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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: DECEMBER 8, 1997
DAYTON HUDSON RECEIVABLES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation)
0-26930 41-1812153
(Commission File Number) (I.R.S. Employer Identification Number)
Dayton Hudson Receivables Corporation
80 South Eighth Street
14th Floor, Suite 1401
Minneapolis, Minnesota 55402
(612)370-6530
(Address, including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Office)
Page 1 of 85 Pages
The Exhibit Index Appears on Page 3
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ITEM 5: OTHER EVENTS
On October 15, 1997, the Company entered into a Series 1997-1 Supplement to
Pooling and Servicing Agreement, dated as of September 13, 1995 (the
"Agreement"). The Agreement defines the rights of the holders of both the Class
A Asset Backed Certificates, 6.25% Series 1997-1 and the Class B Asset Backed
Certificates, Series 1997-1, issued by the Dayton Hudson Credit Card Master
Trust on October 15, 1997. The Agreement is filed as Exhibit 4.3 to the Report.
The Monthly Servicer's Certificates for the Monthly Period ended November 1,
1997 and the Monthly Certificateholders' Statements for the Monthly Period ended
November 1, 1997, with respect to the Class A Asset Backed Certificates, 6.10%
Series 1995-1, the Class B Asset Backed Certificates, Series 1995-1, the Class A
Asset Backed Certificates, 6.25% Series 1997-1 and the Class B Asset Backed
Certificates, Series 1997-1, issued by the Dayton Hudson Credit Card Master
Trust, were delivered to the Trustee on November 20, 1997, and the Monthly
Certificateholders' Statements were then distributed to Certificateholders on
November 25, 1997.
The above described Monthly Servicer's Certificates are filed as Exhibits 20.1
and 20.3 to this Report. The above described Monthly Certificateholders'
Statements are filed as Exhibits 20.2 and 20.4 to this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 8, 1997
DAYTON HUDSON RECEIVABLES CORPORATION
By: /s/ Stephen C. Kowalke
Name: Stephen C. Kowalke
Title: Vice President and Treasurer
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EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBER DESCRIPTION NUMBERED PAGE
-------------- ----------- -------------
4.3 Series 1997-1 Supplement
dated October 15, 1997 to 4
Pooling and Servicing
Agreement dated September
13, 1995.
20.1 Series 1995-1 Monthly 70
Servicer's Certificate
for the Monthly Period
ended November 1, 1997.
20.2 Series 1995-1 Monthly 72
Certificateholders'
Statement for the Monthly
Period ended November 1,
1997.
20.3 Series 1997-1 Monthly 78
Servicer's Certificate
for the Monthly Period
ended November 1, 1997.
20.4 Series 1997-1 Monthly 80
Certificateholders'
Statement for the Monthly
Period ended November 1,
1997.
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- --------------------------------------------------------------------------------
DAYTON HUDSON RECEIVABLES CORPORATION,
Transferor
RETAILERS NATIONAL BANK,
Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Series 1997-1 Certificateholders
________________________________________
SERIES 1997-1 SUPPLEMENT
Dated as of October 15, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of September 13, 1995
________________________________________
DAYTON HUDSON CREDIT CARD MASTER TRUST
$400,000,000 6.25 % Class A Asset Backed
Certificates, Series 1997-1
$ 122,875,817 Class B Asset Backed
Certificates, Series 1997-1
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
Page
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ARTICLE I
CREATION OF THE SERIES 1997-1 CERTIFICATES
Section 1.1. Designation................................................... 1
Section 1.2. Delivery and Payment for the Series 1997-1 Certificates....... 1
Section 1.3. Form of Delivery of Series 1997-1 Certificates................ 2
ARTICLE II
DEFINITIONS
Section 2.1. Definitions................................................... 3
ARTICLE III
SERVICER
Section 3.1. Servicing Compensation........................................ 16
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1. Rights of Certificateholders.................................. 17
Section 4.2. Collections and Allocation; Payments on
Transferor Certificate........................................ 17
Section 4.3. Determination of Monthly Interest for the Series 1997-1
Certificates.................................................. 21
Section 4.4. Determination of Principal Amounts............................ 22
Section 4.5. Shared Principal Collections.................................. 23
Section 4.6. Application of Funds on Deposit in the Collection Account
for the Certificates.......................................... 23
Section 4.7. Coverage of Required Amount for the Series 1997-1
Certificates.................................................. 28
Section 4.8. Investor Charge-Offs.......................................... 29
Section 4.9. Reallocated Class B Principal Collections for the
Series 1997-1 Certificates.................................... 29
Section 4.10. Issuance of Additional Investor
Certificates...................................................30
Section 4.11. Establishment of the Principal Funding Account for the
Certificates.................................................. 31
Section 4.12. Accumulation Period........................................... 32
Section 4.13. Reserve Account............................................... 33
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Page
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SECTION 4.14. Defeasance.................................................... 35
ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 1997-1 INVESTOR
CERTIFICATEHOLDERS
Section 5.1. Distributions................................................. 36
Section 5.2. Reports and Statements to Series 1997-1 Certificateholders.... 37
ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1. Series 1997-1 Early Amortization Events....................... 38
ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION;
SALE OF CLASS B CERTIFICATES
Section 7.1. Optional Repurchase........................................... 40
Section 7.2. Series 1997-1 Termination..................................... 40
Section 7.3. Reduction of Class B Invested Amount During the Revolving
Period; Designation of Class B Certificate Terms; Sale of
Class B Certificates.......................................... 40
Section 7.4. Purchase of the Class A Certificates by the Transferor........ 41
ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1. Sale of Receivables or Certificateholders' Interest
pursuant to Section 2.6 or 10.1 of the Agreement and
Section 7.1 or 7.2 of this Supplement......................... 43
Section 8.2. Distribution of Proceeds of Sale, Disposition or Liquidation
of the Receivables pursuant to Section 9.2 of the Agreement... 44
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Page
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Delivery and Payment for the Series 1997-1 Certificates....... 46
Section 9.2. Form of Delivery of Series 1997-1 Certificates................ 46
Section 9.3. Legend on Class B Certificates................................ 46
Section 9.4. Ratification of Agreement..................................... 47
Section 9.5. Counterparts.................................................. 47
Section 9.6. Paired Series................................................. 47
Section 9.7. Jurisdiction; Service......................................... 48
Section 9.8. Governing Law................................................. 48
Section 9.9. Instructions in Writing....................................... 48
EXHIBITS
EXHIBIT A-1 FORM OF CLASS A INVESTOR CERTIFICATE
EXHIBIT A-2 FORM OF CLASS B INVESTOR CERTIFICATE
EXHIBIT B FORM OF MONTHLY SERIES 1997-1 CERTIFICATEHOLDERS' STATEMENT
EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE
iii
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SERIES 1997-1 SUPPLEMENT, dated as of October 15, 1997 (this
"Supplement") by and among DAYTON HUDSON RECEIVABLES CORPORATION, a corporation
organized and existing under the laws of the State of Minnesota, as Transferor
(the "Transferor"), RETAILERS NATIONAL BANK, a national banking association
organized and existing under the laws of the United States, as Servicer (the
"Servicer"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United States,
as trustee (together with its successors in trust thereunder as provided in the
Agreement referred to below, the "Trustee") under the Pooling and Servicing
Agreement dated as of September 13, 1995, as amended (the "Agreement") among the
Transferor, the Servicer and the Trustee.
Section 6.3 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance by the
Transferor, for execution and redelivery to the Trustee for authentication, of
one or more Series of Certificates.
Pursuant to this Supplement, the Transferor and the Trustee shall
create a new Series of Investor Certificates and shall specify the Principal
Terms thereof. The Investor Certificates shall not be subordinated to any other
Series.
ARTICLE I
CREATION OF THE SERIES 1997-1 CERTIFICATES
Section 1.1 DESIGNATION. There is hereby created a Series of
Investor Certificates to be issued pursuant to the Agreement and this Supplement
to be known generally as the "Series 1997-1 Certificates." The Series 1997-1
Certificates shall be issued in two Classes, which shall be designated generally
as the $400,000,000 6.25% Class A Asset Backed Certificates, Series 1997-1 (the
"Class A Certificates") and the $122,875,817 Class B Asset Backed Certificates,
Series 1997-1 (the "Class B Certificates"), subject to any increase in such
principal amounts as a result of the issuance of Additional Certificates
pursuant to Section 4.10 of this Supplement. The Series 1997-1 Certificates
shall be a Principal Sharing Series and shall be included in Group I. The
Series 1997-1 Certificates shall be entitled to share Excess Transferor Finance
Charge Collections and Shared Transferor Principal Collections.
Section 1.2 DELIVERY AND PAYMENT FOR THE SERIES 1997-1 CERTIFICATES.
The Transferor shall execute and deliver the Series 1997-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1997-1 Certificates to or upon the order of
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the Transferor when authenticated in accordance with Section 6.2 of the
Agreement.
Section 1.3 FORM OF DELIVERY OF SERIES 1997-1 CERTIFICATES. (a) The
Class A Certificates shall be delivered as Book-Entry Certificates as provided
in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be substantially in the
form of EXHIBIT A-1 hereto. The Class B Certificates shall be delivered as
Definitive Certificates as provided in Sections 6.1, 6.2 and 6.10 of the
Agreement and shall be substantially in the form of EXHIBIT A-2 hereto.
(b) The Depositary for the Class A Certificates shall be the
Depositary Trust Company, and the Class A Certificates initially shall be
registered in the name of Cede & Co., its nominee.
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ARTICLE II
DEFINITIONS
Section 2.1 DEFINITIONS. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Agreement, the terms and provisions of this Supplement shall
govern with respect to the Series 1997-1 Certificates. All Article, Section or
subsection references herein shall mean Article, Section or subsections of this
Supplement except as otherwise provided herein. All capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Agreement. Each capitalized term defined herein shall relate only to the
Series 1997-1 Certificates and to no other Series of Certificates issued by the
Trust.
"ACCUMULATION DATE" shall mean the first day of the October 2001
Monthly Period.
"ACCUMULATION PERIOD" shall mean, with respect to the Class A
Certificates, the period commencing on the Accumulation Date, or such later date
as may be specified by the Servicer in accordance with Section 4.12, and
continuing to and including the earliest of (x) the Early Amortization
Commencement Date, (y) the end of the September 2002 Monthly Period and (z) the
date of termination of the Trust pursuant to Section 12.1 of the Agreement.
"ACCUMULATION PERIOD LENGTH" shall have the meaning specified in
Section 4.12.
"ADDITIONAL CERTIFICATE DATE" shall have the meaning specified in
subsection 4.10(a).
"ADDITIONAL CERTIFICATES" shall have the meaning specified in
subsection 4.10(a).
"ADDITIONAL INTEREST" shall mean, at any time of determination, the
sum of Class A Additional Interest and Class B Additional Interest, if any.
"ADJUSTED INVESTED AMOUNT" shall mean for any Business Day an amount
equal to the sum of the Class A Adjusted Invested Amount plus the Class B
Invested Amount.
"AMORTIZATION PERIOD COMMENCEMENT DATE" shall mean the earlier of the
Accumulation Date, or such later date as may be specified by the Servicer in
accordance with Section 4.12, and the Early Amortization Commencement Date.
"AVAILABLE RESERVE ACCOUNT AMOUNT" shall mean, with respect to any
Transfer Date, the lesser of (a) the amount on
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deposit in the Reserve Account as of such date (before giving effect to any
deposit or withdrawals made or to be made pursuant to subsections 4.6(a)(ix)
and 4.13(d) to the Reserve Account on such date) and (b) the Required Reserve
Account Amount.
"AVAILABLE SERIES 1997-1 FINANCE CHARGE COLLECTIONS" shall have the
meaning specified in subsection 4.6(a).
"AVAILABLE SHARED PRINCIPAL COLLECTIONS" shall mean, for any Monthly
Period, Shared Principal Collections available to be allocated to the
Certificates from each other Series that has a controlled or scheduled
amortization or accumulation period beginning after the October 2002
Distribution Date.
"BASE RATE" shall mean, with respect to any Monthly Period, the sum of
(i) the annualized percentage equivalent of a fraction the numerator of which is
the sum of the Class A Interest and the Class B Interest for the related
Interest Accrual Period and the denominator of which is the Invested Amount as
of the close of business on the last day of the Monthly Period and (ii) the
annualized percentage equivalent of a fraction the numerator of which is the
Monthly Servicing Fee for such Monthly Period and the denominator of which is
the Invested Amount as of the close of business on the last day of the preceding
Monthly Period.
"CARRYOVER CLASS A INTEREST" shall mean, with respect to any
Distribution Date, (a) any Class A Interest due but not paid on any previous
Distribution Date plus (b) any Class A Additional Interest.
"CARRYOVER CLASS B INTEREST" shall mean, with respect to any
Distribution Date, (a) any Class B Interest due but not paid on any previous
Distribution Date plus (b) any Class B Additional Interest.
"CARRYOVER INTEREST" shall mean, with respect to any Distribution
Date, the sum of Carryover Class A Interest and Carryover Class B Interest.
"CLASS A ADDITIONAL INTEREST" shall have the meaning specified in
subsection 4.3.
"CLASS A ADJUSTED INVESTED AMOUNT" shall mean for any Business Day an
amount equal to the Class A Invested Amount MINUS the aggregate principal amount
on deposit in the Principal Funding Account on such Business Day.
"CLASS A CERTIFICATEHOLDER" shall mean the Person in whose name a
Class A Certificate is registered in the Certificate Register.
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"CLASS A CERTIFICATEHOLDERS' INTEREST" shall mean, with respect to any
date, the portion of the Series 1997-1 Certificateholders' Interest evidenced by
the Class A Certificates.
"CLASS A CERTIFICATE RATE" shall mean, with respect to any Interest
Accrual Period, a per annum rate equal to 6.25%.
"CLASS A CERTIFICATES" shall mean any of the certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-1 hereto.
"CLASS A EXPECTED FINAL PAYMENT DATE" shall mean the October 2002
Distribution Date.
"CLASS A FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to
any Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Class A Adjusted Invested Amount as of (x) during the Revolving
Period or the Accumulation Period with respect to Collections of Finance Charge
Receivables and at all times with respect to Defaulted Amounts, the close of
business on the last day of the immediately preceding Monthly Period (or, in the
case of the first Monthly Period, the Closing Date) and (y) during an Early
Amortization Period with respect to Collections of Finance Charge Receivables,
the close of business on the last day of the Monthly Period immediately
preceding the occurrence of an Early Amortization Event and the denominator of
which is the greater of (a) the total amount of Principal Receivables in the
Trust plus the amounts on deposit in the Special Funding Account as of the close
of business on such date and (b) when used with respect to Collections of
Finance Charge Receivables, the sum of the numerators with respect to all
Classes of all Series and Participations then outstanding used to calculate the
applicable allocation percentage.
"CLASS A INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $400,000,000.
"CLASS A INTEREST" shall mean the interest distributable in respect of
the Class A Certificates as calculated in accordance with Section 4.3.
"CLASS A INTEREST SHORTFALL" shall have the meaning specified in
Section 4.3.
"CLASS A INVESTED AMOUNT" shall mean, when used with respect to any
date of determination, an amount equal to (a) the Class A Initial Invested
Amount, MINUS (b) the aggregate amount of principal payments made to Class A
Certificateholders prior to such date, MINUS (c) the aggregate amount of Class A
Investor Charge-Offs for all prior Distribution Dates, PLUS (d) the sum of
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the aggregate amount allocated with respect to Class A Investor Charge-Offs and
available on all prior Distribution Dates pursuant to subsection 4.6(a)(vi) and,
with respect to such subsection, pursuant to Sections 4.7 and 4.9, for the
purpose of reinstating amounts reduced pursuant to the foregoing clause (c),
PLUS (e) the amount of any increase in the Class A Invested Amount resulting
from the issuance of Additional Certificates under Section 4.10 and MINUS (f)
the amount of any reduction in the Class A Invested Amount as a result of the
purchase by the Transferor and subsequent cancellation of Class A Certificates
pursuant to Section 7.4.
"CLASS A INVESTOR CHARGE-OFFS" shall have the meaning specified in
subsection 4.8(b).
"CLASS A INVESTOR DEFAULTED AMOUNT" shall mean, with respect to each
Distribution Date, an amount equal to the product of (a) the Class A Floating
Allocation Percentage applicable on such date and (b) the Defaulted Amount for
the related Monthly Period.
"CLASS A PERCENTAGE" shall mean a fraction the numerator of which is
the Class A Adjusted Invested Amount and the denominator of which is the sum of
the Class A Adjusted Invested Amount and the Class B Invested Amount.
"CLASS A PRINCIPAL" shall mean the principal distributable in respect
of the Class A Certificates as calculated in accordance with subsection 4.4(a).
"CLASS A REQUIRED AMOUNT" shall mean, with respect to each
Distribution Date, the amount determined by the Servicer equal to the excess, if
any, of (x) the sum of (i) Class A Interest for the related Monthly Period, (ii)
any Carryover Class A Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iii) the Class A Servicing Fee
for the related Monthly Period, (iv) the Class A Investor Defaulted Amount and
(v) the Class A Percentage of the Series Allocation Percentage of the adjustment
payments required to be made by the Transferor pursuant to Section 3.9 of the
Agreement but not made on or prior to the related Distribution Date, over (y)
the sum of the Available Series 1997-1 Finance Charge Collections applied with
respect to such amounts pursuant to subsection 4.6(a) PLUS any Excess Finance
Charge Collections from other Series and Excess Transferor Finance Charge
Collections allocable to Series 1997-1 and applied with respect to such amounts
pursuant to Section 4.7.
"CLASS A SERVICING FEE" shall have the meaning specified in Section
3.1.
"CLASS B ADDITIONAL INTEREST" shall mean the amount, if any,
distributable in respect of the Class B Certificates as
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calculated pursuant to a supplemental agreement entered into in accordance with
Section 7.3.
"CLASS B CERTIFICATEHOLDER" shall mean the Person in whose name a
Class B Certificate is registered in the Certificate Register.
"CLASS B CERTIFICATEHOLDERS' INTEREST" shall mean, with respect to any
date, the portion of the Series 1997-1 Certificateholders' Interest evidenced by
the Class B Certificates.
"CLASS B CERTIFICATE RATE" shall mean, with respect to any Interest
Accrual Period, a per annum rate equal to 0%; PROVIDED, HOWEVER such interest
rate may be increased pursuant to the terms of a supplemental agreement entered
into in accordance with Section 7.3.
"CLASS B CERTIFICATES" shall mean any of the certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-2 hereto.
"CLASS B FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to
any Monthly Period, the percentage equivalent of a fraction, the numerator of
which is the Class B Invested Amount as of (x) during the Revolving Period or
the Accumulation Period with respect to Collections of Finance Charge
Receivables and at all times with respect to Defaulted Amounts, the close of
business on the last day of the immediately preceding Monthly Period (or, in the
case of the first Monthly Period, the Closing Date) and (y) during an Early
Amortization Period with respect to Collections of Finance Charge Receivables,
the close of business on the last day of the Monthly Period immediately
preceding the occurrence of an Early Amortization Event and the denominator of
which is the greater of (a) the total amount of Principal Receivables plus the
amount on deposit in the Special Funding Account as of the close of business on
such date and (b) when used with respect to Collections of Finance Charge
Receivables, the sum of the numerators with respect to all Classes of all Series
and Participations then outstanding used to calculate the applicable allocation
percentage.
"CLASS B INITIAL INVESTED AMOUNT" shall mean the aggregate initial
principal amount of the Class B Certificates, which is $122,875,817.
"CLASS B INTEREST" shall mean the interest, if any, distributable in
respect of the Class B Certificates as may be calculated pursuant to a
supplemental agreement entered into in accordance with Section 7.3.
"CLASS B INVESTED AMOUNT" shall mean, when used with respect to any
date of determination, an amount equal to (a) the
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Class B Initial Invested Amount, MINUS (b) the aggregate amount of principal
payments made to Class B Certificateholders prior to such date, MINUS (c) the
aggregate amount of Class B Investor Charge-Offs for all prior Distribution
Dates, MINUS (d) the aggregate amount of Reallocated Class B Principal
Collections for which the Class B Invested Amount has been reduced for all prior
Distribution Dates, PLUS (e) the sum of the aggregate amount allocated and
available on all prior Distribution Dates pursuant to subsection 4.6(a)(vii)
and, with respect to such subsection, pursuant to Section 4.7, for the purpose
of reinstating amounts reduced pursuant to the foregoing clauses (c) and (d)
PLUS (f) the amount of any increase in the Class B Invested Amount resulting
from the issuance of Additional Certificates under Section 4.10.
"CLASS B INVESTOR CHARGE-OFFS" shall have the meaning specified in
subsection 4.8(a).
"CLASS B INVESTOR DEFAULTED AMOUNT" shall mean, with respect to each
Distribution Date, an amount equal to the product of (a) the Class B Floating
Allocation Percentage applicable on such date and (b) the Defaulted Amount for
the related Monthly Period.
"CLASS B PERCENTAGE" shall mean a fraction the numerator of which is
the Class B Invested Amount and the denominator of which is the sum of the Class
A Adjusted Invested Amount and the Class B Invested Amount.
"CLASS B PRINCIPAL" shall mean the principal distributable in respect
of the Class B Certificates as calculated in accordance with subsection 4.4(b).
"CLASS B PRINCIPAL ALLOCATION PERCENTAGE" shall mean, with respect to
any Monthly Period, the percentage equivalent of a fraction, the numerator of
which is (a) during the Revolving Period, the Class B Invested Amount as of the
last day of the immediately preceding Monthly Period (or, in the case of the
first Monthly Period, the Closing Date), (b) during the Accumulation Period, the
Class B Invested Amount as of the last day of the Revolving Period, and (c)
during the Early Amortization Period, the Class B Invested Amount as of the last
day of the Revolving Period, or, if less, the last numerator used to calculate
the Class B Principal Allocation Percentage in the Accumulation Period, if any,
and the denominator of which is the greater of (a)(x) if only one Series is
outstanding (i) during the Revolving Period, the sum of the total amount of
Principal Receivables in the Trust and the principal amount on deposit in the
Special Funding Account as of the last day of the immediately preceding Monthly
Period and (ii) during the Accumulation Period and the Early Amortization Period
the sum of the total amount of Principal Receivables in the Trust and the
principal amount on deposit in the Special Funding Account as of the last day of
the
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Revolving Period and (y), if more than one Series is outstanding, the sum of the
total amount of Principal Receivables in the Trust and the principal amount on
deposit in the Special Funding Account as of the last day of the immediately
preceding Monthly Period (or, in the case of the first Monthly Period, the
Closing Date) and (b) the sum of the numerators used to calculate the principal
allocation percentages for all Series and Participations outstanding as of the
date as to which such determination is being made; PROVIDED, that such
calculations are subject to adjustment to give effect to additions of Additional
Accounts.
"CLASS B SERVICING FEE" shall have the meaning specified in
Section 3.1.
"CLOSING DATE" shall mean October 15, 1997.
"CONTROLLED ACCUMULATION AMOUNT" shall mean $33,333,333.34 PROVIDED
that such amount may be increased pursuant to Section 4.10 as a result of the
issuance of Additional Certificates; PROVIDED, FURTHER, that, if the
Accumulation Period is modified pursuant to Section 4.12, (i) the Controlled
Accumulation Amount for each Distribution Date with respect to the Accumulation
Period shall mean the amount determined in accordance with Section 4.12 on the
date on which the Accumulation Period has most recently been modified and (ii)
the sum of the Controlled Accumulation Amounts for all Distribution Dates with
respect to the modified Accumulation Period shall not be less than the Class A
Invested Amount.
"CONTROLLED DEPOSIT AMOUNT" shall mean, with respect to any
Distribution Date with respect to the Accumulation Period, an amount equal to
the Controlled Accumulation Amount plus the Deficit Controlled Accumulation
Amount for the preceding Distribution Date, if any.
"COVERED AMOUNT" shall mean, with respect to any Interest Period
prior to the payment in full of the Class A Invested Amount, one-twelfth of the
product of (a) the Class A Certificate Rate in effect with respect to the
related Interest Period and (b) the Principal Funding Account Balance as of the
first day of such interest Period.
"DEFICIT CONTROLLED ACCUMULATION AMOUNT" shall mean, on each
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Deposit Amount for such Distribution Date over the amount
distributed from the Collection Account as Class A Principal for such
Distribution Date.
"DISTRIBUTION DATE" shall mean November 25, 1997 and the 25th day of
each month thereafter, or if such day is not a Business Day, the next succeeding
Business Day.
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"EARLY AMORTIZATION COMMENCEMENT DATE" shall mean the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of the
Agreement or a Series 1997-1 Early Amortization Event is deemed to occur
pursuant to Section 6.1.
"EARLY AMORTIZATION PERIOD" shall mean the period beginning on the
earlier of (a) the day on which a Series 1997-1 Early Amortization Event or an
Early Amortization Event occurs or is deemed to have occurred and (b) the Class
A Expected Final Payment Date if the Class A Invested Amount has not been paid
in full on such date, and ending on the earlier of (i) the date on which the
Class A Invested Amount and the Class B Invested Amount have been paid in full
and (ii) the Series 1997-1 Termination Date.
"ENHANCEMENT" shall mean, with respect to the Class A Certificates,
the subordination of the Class B Invested Amount.
"EXCESS FINANCE CHARGE COLLECTIONS" shall mean, with respect to any
Distribution Date, as the context requires, either (x) the amount described in
subsection 4.6(a)(x) allocated to the Series 1997-1 Certificates but available
to cover shortfalls in amounts paid from Collections of Finance Charge
Receivables for other Series, if any or (y) the aggregate amount of Collections
of Finance Charge Receivables allocable to other Series in excess of the amounts
necessary to make required payments with respect to such Series, if any, and
available to cover shortfalls with respect to the Series 1997-1 Certificates.
"EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS" shall have the meaning
specified in subsection 4.2(d).
"FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to any date
of determination, the sum of the Class A Floating Allocation Percentage and
Class B Floating Allocation Percentage on such date.
"INITIAL INVESTED AMOUNT" shall mean the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
"INTEREST ACCRUAL PERIOD" shall mean, with respect to a Distribution
Date, the period from and including the preceding Distribution Date to and
excluding such Distribution Date; PROVIDED, HOWEVER, that the initial Interest
Accrual Period shall be the period from the Closing Date to and excluding the
first Distribution Date.
"INVESTED AMOUNT" shall mean, as of any date of determination, an
amount equal to the sum of (a) the Class A Invested Amount as of such date and
(b) the Class B Invested Amount as of such date.
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"INVESTOR CERTIFICATEHOLDER" shall mean the Holder of record of an
Investor Certificate.
"INVESTOR CERTIFICATES" shall mean the Class A Certificates and the
Class B Certificates; PROVIDED, HOWEVER, that the Class B Certificates shall not
be considered to be Investor Certificates for purposes of any Tax Opinion or
other opinion relating to tax matters hereunder or under the Agreement for so
long as they are held by the Transferor.
"INVESTOR CHARGE-OFFS" shall mean the sum of Class A Investor
Charge-Offs and Class B Investor Charge-Offs.
"INVESTOR DEFAULTED AMOUNT" shall mean, with respect to any Monthly
Period, an amount equal to the product of the Defaulted Amount and the Floating
Allocation Percentage as of the related Distribution Date.
"INVESTOR PERCENTAGE" shall mean, with respect to Principal
Receivables, the Principal Allocation Percentage and, with respect to Finance
Charge Receivables and Receivables in Defaulted Accounts, the Floating
Allocation Percentage.
"MONTHLY PERIOD" shall mean with respect to each Distribution Date,
the immediately preceding fiscal month of the Transferor, PROVIDED, that the
first Monthly Period shall begin on the Closing Date and end on the last day of
the fiscal month of the Transferor during which the Closing Date occurs.
"MONTHLY SERVICING FEE" shall have the meaning specified in
Section 3.1.
"PERCENTAGE ALLOCATION" shall have the meaning specified in subsection
4.2(b)(ii)(y).
"PORTFOLIO YIELD" shall mean for the Series 1997-1 Certificates, with
respect to any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the sum of the aggregate
amount of Available Series 1997-1 Finance Charge Collections for such Monthly
Period, MINUS the aggregate Investor Defaulted Amount for such Monthly Period
and the Series 1997-1 Allocation Percentage of any adjustment payments required
to be made by the Transferor pursuant to Section 3.9 of the Agreement but not
made on or prior to the related Distribution Date, and the denominator of which
is the Invested Amount as of the last day of the preceding Monthly Period.
"PRINCIPAL ALLOCATION PERCENTAGE" shall mean, with respect to any
Monthly Period, the percentage equivalent of a fraction, the numerator of which
is (a) during the Revolving Period, the Invested Amount as of the last day of
the immediately preceding Monthly Period (or, in the case of the first Monthly
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Period, the Closing Date), (b) during the Accumulation Period, the Invested
Amount as of the last day of the Revolving Period; PROVIDED, that during the
Accumulation Period on the date of issuance of a new Series, at the option of
the Transferor, such amount may be reduced to an amount not less than the
greater of (x) the Adjusted Invested Amount on such date and (y) the amount
which would result in a Principal Allocation Percentage which when multiplied by
the amount of Collections of Principal Receivables for the preceding Monthly
Period would equal (I) the Controlled Deposit Amount for such Monthly Period
plus 10% of the Controlled Accumulation Amount or, if such date is on or after
the Class A Expected Final Payment Date and the Class A Invested Amount has been
paid in full, the Class B Invested Amount minus (II) the amount of any Available
Shared Principal Collections with respect to such Monthly Period, and (c) during
the Early Amortization Period, the Invested Amount as of the last day of the
Revolving Period or, if less, the last numerator used to calculate the Principal
Allocation Percentage in the Accumulation Period, if any, and the denominator of
which is the greater of (a)(x) if only one Series is outstanding (i) during the
Revolving Period, the sum of the total amount of Principal Receivables in the
Trust and the principal amount on deposit in the Special Funding Account as of
the last day of the immediately preceding Monthly Period and (ii) during the
Accumulation Period and the Early Amortization Period the sum of the total
amount of Principal Receivables in the Trust and the principal amount on deposit
in the Special Funding Account as of the last day of the Revolving Period and
(y), if more than one Series is outstanding, the sum of the total amount of
Principal Receivables in the Trust and the principal amount on deposit in the
Special Funding Account as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and (b)
the sum of the numerators used to calculate the principal allocation percentages
for all Series and Participations outstanding as of the date as to which such
determination is being made; PROVIDED, FURTHER, that such calculations are
subject to adjustment to give effect to additions of Additional Accounts.
"PRINCIPAL FUNDING ACCOUNT" shall have the meaning specified in
subsection 4.11(a).
"PRINCIPAL FUNDING ACCOUNT BALANCE" shall mean, with respect to any
date of determination during the Accumulation Period, the principal amount, if
any, on deposit in the Principal Funding Account on such date of determination.
"PRINCIPAL FUNDING INVESTMENT PROCEEDS" shall mean, with respect to
each Interest Period during the Accumulation Period, the investment earnings on
funds on deposit in the Principal Funding Account (net of investment expenses
and losses) for such Interest Period.
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"PRINCIPAL FUNDING INVESTMENT SHORTFALL" shall mean, with respect to
each Interest Period during the Accumulation Period, the amount, if any, by
which the Principal Funding Investment Proceeds are less than the Covered
Amount.
"PRINCIPAL SHORTFALLS" shall mean on any Distribution Date (x) for
Series 1997-1, (i) during the Accumulation Period, the excess of the Controlled
Deposit Amount over the aggregate amount applied with respect thereto for such
Distribution Date, and (ii) at all other times, the Invested Amount of the class
then receiving principal payments after the application of Collections of
Principal Receivables on such Distribution Date PROVIDED HOWEVER, that after the
Class A Invested Amount has been paid in full, such amount shall be equal to the
Class B Invested Amount or (y) for any other Series the amounts specified as
such in the Supplement for such other Series.
"RATING AGENCY" shall mean Standard & Poor's and Moody's.
"REALLOCATED CLASS B PRINCIPAL COLLECTIONS" shall have the meaning
specified in Section 4.9.
"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 sum of the Class A Adjusted
Invested Amount and the Class B Invested Amount on such Distribution Date, PLUS
(ii) the sum of the Class A Interest and Class B Interest, if any, for such
Distribution Date and the sum of Class A Interest and Class B Interest, if any,
previously due but not distributed to the Series 1997-1 Certificateholders on a
prior Distribution Date, PLUS (iii) the amount of Additional Interest, if any,
for such Distribution Date and any Additional Interest previously due but not
distributed to the Series 1997-1 Certificateholders on a prior Distribution
Date.
"REQUIRED AMOUNT" shall have the meaning specified in Section 4.7.
"REQUIRED RESERVE ACCOUNT AMOUNT" shall mean, with respect to any
Distribution Date on or after the Reserve Account Funding Date, an amount, if
any, specified by the Transferor.
"REQUIRED RETAINED TRANSFEROR'S PERCENTAGE" shall mean 2%; PROVIDED,
HOWEVER, that such percentage may be adjusted from time to time upon written
notice from the Transferor to the Trustee if each Rating Agency initially
contracted to rate the Class A Certificates shall have been notified of such
amendment and shall have provided notice to the Trustee or the Servicer that
such action would not result in a reduction or withdrawal of its rating of the
Class A Certificates and such action shall not, as evidenced by a Tax Opinion,
cause the Trust to be character-
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ized for Federal income tax purposes as an association or publicly traded
partnership taxable as a corporation or otherwise have any material adverse
effect on the Federal income taxation of any outstanding Series of Certificates
or any Certificate Owner.
"RESERVE ACCOUNT" shall have the meaning specified in subsection
4.13(a).
"RESERVE ACCOUNT FUNDING DATE" shall mean the date specified by the
Transferor for the commencement of the funding of the Reserve Account.
"RESERVE ACCOUNT SURPLUS" shall mean, as of any Transfer Date
following the Reserve Account Funding Date, the amount, if any, by which the
amount on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"RESERVE DRAW AMOUNT" shall have the meaning specified in subsection
4.13(c).
"REVOLVING PERIOD" shall mean the period from and including the
Closing Date to, but not including, the Amortization Period Commencement Date.
"SCHEDULED SERIES 1997-1 TERMINATION DATE" shall mean the August 2005
Distribution Date.
"SERIES ACCOUNTS" shall mean the Principal Funding Account and the
Reserve Account.
"SERIES INVESTED AMOUNT" shall mean, for Series 1997-1, as of any date
of determination, an amount equal to the sum of (a) the Class A Adjusted
Invested Amount as of such date and (b) the Class B Invested Amount as of such
date.
"SERIES 1997-1" shall mean the Series of the Dayton Hudson Credit Card
Master Trust represented by the Series 1997-1 Certificates.
"SERIES 1997-1 ALLOCATION PERCENTAGE" shall mean, on any date of
determination, the percentage equivalent of a fraction the numerator of which is
the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount
and the denominator of which is the sum of the invested amounts (or adjusted
invested amounts, as applicable) of all then outstanding Series.
"SERIES 1997-1 CERTIFICATEHOLDER" shall mean the holder of record of
any Series 1997-1 Investor Certificate.
"SERIES 1997-1 CERTIFICATEHOLDERS' INTEREST" shall have the meaning
specified in Section 4.1.
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"SERIES 1997-1 CERTIFICATES" shall have the meaning specified in
Section 1.1.
"SERIES 1997-1 EARLY AMORTIZATION EVENT" shall have the meaning
specified in Section 6.1.
"SERIES 1997-1 TERMINATION DATE" shall mean the earlier to occur of
(i) the day after the Distribution Date on which the Series 1997-1 Certificates
are paid in full, or (ii) the Scheduled Series 1997-1 Termination Date.
"SERVICING BASE AMOUNT" shall have the meaning specified in
Section 3.1.
"SERVICING FEE RATE" shall mean 2.00% per annum.
"SHARED PRINCIPAL COLLECTIONS" shall mean, as the context requires,
either (a) the amount allocated to the Series 1997-1 Certificates which, in
accordance with subsections 4.6(a)(iii), (iv), (v), (vi) and (vii), 4.6(b) and
4.6(c)(iii), may be applied in accordance with Section 4.4 of the Agreement or
(b) the amounts allocated to the investor certificates of other Series which the
applicable Supplements for such Series specify are to be treated as "Shared
Principal Collections" plus amounts specified in any Participation Supplement
with respect to any participation to be treated as Shared Principal Collections
which may be applied to cover Principal Shortfalls with respect to the Series
1997-1 Certificates.
"SPECIAL PAYMENT DATE" shall mean each Distribution Date following the
Monthly Period in which an Early Amortization Event occurs with respect to an
Early Amortization Period and each Distribution Date following the Class A
Expected Final Payment Date.
"SHARED TRANSFEROR PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.2(d).
"TERMINATION PAYMENT DATE" shall mean the earlier of the first
Distribution Date following (i) to the extent applicable, the liquidation or
sale of the Receivables as a result of an Insolvency Event and (ii) the
occurrence of the Scheduled Series 1997-1 Termination Date.
"TRANSFEROR RETAINED CERTIFICATES" shall mean investor certificates of
any Series, including the Class B Certificates, which the Transferor retains,
but only to the extent that and for so long as the Transferor is the Holder of
such Certificates.
"TRANSFEROR RETAINED CLASS" shall mean the Class B Certificates.
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ARTICLE III
SERVICER
Section 3.1 SERVICING COMPENSATION. The share of the Servicing Fee
allocable to the Series 1997-1 Certificateholders with respect to any
Distribution Date (the "MONTHLY SERVICING FEE") shall be equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) (i) the sum of the Class A
Adjusted Invested Amount and the Class B Invested Amount as of the last day of
the Monthly Period second preceding such Distribution Date, MINUS (ii) the
product of the amount, if any, on deposit in the Special Funding Account as of
the last day of the Monthly Period second preceding such Distribution Date and
the Floating Allocation Percentage with respect to such Monthly Period (the
amount calculated pursuant to this clause (b) is referred to as the "SERVICING
BASE AMOUNT"); PROVIDED, HOWEVER, that with respect to the first Distribution
Date, the Monthly Servicing Fee shall be $560,224. The share of the Monthly
Servicing Fee allocable to the Class A Certificateholders with respect to any
Distribution Date (the "CLASS A SERVICING FEE") shall be equal to the product of
(a) the Class A Percentage and (b) the Monthly Servicing Fee; PROVIDED, HOWEVER,
that with respect to the first Distribution Date the Class A Servicing Fee shall
be $428,571. The share of the Monthly Servicing Fee allocable to the Class B
Certificateholders with respect to any Distribution Date (the "CLASS B SERVICING
FEE") shall be equal to the product of (a) the Class B Percentage and (b) the
Monthly Servicing Fee; PROVIDED, HOWEVER, that with respect to the first
Distribution Date, the Class B Servicing Fee shall be $131,653. The remainder
of the Servicing Fee shall be paid from amounts allocable to the Holder of the
Transferor Certificate, holders of Participations or the Certificateholders of
other Series (as provided in the related Supplements) and in no event shall the
Trust, the Trustee or the Series 1997-1 Certificateholders be liable for the
share of the Servicing Fee to be paid from amounts allocable to the Holder of
the Transferor Certificate, holders of a Participation or the Certificateholders
of any other Series. The Monthly Servicing Fee shall be payable to the Servicer
solely to the extent amounts are available for distribution in respect thereof
pursuant to Section 4.6(a)(ii).
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1 RIGHTS OF CERTIFICATEHOLDERS. The Series 1997-1
Certificates shall represent undivided interests in the Trust, consisting of the
right to receive, to the extent necessary to make the required payments with
respect to such Series 1997-1 Certificates at the times and in the amounts
specified in this Agreement, (a) the Floating Allocation Percentage and the
Principal Allocation Percentage (as applicable from time to time) of
Collections, (b) funds distributable to the Series 1997-1 Certificates pursuant
to Section 4.2 of the Agreement on deposit in the Special Funding Account, (c)
funds on deposit in the Principal Funding Account and (d) funds on deposit in
the Reserve Account (for such Series, the "SERIES 1997-1 CERTIFICATEHOLDERS'
INTEREST"). The Class B Certificates shall be subordinated to the Class A
Certificates to the extent provided in this Article IV. The Class B
Certificates will not have the right to receive payments of principal until the
Class A Invested Amount has been paid in full, except as provided in Section
7.3.
Section 4.2 COLLECTIONS AND ALLOCATION; PAYMENTS ON TRANSFEROR
CERTIFICATE.
(a) COLLECTIONS. The Servicer will apply or will instruct the
Trustee to apply all funds on deposit in the Collection Account, the Special
Funding Account, the Principal Funding Account and the Reserve Account allocable
to the Series 1997-1 Certificates as described in this Article IV and Article IV
of the Agreement. In addition, on the Closing Date, the Transferor shall make a
deposit to the Collection Account in the amount of $1,597,222, to be allocated
to the Series 1997-1 Certificates.
(b) ALLOCATIONS. The Servicer will apply, or will instruct the
Trustee to apply, all collections and other funds that are allocated to the
Investor Certificates as follows:
(i) DAILY ALLOCATIONS DURING THE REVOLVING PERIOD. During the
Revolving Period, the Servicer shall, prior to the close of business on any
Date of Processing, allocate the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and deposit in
the Collection Account in accordance with Section 4.3(a) of the
Agreement an amount equal to the product of (i) the Floating
Allocation Percentage and (ii) the aggregate amount of Collections of
Finance Charge Receivables on such Date of Processing, PROVIDED,
HOWEVER, that, with respect to each Monthly Period, such amount shall
only be allocated until such time as the amount deposited in the
Collection Account equals
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the amount of Class A Interest, Class B Interest, if any, Carryover
Interest, if any, and, at any time that Retailers National Bank is not
the Servicer, the Servicing Fee, due on the next Distribution Date.
(y) Allocate to the Investor Certificateholders an amount equal
to the product of (A) the Principal Allocation Percentage on such Date
of Processing and (B) the aggregate amount of Collections of Principal
Receivables on such Date of Processing and pay such amount to the
Holder of the Transferor Certificate; PROVIDED, HOWEVER, that the
amount to be paid to the Holder of the Transferor Certificate pursuant
to this Section 4.2(b)(i)(y) on any Date of Processing shall be first,
if any other Principal Sharing Series is outstanding and in its
Amortization Period, deposited in the Collection Account for
application, to the extent necessary, as Shared Principal Collections
on the related Distribution Date and second shall be paid to such
Holder only if on such Date of Processing the Transferor Amount
(excluding the interest represented by the Supplemental Certificate)
is greater than the Required Retained Transferor Amount and otherwise
shall be deposited in the Special Funding Account; PROVIDED, FURTHER,
that such amounts will be paid to the Holder of the Transferor
Certificate subject to the obligation of the Transferor to make an
amount equal to the Reallocated Class B Principal Collections for each
Monthly Period available on the related Distribution Date for
application in accordance with Section 4.9.
(ii) DAILY ALLOCATIONS DURING THE ACCUMULATION PERIOD. During the
Accumulation Period, the Servicer shall, prior to the close of business on
any Date of Processing, allocate the following amounts as set forth below:
(x) Allocate to the Investor Certificateholders and deposit in
the Collection Account in accordance with Section 4.3(a) of the
Agreement an amount equal to the product of (A) the Floating
Allocation Percentage on such Date of Processing and (B) the aggregate
amount of Collections of Finance Charge Receivables on such Date of
Processing, PROVIDED, HOWEVER, that, with respect to each Monthly
Period, such amount shall only be allocated until such time as the
amount deposited in the Collection Account equals the amount of Class
A Interest, Class B Interest, if any, and Carryover Interest, if any,
and, at any time that Retailers National Bank is not the Servicer, the
Servicing Fee, due on the next Distribution Date.
(y) During each Monthly Period prior to the Monthly Period
related to the Distribution Date on
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which the Class A Invested Amount is paid in full, allocate to the
Class A Certificateholders and deposit in the Collection Account in
accordance with Section 4.3(a) of the Agreement an amount equal to the
product of (x) the Principal Allocation Percentage on such Date of
Processing and (y) the aggregate amount of Collections of Principal
Receivables on such Date of Processing (for any such date, a
"Percentage Allocation"); PROVIDED, HOWEVER, that if the sum of such
Percentage Allocations with respect to the same Monthly Period exceeds
the Controlled Deposit Amount for the related Distribution Date, then
such excess shall be first, if any other Principal Sharing Series is
outstanding and in its Amortization Period, deposited in the
Collection Account for application, to the extent necessary, as Shared
Principal Collections on the related Distribution Date and second
shall not be treated as a Percentage Allocation and shall be paid to
the Holder of the Transferor Certificate only if the Transferor Amount
(excluding the interest represented by the Supplemental Certificate)
on such Date of Processing is greater than the Required Retained
Transferor Amount (after giving effect to all Principal Receivables
transferred to the Trust on such day) and otherwise shall be deposited
in the Special Funding Account; PROVIDED, FURTHER, that such amounts
will be paid to the Holder of the Transferor Certificate subject to
the obligation of the Transferor to make an amount equal to the
Reallocated Class B Principal Collections for each Monthly Period
available on the related Distribution Date for application in
accordance with Section 4.9.
(iii) DAILY ALLOCATIONS DURING THE EARLY AMORTIZATION PERIOD. During
the Early Amortization Period, the Servicer shall, prior to the close of
business on any Date of Processing, allocate the following amounts as set
forth below:
(x) Allocate to the Investor Certificateholders and deposit in
the Collection Account in accordance with Section 4.3(a) of the
Agreement an amount equal to the product of (A) the Floating
Allocation Percentage on such Date of Processing and (B) the aggregate
amount of Collections of Finance Charge Receivables on such Date of
Processing.
(y) Allocate to the Investor Certificateholders and deposit in
the Collection Account in accordance with Section 4.3(a) of the
Agreement an amount equal to the product of (A) the Principal
Allocation Percentage on such Date of Processing and (B) the aggregate
amount of Collections of Principal Receivables on such Date of
Processing; PROVIDED, HOWEVER, that after the date on which an amount
of such Collections equal to the In-
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vested Amount has been deposited into the Collection Account and
allocated to the Investor Certificateholders, any excess of the amount
determined in accordance with this subparagraph (y) shall be first, if
any other Principal Sharing Series is outstanding and in its
Amortization Period, deposited in the Collection Account for
application, to the extent necessary, as Shared Principal Collections
on the related Distribution Date and second shall be paid to the
Holder of the Transferor Certificate only if on such Date of
Processing the Transferor Amount (excluding the interest represented
by the Supplemental Certificate) is greater than the Required Retained
Transferor Amount and otherwise shall be deposited in the Special
Funding Account.
(iv) MONTHLY ALLOCATIONS DURING THE REVOLVING PERIOD AND ACCUMULATION
PERIOD. During the Revolving Period and Accumulation Period, the Servicer
shall, prior to the close of business on any Transfer Date allocate to the
Investor Certificateholders and deposit in the Collection Account an amount
equal to the sum of (I) (A) the lesser of (1) the sum of (a) the product of
(x) the Floating Allocation Percentage with respect to the preceding
Monthly Period and (y) the aggregate amount of Collections of Finance
Charge Receivables for the related Monthly Period, (b) the amount of Excess
Finance Charge Collections allocated to Series 1997-1 for the related
Monthly Period and (c) the amount of Excess Transferor Finance Charge
Collections allocated to Series 1997-1 for the related Monthly Period and
(2) the aggregate of the amounts to be paid on such Distribution Date
pursuant to clause (y) of each of clauses (i) through (viii) of Section
4.6(a) and the amount described in Section 4.6(a)(ix), less (B) the daily
amounts deposited in the Collection Account during such Monthly Period
pursuant to subsections 4.2(b)(i)(x) and 4.2(b)(ii)(x) with respect to the
Revolving Period and the Accumulation Period, respectively, (II) the excess
of the amount of Reallocated Class B Principal Collections over the amount
retained in the Collection Account pursuant to subsections 4.2(b)(i)(y) and
4.2(b)(ii)(y) with respect to the Revolving Period and Accumulation Period,
(III) an amount equal to the pro rata portion of Finance Charge Shortfalls,
if any, for Group I allocated to Series 1997-1 pursuant to Section 4.5 of
the Agreement, not to exceed Excess Finance Charge Collections pursuant to
Section 4.6(a)(x) available on the related Distribution Date, (IV) an
amount equal to the amount of Shared Principal Collections to be applied
for the benefit of other Principal Sharing Series pursuant to Section 4.4
of the Agreement from amounts that were originally allocated to Series
1997-1, not to exceed (a) during the Revolving Period, the Principal
Allocation Percentage of Principal Collections for the related Monthly
Period or (b) during the Accumulation Period, the Principal Allocation
Percentage of
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Principal Collections for the related Monthly Period less the amount
thereof applied to pay Class A Monthly Principal on the related
Distribution Date and (V) the amount of Shared Transferor Principal
Collections to be applied to make payments of Class A Monthly Principal and
Class B Monthly Principal on the related Distribution Date.
(c) The allocations to be made pursuant to this subsection 4.2 also
apply to deposits into the Collection Account that are treated as Collections,
including adjustment payments made in accordance with Section 3.9 of the
Agreement, payment of the reassignment price pursuant to Section 2.5(b) of the
Agreement and proceeds from the sale, disposition or liquidation of the
Receivables pursuant to Section 9.2, 10.2, 12.1 or 12.2 of the Agreement and
Section 7.1. Such deposits to be treated as Collections will be allocated as
Finance Charge Receivables or Principal Receivables as provided in the
Agreement.
(d) Notwithstanding anything herein or in the Agreement, the
Supplement for any other Series or any Enhancement Agreement for any Series to
the contrary, all amounts designated to be paid to the Transferor or any holder
of a Transferor Certificate in such documents, other than amounts allocated to
be paid to the holder of any Supplemental Certificate, instead, to the extent
that such amounts are derived from Collections of Finance Charge Receivables and
other amounts applied like collections of Finance Charge Receivables, including
any amounts constituting Excess Finance Charge Collections remaining after
application thereof to all Series but prior to payment thereof to the
Transferor, shall be deemed to be "Excess Transferor Finance Charge Collections"
and to the extent that such amounts are derived from Collections of Principal
Receivables, and to the extent of any Excess Transferor Finance Charge
Collections remaining after application thereof to each Series designated to be
entitled thereto, shall be deemed to be "Shared Transferor Principal
Collections."
Section 4.3 DETERMINATION OF MONTHLY INTEREST FOR THE SERIES 1997-1
CERTIFICATES. The amount of monthly interest (the "Class A Interest") allocable
to the Class A Certificates with respect to any Interest Accrual Period shall be
an amount equal to one-twelfth of the product of (i) the Class A Certificate
Rate and (ii) the outstanding principal balance of the Class A Certificates as
of the close of business on the last day of the preceding monthly period,
PROVIDED, HOWEVER, that with respect to the first Distribution Date after the
Closing Date the Class A Interest shall be an amount equal to $2,777,777.78.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class A Interest Shortfall") equal to
the excess, if any, of (x) the Class A Interest for the Interest Accrual Period
applicable to such Distribution Date OVER (y) the amount available to be paid
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to the Class A Certificateholders in respect of interest on such Distribution
Date. If there is a Class A Interest Shortfall with respect to any Distribution
Date, an additional amount ("Class A Additional Interest") shall be payable as
provided herein with respect to the Class A Certificates on each Distribution
Date following such Distribution Date, to and including the Distribution Date on
which such Class A Interest Shortfall is paid to Class A Certificateholders,
equal to one-twelfth of the product of (i) the Class A Certificate Rate plus 2%
per annum and (ii) such Class A Interest Shortfall remaining unpaid.
Notwithstanding anything to the contrary herein, Class A Additional Interest
shall be payable or distributed to Class A Certificateholders only to the extent
permitted by applicable law.
Section 4.4 DETERMINATION OF PRINCIPAL AMOUNTS. (a) The amount of
principal (the "Class A Principal") distributable from the Collection Account
with respect to the Class A Certificates on each Distribution Date with respect
to the Amortization Period shall be equal to an amount calculated as follows:
the sum of (i) an amount equal to the product of the Principal Allocation
Percentage and the aggregate amount of Collections of Principal Receivables with
respect to the preceding Monthly Period, (ii) any amount on deposit in the
Special Funding Account that is distributable to the Class A Certificates
pursuant to subsection 4.6(d) with respect to the preceding Monthly Period,
(iii) the amount, if any, allocated to the Class A Certificates pursuant to
subsections 4.6(a)(iii), (iv), (v), (vi) and (vii), (iv) the amount of Shared
Principal Collections allocated to the Class A Certificates with respect to the
preceding Monthly Period pursuant to Section 4.4 of the Agreement and (v) the
amount of Shared Transferor Principal Collections allocated to the Class A
Certificates with respect to the preceding Monthly Period pursuant to subsection
4.5(b); PROVIDED, HOWEVER, that (i) with respect to any Distribution Date during
the Accumulation Period, Class A Principal may not exceed the Controlled Deposit
Amount for such Distribution Date; (ii) with respect to any Distribution Date,
Class A Principal may not exceed the Class A Adjusted Invested Amount; and (iii)
with respect to the Scheduled Series 1997-1 Termination Date, the Class A
Principal shall be an amount equal to the Class A Adjusted Invested Amount.
(b) The amount of principal (the "Class B Principal") distributable
from the Collection Account with respect to the Class B Certificates on each
Distribution Date on and after the Distribution Date on which the Class A
Invested Amount is paid in full, shall be an amount equal to the lesser of: (x)
the sum of (i) an amount equal to the product of the Principal Allocation
Percentage and the aggregate amount of Collections of Principal Receivables
(subtracting from such product the amount of Reallocated Class B Principal
Collections) with respect to the preceding Monthly Period, (ii) any amount on
deposit in the Special Funding Account that is distributable to the Class B
Certificates pursuant to subsection 4.6(d) with respect to the
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preceding Monthly Period, and (iii) the amount, if any, allocated to the Class B
Certificates pursuant to subsections 4.6(a)(iv), (v) and (vii) with respect to
such Distribution Date, (iv) the amount, if any, of principal allocable to the
Class A Certificates pursuant to subsection 4.4(a) (without regard to the
PROVISO thereof), respectively, but remaining after distributions have been made
to Class A Certificateholders pursuant to subsections 4.6(c)(i), (v) the amount
of Shared Principal Collections allocated to the Class B Certificates with
respect to the preceding Monthly Period pursuant to Section 4.4 of the Agreement
and (vi) the amount of Shared Transferor Principal Collections allocated to the
Class B Certificates with respect to the preceding Monthly Period pursuant to
subsection 4.5(b) and (y) the Class B Invested Amount, PROVIDED, HOWEVER, that
with respect to the Scheduled Series 1997-1 Termination Date, the Class B
Principal shall be an amount equal to the Class B Invested Amount,
Section 4.5 SHARED PRINCIPAL COLLECTIONS. (a) Shared Principal
Collections allocated to the Series 1997-1 Certificates and to be applied
pursuant to subsection 4.4(a)(iv) and subsection 4.4(b)(v) for any Distribution
Date with respect to the Amortization Period shall mean an amount equal to the
product of (x) Shared Principal Collections for all Series for such date and (y)
a fraction, the numerator of which is the Principal Shortfall for the Series
1997-1 Certificates for such date and the denominator of which is the aggregate
amount of Principal Shortfalls for all Series for such date. For any
Distribution Date with respect to the Revolving Period, Shared Principal
Collections allocated to the Series 1997-1 Certificates shall be zero.
(b) Shared Transferor Principal Collections allocated to the Series
1997-1 Certificates and to be applied pursuant to subsection 4.4(a)(v) and
subsection 4.4(b)(vi) for any Distribution Date with respect to the Amortization
Period shall mean an amount equal to the product of (x) the aggregate amount of
Shared Transferor Principal Collections for such date and (y) a fraction, the
numerator of which is the Principal Shortfall for the Series 1997-1 Certificates
for such date and the denominator of which is the aggregate amount of Principal
Shortfalls for all Series for such date. For any Distribution Date with respect
to the Revolving Period, Shared Transferor Principal Collections allocated to
the Series 1997-1 Certificates shall be zero.
Section 4.6 APPLICATION OF FUNDS ON DEPOSIT IN THE COLLECTION ACCOUNT
FOR THE CERTIFICATES. (a) On each Distribution Date, the Servicer shall
instruct the Trustee to withdraw, and the Trustee, acting in accordance with
such instructions set forth in the Monthly Servicer Report, shall withdraw from
the Collection Account, or retain therein, as applicable, to the extent of the
sum of (x) the Floating Allocation Percentage of Collections of Finance Charge
Receivables collected during the preceding Monthly Period plus (y) any
investment earnings on amounts on deposit in the Principal Funding Account
deposited in
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the Collection Account pursuant to Section 4.11(b) and investment earnings on
amounts on deposit in the Reserve Account deposited in the Collection Account
pursuant to Section 4.13(b) PLUS (z) the Reserve Draw Amount deposited into the
Collection Account pursuant to subsection 4.13(d) (such sum, the "Available
Series 1997-1 Finance Charge Collections"; PROVIDED that, with respect to the
first Distribution Date, the amount deposited by the Transferor into the
Collection Account pursuant to Section 4.2(a) shall also constitute Available
Series 1997-1 Finance Charge Collections), the following amounts, and apply such
amounts as follows and in the following priority:
(i) CLASS A INTEREST. An amount equal to the lesser of (x) the
Available Series 1997-1 Finance Charge Collections for such date and (y)
the sum of Class A Interest and Carryover Class A Interest shall paid to
the Class A Certificateholders in accordance with Section 5.1.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class A Interest that constitutes Class A Additional Interest shall be
payable or distributable to Class A Certificateholders only to the extent
permitted by applicable law.
(ii) SERVICING FEE. An amount equal to the lesser of (x) any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawal pursuant to subsection 4.6(a)(i) and (y) the
Monthly Servicing Fee for such Monthly Period plus any unpaid Monthly
Servicing Fees from prior Monthly Periods.
(iii) CLASS A INVESTOR DEFAULTED AMOUNT. An amount equal to the
lesser of (x) any Available Series 1997-1 Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to subsections
4.6(a)(i) and (ii) and (y) the aggregate Class A Investor Defaulted Amount
for such Distribution Date, shall be (A) during the Revolving Period,
treated as Shared Principal Collections and (B)(I) during the Accumulation
Period, on and prior to the date on which an amount equal to the Class A
Invested Amount is available in the Principal Funding Account for
distribution to the Class A Certificateholders, deposited in the Principal
Funding Account, and (II) during the Early Amortization Period, on and
prior to the date on which the Class A Invested Amount is paid in full,
deposited in the Collection Account, in each case for payment to the Class
A Certificateholders to the extent required in accordance with subsections
4.4(a)(iii) and 4.6(c).
(iv) CLASS B INVESTOR DEFAULTED AMOUNT. An amount equal to the lesser
of (x) any Available Series 1997-1 Finance Charge Collections remaining
after giving effect to the withdrawals pursuant to subsections 4.6(a)(i)
through (iii) and (y) the aggregate Class B Investor Defaulted
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Amount for such Distribution Date, shall be (A) during the Revolving Period
treated as Shared Principal Collections, (B)(I) during the Accumulation
Period, on and prior to the day on which an amount equal to the Class A
Invested Amount is deposited in the Principal Funding Account, retained in
the Principal Funding Account, and (II) during the Early Amortization
Period, on and prior to the date on which the Class A Invested Amount is
paid in full, deposited in the Collection Account, in each case for payment
to the Class A Certificateholders to the extent required in accordance with
subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which
an amount equal to the Class A Invested Amount has been retained in the
Principal Funding Account or the Class A Invested Amount has been paid in
full, distributed to the Class B Certificateholders to the extent of the
Class B Invested Amount.
(v) ADJUSTMENT PAYMENT SHORTFALLS. An amount equal to the lesser of
(x) any Available Series 1997-1 Finance Charge Collections remaining after
giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through
(iv) and (y) an amount equal to the Floating Allocation Percentage of any
adjustment payment which the Transferor is required but fails to make
pursuant to subsection 3.9(a) of the Agreement shall be, (A) during the
Revolving Period, treated as Shared Principal Collections, (B)(I) during
the Accumulation Period, on and prior to the day on which an amount equal
to the Class A Invested Amount is deposited in the Principal Funding
Account, retained in the Principal Funding Account, and (II) during the
Early Amortization Period, on and prior to the date on which the Class A
Invested Amount is paid in full, deposited in the Collection Account, in
each case for payment to the Class A Certificateholders to the extent
required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on
and after the date on which an amount equal to the Class A Invested Amount
has been retained in the Principal Funding Account or the Class A Invested
Amount has been paid in full, distributed to the Class B Certificateholders
to the extent of the Class B Invested Amount.
(vi) REIMBURSEMENT OF CLASS A INVESTOR CHARGE-OFFS. An amount equal
to the lesser of (x) any Available Series 1997-1 Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to subsections
4.6(a)(i) through (v) and (y) the unreimbursed Class A Investor
Charge-Offs, if any, will be applied to reimburse Class A Investor
Charge-Offs, and shall be (A) during the Revolving Period, treated as
Shared Principal Collections and (B)(I) during the Accumulation Period, on
and prior to the day on which an amount equal to the Class A Invested
Amount is available in the Principal Funding Account, retained in the
Principal Funding Account, and (II) during the Early Amortization Period,
on and prior to the date on which the Class A
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Invested Amount is paid in full, deposited in the Collection Account, in
each case for payment to the Class A Certificateholders to the extent
required in accordance with subsections 4.4(a)(iii) and 4.6(c).
(vii) REIMBURSEMENT OF CLASS B INVESTOR CHARGE-OFFS AND REALLOCATED
CLASS B PRINCIPAL COLLECTIONS. An amount equal to the lesser of (x) any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals pursuant to subsections 4.6(a)(i) through (vi)
and (y) the unreimbursed reductions in the Class B Invested Amount as a
result of Class B Investor Charge-Offs and Reallocated Class B Principal
Collections, if any, shall be (A) during the Revolving Period treated as
Shared Principal Collections, (B)(I) during the Accumulation Period, on and
prior to the day on which an amount equal to the Class A Invested Amount is
deposited in the Principal Funding Account, retained in the Principal
Funding Account, and (II) during the Early Amortization Period, on and
prior to the date on which the Class A Invested Amount is paid in full,
deposited in the Collection Account, in each case for payment to the Class
A Certificateholders to the extent required in accordance with subsections
4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount
equal to the Class A Invested Amount has been retained in the Principal
Funding Account or the Class A Invested Amount has been paid in full,
distributed to the Class B Certificateholders to the extent of the Class B
Invested Amount.
(viii) CLASS B INTEREST. An amount equal to the lesser of (x) any
Available Series 1997-1 Finance Charge Collections remaining after giving
effect to the withdrawals to subsections 4.6(a)(i) through (vii) and (y)
the sum of Class B Interest and Carryover Class B Interest, if any, shall
be paid to the Class B Certificateholders. Notwithstanding anything to the
contrary herein, the portion of Carryover Class B Interest that constitutes
Class B Additional Interest shall be payable or distributable to Class B
Certificateholders only to the extent permitted by applicable law.
(ix) RESERVE ACCOUNT. On each Distribution Date from and after the
Reserve Account Funding Date, but prior to the date of termination of the
Reserve Account as described in subsection 4.13(f), an amount up to the
excess, if any, of the Required Reserve Account Amount over the Available
Reserve Account Amount shall be deposited into the Reserve Account.
(x) EXCESS FINANCE CHARGE COLLECTIONS. Any Available Series 1997-1
Finance Charge Collections after giving effect to the withdrawals pursuant
to subsection 4.6(a)(i) through (ix) shall be treated as Excess Finance
Charge Collections,
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and the Servicer shall direct the Trustee in writing on each Distribution
Date to withdraw such amounts from the Collection Account and to first make
such amounts available to pay to Certificateholders of other Series to the
extent of shortfalls, if any, in amounts payable to such certificateholders
from Collections of Finance Charge Receivables allocated to such other
Series, and then, to pay any unpaid expenses or liabilities of the Trust,
and then treated as Excess Transferor Finance Charge Collections.
(b) For each Distribution Date with respect to the Revolving Period,
the product of (i) the Principal Allocation Percentage and (ii) Collections of
Principal Receivables with respect to such Distribution Date will be treated as
Shared Principal Collections and applied, for such Distribution Date, as
provided in Section 4.4 of the Agreement; PROVIDED, HOWEVER, that if the Class B
Invested Amount is reduced in accordance with Section 7.3(a), the amount
specified in clauses (i) and (ii) may be distributed to the Class B
Certificateholders in an amount not to exceed such reduction.
(c) For each Distribution Date on and after the Amortization Period
Commencement Date, the Trustee, acting pursuant to the Servicer's instructions,
will distribute the amount of funds on deposit in the Collection Account
available for payment of principal to Series 1997-1 Certificateholders in
accordance with Section 4.4 in the following priority:
(i) an amount equal to Class A Principal, subject to the proviso
in Section 4.4(a) (x) with respect to the Controlled Accumulation
Period, to the Principal Funding Account for payment to the Class A
Certificateholders on the earlier of the Class A Expected Final
Payment Date and the first Special Payment Date or (y) with respect to
the Early Amortization Period, to the Class A Certificateholders;
(ii) after the Class A Invested Amount has been paid in full, to
the Class B Certificateholders, an amount equal to Class B Principal,
subject to the proviso in Section 4.4(b); and
(iii) an amount equal to the sum of (I) the excess, if any, of
(A) the sum of the amounts described in subsections 4.4(a)(i) and
(iii) over (B) the Class A Principal and (II) the excess, if any, of
(A) the sum of the amounts described in subsections 4.4(b)(i) and
(iii) over (B) the Class B Principal will be treated as Shared
Principal Collections and applied as provided in subsection 4.4 of the
Agreement.
(d) On each Distribution Date during the Amortization Period, funds on
deposit in the Special Funding Account and
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distributable to Series 1997-1 as provided in Section 4.2 of the Agreement will
be deposited in the Collection Account. Such amounts will be allocated in the
following order of priority:
(i) on each Distribution Date until the Class A Invested Amount
is paid in full to the Class A Certificateholders in an amount equal
to the lesser of the Principal Shortfall and the amount allocated with
respect thereto pursuant to Section 4.2 of the Agreement; PROVIDED,
HOWEVER, such amount shall not exceed the Class A Principal after
subtracting therefrom any amounts to be deposited in the Collection
Account with respect thereto pursuant to subsections 4.4(a)(i),
(iii),(iv) and (v); and PROVIDED, FURTHER that during the Accumulation
Period such amount shall be deposited in the Principal Funding
Account; and
(ii) on each Distribution Date on and after the Distribution Date
on which the Class A Invested Amount is paid in full to the Class B
Certificateholders in an amount not to exceed the Class B Invested
Amount after subtracting therefrom any amounts to be deposited in the
Collection Account with respect thereto pursuant to subsections
4.4(b)(i), (iii), (iv), (v) and (vi) to be paid to the Class B
Certificateholders.
Section 4.7 COVERAGE OF REQUIRED AMOUNT FOR THE SERIES 1997-1
CERTIFICATES. To the extent that on any Distribution Date payments are being
made pursuant to any of subsections 4.6(a)(i) through (ix), respectively, and
the full amount to be paid pursuant to any such subsection receiving payments on
such Distribution Date is not paid in full on such Distribution Date, the
Servicer shall apply all or a portion of the Excess Finance Charge Collections
from other Series with respect to such Distribution Date allocable to the Series
1997-1 Certificates in an amount equal to the excess of the full amount to be
allocated or paid pursuant to the applicable subsection over the amount applied
with respect thereto from Available Series 1997-1 Finance Charge Collections on
such Distribution Date (the "Required Amount"). Excess Finance Charge
Collections allocated to the Series 1997-1 Certificates for any Distribution
Date shall mean an amount equal to the product of (x) Excess Finance Charge
Collections available from all other Series in Group I for such Distribution
Date and (y) a fraction, the numerator of which is the Required Amount for such
Distribution Date and the denominator of which is the aggregate amount of
shortfalls in required amounts or other amounts to be paid from Collections of
Finance Charge Receivables for all Series in Group I for such Distribution Date.
In addition, the Servicer shall apply all or a portion of the Excess
Transferor Finance Charge Collections with respect to such Distribution Date
allocable to the Series 1997-1 Certifi-
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cates in an amount equal to the unpaid Required Amount after the application of
Excess Finance Charge Collections. Excess Transferor Finance Charge Collections
allocated to the Series 1997-1 Certificates for any Distribution Date shall mean
an amount equal to the product of (x) Excess Transferor Finance Charge
Collections available for such Distribution Date and (y) a fraction, the
numerator of which is the unpaid Required Amount after the application of Excess
Finance Charge Collections for such Distribution Date and the denominator of
which is the aggregate amount of shortfalls for such Distribution Date in
required amounts or other amounts to be paid from Collections of Finance Charge
Receivables for all Series which are designated pursuant to the applicable
Series Supplement to be entitled to share Excess Transferor Finance Charge
Collections.
Section 4.8. INVESTOR CHARGE-OFFS. (a) If, on any Determination Date,
the aggregate Investor Defaulted Amount and the Series Allocation Percentage of
any unpaid adjustment payments required by Section 3.9 of the Agreement in the
preceding Monthly Period exceed the Available Series 1997-1 Finance Charge
Collections applied to the payment thereof pursuant to subsections 4.6(a)(iii),
(iv) and (v) plus the amount of Excess Finance Charge Collections and Excess
Transferor Finance Charge Collections allocated thereto pursuant to Section 4.7,
plus the amount of Reallocated Class B Principal Collections applied with
respect thereto pursuant to Section 4.9, the Class B Invested Amount will be
reduced by the amount by which the remaining aggregate Investor Defaulted Amount
and Series Allocation Percentage of such unpaid adjustment payments exceed the
amount applied with respect thereto during such preceding Monthly Period (a
"Class B Investor Charge-Off").
(b) 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 will be reduced to zero, and the Class A Invested Amount
will be reduced by the amount by which the Class B Invested Amount would have
been reduced below zero, but not more than the aggregate Investor Defaulted
Amount and Series Allocation Percentage of the unpaid adjustment payments
required by Section 3.9 of the Agreement for such Monthly Period (a "Class A
Investor Charge-Off").
Section 4.9. REALLOCATED CLASS B PRINCIPAL COLLECTIONS FOR THE
SERIES 1997-1 CERTIFICATES. On each Distribution Date, the Servicer will
apply or cause the Trustee to apply from amounts on deposit in the Collection
Account an amount equal to the lesser of (i) the Class B Invested Amount,
(ii) the product of (x) the Class B Principal Allocation Percentage and (y)
the amount of Collections of Principal Receivables with respect to the
related Monthly Period and (iii) the Class A Required Amount for such
Distribution Date (such amount called "Reallocated Class B Principal
Collections") to the components of the Class A Required Amount in the same
priority as amounts are applied to
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such components from Available Series 1997-1 Finance Charge Collections pursuant
to subsection 4.6(a).
Section 4.10. ISSUANCE OF ADDITIONAL INVESTOR CERTIFICATES. (a)
During the Revolving Period, the Transferor may, in its discretion and
subject to the terms of subsection (b) below, request the Trustee to issue
additional Class A Certificates and Class B Certificates (each such
additional certificates, the "Additional Certificates") in an amount and on
the date (the "Additional Certificate Date") determined by the Transferor.
Upon issuance, the Additional Certificates will be identical in all respects
(except that the principal amount of such Additional Certificates may be
different) to the Certificates currently outstanding and will be equally and
ratably entitled to the benefits of this Supplement and the Agreement. As a
result of such issuance, the Class A Invested Amount and the Class B Invested
Amount shall be increased pro rata and all the calculations required pursuant
to this Supplement shall, from and after the Additional Certificate Date, be
computed using such increased Class A Invested Amount and Class B Invested
Amount. The Controlled Accumulation Amount shall be increased proportionally
to reflect the additional principal amount of Class A Certificates and Class
B Certificates represented by the Additional Certificates.
(b) Additional Certificates shall only be issued upon satisfaction of
all of the following conditions:
(i) on or before the fifth Business Day immediately preceding the date
on which the Additional Certificates are to be issued, the Transferor shall
give notice to the Trustee, the Servicer and the Rating Agency of such
issuance and the date upon which it is to occur;
(ii) after giving effect to the addition of the Additional Certificates
to the Series, the total amount of Principal Receivables in the Trust shall
be greater than or equal to the Required Principal Balance;
(iii) on or before the Additional Certificate Date, the Rating Agency
Condition shall have been satisfied;
(iv) the Transferor shall have delivered to the Trustee an Officer's
Certificate dated as of the Additional Certificate Date, stating that the
Transferor reasonably believes that the issuance of such Additional
Certificates will not have a material adverse effect on the Class A
Certificates or Class B Certificates;
(v) as of the date of issuance of the Additional Certificates, the
amount of unreimbursed Investor Charge-Offs shall be zero; and
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(vi) the Transferor shall have delivered to the Trustee a Tax Opinion
with respect to such issuance.
Section 4.11. ESTABLISHMENT OF THE PRINCIPAL FUNDING ACCOUNT FOR
THE CERTIFICATES. (a) The Trustee, for the benefit of the holders of the
Series 1997-1 Certificates, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the holders of the Series 1997-1 Certificates (the "Principal
Funding Account"). The Principal Funding Account shall initially be
established with the Trustee. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Principal Funding
Account and in all proceeds thereof for the benefit of the holders of the
Series 1997-1 Certificates. For purposes of the definition of "Required
Retained Transferor Amount" the Principal Funding Account shall be an account
specified in clause (i)(b) of the definition thereof. Additionally the
Principal Funding Account is hereby specified as an account to be included
for purposes of the definition of "Transferor Amount." Except as provided in
subsection 4.11(b), the Principal Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the holders of the
Series 1997-1 Certificates. If, at any time, the Principal Funding Account
ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its
behalf) shall within 10 Business Days establish a new Principal Funding
Account meeting the conditions specified above, transfer any cash and/or any
investments to such new Principal Funding Account and from the date such new
Principal Funding Account is established, it shall be, for the Certificates,
the "Principal Funding Account."
(b) On each Distribution Date with respect to the Accumulation Period
and any Special Payment Date, the Servicer shall withdraw from the Principal
Funding Account and deposit in the Collection Account all interest and other
investment income (net of losses and investment expenses) on funds then on
deposit in the Principal Funding Account. Investment income (including
reinvested interest) on funds deposited in the Principal Funding Account and
invested pursuant to subsection 4.11(c) shall not be considered to be principal
amounts on deposit in the Principal Funding Account for purposes hereof, and
shall be treated as Available Series 1997-1 Finance Charge Collections with
respect to the last day of the related Monthly Period. Funds on deposit in the
Principal Funding Account prior to the Class A Expected Final Payment Date shall
be invested at the direction of the Transferor by the Trustee in Eligible
Investments. Any such investment shall (i) convert or be convertible into cash
so that such funds shall be made available for withdrawal on or prior to the
next Distribution Date and (ii) shall be held until maturity; PROVIDED, HOWEVER,
that the Trustee, at the direction of the Transferor, may sell an investment
that is no longer an Eligible Investment prior to its maturity. Any request to
the Trustee
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from the Servicer to invest funds on deposit in the Principal Funding Account
shall be in writing and shall certify that the requested investment is an
Eligible Investment which converts or is convertible into cash at or prior to
the time required hereby.
(c) Pursuant to the authority granted to the Servicer in subsection
3.1(b) 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 Principal Funding Account for the purposes of
carrying out of the Servicer's or Trustee's duties hereunder. Pursuant to the
authority granted to the Paying Agent in Sections 5.1 and 6.7 of the Agreement,
the Paying Agent shall have the power, revocable by the Trustee, to withdraw
funds from the Principal Funding Account for the purpose of making distributions
to the Certificateholders.
Section 4.12 ACCUMULATION PERIOD. The Accumulation Period is
scheduled to commence on the Accumulation Date; PROVIDED, HOWEVER, that if the
Accumulation Period Length (determined as described below) on any Determination
Date on or after the September 2001 Determination Date is less than 12
months,upon written notice to the Trustee, the Transferor and each Rating
Agency, the Servicer, at its option, may elect to modify the date on which the
Accumulation Period actually commences to the first day of the month that is a
number of months prior to the month in which the Class A Expected Final Payment
Date occurs at least equal to the Accumulation Period Length (so that, as a
result of such election, the number of Monthly Periods in the Accumulation
Period will at least equal the Accumulation Period Length); PROVIDED, HOWEVER,
that (i) the length of the Accumulation Period will not be less than one month;
(ii) such determination of the Accumulation Period Length shall be made on each
Determination Date on and after the June 2001 Determination Date but prior to
the commencement of the Accumulation Period, and any election to shorten the
Accumulation Period shall be subject to the subsequent lengthening of the
Accumulation Period to the Accumulation Period Length determined on any
subsequent Determination Date, but the Accumulation Period shall in no event
commence prior to the Accumulation Date, and (iii) notwithstanding any other
provision of the Series 1997-1 Supplement to the contrary, no election to
postpone the commencement of the Accumulation Period shall be made after an
Early Amortization Event (as defined in the related Supplement) shall have
occurred and be continuing with respect to any other Series. The "Accumulation
Period Length," will mean a number of months such that the amount available for
distribution of principal on the Class A Certificates on the Class A Expected
Final Payment Date is expected to equal or exceed the Class A Invested Amount,
assuming for this purpose that (1) the payment rate with respect to Collections
of Principal Receivables remains constant at the lowest level of such payment
rate during the twelve preceding Monthly Periods (or such lower payment rate as
the Servicer may select), (2) the total amount of Principal
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Receivables in the Trust (and the principal amount on deposit in the Special
Funding Account, if any) remains constant at the level on such date of
determination, (3) no Early Amortization Event with respect to any Series will
subsequently occur and (4) no additional Series (other than any Series being
issued on such date of determination) will be subsequently issued. Any notice
by the Servicer electing to modify the commencement of the Accumulation Period
pursuant to this Section 4.12 shall specify (i) the Accumulation Period Length,
(ii) the commencement date of the Accumulation Period and (iii) the Controlled
Accumulation Amount with respect to each Monthly Period during the Accumulation
Period.
Section 4.13. RESERVE ACCOUNT. (a) The Servicer shall establish and
maintain with an Eligible Institution, which may be the Trustee, in the name of
the Trustee, on behalf of the Trust, for the benefit of the Investor
Certificateholders, a segregated trust account with the corporate trust
department of such Eligible Institution (the "Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Reserve Account and in all proceeds thereof. The Reserve Account shall be under
the sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If at any time the institution holding the Reserve Account
ceases to be an Eligible Institution the Transferor shall notify the Trustee,
and the Trustee upon being notified (or the Servicer on its behalf) shall,
within 10 Business Days, establish a new Reserve Account meeting the conditions
specified above with an Eligible Institution, and shall transfer any cash or any
investments to such new Reserve Account. The Trustee, at the written direction
of the Servicer, shall (i) make withdrawals from the Reserve Account from time
to time in an amount up to the Available Reserve Account Amount at such time,
for the purposes set forth in this Supplement, and (ii) on each Distribution
Date (from and after the Reserve Account Funding Date) prior to termination of
the Reserve Account make a deposit into the Reserve Account in the amount
specified in, and otherwise in accordance with, subsection 4.6(a)(ix).
(b) Funds on deposit in the Reserve Account shall be invested by the
Transferor (or, at the direction of the Transferor, by the Servicer or the
Trustee on behalf of the Transferor) in Eligible Investments. Funds on deposit
in the Reserve Account on any Transfer Date, after giving effect to any
withdrawals from the Reserve Account on such Transfer Date shall be invested in
such investments that will convert or be convertible into cash so that such
funds will be available for withdrawal on or prior to the following Transfer
Date. The Trustee shall maintain for the benefit of the Investor
Certificateholders possession of the negotiable instruments or certificated
securities, if any, evidencing such Eligible Investments. No Eligible
Investment
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shall be disposed of prior to its maturity. On each Transfer Date, all interest
and earnings (net of losses and investment expenses) accrued since the preceding
Transfer Date on funds on deposit in the Reserve Account shall be retained in
the Reserve Account to the extent that the Available Reserve Account Amount is
less than the Required Reserve Account Amount and the balance, if any, shall be
deposited into the Collection Account for application as Available Series 1997-1
Finance Charge Collections on the following Distribution Date. For purposes of
determining the availability of funds or the balance in the Reserve Account for
any reason under this Supplement, except as otherwise provided in the preceding
sentence, investment earnings on such funds shall be deemed not to be available
or on deposit.
(c) On each Transfer Date with respect to the Accumulation Period
prior to the payment in full of the Class A Invested Amount and the first
Transfer Date with respect to the Early Amortization Period, the Servicer shall
calculate the "Reserve Draw Amount" which shall be equal to the Principal
Funding Investment Shortfall with respect to each Transfer Date with respect to
the Accumulation Period or the first Transfer Date with respect to the Early
Amortization Period.
(d) In the event that for any Transfer Date the Reserve Draw Amount
is greater than zero, the Reserve Draw Amount, up to the Available Reserve
Account Amount, shall be withdrawn from the Reserve Account on such Transfer
Date by the Trustee (acting in accordance with the written instructions of the
Servicer), deposited into the Collection Account and included in Available
Series 1997-1 Finance Charge Collections for such Transfer Date.
(e) In the event that the Reserve Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Reserve
Account on and prior to such Distribution Date, is greater than zero, the
Trustee, acting in accordance with the written instructions of the Servicer,
shall withdraw from the Reserve Account, and apply as Excess Finance Charge
Collections, an amount equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the Class A
Invested Amount is paid in full to the Class A Certificateholders, (iii) if the
Accumulation Period has not commenced, the occurrence of a Series 1997-1 Early
Amortization Event or a Early Amortization Event and (iv) if the Accumulation
Period has commenced, the earlier of the first Transfer Date with respect to the
Early Amortization Period and the Class A Expected Final Payment Date, the
Trustee, acting in accordance with the written instructions of the Servicer,
shall withdraw from the Reserve Account and apply as Available Series 1997-1
Finance Charge Collections, all amounts, if any, on deposit in
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the Reserve Account and the Reserve Account shall be deemed to have terminated
for purposes of this Supplement.
SECTION 4.14 DEFEASANCE. On any date prior to the Early Amortization
Period on which the following conditions have been satisfied: (i) the
Transferor has deposited (x) in the Principal Funding Account, an amount equal
to the outstanding principal balance of the Class A Certificates, which amount
will be invested in Eligible Investments and (y) in the Reserve Account an
amount equal to or greater than the Covered Amount, as estimated by the
Transferor, for the period from the date of the deposit to the Principal Funding
Account through the Class A Expected Final Payment Date; (ii) the Transferor has
delivered to the Trustee an opinion of counsel to the effect that such deposit
and termination of obligations as described below will not result in the Trust
being required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and an opinion of counsel to the
effect that following such deposit none of the Trust, the Reserve Account or the
Principal Funding Account will be deemed to be an association (or publicly
traded partnership) taxable as a corporation; (iii) the Transferor has delivered
to the Trustee a certificate of an officer of the Transferor stating that the
Transferor reasonably believes that such deposit and termination of its
obligations will not constitute an Early Amortization Event or any event that,
with the giving of notice or the lapse of time, would constitute an Early
Amortization Event or a Series 1997-1 Early Amortization Event to occur; and
(iv) the Rating Agency Condition shall have been satisfied; then, the Series
1997-1 Certificates will no longer be entitled to the security interest of the
Trust in the Receivables and, except those set forth in clause (i) above, other
Trust assets ("Defeasance"), and the Investor Percentages applicable to the
allocation to the Series 1997-1 Certificateholders of Collections of Principal
Receivables, Finance Charge Receivables and Defaulted Receivables will be
reduced to zero. Upon the satisfaction of the foregoing conditions, the Class B
Invested Amount will be reduced to zero.
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ARTICLE V
DISTRIBUTIONS AND REPORTS TO SERIES 1997-1 INVESTOR
CERTIFICATEHOLDERS
Section 5.1 DISTRIBUTIONS.
(a) On each Distribution Date, the Paying Agent shall distribute to
each Class A Certificateholder of record on the related Record Date (other than
as provided in Section 12.2 of the Agreement) such Class A Certificateholder's
PRO RATA share of the amounts that are available on such Distribution Date to
pay interest on the Class A Certificates pursuant to this Supplement.
(b) On the Class A Expected Final Payment Date and on each
Distribution Date thereafter, and on each Distribution Date with respect to the
an Early Amortization Period, the Paying Agent shall distribute to each Class A
Certificateholder of record on the related Record Date (other than as provided
in Section 12.2 of the Agreement) such Class A Certificateholder's PRO RATA
share of the amounts that are available on such date to pay principal of the
Class A Certificates pursuant to this Supplement up to a maximum amount on any
such date equal to the Class A Invested Amount on such date. On each
Distribution Date on and after the Distribution Date on which the Class A
Invested Amount is paid in full, the Paying Agent shall distribute to each Class
B Certificateholder of record on the related Record Date (other than as provided
in Section 12.2 of the Agreement) such Class B Certificateholder's PRO RATA
share of the amounts that are available on such date to pay principal of the
Class B Certificates pursuant to this Supplement up to a maximum amount on any
such date equal to the Class B Invested Amount on such date.
(c) The distributions to be made pursuant to this Section 5.1 are
subject to the provisions of Sections 2.6, 9.2, 10.1 and 12.2 of the Agreement
and Sections 8.1 and 8.2.
(d) Except as provided in Section 12.2 of the Agreement with respect
to a final distribution, distributions to Series 1997-1 Certificateholders
hereunder shall be made by check mailed to each Series 1997-1 Certificateholder
at such Series 1997-1 Certificateholder's address appearing in the Certificate
Register without presentation or surrender of any Series 1997-1 Certificate or
the making of any notation thereon; PROVIDED, HOWEVER, that with respect to
Series 1997-1 Certificates registered in the name of a Clearing Agency, such
distributions shall be made to such Clearing Agency in immediately available
funds.
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Section 5.2 REPORTS AND STATEMENTS TO SERIES 1997-1
CERTIFICATEHOLDERS.
(a) On each Distribution Date, the Paying Agent, on behalf of the
Trustee, shall forward to each Class A Certificateholder a statement
substantially in the form of EXHIBIT B prepared by the Servicer.
(b) Not later than each Determination Date, the Servicer shall deliver
to the Trustee, the Paying Agent and each Rating Agency (i) statements
substantially in the form of EXHIBIT B prepared by the Servicer and (ii) a
certificate of a Servicing Officer substantially in the form of EXHIBIT C.
(c) On or before January 31 of each calendar year, beginning with
calendar year 1998, the Paying Agent, on behalf of the Trustee, shall furnish or
cause to be furnished to each Person who at any time during the preceding
calendar year was a Series 1997-1 Certificateholder, a statement prepared by the
Servicer containing the information which is required to be contained in the
statement to Series 1997-1 Certificateholders, as set forth in paragraph (a) or
(b) above, as applicable, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1997-1 Certificateholder,
together with other information as is required to be provided by an issuer of
indebtedness under the Internal Revenue Code. Such obligation of the Servicer
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Paying Agent pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
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ARTICLE VI
EARLY AMORTIZATION EVENTS
Section 6.1 SERIES 1997-1 EARLY AMORTIZATION EVENTS. If any one of
the following events shall occur with respect to the Series 1997-1 Certificates:
(a) failure on the part of the Transferor (i) to make any payment or
deposit required to be made by the Transferor by the terms of (A) the Agreement
or (B) this Supplement, on or before the date occurring five Business Days after
the date such payment or deposit is required to be made herein, (ii) to perform
in all material respects the Transferor's covenant not to sell, pledge, assign,
or transfer to any person, or grant any unpermitted lien on, any Receivable; or
(iii) duly to observe or perform in any material respect any covenants or
agreements of the Transferor set forth in the Agreement or this Supplement,
which failure has a material adverse effect on the Series 1997-1
Certificateholders and which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by any Holder of Series 1997-1 Certificates;
(b) any representation or warranty made by the Transferor in the
Agreement or this Supplement (i) shall prove to have been incorrect in any
material respect when made, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by any Holder of
Series 1997-1 Certificates, and (ii) as a result of which the interests of the
Series 1997-1 Certificateholders are materially and adversely affected;
PROVIDED, HOWEVER, that a Series 1997-1 Early Amortization Event pursuant to
this subsection 6.1(b) shall not be deemed to have occurred hereunder if the
Transferor has accepted designation of the related Receivable as an Ineligible
Receivable during such period in accordance with the provisions of the
Agreement;
(c) the average of the Portfolio Yields for any three consecutive
Monthly Periods is reduced to a rate which is less than the average of the Base
Rates for such three consecutive Monthly Periods;
(d) (i) a failure by DHCC or the Transferor to make an Addition within
five Business Days after the Required Designation Date or (ii) the Class B
Invested Amount shall be less than 5% of the Initial Invested Amount;
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(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1997-1 Certificateholders; or
(f) the amount on deposit in the Special Funding Account as a
percentage of the sum of the aggregate amount of Principal Receivables plus the
amount on deposit in the Special Funding Account shall equal or exceed 30% on
the last day of three consecutive Monthly Periods;
then, the Trustee shall within five days publish a notice of such Early
Amortization Event and in the case of any event described in subparagraph (a),
(b) or (e), after the applicable grace period, if any, set forth in such
subparagraphs, the Holders of Series 1997-1 Certificates evidencing undivided
interests aggregating more than 50% of the Invested Amount of this Series 1997-1
by notice then given in writing to the Trustee, the Transferor and the Servicer
may declare that a early amortization event (a "Series 1997-1 Early Amortization
Event") has occurred as of the date of such notice, and in the case of any event
described in subparagraphs (c), (d) or (f), a Series 1997-1 Early Amortization
Event shall occur without any notice or other action on the part of the Trustee
or the Series 1997-1 Certificateholders immediately upon the occurrence of such
event.
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ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION;
SALE OF CLASS B CERTIFICATES
Section 7.1 OPTIONAL REPURCHASE. The Series 1997-1 Certificates
shall be subject to termination by the Transferor at its option on any
Distribution Date on or after the Distribution Date on which the Class A
Invested Amount is reduced to an amount less than or equal to 10% of the Class A
Initial Invested Amount. The deposit required in connection with any such
termination and final distribution shall be equal to the Class A Invested Amount
plus accrued and unpaid interest on the Series 1997-1 Certificates through the
day prior to the Distribution Date on which the final distribution occurs.
Section 7.2 SERIES 1997-1 TERMINATION. (a) If, on the June 2005
Distribution Date, the Invested Amount (after giving effect to all changes
therein on such date) would be greater than zero, the Servicer, on behalf of the
Trustee, shall, within the forty-day period which begins on such Distribution
Date, solicit bids for the sale of Principal Receivables and the related Finance
Charge Receivables (or interests therein) in the amount specified in subsection
12.2(c) of the Agreement. Such bids shall require that such sale shall (subject
to Section 7.2(b)) occur on the Scheduled Series 1997-1 Termination Date. The
Transferor shall be entitled to participate in, and to receive from the Trustee
a copy of each other bid submitted in connection with, such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Scheduled Series 1997-1 Termination
Date to the bidder who made the highest cash purchase offer. The proceeds of
any such sale shall be treated as Collections on the Receivables to be allocated
to the Series 1997-1 Certificateholders pursuant to the Agreement and this
Supplement; PROVIDED, HOWEVER, that the Servicer shall determine conclusively
the amount of such proceeds which are allocable to Finance Charge Receivables
and the amount of such proceeds which are allocable to Principal Receivables.
During the period from the June 2005 Distribution Date to the Scheduled Series
1997-1 Termination Date, the Servicer shall continue to collect payments on the
Receivables and allocate and deposit such Collections in accordance with the
provisions of the Agreement and this Supplement.
Section 7.3 REDUCTION OF CLASS B INVESTED AMOUNT DURING THE REVOLVING
PERIOD; DESIGNATION OF CLASS B CERTIFICATE TERMS; SALE OF CLASS B CERTIFICATES.
(a) The Class B Invested Amount may be reduced during the Revolving Period by
distributing Collections of Principal Receivables to the Class B
Certificateholders in accordance with Section 4.6(b), PROVIDED that (i) the
Rating Agency Condition shall have been satisfied with respect to
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such reduction and (ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate stating that the Transferor reasonably believes that such
reduction will not, based on the facts known to such officer at the time of such
certification, cause an Early Amortization Event or any event that, after the
giving of notice or the lapse of time or both, would constitute an Early
Amortization Event.
(b) The Transferor may at any time, without the consent of the
Investor Certificateholders, (i) sell or transfer all or a portion of the Class
B Certificates and (ii) in connection with any such sale or transfer, enter into
a supplemental agreement with the Trustee pursuant to which the Transferor and
the Trustee may amend the Class B Certificate Rate, set forth the amount of
monthly interest due Class B Certificateholders (the "Class B Interest"),
provide for the payment of additional amounts (the "Class B Additional
Interest") with respect to any shortfall (the "Class B Interest Shortfall") in
such Class B Interest and provide for such other provisions with respect to the
Class B Certificates as may be specified in such supplemental agreement,
PROVIDED that in each such case (A) the Transferor shall have given notice to
the Trustee, the Servicer and the Rating Agencies of such proposed sale or
transfer of the Class B Certificates and such supplemental agreement at least
five business days prior to the consummation of such sale or transfer and the
execution of such proposed supplemental agreement; (B) the Rating Agency
Condition shall have been satisfied; (C) no Early Amortization Event shall have
occurred prior to the consummation of such proposed sale or transfer of Class B
Certificates or the execution of such supplemental agreement; (D) the Transferor
shall have delivered an Officer's Certificate, dated the date of the
consummation of such sale or transfer and the effectiveness of such supplemental
agreement, to the effect that, in the reasonable belief of the Transferor, such
action will not, based on the facts known to such officer at the time of such
certification, cause an Early Amortization Event to occur with respect to any
Series, and (E) the Transferor will have delivered a Tax Opinion, dated the date
of such certificate with respect to such action; PROVIDED, FURTHER, (i) as a
condition to the sale or transfer of all or a portion of the Class B
Certificates the transferee shall be required to agree not to institute against,
or join any other Person in instituting against, the Trust or the Transferor any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after all Investor Certificates are paid in full and (ii)
the Class B Certificates may not be sold or transferred, in whole or in part, to
Dayton Hudson Capital Corporation.
Section 7.4 PURCHASE OF THE CLASS A CERTIFICATES BY THE TRANSFEROR.
The Transferor may from time to time, purchase Class A Certificates on the
secondary market and request the Trustee to cancel such Class A Certificates
held by the Transfer-
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or and reduce the Class A Invested Amount by a corresponding amount.
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ARTICLE VIII
FINAL DISTRIBUTION
Section 8.1 SALE OF RECEIVABLES OR CERTIFICATEHOLDERS' INTEREST
PURSUANT TO SECTION 2.6 OR 10.1 OF THE AGREEMENT AND SECTION 7.1 OR 7.2 OF THIS
SUPPLEMENT.
(a) The amount to be paid by the Transferor with respect to Series
1997-1 in connection with a reassignment of Receivables to the Transferor
pursuant to Section 2.6 of the Agreement or a repurchase of the
Certificateholder's Interest pursuant to Section 10.1 shall equal the
Reassignment Amount for the first Distribution Date following the Monthly Period
in which the reassignment obligation arises under the Agreement.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Sections 7.1 or 8.1 or any amounts allocable to
the Series 1997-1 Certificateholders' Interest deposited into the Collection
Account pursuant to Section 7.2, the Trustee shall, not later than 10:00 a.m.,
New York City time, on the related Distribution Date, make deposits or
distributions of the following amounts (in the priority set forth below and, in
each case after giving effect to any deposits and distributions otherwise to be
made on such date) in immediately available funds: (i) (x) the Class A Invested
Amount on such Distribution Date will be distributed to the Paying Agent for
payment to the Class A Certificateholders and (y) an amount equal to the sum of
(A) Class A Interest for such Distribution Date, (B) any Class A Interest
previously due but not distributed to the Class A Certificateholders on a prior
Distribution Date and (C) the amount of Class A Additional Interest, if any, for
such Distribution Date and any Class A Additional Interest previously due but
not distributed to the Class A Certificateholders on any prior Distribution
Date, will be distributed to the Paying Agent for payment to the Class A
Certificateholders, (ii) (x) the Class B Invested Amount on such Distribution
Date will be distributed to the Paying Agent for payment to the Class B
Certificateholders and (y) an amount equal to the sum of (A) Class B Monthly
Interest for such Distribution Date, (B) any Class B Monthly Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date and (C) the amount of Class B Additional Interest, if any, for
such Distribution Date and any Class B Additional Interest previously due but
not distributed to the Class B Certificateholders on any prior Distribution
Date, will be distributed to the Paying Agent for payment to the Class B
Certificateholders, (iii) any other amounts payable pursuant to subsection
4.6(a) shall be paid in accordance therewith and (iv) the balance, if any, will
be distributed to the Holder of the Transferor Certificate.
(c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the
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Paying Agent pursuant to Section 8.1(b) for payment to the Series 1997-1
Certificateholders shall be deemed distributed in full to the Series 1997-1
Certificateholders on the date on which such funds are distributed to the Paying
Agent pursuant to this Section and shall be deemed to be a final distribution
pursuant to Section 12.2 of the Agreement.
Section 8.2 DISTRIBUTION OF PROCEEDS OF SALE, DISPOSITION OR
LIQUIDATION OF THE RECEIVABLES PURSUANT TO SECTION 9.2 OF THE AGREEMENT.
(a) Not later than 10:00 a.m., 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 (in the following priority and, in each case, after giving effect to any
deposits and distributions otherwise to be made on such Distribution Date) (i)
deduct an amount equal to the Class A Invested Amount on such Distribution Date
from the portion of the Insolvency Proceeds allocated to Collections of
Principal Receivables and distribute such amount to the Paying Agent for payment
to the Class A Certificateholders, provided that the amount of such distribution
shall not exceed the product of (x) the portion of the Insolvency Proceeds
allocated to Collections of Principal Receivables and (y) the Principal
Allocation Percentage with respect to the related Monthly Period and (ii) deduct
an amount equal to the Class B Invested Amount on such Distribution Date from
the portion of the Insolvency Proceeds allocated to Collections of Principal
Receivables and distribute such amount to the Paying Agent for payment to the
Class B Certificateholders, PROVIDED that the amount of such distribution shall
not exceed (x) the product of (A) the portion of such Insolvency Proceeds
allocated to Collections of Principal Receivables and (B) the Principal
Allocation Percentage with respect to the related Monthly Period MINUS (y) the
amount distributed to the Paying Agent pursuant to clause (i) of this sentence.
(b) Not later than 10:00 a.m., New York City time, on such
Distribution Date, the Trustee shall (in the following priority and, in each
case, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date) (i) deduct an amount equal to the sum of (w) Class A
Interest for such Distribution Date, (x) any Class A Interest previously due but
not distributed to the Class A Certificateholders on a prior Distribution Date
and (y) the amount of Class A Additional Interest, if any, for such Distribution
Date and any Class A Additional Interest previously due but not distributed to
the Class A Certificateholders on a prior Distribution Date from the portion of
the Insolvency Proceeds allocated to Collections of Finance Charge Receivables
and distribute such amount to the Paying Agent for payment to the Class A
Certificateholders, PROVIDED that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allo-
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cated to Collections of Finance Charge Receivables and (y) the Floating
Allocation Percentage with respect to the related Monthly Period and (ii) deduct
an amount equal to the sum of (w) Class B Monthly Interest for such Distribution
Date, (x) Class B Monthly Interest previously due but not distributed to the
Class B Certificateholders and (y) the amount of Class B Additional Interest, if
any, for such Distribution Date and any Class B Additional Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date from the portion of the Insolvency Proceeds allocated to
Collections of Finance Charge Receivables and distribute such amount to the
Paying Agent for payment to the Class B Certificateholders, provided that the
amount of such distribution shall not exceed (I) the product of (x) the portion
of the Insolvency Proceeds allocated to Collections of Finance Charge
Receivables and (y) the Floating Allocation Percentage with respect to the
related Monthly Period MINUS (II) the amount thereof applied to the payment of
current and overdue Class A Interest and Class A Additional Interest as
described above. To the extent that the product of (A) the portion of the
Insolvency Proceeds allocated to Collections of Finance Charge Receivables and
(B) the Floating Allocation Percentage with respect to the related Monthly
Period exceeds the aggregate amount distributed to the Paying Agent pursuant to
the preceding sentence, the excess shall FIRST be applied with respect to any
other amounts payable pursuant to subsection 4.6(a) and SECOND be released to
the Holder of the Transferor Certificate.
(c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to this Section
for payment to the Series 1997-1 Certificateholders shall be distributed in full
to the Series 1997-1 Certificateholders on the date on which funds are
distributed to the Paying Agent pursuant to this Section and shall be deemed to
be a final distribution pursuant to Section 12.2 of the Agreement.
(d) If (i) an Event of Insolvency occurs relating to the Transferor
(excluding any Supplemental Certificate) or (ii) the Transferor Amount
(excluding the interest represented by any Supplemental Certificate) is less
than the Required Retained Transferor Amount while any of the Series 1995-1
Certificates or, unless otherwise provided in the applicable Series Supplement
or any amendment thereo, the Series 1996-1 Certificates remain outstanding, the
relationship among the Certificateholders and the holders of the Transferor
Interest will dissolve and, in accordance with Section 9.2 of the Agreement,
within fifteen days of receiving notice of such event, the Trustee will publish
a notice of the occurrence of such event stating that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables in a commercially
reasonable manner and on commercially reasonable terms. Notwithstanding the
foregoing and anything to the contrary set forth in this Supplement, the Series
Supplement
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for any other Series or the Agreement, no such dissolution and sale, disposal or
liquidation of Receivables shall occur in connection with the events specified
in clauses (i) and (ii) of the preceding sentence after the Series 1995-1
Certificates and the Series 1996-1 Certificates have been paid in full or
earlier to the extent so provided in the Series Supplement for either such
Series or any amendment thereto.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 DELIVERY AND PAYMENT FOR THE SERIES 1997-1 CERTIFICATES.
The Transferor shall execute and deliver the Series 1997-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1997-1 Certificates to or upon the order of the
Transferor when authenticated in accordance with Section 6.2 of the Agreement.
Section 9.2 FORM OF DELIVERY OF SERIES 1997-1 CERTIFICATES. The
Class A certificates and the Class B Certificates shall be delivered as
Registered Certificates as provided in Section 6.1 of the Agreement.
Section 9.3 LEGEND ON CLASS B CERTIFICATES.
Each Class B Certificate will bear a legend substantially in the
following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF DAYTON
HUDSON RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT
(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 INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA,
SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON
OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN
ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V),
ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE 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
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) A "SECONDARY MARKET" 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 B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN
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SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE
BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES
AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES
FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR
"BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS
CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS
OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE SECURITIES
OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN
ACCORDANCE WITH THE PROVISIONS OF THE SERIES 1997-1 SUPPLEMENT.
Section 9.4 RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken, and
construed as one and the same instrument.
Section 9.5 COUNTERPARTS. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
Section 9.6 PAIRED SERIES. Subject to satisfaction of the Rating
Agency Condition, and prior to the commencement of the Early Amortization
Period, the Series 1997-1 Certificates may be paired with one or more other
Series (each a "PAIRED SERIES"). Each Paired Series either will be pre-funded
with an initial deposit to a prefunding account in an amount up to the initial
principal balance of such Paired Series and primarily from the proceeds of the
sale of such Paired Series or will have a variable principal amount. Any such
prefunding account will be held for the benefit of such Paired Series and not
for the benefit of the Series 1997-1 Certificateholders. As principal is paid
with respect to the Series 1997-1 Certificates, either (i) in the case of a
prefunded Paired Series, an equal amount of funds on deposit in any prefunding
account for such prefunded Paired Series will be released (which funds will be
distributed to the Transferor) or (ii) in the case of a Paired Series having a
variable principal amount, an interest in such variable Paired Series in an
equal or lesser amount may be sold by the Trust (and the proceeds thereof will
be distributed to the Transferor) and, in either case, the invested amount in
the Trust of such Paired Series will increase by up to a corresponding amount.
Upon payment in full of the Series 1997-1 Certificates, assuming that there have
been no unreimbursed charge-offs with respect to any related Paired
48
<PAGE>
Series, the aggregate invested amount of such related Paired Series will have
been increased by an amount up to an aggregate amount equal to the Invested
Amount paid to the Series 1997-1 Certificateholders since the issuance of such
Paired Series. The issuance of a Paired Series will be subject to the
conditions described in subsection 6.3 of the Agreement.
Section 9.7 JURISDICTION; SERVICE. Solely with respect to the
Agreement (as supplemented hereby and as further amended, modified or
supplemented from time to time) and the transactions and other matters
contemplated thereby or relating thereto, each of the parties hereto hereby
irrevocably and unconditionally agrees (a) to be subject to the jurisdiction of
the courts of the State of Delaware and of the federal courts sitting in the
State of Delaware, and (b)(i) to the extent such party is not otherwise subject
to service of process in the State of Delaware, to appoint and maintain an agent
in the State of Delaware as such party's agent for acceptance of legal process,
and (ii) that service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by the United States
Postal Service constituting evidence of valid service, and that service made
pursuant to (b)(i) or (ii) above shall have the same legal force and effect as
if served upon such party personally within the State of Delaware. For purposes
of implementing the parties' foregoing agreement to appoint and maintain an
agent for service of process in the State of Delaware solely in respect of the
Agreement and the transactions and other matters contemplated thereby or
relating thereto, each such party that has not as of the date hereof already
duly appointed such an agent does hereby appoint RL&F Service Corp., One Rodney
Square, 10th Floor, Wilmington, Delaware 19801, as such agent.
SECTION 9.8 GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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 9.9 INSTRUCTIONS IN WRITING. All instructions or other
communications given by the Servicer or any other person to the Trustee pursuant
to this Supplement shall be in writing.
49
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series 1997-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
DAYTON HUDSON RECEIVABLES CORPORATION,
Transferor
By: /s/ Stephen C. Kowalke
--------------------------------
Name: Stephen C. Kowalke
Title: Vice President and Treasurer
RETAILERS NATIONAL BANK,
Servicer
By: /s/ Stephen C. Kowalke
--------------------------------
Name: Stephen C. Kowalke
Title: Assistant Treasurer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
Trustee
By: /s/ Michael W.G. Bjorgan
--------------------------------
Name: Michael W.G. Bjorgan
Title: Corporate Trust Officer
<PAGE>
EXHIBIT A-1
[FORM OF CLASS A INVESTOR CERTIFICATE]
REGISTERED $_____________
No. [ ] CUSIP NO. 23975NAB8
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE 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.
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1997-1
6.25% CLASS A ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which consists of
receivables generated from time to time in the ordinary course of business from
a portfolio of consumer open end credit card accounts generated or to be
generated by Retailers National Bank ("RNB" or the "Servicer") and other assets
and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Dayton Hudson
Receivables Corporation, Dayton Hudson Capital Corporation or RNB or any
affiliate of any of them.)
This certifies that CEDE & CO. (the "Certificateholder") is the
registered owner of a fractional undivided interest in the Dayton Hudson Credit
Card Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of September 13, 1995, as amended (the "Pooling and
Servicing Agreement"; such term to include any amendment thereto) by and between
Dayton Hudson Receivables Corporation, as Transferor (the
A-1-1
<PAGE>
"Transferor"), RNB, as the Servicer, and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), and the Series 1997-1 Supplement, dated
as of October 15, 1997 (the "Series 1997-1 Supplement"), among the Transferor,
the Servicer and the Trustee. The Pooling and Servicing Agreement, as
supplemented by the Series 1997-1 Supplement, is herein referred to as the
"Agreement"). The corpus of the Trust consists of all of the Transferor's
right, title and interest in, to and under the Trust Assets (as defined in the
Agreement).
This Certificate does not purport to summarize the Agreement and
reference is made to that 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. To the extent not
defined herein, the capitalized terms used herein have the meanings ascribed to
them in the Agreement. This Certificate is one of a class of Certificates
entitled "Dayton Hudson Credit Card Master Trust $400,000,000 6.25% Class A
Asset Backed Certificates, Series 1997-1" (the "Class A Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class A Certificates
and the "Dayton Hudson Credit Card Master Trust $122,875,817 Class B Asset
Backed Certificates, Series 1997-1" (the "Class B Certificates") with the
intention that the Class A Certificates will qualify under applicable tax law as
debt, and both the Transferor and each holder of a Class A Certificate (a "Class
A Certificateholder") or any interest therein by acceptance of its Certificate
or any interest therein, agrees to treat the Class A Certificates for purposes
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as debt.
No principal will be payable to the Class A Certificateholders until
the first Distribution Date in the Amortization Period.
Each Class A Certificate represents the right to receive interest at
the rate of 6.25% per annum (such rate, as in effect from time to time, the
"Class A Certificate Rate"). Interest on the Class A Certificates will accrue
from the Closing Date and will be distributed on November 25, 1997, and on the
25th day of each month thereafter, or if such day is not a business day, on the
next succeeding business day (each, a "Distribution Date"), in an amount equal
to one-twelfth of the
A-1-2
<PAGE>
product of (a) the Class A Certificate Rate and (b) the outstanding principal
balance of the Class A Certificates as of the last day of the preceding Monthly
Period (or in the case of the first Distribution Date, the initial Class A
Invested Amount).
Principal is scheduled to be paid in full on the October 2002
Distribution Date for the Class A Certificates, but may be paid earlier or later
in certain circumstances. Unpaid principal, together with interest, will be
payable monthly to Class A Certificateholders following the Class A Expected
Final Payment Date to the extent principal has not been paid in full on the
Class A Expected Final Payment Date. However, no payments of principal or
interest will be made on the Series 1997-1 Certificates after the Series 1997-1
Termination Date, regardless of whether principal and interest have been paid in
full with respect thereto. Interest will be distributed to the Class A
Certificateholders monthly on each Distribution Date prior to the Series
Termination Date. Interest for any Distribution Date will include accrued
interest at the Class A Certificate Rate from and including the preceding
Distribution Date or, in the case of the first Distribution Date from and
including the Closing Date, to but excluding such Distribution Date. Interest
for any Distribution Date due but not paid on any Distribution Date will be due
on the next succeeding Distribution Date together with, to the extent permitted
by applicable law, additional interest on such amount at the Class A Certificate
Rate plus 2% per annum.
In general, payments of principal with respect to the Class A
Certificates are limited to the Class A Invested Amount, which may be less than
the unpaid principal balance of the Class A Certificates. The Class A Expected
Final Payment Date is the October 2002 Distribution Date, but principal with
respect to the Class A Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Series 1997-1 Supplement. If
for one or more months during the Accumulation Period there are not sufficient
funds to pay the Controlled Deposit Amount, then to the extent that excess funds
are not available on subsequent Distribution Dates with respect to the
Accumulation Period to make up for such shortfalls, the final payment of
principal of the Class A Certificates will occur later than the Class A Expected
Final Payment Date.
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 Agreement, or be valid for any purpose.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be
duly executed under its official seal.
DAYTON HUDSON RECEIVABLES
CORPORATION
By:
--------------------------------
Name:
Title:
Dated: __________ __, 1997
A-1-4
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:
-----------------------------
Name:
Title:
A-1-5
<PAGE>
EXHIBIT A-2
[FORM OF CLASS B INVESTOR CERTIFICATE]
REGISTERED $____________
No. [ ]
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF DAYTON
HUDSON RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT
(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 INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA,
SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON
OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN
ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V),
ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE 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
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) A "SECONDARY MARKET" 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 B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN
SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE
BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES
AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES
FOR ITSELF OR ON BEHALF OF OTHERS.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"),
A-2-1
<PAGE>
OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER
JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE
OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES
OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES
1997-1 SUPPLEMENT.
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1997-1
$__________ CLASS B ASSET BACKED CERTIFICATE
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated from time to time in the ordinary course of
business from a portfolio of consumer open end credit card accounts generated or
to be generated by Retailers National Bank ("RNB" or the "Servicer") and other
assets and interests constituting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation of Dayton Hudson
Receivables Corporation, Dayton Hudson Capital Corporation or RNB or any
affiliate of any of them.)
This certifies that Dayton Hudson Receivables Corporation (the
"Certificateholder") is the registered owner of a fractional undivided interest
in the Dayton Hudson Credit Card Master Trust (the "Trust") issued pursuant to
the Pooling and Servicing Agreement, dated as of September 13, 1995 (the
"Pooling and Servicing Agreement"; such term to include any amendment thereto)
by and between Dayton Hudson Receivables Corporation, as Transferor (the
"Transferor"), RNB as the Servicer, and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), and the Series 1997-1 Supplement, dated
as of October 15, 1997 (the "Series 1997-1 Supplement"), among the Transferor,
RNB, as Servicer and the Trustee. The Pooling and Servicing Agreement, as
supplemented by the Series 1997-1 Supplement, is herein referred to as the
"Agreement". The corpus of the Trust consists of all of the Transferor's right,
title and interest in, to and under the Trust Assets (as defined in the
Agreement).
This Certificate does not purport to summarize the Agreement and
reference is made to that Agreement for information with respect to the
interests, rights, benefits, obligations,
A-2-2
<PAGE>
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement. This Certificate is
one of a class of Certificates entitled "Dayton Hudson Credit Card Master Trust
$122,875,817 Class B Asset Backed Certificates, Series 1997-1" (the "Class B
Certificates"), each of which represents a fractional undivided interest in the
Trust, and is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to time,
the Certificateholder by virtue of the acceptance hereof assents and by which
the Certificateholder is bound.
Unless the Rating Agency Condition and certain other conditions set
forth in the Series 1997-1 Supplement are satisfied, (i) no principal will be
payable to the Class B Certificateholders until the Class A Invested Amount is
paid in full and (ii) no interest will accrue on the unpaid principal amount of
the Class B Certificates. Principal is scheduled to be paid in full to the
Class A Certificates on the October 2002 Distribution Date.
In general, payments of principal with respect to the Class B
Certificates are limited to the Class B Invested Amount, which may be less than
the unpaid principal balance of the Class B Certificates. The Class B Expected
Final Payment Date is the November 2002 Distribution Date, but principal with
respect to the Class B Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Series 1997-1 Supplement.
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 Agreement, or be valid for any purpose.
A-2-3
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be
duly executed under its official seal.
DAYTON HUDSON RECEIVABLES
CORPORATION
By:
------------------------------------
Name:
Title:
Dated: , 1997
------------ --
A-2-4
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:
------------------------------------
Name:
Title:
A-2-5
<PAGE>
EXHIBIT B
FORM OF MONTHLY SERIES 1997-1 CERTIFICATEHOLDERS' STATEMENT
Please see Exhibit 20.4 to Form 8-K filed by Dayton Hudson Receivables
Corporation on December 8, 1997.
B-1
<PAGE>
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1997-1
The undersigned, a duly authorized representative of Retailers National
Bank, as Servicer ("RNB"), pursuant to the Pooling and Servicing Agreement,
dated as of September 13, 1995 (as may be amended, from time to time, the
"Agreement"), as supplemented by the Series 1997-1 Supplement (as amended and
supplemented, the "Series Supplement"), among RNB, Dayton Hudson Receivables
Corporation and Norwest Bank Minnesota, National Association, does hereby
certify as follows:
1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. RNB is, as of the date hereof, the Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date occurring on
__________ __, ____ (the "________ __ Distribution Date").
5. As of the date hereof, to the best knowledge of the undersigned, the
Servicer has performed in all material respects all its obligations under
the Agreement through the Monthly Period preceding such Distribution Date
[or, if there has been a default in the performance of any such obligation,
set forth in detail the (i) nature of such default, (ii) the action taken
by the Servicer, if any, to remedy such default and (iii) the current
status of each such default; if applicable, insert "None"].
6. As of the date hereof, to the best knowledge of the undersigned, no
Early Amortization Event occurred on or prior to such Distribution Date.
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Certificate this ____ day of ___________ ____.
RETAILERS NATIONAL BANK,
as Servicer
By:_______________________________
Name:
Title:
<PAGE>
MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
The undersigned, a duly authorized representative of Retailers National Bank, as
Servicer (RNB) pursuant to the Pooling and Servicing Agreement dated as of
September 13, 1995 (as may be amended, from time to time, the Agreement) as
supplemented by the Series 1995-1 Supplement (as amended and supplemented, the
Series Supplement), among RNB, Dayton Hudson Receivables Corporation and Norwest
Bank Minnesota, National Association, does hereby certify as follows:
1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. RNB is, as of the date hereof, the Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. This certificate relates to the Distribution Date occuring on November
25, 1997.
5. As of the date hereof, to the best knowledge of the undersigned, the
Servicer has performed in all material respects all its obligations
under the Agreement through the Monthly Period preceding such
Distribution Date.
6. As of the date hereof, to the best knowledge of the undersigned, no
Early Amortization Event occurred on or prior to such Distribution
Date.
7. The aggregate amount of Collections processed for the preceding
Monthly Period was equal to $339,625,397.32.
8. The aggregate amount of Collections of Finance Charge Receivables
(including Discounted Receivables) for the preceding Monthly Period
was equal to $44,582,617.33.
9. The aggregate amount of Collections of Principal Receivables for the
preceding Monthly Period was equal to $295,042,779.99.
10. The aggregate amount of the Defaulted Amount for the preceding Monthly
Period was equal to $14,062,663.82.
11. The aggregate amount of Recoveries for the preceding Monthly Period
was equal to $2,219,841.29.
12. The Portfolio Yield for the preceding Monthly Period was equal to
19.48%.
13. The Base Rate for the preceding Monthly Period was equal to 6.67%.
14. The aggregate amount of Receivables as of the end of the last day of
the preceding Monthly Period was equal to $2,177,012,294.83.
<PAGE>
15. The balance on deposit in the Collection Account with respect to
Collections processed as of the end of the last day of the preceding
Monthly Period was equal to $2,033,333.34.
16. The aggregate amount of Adjustments for the preceding Monthly Period
was equal to $50,313,288.09.
17. The aggregate amount of withdrawals, drawings or payments under any
Enhancement to be made with respect to the preceding Monthly Period is
equal to $0.00.
18. The total amount to be distributed to Investor Certificateholders on
the Distribution Date is equal to $2,033,333.34.
19. The amount to be distributed to Investor Certificateholders on the
Distribution Date per $1,000 original principal amount is equal to:
Class A 5.083
20. The amount of such distribution allocable to principal is equal to
$0.00.
21. The amount of such distribution allocable to principal per $1,000
original principal amount is equal to:
Class A 0.000
22. The amount of such distribution allocable to interest is equal to
$2,033,333.34.
23. The amount of such distribution allocable to interest per $1,000
original principal amount is equal to:
Class A 5.083
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Servicer's Certificate this 20th day of November, 1997.
RETAILERS NATIONAL BANK,
AS SERVICER
BY: /s/ Thomas A. Swanson
-------------------------------
NAME: THOMAS A. SWANSON
TITLE: VICE PRESIDENT & CASHIER
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
Pursuant to the Pooling and Servicing Agreement, dated as of September 13, 1995
(as may be amended, from time to time, the Agreement), as supplemented by the
Series 1995-1 Supplement (as amended and Supplemented, the Series Supplement),
each among Retailers National Bank, as Servicer, Dayton Hudson Receivables
Corporation, as Transferor, and Norwest Bank Minnesota, National Association, as
Trustee, the Servicer is required to prepare certain information each month
regarding distributions to Certificateholders and the performance of the Trust.
The information with respect to the applicable Distribution Date and Monthly
Period is set forth below.
<TABLE>
<CAPTION>
MONTHLY PERIOD: OCTOBER 1997
DISTRIBUTION DATE: NOVEMBER 25, 1997
NO. OF DAYS IN PERIOD: 28
- ----------------------------------------------------------------------------------------------------------------------------------
A. ORIGINAL DEAL PARAMETERS
<S> <C> <C> <C>
(a) Class A Initial Invested Amount $ 400,000,000.00 76.50%
(b) Class B Initial Invested Amount 122,875,817.00 23.50%
-------------------
(c) Total Initial Invested Amount $ 522,875,817.00
-------------------
-------------------
(d) Class A Certificate Rate 6.10%
(e) Class B Certificate Rate 0.00%
(f) Servicing Fee Rate 2.00%
(g) Discount Percentage 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
I. RECEIVABLES IN THE TRUST
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Beginning of the Period Principal Receivables $ 2,013,878,763.33
(b) Beginning of the Period Finance Charge Receivables 70,421,203.64
(c) Beginning of the Period Discounted Receivables -
-------------------
(d) Beginning of the Period Total Receivables (a + b + c) $ 2,084,299,966.97
-------------------
-------------------
(e) Removed Principal Receivables $ -
(f) Removed Finance Charge Receivables -
-------------------
(g) Removed Total Receivables (e + f) $ -
-------------------
-------------------
(h) Supplemental Principal Receivables $ -
(i) Supplemental Finance Charge Receivables -
-------------------
(j) Supplemental Total Receivables (h + i) $ -
-------------------
(k) End of Period Principal Receivables $ 2,106,802,495.35
(l) End of Period Finance Charge Receivables 70,209,799.48
(m) End of Period Discounted Receivables -
-------------------
(n) End of Period Total Receivables (k + l + m) $ 2,177,012,294.83
-------------------
-------------------
Page 1 of 6
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
II. INVESTED AMOUNTS AND ALLOCATION PERCENTAGES
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Initial Invested Amount $ 400,000,000.00 76.50%
(b) Class B Initial Invested Amount 122,875,817.00 23.50%
-------------------
(c) Total Initial Invested Amount (a + b) $ 522,875,817.00
(d) Class A Invested Amount (a - (X.a)) $ 400,000,000.00 76.50%
(e) Class B Invested Amount (b - (X.e)) 122,875,817.00 23.50%
-------------------
(f) Total Invested Amount (d + e) $ 522,875,817.00
(g) Class A Adjusted Invested Amount (a - (X.a)-(III.f)) $ 400,000,000.00 76.50%
(h) Class B Invested Amount (b - (X.e)) 122,875,817.00 23.50%
-------------------
(i) Total Adjusted Invested Amount (g + h) $ 522,875,817.00
(j) Floating Allocation Percentage 25.96%
(k) Class A Floating Allocation Percentage 19.86%
(l) Class B Floating Allocation Percentage 6.10%
(m) Principal Allocation Percentage 25.96%
(n) Class A Principal Allocation Percentage 19.86%
(o) Class B Principal Allocation Percentage 6.10%
(p) Servicing Fee $ 871,459.70
(q) Investor Defaulted Amount (j * (IV.(m))) $ 3,651,176.51
III. TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING
ACCOUNT, AND PRINCIPAL FUNDING ACCOUNT
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Transferor's Amount (end of month) $ 838,063,677.58
(b) Required Retained Transferor Amount $ 42,136,049.91
(c) Required Principal Balance $ 1,268,738,817.77
(e) Funds on deposit in Special Funding Account (end of month) $ -
(f) Principal on deposit in Principal Funding Account $ -
(end of month)
Page 2 of 6
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
IV. PERFORMANCE SUMMARY
- ----------------------------------------------------------------------------------------------------------------------------------
COLLECTIONS:
------------
(a) Collections of Principal Receivables $ 295,042,779.99
(b) Collections of Finance Charge Receivables
(from cardholder payments) 37,775,643.79
(c) Collections of Finance Charge Receivables (from merchant fees, 6,806,973.54
deferred billing fees, collection account interest)
(d) Collections of Discount Option Receivables 0.00
----
(e) Total Finance Charge Collections (b + c + d) $ 44,582,617.33
-------------------
(f) Total Collections (a + e) $ 339,625,397.32
-------------------
-------------------
DELINQUENCIES AND LOSSES:
-------------------------
(g) 2 missed payments $ 84,579,000
(h) 3 missed payments 36,588,000
(i) 4 or more missed payments 75,163,000
-------------------
(j) Total delinquencies (g + h + i) $ 196,330,000
-------------------
-------------------
(k) Gross Charge-Offs during the month $ 16,282,505.11
(l) Recoveries during the month $ 2,219,841.29
(m) Net Charge-Offs during the month (k - l) $ 14,062,663.82
V NON-U.S. ACCOUNTS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Non-US Accounts at end of month 110,512
(b) as a percentage of total (a / c) 0.45%
(c) Total number of Accounts in Trust (at end of month) 24,402,520
Page 3 of 6
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
VI AVAILABLE SERIES 1995-1 FINANCE CHARGE COLLECTIONS AND APPLICATION OF FUNDS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Floating Allocation Percentage of Collections of Finance $ 11,575,261.08
Charge Receivables
(b) Investment earnings on Principal Funding Account -
(c) Investment earnings in Reserve Account deposited in the -
Collection Account
(d) Reserve draw Amount deposited into the Collection Account -
-=-----------------
(e) Available Series 1995-1 Finance Charge Collections $ 11,575,261.08
(a + b + c + d)
(i) Class A Interest 2,033,333.34
(ii) Servicing Fee 871,459.70
(iii) Class A Investor Defaulted Amount ((IV.m * (II.k)) 2,793,150.03
(iv) Class B Investor Defaulted Amount ((IV.m * (II.l )) 858,026.48
(v) Adjustment Payment Shortfalls -
(vi) Reimbursement of Class A Investor Charge-Offs -
(vii) Reimbursement of Class B Investor Charge-Offs -
and Reallocated Class B Principal Collections
(viii) Class B Interest -
(ix) Reserve Account -
(x) Excess Finance Charge Collections $ 5,019,291.53
(e-i-ii-iii-iv-v-vi-vii-viii-ix)
Page 4 of 6
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
VII YIELD AND BASE RATE
- ----------------------------------------------------------------------------------------------------------------------------------
BASE RATE
- ---------
(a) Base Rate (current month) 6.67%
(b) Base Rate (prior month) 6.67%
(c) Base Rate (2 months ago) 6.67%
(d) 3 Month Average Base Rate 6.67%
PORTFOLIO YIELD
- ---------------
(e) Portfolio Yield (current month) 19.48%
(f) Portfolio Yield (prior month) 14.68%
(g) Portfolio Yield (2 months ago) 18.51%
(h) 3 Month Average Portfolio Yield 17.56%
VIII PORTFOLIO PERFORMANCE RATES
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Net Charge-Offs (annualized % of Principal Receivables at beginning of 8.98%
period)
(b) Monthly Payment Rate (% of Principal Receivables at beginning of period 18.07%
(adjusted for number of days in period))
(c) Trust Portfolio Yield (annualized) 28.46%
(d) Portfolio Yield (3 month average (annualized)) 17.56%
(e) Base Rate (3 month average) 6.67%
(f) Excess Finance Charge Collections % (d - e) 10.89%
Page 5 of 6
<PAGE>
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1995-1
IX PRINCIPAL COLLECTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Principal Allocation Percentage 19.86%
(b) Class A Principal $ -
(c) Class B Principal Allocation Percentage 6.10%
(d) Class B Principal $ -
(e) Total Principal (b + d) $ -
(f) Reallocated Principal Collections $ -
(g) Shared Principal Collections allocable from $ -
other Series and Participation
X INVESTOR CHARGE-OFFS
CLASS A INVESTOR CHARGE-OFFS
(a) Class A Investor Charge-Offs $ -
(b) Class A Investor Charge-Offs per $1,000 original
certificate principal amount $ -
(c) Total amount reimbursed in respect of Class A $ -
Investor Charge-Offs
(d) The amount, if any, by which the outstanding principal $ -
balance of the Class A Certificates exceeds the Class A
Invested Amount after giving effect to all transactions
on such Distribution Date.
CLASS B INVESTOR CHARGE-OFFS
----------------------------
(e) Class B Investor Charge-Offs $ -
(f) Class B Investor Charge-Offs per $1,000 original certificate $ -
principal amount
(g) Total amount reimbursed in respect of Class B Investor $ -
Charge-Offs
(h) The amount, if any, by which the outstanding principal $ -
balance of the Class B Certificates exceeds the Class B
Invested Amount after giving effect to all transactions
on such Distribution Date.
XI AMORTIZATION
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Accumulation Period Length (months) 6
(b) Controlled Accumulation Amount $ 66,666,666.67
(c) Deficit Controlled Accumulation Amount $ -
(d) Total Principal on deposit in Principal Funding Account for $ -
the benefit of Class A Certificateholders
</TABLE>
RETAILERS NATIONAL BANK,
AS SERVICER
BY: /s/ Thomas A Swanson
----------------------------------
NAME: THOMAS A. SWANSON
TITLE: VICE PRESIDENT & CASHIER
Page 6 of 6
<PAGE>
EXHIBIT 20.3
MONTHLY SERVICER'S CERTIFICATE
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1997-1
The undersigned, a duly authorized representative of Retailers National Bank, as
Servicer ("RNB") pursuant to the Pooling and Servicing Agreement dated as of
September 13, 1995 (as may be amended, from time to time, the "Agreement") as
supplemented by the Series 1997-1 Supplement (as amended and supplemented,
the "Series Supplement"), among RNB, Dayton Hudson Receivables Corporation
and Norwest Bank Minnesota, National Association, does hereby certify as
follows:
1. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement or the Series Supplement, as
applicable.
2. RNB is, as of the date hereof, the Servicer under the Agreement.
3. The undersigned is a Servicing Officer.
4. This certificate relates to the Distribution Date occuring on November
25, 1997.
5. As of the date hereof, to the best knowledge of the undersigned, the
Servicer has performed in all material respects all its obligations
under the Agreement through the Monthly Period preceding such
Distribution Date.
6. As of the date hereof, to the best knowledge of the undersigned, no
Early Amortization Event occurred on or prior to such Distribution
Date.
7. The aggregate amount of Collections processed for the preceding
Monthly Period was equal to $215,375,282.68.
8. The aggregate amount of Collections of Finance Charge Receivables
(including Discounted Receivables) for the preceding Monthly Period
was equal to $30,375,802.18.
9. The aggregate amount of Collections of Principal Receivables for the
preceding Monthly Period was equal to $184,999,480.50.
10. The aggregate amount of the Defaulted Amount for the preceding Monthly
Period was equal to $7,146,100.73.
11. The aggregate amount of Recoveries for the preceding Monthly Period
was equal to $1,232,054.76.
12. The Portfolio Yield for the preceding Monthly Period was equal to
29.09%.
13. The Base Rate for the preceding Monthly Period was equal to 6.78%.
14. The aggregate amount of Receivables as of the end of the last day of
the preceding Monthly Period was equal to $2,177,012,294.83.
<PAGE>
15. The balance on deposit in the Collection Account with respect to
Collections processed as of the end of the last day of the preceding
Monthly Period was equal to $2,777,777.78.
16. The aggregate amount of Adjustments for the preceding Monthly Period
was equal to $32,936,144.49.
17. The aggregate amount of withdrawals, drawings or payments under any
Enhancement to be made with respect to the preceding Monthly Period is
equal to $0.00.
18. The total amount to be distributed to Investor Certificateholders on
the Distribution Date is equal to $2,777,777.78.
19. The amount to be distributed to Investor Certificateholders on the
Distribution Date per $1,000 original principal amount is equal to:
Class A 6.944
20. The amount of such distribution allocable to principal is equal to
$0.00.
21. The amount of such distribution allocable to principal per $1,000
original principal amount is equal to:
Class A 0.000
22. The amount of such distribution allocable to interest is equal to
$2,777,777.78.
23. The amount of such distribution allocable to interest per $1,000
original principal amount is equal to:
Class A 6.944
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Servicer's Certificate this 20th day of November, 1997.
RETAILERS NATIONAL BANK,
AS SERVICER
BY: /s/ Thomas A. Swanson
---------------------------
NAME: THOMAS A. SWANSON
TITLE: VICE PRESIDENT & CASHIER
<PAGE>
EXHIBIT 20.4
MONTHLY CERTIFICATEHOLDERS' STATEMENT
RETAILERS NATIONAL BANK
DAYTON HUDSON CREDIT CARD MASTER TRUST
SERIES 1997-1
Pursuant to the Pooling and Servicing Agreement, dated as of September 13, 1995
(as may be amended, from time to time, the "Agreement"), as supplemented by the
Series 1997-1 Supplement (as amended and Supplemented, the "Series Supplement"),
each among Retailers National Bank, as Servicer, Dayton Hudson Receivables
Corporation, as Transferor, and Norwest Bank Minnesota, National Association, as
Trustee, the Servicer is required to prepare certain information each month
regarding distributions to Certificateholders and the performance of the Trust.
The information with respect to the applicable Distribution Date and Monthly
Period is set forth below.
<TABLE>
<CAPTION>
MONTHLY PERIOD: OCTOBER 1997
DISTRIBUTION DATE: NOVEMBER 25, 1997
NO. OF DAYS IN PERIOD: 18
(partial month)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A. ORIGINAL DEAL PARAMETERS
(a) Class A Initial Invested Amount $ 400,000,000.00 76.50%
(b) Class B Initial Invested Amount 122,875,817.00 23.50%
--------------
(c) Total Initial Invested Amount $ 522,875,817.00
-------------------
-------------------
(d) Class A Certificate Rate 6.25%
(e) Class B Certificate Rate 0.00%
(f) Servicing Fee Rate 2.00%
(g) Discount Percentage 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
I. RECEIVABLES IN THE TRUST
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Beginning of the Period Principal Receivables $ 2,021,525,488.86
(b) Beginning of the Period Finance Charge Receivables 67,734,948.58
(c) Beginning of the Period Discounted Receivables -
-------------------
(d) Beginning of the Period Total Receivables (a + b + c) $ 2,089,260,437.44
-------------------
-------------------
(e) Removed Principal Receivables $ -
(f) Removed Finance Charge Receivables -
-------------------
(g) Removed Total Receivables (e + f) $ -
-------------------
-------------------
(h) Supplemental Principal Receivables $ -
(i) Supplemental Finance Charge Receivables -
-------------------
(j) Supplemental Total Receivables (h + i) $ -
-------------------
-------------------
(k) End of Period Principal Receivables $ 2,106,802,495.35
(l) End of Period Finance Charge Receivables 70,209,799.48
(m) End of Period Discounted Receivables -
-------------------
(n) End of Period Total Receivables (k + l + m) $ 2,177,012,294.83
-------------------
-------------------
Page 1 of 6
<PAGE>
II. INVESTED AMOUNTS AND ALLOCATION PERCENTAGES
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Initial Invested Amount $ 400,000,000.00 76.50%
(b) Class B Initial Invested Amount 122,875,817.00 23.50%
-------------------
(c) Total Initial Invested Amount (a + b) $ 522,875,817.00
(d) Class A Invested Amount (a - (X.a)) $ 400,000,000.00 76.50%
(e) Class B Invested Amount (b - (X.e)) 122,875,817.00 23.50%
-------------------
(f) Total Invested Amount (d + e) $ 522,875,817.00
(g) Class A Adjusted Invested Amount (a - (X.a)-(III.f)) $ 400,000,000.00 76.50%
(h) Class B Invested Amount (b - (X.e)) 122,875,817.00 23.50%
-------------------
(i) Total Adjusted Invested Amount (g + h) $ 522,875,817.00
(j) Floating Allocation Percentage 25.87%
(k) Class A Floating Allocation Percentage 19.79%
(l) Class B Floating Allocation Percentage 6.08%
(m) Principal Allocation Percentage 25.87%
(n) Class A Principal Allocation Percentage 19.79%
(o) Class B Principal Allocation Percentage 6.08%
(p) Servicing Fee $ 560,224.00
(q) Investor Defaulted Amount (j * (IV.(m))) $ 1,848,368.12
III. TRANSFEROR'S INTEREST, RETAINED INTEREST, SPECIAL FUNDING
ACCOUNT, AND PRINCIPAL FUNDING ACCOUNT
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Transferor's Amount (end of month) $ 838,063,677.58
(b) Required Retained Transferor Amount $ 42,136,049.91
(c) Required Principal Balance $ 1,268,738,817.77
(e) Funds on deposit in Special Funding Account (end of month) $ -
(f) Principal on deposit in Principal Funding Account (end of month) $ -
Page 2 of 6
<PAGE>
IV. PERFORMANCE SUMMARY
- ----------------------------------------------------------------------------------------------------------------------------------
COLLECTIONS:
(a) Collections of Principal Receivables $ 184,999,480.50
(b) Collections of Finance Charge Receivables
(from cardholder payments) 23,568,828.64
(c) Collections of Finance Charge Receivables (from merchant fees, 6,806,973.54
deferred billing fees, collection account interest)
(d) Collections of Discount Option Receivables 0.00
----
(e) Total Finance Charge Collections (b + c + d) $ 30,375,802.18
-------------------
(f) Total Collections (a + e) $ 215,375,282.68
-------------------
-------------------
DELINQUENCIES AND LOSSES:
(g) 2 missed payments $ 84,579,000
(h) 3 missed payments 36,588,000
(i) 4 or more missed payments 75,163,000
-------------------
(j) Total delinquencies (g + h + i) $ 196,330,000
-------------------
-------------------
(k) Gross Charge-Offs during the month $ 8,378,155.49
(l) Recoveries during the month $ 1,232,054.76
(m) Net Charge-Offs during the month (k - l) $ 7,146,100.73
V NON-U.S. ACCOUNTS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Non-US Accounts at end of month 110,512
(b) as a percentage of total (a / c) 0.45%
(c) Total number of Accounts in Trust (at end of month) 24,402,520
Page 3 of 6
<PAGE>
VI AVAILABLE SERIES 1995-1 FINANCE CHARGE COLLECTIONS AND APPLICATION OF FUNDS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Floating Allocation Percentage of Collections of Finance $ 7,856,825.19
Charge Receivables
(b) Investment earnings on Principal Funding Account -
(c) Investment earnings in Reserve Account deposited in the -
Collection Account
(d) Reserve draw Amount deposited into the Collection Account -
(e) Closing Date deposit to Collection Account 1,597,222.00
-------------------
(f) Available Series 1997-1 Finance Charge Collections $ 9,454,047.19
(a + b + c + d + e)
(i) Class A Interest 2,777,777.78
(ii) Servicing Fee 560,224.00
(iii) Class A Investor Defaulted Amount ((IV.m * (II.k)) 1,414,001.61
(iv) Class B Investor Defaulted Amount ((IV.m * (II.l )) 434,366.51
(v) Adjustment Payment Shortfalls -
(vi) Reimbursement of Class A Investor Charge-Offs -
(vii) Reimbursement of Class B Investor Charge-Offs -
and Reallocated Class B Principal Collections
(viii) Class B Interest -
(ix) Reserve Account -
(x) Excess Finance Charge Collections $ 4,267,677.29
(f-i-ii-iii-iv-v-vi-vii-viii-ix)
Page 4 of 6
<PAGE>
VII YIELD AND BASE RATE
- ----------------------------------------------------------------------------------------------------------------------------------
BASE RATE
(a) Base Rate (current month) 6.78%
(b) Base Rate (prior month) #N/A
(c) Base Rate (2 months ago) #N/A
(d) 3 Month Average Base Rate #N/A
PORTFOLIO YIELD
(e) Portfolio Yield (current month) 29.09%
(f) Portfolio Yield (prior month) #N/A
(g) Portfolio Yield (2 months ago) #N/A
(h) 3 Month Average Portfolio Yield #N/A
VIII PORTFOLIO PERFORMANCE RATES
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Net Charge-Offs (annualized % of Principal Receivables at beginning of 7.07%
period)
(b) Monthly Payment Rate (% of Principal Receivables at beginning of period 17.76%
(adjusted for number of days in period))
(c) Trust Portfolio Yield (annualized) 30.05%
(d) Portfolio Yield (3 month average (annualized)) #N/A
(e) Base Rate (3 month average) #N/A
(f) Excess Finance Charge Collections % (d - e) #N/A
Page 5 of 6
<PAGE>
IX PRINCIPAL COLLECTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Principal Allocation Percentage 19.79%
(b) Class A Principal $ -
(c) Class B Principal Allocation Percentage 6.08%
(d) Class B Principal $ -
(e) Total Principal (b + d) $ -
(f) Reallocated Principal Collections $ -
(g) Shared Principal Collections allocable from other $ -
Series, Participation and Transferor Certificate
X INVESTOR CHARGE-OFFS
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A INVESTOR CHARGE-OFFS
(a) Class A Investor Charge-Offs $ -
(b) Class A Investor Charge-Offs per $1,000 original $ -
certificate principal amount
(c) Total amount reimbursed in respect of Class A Investor $ -
Charge-Offs
(d) The amount, if any, by which the outstanding principal $ -
balance of the Class A Certificates exceeds the Class A
Invested Amount after giving effect to all transactions
on such Distribution Date.
CLASS B INVESTOR CHARGE-OFFS
(e) Class B Investor Charge-Offs $ -
(f) Class B Investor Charge-Offs per $1,000 original $ -
certificate principal amount
(g) Total amount reimbursed in respect of Class B Investor Charge-Offs $ -
(h) The amount, if any, by which the outstanding principal $ -
balance of the Class B Certificates exceeds the Class B
Invested Amount after giving effect to all transactions on
such Distribution Date.
XI AMORTIZATION
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Class A Accumulation Period Length (months) 12
(b) Controlled Accumulation Amount $33,333,333.34
(c) Deficit Controlled Accumulation Amount $ -
(d) Total Principal on deposit in Principal Funding Account for $ -
the benefit of Class A Certificateholders
</TABLE>
RETAILERS NATIONAL BANK,
AS SERVICER
BY: /s/ Thomas A. Swanson
-------------------------------------
NAME: THOMAS A. SWANSON
TITLE: VICE PRESIDENT & CASHIER
Page 6 of 6
