder of Class A and Class B Certificates at the
Holder's address in the register maintained by the Trustee under the Pooling and
Servicing Agreement, and shall inform the Luxembourg Stock Exchange thereof one
Business Day prior thereto in accordance with instructions from the Servicer
(which may be standing instructions).
ARTICLE VIII
Final Distributions
SECTION 8.1 Sale of Certificateholders' Interest Pursuant to Section 2.3
of the Agreement; Distributions Pursuant to Section 7.1 of this Series
Supplement or Section 2.3 or 12.2(c) of the Agreement. (1) The amount to be paid
by the Seller to the Collection Account with respect to Series [ ] in connection
with a purchase of the Certificateholders' Interest pursuant to Section 2.3 of
the Agreement shall equal the Reassignment Amount for the Distribution Date on
which such repurchase occurs.
(b) With respect to the Reassignment Amount deposited into the Collection
Account pursuant to Section 7.1 or 8.1 of this Series Supplement or Section 2.3
of the Agreement or any Termination Proceeds deposited into the Collection
Account pursuant to Section 12.2(c) of the Agreement, the Trustee shall, not
later than 12:00 noon, New York time, on the Distribution Date on which such
amounts are deposited (or, if such date is not a Distribution Date, on the
immediately following Distribution Date) (in the priority set forth below): (i)
first, deposit an amount equal to the Invested Amount on such Distribution Date
into the Principal Funding Account, (ii) second, deposit an amount equal to the
amount distributable on such Distribution Date pursuant to Section 4.7(a)(i)
into the Interest Funding Account and (iii) third, pay the remainder of any
Termination Proceeds to the Seller; provided, however, that the sum of the
amounts allocated pursuant to clauses (i) through (iii) shall not exceed the
Reassignment Amount for Series [ ].
(c) Notwithstanding anything to the contrary in this Series Supplement or
the Agreement, any Termination Proceeds deposited in the Principal Funding
Account and the Interest Funding Account pursuant to Section 8.1 of this Series
Supplement and all other amounts on deposit therein
32
on the applicable Distribution Date shall be distributed in full to the Series
[ ] Certificateholders on such date in the following order of priority:
(i) first to Class A Certificateholders, in an amount equal to the
sum of (x) the Class A Monthly Interest for the current Distribution Date
and, without duplication, any unpaid Class A Monthly Interest for any
previous Distribution Date, (y) to the extent permitted by applicable law,
any Class A Additional Interest for the current Distribution Date and,
without duplication, any unpaid Class A Additional Interest for any
previous Distribution Date, and (z) the Class A Invested Amount;
(ii) second to Class B Certificateholders, in an amount equal to the
sum of (x) the Class B Monthly Interest for the current Distribution Date
and, without duplication, any unpaid Class B Monthly Interest for any
previous Distribution Date, (y) to the extent permitted by applicable law,
any Class B Additional Interest for the current Distribution Date and,
without duplication, any unpaid Class B Additional Interest for any
previous Distribution Date, and (z) the Class B Invested Amount; and
(iii) third to Class C Certificateholders, in an amount equal to the
sum of (x) the Class C Monthly Interest for the current Distribution Date
and, without duplication, any unpaid Class C Monthly Interest for any
previous Distribution Date, (y) to the extent permitted by applicable law,
any Class C Additional Interest for the current Distribution Date and,
without duplication, any unpaid Class C Additional Interest for any
previous Distribution Date and (z) the Class C Invested Amount.
No Class A Carry-over Amount, Class B Carry-over Amount, Class C
Carry-over Amount, Class A Carry-over Amount Additional Interest, Class B
Carry-over Amount Additional Interest or Class C Carry-over Amount Additional
Interest will be paid as part of this distribution.
Any remaining funds shall be paid to the Seller.
Any distribution made pursuant to paragraph (b) above and this paragraph
(c) shall be deemed to be a final distribution pursuant to Section 12.2 of the
Agreement with respect to Series [ ].
SECTION 8.2 Distribution of Proceeds of Sale, Disposition or Liquidation
of the Receivables Pursuant to Section 9.2 of the Agreement. (1) Not later than
12:00 noon, New York City time, on the Distribution Date following the date on
which the Insolvency Proceeds are deposited into the Collection Account pursuant
to Section 9.2(b) of the Agreement, the Trustee shall (after giving effect to
any deposits and distributions otherwise to be made on such Distribution Date)
(x) deduct an amount equal to the amount distributable on such Distribution Date
pursuant to Section 4.7(a)(ii) from the Series [ ] Allocation Percentage of the
Insolvency Proceeds and deposit such amount in the Principal Funding Account,
(y) deduct an amount equal to the amount distributable on such Distribution Date
pursuant to Section 4.7(a)(i) from the Series [ ] Allocation Percentage of the
Insolvency Proceeds, and deposit such amount in the Interest Funding Account,
33
and (z) allocate the remainder of the Series [ ] Allocation Percentage of the
Insolvency Proceeds to the Seller's Interest and release the same to the Seller
on such Distribution Date.
(b) Notwithstanding anything to the contrary in this Series Supplement or
the Agreement, the entire amount deposited in the Principal Funding Account and
the Interest Funding Account pursuant to this Section and all other amounts on
deposit therein shall be distributed in full to the Series [ ]
Certificateholders in the order of priority set forth in Section 4.7 on the
Distribution Date on which funds are deposited pursuant to this Section 8.2 (or,
if not so deposited on a Distribution Date, on the immediately following
Distribution Date) and any distribution made pursuant to this Section 8.2 shall
be deemed to be a final distribution pursuant to Section 12.2 of the Agreement
with respect to Series [ ].
ARTICLE IX
Miscellaneous Provisions
SECTION 9.1 Securities Law Filings. The Seller shall cause the Class A and
Class B Certificates to be registered under the Securities Exchange Act of 1934,
as amended, to the extent required to do so under applicable law.
SECTION 9.2 Ratification of Agreement. As supplemented by this Series
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 9.3 Counterparts. This Series Supplement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION 9.4 Governing Law. This Series Supplement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
SECTION 9.5 Limitation of Class C Certificates. Each purchaser of a Class
C Certificate (other than Deutsche FRLP) (each, the "Purchaser") hereby
represents and warrants to the Trustee and Deutsche FRLP, and hereby agrees with
the Trustee and Deutsche FRLP, and the Purchaser hereby acknowledges, as follows
(except to the extent that such provisions have been waived or modified by
Deutsche FRLP in accordance with the Agreement or this Series Supplement):
(1) The Class C Certificates have not been and will not be
registered under the Securities Act or the securities laws of any
jurisdiction. Consequently, the Class C Certificates are not transferable
other than pursuant to an exemption from the registration requirements of
the Securities Act and satisfaction of certain provisions of this Series
Supplement.
34
(2) The Purchaser is a "qualified institutional buyer" ("QIB")
within the meaning of Rule 144A under the Securities Act ("Rule 144A") and
is purchasing for its own account (and not for the account of others) or
as a fiduciary or agent for others (which others also are QIBs and have
executed a letter substantially in the form of Exhibit C to this Series
Supplement and have delivered a copy of such letter to Deutsche FRLP and
the Trustee). The Purchaser is aware that it (or any account for which it
is purchasing) may be required to bear the economic risk of an investment
in the Class C Certificates for an indefinite period, and it (or such
account) is able to bear such risk for an indefinite period.
(3) No sale, pledge or other transfer of any Class C Certificate may
be made by any Person unless (a) either (i) such sale, pledge or other
transfer is made to Deutsche FRLP, or (ii) so long as the Class C
Certificates are eligible for resale pursuant to Rule 144A under the
Securities Act, such sale, pledge or other transfer is made to a Person
whom the transferor reasonably believes after due inquiry is a QIB acting
for its own account (and not for the account of others) or as a fiduciary
or agent for others (which others also are QIBs) to whom notice is given
that the sale, pledge or transfer is being made in reliance on Rule 144A.
(4) The Class C Certificates may not be acquired by or for the
account of (i) an "employee benefit plan" (as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Code or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in
the entity. By accepting and holding a Class C Certificate, the holder
thereof shall be deemed to have represented and warranted that it is not
within any of the categories described in the preceding sentence.
(5) The Purchaser acknowledges that it has been afforded an
opportunity to request from Deutsche FRLP, the Servicer and Deutsche Bank
Securities Inc. (the "Initial Purchaser"), and has received and reviewed,
all information which it has deemed necessary in connection with its
decision to purchase the Class C Certificates. The Purchaser acknowledges
that none of Deutsche FRLP, the Servicer, the Initial Purchaser nor any of
their respective affiliates or any Person representing any of them has
made any representation to it with respect to any information relating to
the offering or sale of the Class C Certificates, other than the
information contained in the private placement memorandum for the Class C
Certificates, a copy of which has been delivered to it.
(6) The Purchaser understands that all information furnished to it
by Deutsche FRLP, the Servicer or the Initial Purchaser or representatives
of Deutsche FRLP, the Servicer or the Initial Purchaser in connection with
its evaluation of an investment in the Class C Certificates was provided
to it on a confidential basis and it agrees not to disclose such
information, in whole or in part, to any other Person.
35
(7) The Purchaser further represents and warrants to Deutsche FRLP
and the Trustee that, except to the extent permitted in paragraphs (8) and
(9) below, the Purchaser: (i) is properly classified as a "corporation" as
described in Section 7701(a)(3) of the Code which is created or organized
under the laws of the United States, any State thereof or the District of
Columbia, and will not knowingly take any action which will cause it not
to be so classified; and (ii) is not an S corporation as described in
Section 1361 of the Code (an "S Corporation"), and will not knowingly take
any action which will cause it to be so classified.
(8) No Class C Certificates shall be transferred or sold to any
grantor trust, partnership or S Corporation (each a "Pass-Through Entity")
unless such entity represents that (i) not 25% or more (or that amount
which the Internal Revenue Service (or any successor thereto) may
subsequently indicate is an amount which prevents treating direct and/or
indirect owners of a Pass-Through Entity as partners in the Trust for
purposes of determining whether the Trust is a publicly traded
partnership) of the value of the assets of the Pass-Through Entity is
attributable to the Pass-Through Entity's ownership interest in
certificates issued by the Trust other than the Class A and Class B
Certificates and (ii) the Pass-Through Entity does not specially allocate
to any of its beneficiaries amounts received in respect of certificates
issued by the Trust other than Class A and Class B Certificates. Any
purported transfer, assignment or other conveyance (including any
participation) of the Class C Certificates in contravention of the
immediately preceding sentence shall be null and void ab initio and the
purported transferor shall continue to be treated as the owner of such
Class C Certificates and the purported transferee shall not be recognized
as a Class C Certificateholder by Deutsche FRLP or the Trustee.
(9) No Class C Certificates shall be transferred or sold to any
foreign investor ("Foreign Investor") which does not make the
representations contained in Annex 1 to the representation letter required
to be signed by a purchaser in connection with the purchase of Class C
Certificates. A Foreign Investor for this purpose includes any person who
is not: (1) a citizen or resident of the United States; (2) a corporation
or partnership or other entity treated for Federal income tax purposes as
a corporation or a partnership created or organized in or under the laws
of the United States, any State thereof or the District of Columbia; (3)
an estate, the income of which is subject to United States Federal income
tax, regardless of its source; or (4) a trust if a U.S. court is able to
exercise primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons under the Code and
applicable Treasury regulations prior to that date, that elect to continue
to be treated as United States persons under the Code or applicable
Treasury regulations will not be Foreign Investors.
(10) The Purchaser confirms that is has neither acquired nor will it
sell, trade or transfer any interest in any Class C Certificate or cause
an interest in any Class C Certificate to be marketed on or through (i) an
"established securities market" within the meaning of
36
Section 7704(b)(1) of the Code and any proposed, temporary or final
treasury regulation thereunder, including, without limitation, an
over-the-counter market or an interdealer quotation system that regularly
disseminates firm buy or sell quotations or (ii) "secondary market" or
"substantial equivalent thereof" within the meaning of Section 7704(b)(2)
of the Code and any proposed, temporary or final treasury regulation
thereunder, including a market wherein interests in the Class C
Certificates are regularly quoted by any person making a market in those
interests and a market wherein any person regularly makes available bid or
offer quotes with respect to interests in the Class C Certificates and
stands ready to effect buy or sell transactions at the quoted prices for
itself or on behalf of others. Any purported transfer, assignment or other
conveyance of any Class C Certificate in contravention of the foregoing
covenant will be null and void ab initio and the purported transferor will
continue to be treated as the holder of such Class C Certificate and the
purported transferee will not be recognized as a Class C Certificateholder
by Deutsche FRLP, the Servicer or the Trustee.
(11) Notwithstanding the foregoing, at no time shall the aggregate
number of Private Holders exceed 100. Any purported transfer, assignment
or other conveyance (including any participation) of the Class C
Certificates in contravention of the immediately preceding sentence will
be null and void ab initio and the purported transferor will continue to
be treated as the holder of those Class C Certificates and the purported
transferee will not be recognized as a Class C Certificateholder by
Deutsche FRLP, the Servicer or the Trustee. "Private Holder" means each
holder of a right to receive interest or principal in respect of any
direct or indirect interest in the Trust, including any financial
instrument or contract the value of which is determined in whole or part
by reference to the Trust (including the Trust's assets, income of the
Trust or distributions made by the Trust), excluding any interest in the
Trust represented by any series or class of certificates or any other
interests as to which the Trustee has received an opinion of counsel to
the effect that that series, class or other interest will be treated as
debt or otherwise not as an equity interest in either the Trust or the
Receivables for federal income tax purposes (unless that interest is
convertible or exchangeable into an interest in the Trust or the Trust's
income or that interest provides for payment of equivalent value).
Notwithstanding the immediately preceding sentence, "Private Holder" will
also include any other person that Deutsche FRLP determines is a "partner"
within the meaning of Section 1.7704-1(h)(1)(ii) of the U.S. Treasury
Regulations (including by reason of Section 1.7704-1(h)(3)) or any
successor provision of law. Any person holding more than one interest in
the Trust, each of which separately would cause that person to be a
Private Holder, will be treated as a single Private Holder. Each holder of
an interest in a Private Holder which is a partnership, S corporation or a
grantor trust under the Code will be treated as a Private Holder unless
excepted with the consent of Deutsche FRLP (which consent will be based on
an opinion of counsel generally to the effect that the action taken
pursuant to the consent will not cause the Trust to become a publicly
traded partnership treated as a corporation). Notwithstanding anything to
the contrary herein, each Class C Certificateholder, and each holder of
any Class of any Series if with respect to such Class no opinion is
delivered to the effect that the Certificates of such Class will be
treated as debt for federal income tax purposes, will be considered to be
a Private Holder.
37
(12) The Class C Certificates will be issued in denominations of
$1,000,000 and integral multiples of $100,000 in excess thereof. No Class
C Certificate may be subdivided upon transfer or exchange in a manner so
that the resulting Class C Certificate if it had been sold in the original
offering would have had an initial offering price of less than $1,000,000
and any purported transfer, assignment or conveyance of a Class C
Certificate in contravention of the immediately preceding sentence will be
void ab initio and the purported transferor will continue to be treated as
the owner of that Class C Certificate for all purposes.
(13) Without limiting the foregoing, no transfer, pledge, assignment
or conveyance may be made to any one Person for Class C Certificates with
a face amount of less than $1,000,000 and, in the case of any Person
acting on behalf of one or more third parties (other than a bank (as
defined in Section 3(a)(2) of the Securities Act) acting in its fiduciary
capacity), for Class C Certificates with a face amount of less than that
amount for each of those third parties. Any purported transfer, assignment
or conveyance in contravention of the immediately preceding sentence will
be void ab initio and the purported transferor will continue to be treated
as the owner of the Class C Certificates for all purposes. Neither
Deutsche FRLP nor the Trustee will be obligated to register the Class C
Certificates under the Securities Act, qualify the Class C Certificates
under the securities laws of any state or provide registration rights to
any purchaser or holder thereof.
(14) No transfer, assignment or conveyance of a Class C Certificate
will be effective unless Deutsche FRLP and the Trustee shall have received
a letter, substantially in the form of Exhibit C to this Series
Supplement, from the transferee, assignee or recipient of the conveyance.
(15) The Class C Certificates will bear legends substantially to the
effect of the matters contemplated by paragraphs (1) through (14) above,
unless Deutsche FRLP determines otherwise in accordance with applicable
law.
(16) If the Purchaser of the Class C Certificate is a Foreign
Investor, the representations and warranties contained in Annex 1 to the
form of letter in Exhibit C to this Series Supplement required to be
signed by Foreign Investors purchasing Class C Certificates are
incorporated by reference.
SECTION 9.6 The Trustee; Paying Agent; Transfer Agent and Registrar. (a)
The Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Series Supplement, for or in respect of
the calculation or verification of any of the amounts, allocation or
distributions set forth in Article IV and Article VIII or for or in respect of
the recitals contained herein, all of which recitals are made solely by the
Seller; provided, however, that this sentence shall not limit the obligations of
the Trustee contemplated by Section 4.2(b) of this Series Supplement.
(b) For so long as any Series [ ] Certificates are listed on the
Luxembourg Stock Exchange, an additional Paying Agent and an additional Transfer
Agent and Registrar for the Series
38
[ ] Certificates shall be maintained in Luxembourg. The Trustee is hereby
directed to appoint Kredietbank S.A. Luxembourgeoise in Luxembourg as an
additional Paying Agent and as additional Transfer Agent and Registrar for the
Series [ ] Certificates and to enter into a listing agency agreement with
Kredietbank S.A. Luxembourgeoise which is not inconsistent with the terms of
this Series Supplement and which is mutually satisfactory to the Servicer, the
Trustee and the Listing Agent; provided, that unless Kredietbank S.A.
Luxembourgeoise shall be rated "P-1" by ▇▇▇▇▇'▇ and "A-1" by S&P, it may not
hold funds pursuant to this Series Supplement overnight.
If the Listing Agent resigns or is removed and a successor is appointed,
notice of said appointment shall be given by publication in an Authorized
European Newspaper.
SECTION 9.7 Instructions in Writing. All instructions given by the
Servicer to the Trustee pursuant to this Series Supplement shall be in writing,
and may be included in a Distribution Date Statement.
SECTION 9.8 Initial Funding of Reserve Fund. On the Closing Date the
Seller shall cause to be deposited with the Trustee, and the Trustee shall
deposit in the Reserve Fund, available funds in an amount equal to [ ] percent
of the aggregate initial principal balance of the Series [ ] Certificates.
SECTION 9.9 Severability; Certificate Rate Limitation. (a) If any one or
more of the covenants, agreements, provisions or terms of this Series Supplement
or any Series [ ] Certificate shall for any reason whatsoever be held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Series
Supplement and shall in no way affect the validity or enforceability of the
other provisions of this Series Supplement or of such Series [ ] Certificate.
(b) Notwithstanding anything in this Series Supplement, the Agreement, or
any Series [ ] Certificate to the contrary, if at any time any Certificate Rate,
together with all fees, charges and other amounts which are treated as interest
on any Series [ ] Certificate under applicable law (collectively the "Charges"),
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by the Series [ ]
Certificateholders in accordance with the terms of this Series Supplement, the
Agreement or any Series [ ] Certificate, then such Certificate Rate, together
with all Charges payable in respect of the Series [ ] Certificate, shall be
limited to the Maximum Rate and, to the extent lawful, such Certificate Rate and
Charges that would have been payable in respect of the Series [ ] Certificates,
but were not payable as a result of the operation of this Section, shall be
cumulated and the Certificate Rate and Charges payable to the Series [ ]
Certificateholders in respect of other periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount shall have been received
by the Series [ ] Certificateholders.
SECTION 9.10 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
39
SECTION 9.11 Certain Matters Relating to Luxembourg Stock Exchange
Listing. (a) For as long as any Series [ ] Certificates are listed on the
Luxembourg Stock Exchange, on each Date the Trustee shall notify the Listing
Agent and the Luxembourg Stock Exchange of the outstanding principal balance of
each Class of such Series [ ] Certificates after giving effect to distributions
of principal, if any, thereon on each Distribution Date (as soon as possible
after the determination of such principal balances but not later than the
Distribution Date on which a payment of principal is made) in accordance with
instructions from the Servicer (which may be standing instructions).
(b) Promptly upon receipt of notice of any qualification, reduction or
withdrawal of the rating assigned to any Class of Certificates listed on the
Luxembourg Stock Exchange, the Trustee shall notify the Listing Agent and the
Luxembourg Stock Exchange thereof in accordance with instructions from the
Servicer (which may be standing instructions).
(c) Prior to listing on the Luxembourg Stock Exchange, a legal notice
("Notice Legale") relating to the issuance of the Certificates, together with
certain documents relating to the Seller and the Trust, shall be deposited by
the Trustee (at the written direction of the Seller or the Servicer) with the
Chief Registrar of the District of Luxembourg ("Greffier en Chef du Tribunal
d'Arrondissement de et a Luxembourg"), where copies thereof may be obtained,
free of charge, upon request.
(d) For so long as the Class A or Class B Certificates are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the
Servicer and the Trustee shall cause the following documents to be available
without charge for inspection (and copies of the documents listed in (1), (2) ,
(4) and (5) to be provided without charge) during regular business hours at the
office of the Listing Agent in the City of Luxembourg:
(1) an executed copy of the Agreement;
(2) an executed copy of this Series Supplement;
(3) an executed copy of the agreement between the Trustee and the
Listing Agent;
(4) a copy of the prospectus supplement relating to the public
offering of the Class A and the Class B Certificates and the accompanying
prospectus; and
(5) copies of each monthly statement prepared by the Servicer for
each Distribution Date.
(e) The parties hereto shall cooperate in good faith to take all actions
and execute all documents which are necessary and appropriate to cause the Class
A Certificates and the Class B Certificates to be listed on the Luxembourg Stock
Exchange and to maintain such listing.
40
[SIGNATURES FOLLOW]
41
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have caused
this Series Supplement to be duly executed as of the day and year first above
written.
DEUTSCHE FLOORPLAN RECEIVABLES, L.P.,
as Seller
By DEUTSCHE FLOORPLAN RECEIVABLES, INC.,
its general partner
By:
--------------------------------------
By:
--------------------------------------
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Servicer
By:
--------------------------------------
By:
--------------------------------------
S-1
[ ],
as Trustee
By:
--------------------------------------
Name:
Title:
S-2
EXHIBIT A
FORM OF CLASS [ ] CERTIFICATE
Initial
REGISTERED Principal Balance: */
$____________________
Certificate No. R-
CUSIP NO.
[Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
[FOR CLASS B CERTIFICATES, INSERT:
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF (I) AN "EMPLOYEE
BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")), THAT IS SUBJECT TO THE PROVISIONS
OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE CODE OR
(III) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY. BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE
HOLDER THEREOF SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT
WITHIN ANY OF THE CATEGORIES DESCRIBED IN THE PRECEDING SENTENCE.
[FOR CLASS C CERTIFICATES INSERT:
THE PURCHASER OF THIS CERTIFICATE (THE "PURCHASER") HEREBY REPRESENTS AND
WARRANTS TO THE TRUSTEE AND DEUTSCHE FRLP, AND HEREBY AGREES WITH THE TRUSTEE
AND DEUTSCHE FRLP, AND THE PURCHASER HEREBY ACKNOWLEDGES, AS FOLLOWS:
(1) THE CLASS C CERTIFICATES HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY
JURISDICTION. CONSEQUENTLY, THE CLASS C CERTIFICATES ARE NOT TRANSFERABLE
OTHER THAN PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND SATISFACTION OF CERTAIN PROVISIONS OF THE SERIES
SUPPLEMENT.
----------
*/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
(2) THE PURCHASER IS A "QUALIFIED INSTITUTIONAL BUYER" ("QIB")
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") AND
IS PURCHASING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR
AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS AND HAVE
EXECUTED A LETTER SUBSTANTIALLY IN THE FORM OF EXHIBIT C TO THE SERIES
SUPPLEMENT AND HAVE DELIVERED A COPY OF SUCH LETTER TO DEUTSCHE FRLP AND
THE TRUSTEE). THE PURCHASER IS AWARE THAT IT (OR ANY ACCOUNT FOR WHICH IT
IS PURCHASING) MAY BE REQUIRED TO BEAR THE ECONOMIC RISK OF AN INVESTMENT
IN THE CLASS C CERTIFICATES FOR AN INDEFINITE PERIOD, AND IT (OR SUCH
ACCOUNT) IS ABLE TO BEAR SUCH RISK FOR AN INDEFINITE PERIOD.
(3) NO SALE, PLEDGE OR OTHER TRANSFER OF ANY CLASS C CERTIFICATE MAY
BE MADE BY ANY PERSON UNLESS (A) EITHER (I) SUCH SALE, PLEDGE OR OTHER
TRANSFER IS MADE TO DEUTSCHE FRLP, OR (II) SO LONG AS THE CLASS C
CERTIFICATES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON
WHOM THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QIB ACTING
FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS) TO WHOM NOTICE IS GIVEN
THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A.
(4) THE CLASS C CERTIFICATES MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF (I) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")), THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE CODE OR (III) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY. BY ACCEPTING AND HOLDING A CLASS C CERTIFICATE, THE HOLDER
THEREOF SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT
WITHIN ANY OF THE CATEGORIES DESCRIBED IN THE PRECEDING SENTENCE.
(5) THE PURCHASER ACKNOWLEDGES THAT IT HAS BEEN AFFORDED AN
OPPORTUNITY TO REQUEST FROM DEUTSCHE FRLP, THE SERVICER AND DEUTSCHE BANK
SECURITIES INC. (THE "INITIAL PURCHASER"), AND HAS RECEIVED AND REVIEWED,
ALL INFORMATION WHICH IT HAS DEEMED NECESSARY IN CONNECTION WITH ITS
DECISION TO PURCHASE THE CLASS C CERTIFICATES. THE PURCHASER ACKNOWLEDGES
THAT NONE OF DEUTSCHE FRLP, THE SERVICER, THE INITIAL PURCHASER NOR ANY OF
THEIR RESPECTIVE AFFILIATES OR ANY PERSON REPRESENTING ANY OF THEM HAS
2
MADE ANY REPRESENTATION TO IT WITH RESPECT TO ANY INFORMATION RELATING TO
THE OFFERING OR SALE OF THE CLASS C CERTIFICATES, OTHER THAN THE
INFORMATION CONTAINED IN THE PRIVATE PLACEMENT MEMORANDUM FOR THE CLASS C
CERTIFICATES, A COPY OF WHICH HAS BEEN DELIVERED TO IT.
(6) THE PURCHASER UNDERSTANDS THAT ALL INFORMATION FURNISHED TO IT
BY DEUTSCHE FRLP, THE SERVICER OR THE INITIAL PURCHASER OR REPRESENTATIVES
OF DEUTSCHE FRLP, THE SERVICER OR THE INITIAL PURCHASER IN CONNECTION WITH
ITS EVALUATION OF AN INVESTMENT IN THE CLASS C CERTIFICATES WAS PROVIDED
TO IT ON A CONFIDENTIAL BASIS AND IT AGREES NOT TO DISCLOSE SUCH
INFORMATION, IN WHOLE OR IN PART, TO ANY OTHER PERSON.
(7) THE PURCHASER FURTHER REPRESENTS AND WARRANTS TO DEUTSCHE FRLP
AND THE TRUSTEE THAT, EXCEPT TO THE EXTENT PERMITTED IN PARAGRAPHS (8) AND
(9) BELOW, THE PURCHASER: (I) IS PROPERLY CLASSIFIED AS A "CORPORATION" AS
DESCRIBED IN SECTION 7701(a)(3) OF THE CODE WHICH IS CREATED OR ORGANIZED
UNDER THE LAWS OF THE UNITED STATES, ANY STATE THEREOF OR THE DISTRICT OF
COLUMBIA, AND WILL NOT KNOWINGLY TAKE ANY ACTION WHICH WILL CAUSE IT NOT
TO BE SO CLASSIFIED; AND (II) IS NOT AN S CORPORATION AS DESCRIBED IN
SECTION 1361 OF THE CODE, AND WILL NOT KNOWINGLY TAKE ANY ACTION WHICH
WILL CAUSE IT TO BE SO CLASSIFIED.
(8) NO CLASS C CERTIFICATES SHALL BE TRANSFERRED OR SOLD TO ANY
GRANTOR TRUST, PARTNERSHIP OR S CORPORATION (EACH A "PASS-THROUGH ENTITY")
UNLESS SUCH ENTITY REPRESENTS THAT (I) NOT 25% OR MORE (OR THAT AMOUNT
WHICH THE INTERNAL REVENUE SERVICE (OR ANY SUCCESSOR THERETO) MAY
SUBSEQUENTLY INDICATE IS AN AMOUNT WHICH PREVENTS TREATING DIRECT AND/OR
INDIRECT OWNERS OF A PASS-THROUGH ENTITY AS PARTNERS IN THE TRUST FOR
PURPOSES OF DETERMINING WHETHER THE TRUST IS A PUBLICLY TRADED
PARTNERSHIP) OF THE VALUE OF THE ASSETS OF THE PASS-THROUGH ENTITY IS
ATTRIBUTABLE TO THE PASS-THROUGH ENTITY'S OWNERSHIP INTEREST IN
CERTIFICATES ISSUED BY THE TRUST OTHER THAN THE CLASS A AND CLASS B
CERTIFICATES AND (II) THE PASS-THROUGH ENTITY DOES NOT SPECIALLY ALLOCATE
TO ANY OF ITS BENEFICIARIES AMOUNTS RECEIVED IN RESPECT OF CERTIFICATES
ISSUED BY THE TRUST OTHER THAN CLASS A AND CLASS B CERTIFICATES. ANY
PURPORTED TRANSFER, ASSIGNMENT OR OTHER CONVEYANCE (INCLUDING ANY
PARTICIPATION) OF THE CLASS C CERTIFICATES IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING SENTENCE SHALL BE NULL AND VOID AB INITIO AND THE
PURPORTED TRANSFEROR SHALL CONTINUE TO BE TREATED AS THE OWNER OF SUCH
3
CLASS C CERTIFICATES AND THE PURPORTED TRANSFEREE SHALL NOT BE RECOGNIZED
AS A CLASS C CERTIFICATEHOLDER BY DEUTSCHE FRLP OR THE TRUSTEE.
(9) NO CLASS C CERTIFICATES SHALL BE TRANSFERRED OR SOLD TO ANY
FOREIGN INVESTOR ("FOREIGN INVESTOR") WHICH DOES NOT MAKE THE
REPRESENTATIONS CONTAINED IN ANNEX 1 TO THE REPRESENTATION LETTER REQUIRED
TO BE SIGNED BY A PURCHASER IN CONNECTION WITH THE PURCHASE OF CLASS C
CERTIFICATES. A FOREIGN INVESTOR FOR THIS PURPOSE INCLUDES ANY PERSON WHO
IS NOT: (1) A CITIZEN OR RESIDENT OF THE UNITED STATES; (2) A CORPORATION
OR PARTNERSHIP OR OTHER ENTITY TREATED FOR FEDERAL INCOME TAX PURPOSES AS
A CORPORATION OR A PARTNERSHIP CREATED OR ORGANIZED IN OR UNDER THE LAWS
OF THE UNITED STATES, ANY STATE THEREOF OR THE DISTRICT OF COLUMBIA; (3)
AN ESTATE, THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL INCOME
TAX, REGARDLESS OF ITS SOURCE; OR (4) A TRUST IF A U.S. COURT IS ABLE TO
EXERCISE PRIMARY SUPERVISION OVER THE ADMINISTRATION OF THE TRUST AND ONE
OR MORE U.S. PERSONS HAVE THE AUTHORITY TO CONTROL ALL SUBSTANTIAL
DECISIONS OF THE TRUST. NOTWITHSTANDING THE PRECEDING SENTENCE, TO THE
EXTENT PROVIDED IN TREASURY REGULATIONS, CERTAIN TRUSTS IN EXISTENCE ON
AUGUST 20, 1996, AND TREATED AS UNITED STATES PERSONS UNDER THE CODE AND
APPLICABLE TREASURY REGULATIONS PRIOR TO THAT DATE, THAT ELECT TO CONTINUE
TO BE TREATED AS UNITED STATES PERSONS UNDER THE CODE OR APPLICABLE
TREASURY REGULATIONS WILL NOT BE FOREIGN INVESTORS.
(10) THE PURCHASER CONFIRMS THAT IS HAS NEITHER ACQUIRED NOR WILL IT
SELL, TRADE OR TRANSFER ANY INTEREST IN ANY CLASS C CERTIFICATE OR CAUSE
AN INTEREST IN ANY CLASS C CERTIFICATE TO BE MARKETED ON OR THROUGH (I) AN
"ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1)
OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION
THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET OR
AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR
SELL QUOTATIONS OR (II) "SECONDARY MARKET" OR "SUBSTANTIAL EQUIVALENT
THEREOF" WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY
PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER, INCLUDING A
MARKET WHEREIN INTERESTS IN THE CLASS C CERTIFICATES ARE REGULARLY QUOTED
BY ANY PERSON MAKING A MARKET IN THOSE INTERESTS AND A MARKET WHEREIN ANY
PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO
INTERESTS IN THE CLASS C CERTIFICATES AND STANDS READY TO EFFECT BUY OR
SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON
4
BEHALF OF OTHERS. ANY PURPORTED TRANSFER, ASSIGNMENT OR OTHER CONVEYANCE
OF ANY CLASS C CERTIFICATE IN CONTRAVENTION OF THE FOREGOING COVENANT WILL
BE NULL AND VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO
BE TREATED AS THE HOLDER OF SUCH CLASS C CERTIFICATE AND THE PURPORTED
TRANSFEREE WILL NOT BE RECOGNIZED AS A CLASS C CERTIFICATEHOLDER BY
DEUTSCHE FRLP, THE SERVICER OR THE TRUSTEE.
(11) NOTWITHSTANDING THE FOREGOING, AT NO TIME SHALL THE AGGREGATE
NUMBER OF PRIVATE HOLDERS EXCEED 100. ANY PURPORTED TRANSFER, ASSIGNMENT
OR OTHER CONVEYANCE (INCLUDING ANY PARTICIPATION) OF THE CLASS C
CERTIFICATES IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING SENTENCE WILL
BE NULL AND VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO
BE TREATED AS THE HOLDER OF THOSE CLASS C CERTIFICATES AND THE PURPORTED
TRANSFEREE WILL NOT BE RECOGNIZED AS A CLASS C CERTIFICATEHOLDER BY
DEUTSCHE FRLP, THE SERVICER OR THE TRUSTEE. "PRIVATE HOLDER" MEANS EACH
HOLDER OF A RIGHT TO RECEIVE INTEREST OR PRINCIPAL IN RESPECT OF ANY
DIRECT OR INDIRECT INTEREST IN THE TRUST, INCLUDING ANY FINANCIAL
INSTRUMENT OR CONTRACT THE VALUE OF WHICH IS DETERMINED IN WHOLE OR PART
BY REFERENCE TO THE TRUST (INCLUDING THE TRUST'S ASSETS, INCOME OF THE
TRUST OR DISTRIBUTIONS MADE BY THE TRUST), EXCLUDING ANY INTEREST IN THE
TRUST REPRESENTED BY ANY SERIES OR CLASS OF CERTIFICATES OR ANY OTHER
INTERESTS AS TO WHICH THE TRUSTEE HAS RECEIVED AN OPINION OF COUNSEL TO
THE EFFECT THAT THAT SERIES, CLASS OR OTHER INTEREST WILL BE TREATED AS
DEBT OR OTHERWISE NOT AS AN EQUITY INTEREST IN EITHER THE TRUST OR THE
RECEIVABLES FOR FEDERAL INCOME TAX PURPOSES (UNLESS THAT INTEREST IS
CONVERTIBLE OR EXCHANGEABLE INTO AN INTEREST IN THE TRUST OR THE TRUST'S
INCOME OR THAT INTEREST PROVIDES FOR PAYMENT OF EQUIVALENT VALUE).
NOTWITHSTANDING THE IMMEDIATELY PRECEDING SENTENCE, "PRIVATE HOLDER" WILL
ALSO INCLUDE ANY OTHER PERSON THAT DEUTSCHE FRLP DETERMINES IS A "PARTNER"
WITHIN THE MEANING OF SECTION 1.7704-1(h)(1)(ii) OF THE U.S. TREASURY
REGULATIONS (INCLUDING BY REASON OF SECTION 1.7704-1(h)(3)) OR ANY
SUCCESSOR PROVISION OF LAW. ANY PERSON HOLDING MORE THAN ONE INTEREST IN
THE TRUST, EACH OF WHICH SEPARATELY WOULD CAUSE THAT PERSON TO BE A
PRIVATE HOLDER, WILL BE TREATED AS A SINGLE PRIVATE HOLDER. EACH HOLDER OF
AN INTEREST IN A PRIVATE HOLDER WHICH IS A PARTNERSHIP, S CORPORATION OR A
GRANTOR TRUST UNDER THE CODE WILL BE TREATED AS A PRIVATE HOLDER UNLESS
EXCEPTED WITH THE CONSENT OF DEUTSCHE FRLP (WHICH CONSENT WILL BE BASED ON
AN OPINION OF COUNSEL GENERALLY TO THE EFFECT THAT THE ACTION TAKEN
PURSUANT TO THE CONSENT WILL NOT CAUSE THE TRUST TO BECOME A
5
PUBLICLY TRADED PARTNERSHIP TREATED AS A CORPORATION). NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, EACH CLASS C CERTIFICATEHOLDER, AND EACH
HOLDER OF ANY CLASS OF ANY SERIES IF WITH RESPECT TO SUCH CLASS NO OPINION
IS DELIVERED TO THE EFFECT THAT THE CERTIFICATES OF SUCH CLASS WILL BE
TREATED AS DEBT FOR FEDERAL INCOME TAX PURPOSES, WILL BE CONSIDERED TO BE
A PRIVATE HOLDER.
(12) THE CLASS C CERTIFICATES WILL BE ISSUED IN DENOMINATIONS OF
$1,000,000 AND INTEGRAL MULTIPLES OF $100,000 IN EXCESS THEREOF. NO CLASS
C CERTIFICATE MAY BE SUBDIVIDED UPON TRANSFER OR EXCHANGE IN A MANNER SO
THAT THE RESULTING CLASS C CERTIFICATE IF IT HAD BEEN SOLD IN THE ORIGINAL
OFFERING WOULD HAVE HAD AN INITIAL OFFERING PRICE OF LESS THAN $1,000,000
AND ANY PURPORTED TRANSFER, ASSIGNMENT OR CONVEYANCE OF A CLASS C
CERTIFICATE IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING SENTENCE WILL BE
VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS
THE OWNER OF THAT CLASS C CERTIFICATE FOR ALL PURPOSES.
(13) WITHOUT LIMITING THE FOREGOING, NO TRANSFER, PLEDGE, ASSIGNMENT
OR CONVEYANCE MAY BE MADE TO ANY ONE PERSON FOR CLASS C CERTIFICATES WITH
A FACE AMOUNT OF LESS THAN $1,000,000 AND, IN THE CASE OF ANY PERSON
ACTING ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS
DEFINED IN SECTION 3(a)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY
CAPACITY), FOR CLASS C CERTIFICATES WITH A FACE AMOUNT OF LESS THAN THAT
AMOUNT FOR EACH OF THOSE THIRD PARTIES. ANY PURPORTED TRANSFER, ASSIGNMENT
OR CONVEYANCE IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING SENTENCE WILL
BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED
AS THE OWNER OF THE CLASS C CERTIFICATES FOR ALL PURPOSES. NEITHER
DEUTSCHE FRLP NOR THE TRUSTEE WILL BE OBLIGATED TO REGISTER THE CLASS C
CERTIFICATES UNDER THE SECURITIES ACT, QUALIFY THE CLASS C CERTIFICATES
UNDER THE SECURITIES LAWS OF ANY STATE OR PROVIDE REGISTRATION RIGHTS TO
ANY PURCHASER OR HOLDER THEREOF.
(14) NO TRANSFER, ASSIGNMENT OR CONVEYANCE OF A CLASS C CERTIFICATE
WILL BE EFFECTIVE UNLESS DEUTSCHE FRLP AND THE TRUSTEE SHALL HAVE RECEIVED
A LETTER, SUBSTANTIALLY IN THE FORM OF EXHIBIT C TO THE SERIES SUPPLEMENT,
FROM THE TRANSFEREE, ASSIGNEE OR RECIPIENT OF THE CONVEYANCE.
(15) IF THE PURCHASER OF THE CLASS C CERTIFICATE IS A FOREIGN
INVESTOR, THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ANNEX
6
1 TO THE FORM OF LETTER IN EXHIBIT C TO THE SERIES SUPPLEMENT REQUIRED TO
BE SIGNED BY FOREIGN INVESTORS PURCHASING CLASS C CERTIFICATES ARE
INCORPORATED BY REFERENCE.]
7
$___________ FLOATING RATE ASSET BACKED CERTIFICATES,
SERIES [ ], CLASS [ ]
evidencing a fractional undivided interest in certain
assets of the
DISTRIBUTION FINANCIAL SERVICES FLOORPLAN MASTER TRUST.
This certificate ("Certificate") does not represent any interest in, or
obligation of, Deutsche Floorplan Receivables, L.P. ("Deutsche FRLP" or the
"Seller"), Deutsche Financial Services Corporation ("DFS"), Deutsche Bank AG or
any affiliate thereof.
This certifies that [ ] (the "Class [ ] Certificateholder"), is the
registered owner of a fractional undivided interest in assets of the
Distribution Financial Services Floorplan Master Trust (the "Trust") created
pursuant to an Amended and Restated Pooling and Servicing Agreement (the "P&S"),
dated as of April 1, 2000, as supplemented by the Series [ ] Supplement dated as
of [ ], 2002 (the "Series [ ] Supplement" or the "Series Supplement"), among
Deutsche FRLP, as Seller, DFS, as Servicer, and [ ], as trustee (the "Trustee").
The P&S and the Series [ ] Supplement are collectively referred to herein as the
"Pooling and Servicing Agreement."
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
This Certificate is issued under and is subject to the terms, provisions
and conditions of the Pooling and Servicing Agreement to which, as amended and
supplemented from time to time, the Certificateholder by virtue of the
acceptance hereof assents and is bound. Although a summary of certain provisions
of the Pooling and Servicing Agreement is set forth herein, this Certificate
does not purport to summarize the Pooling and Servicing Agreement and reference
is made to the Pooling and Servicing Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee. In the event of
any conflict or inconsistency between this Certificate and the Pooling and
Servicing Agreement, the Pooling and Servicing Agreement shall control in all
respects. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to them in the Pooling and Servicing Agreement.
8
The Seller has entered into the Pooling and Servicing Agreement and the
Series [ ] Certificates have been (or shall be) issued with the intention that
the Series [ ] Certificates shall qualify as indebtedness of Deutsche FRLP
secured by the Receivables for Federal income taxes, state and local income,
single business and franchise taxes (imposed on or measured by income) and any
other taxes imposed on or measured by income. The Seller, each Beneficiary and
each Certificateholder and Certificate Owner, by the acceptance of its
Certificate or Book-Entry Certificate, as applicable, agrees to treat such
Series [ ] Certificate as indebtedness of the Seller secured by the Receivables
for Federal income taxes, state and local income, single business and franchise
taxes (imposed on or measured by income) and any other taxes imposed on or
measured by income.
[FOR CLASS B AND CLASS C CERTIFICATES, INSERT: THIS CERTIFICATE IS
SUBORDINATE TO THE CLASS A [AND CLASS B] CERTIFICATES IN ACCORDANCE WITH THE
SERIES SUPPLEMENT].
9
IN WITNESS WHEREOF, the Seller has caused this Certificate to be duly
executed.
DEUTSCHE FLOORPLAN RECEIVABLES, L.P.,
as Seller
By DEUTSCHE FLOORPLAN RECEIVABLES, INC.,
its general partner
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Dated:
S-1
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.
[ ],
as Trustee
By:
------------------------------
Authorized Officer
Dated:
S-2
ASSIGNMENT
Social Security or other identifying number of assignee
--------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
--------------------------------
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints __________________________________, attorney, to
transfer said certificate on the books kept for registration thereof, with full
power of substitution in the premises.
*
Dated:___________________ ---------------------------------
Signature Guaranteed:
----------
(*) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the within Certificate in every particular,
without alteration, enlargement or any change whatsoever.
EXHIBIT B
DISTRIBUTION DATE STATEMENT
(a) The aggregate amount of Collections, the aggregate amount of
Non-Principal Collections and the aggregate amount of Principal Collections
processed during the immediately preceding Collection Period, and the Pool
Balance as of the end of such Collection Period;
(b) The Floating Allocation Percentage, the Principal Allocation
Percentage and the Series [ ] Allocation Percentage relating to such Collection
Period;
(c) The total amount, if any, distributed on the Series [ ]
Certificates;
(d) The amount of such distribution allocable to principal on the Class
A Certificates, the Class B Certificates and the Class C Certificates;
(e) The amount of such distribution allocable to interest on the Class A
Certificates, the Class B Certificates and the Class C Certificates;
(f) The Investor Default Amount for the applicable Distribution Date;
(g) The Deficiency Amount, if any, for the preceding Collection Period;
(h) The amount of the Class A, Class B and Class C Investor Charge-Offs
and the amounts of reimbursements thereof for the preceding Collection Period;
(i) The amount of the Monthly Servicing Fee for the preceding Collection
Period;
(j) The Class A Invested Amount, the Class B Invested Amount, the Class
C Invested Amount, the Excess Funding Account balance and the outstanding
principal balance of the Class A, Class B and Class C Certificates for such
Distribution Date (after giving effect to all distributions which shall occur on
such Distribution Date);
(k) The Controlled Deposit Amount, if any;
(l) The Class A Pool Factor, Class B Pool Factor and Class C Pool
Factor;
(m) LIBOR and the applicable Net Receivables Rate for the next Interest
Period;
(n) The Reserve Fund balance with respect to the current Determination
Date;
(o) The Principal Funding Account balance, the Interest Funding Account
balance, he Yield Supplement Account balance and the Collection Account balance
with respect to the current Distribution Date;
(p) The Servicer Advance, if any, for the current Distribution Date and
reimbursement of any Servicer Advance;
(q) Any elective or "deemed" waiver of the Monthly Servicing Fee for the
current Distribution Date;
(r) If a Dealer Overconcentration exists, (i) the Unconcentrated Pool
Balance, (ii) the aggregate amount of such Dealer Overconcentration, (iii) the
applicable Unconcentrated Percentage and Overconcentrated Percentage, and (iv)
the portion of Collections, Miscellaneous Payments and the Defaulted Amount
allocated to the Dealer Overconcentration Series and other Series;
(s) the Class A Monthly Interest;
(t) the Class B Monthly Interest;
(u) the Class C Monthly Interest;
(v) the Class A Additional Interest;
(w) the Class B Additional Interest;
(x) the Class C Additional Interest;
(y) the Certificateholders' Monthly Servicing Fee;
(z) the Reserve Fund Deposit Amount;
(aa) the Investor Default Amount;
(bb) the Class A Carry-over Amount;
(cc) the Class B Carry-over Amount;
(dd) the Class C Carry-over Amount;
(ee) the Yield Supplement Account Deposit Amount;
(ff) the amount calculated pursuant to Section 4.6(b);
(gg) the amount calculated pursuant to Section 4.7(a)(i);
2
(hh) the amount calculated pursuant to Section 4.8;
(ii) the amount calculated pursuant to Section 4.10; and
(jj) Miscellaneous Payments, including Adjustment Payments, Transfer
Deposit Amounts and Unallocated Principal Collections.
3
EXHIBIT C
FORM OF REPRESENTATION LETTER
[Date]
[ ], as Trustee
Deutsche Floorplan Receivables, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Distribution Financial Services Floorplan Master Trust, Series [ ],
Class C Certificates
Ladies and Gentlemen:
This letter is being delivered by the undersigned (the "Purchaser")
pursuant to Section 9.5 of the Series [ ] Supplement dated as of [ ], 2002 (as
amended, amended and restated or otherwise modified from time to time, the
"Supplement") among Deutsche Floorplan Receivables, L.P., as Seller ("Deutsche
FRLP"), Deutsche Financial Services Corporation, as Servicer, and [ ], as
Trustee, in connection with the Purchaser's acquisition of a Class C
Certificate. Capitalized terms defined in (or by reference in) the Supplement
and used herein without definition shall have the meanings defined in (or by
reference in) the Supplement. The Purchaser hereby represents and warrants to
the Trustee and Deutsche FRLP, and hereby agrees with the Trustee and Deutsche
FRLP, and the Purchaser hereby acknowledges, as follows:
(1) The Class C Certificates have not been and will not be
registered under the Securities Act or the securities laws of any
jurisdiction. Consequently, the Class C Certificates are not transferable
other than pursuant to an exemption from the registration requirements of
the Securities Act and satisfaction of certain provisions of the
Supplement.
(2) The Purchaser is a "qualified institutional buyer" ("QIB")
within the meaning of Rule 144A under the Securities Act ("Rule 144A") and
is purchasing for its own account (and not for the account of others) or
as a fiduciary or agent for others (which others also are QIBs and have
executed a letter substantially in the form of this letter and have
delivered a copy of such letter to Deutsche FRLP and the Trustee). The
1
Purchaser is aware that it (or any account for which it is purchasing) may
be required to bear the economic risk of an investment in the Class C
Certificates for an indefinite period, and it (or such account) is able to
bear such risk for an indefinite period.
(3) No sale, pledge or other transfer of any Class C Certificate may
be made by any Person unless (a) either (i) such sale, pledge or other
transfer is made to Deutsche FRLP, or (ii) so long as the Class C
Certificates are eligible for resale pursuant to Rule 144A under the
Securities Act, such sale, pledge or other transfer is made to a Person
whom the transferor reasonably believes after due inquiry is a QIB acting
for its own account (and not for the account of others) or as a fiduciary
or agent for others (which others also are QIBs) to whom notice is given
that the sale, pledge or transfer is being made in reliance on Rule 144A.
(4) The Class C Certificates may not be acquired by or for the
account of (i) an "employee benefit plan" (as defined in section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Code or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in
the entity. By accepting and holding a Class C Certificate, the holder
thereof shall be deemed to have represented and warranted that it is not
within any of the categories described in the preceding sentence.
(5) The Purchaser acknowledges that it has been afforded an
opportunity to request from Deutsche FRLP, the Servicer and Deutsche Bank
Securities Inc. (the "Initial Purchaser"), and has received and reviewed,
all information which it has deemed necessary in connection with its
decision to purchase the Class C Certificates. The Purchaser acknowledges
that none of Deutsche FRLP, the Servicer, the Initial Purchaser nor any of
their respective affiliates or any Person representing any of them has
made any representation to it with respect to any information relating to
the offering or sale of the Class C Certificates, other than the
information contained in the private placement memorandum for the Class C
Certificates, a copy of which has been delivered to it.
(6) The Purchaser understands that all information furnished to it
by Deutsche FRLP, the Servicer or the Initial Purchaser or representatives
of Deutsche FRLP, the Servicer or the Initial Purchaser in connection with
its evaluation of an investment in the Class C Certificates was provided
to it on a confidential basis and it agrees not to disclose such
information, in whole or in part, to any other Person.
(7) The Purchaser further represents and warrants to Deutsche FRLP
and the Trustee that, except to the extent permitted in paragraphs (8) and
(9) below, the Purchaser: (i) is properly classified as a "corporation" as
described in Section 7701(a)(3) of the Code which is created or organized
under the laws of the United States, any State thereof or the District of
Columbia, and will not knowingly take any action which will cause it not
to be so classified; and (ii) is not an S corporation as described in
Section
2
1361 of the Code (an "S Corporation"), and will not knowingly take any
action which will cause it to be so classified.
(8) No Class C Certificates shall be transferred or sold to any
grantor trust, partnership or S Corporation (each a "Pass-Through Entity")
unless such entity represents that (i) not 25% or more (or that amount
which the Internal Revenue Service (or any successor thereto) may
subsequently indicate is an amount which prevents treating direct and/or
indirect owners of a Pass-Through Entity as partners in the Trust for
purposes of determining whether the Trust is a publicly traded
partnership) of the value of the assets of the Pass-Through Entity is
attributable to the Pass-Through Entity's ownership interest in
certificates issued by the Trust other than the Class A and Class B
Certificates and (ii) the Pass-Through Entity does not specially allocate
to any of its beneficiaries amounts received in respect of certificates
issued by the Trust other than Class A and Class B Certificates. Any
purported transfer, assignment or other conveyance (including any
participation) of the Class C Certificates in contravention of the
immediately preceding sentence shall be null and void ab initio and the
purported transferor shall continue to be treated as the owner of such
Class C Certificates and the purported transferee shall not be recognized
as a Class C Certificateholder by Deutsche FRLP or the Trustee.
(9) No Class C Certificates shall be transferred or sold to any
foreign investor ("Foreign Investor") which does not make the
representations contained in Annex 1 to the representation letter required
to be signed by a purchaser in connection with the purchase of Class C
Certificates. A Foreign Investor for this purpose includes any person who
is not: (1) a citizen or resident of the United States; (2) a corporation
or partnership or other entity treated for Federal income tax purposes as
a corporation or a partnership created or organized in or under the laws
of the United States, any State thereof or the District of Columbia; (3)
an estate, the income of which is subject to United States Federal income
tax, regardless of its source; or (4) a trust if a U.S. court is able to
exercise primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons under the Code and
applicable Treasury regulations prior to that date, that elect to continue
to be treated as United States persons under the Code or applicable
Treasury regulations will not be Foreign Investors.
(10) The Purchaser confirms that is has neither acquired nor will it
sell, trade or transfer any interest in any Class C Certificate or cause
an interest in any Class C Certificate to be marketed on or through (i) an
"established securities market" within the meaning of Section 7704(b)(1)
of the Code and any proposed, temporary or final treasury regulation
thereunder, including, without limitation, an over-the-counter market or
an interdealer quotation system that regularly disseminates firm buy or
sell quotations or (ii) "secondary market" or "substantial equivalent
thereof" within the meaning of Section 7704(b)(2) of the Code and any
proposed, temporary or final treasury regulation
3
thereunder, including a market wherein interests in the Class C
Certificates are regularly quoted by any person making a market in those
interests and a market wherein any person regularly makes available bid or
offer quotes with respect to interests in the Class C Certificates and
stands ready to effect buy or sell transactions at the quoted prices for
itself or on behalf of others. Any purported transfer, assignment or other
conveyance of any Class C Certificate in contravention of the foregoing
covenant will be null and void ab initio and the purported transferor will
continue to be treated as the holder of such Class C Certificate and the
purported transferee will not be recognized as a Class C Certificateholder
by Deutsche FRLP, the Servicer or the Trustee.
(11) Notwithstanding the foregoing, at no time shall the aggregate
number of Private Holders exceed 100. Any purported transfer, assignment
or other conveyance (including any participation) of the Class C
Certificates in contravention of the immediately preceding sentence will
be null and void ab initio and the purported transferor will continue to
be treated as the holder of those Class C Certificates and the purported
transferee will not be recognized as a Class C Certificateholder by
Deutsche FRLP, the Servicer or the Trustee. "Private Holder" means each
holder of a right to receive interest or principal in respect of any
direct or indirect interest in the Trust, including any financial
instrument or contract the value of which is determined in whole or part
by reference to the Trust (including the Trust's assets, income of the
Trust or distributions made by the Trust), excluding any interest in the
Trust represented by any series or class of certificates or any other
interests as to which the Trustee has received an opinion of counsel to
the effect that that series, class or other interest will be treated as
debt or otherwise not as an equity interest in either the Trust or the
Receivables for federal income tax purposes (unless that interest is
convertible or exchangeable into an interest in the Trust or the Trust's
income or that interest provides for payment of equivalent value).
Notwithstanding the immediately preceding sentence, "Private Holder" will
also include any other person that Deutsche FRLP determines is a "partner"
within the meaning of Section 1.7704-1(h)(1)(ii) of the U.S. Treasury
Regulations (including by reason of Section 1.7704-1(h)(3)) or any
successor provision of law. Any person holding more than one interest in
the Trust, each of which separately would cause that person to be a
Private Holder, will be treated as a single Private Holder. Each holder of
an interest in a Private Holder which is a partnership, S corporation or a
grantor trust under the Code will be treated as a Private Holder unless
excepted with the consent of Deutsche FRLP (which consent will be based on
an opinion of counsel generally to the effect that the action taken
pursuant to the consent will not cause the Trust to become a publicly
traded partnership treated as a corporation). Notwithstanding anything to
the contrary herein, each Class C Certificateholder, and each holder of
any Class of any Series if with respect to such Class no opinion is
delivered to the effect that the Certificates of such Class will be
treated as debt for federal income tax purposes, will be considered to be
a Private Holder.
(12) The Class C Certificates will be issued in denominations of
$1,000,000 and integral multiples of $100,000 in excess thereof. No Class
C Certificate may be
4
subdivided upon transfer or exchange in a manner so that the resulting
Class C Certificate if it had been sold in the original offering would
have had an initial offering price of less than $1,000,000 and any
purported transfer, assignment or conveyance of a Class C Certificate in
contravention of the immediately preceding sentence will be void ab initio
and the purported transferor will continue to be treated as the owner of
that Class C Certificate for all purposes.
(13) Without limiting the foregoing, no transfer, pledge, assignment
or conveyance may be made to any one Person for Class C Certificates with
a face amount of less than $1,000,000 and, in the case of any Person
acting on behalf of one or more third parties (other than a bank (as
defined in Section 3(a)(2) of the Securities Act) acting in its fiduciary
capacity), for Class C Certificates with a face amount of less than that
amount for each of those third parties. Any purported transfer, assignment
or conveyance in contravention of the immediately preceding sentence will
be void ab initio and the purported transferor will continue to be treated
as the owner of the Class C Certificates for all purposes. Neither
Deutsche FRLP nor the Trustee will be obligated to register the Class C
Certificates under the Securities Act, qualify the Class C Certificates
under the securities laws of any state or provide registration rights to
any purchaser or holder thereof.
(14) No transfer, assignment or conveyance of a Class C Certificate
will be effective unless Deutsche FRLP and the Trustee shall have received
a letter, substantially in the form of this letter, from the transferee,
assignee or recipient of the conveyance.
(15) The Class C Certificates will bear legends substantially to the
effect of the matters contemplated by paragraphs (1) through (14) above,
unless Deutsche FRLP determines otherwise in accordance with applicable
law.
(16) This letter has been duly executed and delivered by the
Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally and general
principles of equity.
(17) If the Purchaser is a Foreign Investor, the representations and
warranties contained in Annex 1 hereto are incorporated herein by
reference.
5
IN WITNESS WHEREOF, the Purchaser has signed this letter as of the date
first above written.
[NAME OF PURCHASER]
By:
---------------------------------
Name:
Title:
6
ANNEX 1
(18) The Purchaser's long term debt is rated investment grade by an
internationally recognized rating agency.
(19) The Purchaser agrees that, prior to the date on which the first
interest payment under the Supplement is due thereto, it shall deliver to
Deutsche FRLP, the Servicer and the Trustee (i) two duly completed copies
of the United States Internal Revenue Service Form W-8ECI or successor
applicable form and (ii) an Internal Revenue Service Form W-8 or successor
applicable form. The Purchaser also agrees to deliver to Deutsche FRLP,
the Servicer and the Trustee two further copies of the said Form W-8ECI
and Form W-8, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it and
such extensions or renewals thereof as may reasonably be requested by the
Servicer, unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent the Purchaser from duly
completing and delivering any such form with respect to it and the
Purchaser so advises the Servicer, the Trustee and Deutsche FRLP.
(20) Notwithstanding anything to the contrary in this letter, the
Purchaser agrees that, upon written notice by the Servicer to the
Purchaser in accordance with paragraph (22) below that the U.S. Internal
Revenue Service ("IRS") has determined that amounts payable under the
Supplement are subject to withholding tax under Section 1446 of the Code
(a "Withholding Tax" and such determination being a "Withholding Event"):
a. The Purchaser shall, for tax years for which the Purchaser
has already filed, or was legally required to file, U.S. federal
income tax returns (each a "Prior Tax Year") prior to notice of such
Withholding Event in accordance with paragraph (22) below, (A)
provide to Deutsche FRLP a signed officer's certificate of the
Purchaser stating that amounts paid under the Supplement have been
included in the Purchaser's U.S. federal income tax returns for each
such Prior Tax Year, and (B) upon the written request of Deutsche
FRLP, which request shall provide assurances of confidentiality of
information reasonably satisfactory to the Purchaser, provide all
information in the Purchaser's possession or control to Deutsche
FRLP or, at the Purchaser's option, to the IRS directly required by
the IRS in support of the application of Section 1463 of the Code
for each such Prior Tax Year to such Withholding Tax.
b. If Section 1463 of the Code is not applicable for any Prior
Tax Year of the Purchaser because the Purchaser did not include
amounts payable under the Supplement in its U.S. federal income tax
return for such Prior Tax Year and properly pay any federal income
tax due on such amounts or failed to file a U.S. federal income
return with respect to such Prior Tax
7
Year, the Purchaser shall (at the Purchaser's option) either (x)
amend or file, as the case may be, its U.S. federal income tax
return for such Prior Tax Year to properly include amounts paid
under the Supplement during such Prior Tax Year, pay any federal
income tax due on such amounts (and interest and penalties thereon
if required) and comply with the provisions of clause (b) of this
paragraph (20) with respect to such Prior Tax Year or (y) pay to
Deutsche FRLP or the Trust, as applicable, the amount of any
Withholding Tax (and any interest or penalties thereon) paid or
payable by Deutsche FRLP or the Trust to the IRS (which payment by
the Purchaser, if the applicable Withholding Tax has not theretofore
been remitted to the IRS, shall be paid over by Deutsche FRLP or the
Trust, as applicable, to the IRS for application to such Withholding
Tax) on payments under the Supplement during such Prior Tax Year
which were not included on the Purchaser's U.S. federal income tax
return or with respect to which the Purchaser did not so properly
pay federal income tax.
c. No increased amounts shall be payable to the Purchaser if
any taxes are required to be withheld or deducted from any amount
payable to the Purchaser with respect to any Withholding Tax unless,
due to a change in law, treaty or regulation (or in the
interpretation or administration thereof by any governmental or
regulatory agency or body charged with the administration or
interpretation thereof), the credit for U.S. federal income tax
purposes available to the Purchaser under the Code (as in effect on
the Closing Date) resulting from such Withholding Tax is
discontinued or substantially reduced.
In connection with remitting to the IRS any required amount of Withholding
Tax on account of the Purchaser for any tax year subsequent to the last
Prior Tax Year, the amount thereof may be charged first against the amount
otherwise payable to the Purchaser pursuant to the Supplement (a "Payable
Amount") for the distribution date immediately preceding such remittance
and then against each successive Payable Amount for subsequent
distribution dates to the extent required to aggregate such Withholding
Tax amount.
(21) The Purchaser agrees that it shall use reasonable efforts to
take any actions that shall avoid any Withholding Tax or the need for, or
reduce the amount of, any amounts payable to it for all present and future
taxes, levies, imposts, duties, deductions, withholdings, fees,
liabilities and similar charges ("Taxes"); provided that the Purchaser
shall not be obligated to take any such actions that would, in the
reasonable opinion of the Purchaser, be unlawful or otherwise
disadvantageous to the Purchaser or would result in any unreimbursed cost
or expense to the Purchaser, which cost and expense would not have been
incurred but for such actions. If any amounts payable to the Purchaser for
Taxes (referred to above) shall not be eliminated or reduced by the
actions taken by the Purchaser and payment thereof under the Supplement
shall not be waived by the Purchaser within 15 days after Deutsche FRLP
shall have given written notice to the Purchaser of its intent to replace
the Purchaser, Deutsche FRLP shall have the right to (A) request in
writing that the Purchaser use reasonable efforts, and the Purchaser
hereby agrees upon receipt of such request to use its reasonable efforts,
to obtain a replacement investor for the Class C Certificates owned by the
Purchaser, which replacement investor is reasonably acceptable to Deutsche
FRLP, or (B) itself seek to replace the Purchaser with a new investor
which is reasonably acceptable to Deutsche FRLP; provided that the
Purchaser shall not be
8
replaced with a new investor until the Purchaser has been repaid in full
all amounts owed to it pursuant to the Supplement. Subject to the
provisions of this paragraph (21), the Purchaser hereby agrees to assign
all of its rights and obligations with respect to the Class C certificates
(and with respect to the Supplement) to the replacement investor pursuant
to an agreement in form and substance reasonably acceptable to the
Purchaser, Deutsche FRLP, the Trustee and the replacement investor,
subject to payment in full of all amounts due to the Purchaser under the
Supplement.
(22) The Purchaser's address for notice is:
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9
SCHEDULE 1
Name of Series
[ ] Account Account No.
-------------- -----------
Interest Funding Account [ ]
Principal Funding Account [ ]
Excess Funding Account [ ]
Reserve Fund [ ]
Yield Supplement Account [ ]
All of the foregoing accounts are maintained at the Trustee.
SCHEDULE 2
Initial Principal Amounts of the Series [ ] Certificates
Class Initial Principal Amount
----- ------------------------
Class A $[ ]
Class B $[ ]
Class C $[ ]